EXHIBIT 10.4
THE AMETEK RETIREMENT AND SAVINGS PLAN
Amended and Restated Effective January 1, 2002
THE AMETEK RETIREMENT AND SAVINGS PLAN
AMETEK, Inc. adopted The AMETEK Retirement and Savings Plan (the
"Plan") (known prior to January 1, 1998 as The AMETEK Savings and Investment
Plan), effective as of October 1, 1984, for the benefit of its eligible
employees. The Plan was subsequently amended and restated in its entirety,
effective October 1, 1992, effective January 1, 1997, and again, 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
ARTICLE I DEFINITIONS AND CONSTRUCTION............................................................... 1
ARTICLE II PARTICIPATION.............................................................................. 1
2.1 Prior Eligibility.......................................................................... 1
2.2 Eligibility for Other Employees............................................................ 1
2.3 Ineligible Employees....................................................................... 1
2.4 Participant Information.................................................................... 2
2.5 Employee Acceptance........................................................................ 2
ARTICLE III SERVICE.................................................................................... 3
3.1 Year of Service............................................................................ 3
3.2 Hours of Service........................................................................... 3
3.3 Severance From Service Date................................................................ 3
3.4 Absence of Less Than Twelve Months......................................................... 4
3.5 Severance From Service..................................................................... 4
ARTICLE IV CONTRIBUTIONS.............................................................................. 5
4.1 Deferral Election.......................................................................... 5
4.2 Employer Deferral, Catch-up Contributions and Matching Contributions....................... 6
4.3 Employer Contributions on Behalf of Retirement Participants................................ 7
4.4 Reemployment Following a Period of Qualified Military Service.............................. 8
4.5 Limitation on Contributions................................................................ 9
4.6 Limitation on Contributions on Behalf of Highly Compensated Employees...................... 9
4.7 Nondiscrimination Requirements............................................................. 10
4.8 Rollovers and Transfers.................................................................... 15
4.9 Non-Forfeitability of Certain Accounts..................................................... 16
ARTICLE V INDIVIDUAL ACCOUNTS........................................................................ 17
5.1 Participant Accounts....................................................................... 17
5.2 Valuation of Accounts...................................................................... 17
5.3 Employer Contributions Considered Made on Last Day of Plan Year............................ 17
5.4 Valuation.................................................................................. 17
5.5 Limitation on Annual Additions............................................................. 18
5.6 Allocations Do Not Create Rights........................................................... 20
ARTICLE VI PAYMENT OF BENEFITS........................................................................ 21
6.1 Retirement, Death, Disability or Termination of Employment................................. 21
6.2 Attainment of 59 1/2....................................................................... 22
6.3 Beneficiary Designation.................................................................... 22
6.4 Form of Payment............................................................................ 23
6.5 Limitations on Commencement or Duration of Benefit Payments................................ 25
6.6 Cash-Out of Benefits....................................................................... 27
6.7 Qualified Domestic Relations Orders........................................................ 27
ARTICLE VII LOANS TO PARTICIPANTS AND WITHDRAWALS...................................................... 28
7.1 Loans...................................................................................... 28
7.2 Hardship Distribution...................................................................... 30
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VIII COMMITTEE AND PLAN ADMINISTRATOR........................................................... 33
8.1 Committee - Authority...................................................................... 33
8.2 Appointment................................................................................ 33
8.3 Death, Resignation or Removal of Committee Member.......................................... 33
8.4 Written Notice of Appointment, Resignation or Removal...................................... 33
8.5 Action By Committee........................................................................ 33
8.6 Employment of Agents....................................................................... 33
8.7 No Committee Member Compensation........................................................... 33
8.8 Committee Powers........................................................................... 34
8.9 Claim for Benefits......................................................................... 34
8.10 Liability for Contributions................................................................ 36
8.11 Plan Administrator......................................................................... 36
8.12 Compensation and Expenses of Plan Administrator............................................ 36
8.13 Allocation of Duties....................................................................... 36
8.14 Participation of Committee Members and Plan Administrator.................................. 36
8.15 Books and Records.......................................................................... 36
8.16 Fiduciary Standard......................................................................... 37
8.17 Indemnification............................................................................ 37
ARTICLE IX INVESTMENT OF PLAN ASSETS.................................................................. 38
9.1 Contributions Held in Trust................................................................ 38
9.2 Investment Funds........................................................................... 38
9.3 Investment of Contributions................................................................ 38
9.4 Changes in Investment Elections............................................................ 38
9.5 Insurance Contract......................................................................... 39
9.6 Common Stock Fund.......................................................................... 40
9.7 Appointment of Investment Manager.......................................................... 40
ARTICLE X AMENDMENT, TERMINATION OR TRANSFER OF ASSETS............................................... 41
10.1 Amendment or Termination................................................................... 41
10.2 Termination of Plan........................................................................ 41
10.3 Distribution of Assets..................................................................... 41
10.4 Affiliates................................................................................. 42
10.5 Amendment to Vesting Schedule.............................................................. 42
10.6 Merger of Plan............................................................................. 43
ARTICLE XI TOP HEAVY PLANS............................................................................ 44
11.1 Definitions................................................................................ 44
11.2 Minimum Contributions...................................................................... 47
11.3 Coordination with Defined Benefit Plan..................................................... 48
ARTICLE XII MISCELLANEOUS.............................................................................. 49
12.1 No Rights Implied.......................................................................... 49
12.2 Assignment and Alienation.................................................................. 49
12.3 No Diversion of Trust Assets............................................................... 49
12.4 Exclusive Benefit.......................................................................... 49
12.5 No Employment Contract..................................................................... 49
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TABLE OF CONTENTS
(CONTINUED)
PAGE
12.6 Fiduciaries................................................................................ 49
12.7 Incapacity................................................................................. 50
12.8 Governing Law.............................................................................. 50
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, the Retirement
Account and the Rollover Contribution Account, or as many Accounts as are
applicable, maintained on behalf of a Participant or Retirement 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, Former Participant, Retirement Participant or Former Retirement
Participant, in accordance with Section 6.3, as the person or persons entitled
to receive upon the death of such Participant, Former Participant, Retirement
Participant or Former Retirement 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.
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1.11 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
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 9.6.
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 limitation 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 sum of
Employer Matching Contributions and the Employer Incentive Retirement
Contributions made on behalf of a Participant or a Retirement Participant for a
Plan Year to the Participant's or the Retirement 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).
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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.
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 of a Participant or a
Retirement Participant as determined under the terms of the defined benefit
pension plan maintained by the Company or an Affiliate under which the
Participant or Retirement Participant participated in immediately prior to his
disability. If a Participant or Retirement Participant does not participate in a
defined benefit pension plan immediately prior to his disability, Disability
shall mean a disability that entitles the Participant or the Retirement
Participant to disability benefits from Social Security; provided, however, that
the Participant's or the Retirement 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 October 1, 1984.
1.23 "Employee" shall mean any person classified as a regular
Employee who is on the payroll of the Employer or an Affiliate and whose wages
from the Employer or Affiliate are subject to withholding for United States
Federal income tax purposes. Except as otherwise provided in Article II, a
person who is not otherwise employed by an Employer or an Affiliate will be
deemed to be employed by any such company if he is a Leased Employee with
respect to whose services such Employer or Affiliate is the recipient.
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 eligibility requirements of the Plan.
1.24 "Employer" shall mean the Company and any Affiliate of the
Company that adopts this Plan pursuant to Section 10.4 hereof.
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1.25 "Employer Contributions" shall mean the contributions made by
the Employer pursuant to Section 4.2(b), Section 4.3(a) and 4.3(b).
1.26 "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.
1.27 "Employer Matching Contribution" shall mean a profit-sharing
contribution made to a Participant's Employer Matching Contribution Account
pursuant to Section 4.2(b).
1.28 "Employer Incentive Retirement Contribution" shall mean a
profit-sharing contribution made to a Retirement Participant's Retirement
Account pursuant to Section 4.3(b).
1.29 "Employer Retirement Contribution" shall mean a profit-sharing
contribution made to a Retirement Participant's Retirement Account pursuant to
Section 4.3(a).
1.30 "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.
1.31 "Entry Date" shall mean the first day of January, April, July
and October of any Plan Year.
1.32 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.33 "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.
1.34 "Former Retirement Participant" shall mean a person who has
ceased to be a Retirement Participant but who is entitled to immediate or
deferred benefits under this Plan.
1.35 "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.
For purposes of this Section 1.35, the following definitions shall apply:
"Total Compensation" shall mean the Employee's "compensation" as
defined in Subsection 5.5(d); and
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"Look-Back Year" shall mean the twelve (12) month period immediately
preceding the Plan Year.
1.36 "Hour of Service" shall have the meaning defined in Section
3.2.
1.37 "Insurance Contract" shall mean an insurance policy issued to
he Trustee for the benefit of a Participant pursuant to Section 9.5.
1.38 "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.
1.39 "Investment Funds" shall mean the funds comprising the Trust
Fund.
1.40 "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;
(b) such plan provides for full and immediate vesting;
(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.
1.41 "Limitation Year" shall mean the Plan Year.
1.42 "Mandatory Distribution Date" shall have the meaning set forth
in Section 6.5(a).
1.43 "Normal Retirement Age" shall mean a Participant's or Former
Participant's 65th birthday. For purposes of a Retirement Participant, Normal
Retirement Age shall mean the later of a Retirement Participant's 65th birthday
or the fifth (5th) anniversary of the Retirement Participant's commencement of
participation in the Plan.
1.44 "One Year Period of Severance" shall have the meaning set
forth in Section 3.5.
1.45 "Participant" shall mean an Employee who has met the
requirements for participation in this Plan, pursuant to the provisions of
Article II.
5
1.46 "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.
1.47 "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.
1.48 "Plan" shall mean The AMETEK Retirement and Savings Plan
(known prior to January 1, 1998 as The AMETEK Savings and Investment Plan), as
it is embodied herein and as it may be amended from time to time.
1.49 "Plan Administrator" shall mean the person, group of persons,
firm or corporation serving as plan administrator pursuant to Section 8.11.
1.50 "Plan Year" shall mean the twelve (12) consecutive month
period commencing January 1st and ending the following December 31st.
1.51 "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 or a Retirement 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 or a Retirement Participant
under this Plan;
(c) specifies (i) the name and last known mailing address
(if any) of the Participant or the Retirement Participant and each Alternate
Payee covered by the order, (ii) the amount or percentage of the Participant's
or the Retirement Participant's Plan benefits to be paid to the Alternate Payee,
or the manner in which such 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 or Retirement Participant attains, or would have attained the
earlier of (i) the date on which the Participant or the Retirement Participant
is entitled to a distribution under the Plan or (ii) the date on which the
Participant or Retirement Participant attains age fifty (50), regardless of
whether the Participant or Retirement 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 or Retirement Participant has incurred a
Severance From Service Date, if the Order directs (i) that the
6
payment of the benefits be determined as if the Participant or Retirement
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 or
Retirement 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 or Retirement Participant other than in the form of a joint and
survivor annuity with respect to the Alternate Payee and his subsequent spouse.
1.52 "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.
1.53 "Retirement Account" shall mean a separate Account maintained
for each Retirement Participant or Former Retirement Participant, consisting of
the Employer Retirement Contribution and the Employer Incentive Retirement
Contribution made pursuant to Section 4.3 plus any earnings of the Trust and
realized or unrealized gains or losses allocable to such Retirement Account, but
less any amounts previously distributed to the Retirement Participant, Former
Retirement Participant or Beneficiary for whom the Account is maintained.
1.54 "Retirement Participant" shall mean an Employee who has met
the requirements set forth in Sections 2.2(b) and 2.3(b).
1.55 "Rollover Contribution" shall mean a contribution that meets
the requirements of Section 4.8(b) as modified by Section 4.8(c).
1.56 "Rollover Contribution Account" shall mean a separate Account
maintained for each Participant or Retirement Participant who has elected to
make a Rollover Contribution pursuant to Section 4.8, 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, Retirement Participant, Former Retirement
Participant or Beneficiary for whom the Account is maintained.
1.57 "Severance From Service Date" shall have the meaning set forth
in Section 3.3.
1.58 "Taxable Wage Base" for a Plan Year with respect to a
Retirement Participant shall mean the contribution and benefit base in effect
under Section 230 of the Social Security Act on the first day of the Plan Year
for which allocations of Employer Contributions are made. The Taxable Wage Base
level shall be deemed to be the full amount of such Taxable Wage Base even
though (a) a Retirement Participant's Compensation may include less than a full
year's Compensation because of either his participation commencing after the
first day of the Plan Year or his experiencing a Severance From Service Date
prior to the end of the Plan Year or (b) because a Retirement Participant's
Compensation for a Plan Year does not exceed the Taxable Wage Base.
1.59 "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
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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.
1.60 "Trust" shall mean The AMETEK Retirement and Savings Trust, as
amended from time to time.
1.61 "Trust Fund" shall mean the assets held by the Trustee for the
benefit of the Participants, Retirement Participants, Former Participants,
Former Retirement Participants and their Beneficiaries.
1.62 "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.
1.63 "Valuation Date" shall mean the last business day of each
month, and any other date as determined by the Committee that is
nondiscriminatory, that is closer to the event requiring valuation of a
Participant's or Retirement Participant's Accounts under the Plan.
1.64 "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 Prior Eligibility. Each Employee who, as of December 31, 2001,
was a Participant in the Plan, shall continue to be a Participant in the Plan as
of January 1, 2002, and for so long as he continues to meet the eligibility
requirements for being a Participant.
2.2 Eligibility for Other Employees.
(a) Participant. Any other Employee, who is not an
ineligible employee as described in Section 2.3(a), 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 and is on or after the date on which he first attains age
eighteen (18) (age twenty-one (21) prior to January 1, 2001). In order to make a
Deferral Election under Section 4.1, and become an active Participant in the
Plan, a Participant must signify his acceptance of the Plan in accordance with
Section 2.5. Any Employee who is an ineligible employee as described in Section
2.3(a), but who becomes an eligible employee and meets the requirements of the
previous sentence, shall become a Participant on the next Entry Date that is at
least thirty-one (31) days from his most recent date of hire. An Employee shall
remain a Participant as long as he continues to meet the requirements of this
Section 2.2(a).
(b) Retirement Participant. Any Employee hired on or
after January 1, 1997 or rehired on or after January 1, 1997 following a
Severance From Service Date, who (1) is not an ineligible employee as described
in Section 2.3(b) and (2) does not have an accrued benefit under any defined
benefit plan maintained by the Company or an Affiliate (including an accrued
benefit that has been forfeited upon the Employee's severance from service and
restored upon his reemployment), shall become a Retirement Participant in the
Plan as of the Entry Date that follows his date of hire by at least thirty-one
(31) days and is on or after the date on which he first attains age eighteen
(18). Any Employee who is an ineligible employee as described in Section 2.3(b),
but who becomes an eligible employee and meets the requirements of the previous
sentence, shall become a Retirement Participant on the next Entry Date that is
at least thirty-one (31) days from his most recent date of hire. An Employee
shall remain a Retirement Participant as long as he continues to meet the
requirements of this Section 2.2(b). A Retirement Participant shall also be
considered a Participant under the terms of the Plan.
2.3 Ineligible Employees.
(a) Participant. Notwithstanding Sections 2.1 or 2.2, 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, (ii) he is eligible to participate in the AMETEK 401(k) Plan for
Acquired Businesses, (iii) he is a Temporary Employee or Intern, or (iv) 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
2.2, on the later of the date specified in the
1
collective bargaining agreement or the next January 1st that is on or after the
date he completes the eligibility requirements set forth in Section 2.2.
(b) Retirement Participant. Notwithstanding Sections 2.1
and 2.2 above, an Employee shall not be eligible to be a Retirement 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, (ii) he is eligible to
participate in the AMETEK 401(k) Plan for Acquired Businesses, (iii) he is an
active participant in a defined benefit pension plan sponsored by Company or
Affiliate, (iv) he is a Temporary Employee or Intern, or (v) 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 2.2,
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 2.2.
2.4 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, Retirement Participants, Former
Participants, Former Retirement 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 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.
2.5 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 shall become an active 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 an active 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. Notwithstanding the foregoing provisions of this Section 2.5, an
Employee who is a Retirement Participant shall become an active Participant at
the time described in Section 2.2(b).
2
ARTICLE III
SERVICE
3.1 Year of Service. An Employee 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 during which he
completes at least one Hour of Service. 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. For any Employee of the
Process & Analytical Instruments Division of the Company who was a participant
in the AMETEK, Inc. Hourly Employees' Pension Plan and became a Retirement
Participant as of September 1, 1997, Year of Service shall mean, solely for
purposes of determining such Employee's Employer Retirement Contribution under
Section 4.3, Periods of Service beginning on September 1, 1997.
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
3
(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.
3.4 Absence of Less Than Twelve Months. If a Participant's or a
Retirement Participant's service as an Employee is severed pursuant to Section
3.3 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 or a Retirement Participant who incurs a One-Year Period of
Severance shall again become a Participant or a Retirement Participant on his
new Employment Commencement Date. For this purpose, the new Employment
Commencement Date shall be the date following the Participant's or a Retirement
Participant's reemployment on which he first performs an Hour of Service for the
Employer. Such Employee's Years of Service completed prior to his One Year
Period of Severance shall be taken into account to determine the vested
percentage of his Retirement Account, whether or not the Employee is again
considered a Retirement Participant.
4
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
ten percent (10%) 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), 4.7(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, 4.7, 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.
5
(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:
(i) if the Participant's Deferrals, together
with elective deferrals (as defined in Section 402(g) of the
Code) under any other plan or arrangement maintained by the
Company or an Affiliate, 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 Contributions 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 4.7(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
6
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)), together with elective
deferrals (as defined in Section 402(g) of the Code) under any other plan or
arrangement maintained by the Company or an Affiliate 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 33" percent (33"%) of the amount
contributed on behalf of such Participant pursuant to such Participant's
Deferral Election (excluding a Deferral Election made under Section 4.1(c)) that
does not exceed six percent (6%) of his Compensation for that payroll period. In
no event shall the amount contributed, pursuant to this Section 4.2(b), on
behalf of any Participant exceed $1,200 in a Plan Year. 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 4.7 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 4.7(b) or (c), the Participant shall forfeit such
Employer Matching Contributions (plus earnings thereon determined in the manner
described in Section 4.7(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 4.3 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).
4.3 Employer Contributions on Behalf of Retirement Participants.
The following contributions shall be made by the Employer, effective January 1,
1997, solely for the benefit of Retirement Participants, regardless of whether
the Employer has current or accumulated earnings or profits for the taxable year
ending with or within the Plan Year:
(a) Employer Retirement Contributions. For each Plan
Year, the Employer shall contribute on behalf of each Retirement Participant a
percentage of the Compensation earned during the portion of the Plan Year that
the Employee was a Retirement Participant based upon the table set forth below.
Contributions shall be made for each payroll period.
7
Total of Employee's Age Plus Percentage of Compensation Percentage of Compensation
Full Years of Service Up to Taxable Wage Base Exceeding Taxable Wage Base
--------------------- ----------------------- ---------------------------
Less than 50 3.00% 5.00%
50 or more, but less than 65 4.00% 6.00%
65 or more, but less than 75 5.00% 7.00%
75 or more 6.00% 8.00%
For purposes of this Section 4.3(a), a Retirement Participant's age and full
Years of Service shall be the age and full Years of Service, not rounded, of the
Retirement Participant on the first day of the Plan Year.
Employer Retirement Contributions forfeited under Section 6.1(b) shall be used
to reduce future Employer Retirement Contributions.
(b) Employer Incentive Retirement Contributions. If a
Retirement Participant has elected a Deferral Election (excluding a Deferral
Election made under Section 4.1 (c)) equal to or greater than 6 percent (6%) of
his Compensation during any payroll processing period, the Employer shall
contribute on behalf of such Retirement Participant for such payroll processing
period an amount equal to 1 percent (1%) of that Retirement Participant's
Compensation to such Participant's Retirement Account.
Employer Incentive Retirement Contributions forfeited under Section 6.1(b) shall
be used to reduce future Employer Incentive Retirement Contributions.
4.4 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 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,
8
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) Employer Retirement Contributions. The Employer shall
contribute to the Plan, on behalf of each Retirement Participant who returns
from Qualified Military Service, an amount equal to the Employer Retirement
Contributions, if any, that would have been required under Section 4.3(a) had
such Retirement Participant continued to be employed and received Compensation
during the period of Qualified Military Service.
(d) Employer Incentive Retirement Contributions. The
Employer Incentive Retirement Contribution, with respect to any additional
Deferral Elections, will equal the Employer Incentive Retirement Contribution
would have been required had such Deferral Election been made during the period
of Qualified Military Service.
(e) Inapplicability of Certain Limitations. If any
contributions are made by a Participant or the Employer in accordance with this
Section 4.4:
(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 4.5 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 4.4(e)(i)
with respect to the year to which the contribution relates (in
accordance with rules prescribed by the Secretary of the
Treasury).
4.5 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 Section 4.2 or 4.3 on behalf of a Participant if
such contributions would exceed the limitations of Section 5.5.
4.6 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 Section 4.2 or Section
4.3 on behalf of a Participant who is a Highly Compensated Employee that would
exceed the limitations of Section 4.7.
9
4.7 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
(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.
In accordance with Treas. Reg. section 1.401(k)-1(b)(4), an elective
contribution will be taken into account under the Average Deferral Percentage
test for a Plan Year only if (a) it relates to Compensation that either would
have been received by the Participant in the Plan Year (but for the deferral
election) or is attributable to services performed by the Participant in the
Plan Year and would have been received by the Participant within 2-1/2 months
after the close of the Plan Year (but for the deferral election); and (b) it is
allocated to the Participant as of a date within that Plan Year, that is, if the
allocation is not contingent on participation or performance of services after
such date and the elective contribution is paid to the Trust Fund no later than
12 months after the Plan Year to which the contribution relates.
(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.
10
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.
In accordance with Treas. Reg. section 1.401(m)-1(b)(1) and (4), in calculating
the Average Contribution Percentage test for a Plan Year, Employer Matching
Contributions is taken into account for a Plan Year only if it is (a) made on
account of the Participant's elective contributions for the Plan Year, (b)
allocated to the Participant's account as of a date within that year, (c) paid
to the Trust Fund by the end of the 12th month following the close of that year.
(c) Aggregate Limit. For any Plan Year beginning before
January 1, 2002 in which both the limitations in Sections 4.7(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 Subsections 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
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 4.7(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 (1) 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, (2) Employees
whose eligibility to make elective contributions has been suspended because of
an election (other than certain one-time elections) not to participate, a
distribution, or a loan, and (3) Employees who cannot defer because of the
section 415 limits on annual additions. "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. In accordance with Treas. Reg. section
1.401(k)-
11
1(a)(4)(iv), the availability of elective contributions does not discriminate in
favor of Highly Compensated Employees.
(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
Deferrals 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 Deferrals of the Highly
Compensated Employee or Employees with the greatest
dollar amount of Deferrals 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 Deferrals exceeds the
dollar amount of the Highly Compensated Employee with
the next highest dollar amount of Deferrals, or (2)
the amount of the excess dollar amount determined
under (B);
(D) repeat this reduction process until
the Deferrals of Highly Compensated Employees have
been reduced by an amount equal to the excess dollar
amount determined under (B); and
(E) direct the Trustee to return the
excess Deferrals, as adjusted in accordance with
Subsection (g), to the individuals from whose
Deferral Account the excess Deferrals 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 Deferrals of any Highly Compensated
Employee that must be reduced pursuant to this
Section 4.7(e) shall be reduced (i) first, by
distributing Deferrals not taken into account in
determining Employer Matching Contributions under
Section 4.2(b) and (ii) then, by distributing
Deferrals not described in (i), within 12 months of
the close of the Plan Year with respect to which the
distribution applies. The provisions of
12
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 Deferrals as Deferrals
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 Deferrals recharacterized as Deferrals
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 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
13
(F) direct the Trustee to return the
excess Employer Matching Contributions, as adjusted
in accordance with Subsection (g), to the individuals
from 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 4.7(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 4.7(a) and 4.7(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
(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.
14
(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.
(i) Compensation - Defined. For purposes of this Section
4.7, Compensation shall mean "compensation" as such term is defined in Treas.
Reg. Section 1.415-2(d)(11)(i), plus contributions made at the Participant's
election to employee benefit plans but excluded from the Participant'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 a Participant's earnings on a pre-tax basis for group
health care coverage because the Participant 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 Participant's Compensation, so long as the Employer
does not otherwise request or collect information regarding the Participant's
other health coverage as part of the enrollment process for the Employer's
health care plan.
4.8 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 a Retirement 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 2.2, and who, for purposes of his Rollover
Contribution only, shall be considered a Participant or a Retirement 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 or Retirement 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 4.8 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 or Retirement 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 or Retirement Participant is not a valid Rollover
Contribution, the Committee shall return to the Participant or the Retirement
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 or a Retirement Participant under a retirement
plan qualified under Section 401(a) of the Code;
15
(ii) it represents the balance to the credit of
the Participant or Retirement 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 4.8, but subject to subsection (c) below, "Eligible
Rollover Distribution" and "Eligible Retirement Plan" shall have the meanings
set forth in Section 6.4(f).
(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).
4.9 Non-Forfeitability of Certain Accounts. A Participant's rights
to his Catch-up Contribution Account, his Deferral Account, his Rollover
Contribution Account, if any, and, effective January 1, 2001, his Matching
Contribution Account shall, at all times, be 100 percent (100%) nonforfeitable.
The forfeitability of a Retirement Participant's rights to his Retirement
Account shall be determined in accordance with the provisions of Section 6.1(b).
16
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, a Retirement Account and a Rollover Contribution Account, if
applicable, in the name of each Participant or Retirement Participant.
5.2 Valuation of Accounts. As of each Valuation Date, the
Committee shall:
(a) First, add to each of the Participant's or Retirement
Participant's Accounts the Catch-up Contributions, Deferrals and Employer
Contributions made during the preceding month that are then allocable to each
such Account and subtract all distributions made to Participants or Retirement
Participants since the last preceding Valuation Date;
(b) Next, allocate to the Accounts of each Participant,
Retirement Participant, Former Participant or Former Retirement Participant who
has elected to invest in any Investment Fund, other than in an Insurance
Contract each item of income, expense, gain and loss accruing to such Fund among
the Accounts of Participants, Retirement Participants, Former Participant or
Former Retirement Participant 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. If any
portion of a Participant's, Retirement Participant's, Former Participant or
Former Retirement Participant's Account is invested in an Insurance Contract,
any item of income, expense, gain or loss attributable to such Insurance
Contract shall be allocated to his Account or Accounts that is so invested.
(c) With respect to a Participant or Retirement
Participant whose employment with the Employer terminates for any reason during
a month, the Committee may (A) value such Participant's or Retirement
Participant's Accounts, in accordance with the provisions of this Section 5.2,
as of the last day of the month in which such termination occurs, and (B) value
the portion of the Participant's or Retirement 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 Contributions Considered Made on Last Day of Plan
Year. For purposes of this Article V, the Employer Contributions made pursuant
to Section 4.2(b), 4.3(a) or 4.3(b) for any Plan Year will be considered to have
been made on the last day of that Plan Year. Employer Contributions for any Plan
Year will be made no later than the last date on which amounts so paid may be
deducted for federal income tax purposes for the taxable year of the Employer in
which the Plan Year ends. Each contribution made by the Employer pursuant to the
provisions of Article IV is made expressly contingent on its deductibility for
federal income tax purposes for the fiscal year with respect to which such
contribution is made, and no such contribution will be made for any year to the
extent it would exceed the deductible limit for such year as set forth in
section 404 of the Code.
5.4 Valuation. The Trustee shall have prepared, on a daily basis,
a valuation of each Investment Fund and each Participant's, Retirement
Participant's, Former Participant's or
17
Former Retirement Participant's Accounts, the same to be available to each
Participant, Retirement Participant, Former Participant or Former Retirement
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, Retirement Participant, Former
Participant or Former Retirement 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 or Retirement Participant 's
Accounts for any Limitation Year may not exceed an amount equal to the lesser
of:
(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 or Retirement
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 or Retirement
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
18
(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 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
or Retirement Participant 's Annual Addition exceeds the amounts specified above
as a result of the reallocation of forfeitures, a reasonable error in estimating
the Participant's Compensation, a reasonable error in determining the amount of
elective deferrals (within the meaning of Section 402(g) of the Code) that may
be made under the limitations of Section 415 of the Code, or such other
circumstances as permitted by law:
19
(i) The Plan shall distribute Deferrals to the
Participant or Retirement 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 and Employer
Incentive Retirement Contributions based on the Deferrals
above shall be forfeited in the Plan Year in which the
Deferrals are distributed. Employer Matching Contributions and
Employer Incentive Retirement Contributions are based on
distributed Deferrals to the extent that Employer Matching
Contributions and Employer Incentive Retirement Contributions
would have been reduced if the Participant or Retirement
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 4.7 of this Plan.
5.6 Allocations Do Not Create Rights. No Participant or Retirement
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.
20
ARTICLE VI
PAYMENT OF BENEFITS
6.1 Retirement, Death, Disability or Termination of Employment.
(a) Retirement, Death or Disability. A Participant or
Retirement Participant shall be 100 percent (100%) vested in his Accounts upon
reaching Normal Retirement Age, death, or Disability while employed by the
Employer or an Affiliate. If any Participant or Retirement Participant retires
(within the meaning of the preceding sentence) or dies, an amount equal to the
value of his Accounts shall be payable to the Participant, Former Participant,
Retirement Participant, Former Retirement Participant or his Beneficiary, as the
case may be, in accordance with the provisions of Section 6.4.
(b) Termination of Employment (Other than Retirement,
Death or Disability).
(i) Upon a Participant's termination of
employment with the Employer, either voluntarily or
involuntarily, prior to his Normal Retirement Age, death or
Disability, he shall be entitled to 100 percent (100%) of the
value of his Catch-up Contribution Account, his Deferral
Account, his Employer Matching Contribution Account, and his
Rollover Contribution Account, if any.
(ii) A Retirement Participant shall be entitled
to 100 percent (100%) of the value of his Retirement Account
if, as of the date of his termination of employment, he has
completed five (5) Years of Service (effective January 1,
2002, three (3) Years of Service for Employer Incentive
Retirement Contributions made on or after January 1, 2002 and,
effective July 1, 2002, three (3) Years of Service for
Employer Incentive Retirement Contributions made prior to
January 1, 2002). If such Retirement Participant has not
completed five (5) Years of Service (or 3 Years of Service, if
applicable), he shall forfeit the entire applicable amount
outstanding to his credit in his Retirement Account as of the
earlier of (i) the date on which he receives a distribution of
his Retirement Account or (ii) the date on which he incurs
five consecutive One Year Periods of Severance.
(iii) Employer Retirement Contributions or
Employer Incentive Retirement Contributions forfeited in any
Plan Year pursuant to this Section 6.1(b) shall be applied to
reduce future Employer Retirement Contributions or Employer
Incentive Retirement Contributions, respectively, made
pursuant to Section 4.2(b) or 4.3(b) for such Plan Year.
(c) Separation from Service. Notwithstanding the
foregoing, prior to January 1, 2002, in the event a Participant is affected by a
sale or other disposition involving an Employer, 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
21
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).
(d) Restoration of Benefits. Any Employer Matching
Contributions forfeited prior to January 1, 2001 and any amounts forfeited under
subsection 6.1(b)(ii) will be restored if the Former Participant or Former
Retirement Participant is reemployed with the Employer or an Affiliate before
incurring five (5) consecutive One Year Periods of Severance. Such restored
amounts shall be allocated to the Participant's Employer Matching Contribution
Account or Retirement Participant's Retirement Account and his vested right to
the amount so contributed shall be determined in accordance with Section 6.1(b)
based upon his Years of Service completed both prior to and subsequent to his
Period of Severance.
6.2 Attainment of 59 1/2. 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.
6.3 Beneficiary Designation. If a Participant, Retirement
Participant, Former Participant or Former Retirement Participant has a spouse,
his spouse shall be his Beneficiary, unless the Participant, Retirement
Participant, Former Participant or Former Retirement 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, Retirement Participant, Former Participant, or
Former Retirement Participant does not have a spouse, or if the spouse consents,
the Participant, Retirement Participant, Former Participant or Former Retirement
Participant shall have the right to designate someone other than his spouse as
his Beneficiary. In all events, the Participant, Retirement Participant, Former
Participant or Former Retirement 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, Retirement Participant, Former Participant or Former
Retirement 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, Retirement Participant,
Former Participant or Former Retirement 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
22
designated, or if the designated Beneficiaries predecease the Participant,
Retirement Participant, Former Participant or Former Retirement Participant,
then the amount, if any, payable upon the Participant's Retirement
Participant's, Former Participant's or Former Retirement Participant's death
shall be paid:
(a) to the Participant's, Retirement Participant's,
Former Participant's or Former Retirement Participant's surviving spouse; or, if
there is none,
(b) to the Participant's, the Retirement Participant's,
Former Participant's or Former Retirement Participant's children and issue of
deceased children, in equal shares, per stirpes; or if there are none,
(c) to the Participant's, the Retirement Participant's
the Former Participant's or Former Retirement 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,
the Retirement Participant's, the Former Participant's or the Former Retirement
Participant's estate.
6.4 Form of Payment.
(a) Normal Form of Payment. A Participant or a Retirement
Participant who has a termination of employment may elect, in writing, in a form
satisfactory to the Committee, to receive his benefit under the Plan in one lump
sum payment.
(b) Normal or Disability Retirement. A Participant or a
Retirement Participant who has a termination of employment on or after his
Normal Retirement Age or on account of a Disability shall, as an alternative to
the lump sum form of payment, be entitled to receive his benefit under the Plan
by payment in equal monthly, quarterly or semi-annual installments over a period
not in excess of fifteen (15) years in which event the remaining balance held in
the Participant's or Retirement Participant's Accounts shall be held and
invested in accordance with Section 9.2 pursuant to the instructions of the
Participant or Retirement Participant. Notwithstanding the foregoing,
installment payments shall not extend beyond the life expectancy of the
Participant or Retirement Participant. Payment shall be made not less often than
semi-annually to such Participant or Retirement Participant of the installments
as they fall due, plus such earnings as may have been credited on the amount so
deposited or invested less an annual administrative fee in an amount determined
by the Trustee. In the event of the death of the Participant or the Retirement
Participant prior to completion of the designated number of payments, such
payments shall be paid to his Beneficiary until the designated number of
payments has been completed.
(c) Time of Distribution. Any distribution hereunder
shall be made as soon as administratively practicable after the Participant or
Retirement Participant returns a completed benefit distribution form to the Plan
Administrator; provided, however, that a Participant or Retirement Participant's
Accounts must be distributed no later than his Mandatory Distribution Date as
determined under Section 6.5. Until benefits are distributed, a Participant's or
a Retirement Participant's Accounts shall be held and invested in accordance
with Section 9.2 pursuant to the instructions of the Participant or Retirement
Participant.
23
(d) Death of a Participant or Retirement Participant. If
a Participant, Former Participant, Retirement Participant or Former Retirement
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. Benefits shall be paid in a lump sum.
(e) Amount and Form of Payment. The present value of the
payments to the Participant or Retirement Participant pursuant to this Section
6.5 must be greater than 50 percent (50%) of the present value of the total
payments to be made to the Participant or Retirement Participant and his
Beneficiary. Any distribution made pursuant to this Plan shall be made in cash
except that if, as of the date the Participant or Retirement Participant
terminates his employment, part of his Accounts is invested in the Common Stock
Fund or in shares of any other Investment Fund, and if the Participant's,
Retirement Participant's, Former Participant's or Former Retirement
Participant's benefit is to be paid in the form of a lump sum pursuant to this
Section 6.4 then the Participant, Retirement 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
Fund; provided, however, that cash will be paid in lieu of any fractional shares
allocated to the Participant's, or Retirement Participant's, Retirement
Participant's, Former Participant's or Former Retirement Participant's Accounts.
(f) 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 or Retirement Participant in a Direct Rollover.
For purposes of Subsection (f) 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) 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) 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) 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 spouse of a
Participant and (ii) with respect to a distribution (or
portion of a distribution) consisting of after-tax employee
contributions,
24
"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. The form and timing of all
distributions under the Plan shall be in accordance with section 401(a)(9) of
the Code and regulations thereunder. Notwithstanding the foregoing, the payment
of benefits to each Participant or Former Participant who is a 5% owner of the
Employer (as determined under Section 416(i) of the Code) shall commence not
later than the April 1st following the calendar year in which he attained age 70
1/2 (his "Mandatory Distribution Date"). Such payment shall be the required
minimum distribution described under Section 401(a)(9) of the Code and the
regulations thereunder. 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. 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.
Notwithstanding the foregoing, a Retirement Participant who attains age
70 1/2 and who is not a five-percent (5%) owner shall be permitted to elect
distribution of his Employer Retirement Contributions or Employer Incentive
Retirement Contributions in a lump sum prior to the calendar year in which he
has a termination of employment.
(b) Maximum Duration of Death Benefits. If a Participant,
Retirement Participant, Former Participant or Former Retirement Participant dies
before his entire interest is distributed to him or if a distribution has
commenced to his surviving spouse and such surviving spouse dies but before the
entire remaining interest is distributed to such surviving spouse, then if any
benefit remains payable under this Plan with respect to such deceased
Participant, Retirement Participant, Former Participant or Former Retirement
Participant, such remaining benefit shall be distributed to his Beneficiary:
25
(i) within five years after the death of the
Participant, Retirement Participant, Former Participant or
Former Retirement Participant (or the death of his surviving
spouse, as the case may be); or
(ii) over the life of such Beneficiary, or over a
period no longer than the life expectancy of such Beneficiary
(determined no more frequently than once during a Plan Year,
if the Beneficiary is the surviving spouse, or, if not,
calculated as of the date payments begin); provided, that if
the Beneficiary is the surviving spouse of the deceased
Participant, Retirement Participant, Former Participant or
Former Retirement Participant, such payments begin on or
before the date on which the Participant, Retirement
Participant, Former Participant or Former Retirement
Participant would have attained age 70 1/2if he had lived;
and, provided further, that if the Beneficiary is not the
surviving spouse, such payments begin no later than within one
(1) year of the Participant's, Retirement Participant's,
Former Participant's or Former Retirement Participant's death,
or the death of the surviving spouse, if the surviving spouse
dies before benefit payments begin, as the case may be.
The provisions of this Subsection (b) shall not apply if distribution
of the Participant's, Retirement Participant's, Former Participant's or Former
Retirement Participant's interest had commenced prior to the death of the
Participant, Retirement Participant, the Former Participant or Former Retirement
Participant, or his spouse, as the case may be, in accordance with a form of
benefit payment that satisfies Subsection (a)(iii) and payment of such interest
continues to be made pursuant thereto.
Notwithstanding anything in the Plan to the contrary, the form and
timing of all distributions under the Plan will be in accordance with Treasury
regulations under section 401(a)(9) of the Code, including the incidental death
benefit requirements of section 401(a)(9)(G) of the Code. 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 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, Retirement Participant, Former Participant or Former Retirement
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);
26
(ii) the tenth anniversary of the year in which
the Participant or Retirement Participant began to participate
in the Plan; or
(iii) the termination of the Participant's or
Retirement Participant's service with the Employer or an
Affiliate; provided, however, that the Participant, Retirement
Participant, Former Participant or Former Retirement
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, Retirement
Participant's, Former Participant's or Former Retirement 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 ($3,500 prior to January 1, 1999), 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, Retirement
Participant, Former Participant or Former Retirement Participant, and any such
distribution to the Participant, Retirement Participant, Former Participant,
Former Retirement Participant or his Beneficiary, as the case may be, shall be
in complete discharge of the Plan's obligation with respect to such benefit. A
Participant who terminated employment prior to being entitled to a
nonforfeitable interest in any of his Accounts (including his Catch-up
Contribution Account and his Deferral Account), shall be deemed to have received
the entire distribution of such Accounts as of his termination of employment.
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, Retirement Participant, Former Participant or
Former Retirement Participant is a Qualified Domestic Relations Order, then the
amount of benefits otherwise payable under this Plan to such Participant,
Retirement Participant, Former Participant or Former Retirement 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.
27
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, not including any balance in
his Retirement Account, in accordance with the following procedures, terms and
conditions:
(i) In order to borrow any portion of his
Accounts, but not including any balance in his Retirement
Account, 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, but not
including any balance in his Retirement Account, 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 non-forfeitable value of the
Participant's Accounts, but not including any balance in his
Retirement Account. 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, but not
28
including any balance in his Retirement Account, 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.
(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) For all loans made on or after January 1,
1999, 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,
other than an Insurance Contract 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.
29
(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.
(e) Maximum Term of Loans. The Committee may not permit a
Participant to borrow any part of the value of the Participant's Accounts, but
not including any balance in his Retirement Account, 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, but not including
any balance in his Retirement Account, 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 (i) first, to repay any amount that may have been borrowed under the
terms of any Insurance Contracts allocated to the Participants Accounts if such
loan was originally charged against such Insurance Contracts and (ii) second, 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
Catch-up Contribution Account, his Deferral Account
30
and his Rollover 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 as of December 31, 1988 plus the balance of his
Rollover Contribution Account, the amount of the Participant's Deferrals made
after December 31, 1988 and the amount of the Participant's Catch-up
Contributions (reduced by any prior distributions of such amounts). 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:
(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
31
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.
32
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,
33
including reasonable fees and expenses of custodial agents, attorneys,
accountants and other advisers, shall be paid from the Trust Fund; 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, Retirement 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,
Retirement Participants, Former Participants, Former Retirement Participants,
spouses, Beneficiaries, Alternate Payees and their respective heirs,
distributees, executors, administrators, or assignees; subject, however, to the
right of Participants, Former Participants, Retirement Participants, Former
Retirement 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,
Retirement Participant, Former Participant or Former Retirement 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
34
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:
(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 to 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
35
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.
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 or a Retirement 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, Retirement Participants, Former Retirement
36
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,
Retirement Participants, Former Participants, Former Retirement 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.
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.
37
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, Retirement
Participant, Former Participant or Former Retirement 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%). In the event that a Participant or
Retirement Participant elected prior to July 1, 1987 to invest part of his
contributions in an Insurance Contract, the amount to be invested in accordance
with the preceding sentence shall first be reduced by the dollar amount of his
contributions to the Insurance Contract. Notwithstanding the foregoing, a
Participant or Retirement Participant may not elect to have more than 25 percent
(25%) of any future contributions made to the Plan on his behalf, which are not
invested in Insurance Contracts, invested in the Common Stock Fund. At the time
the Participant or Retirement 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.
9.4 Changes in Investment Elections. A Participant, Retirement
Participant, Former Participant or Former Retirement Participant who has elected
to have all or part of his Accounts invested in any vehicle maintained in the
Investment Fund, other than an Insurance Contract, 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 that are not invested in an Insurance Contract, 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 or Retirement Participant may not
elect to have amounts transferred from any Investment Fund to the AMETEK Common
Stock Fund in an amount that would cause
38
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 (except for those amounts that are invested in an Insurance Contract.) A
Participant or Retirement Participant may elect to change the portion of each
Account invested in an Insurance Contract and have such amounts invested in
either of the investment vehicles maintained in the Investment Fund, within the
limits specified in this Section 9.4, only at the times and to the extent
permitted in the Insurance Contract. If a Participant does not elect to have all
or part of his Accounts invested in an Insurance Contract at the time he becomes
a Participant in the Plan, he may subsequently elect to have all or part of his
Accounts invested in an Insurance Contract, but only if the insured party
satisfies the insurance carrier's requirements for coverage. 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. Notwithstanding any other provision of the Plan, a
Participant may not make an initial election on or after July 1, 1987 to have
any part of his Accounts invested in an Insurance Contract. If any Employee
makes a Rollover Contribution to the Plan of the distribution of his benefit
under the AMETEK, Inc. Employee Stock Ownership Plan in connection with the
termination and liquidation thereof, then, notwithstanding any other provision
of this Section 9.4, the 25 percent (25%) limitations applicable to
contributions and allocations of amounts to be invested in the Common Stock Fund
shall be waived to such extent as may be necessary to enable the entire amount
of any such Rollover Contribution to be invested in, and remain allocable to,
the Common Stock Fund.
9.5 Insurance Contract. At the time he elects to participate in
the Plan, the Participant may elect to have all or part of each of his Accounts
invested in one or more Insurance Contracts, including, but not limited to,
universal life insurance policies issued by a licensed insurance carrier. The
premiums for such Insurance Contracts shall be paid from the amounts then
allocated to the Participant's Accounts, as designated by the Participant, from
future contributions made on behalf of the Participant and from any amounts paid
with respect to the Insurance Contract. In the event that such amounts are
insufficient to pay any premiums due on the Insurance Contract, the Committee
shall notify the Participant and the Insurance Contract shall be surrendered to
the insurance company and the proceeds shall be invested in either the Fixed
Income Fund, the Equity Fund or the Common Stock Fund as the Participant so
elects within the limitations specified in this Section 9.5, after being
notified by the Committee that the Insurance Contract has been surrendered.
Alternatively, the Participant may elect to have the Trustee pay the premiums on
such Insurance Contract from the portion of the Participant's Accounts invested
in the Fixed Income Fund or the Equity Fund or the Common Stock Fund.
Notwithstanding the preceding, in the case of each Participant, (i) the
aggregate premiums paid for term life insurance under any Insurance Contract may
not exceed 25 percent (25%), nor may the aggregate premiums paid for whole life
insurance under any Insurance Contract exceed 50 percent (50%) of the aggregate
contributions allocated to the Participant's Catch-up Contribution Account, his
Deferral Account and his Employer Matching Contribution Account plus the amounts
allocated to his Rollover Contribution Account, if any, at any particular time;
and (ii) the Trustee, either on or before the Participant's termination of
employment with the Employer, shall either convert the entire value of an
Insurance Contract into cash or an annuity or distribute the Insurance Contract
to the Participant, provided such contract is nontransferable.
39
9.6 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 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, Former Participant, Retirement Participant or Former Retirement
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, Former Participant, Retirement Participant or Former Retirement
Participant all proxy materials and a proxy form of ballot on which the
Participant, Former Participant, Retirement Participant or Former Retirement
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, Former Participant's, Retirement Participant's
or Former Retirement Participant's Accounts shall be combined with other
fractional shares of other Participants, Former Participants, Retirement
Participants or Former Retirement Participants and shall be voted, to the extent
possible, to reflect the direction of Participants, Former Participants,
Retirement Participants or Former Retirement 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,
Former Participant, Retirement Participant or Former Retirement Participant.
9.7 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 9.7 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, Retirement Participants, Former Participants, Former Retirement
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, Retirement Participant, Former Retirement 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, Retirement
Participant, Former Participant or Former Retirement 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, Retirement Participant,
Former Participant, Former Retirement 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 or Retirement 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 or Retirement Participants affected by the
partial termination. Except as otherwise provided by ERISA, there shall first be
set aside amounts due to Former
41
Participants or Former Retirement Participants that were not previously paid
pursuant to the provisions of Article VI, and the amount to which any such
Former Participants or Former Retirement 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 or Retirement 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 be
paid to each Participant, Retirement 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' or
Retirement 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, Retirement
Participants, Former Participants or Former Retirement 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 or Retirement 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 or Retirement Participant 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 or
Retirement 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
42
date the amendment is adopted, or (iii) the date the amendment becomes
effective. Such Participant or Retirement 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, Retirement Participant, Former
Participant, Former Retirement 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.
43
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, including any frozen or terminated plan that was
maintained during the five-year period (effective January 1, 2002, the one-year
period) ending on the Determination Date, 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;
44
(iii) a Five Percent Owner;
(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) "Key Employee Ratio" shall mean the ratio (expressed
as a percentage) for any Plan Year, calculated as of the Determination Date with
respect to such Plan Year, determined by dividing the amount described in
paragraph (i) hereof by the amount described in paragraph (ii) hereof, after
deduction from both such amounts of the amount described in paragraph (iii)
hereof.
(i) The amount described in this paragraph (i)
is the sum of (A) the aggregate of the present value of all
accrued benefits of Key Employees under all qualified defined
benefit plans included in the Aggregation Group, (B) the
aggregate of the balances in all of the accounts standing to
the credit of Key Employees under all qualified defined
contribution plans included in the Aggregation Group, and (C)
either (i) prior to January 1, 2002, the aggregate amount
distributed from all plans in such Aggregation Group to or on
behalf of any Key Employee during the period of five (5) Plan
Years ending on the Determination Date or (ii) effective
January 1, 2002, the sum of the amount of any in-service
distributions during the period of five (5) Plan Years ending
on the Determination Date, and the amount of any other
distributions during the one-year period ending on the
Determination Date, to or on behalf of any Key Employee from
all plans in the Aggregation Group.
(ii) The amount described in this paragraph (ii)
is the sum of (A) the aggregate of the present value of all
accrued benefits of all Participants under all qualified
defined benefit plans included in the Aggregation Group, (B)
the aggregate of the balances in all of the accounts standing
to the credit of all Participants under all qualified defined
contribution plans included in the Aggregation Group, and (C)
either (i) prior to January 1, 2002, the aggregate amount
distributed from all plans in such Aggregation Group to or on
behalf of any Participant during the period of five (5) Plan
Years ending on the Determination Date or (ii) effective
January 1, 2002, the sum of the amount of any in-service
distributions during the period of five (5) Plan Years ending
on the Determination Date, and the amount of any other
distributions during the one-year period ending on the
Determination Date, to or on behalf of any Participant from
all plans in the Aggregation Group.
(iii) The amount described in this paragraph (iii)
is the sum of (A) all rollover contributions (or similar
transfers) to plans included in the Aggregation Group
initiated by an Employee from a plan sponsored by an employer
that is not the Employer or an Affiliate, (B) any amount that
would have been included under paragraph (1) or (2) hereof
with respect to any person who has not rendered service to any
Employer at any time during the five-year-period (or,
45
effective January 1, 2002, the one-year period) ending on the
Determination Date, and (C) any amount that is included in
paragraph (2) hereof for, on behalf of, or on account of, a
person who is a Non-Key Employee as to the Plan Year of
reference but who was a Key Employee as to any earlier Plan
Year.
(iv) the aggregate of the present value of all
accrued benefits under all qualified defined benefit plans
included in the Aggregation Group is determined as of the most
recent Valuation Date that falls within or ends with the
12-month period ending on the Determination Date except as
provided in Section 416 of the Code and the regulations
thereunder for the first and second plan years of a defined
benefit plan.
(v) the aggregate of the balances in all of the
accounts under all qualified defined contribution plans
included in the Aggregation Group is determined as of the most
recent Valuation Date occurring within a 12-month period
ending on the Determination Date.
The present value of accrued benefits under any defined benefit plan
will be determined under the method used for accrual purposes for all plans
maintained by the Employer and all Affiliated Companies if a single method is
used by all such plans, or otherwise, the slowest accrual method permitted under
section 411(b)(1)(C) of the Code.
(f) "Non-Key Employee" shall mean each individual who is
an employee of the Company or an Affiliate but who is not a Key Employee.
(g) "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.
(h) "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).
46
(i) "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 (j).
(j) "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 Key Employee Ratio, determined by substituting the
"Plan" for the "Aggregation Group" each place it appears in
Section 11.1(e), exceeds sixty percent (60%), or
(ii) The Plan is part of an Aggregation Group,
and the Key Employee Ratio of such Aggregation Group exceeds
sixty percent (60%).
(k) "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 (k), 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.
(l) "Total Compensation" shall mean the Employee's
'compensation' as defined in Subsection 5.5(f).
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 employee acceptance
requirements of Section 2.5) 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
(b) a percentage that is equal to the highest percentage
of Total Compensation contributed by the Employer on behalf of any Key Employee
for such Plan Year (including amounts allocated to the Deferral Account of such
Key Employee under Section 4.1(c)).
For the purposes of determining whether or not the provisions of this
Section have been satisfied, (a) the minimum contribution allocated to Non-Key
Employees for the Plan Year shall be determined without regard to elective
deferrals under all plans in the Aggregation Group, (b) the highest percentage
of Total Compensation contributed by the Employer on behalf of any Key Employee
for the Plan Year shall be determined by including elective deferrals under all
plans in the Aggregation Group, (c) contributions or benefits under chapter 2 of
the Code (relating to tax on self-employment income), chapter 21 of the Code
(relating to Federal Insurance Contributions Act), title II of the Social
Security Act, or any other Federal or state law are disregarded; (d) all defined
contribution plans in the Aggregation Group shall be treated as
47
a single plan; and (e) employer matching contributions made with respect to
periods beginning before January 1, 2002 shall be disregarded.
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.
48
ARTICLE XII
MISCELLANEOUS
12.1 No Rights Implied. Nothing herein contained shall be deemed to
give any Participant, Retirement Participant, Former Participant, Former
Retirement 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, Retirement Participant, Former Participant, Former Retirement
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, Retirement Participant, Former
Participant, Former Retirement 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, 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,
Retirement Participant, Former Participant, Former Retirement 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, Retirement Participants. Former Participants,
Former Retirement 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, Retirement Participants, Former Participants, Former
Retirement 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.
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12.7 Incapacity. In the event that the Committee finds that any
Participant, Retirement Participant, Former Participant, Former Retirement
Participant or Beneficiary is unable to care for his affairs due to illness or
accident, any payments due to such Participant, Retirement Participant, Former
Participant, Former Retirement 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,
Retirement Participant, Former Participant, Former Retirement 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 10th day of December,
2003.
AMETEK, Inc.
By: /s/ John J. Molinelli
----------------------------
Attest:
/s/ Kathryn E. Londra
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