EXHIBIT 99a2
MASTERBRAND INDUSTRIES, INC.
HOURLY EMPLOYEE SAVINGS PLAN
(As Amended and Restated
Effective as of January 1, 1996)
TABLE OF CONTENTS
ARTICLE DESCRIPTION
I DEFINITIONS
II PARTICIPATION
2.01 Eligibility
2.02 Change in Status Within Participating Employer
2.03 Transfers From Non-Participating Related Employers
2.04 Reemployment
III CONTRIBUTIONS
3.01 Tax Deferred Contributions and Supplemental Contributions
3.02 Company Matching Contributions
3.03 Rollover Contributions
3.04 Limitation on Annual Amount of Tax Deferred Contributions
3.05 Actual Deferral Percentage Tests
3.06 Actual Contribution Percentage Tests
3.07 Alternate Percentage Test
3.08 Special Company Contributions
IV INVESTMENT PROVISIONS
4.01 Investment Funds
4.02 Investment Fund Elections
4.03 Administration of American Stock Fund
4.04 Investment of Value Equity Fund
4.05 Investment of Large-Cap Growth Equity Fund
4.06 Investment of Small-Cap Growth Equity Fund
4.07 Investment of International Equity Fund
4.08 Investment of S&P 500 Index Fund
4.09 Investment of Growth-Oriented Diversified Fund
4.10 Investment of Value-Oriented Diversified Fund
4.11 Investment of Corporate/Government Bond Fund
4.12 Investment of Government Securities Fund
4.13 Investment of Short-Term Investment Fund
4.14 Voting of Shares in American Stock Fund
4.15 Tendering of Shares in American Stock Fund
4.16 Exercise of Certain Rights Held in American Stock Fund
4.17 Valuation of Investment Funds
V ACCOUNTS
5.01 Participants' Accounts
5.02 Allocation of Earnings and Losses to Accounts
5.03 Allocation of Contributions to Accounts
5.04 Annual Additions Limitation
5.05 Combined Maximum Limitations
5.06 Limitation of Annual Compensation
VI VESTING AND FORFEITURES
6.01 Participant Contributions
6.02 Company Contributions
6.03 Vesting in Prior Plan
6.04 Amendments to Vesting Schedule
6.05 Forfeitures
6.06 Reinstatement of Account Balances
VII DISTRIBUTIONS
7.01 Form of Payment
7.02 Time of Payment
7.03 Certain Retroactive Payments
7.04 Designation of Beneficiary
7.05 Payment in Event of Legal Disability
7.06 Missing Distributees
7.07 Information Required of Distributees
7.08 Direct Rollover Provision
VIII IN-SERVICE WITHDRAWALS
8.01 Hardship Withdrawals
8.02 Withdrawals Upon Attainment of Age 59-1/2
IX LOANS
9.01 Availability
9.02 Effect on Account Balances and Investment Funds
9.03 Amount
9.04 Term of Loan
9.05 Promissory Note
9.06 Repayment
9.07 Reduction of Account Balance
X ADMINISTRATION
10.01 Fiduciaries
10.02 Claims Procedure
10.03 ERISA Compliance
10.04 Fiduciary Powers
10.05 Administrative Rules
10.06 Committee Procedures
10.07 Plan Expenses
XI AMENDMENT AND TERMINATION
11.01 Reserved Powers
11.02 Plan Termination
11.03 Plan Merger
11.04 Successor Employer
XII MANAGEMENT OF TRUSTS
12.01 Funds in Trusts
12.02 Trustee and Trust Agreement
12.03 Investment Managers
12.04 Conclusiveness of Reports
XIII MISCELLANEOUS
13.01 Non-Alienation of Benefits
13.02 Action by Participating Employers
13.03 Exclusive Benefit
13.04 Gender and Number
13.05 Right to Discharge
13.06 Absence of Guaranty
13.07 Headings
13.08 Governing Law
XIV TOP-HEAVY RULES
14.01 Top-Heavy Determination
14.02 Minimum Vesting
14.03 Minimum Contributions
14.04 Special Annual Additions Limitation
14.05 Provisions Applicable if Plan Ceases to be Top-Heavy
MASTERBRAND INDUSTRIES, INC.
HOURLY EMPLOYEE SAVINGS PLAN
The MasterBrand Industries, Inc. Hourly Employee Savings Plan (the "Plan")
is established as of the Effective Date for eligible Employees of Moen
Incorporated, Waterloo Industries, Inc., Aristokraft, Inc. and Master Lock
Company on and after the Effective Date. The Plan constitutes a restatement and
merger as of the Effective Date of the Moen Incorporated Employee Savings Plan
and the Waterloo Industries, Inc. Employee Savings Plan for Production and
Maintenance Employees and constitutes a continuation of each such plan (each a
"Prior Plan").
ARTICLE I
DEFINITIONS
1.01. The following words and phrases shall have the respective meanings
stated below unless a different meaning is plainly required by the context:
(a) "Account(s)" means the Tax Deferred Account, Supplemental Account,
Company Matching Account and Rollover Account so designated and provided for in
Section 5.01.
(b) "Alternate Payee" means any spouse, former spouse, child or other
dependent of a Participant who is recognized by a Qualified Domestic Relations
Order as having a right to receive all or a portion of a Participant's benefits
payable under the Plan.
(c) "American" means American Brands, Inc., a Delaware corporation, its
successors and assigns.
(d) "American Common Stock" means the common stock of American as now
constituted and any other common stock into which it may be reclassified.
(e) "American Stock Fund" means the portion of the Trust Fund so designated
and provided for in Section 4.01.
(f) "Annual Valuation Date" means the close of business on the last
business day of December in each Plan Year.
(g) "Approved Leave of Absence" means an absence from work approved by the
Participating Employer under uniform rules and conditions for all Employees of
such Participating Employer. In all events an Approved Leave of Absence by
reason of service in the armed forces of the United States shall end no later
than the time at which a Participant's reemployment rights are protected by
Federal law.
(h) "Beneficiary" means the person or persons designated by a Participant,
former Participant or Beneficiary to receive any benefits under the Plan which
may be due upon the Participant's, former Participant's or Beneficiary's death.
(i) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(j) "Company" means MasterBrand Industries, Inc., a Delaware corporation,
and any successors to all or substantially all its business.
(k) "Company Matching Account" means any one of the accounts so designated
and provided for in Section 5.01(c).
(l) "Company Matching Contributions" means any contributions made to the
Company Matching Account of a Participant by a Participating Employer as
provided for in Section 3.02.
(m) "Compensation" means, for purposes of Sections 3.01 and 3.02 of the
Plan, the basic salary or wages, overtime, shift premiums, commissions and
bonuses paid by a Participating Employer to a Covered Employee for personal
services, and other amounts includible in the Covered Employee's gross income on
account of such services, including his Tax Deferred Contributions under this
Plan or amounts elected to be contributed under a program established pursuant
to Section 125 of the Code, and excluding any (1) severance pay whether paid
before or after Severance From Service, (2) amounts deferred under a plan of a
Related Employer until such amounts are paid, (3) amounts paid under any
long-term incentive plan, (4) tax protection payments or foreign service
overbase allowances or premiums, (5) reimbursement for expenses incurred or to
be incurred, (6) non-cash remuneration such as taxable amounts for life
insurance coverage or use of an automobile or stock options or awards, (7)
remuneration paid in currency other than U.S. dollars, or (8) relocation
allowances, sign-on bonuses and other non-recurring payments.
For purposes of Section 1.01(aa), "Compensation" shall have the meaning
prescribed in Section 415(c)(3) of the Code from the Related Employers, but
shall also include Tax Deferred Contributions and any salary reduction
contributions to a cafeteria plan under Code Section 125.
For purposes of Sections 3.05 and 3.06, "Compensation" shall have the
meaning prescribed in Section 414(s) of the Code.
For purposes of Sections 5.04 and 5.05, "Compensation" means a
Participant's W-2 income for the limitation year.
For purposes of Article XIV, "Compensation" shall have the meaning
prescribed in Section 415(c)(3) of the Code.
In each case, "Compensation" shall be limited to $150,000 annually for Plan
Years commencing on or after January 1, 1994 (adjusted for increases in the cost
of living pursuant to Section 401(a)(17) of the Code or regulations of the
Internal Revenue Service) and in accordance with Section 5.06 of the Plan.
(n) "Corporate/Government Bond Fund" means the portion of the Trust Fund so
designated and provided for in Section 4.01.
(o) "Covered Employee" means an Employee who is a member of a group of
Employees to which the Plan has been and continues to be extended by the Company
or a Participating Employer, including (1) Employees of Moen Incorporated
employed in non-supervisory production or distribution positions, (2) Employees
of Waterloo Industries, Inc. employed in the Pocahontas, Arkansas, Sedalia,
Missouri or Muskogee, Oklahoma Plant of Waterloo Industries, Inc. in production
or maintenance positions, (3) hourly-paid Employees of Aristokraft, Inc.
employed in the Littlestown, Pennsylvania or Crossville, Tennessee locations or
distribution centers of Aristokraft, Inc. and (4) hourly-paid Employees of
Master Lock Company employed in the Auburn, Alabama location of Master Lock
Company. The term "Covered Employee" does not include an Employee covered under
a collective bargaining agreement with a Participating Employer which fails to
provide for his inclusion under this Plan, or an Employee employed at an
operating unit acquired or created by a Participating Employer unless, and
until, the Plan is extended to Employees at such unit.
(p) "Date of Employment" means the first day an Employee performs an Hour
of Service.
(q) "Disability" means a physical or mental condition of a Participant
which renders him permanently incapable of continuing any employment for wage or
profit and for which such Participant receives Social Security disability
benefits. Proof of receipt by the Participating Employer of Social Security
disability benefits shall be required.
(r) "Domestic Relations Order" means any judgment, decree or order
(including approval of a property settlement agreement) that relates to the
provision of child support, alimony payments or marital property rights to an
Alternate Payee and is made pursuant to a State domestic relations law,
including a community property law.
(s) "Effective Date" means January 1, 1994.
(t) "Entry Date" means, with respect to each Covered Employee, the date as
of which the Plan is extended to the group of Employees of which he is a member
and the first day of each subsequent calendar month.
(u) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
(v) "Fair Market Value" on any date means the value reported by the Trustee
as being the fair market value at such date as determined by it according to its
usual methods and procedures.
(w) "Fiduciaries" means the Company, each other Participating Employer, the
Board of Directors of the Company and the board of directors of any other
Participating Employer, the Board of Directors of American, the Executive
Committee of the Board of Directors of American, the Retirement Committee, the
Trusts Investment Committee of American and the Trustee, but only with respect
to the specific responsibilities of each as described in Articles X and XII. The
term "Fiduciaries" also includes any Participant, former Participant or
Beneficiary, but only to the extent such Participant, former Participant or
Beneficiary is acting as a named fiduciary (within the meaning of Section
403(a)(1) of ERISA) with respect to the exercise of voting rights of shares of
American Common Stock held in the American Stock Fund or the tender, deposit,
sale, exchange or transfer of such shares (and any rights within the meaning of
Section 4.16(a)) as provided in Section 4.14 or 4.15 or with respect to the
sale, exercise or retention of any such rights held in the American Stock Fund
as provided in Section 4.16.
(x) "Forfeiture" means the portion of a Participant's Account Balances to
which he is not entitled at the termination of his employment as determined in
Section 6.05 and as determined in Section 7.06.
(y) "Government Securities Fund" means the portion of the Trust Fund so
designated and provided for in Section 4.01.
(z) "Growth-Oriented Diversified Fund" means the portion of the Trust Fund
so designated and provided for in Section 4.01.
(aa) "Highly Compensated Employee" means for a Plan Year any Employee who,
during such Plan Year or the immediately preceding Plan Year:
(1) Was at any time a five percent (5%) owner of any Related Employer
(within the meaning of Section 416(i)(1) of the Code);
(2) Received Compensation from any Related Employer in excess of
seventy-five thousand dollars ($75,000) (or such other amount as determined
under Section 415(d) of the Code);
(3) Received Compensation from any Related Employer in excess of fifty
thousand dollars ($50,000) (or such other amount as determined under
Section 415(d) of the Code) and was in the top twenty percent (20%) of the
group of Employees determined under Section 414(q)(8) of the Code when
ranked on the basis of Compensation in such Plan Year; or
(4) Was at any time an officer of any Related Employer and received
Compensation from any Related Employer in excess of fifty percent (50%) of
the amount in effect under Section 415(b)(1)(A) of the Code for such Plan
Year.
In the event that no officer of the Related Employer received Compensation
from the Related Employer in excess of fifty percent (50%) of the amount in
effect under Section 415(b)(1)(A) of the Code for such Plan Year, the highest
paid officer shall be treated as a Highly Compensated Employee. Further, no more
than fifty (50) Employees or ten percent (10%) of the Employees shall be treated
as officers for purposes of determining a Highly Compensated Employee.
In the case of the Plan Year for which the determination is made, an
Employee not described in (2), (3) or (4) above for the preceding year (without
regard to this sentence) shall not be treated as described in (2), (3) or (4)
above unless such Employee is a member of the group consisting of the one
hundred (100) Employees paid the greatest Compensation during the Plan Year for
which the determination is being made.
For purposes of Article III, if any individual is the spouse, lineal
ascendant, lineal descendant or spouse of a lineal ascendant or descendant of a
five percent (5%) owner or a Highly Compensated Employee in the group consisting
of the ten (10) Highly Compensated Employees paid the greatest Compensation
during the year, then such individual shall not be treated as a separate
employee, and any Compensation paid to such individual (and any Tax Deferred
Contributions, Supplemental Contributions and Company Matching Contributions on
behalf of such individual) shall be treated as if paid to (or on behalf of) the
five percent (5%) owner or Highly Compensated Employee.
A former Employee who had a separation year prior to the Plan Year for
which the determination is made who was a Highly Compensated Employee for either
such former Employee's final year of employment or any determination year ending
on or after the Employee's fifty-fifth (55th) birthday shall be included as a
Highly Compensated Employee.
(bb) "Hour of Service" means:
(1) Each hour for which an Employee is paid or entitled to payment for
the performance of duties for a Related Employer. These hours shall be
credited to the Employee for the computation period or periods in which the
duties are performed;
(2) Each hour for which an Employee is paid or entitled to payment by
a Related Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than five hundred one (501) Hours of Service shall be credited under this
section for any single continuous period (whether or not such period occurs
in a single computation period). Hours under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations, which are incorporated herein by reference; and
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by a Related Employer. The same
Hours of Service shall not be credited under both paragraph (1) or
paragraph (2), as the case may be, and under this paragraph (3). These
hours shall be credited to 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.
(cc) "International Equity Fund" means the portion of the Trust Fund so
designated and provided for in Section 4.01.
(dd) "Investment Fund(s)" means the American Stock Fund, Value Equity Fund,
Large-Cap Growth Equity Fund, Small-Cap Growth Equity Fund, International Equity
Fund, S&P 500 Index Fund, Growth-Oriented Diversified Fund, Value-Oriented
Diversified Fund, Corporate/Government Bond Fund, Government Securities Fund,
Short-Term Investment Fund and Loan Fund held under the Trust Fund as designated
pursuant to Section 4.01.
(ee) "Investment Manager" means one or more investment counsel appointed as
provided in Section 12.03.
(ff) "Large-Cap Growth Equity Fund" means the portion of the Trust Fund so
designated and provided for in Section 4.01.
(gg) "Loan Fund" means the portion of the Trust Fund so designated and
provided for in Section 4.01.
(hh) "Participant" means a Covered Employee who has authorized Tax Deferred
Contributions or Supplemental Contributions and who has not incurred a Severance
From Service.
(ii) "Participating Employer" means, individually, the Company and Moen
Incorporated, Waterloo Industries, Inc., Aristokraft, Inc. and Master Lock
Company and any other Related Employer which adopts this Plan for its eligible
Employees.
(jj) "Plan" means the MasterBrand Industries, Inc. Hourly Employee Savings
Plan as set forth herein and as amended from time to time. Furthermore, where
the context so requires, the term "Plan" shall refer to the Prior Plan.
(kk) "Plan Year" means the calendar year.
(ll) "Prior Plan" means, where applicable, (1) the Moen Incorporated
Employee Savings Plan or its predecessor, the Moen Incorporated Savings Plus
Plan and (2) the Waterloo Industries, Inc. Employee Savings Plan for Production
and Maintenance Employees.
(mm) "Qualified Domestic Relations Order" means any Domestic Relations
Order that creates, recognizes or assigns to an Alternate Payee the right to
receive all or a portion of a Participant's benefits payable hereunder and that
meets the requirements of Section 414(p) of the Code, as determined by the
Retirement Committee.
(nn) "Related Employer" means any corporation or other business entity
which is included in a controlled group of corporations within which the Company
is also included, as provided in Section 414(b) of the Code (as modified for
purposes of Sections 5.04 and 5.05 of this Plan by Section 415(h) of the Code),
or which is a trade or business under common control with the Company, as
provided in Section 414(c) of the Code (as modified, for purposes of Sections
5.04 and 5.05, by Section 415(h) of the Code), or which constitutes a member of
an affiliated service group within which the Company is also included, as
provided in Section 414(m) of the Code, or which is required to be aggregated
with the Company pursuant to regulations issued under Section 414(o) of the
Code.
(oo) "Restatement Date" means January 1, 1996.
(pp) "Retirement" means retirement under a retirement plan of a Related
Employer.
(qq) "Retirement Committee" means the MasterBrand Industries, Inc.
Retirement Plan Investment Committee.
(rr) "Rollover Account" means any of the accounts so designated and
provided for in Section 5.01(d).
(ss) "Rollover Contributions" means amounts attributable to part or all of
an "eligible rollover distribution" (within the meaning of Section 402(c)(4) of
the Code and the Treasury Regulations thereunder) transferred to this Plan
pursuant to Section 3.03 as the result of the distribution of a Participant's
account under another qualified trust, individual retirement account or
individual retirement annuity as defined in Section 3.03.
(tt) "Severance From Service" means the earlier of the following dates:
(1) The date on which an Employee terminates employment, is
discharged, retires or dies; or
(2) The first anniversary of the first day of a period in which an
Employee remains absent from service (with or without pay) with a Related
Employer for any reason other than one listed in paragraph (1). If such
Employee is on an Approved Leave of Absence on such first anniversary, he
shall be deemed to have incurred a Severance From Service on the expiration
of such Approved Leave of Absence, unless he returns to active employment
with his Participating Employer on or before that date. Solely for purposes
of determining whether a Break in Service has occurred for purpose of
Section 6.06, the first twelve (12) months shall be disregarded under this
subparagraph (2) to the extent that the Employee's absence from employment
is attributable to maternity or paternity leave. For purposes of this
subparagraph, an absence from employment for maternity or paternity reasons
means an absence:
(A) by reason of the pregnancy of the individual;
(B) by reason of a birth of a child of the individual;
(C) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual; or
(D) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
The Employee shall be required to furnish the Retirement Committee with
such timely information as the Retirement Committee may reasonably require to
establish both that the absence from employment is for maternity or paternity
reasons and the number of days for which there was such an absence.
(uu) "Short-Term Investment Fund" means the portion of the Trust Fund so
designated and provided for in Section 4.01.
(vv) "Small-Cap Growth Equity Fund" means the portion of the Trust Fund so
designated and provided for in Section 4.01.
(ww) "S&P 500 Index Fund" means the portion of the Trust Fund so designated
and provided for in Section 4.01.
(xx) "Supplemental Account" means any one of the accounts so designated and
provided for in Section 5.01(b).
(yy) "Supplemental Contributions" means any contributions made by a
Participating Employer that are attributable to the reduction in Compensation on
an after-tax basis that a Participant agrees to accept from his Participating
Employer each Plan Year as described in Section 3.01.
(zz) "Tax Deferred Account" means any one of the accounts so designated and
provided for in Section 5.01(a).
(aaa) "Tax Deferred Contributions" means any contributions made by a
Participating Employer that are attributable to the reduction in Compensation on
a before-tax basis that a Participant agrees to accept from such Participating
Employer each Plan Year as described in Section 3.01.
(bbb) "Termination of Employment Without Fault" means any involuntary
separation of a Participant by a Related Employer otherwise than by reason of
Retirement, Disability, failure to maintain work standards, dishonesty or other
misconduct prejudicial to the Related Employer by which the Participant is
employed, absence without prescribed notice, or refusal to return from layoff or
Approved Leave of Absence within the prescribed period.
(ccc) "Trust Agreement" and "Trust" mean, respectively, the American
Brands, Inc. Defined Contribution Plan Master Trust Agreement, as it may be
amended from time to time, and the trust established thereunder.
(ddd) "Trustee" means the trustee from time to time acting under the Trust
Agreement, including any successor trustee.
(eee) "Trust Fund" means all money, securities and other property held
under the Trust Agreement for the purposes of the Plan, together with the income
therefrom.
(fff) "Trusts Investment Committee" means the Trusts Investment Committee
of American.
(ggg) "Valuation Date" means the Annual Valuation Date and each other date,
as determined from time to time by the Retirement Committee, as of which funds
and accounts are valued or adjusted as provided in Article V.
(hhh) "Value Equity Fund" means the portion of the Trust Fund so designated
and provided for in Section 4.01.
(iii) "Value-Oriented Diversified Fund" means the portion of the Trust Fund
so designated and provided for in Section 4.01.
(jjj) "Vesting Service" means a Participant's credit for purposes of
determining his right to a nonforfeitable benefit under the Plan, as determined
in accordance with Article VI. Such Vesting Service shall mean service as an
Employee with a Related Employer, as follows:
(1) Vesting Service shall be determined from the Participant's Date of
Employment or reemployment in completed full years and fractions of years
in excess of completed full years, each twelve (12) months of employment
constituting a full year of Vesting Service, and each thirty (30) days of
employment completed in excess of full years of Vesting Service counted as
one-twelfth (1/12) of a year of Vesting Service.
(2) Subject to paragraph (3) below, each Employee shall be credited
with Vesting Service during any period of employment with a Related
Employer, extending to the date he incurs a Severance From Service.
(3) Notwithstanding any other provision herein to the contrary, if a
Participant shall have incurred a Severance From Service and is
subsequently reemployed by a Related Employer, his Vesting Service shall be
reinstated, as follows:
(A) If the Employee is reemployed within twelve (12) months after
the date he is first absent from active employment, the Vesting
Service he had at the date of first absence from active employment
shall be reinstated upon his reemployment, and he shall receive credit
for Vesting Service for the period between the date he was first
absent from active employment and his reemployment; or
(B) If the Employee is reemployed after twelve (12) months have
elapsed after he is first absent from employment, the Vesting Service
he had at the time of such Severance From Service shall be reinstated
upon his reemployment, but he shall not receive credit for Vesting
Service for the period between his Severance From Service and date of
reemployment.
Notwithstanding the foregoing, the Vesting Service of each Participant for
the period prior to January 1, 1996 shall not be less than as determined under
the provisions of the Plan prior to January 1, 1996.
(kkk) "Year of Eligibility Service" means any consecutive twelve (12) month
period of employment, as herein set forth, during which an Employee completes
one thousand (1,000) or more Hours of Service. The first consecutive twelve (12)
month period to be taken into account for this purpose shall be the consecutive
twelve (12) month period commencing with the Employee's Date of Employment or
the Employee's date of reemployment. The second consecutive twelve (12) month
period to be taken into account for this purpose shall be the Plan Year which
includes the first anniversary of the Employee's Date of Employment or date of
reemployment. All subsequent twelve (12) month periods to be taken into account
for this purpose shall correspond with Plan Years.
ARTICLE II
PARTICIPATION
2.01. Eligibility.
(a) Any Covered Employee who was eligible to participate in the Plan
immediately prior to the Restatement Date shall continue to be eligible to
participate in the Plan on the Restatement Date, provided he is a Covered
Employee on that date.
(b) A Covered Employee who was not eligible to participate in the Plan on
the day prior to the Restatement Date shall be eligible to participate in the
Plan on the first Entry Date coincident with or next following his completion of
a Year of Eligibility Service.
2.02. Change in Status Within Participating Employer. If an Employee is
transferred from a position within his Participating Employer in which he was
not a Covered Employee to a position in which he is a Covered Employee, he shall
be eligible to participate in the Plan or resume Tax Deferred Contributions and
Supplemental Contributions, as the case may be, as of the first Entry Date
coincident with or next following the later to occur of (a) such transfer or (b)
satisfaction of the requirements of Section 2.01; provided, however, that an
Employee who at the time of transfer was contributing under another defined
contribution plan (as defined in Section 414(i) of the Code) that provides for
matching employer contributions shall be eligible as soon as practicable after
the later of (a) or (b) above.
2.03. Transfers From Non-Participating Related Employers. Each person
becoming a Covered Employee upon transfer from a Related Employer that is not a
Participating Employer shall be eligible to participate in the Plan on the later
of the (a) first Entry Date which is coincident with or next following the date
on which he has completed one (1) Year of Eligibility Service, provided he is a
Covered Employee on that date and (b) date of his transfer to such Participating
Employer.
2.04. Reemployment. Each Covered Employee who was eligible to participate
in the Plan or was a Participant in the Plan and who terminates employment and
is subsequently reemployed as a Covered Employee, shall be eligible to
participate as of the first Entry Date coincident with or next following his
reemployment.
ARTICLE III
CONTRIBUTIONS
3.01. Tax Deferred Contributions and Supplemental Contributions.
(a) Rate of Tax Deferred Contributions and Supplemental Contributions. Each
Participant shall have the option to enter into a salary reduction agreement
with his Participating Employer which shall be applicable to all Compensation
received thereafter. The salary reduction agreement shall provide that the
Participant agrees to accept a reduction in salary from the Participating
Employer on a before-tax basis by an amount equal to an integral percentage of
up to seventeen percent (17%) of his Compensation subject to the limitations of
this Article III. Each Participant may also enter into a salary reduction
agreement to accept a reduction in salary from the Participating Employer on an
after-tax basis by an amount equal to an integral percentage of up to seventeen
percent (17%) of his Compensation, minus the percentage he elected to contribute
on a before-tax basis, subject to the limitations of this Article III. The
Participating Employer may limit the maximum salary reduction percentage to a
lesser percentage of Compensation, provided such policy does not impermissibly
discriminate against Covered Employees who are not Highly Compensated Employees.
Tax Deferred Contributions and Supplemental Contributions shall be paid at least
monthly to the Trustee by the Participating Employers.
(b) Change in Rate of Tax Deferred Contributions and Supplemental
Contributions. Each Participant may elect to change the rate of his Tax Deferred
Contributions and Supplemental Contributions effective as of the first day of
any month.
(c) Discontinuance and Resumption of Tax Deferred Contributions and
Supplemental Contributions. Each Participant may elect to discontinue his Tax
Deferred Contributions or Supplemental Contributions at any time. Each
Participant may elect to resume his Tax Deferred Contributions or Supplemental
Contributions as of the first day of any month after the date as of which such
contributions were discontinued.
(d) Notice Requirement. Any election to change the rate of Tax Deferred
Contributions or Supplemental Contributions pursuant to Section 3.01(b) and any
election to discontinue or resume Tax Deferred Contributions or Supplemental
Contributions pursuant to Section 3.01(c) must be made within the time period
prior to the effective date of such change, discontinuance or resumption as may
be designated by the Retirement Committee. Such election shall be made in
accordance with the voice response system implemented by the Participant's
Participating Employer, or, if required by such Participating Employer, by means
of a written notice to such Participating Employer, on a form approved by the
Retirement Committee. The Retirement Committee may establish additional rules
regarding the timing and frequency of a change in the amount of Tax Deferred
Contributions or Supplemental Contributions, provided such policy is applied
uniformly to all Participants of the Participating Employer.
(e) Limitations. Notwithstanding any other provision of this Plan to the
contrary, a Participating Employer may refuse to give effect to any salary
reduction agreement entered into by a Participant at any time if the
Participating Employer determines that such refusal is necessary to ensure that
the additions to a Participant's Accounts for any Plan Year shall not exceed the
limitations set forth in Sections 3.04, 3.05, 3.06 or 3.07 and Sections 5.04,
5.05 or 5.06 of the Plan.
3.02. Company Matching Contributions.
(a) Rate of Company Matching Contributions. Subject to the conditions and
limitations of this Article III and Article XIII, Moen Incorporated and Waterloo
Industries, Inc. shall contribute under the Plan each year for each Participant
in its employ during such year an amount based on any Tax Deferred Contributions
and Supplemental Contributions made on his behalf during such year by such
Participating Employer. The Company Matching Contribution for each Participant
employed by Moen Incorporated or by Waterloo Industries, Inc. in the Muskogee,
Oklahoma Plant of Waterloo, Industries, Inc. shall be equal to fifty percent
(50%) of the aggregate Participant's Tax Deferred Contributions and Supplemental
Contributions to the extent the rate of such aggregate Tax Deferred
Contributions and Supplemental Contributions in effect from time to time does
not exceed six percent (6%) of his Compensation. The Company Matching
Contribution for each Participant employed by Waterloo Industries, Inc. in the
Pocahontas, Arkansas or Sedalia, Missouri Plant of Waterloo Industries, Inc.
shall be equal to fifty percent (50%) of the Participant's aggregate Tax
Deferred Contributions and Supplemental Contributions to the extent the rate of
such aggregate Tax Deferred Contributions and Supplemental Contributions does
not exceed three percent (3%) of his Compensation. Notwithstanding any other
provision of this Plan to the contrary, no Company Matching Contributions shall
be made with respect to Tax Deferred Contributions or Supplemental Contributions
made by Participants employed by Aristokraft, Inc. or Master Lock Company.
Company Matching Contributions shall be paid monthly to the Trustee by the
Participating Employers.
(b) Limitations. Notwithstanding the foregoing and in addition to the
limitations set forth in Sections 3.05 and 3.06, no Company Matching
Contributions shall be made with respect to excess Tax Deferred Contributions
and Supplemental Contributions distributed pursuant to Section 3.05, 3.06 or
3.07 and Company Matching Contributions made with respect thereto shall be
returned to the Participating Employer pursuant to Section 13.03.
3.03. Rollover Contributions.
(a) Eligible Amounts. Any Covered Employee, may, subject to obtaining the
prior approval of his Participating Employer, at any time transfer (or cause to
be transferred) to the Trust Fund:
(1) Up to the entire amount of money and other property received from
another qualified trust under Section 401(a) of the Code which constitutes
an eligible rollover distribution within the meaning of Section 402(c)(4)
of the Code, provided that (A) such amount must be received by the Trustee
within sixty (60) days after the Covered Employee's receipt of such payment
or (B) such amount is directly transferred to the Trust Fund from such
other qualified trust; and
(2) Up to the entire amount of money and other property received by
the Covered Employee that was held separately in an "individual retirement
account" or an "individual retirement annuity" (as defined in Section 408
of the Code) which contains only those amounts described above in paragraph
(1) plus any earnings thereon, provided that such amount must be received
by the Trustee within sixty (60) days after the Covered Employee's receipt
of such payment.
After-tax contributions are not eligible to be rolled over to this Plan. The
Covered Employee shall furnish his Participating Employer with a written
statement that the contribution to the Trust Fund is a rollover contribution,
together with such other statements and information as may be required by his
Participating Employer in order to establish that such contribution does not
contain amounts from sources other than provided above and that such rollover
contribution otherwise meets the requirements of law. Acceptance by the Trustee
of any amount under these provisions shall not be construed as a determination
of the Covered Employee's tax consequences by either the Participating Employer
or the Trustee.
(b) Limitation on Assets Transferred. Except as otherwise provided in this
Section 3.03, assets shall not be transferred to the Plan or Trust Fund from any
other plan or trust.
3.04. Limitation on Annual Amount of Tax Deferred Contributions.
(a) Maximum Annual Amount. The maximum amount of Tax Deferred Contributions
which may be made on behalf of each Participant in any calendar year to this
Plan and any other qualified plan shall not exceed nine thousand five hundred
dollars ($9,500), adjusted for each year to take into account any cost of living
increase provided for such year under Section 402(g) of the Code. For purposes
of this Section 3.04, the term "qualified plan" means any tax qualified plan
under Section 401(k) of the Code, any simplified employee pension cash or
deferred arrangement as described in Section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under Section 457 of the Code, any plan
described in Section 501(c)(18) of the Code and any employer contributions made
on behalf of the Participant for the purchase of an annuity contract under
Section 403(b) of the Code pursuant to a salary reduction arrangement.
(b) Procedure for Requesting Return of Excess Deferrals. If a Participant
makes elective deferrals to this Plan and to any other qualified plan in excess
of the dollar limit specified above for the Participant's taxable year, then the
Participant must notify his Participating Employer in writing by March 1 of the
following year of the amount, if any, to be refunded from this Plan. The notice
must specify the amount of excess Tax Deferred Contributions received by the
Plan for the preceding year and must be accompanied by the Participant's written
statement that if the excess is not distributed, the Tax Deferred Contributions,
when added to amounts deferred under other qualified plans, exceed the limit
imposed on the Participant by Code Section 402(g) for the taxable year in which
the deferral occurred. If the Participant fails to notify the Retirement
Committee by March 1, no refund will be made pursuant to this Section 3.04.
(c) Return of Excess Deferrals. The amount to be refunded shall be paid to
the Participant in a single payment not later than April 15 following the close
of the taxable year and shall include any income or loss allocated to the
refund, as determined in Section 3.04(d), for the period during the
Participant's taxable year. Although the excess deferral may be refunded, it
shall still be considered as an elective deferral for the Plan Year in which it
was originally made and shall be included in the actual deferral percentage of a
Highly Compensated Employee.
(d) Income or Loss Allocable for Taxable Year. The income or loss allocable
to excess elective deferrals for the Participant's taxable year shall be
determined by multiplying the income or loss for the Participant's taxable year
allocable to the Participant's elective deferrals for such year by a fraction,
the numerator of which is the amount of excess elective deferrals for such
taxable year and the denominator of which is equal to the sum of (1) the total
Account Balances in the Participant's Tax Deferred Account as of the beginning
of the taxable year plus (2) the Participant's Tax Deferred Contributions for
such taxable year. No adjustment shall be made with respect to any period
following such taxable year.
3.05. Actual Deferral Percentage Tests.
(a) Tests. The Actual Deferral Percentage for the Highly Compensated
Employees shall not exceed for any Plan Year the greater of:
(1) the Actual Deferral Percentage for all other Covered Employees,
multiplied by one and one-quarter (1.25); or
(2) the Actual Deferral Percentage for all other Covered Employees,
multiplied by two (2); provided, however, the Actual Deferral Percentage
for the Highly Compensated Employees does not exceed the Actual Deferral
Percentage for all other Covered Employees by more than two (2.0)
percentage points.
For the purpose of the foregoing tests:
(1) those Covered Employees who were not directly or indirectly
eligible to have Tax Deferred Contributions made for them at any time
during the Plan Year shall be disregarded;
(2) if two or more plans which include cash or deferred arrangements
are considered one plan for purposes of Section 401(a)(4) or 410(b) (other
than 410(b)(2)(A)(ii)) of the Code, the cash or deferred arrangements
included in those plans shall be treated as one arrangement;
(3) if two or more plans are permissibly aggregated for purposes of
the foregoing tests, the aggregated plans must also satisfy Sections
401(a)(4) and 410(b) of the Code as though they were one plan; and
(4) if a Highly Compensated Employee is a participant in two or more
cash or deferred arrangements of Related Employers, all such cash or
deferred arrangements shall be treated as one cash or deferred arrangement
for purposes of determining the Actual Deferral Percentage of that Highly
Compensated Employee.
(b) Actual Deferral Percentage. The Actual Deferral Percentage for a
specified group of Covered Employees for a Plan Year shall be the average of the
ratios (calculated separately) for the Covered Employees in such group of:
(1) the amount of Tax Deferred Contributions and Special Company
Contributions pursuant to Section 3.08 actually paid to the Trustee on
behalf of each such Covered Employee for such Plan Year, to
(2) his Compensation for such Plan Year.
Every family member of a five percent (5%) owner of a Related Employer (as
defined in Section 416(i) of the Code) or of one of the ten most Highly
Compensated Employees shall be aggregated with the five percent (5%) owner or
Highly Compensated Employee into a single family group ("Family Group"). If an
Employee is required to be aggregated as a member of more than one Family Group,
all eligible Employees who are members of those Family Groups that include that
Covered Employee shall be aggregated as one Family Group. The Compensation and
Tax Deferred Contributions of each member of a Family Group are treated as if
paid to (or on behalf of) one Highly Compensated Employee. The combined actual
deferral ratio of the Family Group shall be the ratio determined by combining
the Tax Deferred Contributions and the Compensation of all members of the Family
Group.
Except as provided in the preceding paragraph, the Tax Deferred
Contributions and the Compensation of all members of the Family Group are
disregarded in calculating the Actual Deferral Percentage of the Covered
Employees other than Highly Compensated Employees.
(c) Return of Excess Contributions. The Company shall determine after the
end of the Plan Year whether the Actual Deferral Percentage results satisfy
either of the tests contained in Section 3.05(a). If neither test is satisfied,
the excess amount for each Highly Compensated Employee shall be distributed to
the Participant (together with any income allocable thereto) within twelve (12)
months following the Plan Year for which the excess Tax Deferred Contributions
were made. The excess amount shall be determined for each Highly Compensated
Employee by determining the maximum actual deferral ratio that Highly
Compensated Employees may defer under the tests contained in Section 3.05(a),
and then reducing the actual deferral ratio of those Participants whose actual
deferral ratio exceeds that maximum by an amount of sufficient size to reduce
the overall Actual Deferral Percentage for Highly Compensated Employees to a
level such that one of the tests contained in Section 3.05(a) shall be
satisfied. The excess amount shall be determined in a fashion such that the
actual deferral ratio of the affected Participants who elected the highest
actual deferral ratio shall be first lowered to the extent required to achieve
compliance with the tests in Section 3.05(a) or the level of the affected
Participants who elected the next to the highest actual deferral ratio. If
further overall reductions are required to achieve compliance with the tests
contained in Section 3.05(a), this process is repeated until sufficient total
reductions have occurred to achieve compliance with the tests contained in
Section 3.05(a).
If a Highly Compensated Employee's actual deferral ratio is determined
under the family aggregation rules described above, the Family Group's excess
Tax Deferred Contributions shall be allocated among the members of the Family
Group in proportion to each member's Tax Deferred Contributions on a pro rata
basis.
The amount of excess Tax Deferred Contributions to be distributed shall be
reduced by the amount of excess deferrals (as defined in Section 402(g)(2) of
the Code and the applicable regulations) previously distributed for the taxable
year ending in the same Plan Year. The amount of excess deferrals to be
distributed for a taxable year shall be reduced by the amount of excess Tax
Deferred Contributions previously distributed for the Plan Year beginning in the
taxable year.
(d) Adjustment for Income or Losses. The excess Tax Deferred Contributions
for each Highly Compensated Employee shall be adjusted for income or loss during
the Plan Year, in the manner prescribed in Section 3.04(d).
(e) Forfeiture of Company Matching Contributions. Tax Deferred
Contributions which are refunded shall cause the corresponding Company Matching
Contributions to be forfeited.
3.06. Actual Contribution Percentage Tests.
(a) Tests. The Actual Contribution Percentage for the Highly Compensated
Employees shall not exceed for any Plan Year the greater of:
(1) the Actual Contribution Percentage for all other Covered
Employees, multiplied by one and one-quarter (1.25); or
(2) the Actual Contribution Percentage for all other Covered
Employees, multiplied by two (2); provided, however, the Actual
Contribution Percentage for the Highly Compensated Employees does not
exceed the Actual Contribution Percentage for all other Covered Employees
by more than two (2.0) percentage points.
For the purpose of the foregoing tests:
(1) those Covered Employees who were not directly or indirectly
eligible to have Company Matching Contributions or Supplemental
Contributions made for them at any time during the Plan Year shall be
disregarded;
(2) if two or more plans to which employee contributions and matching
contributions are made are considered one plan for purposes of Section
401(a)(4) or 410(b) (other than 410(b)(2)(A)(ii)) of the Code, all employee
contributions and matching contributions are to be treated as made under
the same plan;
(3) if two or more plans are permissively aggregated for purposes of
the foregoing tests, the aggregated plans must also satisfy Sections
401(a)(4) and 410(b) of the Code as though they were one plan; and
(4) if a Highly Compensated Employee is a participant in two or more
plans of Related Employers to which employee contributions or matching
contributions are made, all such plans shall be treated as one plan for
purposes of determining the Actual Contribution Percentage of that Highly
Compensated Employee.
(b) Actual Contribution Percentage. The Actual Contribution Percentage for
a specified group of Covered Employees for a Plan Year shall be the average of
the ratios (calculated separately) for the Covered Employees in such group of:
(1) the amount of Company Matching Contributions and Supplemental
Contributions, if any, actually paid to the Trustee on behalf of each such
Covered Employee for such Plan Year, to
(2) his Compensation for the Plan Year.
To the extent permitted by Treasury Regulations, Tax Deferred Contributions
and non-elective employer contributions under any other tax-qualified retirement
plan may be added to (1) above.
The Company Matching Contributions, Supplemental Contributions, other
amounts added to (1) above and Compensation of each member of a Family Group (as
determined in Section 3.05(b)) are treated as if paid to (or on behalf of) one
Highly Compensated Employee. The combined actual contribution ratio of the
Family Group shall be the ratio determined by combining the Company Matching
Contributions, Supplemental Contributions, other added amounts and Compensation
of all members of the Family Group.
Except as provided in the preceding paragraph, the Company Matching
Contributions, Supplemental Contributions, other added amounts and Compensation
of all members of the Family Group are disregarded in calculating the Actual
Contribution Percentage of the Covered Employees other than Highly Compensated
Employees.
(c) Return of Excess Contributions. The Company shall determine after the
end of the Plan Year whether the Actual Contribution Percentage results satisfy
either of the tests contained in Section 3.06(a). If neither test is satisfied,
the excess amount ("Excess Aggregate Contributions") for each Highly Compensated
Employee shall be distributed to him (together with any income allocable
thereto) within twelve (12) months following the Plan Year for which the Excess
Aggregate Contributions were made.
The excess amount shall be determined for each Highly Compensated Employee
by determining the maximum actual contribution ratio that Highly Compensated
Employees may elect under the tests contained in Section 3.06(a), and then
reducing the actual contribution ratio of those Participants whose actual
contribution ratio exceeds that maximum by an amount of sufficient size to
reduce the overall actual contribution percentage for Highly Compensated
Employees to a level such that one of the tests contained in Section 3.06(a)
shall be satisfied. The excess amount shall be determined in a fashion such that
the actual contribution ratio of the affected Participants who elected the
highest actual contribution ratio shall be first lowered to the extent required
to achieve compliance with the tests in Section 3.06(a) or the level of the
affected Participants who elected the next to the highest actual contribution
ratio. If further overall reductions are required to achieve compliance with the
tests contained in Section 3.06(a), this process is repeated until sufficient
total reductions have occurred to achieve compliance with the tests contained in
Section 3.06(a). If a Highly Compensated Employee's actual contribution ratio is
determined under the family aggregation rules described above, the Family
Group's Excess Aggregate Contributions shall be allocated among the members of
the Family Group in proportion to each member's Company Matching Contributions
and Supplemental Contributions.
(d) Adjustment for Income and Loss. The Excess Aggregate Contributions for
each Highly Compensated Employee shall be adjusted for income or loss during the
Plan Year, in the manner prescribed in Section 3.04(d).
3.07. Alternate Percentage Test. In the event that the Actual Deferral
Percentage for the Highly Compensated Employees for any Plan Year is more than
the Actual Deferral Percentage for all other Covered Employees multiplied by one
hundred twenty-five percent (l25%) and the Actual Contribution Percentage for
Highly Compensated Employees for the same Plan Year is more than the Actual
Contribution Percentage for all other Covered Employees multiplied by one
hundred twenty-five percent (l25%), then the sum of the Actual Deferral
Percentage for Highly Compensated Employees plus the Actual Contribution
Percentage for Highly Compensated Employees for such Plan Year may not exceed
the greater of:
(a) the sum of:
(1) one hundred twenty-five percent (125%) of the greater of
(A) the Actual Deferral Percentage of the group of all other Covered
Employees or (B) the Actual Contribution Percentage of the group of all
other Covered Employees, and
(2) two (2.0) percentage points plus the lesser of (A) the
Actual Deferral Percentage of the group of all other Covered Employees
or (B) the Actual Contribution Percentage of the group of all other
Covered Employees.
In no event, however, shall the amount described in this
subparagraph 3.07(a)(2) exceed two hundred percent (200%) of the lesser
of (2)(A) and (B) above;
and
(b) the sum of:
(1) one hundred twenty-five percent (125%) of the lesser of
(A) the Actual Deferral Percentage of the group of all other Covered
Employees or (B) the Actual Contribution Percentage of the group of all
other Covered Employees, and
(2) two (2.0) percentage points plus the greater of (A) the
Actual Deferral Percentage of the group of all other Covered Employees
or (B) the Actual Contribution Percentage of the group of all other
Covered Employees.
In no event, however, shall the amount described in this
subparagraph 3.07(b)(2) exceed two hundred percent (200%) of the lesser
of (2)(A) and (B) above.
In the event the sum of the Actual Deferral Percentage for Highly
Compensated Employees plus the Actual Contribution Percentage for Highly
Compensated Employees exceeds the amount set forth in this Section 3.07, the
Actual Deferral Percentage for the Highly Compensated Employees or the Actual
Contribution Percentage for the Highly Compensated Employees shall be reduced in
the manner provided in Sections 3.05 and 3.06, until such excess no longer
exists.
3.08. Special Company Contributions.
(a) Determination of Special Rate. In order to meet the nondiscrimination
requirements of Sections 401(k) and 401(m) of the Code (as set forth in Sections
3.05 and 3.06 of the Plan), any Participating Employer may, in its discretion
and by action of its board of directors, establish a special rate of employer
contributions applicable only to certain Participants who are not Highly
Compensated Employees of such Participating Employer.
(b) Allocation of Special Company Contributions. If contributions made
under this Section 3.08 are made to meet the nondiscrimination requirements of
Code Section 401(k) (as set forth in Section 3.05 of the Plan), then such
contributions shall be deemed, for all Plan purposes except Section 8.01, to be
Tax Deferred Contributions, and shall be allocated to the Tax Deferred Accounts
of the Participants for whom the contributions were made; provided, however,
that Company Matching Contributions shall not be made based upon such
contributions. If contributions made under this Section 3.08 are made to meet
the nondiscrimination requirements of Code Section 401(m) (as set forth in
Section 3.06 of the Plan), then such contributions shall be deemed, for all Plan
purposes except Section 8.01, to be Company Matching Contributions, but shall be
allocated to the Tax Deferred Accounts of the Participants for whom the
contributions were made employed by such Participating Employer who made Tax
Deferred Contributions and such contributions shall be fully vested upon
deposit.
ARTICLE IV
INVESTMENT PROVISIONS
4.01. Investment Funds.
(a) Separate Funds. The Trust Fund shall consist of the following separate
Investment Funds, to be administered as provided in Sections 4.03 through 4.13,
respectively, and the "Loan Fund," to be administered as provided in Article IX:
(1) American Stock Fund;
(2) Value Equity Fund;
(3) Large-Cap Growth Equity Fund;
(4) Small-Cap Growth Equity Fund;
(5) International Equity Fund;
(6) S&P 500 Index Fund;
(7) Growth-Oriented Diversified Fund;
(8) Value-Oriented Diversified Fund;
(9) Corporate/Government Bond Fund;
(10) Government Securities Fund; and
(11) Short-Term Investment Fund.
(b) Assets Pending Allocation, Investment in Investment Funds and Maturity
and Redemption. Contributions to the Plan may be uninvested pending allocation
to the Investment Funds. The Investment Manager of each Investment Fund, or the
Trustee if there shall be no Investment Manager, may invest the Investment Fund
in short-term investments or hold the assets thereof uninvested pending orderly
investment and to permit distributions, reallocations and transfers therefrom.
4.02. Investment Fund Elections. A Participant's Account Balances and
contributions allocable to a Participant's Accounts shall be invested in the
Investment Funds as follows:
(a) Initial Investment of Contributions. Each Participant may elect that
the Tax Deferred Contributions, Supplemental Contributions, Company Matching
Contributions and Rollover Contributions allocable to his Accounts after January
1, 1996 be invested, collectively with investment gains and losses allocated on
a pro rata basis, in whole increments of one percent (1%), in any one or more of
the Investment Funds. The same investment election shall apply to a
Participant's Tax Deferred Contributions, Supplemental Contributions, Company
Matching Contributions and Rollover Contributions.
(b) Change in Investment of New Contributions. Effective as of the first
day of any month, each Participant may elect to change his investment elections
with respect to new contributions allocable to his Accounts, in accordance with
Section 4.02(a).
(c) Interfund Transfers. Effective as of the last day of any month, each
Participant may elect that his Account Balances be rearranged, in whole
percentage increments of the total balance, in any one or more of the Investment
Funds. Notwithstanding the foregoing, each Participant may elect that his
Account Balances as of January 1, 1996 be rearranged, in whole percentage
increments of the total balance, in any one or more of the Investment Funds. Any
amount transferred pursuant to this Section 4.02(c) shall be valued as of the
same Valuation Date as the effective date of the transfer.
(d) Investment Upon Maturity, Purchase or Redemption. Account Balances
attributable to assets held in guaranteed income contracts shall, upon maturity,
purchase or redemption, be invested in accordance with the investment elections
of each Participant in effect as of the Valuation Date next succeeding the date
of maturity, purchase or redemption.
(e) Notice Requirement. Each Participant shall make an election pursuant to
Section 4.02(a), (b) or (c) with his Participating Employer within a period
prior to the effective date of such election as may be specified by the
Retirement Committee. Any investment election made pursuant to Section 4.02(a),
(b) or (c) shall be made in accordance with the voice response system
implemented by the Participant's Participating Employer or, if required by such
Participating Employer, by filing an investment election with such Participating
Employer, on a form approved by the Retirement Committee. Any investment
election made pursuant to Section 4.02(a) or (b) shall remain in effect until
superseded by a subsequent investment election.
(f) Investment in Absence of Election. If a Participant fails to make an
investment election in accordance with Section 4.02(a), the contributions
referred to in Section 4.02(a) shall be invested in the Short-Term Investment
Fund, provided that any investment election under a Prior Plan shall remain in
effect unless changed.
4.03. Administration of American Stock Fund. Subject to the provisions of
the Trust Agreement and Sections 4.14 through 4.16, the Trustee shall administer
the American Stock Fund as follows:
(a) Investment. The assets of the American Stock Fund, including all income
thereon and increments thereto, shall be invested primarily in American Common
Stock; provided, however, that, in order to permit orderly investment in
American Common Stock and pending such investment, the Trustee may hold
uninvested any monies received by it in or for the American Stock Fund or may
invest in collective short-term investment funds of the Trustee.
(b) Registration Upon Distribution. Upon any distribution from the American
Stock Fund as a single distribution pursuant to Section 7.01(a)(2), all whole
shares of American Common Stock distributable therefrom shall be registered in
the name of the distributee and delivered to him together with any cash from the
American Stock Fund to which the distributee is entitled.
(c) Distributions Other Than in Stock. Upon any distribution from the
American Stock Fund pursuant to the provisions of Article VII other than as a
single distribution pursuant to Section 7.01(a)(2), the Trustee shall retain all
shares which would otherwise be distributable to the distributee and distribute
in lieu thereof their Fair Market Value on the Valuation Date next succeeding
the event entitling the distributee thereto (or, if the event coincides with a
Valuation Date, then on that Valuation Date).
(d) Transfers Among Investment Funds. Upon any transfer from any Investment
Fund pursuant to the provisions of Section 4.02(c), the Trustee shall, to the
extent practicable, retain all shares which would otherwise have to be
liquidated by reason of such transfer and transfer in lieu thereof their Fair
Market Value on the Valuation Date next preceding the date as of which such
transfer is to be made.
(e) Rights Exercise; Sale of Stock. To the extent practicable, the Trustee
shall exercise all rights to buy American Common Stock (other than rights within
the meaning of Section 4.16, which shall be exercised only in accordance with
Section 4.16) received with respect to any shares held in the American Stock
Fund. To the extent that there is insufficient cash in the American Stock Fund
with which to exercise any such rights, or to make distribution or transfer of
the Fair Market Value of any stock subject to retention, the Trustee may, in its
discretion, sell such rights or retained stock or any part thereof; in the case
of any retained stock so sold the Fair Market Value thereof shall be the net
proceeds of sale instead of the Fair Market Value determined as provided in
Article I. The Trustee may also obtain cash in such other manner deemed
appropriate by the Trustee provided such other manner is permitted by applicable
law, will not affect the continued qualified status of the Plan or the
tax-exempt status of the Trust under the Code and will not result in a
"prohibited transaction" (as defined in the Code or ERISA).
4.04. Investment of Value Equity Fund. Subject to the provisions of the
Trust Agreement and of Section 4.03(e), the assets of the Value Equity Fund,
including all income thereon and increments thereto, shall be invested and
reinvested in any and all common stocks, preferred stocks and other equity
securities which the Investment Manager believes have a low price relative to
the company's earnings or cash flow, or relative to the past price history of
the stock, as shall be selected by the Investment Manager or, if there shall be
no such Investment Manager, by the Trustee; provided, however, that the
Executive Committee of the Board of Directors of American may determine that the
Value Equity Fund be comprised of a mutual fund having substantially the
foregoing characteristics.
4.05. Investment of Large-Cap Growth Equity Fund. Subject to the provisions
of the Trust Agreement and of Section 4.03(e), the assets of the Large-Cap
Growth Equity Fund, including all income thereon and increments thereto, shall
be invested and reinvested primarily in stocks of medium to large-size companies
with above-average earnings or sales growth, as selected by the Investment
Manager or, if there shall be no such Investment Manager, by the Trustee;
provided, however, that the Executive Committee of the Board of Directors of
American may determine that the Large-Cap Growth Equity Fund be comprised of a
mutual fund having substantially the foregoing characteristics.
4.06. Investment of Small-Cap Growth Equity Fund. Subject to the provisions
of the Trust Agreement and of Section 4.03(e), the assets of the Small-Cap
Growth Equity Fund, including all income thereon and increments thereto, shall
be invested and reinvested primarily in stocks of small to medium-size companies
that are early in their life cycle but which have the potential to become major
enterprises (emerging growth companies), as selected by the Investment Manager
or, if there shall be no such Investment Manager, by the Trustee; provided,
however, that the Executive Committee of the Board of Directors of American may
determine that the Small-Cap Growth Equity Fund be comprised of a mutual fund
having substantially the foregoing characteristics.
4.07. Investment of International Equity Fund. Subject to the provisions of
the Trust Agreement and of Section 4.03(e), the assets of the International
Equity Fund, including all income thereon and increments thereto, shall be
invested and reinvested primarily in stocks of companies incorporated outside
the United States, as selected by the Investment Manager or, if there shall be
no such Investment Manager, by the Trustee; provided, however, that the
Executive Committee of the Board of Directors of American may determine that the
International Equity Fund be comprised of a mutual fund having substantially the
foregoing characteristics.
4.08. Investment of S&P 500 Index Fund. Subject to the provisions of the
Trust Agreement and of Section 4.03(e), the assets of the S&P 500 Index Fund,
including all income thereon and increments thereto, shall be invested and
reinvested in a mutual fund that invests in five hundred (500) stocks that make
up the Standard & Poors 500 Index proportionately to each stock weighting in the
index, as selected by the Executive Committee of the Board of Directors of
American.
4.09. Investment of Growth-Oriented Diversified Fund. Subject to the
provisions of the Trust Agreement and of Section 4.03(e), the assets of the
Growth-Oriented Diversified Fund, including all income thereon and increments
thereto, shall be invested and reinvested in such bonds, debentures, notes,
equipment trust certificates, investment trust certificates, preferred stocks,
common stocks, other securities (including any bonds, debentures, stock and
other securities of American) primarily of companies with strong financial
characteristics and good long-term prospects for above-average earnings or sales
growth, or other properties, not necessarily of the nature hereinbefore
itemized, as shall be selected by the Investment Manager or, if there shall be
no such Investment Manager, by the Trustee; provided, however, that the
Executive Committee of the Board of Directors of American may determine that the
Growth-Oriented Diversified Fund be comprised of a mutual fund having
substantially the foregoing characteristics.
4.10. Investment of Value-Oriented Diversified Fund. Subject to the
provisions of the Trust Agreement and of Section 4.03(e), the assets of the
Value-Oriented Diversified Fund, including all income thereon and increments
thereto, shall be invested and reinvested primarily in companies which have a
low price relative to the company's earnings or cash flow, or relative to the
past price history of the stock, as selected by the Investment Manager or, if
there shall be no such Investment Manager, by the Trustee; provided, however,
that the Executive Committee of the Board of Directors of American may determine
that the Value-Oriented Diversified Fund be comprised of a mutual fund having
substantially the foregoing characteristics.
4.11. Investment of Corporate/Government Bond Fund. Subject to the
provisions of the Trust Agreement and of Section 4.03(e), the assets of the
Corporate/Government Bond Fund, including all income thereon and increments
thereto, shall be invested and reinvested primarily in investment grade
corporate bonds, bonds issued by the United States Government or its agencies,
domestic bank obligations and commercial paper, as selected by the Investment
Manager or, if there shall be no such Investment Manager, by the Trustee;
provided, however, that the Executive Committee of the Board of Directors of
American may determine that the Corporate/Government Bond Fund be comprised of a
mutual fund having substantially the foregoing characteristics.
4.12. Investment of Government Securities Fund. Subject to the provisions
of the Trust Agreement and of Section 4.03(e), the assets of the Government
Securities Fund, including all income thereon and increments thereto, shall be
invested and reinvested primarily in such obligations issued or guaranteed by
the United States Government or its agencies, or by any State or local
government or their agencies, as shall be selected by the Investment Manager or,
if there shall be no such Investment Manager, by the Trustee; provided, however,
that the Executive Committee of the Board of Directors of American may determine
that the Government Securities Fund be comprised of a mutual fund having
substantially the foregoing characteristics.
4.13. Investment of Short-Term Investment Fund. Subject to the provisions
of the Trust Agreement and of Section 4.03(e), the assets of the Short-Term
Investment Fund, including all income thereon and increments thereto, shall be
invested and reinvested in bonds, debentures, mortgages, equipment or other
trust certificates, notes, obligations issued by or guaranteed by the United
States Government or its agencies, domestic bank certificates of deposit,
domestic bankers' acceptances and repurchase agreements, and high grade
commercial paper, all of which shall bear a fixed rate of return and are
intended to minimize market fluctuations, as shall be selected by the Investment
Manager, or if there shall be no such Investment Manager, by the Trustee (which
may include investment in the Trustee's short-term collective investment fund);
provided, however, that the Executive Committee of the Board of Directors of
American may determine that the Short-Term Investment Fund be comprised of a
mutual fund having substantially the foregoing characteristics.
4.14. Voting of Shares in American Stock Fund.
(a) Trustee Voting. Notwithstanding any other provision of the Plan or the
Trust Agreement to the contrary, the Trustee shall have no discretion or
authority to exercise any voting rights with respect to American Common Stock
held in the American Stock Fund except as provided in this Section 4.14.
(b) Participant Direction. Each Participant, former Participant or
Beneficiary shall be entitled to direct the Trustee in writing, and the Trustee
shall solicit the written direction of such Participant, former Participant or
Beneficiary, as to the manner in which any voting rights of shares of American
Common Stock attributable to his interest in the American Stock Fund are to be
exercised with respect to any matter on which holders of American Common Stock
are entitled to vote by proxy, consent or otherwise, and the Trustee shall
exercise the voting rights of such shares with respect to such matter in
accordance with the last-dated timely written direction received by the Trustee
from such Participant, former Participant or Beneficiary. With respect to the
voting rights of shares of American Common Stock held in the American Stock Fund
as to which timely written directions have not been received by the Trustee as
provided in the preceding sentence, the Trustee shall exercise the voting rights
of such shares in the same manner and in the same proportion in which the voting
rights of shares as to which such directions were received by the Trustee are to
be exercised as provided in the preceding sentence. The Trustee shall combine
fractional interests of Participants, former Participants and Beneficiaries in
shares of American Common Stock held in the American Stock Fund to the extent
possible so that the voting rights with respect to such matter are exercised in
a manner which reflects as accurately as possible the collective directions
given by Participants, former Participants and Beneficiaries. In giving
directions to the Trustee as provided in this Section 4.14(b), each Participant,
former Participant or Beneficiary shall be acting as a named fiduciary within
the meaning of Section 403(a)(1) of ERISA ("Named Fiduciary") with respect to
the exercise of voting rights of shares of American Common Stock in accordance
with such directions pursuant to both the first and the second sentences of this
Section 4.14(b). For purposes of this Section 4.14, the number of shares of
American Common Stock attributable at any particular time to the interest of a
Participant, former Participant or Beneficiary in the American Stock Fund shall
be the product of the total number of shares then held in the American Stock
Fund multiplied by a fraction the numerator of which is the amount allocated to
the American Stock Fund then in his Accounts and the denominator of which is the
amount allocated to the American Stock Fund then in the Accounts of all
Participants, former Participants and Beneficiaries.
(c) Trustee to Communicate Voting Procedures. The Trustee shall communicate
or cause to be communicated to all Participants, former Participants and
Beneficiaries the procedures regarding the exercise of voting rights of shares
of American Common Stock held in the American Stock Fund. The Trustee shall
distribute or cause to be distributed as promptly as possible to all
Participants, former Participants and Beneficiaries entitled to give directions
to the Trustee as to the exercise of voting rights with respect to any matter
all communications and other materials, if any, that the Trustee may receive
from any person or entity (including the Company) that are being distributed to
the holders of American Common Stock and either are directed generally to such
holders or relate to any matter on which holders of American Common Stock are
entitled to vote by proxy, consent or otherwise, and the Company shall promptly
furnish to the Trustee all such communications and other materials, if any, as
are being distributed by or on behalf of American. The Company and the
Retirement Committee shall provide the Trustee with such information, documents
and assistance as the Trustee may reasonably request in connection with any
communications or distributions to Participants, former Participants and
Beneficiaries as aforesaid. This information shall include the names and current
addresses of Participants, former Participants and Beneficiaries and the number
of shares of American Common Stock credited to the accounts of each of them,
upon which the Trustee may conclusively rely. Anything to the contrary in this
Section 4.14, the Plan or the Trust Agreement notwithstanding, except if the
Company serves as recordkeeper, to the extent necessary to provide the Company
with information necessary accurately to maintain records of the interest in the
Plan of Participants, former Participants and Beneficiaries, the Trustee shall
use its best efforts to keep confidential the direction (or the absence thereof)
from each Participant, former Participant or Beneficiary in connection with the
exercise of voting rights of shares of American Common Stock held in the
American Stock Fund and the identity of such Participant, former Participant or
Beneficiary and not to divulge such direction or identity to any person or
entity, including, without limitation, the Company, any other Participating
Employer, American and any other Related Employer and any director, officer,
employee or agent thereof, it being the intent of this Section 4.14 that the
Company, each other Participating Employer, American and each other Related
Employer and their directors, officers, employees and agents not be able to
ascertain the direction given (or not given) by any Participant, former
Participant or Beneficiary in connection with the exercise of voting rights of
such shares.
(d) Invalidity. In the event that a court of competent jurisdiction shall
issue an opinion, order or decree which, in the opinion of counsel to the
Company or the Trustee, shall, in all or any particular circumstances,
invalidate under ERISA or otherwise any provision or provisions of the Plan or
the Trust Agreement with respect to the exercise of voting rights of shares of
American Common Stock held in the American Stock Fund, or cause any such
provision or provisions to conflict with ERISA, or require the Trustee not to
act or such voting rights not to be exercised in accordance with such provision
or provisions, then, upon written notice thereof to the Trustee, in the case of
an opinion of counsel to the Company, or to the Company, in the case of an
opinion of counsel to the Trustee, such provision or provisions shall be given
no further force or effect in such circumstances. Except to the extent otherwise
specified in such opinion, order or decree, the Trustee shall nevertheless have
no discretion or authority in such circumstances to exercise voting rights with
respect to shares of American Common Stock held in the American Stock Fund, but
shall exercise such voting rights in accordance with the last-dated timely
written directions received from Participants, former Participants and
Beneficiaries to the extent such directions have not been invalidated. To the
extent the Trustee exercises any fiduciary responsibility it may have in any
circumstances with respect to any exercise of voting rights of shares of
American Common Stock held in the American Stock Fund, the Trustee in exercising
its fiduciary responsibility, unless pursuant to the requirements of ERISA or
otherwise it is unlawful to do so, (1) shall take into account directions timely
received from Participants, former Participants and Beneficiaries as being the
most indicative of their best interests with respect to the exercise of such
voting rights and (2) shall take into consideration, in addition to any relevant
financial factors bearing on any exercise of such voting rights, the continuing
job security of Participants as employees of the Participating Employers,
conditions of employment, employment opportunities and similar matters and the
prospects of Participants, former Participants and Beneficiaries for benefits
under the Plan and may also take into consideration such other relevant
non-financial factors as the Trustee deems appropriate.
4.15. Tendering of Shares in American Stock Fund.
(a) Tender by Trustee. Notwithstanding any other provision of the Plan or
the Trust Agreement to the contrary, the Trustee shall have no discretion or
authority to tender, deposit, sell, exchange or transfer any shares of American
Common Stock (which, for purposes of this Section 4.15, shall include any rights
within the meaning of Section 4.16(a)) held in the American Stock Fund pursuant
to any tender offer (as defined herein) except as provided in this Section 4.15.
For purposes of this Section 4.15, a "tender offer" shall mean any tender or
exchange offer for or request or invitation for tenders or exchanges of shares
of American Common Stock the consummation of which would result in any "person"
or "group" (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended), or any affiliates or associates thereof,
becoming the beneficial owner of ten percent (10%) or more of the then
outstanding shares of American Common Stock and shall include, without
limitation, any such tender offer made by or on behalf of American.
(b) Participant Direction. Each Participant, former Participant or
Beneficiary shall be entitled to direct the Trustee in writing, and the Trustee
shall solicit the written direction of such Participant, former Participant or
Beneficiary, as to the tendering, depositing, selling, exchanging or
transferring of shares of American Common Stock attributable to his interest in
the American Stock Fund pursuant to any tender offer, and the Trustee shall
tender, deposit, sell, exchange or transfer such shares (or shall retain such
shares in the American Stock Fund) pursuant to such tender offer in accordance
with the last-dated timely written direction received by the Trustee from such
Participant, former Participant or Beneficiary. With respect to shares of
American Common Stock held in the American Stock Fund as to which timely written
directions have not been received by the Trustee from Participants, former
Participants and Beneficiaries to whose interests in the American Stock Fund
such shares are attributable, such Participants, former Participants and
Beneficiaries shall be deemed to have directed the Trustee that such shares be
retained in the American Stock Fund subject to all provisions of the Plan and
the Trust Agreement and not be tendered, deposited, sold, exchanged or
transferred pursuant to such tender offer, and the Trustee shall not tender,
deposit, sell, exchange or transfer any of such shares pursuant thereto. In the
event that, under the terms of such tender offer or otherwise, any shares of
American Common Stock tendered or deposited pursuant thereto may be withdrawn,
the Trustee shall use its best efforts to solicit the written direction of each
Participant, former Participant or Beneficiary as to the exercise of withdrawal
rights with respect to shares of American Common Stock that have been tendered
or deposited pursuant to this Section 4.15, and the Trustee shall exercise (or
refrain from exercising) such withdrawal rights in the same manner as shall
reflect the last dated timely written directions received with respect to the
exercise of such withdrawal rights. The Trustee shall not withdraw shares except
pursuant to a timely written direction of a Participant, former Participant or
Beneficiary. The Trustee shall combine fractional interests of Participants,
former Participants and Beneficiaries in shares of American Common Stock held in
the American Stock Fund to the extent possible so that such shares are tendered,
deposited, sold, exchanged or transferred, and withdrawal rights with respect
thereto are exercised, in a manner which reflects as accurately as possible the
collective directions given or deemed to have been given by Participants, former
Participants and Beneficiaries in accordance with this Section 4.15. In giving
or being deemed to have given directions to the Trustee as provided in this
Section 4.15(b), each Participant, former Participant or Beneficiary shall be
acting as a Named Fiduciary with respect to the tender, deposit, sale, exchange
or transfer of shares of American Common Stock (or the retention of such shares
in the American Stock Fund) in accordance with such directions pursuant to both
the first and second sentences of this Section 4.15(b) and the exercise of (or
the refraining from exercising) withdrawal rights with respect to shares of
American Common Stock tendered or deposited pursuant to the third sentence of
this Section 4.15(b).
(c) Trustee to Communicate Tender Procedures. In the event of a tender
offer as to which Participants, former Participants and Beneficiaries are
entitled to give directions as provided in this Section 4.15, the Trustee shall
communicate or cause to be communicated to all Participants, former Participants
and Beneficiaries entitled to give directions the procedures relating to their
right to give directions as Named Fiduciaries to the Trustee and in particular
the consequences of any failure to provide timely written direction to the
Trustee. In the event of such a tender offer, the Trustee shall distribute or
cause to be distributed as promptly as possible to all Participants, former
Participants and Beneficiaries entitled to give directions to the Trustee with
respect to such tender offer all communications and other materials, if any,
that the Trustee may receive from any person or entity (including the Company)
that are being distributed to the holders of the securities to whom such tender
offer is directed and either are directed generally to such holders or relate to
such tender offer, and the Company shall promptly furnish to the Trustee all
such communications and other materials, if any, as are being distributed by or
on behalf of American. The Company and the Retirement Committee shall provide
the Trustee with such information, documents and assistance as the Trustee may
reasonably request in connection with any communications or distributions to
Participants, former Participants and Beneficiaries as aforesaid. This
information shall include the names and current addresses of Participants,
former Participants and Beneficiaries and the number of shares of American
Common Stock credited to the accounts of each of them, upon which the Trustee
may conclusively rely. Anything to the contrary in this Section 4.15, the Plan
or the Trust Agreement notwithstanding, except if the Company serves as
recordkeeper, to the extent necessary to provide the Company with information
necessary accurately to maintain records of the interest in the Plan of
Participants, former Participants and Beneficiaries, the Trustee shall use its
best efforts to keep confidential the direction (or the absence thereof) from
each Participant, former Participant or Beneficiary with respect to any tender
offer and the identity of such Participant, former Participant or Beneficiary
and not to divulge such direction or identity to any person or entity,
including, without limitation, the Company, any other Participating Employer,
American and any other Related Employer and any director, officer, employee or
agent thereof, it being the intent of this Section 4.15 that the Company, each
other Participating Employer, American and each other Related Employer and their
directors, officers, employees and agents not be able to ascertain the direction
given (or not given) or deemed to have been given by any Participant, former
Participant or Beneficiary with respect to any tender offer.
(d) Invalidity. In the event that a court of competent jurisdiction shall
issue an opinion, order or decree which, in the opinion of counsel to the
Company or the Trustee, shall, in all or any particular circumstances,
invalidate under ERISA or otherwise any provision or provisions of the Plan or
the Trust Agreement with respect to the tendering, depositing, sale, exchange or
transfer of shares of American Common Stock held in the American Stock Fund or
the exercise of any withdrawal rights with respect to shares tendered or
deposited pursuant to a tender offer, or cause any such provision or provisions
to conflict with ERISA, or require the Trustee not to act or such shares not to
be tendered, deposited, sold, exchanged or transferred or such withdrawal rights
not to be exercised in accordance with such provision or provisions, then, upon
written notice thereof to the Trustee, in the case of an opinion of counsel to
the Company, or to the Company, in the case of an opinion of counsel to the
Trustee, such provision or provisions shall be given no further force or effect
in such circumstances. Except to the extent otherwise specified in such opinion,
order or decree, the Trustee shall nevertheless have no discretion or authority
in such circumstances to tender, deposit, sell, transfer or exchange shares of
American Common Stock held in the American Stock Fund (or the retention of such
shares in the American Stock Fund) pursuant to a tender offer or with respect to
the exercise of (or refraining from exercising) any withdrawal rights with
respect to shares tendered or deposited pursuant to a tender offer, but shall
act in accordance with the last-dated timely written directions received from
Participants, former Participants and Beneficiaries to the extent such
directions have not been invalidated. To the extent the Trustee exercises any
fiduciary responsibility it may have in any circumstances with respect to the
tendering, depositing, sale, exchange or transfer of shares of American Common
Stock held in the American Stock Fund or the exercise of any withdrawal rights
with respect to shares tendered or deposited pursuant to a tender offer, the
Trustee in exercising its fiduciary responsibility, unless pursuant to the
requirements of ERISA or otherwise it is unlawful to do so, (1) shall take into
account directions timely received from Participants, former Participants and
Beneficiaries as being the most indicative of their best interests with respect
to a tender offer and (2) shall take into consideration, in addition to any
relevant financial factors bearing on any sale, exchange or transfer or any
exercise of withdrawal rights, the continuing job security of Participants as
employees of the Participating Employers, conditions of employment, employment
opportunities and similar matters and the prospects of Participants, former
Participants and Beneficiaries for benefits under the Plan and may also take
into consideration such other relevant nonfinancial factors as the Trustee deems
appropriate.
(e) Proceeds of Tender. The proceeds of any sale, exchange or transfer of
shares of American Common Stock pursuant to the direction of a Participant,
former Participant or Beneficiary in accordance with this Section 4.15 shall be
allocated to his Accounts in the same manner, in the same proportion and as of
the same date as were the shares sold, exchanged or transferred and shall be
governed by the provisions of this Section 4.15(e) and all other applicable
provisions of the Plan and the Trust Agreement. Such proceeds shall be deemed to
be held in the American Stock Fund and shall be subject to this Section 4.15(e)
and the other applicable provisions of the Plan and the Trust Agreement;
provided, however, that, to the extent necessary to segregate any return, loss,
gain or income on or from such proceeds (or on or from any reinvestment thereof)
from any return, loss, gain or income on or from the remainder of the American
Stock Fund, the Company or the Retirement Committee shall take or cause to be
taken all such action so that (1) such proceeds (and any income or proceeds
therefrom) shall be segregated and held by the Trustee in one or more separate
Investment Funds and (2) appropriate adjustments shall be made from time to time
in the amount allocated to the American Stock Fund in the Accounts. Any such
separate Investment Fund shall be otherwise governed by the other applicable
provisions of the Plan and the Trust Agreement. Any such proceeds (and any
income or proceeds therefrom) shall be invested or reinvested in the same type
of instruments and in the same manner as provided in Section 4.13 with respect
to the Short-Term Investment Fund and subject to the same provisions in the Plan
and the Trust Agreement governing investment and reinvestment of the Short-Term
Investment Fund.
4.16. Exercise of Certain Rights Held in American Stock Fund.
(a) Trustee Exercise of Preferred Share Purchase Rights. Notwithstanding
any other provision of the Plan or the Trust Agreement to the contrary, the
Trustee shall have no discretion or authority to sell, exercise, exchange or
retain any Preferred Share Purchase Rights of American (or any rights issued by
American in substitution or replacement therefor) held in the American Stock
Fund ("rights") except as provided in this Section 4.16; provided, however, that
the sale, retention or taking of any other action relating to rights pursuant to
any tender offer shall be governed by the provisions of Section 4.15 and not by
the provisions of this Section 4.16; and provided, further, that, in connection
with any transfer of shares of American Common Stock held in the American Stock
Fund as provided in the Plan or the Trust Agreement, the Trustee shall transfer
with such shares any rights that are not then transferable separately from such
shares.
(b) Participant Direction. In the event that any rights held in the
American Stock Fund shall become transferable separately from the shares of
American Common Stock held in the American Stock Fund or shall become
exercisable, each Participant, former Participant or Beneficiary shall be
entitled to direct the Trustee in writing, and the Trustee shall solicit the
written direction of such Participant, former Participant or Beneficiary, to
sell, exercise or exchange the rights which are attributable to his interest in
the American Stock Fund or to retain such rights in the American Stock Fund, and
the Trustee shall sell, exercise, exchange or retain such rights in accordance
with the last-dated timely written direction received by the Trustee from such
Participant, former Participant or Beneficiary; provided, however, in the case
of a Participant, former Participant or Beneficiary who directs the exercise of
such rights, the rights shall be exercised only to the extent cash is available
in the Participant's, former Participant's or Beneficiary's accounts in the
American Stock Fund or cash can be obtained pursuant to paragraph (e) of this
Section 4.16. With respect to rights as to which timely written directions have
not been received by the Trustee as provided in the preceding sentence, the
Trustee shall in its sole discretion sell, exercise, exchange or retain such
rights. The Trustee shall combine fractional interests in rights of
Participants, former Participants and Beneficiaries who have given timely
written directions as provided in the first sentence of this Section 4.16(b) to
the extent possible so that the rights attributable to their interests in the
American Stock Fund are sold, exercised, exchanged or retained in a manner which
reflects as accurately as possible the collective directions given by them. In
giving directions to the Trustee as provided in this Section 4.16(b), each
Participant, former Participant or Beneficiary shall be acting as a Named
Fiduciary with respect to the sale, exercise, exchange or retention of rights in
accordance with such directions.
(c) Trustee to Communicate Exercise Procedures. In the event that any
rights shall become transferable separately from the shares of American Common
Stock held in the American Stock Fund or shall become exercisable, the Trustee
shall communicate or cause to be communicated to all Participants, former
Participants and Beneficiaries entitled to give directions with respect thereto
as provided in this Section 4.16 the procedures relating to their right to give
directions as Named Fiduciaries to the Trustee and in particular the
consequences of any failure to provide timely written directions to the Trustee
and shall distribute or cause to be distributed as promptly as possible to such
Participants, former Participants and Beneficiaries all communications and other
materials, if any, that the Trustee may receive from any person or entity
(including the Company) that are being distributed to holders of such rights and
either are directed generally to such holders or relate to such rights, and the
Company shall promptly furnish to the Trustee all such communications and other
materials, if any, as are being distributed by or on behalf of American. The
Company and the Retirement Committee shall provide the Trustee with such
information, documents and assistance as the Trustee may reasonably request in
connection with any communications or distributions to Participants, former
Participants and Beneficiaries as aforesaid. This information shall include the
names and current addresses of Participants, former Participants and
Beneficiaries, the number of rights credited to the accounts of each of them and
the amount of cash available in their Accounts in the American Stock Fund, upon
which the Trustee may conclusively rely. Anything to the contrary in this
Section 4.16, the Plan or the Trust Agreement notwithstanding, except if the
Company serves as recordkeeper, to the extent necessary to provide the Company
with information necessary accurately to maintain records of the interest in the
Plan of Participants, former Participants and Beneficiaries, the Trustee shall
use its best efforts to keep confidential the direction (or the absence thereof)
from each Participant, former Participant or Beneficiary with respect to such
rights and the identity of such Participant, former Participant or Beneficiary
and not to divulge such direction or identity to any person or entity,
including, without limitation, the Company, any other Participating Employer,
American and any other Related Employer and any director, officer, employee or
agent thereof, it being the intent of this Section 4.16 that the Company, each
other Participating Employer, American and each other Related Employer and their
directors, officers, employees and agents not be able to ascertain the direction
given (or not given) by any Participant, former Participant or Beneficiary with
respect to any rights.
(d) Invalidity. In the event that a court of competent jurisdiction shall
issue an opinion, order or decree which, in the opinion of counsel to the
Company or the Trustee, shall, in all or any particular circumstances,
invalidate under ERISA or otherwise any provision or provisions of the Plan or
the Trust Agreement with respect to the sale, exercise, exchange or retention of
any rights held in the American Stock Fund, or cause any such provision or
provisions to conflict with ERISA, or require the Trustee not to act or such
rights not to be sold, exercised, exchanged or retained in accordance with such
provision or provisions, then, upon written notice thereof to the Trustee, in
the case of an opinion of counsel to the Company, or to the Company, in the case
of an opinion of counsel to the Trustee, such provision or provisions shall be
given no further force or effect in such circumstances. Except to the extent
otherwise specified in such opinion, order or decree, the Trustee shall
nevertheless have no discretion or authority in such circumstances to sell,
exercise, exchange or retain such rights as to which written directions were
received from Participants, former Participants and Beneficiaries, but shall act
with respect to such rights in accordance with the last-dated timely written
directions received from Participants, former Participants and Beneficiaries to
the extent such directions have not been invalidated. To the extent the Trustee
exercises any discretion or fiduciary responsibility it may have in any
circumstances with respect to the sale, exercise, exchange or retention of any
rights held in the American Stock Fund, the Trustee in exercising its fiduciary
responsibility, unless pursuant to the requirements of ERISA or otherwise it is
unlawful to do so, (1) shall take into account directions timely received from
Participants, former Participants and Beneficiaries as being the most indicative
of their best interests with respect to the sale, exercise, exchange or
retention of such rights and (2) shall take into consideration, in addition to
any relevant financial factors bearing on any sale, exercise, exchange or
retention of such rights, the continuing job security of Participants as
employees of the Participating Employers, conditions of employment, employment
opportunities and similar matters and the prospects of Participants, former
Participants and Beneficiaries for benefits under the Plan and may also take
into consideration such other relevant non-financial factors as the Trustee
deems appropriate.
(e) Funds for Exercise of Preferred Share Purchase Rights. If practicable
and to the extent necessary to exercise rights attributable to the interest of
any Participant, former Participant or Beneficiary in the American Stock Fund,
the Trustee shall sell such portion of the rights attributable to such interest
as will enable the Trustee to apply the proceeds therefrom to the exercise of
the remaining portion of such rights or the Trustee may obtain cash in such
other manner deemed appropriate by the Trustee provided such other manner is
permitted by applicable law, will not affect the continued qualified status of
the Plan or the tax-exempt status of the Trust under the Code and will not
result in a "prohibited transaction" (as defined in the Code or ERISA).
(f) Allocation of Proceeds. The proceeds of any sale, exercise or exchange
of rights pursuant to the direction of a Participant, former Participant or
Beneficiary in accordance with this Section 4.16 shall be allocated to his
Account in the same manner, in the same proportion and as of the same date as
were the shares to which the sold, exercised or exchanged rights were
attributable and shall be governed by the provisions of this Section 4.16(f) and
all other applicable provisions of the Plan and the Trust Agreement. Such
proceeds shall be deemed to be held in the American Stock Fund and shall be
subject to this Section 4.16(f) and the other applicable provisions of the Plan
and the Trust Agreement; provided, however, that, to the extent necessary to
segregate any return, loss, gain or income on or from such proceeds (or on or
from any reinvestment thereof) from any return, loss, gain or income on or from
the remainder of the American Stock Fund, the Company or the Retirement
Committee shall take or cause to be taken all such action so that (1) such
proceeds and any income or proceeds therefrom shall be segregated and held by
the Trustee in one or more separate Investment Funds and (2) appropriate
adjustments shall be made from time to time in the amount allocated to the
American Stock Fund in the Accounts. Any such separate Investment Funds shall be
otherwise governed by the other applicable provisions of the Plan and the Trust
Agreement. Any such proceeds (and any income or proceeds therefrom) shall be
invested or reinvested in the same type of instruments and in the same manner as
provided in Section 4.13 with respect to the Short-Term Investment Fund and
subject to the same provisions of the Plan and the Trust Agreement governing the
investment and reinvestment of the Short-Term Investment Fund.
4.17. Valuation of Investment Funds. As of each Valuation Date, the Trustee
shall report to the Retirement Committee the Fair Market Value of the assets of
each Investment Fund as of such Valuation Date. The Fair Market Value of an
Investment Fund shall be the value of such Investment Fund as of such Valuation
Date.
ARTICLE V
ACCOUNTS
5.01. Participants' Accounts. The Retirement Committee shall maintain or
cause to be maintained the following separate Accounts for each Participant
(and, as long as may be appropriate, for each former Participant and
Beneficiary):
(a) Tax Deferred Account. A Tax Deferred Account shall be maintained for
each Participant on whose behalf Tax Deferred Contributions are made pursuant to
Section 3.01 of this Plan and on whose behalf any before-tax contributions were
made under a Prior Plan, and such contributions and any earnings and losses
thereon shall be allocated to such Tax Deferred Account.
(b) Supplemental Account. A Supplemental Account shall be maintained for
each Participant on whose behalf Supplemental Contributions are made pursuant to
Section 3.01 of this Plan and on whose behalf any after-tax contributions were
made under a Prior Plan, and such contributions and any losses and earnings
thereon shall be allocated to such Supplemental Account.
(c) Company Matching Account. A Company Matching Account shall be
maintained for each Participant on whose behalf Company Matching Contributions
are made pursuant to Section 3.02 of this Plan and on whose behalf any company
matching contributions were made under a Prior Plan, and such contributions and
any earnings and losses thereon shall be allocated to such Company Matching
Account.
(d) Rollover Account. A Rollover Account shall be maintained for each
Participant on whose behalf any amount has been rolled over to this Plan
pursuant to Section 3.03 of this Plan and on whose behalf any amount has been
transferred or rolled over to a Prior Plan, and such amounts and any earnings
and losses thereon shall be allocated to such Rollover Account.
5.02. Allocation of Earnings and Losses to Accounts. Earnings and losses
shall be allocated to the Accounts of all Participants as of each Valuation Date
by credit or deduction therefrom, as the case may be, of the increase or
decrease in the value of the Investment Funds in which such Accounts are
invested since the immediately preceding Valuation Date attributable to
interest, dividends, changes in market value, expenses and gains and losses
realized from the sale of assets.
5.03. Allocation of Contributions to Accounts. As of each Valuation Date,
Tax Deferred Contributions, Supplemental Contributions, Company Matching
Contributions and Rollover Contributions made to the Plan during the period then
ended by or on behalf of each Participant shall be credited to such
Participant's Tax Deferred Account, Supplemental Account, Company Matching
Account and Rollover Account, respectively.
5.04. Annual Additions Limitation.
(a) Maximum Annual Additions. The sum of the Annual Additions (as defined
in Section 5.04(c)) to a Participant's Accounts in any Plan Year shall not
exceed the lesser of:
(1) Thirty thousand dollars ($30,000) or, if greater, one-quarter
(1/4) of the dollar limitation in effect under Section 415(b)(1)(A) of the
Code; or
(2) Twenty-five percent (25%) of the Participant's Compensation.
The limitations set forth in (1) and (2) above shall be adjusted annually for
increases in the cost of living, in accordance with regulations issued by the
Secretary of the Treasury pursuant to the provisions of Section 415(d) of the
Code (or such other Federal income tax statutory provisions as shall at the time
be applicable).
(b) Procedure for Preventing Excess Annual Additions. In the event that the
Annual Additions to a Participant's Accounts in any Plan Year would be in excess
of the maximum annual limits as a result of the allocation of Forfeitures, a
reasonable error in estimating Compensation, a reasonable error in determining
the amount of elective deferrals or under such other facts and circumstances
which the Commissioner of Internal Revenue finds justifiable, any Supplemental
Contributions shall be returned, and thereafter any Company Matching
Contributions otherwise allocable to a Participant's Accounts shall be reduced,
by the amount necessary to reduce the amount allocable to a Participant's
Accounts to the lesser of the amounts set forth in Section 5.04(a)(1) or (2). If
after returning any Supplemental Contributions, then any Company Matching
Contributions otherwise allocable to a Participant's Accounts, an excess still
exists, any Tax Deferred Contributions that cause the excess shall be returned
to the Participant.
(c) Definition of Annual Additions. For purposes of this Plan, the term
"Annual Additions" means the amounts allocated to a Participant's Accounts
during the year that constitute:
(1) the Company Matching Contributions allocated to such Participant's
Accounts.
(2) the Tax Deferred Contributions and Supplemental Contributions
allocated to such Participant's Accounts.
(3) Forfeitures.
(d) Consolidation of Defined Contribution Plans. For purposes of this
Section 5.04, this Plan and any other qualified defined contribution plan
maintained by a Related Employer shall be considered as a single defined
contribution plan if a Participant is a participant in both plans. Amounts
allocated to a Participant's individual medical benefit account, as defined in
Section 415(l)(1) of the Code, which is part of a defined benefit plan
maintained by a Related Employer shall be treated as annual additions to a
defined contribution plan. Amounts derived from contributions which are
attributable to post-retirement medical benefits allocated to the separate
account of a Participant who is a key employee, as defined in Section 419A(d) of
the Code, under a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by a Related Employer, shall be treated as annual additions to
a defined contribution plan. Notwithstanding the foregoing, the compensation
limit described in Section 5.04(a)(2) shall not apply to any contribution for
medical benefits (within the meaning of Section 419A(f)(2) of the Code) after
separation from service which is otherwise treated as an annual addition under
Section 415(l)(1) of the Code. If a reduction is necessary under Section
5.04(b), then the reduction shall be made to the Annual Additions under one of
such plans as determined by the Retirement Committee and the governing bodies of
such other plans.
5.05. Combined Maximum Limitations. In the event any Participant is also
participating in any other qualified plan (within the meaning of Section 401 of
the Code) maintained by a Related Employer, then for any limitation year, which
shall be the Plan Year, the sum of the "Defined Benefit Plan Fraction" and the
"Defined Contribution Plan Fraction" for such limitation year shall not exceed
one (1.0). For purposes of this Section 5.05, such sum shall be determined in
accordance with the following:
(a) The "Defined Benefit Plan Fraction" for any year is a fraction:
(1) the numerator of which is the projected annual benefit of the
Participant under each defined benefit plan (determined as of the close of
the year); and
(2) the denominator of which is the lesser of the maximum dollar
limitation in effect under Section 415(b)(1)(A) of the Code for such
limitation year times one and one-quarter (1.25), or the amount which may
be taken into account under Section 415(b)(1)(B) of the Code for such
limitation year times one and two-fifths (1.4).
(b) The "Defined Contribution Plan Fraction" for any year is a fraction:
(1) the numerator of which is the sum of the annual additions to the
Participant's account under each defined contribution plan as of the close
of the year; and
(2) the denominator of which is the sum of the lesser of the following
amounts determined for such limitation year and each prior year of service
with the Related Employer:
(A) the product of one and one-quarter (1.25) multiplied by the
dollar limitation in effect under Section 415(c)(1)(A) of the Code for
such limitation year; or
(B) The product of one and two-fifths (1.4) multiplied by the
amount which may be taken into account under Section 415(c)(1)(B) of
the Code for such limitation year.
For purposes of this Section 5.05, all defined benefit or defined
contribution plans shall be treated as one (1) plan by class. In the event the
above limitation would otherwise be exceeded in any limitation year, the
Participant's benefits under the defined benefit plans are to be limited. In the
event any such defined benefit plan fails to provide for such reduction of
benefits, the annual additions under this Plan shall be reduced to the extent
necessary to comply with the above limitation.
5.06. Limitation of Annual Compensation. For purposes of this Plan, the
Compensation of a Participant shall be limited to one hundred and fifty thousand
dollars ($150,000) in each Plan Year (adjusted for increases in the cost of
living pursuant to rulings of the Secretary of the Treasury). For purposes of
applying the annual limitation on Compensation under Section 401(a)(17) of the
Code, the family unit of a Participant who either is a five percent (5%) owner
or is both a Highly Compensated Employee and one of the ten (10) most Highly
Compensated Employees, shall be treated as a single employee with one
Compensation and the annual limitation on Compensation shall be allocated among
family members. If as a result of the application of such rules the annual
limitation on Compensation is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation prior to the application of such limitation. For purposes of
applying such rules, the term "family unit" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age nineteen (19) before the close of the year.
ARTICLE VI
VESTING AND FORFEITURES
6.01. Participant Contributions. A Participant shall at all times be one
hundred percent (100%) vested in his Tax Deferred Account, Supplemental Account
and Rollover Account.
6.02. Company Contributions. A Participant shall at all times be one
hundred percent (100%) vested in his Company Matching Account.
6.03. Vesting in Prior Plan. Notwithstanding any other provision of this
Plan to the contrary, a Participant who participated in a Prior Plan shall be
vested in his Accounts at least to the extent he was vested under such Prior
Plan.
6.04. Amendments to Vesting Schedule. No amendment to the Plan's vesting
schedules shall deprive a Participant of his nonforfeitable rights to benefits
accrued to the date of such amendment. If any vesting schedule of the Plan is
amended, each Participant with at least three years of Vesting Service may elect
to have his nonforfeitable percentage determined without regard to such
amendment. The period during which the election may be made shall commence with
the date the amendment is adopted and shall end on the later of:
(a) sixty (60) days after the amendment is adopted;
(b) sixty (60) days after the amendment is effective; and
(c) sixty (60) days after the Participant is issued written notice of the
amendment by the Company.
6.05. Forfeitures. Any Account Balances in a Participant's Accounts that do
not become distributable pursuant to Article VII shall be regarded as
Forfeitures upon such Participant's Severance From Service. All amounts
forfeited in accordance with this Article VI shall be used to reduce
contributions of the Participant's Participating Employer.
6.06. Reinstatement of Account Balances. If a former Participant who has
received a distribution of less than the full amount of his Account Balances
thereafter becomes a Participant, the Participant may, provided a Break in
Service of five (5) years has not occurred, repay in cash the amount of his
Account Balances which previously had been distributed in accordance with
Article VII. Upon such repayment, the amount so repaid shall be reinstated as of
the Valuation Date next succeeding or coincident with such repayment and shall
be nonforfeitable. If a Participant or former Participant who has received a
distribution of less than the full amount of his Account Balances resumes
employment prior to incurring a Break in Service of five (5) years, the amount
of the Account Balances that the Participant or former Participant did not
receive shall be reinstated as of the Valuation Date next succeeding or
coincident with his reemployment, regardless of whether such Participant has
repaid the amount of his Account Balances which previously had been distributed
in accordance with Article VII. If repayment or reinstatement of such amount is
not made as provided herein, the amount of the Participant's Account Balances
previously distributed and the amount that the Participant did not receive shall
be disregarded in the determination of the Participant's Account Balances. For
purposes of this Section 6.06, a "Break in Service" means any period commencing
with an Employee's Severance From Service and continuing for at least twelve
(12) consecutive months until reemployment by a Participating or Related
Employer. In the event an Employee is reemployed by a Participating Employer or
Related Employer within the twelve (12) consecutive month period following
Severance From Service, a Break in Service shall be deemed not to have occurred
and the Employee shall be considered to have been in Service during such period
he was not employed. In the event the Employee is not so reemployed within such
twelve (12) consecutive month period, the Break in Service shall be deemed to
have commenced on his Severance From Service. Notwithstanding the foregoing, any
former Participant who terminated employment prior to January 1, 1995 and who
thereafter becomes a Participant in this Plan, shall be immediately one hundred
percent (100%) vested in any unvested Account Balances attributable to company
matching contributions at the time of his termination of employment.
ARTICLE VII
DISTRIBUTIONS
7.01. Form of Payment.
(a) Payment Forms. A Participant's Account Balances shall be distributed to
or for the benefit of the Participant, former Participant or Beneficiary, as of
the payment dates specified in Section 7.02 and in such one or more of the
following forms of settlement as the Participant, former Participant or his
Beneficiary shall elect:
(1) By a single distribution in cash;
(2) By a single distribution in whole shares of American Common Stock
to the extent that the portion of such Participant's Account Balances
allocated to the American Stock Fund is evenly divisible by the Fair Market
Value of such stock on the Valuation Date as of which such Account Balances
are determined and the remainder of such Participant's Account Balances in
cash; or
(3) By periodic installments in cash during a period not to exceed the
life expectancy of the Participant or former Participant or the joint life
expectancy of the Participant or former Participant and his designated
Beneficiary determined at the date of commencement of distribution.
(b) Conversion From Periodic Installments to Lump Sum. If a Participant,
former Participant or his Beneficiary is receiving periodic installments or is
entitled to a deferred distribution pursuant to Section 7.02, the Participating
Employer shall upon the request of such Participant, former Participant or
Beneficiary direct that all of the Account Balances as of the Valuation Date
next succeeding the Retirement Committee's approval of the request (or if the
date of approval coincides with a Valuation Date, then as of that Valuation
Date), less any periodic installments paid since such Valuation Date, shall be
distributed in a single distribution or otherwise applied for the benefit of
such Participant, former Participant or Beneficiary. A Participant, former
Participant or his Beneficiary who is receiving periodic installments or is
entitled to a deferred distribution pursuant to Section 7.02 may not receive a
partial single sum distribution of his Account Balances.
(c) Allocation of Earnings and Losses. So long as a Participant, former
Participant or his Beneficiary is receiving periodic installments pursuant to
Section 7.01(a)(3) or is entitled to a deferred distribution pursuant to Section
7.02, such Participant, former Participant or his Beneficiary shall continue to
share proportionately in the net income or losses of the Investment Funds.
(d) Lump Sum Payment of Amounts of $3,500 or Less. Notwithstanding the
foregoing, if the vested value of the Participant's Account Balances has not at
any time exceeded three thousand five hundred dollars ($3,500), payment shall be
made as soon as practicable following his termination of employment in a single
distribution in cash.
(e) Reduction of Account Balances and Investment Funds From Periodic
Installments. Payments made in periodic installments pursuant to Section
7.01(a)(3), shall be withdrawn from a Participant's Account Balances first from
amounts attributable to Supplemental Contributions and any earnings thereon and
then from his remaining Account Balances on a pro rata basis. Payments in
periodic installments made pursuant to Section 7.01(a)(3) shall be withdrawn
from the Investment Funds in which such Participant's Account Balances are
invested on a pro rata basis.
7.02. Time of Payment.
(a) Distribution Upon Termination of Employment. Subject to Section 7.02(c)
below, in the event that a Participant terminates employment (whether by reason
of Retirement, Disability, Termination of Employment Without Fault, death or
other reason), if elected by the Participant, former Participant or his
Beneficiary, the Participant's Account Balances determined as of the Valuation
Date next succeeding or coincident with such termination of employment shall be
distributed to or applied for the benefit of such Participant, former
Participant or his Beneficiary in one of the forms of payment specified in
Section 7.01(a) as soon as practicable following such termination of employment.
Except as otherwise provided in Section 7.01(b), if a Participant, former
Participant or his designated Beneficiary elects distribution of his Account
Balances in periodic installments pursuant to Section 7.01(a)(3), the period
over which distribution shall be made may not be changed after distribution has
commenced.
(b) Commencement of Distribution. Unless a Participant elects otherwise in
writing, distribution of a Participant's Account Balances shall commence not
later than the sixtieth (60th) day after the close of the Plan Year in which the
Participant attains age 65 or terminates employment, whichever is later.
(c) Deferred Distribution. Except as otherwise provided in Section 7.05(b),
in the event the Account Balances of a Participant, former Participant or
Beneficiary at any time exceeded thirty-five hundred dollars ($3,500) (or such
other amount permitted by Treasury Regulations) at the time the Account Balances
become distributable, the Account Balances shall not, unless the Participant,
former Participant or Beneficiary elects otherwise, by a written election on a
form approved by the Retirement Committee, be distributed to the Participant,
former Participant or Beneficiary, but shall be distributed in periodic
installments pursuant to Section 7.01(a)(3) to the Participant, former
Participant or Beneficiary commencing on the sixtieth (60th) day after the close
of the Plan Year in which the Participant or former Participant would have
attained age sixty-five (65) (or actual retirement date, if later) or the
Valuation Date coincident with or next succeeding the date the Retirement
Committee is notified of the death of the Participant, former Participant or
Beneficiary. So long as the Account Balances are being so held, such
Participant, former Participant or Beneficiary shall, to the extent provided in
Section 7.02, continue to share proportionately the net income or net loss and
expenses of the Investment Funds but shall not share in any contributions made
by a Participating Employer for any Plan Year after the Participant became a
former Participant.
(d) Minimum Distribution Requirements. A Participant, former Participant or
Beneficiary designated pursuant to Section 7.04(a) may also elect, in writing on
a form approved by the Retirement Committee, signed by the Participant, former
Participant or Beneficiary and filed with the Participating Employer prior to
the commencement of distribution of Account Balances, that distribution be
further deferred (except as otherwise provided herein or in Section 7.04(b)).
Notwithstanding any other provision of this Plan to the contrary, a
Participant's or former Participant's benefits must commence no later than April
1 following the calendar year in which the Participant or former Participant
attains age seventy and one-half (70-1/2). Benefits must be paid (1) over a
period not longer than the life of the Participant or former Participant and his
designated Beneficiary or (2) over a period not extending beyond the life
expectancy of the Participant or former Participant or the joint life
expectancies of the Participant or former Participant and his designated
Beneficiary. If a Participant or former Participant dies before his entire
interest has been distributed to him, or if distribution has begun to his
designated Beneficiary, the Participant's or former Participant's entire
interest (or the remaining part of such interest if distribution has commenced)
will be distributed within five (5) years after his death (or the death of his
designated Beneficiary); provided, however, that this sentence shall not apply
if (A) the distribution of the Participant's or former Participant's interest
has commenced and is for a certain term permitted under (2) and such
distribution to the designated Beneficiary commences within one (1) year after
the Participant's or former Participant's death or (B) the portion of the
Participant's or former Participant's Accounts to which his surviving spouse is
entitled shall be distributed over a period not extending beyond the life
expectancy of the surviving spouse and such distribution commences no later than
the date on which the Participant or former Participant would have attained age
seventy and one-half (70-1/2). If the Participant or former Participant dies
after commencement of payments, the remaining portion of such interest shall
continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's or former Participant's
death. All distributions shall be made in accordance with the regulations under
Section 401(a)(9) of the Code including Treasury Regulation Section
1.401(a)(9)-2.
(e) Notice Requirement. Any election pursuant to this Article VII shall be
made by filing the appropriate form in the manner and within the time limits set
by the Retirement Committee.
7.03. Certain Retroactive Payments. If the amount of the payment required
to be made or to commence on the date determined under this Article VII cannot
be ascertained by such date, a payment retroactive to such date may be made no
later than sixty (60) days after the earliest date on which the amount of such
payment can be ascertained under the Plan.
7.04. Designation of Beneficiary.
(a) Designation by Participant. At any time prior to distribution of the
Account Balances in a Participant's Accounts or, if distribution shall have
begun in periodic installments, then at any time prior to distribution of the
last installment, a Participant or former Participant may designate a
Beneficiary or Beneficiaries (who may be executors or trustees and who shall be
the same person or persons for each of the Participant's Accounts) in a writing
filed with the Participating Employer on a form approved by the Retirement
Committee, signed by the Participant or former Participant. Any such designation
may be revoked or changed by the Participant or former Participant in a writing
filed with the Participating Employer on a form approved by the Retirement
Committee, at any time prior to distribution of such Account Balances or, if
distribution shall have begun in periodic installments, then at any time prior
to distribution of the last installment. The spouse of a Participant or former
Participant shall in all cases be deemed to be the Beneficiary of the
Participant or former Participant unless the Participant or former Participant
prior to death shall have filed with the Participating Employer on a form
approved by the Retirement Committee a designation of someone else as
Beneficiary and the spouse of the Participant or former Participant shall have
consented in writing to such designation and the consent acknowledges the effect
of the designation and is witnessed by a notary public or Plan representative.
The spouse's consent may be dispensed with only if the Participant establishes
to the satisfaction of the Participating Employer that the spouse's consent
cannot be obtained because the spouse cannot be located or because of such other
reasons as may be prescribed by Treasury Regulations. If no effective
designation of Beneficiary by a Participant or former Participant shall be on
file with the Participating Employer when Account Balances would otherwise be
distributable to a Beneficiary designated by a Participant or former
Participant, then such balance shall be distributed to the spouse of the
Participant or former Participant or, if there is no spouse, to the executor of
the will or the administrator of the estate of the Participant or former
Participant or, if no such executor or administrator shall be appointed within
six (6) months after the death of such Participant or former Participant, the
Retirement Committee shall direct that distribution be made, in such shares as
the Retirement Committee shall determine, to the child, parent or other blood
relative of such Participant or former Participant, or any of them, or to such
other person or persons as the Retirement Committee may determine.
(b) Designation by Surviving Primary Beneficiary. Each person who is a
surviving primary Beneficiary designated pursuant to Section 7.04(a) above at
the time of the death of the Participant or former Participant may designate a
Beneficiary or Beneficiaries (who may be executors or trustees and who shall be
the same person or persons for each of the Participant's Accounts) to receive,
upon the death of such Beneficiary designated pursuant to Section 7.04(a) above,
all or any portion of the Account Balances otherwise distributable to the
Beneficiary pursuant to Section 7.04(a) above as of such Beneficiary's date of
death. Notwithstanding any other provision of this Plan to the contrary, any
balance distributable to any Beneficiary designated by a Beneficiary pursuant to
this Section 7.04(b) shall be distributed pursuant to one of the methods of
settlement provided in Section 7.01(a)(1) or (a)(2) as elected by the
Beneficiary designated pursuant to this Section 7.04(b) as soon as practicable
after the date of death of the Beneficiary designated pursuant to Section
7.04(a) above and such balance shall be computed as of the Valuation Date
immediately preceding such date of death (or, if such date of death coincides
with a Valuation Date, then as of that Valuation Date). Any designation made
pursuant to this Section 7.04(b) may be made at any time prior to the
distribution of the Account Balances in the Participant's or former
Participant's accounts to the Beneficiary designated pursuant to Section
7.04(a), or if distribution shall have begun in periodic installments, prior to
the distribution of the last installment to the Beneficiary designated pursuant
to Section 7.04(a) above. Any designation made pursuant to this Section 7.04(b)
shall be made in a writing filed with the Participating Employer on a form
approved by the Retirement Committee and signed by the Beneficiary designated
pursuant to Section 7.04(a) above. Any designation made pursuant to this Section
7.04(b) may be revoked or changed by the Beneficiary designated pursuant to
Section 7.04(a), in a writing filed with the Participating Employer on a form
approved by the Retirement Committee, at any time prior to distribution of such
Account Balances to the Beneficiary designated pursuant to Section 7.04(a) or,
if distribution shall have begun in periodic installments, at any time prior to
distribution of the last installment to such Beneficiary. If no effective
designation of Beneficiary pursuant to this Section 7.04(b) shall be on file
with the Participating Employer upon the death of the Beneficiary designated
pursuant to Section 7.04(a) above, any balance otherwise then distributable to
the Beneficiary designated pursuant to Section 7.04(a) above shall be
distributed to the spouse of such Beneficiary or, if there is no spouse, to the
executor of the will or the administrator of the estate of such Beneficiary or,
if no such executor or administrator shall be appointed within six (6) months
after the death of such Beneficiary, the Retirement Committee shall direct that
distribution be made, in such shares as the Retirement Committee shall
determine, to the child, parent or other blood relative of such Beneficiary, or
any of them, or to such other person or persons as the Retirement Committee may
determine.
7.05. Payment in Event of Legal Disability. If a Participant, former
Participant or Beneficiary is under a legal disability or, by reason of illness
or mental or physical disability, is unable, in the opinion of the Retirement
Committee, to attend properly to his personal financial matters, the Trustee may
make such payments in such of the following ways as the Retirement Committee
shall direct to the spouse, child, parent or other blood relative of such
Participant, former Participant or Beneficiary, or any of them, or to such other
person or persons as the Retirement Committee may determine until such date as
the Retirement Committee shall determine that such incapacity no longer exists.
7.06. Missing Distributees. If all or any part of the interest of any
Participant, former Participant or Beneficiary becomes distributable hereunder
and the whereabouts of such Participant, former Participant or Beneficiary is
then unknown to the Participating Employer and the Participating Employer fails
to receive a claim for such distribution from the person entitled thereto, or
from any other person validly acting in his behalf, within two (2) years
thereafter, then the amount of such distribution shall be forfeited as of the
next Valuation Date; provided, however, that if the person entitled to receive
such distribution subsequently claims it, the amount shall be restored. Any such
Forfeiture shall be applied as soon as practicable to reduce Participating
Employer contributions under the Plan.
7.07. Information Required of Distributees. Each Participant, former
Participant and Beneficiary of a deceased Participant shall file with the
Participating Employer from time to time in writing his post office address and
each change of post office address. Any communication, statement or notice
addressed to such person at his last post office address filed with the
Participating Employer, or if no such address was filed with the Participating
Employer then at his last post office address as shown in a Participating
Employer's records, if any, shall be binding on such person for all purposes of
this Plan, and neither any Participating Employer nor the Trustee shall be
obligated to search for or ascertain the whereabouts of any Participant, former
Participant or Beneficiary.
7.08. Direct Rollover Provision.
(a) Direct Rollover Option. Notwithstanding any provision of this Plan to
the contrary that would otherwise limit a distributee's election under this
paragraph (a), a distributee may elect, at the time and manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) Eligible Rollover Distribution Defined. For purposes of this Section
7.08, an eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an eligible
rollover distribution shall not include: (1) any distribution that is one of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated Beneficiary, or for a specified period of ten years or more, (2) any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code, and (3) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) Eligible Retirement Plan Defined. For purposes of this Section 7.08, 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, (3) an annuity plan described in Section 403(a) of
the Code, or (4) a qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution; provided, however, in
the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(d) Distributee Defined. For purposes of this Section 7.08, a distributee
is an Employee or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a "qualified domestic relations
order", as defined in Section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
(e) Direct Rollover Defined. For purposes of this Section 7.08, a direct
rollover is any payment by the Plan to the eligible retirement plan specified by
the distributee.
ARTICLE VIII
IN-SERVICE WITHDRAWALS
8.01. Hardship Withdrawals. In addition to any other withdrawals that may
be made pursuant to this Article VIII, a Participant may, prior to his Severance
From Service, apply for a withdrawal of a specified portion of the Account
Balances in his Accounts, in accordance with the following:
(a) Amount and Frequency. Subject to such uniform and nondiscriminatory
rules as may be promulgated from time to time by the Retirement Committee, a
Participant may apply not more frequently than once during any twelve (12) month
period for a hardship withdrawal of all or any part of his Account Balances not
previously withdrawn (excluding earnings credited on Tax Deferred Contributions
after December 31, 1988).
(b) Hardship Required. The withdrawal must be for an immediate and heavy
financial need of the Participant for which funds are not reasonably available
from other resources of the Participant. A Participant shall be deemed to have
an immediate and heavy financial need if the hardship is on account of (1)
unreimbursed medical expenses incurred by the Participant, the Participant's
spouse, or any dependents, or necessary for such person to obtain medical care,
(2) the purchase of the principal residence of the Participant (excluding
regular mortgage payments), (3) tuition and related educational fees for
post-secondary education for the Participant, the Participant's spouse, or
dependents for the following twelve (12) months, and (4) the need to prevent
eviction from or foreclosure on the Participant's principal residence. A
Participant shall be deemed to have established that the amount to be withdrawn
is not reasonably available from other resources if the Participant has obtained
all other in-service withdrawals, distributions and nontaxable loans available
under this Plan and any other plan maintained by the Participating Employer. Any
determination of the existence of financial hardship and the amount to be
distributed as a result thereof shall be made by the Participating Employer in
accordance with the Code and the applicable regulations and using a uniform and
nondiscriminatory standard. If approved by the Participating Employer, such
withdrawal shall not exceed the amount required to meet the need created by the
hardship, including any amounts necessary to pay any Federal, State or local
income taxes or penalties reasonably anticipated to result from the withdrawal.
(c) Notice Requirement. Any application for a hardship withdrawal made
pursuant to this Section 8.01 shall be submitted to the Participating Employer
within a period as may be specified by the Retirement Committee and must be on a
form approved by the Retirement Committee.
(d) Effective Date and Valuation Date. A hardship withdrawal shall be
effective as of the Valuation Date coincident with or immediately preceding a
Participant's request for a hardship withdrawal and valued as of the same
Valuation Date. Payment of any amount withdrawn pursuant to this Section 8.01
shall be made as soon as practicable on or after the effective date of such
hardship withdrawal.
(e) Effect on Account Balances and Investment Funds. Whenever a
Participant's Account Balances are withdrawn pursuant to this Section 8.01, such
Account Balances shall be reduced from his Accounts in the following order: (1)
any Supplemental Account; (2) any Rollover Account; (3) Tax Deferred Account;
and (4) any Company Matching Account. Amounts allocated to the Investment Funds
in the Accounts from which amounts are withdrawn pursuant to this Section 8.01
shall be reduced on a pro rata basis.
(f) Limitations. If a hardship withdrawal is made pursuant to this Section
8.01, the Participant may not make Tax Deferred Contributions or Supplemental
Contributions for a period of twelve (12) months following the date of receipt
of the distribution, and the dollar limitation specified in Section 3.04 shall
be reduced for the Plan Year following the year of withdrawal by the amount of
the Tax Deferred Contributions made by the Participant during the Plan Year of
the hardship withdrawal.
8.02. Withdrawals Upon Attainment of Age 59-1/2.
(a) Amount. In addition to any other withdrawals that may be made pursuant
to this Article VIII, a Participant may, prior to his Severance From Service
apply for a withdrawal of all or any portion of his Account Balances in his
Accounts after he has attained age fifty-nine and one-half (59-1/2).
(b) Notice Requirement. Any application for a withdrawal made pursuant to
this Section 8.02 shall be submitted to the Participating Employer within a
period prior to the effective date of the withdrawal as may be specified by the
Retirement Committee and must be on a form approved by the Retirement Committee.
(c) Effective Date and Valuation Date. A withdrawal made pursuant to this
Section 8.02 shall be effective as of the Valuation Date coincident with or next
succeeding a Participant's request for such withdrawal and valued as of such
Valuation Date. Payment of any amount withdrawn pursuant to this Section 8.02
shall be made as soon as practicable on or after the effective date of such
withdrawal in a single sum payment in cash.
(d) Effect on Account Balances and Investment Funds. Whenever a
Participant's Account Balances are withdrawn pursuant to this Section 8.02, such
Account Balances shall be reduced from his Accounts in the following order: (1)
any Supplemental Account; (2) any Rollover Account; (3) any Tax Deferred
Account; and (3) any Company Matching Account. Amounts allocated to the
Investment Funds in the Accounts from which amounts are withdrawn pursuant to
this Section 8.02 shall be reduced on a pro rata basis.
ARTICLE IX
LOANS
9.01. Availability. A Participant may make application to his Participating
Employer to borrow from his Account Balances. The Participating Employer may,
upon such uniformly applicable conditions as the Retirement Committee shall
prescribe, make such a loan in accordance with this Article IX. No more than one
loan the purpose of which is to acquire any dwelling unit which within a
reasonable time is to be used as the principal residence of the Participant and
one loan for any other purpose may be outstanding to a Participant at any time.
A Participant may not apply for a new loan until ninety (90) days after the
prior loan is repaid in full. A former Participant whose Accounts have not been
distributed and who is a party-in-interest within the meaning of Section 3(14)
of ERISA may also make an application to borrow to the extent required by
Federal law.
9.02. Effect on Account Balances and Investment Funds. A loan shall be made
as of the Valuation Date next succeeding the Participating Employer's receipt of
the loan application and shall be based on the Participant's Account Balances as
of the Valuation Date immediately preceding the Valuation Date as of which the
loan is made. Whenever all or any part of a Participant's Account Balances are
borrowed, the amount representing such Account Balances or part thereof
transferred to the Loan Fund shall be reduced in the following order: (a) any
Tax Deferred Account; (b) any Rollover Account; (c) any Supplemental Account;
and (d) any Company Matching Account. The loan and such reduction shall be
effective as of the same Valuation Date. A loan shall be withdrawn from the
respective Investment Funds in which such Account Balances are invested on a pro
rata basis.
9.03. Amount. The amount of any loan made pursuant to this Article IX shall
not be less than one thousand dollars ($1,000). The aggregate amount of all such
loans to a Participant or eligible former Participant shall not exceed fifty
percent (50%) of his Account Balances under the Plan, and shall not exceed fifty
thousand dollars ($50,000) minus the largest outstanding Plan loan balance
during the twelve (12) month period ending the day before the loan is made.
9.04. Term of Loan. The term of a loan shall not exceed five (5) years.
Notwithstanding the foregoing, the term of a loan shall not exceed ten (10)
years if its purpose is to acquire any dwelling unit which within a reasonable
time is to be used as the principal residence of the Participant.
9.05. Promissory Note. A secured promissory note shall be delivered to the
Trustee pledging as collateral a portion of the Participant's Accounts not less
than the amount of the borrowing. Interest on a loan shall be fixed by the
Retirement Committee at a rate reasonably equivalent to prevailing market
interest rates.
9.06. Repayment. The loan shall be repaid in regular installments in each
pay period, by means of payroll deductions. Prepayment of a loan in its entirety
without penalty shall be permitted at any time. Partial prepayment of a loan
shall not be permitted at any time. Notwithstanding the foregoing, repayment by
a Participant who is on an Approved Leave of Absence or by an eligible former
Participant shall be made by such Participant or former Participant on at least
a monthly basis to the Trustee by means of a check or money order delivered to
the Participating Employer. A loan which is not repaid when due shall be deemed
to be in default. A loan under the Plan shall constitute an earmarked investment
of the borrowing Participant's Accounts. Loan repayments shall be credited to
the Participant's Account or Accounts from which the loan was made monthly on a
pro rata basis and shall be credited to the Investment Funds monthly in
accordance with the Participant's investment election in effect at the time of
repayment of the loan or, in the absence of such investment election, to the
Short-Term Investment Fund.
9.07. Reduction of Account Balance. Upon a Participant's termination of
employment or at such other time as the Participant's Account Balances are
distributed before a loan is repaid in full, the unpaid balance thereof,
together with interest due and payable thereon, shall become due and payable,
and the Trustee shall first satisfy the indebtedness from the amount payable to
the Participant before making any payments to Participant. If a loan becomes in
default, foreclosure on the promissory note and attachment of security on such
loan will not occur until a distributable event occurs under the Plan.
ARTICLE X
ADMINISTRATION
10.01. Fiduciaries.
(a) Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration. The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this Plan
and the Trust Agreement or delegated to them by the Company. The Board of
Directors of American shall have the sole authority to appoint and remove the
Trustee and the members of the Trusts Investment Committee of American and to
amend or terminate, in whole or in part, the Trust. The Board of Directors of
the Company shall have the sole authority to amend or terminate, in whole or in
part, this Plan and to appoint and remove the members of the Retirement
Committee. The Company shall be the Plan administrator for the purposes of ERISA
and shall have the responsibility for the administration of this Plan, which
responsibility is specifically described in this Plan and the Trust Agreement,
except that the Retirement Committee or its delegate, the Participating
Employers and the Trusts Investment Committee of American shall have the sole
responsibility for the performance of those administrative duties specifically
given them as described in this Plan. The Executive Committee of the Board of
Directors of American shall have the sole authority to appoint Investment
Managers and select mutual funds. The Trustee shall have the sole responsibility
for the administration of the Trust and management of the assets held
thereunder, except that, if one or more Investment Managers are appointed, each
Investment Manager shall have sole authority and responsibility for the
investment and reinvestment of such portion of the Investment Funds as the
Trusts Investment Committee of American directs. The Trusts Investment Committee
of American shall have the sole authority to vote proxies with respect to any
securities held in the Trust, except for proxies with respect to American Common
Stock held in the American Stock Fund.
(b) Reliance of Fiduciaries. Each Fiduciary may rely upon any direction,
information, or action of another Fiduciary with respect to matters within the
responsibility of such other Fiduciary as being proper under this Plan or any
funding instrument and is not required under this Plan or funding instrument to
inquire into the propriety of any such direction, information, or action. To the
maximum extent permitted by law, it is intended under this Plan that each
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities, and obligations under this Plan and shall not be
responsible for any act or failure to act of another Fiduciary. To the maximum
extent permitted by ERISA, no other Fiduciary shall be liable for any loss which
may result from a decision of an Investment Manager with respect to Plan assets
under its control.
(c) Named Fiduciary. The Company shall be the "Named Fiduciary" for
purposes of ERISA. The Secretary of the Company shall be subject to service of
process on behalf of the Plan.
(d) Indemnity of Board of Directors and Committee Members. The members of
the Board of Directors of the Company, the members of the boards of directors of
each other Participating Employer, the members of the Retirement Committee, the
members of the Board of Directors of American and its Executive Committee and
the members of the Trusts Investment Committee of American shall be entitled to
rely on any certification furnished by a Participating Employer and upon reports
or opinions furnished by any accountant, actuary, Investment Manager or legal
counsel employed or retained by American. The Participating Employers shall
indemnify members of the Board of Directors of the Company, members of the
boards of directors of each other Participating Employer, the members of the
Retirement Committee, the members of the Board of Directors of American and its
Executive Committee and the members of the Trusts Investment Committee of
American and any other employee who may act on their behalf, and each of them,
and save them and each of them harmless from the effects and consequences of
their acts, omissions and conduct in their official capacity, except to the
extent that such effects and consequences shall result from their own willful
misconduct.
(e) Indemnity for Acts of Investment Managers. The members of the Board of
Directors of the Company, the members of the boards of directors of each other
Participating Employer, the members of the Retirement Committee, the members of
the Board of Directors of American and its Executive Committee and the members
of the Trusts Investment Committee of American and any other employee who may
act on their behalf, and each of them, shall be indemnified and saved harmless
from all liability, joint or several, for any loss to the Trust, including any
depreciation of principal or loss of income resulting from the purchase or
retention of any property or any other investment action made or taken by any
Investment Manager or any such action made or taken by the Trustee acting on the
instructions of any Investment Manager.
10.02. Claims Procedure. The Participating Employer shall make all initial
determinations as to the right of any person to a benefit. Any denial by the
Participating Employer of the claim for benefits under the Plan by a
Participant, former Participant or Beneficiary shall be stated in writing by the
Participating Employer and delivered or mailed to the Participant, former
Participant or Beneficiary within ninety (90) days after receipt by the
Participating Employer; and such notice shall set forth the specific reasons for
the denial. In the event of a denial of a claim, a claimant may notify the
Retirement Committee in writing within sixty (60) days after receipt of written
denial of the claim that the claimant wishes a review of the denial of the claim
and present to the Retirement Committee a written statement of the claimant's
position. The Retirement Committee shall act upon such request for review within
sixty (60) days after receipt thereof unless special circumstances require
further time, but in no event later than one hundred twenty (120) days after
receipt. If the Retirement Committee confirms the denial, in whole or in part,
the Retirement Committee shall present in a written notice to the claimant the
specific reasons for denial and specific references to the Plan provisions on
which the decision was based, in a manner calculated to be understood by the
claimant.
10.03. ERISA Compliance. The Company shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and
governmental regulations issued thereunder relating to records of Participants'
benefits under the Plan; notifications to Participants; annual registration with
the Internal Revenue Service; and annual reports to the Department of Labor.
10.04. Fiduciary Powers. The Retirement Committee, or its delegate, shall
have such duties and powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, the following:
(a) to construe and interpret the Plan, decide all questions of eligibility
and determine the manner and time of payment of any benefits hereunder;
(b) to prescribe procedures to be followed by Participants, former
Participants and/or Beneficiaries filing applications for benefits;
(c) to prepare and distribute, in such manner as the Company determines to
be appropriate, information explaining the Plan;
(d) to receive from the Participating Employers, the Trustee and
Participants such information as shall be necessary for the proper
administration of the Plan;
(e) to prepare such annual reports with respect to the administration of
the Plan as are reasonable and appropriate; to submit annually to the Board of
Directors of the Company a report showing in reasonable detail the assets of the
Plan and giving a brief account of the operation of the Plan for the preceding
Plan Year;
(f) to receive, review, and keep on file (as it deems convenient or proper)
reports of the financial condition, and of the receipts and disbursements, of
the Trust;
(g) to direct the Trustee with respect to the payment of benefits; and
(h) to employ agents, attorneys, accountants, or other persons (who also
may be employed by any Participating Employer or the Trustee), and to allocate
or delegate to them such powers, rights, and duties as the Retirement Committee
may consider necessary or advisable to properly carry out the administration of
the Plan, including maintaining the accounts of Participants, provided that such
allocation or delegation, and the acceptance thereof by such agents, attorneys,
accountants, or other persons, shall be in writing.
10.05. Administrative Rules. The Company and the Retirement Committee may
adopt such rules as they deem necessary, desirable or appropriate. All rules and
decisions shall be uniformly and consistently applied to all Participants in
similar instances. When making a determination or calculation, the Company or
the Retirement Committee shall be entitled to rely upon information furnished by
a Participant, former Participant or Beneficiary, a Related Employer or the
legal counsel of a Related Employer.
10.06. Committee Procedures. The Retirement Committee may act at a meeting
or in writing without a meeting. The Retirement Committee shall elect one of its
members as chairman, and appoint a secretary, who may or may not be a Retirement
Committee member. The secretary shall keep a record of all meetings and forward
all necessary communications to the Company. The Retirement Committee may adopt
such bylaws and regulations as it deems desirable for the conduct of its
affairs. All decisions of the Retirement Committee shall be made by the vote of
the majority including actions in writing taken without a meeting.
10.07. Plan Expenses. All reasonable expenses in connection with the
administration of the Plan, including fees of the Trustee and its counsel or
agents, expenses incident to investments of the Trust and any Federal, State or
other taxes levied against the Trust, fees of accountants, actuaries, attorneys,
and Investment Managers and any other proper expenses of administering the Plan
as determined by the Retirement Committee, shall be paid from the Trust;
provided, however, that the Participating Employers may pay their respective
shares of such expenses directly.
ARTICLE XI
AMENDMENTS AND TERMINATION
11.01. Reserved Powers. The Company shall have the power at any time and
from time to time to amend, replace or terminate, in whole or in part, this
Plan, by action of its Board of Directors; provided, however, that no amendment,
under any circumstances, may be adopted, the effect of which would be: (a) to
revest in any Participating Employer any interest in the assets of the Plan or
any part thereof, or (b) to decrease, either directly or indirectly, the accrued
benefit of any Participant (except as permitted by Code Section 411(d)(6) and
applicable regulations and rulings); except that amendments may be so made if,
in the opinion of counsel for the Company, such action is necessary to qualify,
or maintain the qualification of, this Plan under the provisions of the Code.
Notwithstanding any other provision of this Plan, each Participating Employer
reserves the right to completely discontinue its contributions hereunder and its
participation in this Plan at any time.
11.02. Plan Termination. The Plan may be terminated, completely or
partially, at any time by the Company, by action of the Board of Directors of
the Company. In the event of complete termination of the Plan or upon complete
discontinuance of contributions under the Plan by all Participating Employers,
and regardless of any formal corporate action, all Account Balances of all
Participants shall be fully vested and nonforfeitable, after payment of all
expenses of the Plan. In the event of complete termination of the Plan or upon
complete discontinuance of contributions under the Plan, the Account Balances of
all Participants and former Participants shall be distributable as provided in
Article VII, except that the Company may direct, then or at any subsequent time,
forthwith distribution of all assets of the Plan to those entitled thereto at
the time of distribution. In the event of a partial termination of the Plan by
operation of law, all Account Balances of Participants as to whom the partial
termination applies shall be fully vested and nonforfeitable and distributable
in accordance with Article VIII.
11.03. Plan Merger. The Plan may be merged or consolidated with, and Plan
assets and liabilities may be transferred to, any other plan that is qualified
under Section 401(a) of the Code, at any time upon action by the Board of
Directors of the Company. In the event of any merger or consolidation of the
Plan with, or transfer of Plan assets or liabilities to, any other plan
qualified under Section 401(a) of the Code, provision shall be made so that each
Participant in the Plan on the date thereof (if either the Plan or such other
plan then terminated) would receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately prior to the merger, consolidation or
transfer if the Plan had then terminated.
11.04. Successor Employer. In the event of the disposition of an operating
unit by the Company or another Participating Employer whereby a successor
person, firm or company shall continue to carry on all or a substantial part of
its business, and such successor shall elect to carry on the provisions of this
Plan in such manner as is satisfactory to the Company, the Company may cause the
assets of the Plan allocable to the Employees of such operating unit to be
transferred to the successor funding agent. In the absence of such a transfer,
distribution may be made with respect to such Employees as if the date of
disposition constituted the date of termination of employment of each such
Employee.
ARTICLE XII
MANAGEMENT OF TRUSTS
12.01. Funds in Trusts. All the assets of the Plan shall be held in the
Trust, comprising the American Stock Fund, Value Equity Fund, Large-Cap Growth
Equity Fund, Small-Cap Growth Equity Fund, International Equity Fund, S&P 500
Index Fund, Growth-Oriented Diversified Fund, Value-Oriented Diversified Fund,
Corporate/Government Bond Fund, Government Securities Fund, Short-Term
Investment Fund and Loan Fund, for use in accordance with the provisions of the
Plan in providing benefits for Participants, former Participants and
Beneficiaries. The assets of the Trust will be held, invested and disposed of in
accordance with the terms of the Trust Agreement. All contributions under this
Plan shall be paid to the Trustee and, except as otherwise provided in Section
13.03, all assets of the Trust Fund allocable to the Plan, including income from
investments and from all other sources, shall be retained for the exclusive
benefit of Participants, former Participants and Beneficiaries, and shall be
used to pay benefits to such persons or to pay expenses of administration of the
Plan and the Trust to the extent not paid by the Company or another
Participating Employer.
12.02. Trustee and Trust Agreement. The Trust shall be held by a Trustee
under a Trust Agreement approved by the Board of Directors of American, with
such powers in the Trustee as shall be provided in the Trust Agreement and in
accordance with the provisions of the Plan. The Trust Agreement may provide for
the administration thereunder of the funds of any other defined contribution
plan established by American or any other Related Employer and for the
commingling of all funds administered under the Trust Agreement. The Trustee
shall be such bank or trust company as may be appointed by the Board of
Directors of American from time to time. The Board of Directors of American may
remove a Trustee at any time, upon reasonable notice, and upon such removal, or
upon the resignation of a Trustee, the Board of Directors of American shall
appoint a successor Trustee.
12.03. Investment Managers. The Executive Committee of the Board of
Directors of American may appoint one or more investment counsel as Investment
Managers of all or a portion of the Investment Funds held in the Trust and grant
to each such Investment Manager full and sole authority and responsibility for
the investment and reinvestment of such portion thereof as the Trusts Investment
Committee of American so directs. The Executive Committee of the Board of
Directors of American may remove an Investment Manager at any time, upon
reasonable notice, and upon such removal, or upon the resignation of an
Investment Manager, the Executive Committee of the Board of Directors of
American may appoint another Investment Manager. The Executive Committee of the
Board of Directors of American shall also have authority to designate mutual
funds for investments of the Plan.
12.04. Conclusiveness of Reports. Any report of the Trustee required or
permitted under the Plan shall be conclusive upon all Participants, former
Participants, and Beneficiaries.
ARTICLE XIII
MISCELLANEOUS
13.01. Non-Alienation of Benefits.
(a) Interest Non-Transferable. Except as may be required by a Qualified
Domestic Relations Order, benefits under this Plan shall not in any way be
subject to the debts or other obligations of any Participant, former Participant
or Beneficiary, and may not be voluntarily or involuntarily sold, transferred or
assigned.
(b) Application of Benefits. If any Participant, former Participant or
Beneficiary or other person having an interest in or under this Plan or the
Trust shall become bankrupt or shall attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit under the Plan or
interest in the Trust, then such benefit or interest shall cease and determine,
and in that event the Trustee shall hold or apply it, in such shares as the
Retirement Committee shall determine, to or for the benefit of such Participant,
former Participant or other person, or his spouse, child, parent or other blood
relative, or any of them, or to such other person or persons as the Retirement
Committee may determine, but the Trustee, as the case may be, shall be under no
duty to see to the application of any distributions so made.
13.02. Action by Participating Employers. Any action by the Company or
other Participating Employer regarding participation in or amendment or
termination of this Plan shall be evidenced by a resolution of its board of
directors (or an authorized committee of such board) certified by its secretary
or assistant secretary under its corporate seal, or by written instrument
executed by any person or persons, including the Retirement Committee,
authorized by its board of directors (or any authorized committee of such board)
or stockholders to take such action. All actions taken in administration of this
Plan shall be taken by the appropriate officers of the Company or another
Participating Employer or other employees of the Company or another
Participating Employer authorized to take such actions by such officers.
13.03. Exclusive Benefit. The Participating Employers shall have no right,
title or interest in the assets of the Trust, nor will any part of the assets of
the Trust at any time revert to any Participating Employer or be used for, or
diverted to, purposes other than for the exclusive benefit of Participants,
former Participants or their Beneficiaries, or for defraying Plan expenses,
except as follows:
(a) If the Internal Revenue Service initially determines that the Plan, as
applied to any Participating Employer, does not meet the requirements of a
"qualified plan" under Section 401(a) of the Code, the assets of the Trust
attributable to contributions made by that Participating Employer under the Plan
shall be returned to that Participating Employer within one (1) year of the date
of denial of qualification of the Plan as applied to that Participating
Employer.
(b) If a contribution or a portion of a contribution is made by a
Participating Employer as a result of a mistake of fact, such contribution or
portion of a contribution shall not be considered to have been contributed to
the Trust by that Participating Employer and, after having been reduced by any
losses of the Trust attributable thereto, shall be returned to that
Participating Employer within one (1) year of the date the amount is paid to the
Trust.
(c) Each contribution made by a Participating Employer is conditioned upon
the deductibility of such contribution as an expense for Federal income tax
purposes and, therefore, to the extent that the deduction for a contribution
made by a Participating Employer is disallowed, then such contribution, or
portion of a contribution, after having been reduced by any losses of the Trust
attributable thereto shall be returned to that Participating Employer within one
(1) year of the date of disallowance of the deduction.
13.04. Gender and Number. Where the context admits, words in the masculine
gender shall include the feminine and neuter genders, the singular shall include
the plural and the plural shall include the singular.
13.05. Right to Discharge. Every Employee and Participant shall be subject
to dismissal from the service of every and all Related Employers to the same
extent as if this Plan had never been created.
13.06. Absence of Guaranty. No Participating Employer in any way guarantees
the Trust against loss or depreciation. The liability of the Trustee or the
Participating Employers to make any payment or distribution under the Plan
related to assets held or to be held in the Trust is limited to the available
assets of the Trust.
13.07. Headings. The headings of Articles and Sections are included solely
for convenience of reference and are not intended in any way to modify or
otherwise to affect the text of the Plan.
13.08. Governing Law. The Plan shall be governed by and administered and
construed under the laws of the State of New York except to the extent that it
is required to be governed by and administered and construed under the laws of
the United States of America.
ARTICLE XIV
TOP-HEAVY RULES
14.01. Top-Heavy Determination.
(a) Top-Heavy Test. The Plan is top-heavy for a Plan Year if:
(1) the top-heavy ratio for the Plan exceeds sixty percent (60%) and
the Plan is not part of a required aggregation group or a permissive
aggregation group;
(2) the Plan is part of a required aggregation group, but not part of
a permissive aggregation group, and the top-heavy ratio for the required
aggregation group exceeds sixty percent (60%); or
(3) the Plan is part of a required aggregation group and part of a
permissive aggregation group and the top-heavy ratio for every permissive
aggregation group exceeds sixty percent (60%).
(b) Top-Heavy Ratio. The top-heavy ratio is a fraction:
(1) the numerator of which is the sum of the present value of accrued
benefits under the aggregate defined benefit plan or plans for all key
employees (including any part of the accrued benefit distributed in the
five (5) year period ending on the determination date(s)) and the sum of
account balances under the aggregate defined contribution plan or plans for
all key employees as of the determination date(s); and
(2) the denominator of which is the sum of the present values of
accrued benefits under the aggregate defined benefit plan or plans
(including any part of the accrued benefit distributed in the five (5) year
period ending on the determination date(s)) for all Participants and the
sum of the account balances under the aggregate defined contribution plan
or plans for all Participants as of the determination date(s).
Both the numerator and the denominator are determined in accordance with Section
416 of the Code and the applicable regulations. The account balances under a
defined contribution plan in both the numerator and denominator of the top-heavy
ratio are adjusted for any distribution of an account balance made in the five
(5) year period ending on the determination date. The value of account balances
and the present value of accrued benefits will be determined as of the most
recent valuation date that falls within or ends with the twelve (12) month
period ending on the determination date, except as provided in Section 416 of
the Code and the applicable regulations for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits will be
disregarded if the Participant:
(1) is not a key employee but was a key employee in a prior year; or
(2) has not been credited with at least one Hour of Service with any
Related Employer at any time during the five (5) year period ending on the
determination date.
The calculation of the top-heavy ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Section 416 of the Code and the applicable regulations. Proportional subsidies
and nondeductible employee contributions are ignored in computing the top-heavy
ratio. Nonproportional subsidies are considered in computing the top-heavy
ratio. When aggregating plans, the value of account balances and accrued
benefits will be calculated using the determination dates that fall within the
same calendar year.
(c) Required Aggregation Group. A required aggregation group consists of:
(1) each qualified plan of a Related Employer in which at least one
key employee participates or participated at any time during the
determination period (regardless of whether the plan has terminated); and
(2) any other qualified plan of a Related Employer which enables a
plan described in subparagraph (1) to meet the requirements of Section
401(a)(4) or 410 of the Code.
(d) Permissive Aggregation Group. A permissive aggregation group consists
of:
(1) the required aggregation group; and
(2) any other plan or plans of the Related Employers which, when
considered as a group with the required aggregation group, would continue
to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) Key Employee. A key employee is any Employee or former employee of a
Related Employer (and the beneficiaries of such employee) who at any time during
the determination period was:
(1) an officer of a Related Employer with annual compensation
exceeding fifty percent (50%) of the dollar limitation under Section
415(b)(1)(A) of the Code;
(2) an owner (or considered an owner under Section 318 of the Code) of
one of the ten (10) largest interests in a Related Employer if the
individual's annual compensation exceeds the dollar limitation;
(3) a five percent (5%) owner of a Related Employer; or
(4) a one percent (1%) owner of a Related Employer with annual
compensation exceeding one hundred fifty thousand dollars ($150,000).
(f) Non-Key Employee. A non-key employee is an employee of a Related
Employer who is not a key employee, including an employee who is a former key
employee.
(g) Determination Period. The determination period is the Plan Year
containing the determination date and the four (4) preceding Plan Years.
(h) Determination Date and Valuation Date. For the first Plan Year,
December 31, 1988 is the determination date and the valuation date. For any
other Plan Year, the last day of the preceding Plan Year is the determination
date and the valuation date.
(i) Accrual Method. Solely for determining if the Plan, or any other plan
included in a required aggregation group of which this Plan is a part, is
top-heavy the accrued benefit of an employee of a Related Employer other than a
key employee shall be determined under (1) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the group, or (2) if
there is no such method, as if the benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.
14.02. Minimum Vesting. If the Plan is top-heavy in any Plan Year, each
Participant who has an Hour of Service in such Plan Year shall have and retain a
one hundred percent (100%) vested interest in his Account Balances.
14.03. Minimum Contributions. Notwithstanding any other provision of this
Plan to the contrary, for any Plan Year for which the Plan is top-heavy, unless
a Participant who is a non-key employee accrues a benefit under a retirement
plan of a Related Employer for such Plan Year of not less than two percent (2%)
of his average annual compensation during the five (5) consecutive years of his
Vesting Service during which his compensation was the greatest multiplied by his
years of Vesting Service not in excess of ten (10) (disregarding any years after
the last Plan Year with respect to which the Plan is top-heavy), each
Participating Employer shall make such additional contributions as shall be
necessary to provide contributions for each Covered Employee eligible to
participate under Article II who is not a key employee equal to three percent
(3%) of that Participant's Compensation; provided that such contribution need
not exceed the greatest contribution for any key employee for such Plan Year.
The minimum contribution under this Section 14.03 shall apply even though under
other Plan provisions the Employee would not otherwise be entitled to receive an
allocation or would have received a lesser allocation for the year because:
(1) the individual failed to complete one thousand (1,000) Hours of
Service;
(2) the individual failed to make mandatory contributions to the Plan;
or
(3) the individual's Compensation is less than a stated amount.
14.04. Special Annual Additions Limitation. In any Plan Year for which the
Plan is top-heavy, the fraction one (1.0) shall be used in place of the fraction
one and one-quarter (1.25) in applying the limitations in Sections 5.04 and 5.05
to a Participant who has also participated in a qualified defined benefit plan
of a Related Employer.
14.05. Provisions Applicable if Plan Ceases to be Top-Heavy. If the Plan is
top-heavy with respect to a Plan Year and ceases to be top-heavy for a
subsequent Plan Year, the applicable vesting schedule set forth in Section 14.02
shall continue to apply with respect to a Participant.