EXHIBIT 10.2
UNIFIED WESTERN GROCERS, INC.
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EMPLOYEE SAVINGS PLAN
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(Amended and Restated Effective as of August 31, 1997)
(Formerly Known as the Certified Grocers of California, Ltd.
Employee Savings Plan)
TABLE OF CONTENTS
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ARTICLE I NAME, DEFINITIONS & FUNDING POLICY....................................................... 1
Section 1.1: Full Name.......................................................................... 1
Section 1.2: Certain Definitions................................................................ 2
Section 1.3: Other Definitions.................................................................. 13
Section 1.4: Funding Policy..................................................................... 14
ARTICLE II PARTICIPATION............................................................................ 15
Section 2.1: Eligibility Requirements........................................................... 15
Section 2.2: Application For Participation And Beneficiary Designation.......................... 16
Section 2.3: Participation...................................................................... 16
Section 2.4: Re-Employment...................................................................... 16
Section 2.5: Re-Employment Of United Employees.................................................. 16
ARTICLE III CONTRIBUTIONS............................................................................ 18
Section 3.1: Company's Non-Elective Contributions............................................... 18
Section 3.2: Elective Contributions Under Code Section 401(k)................................... 19
Section 3.3: Participants' Contributions........................................................ 19
Section 3.4: Payment Of Non-Elective Contributions To The Trustee............................... 20
Section 3.5: Payment Of Elective Contributions To The Trustee................................... 20
Section 3.6: Payment Of Participants' Contributions To The Trustee.............................. 20
Section 3.7: Actual Deferral Percentage Test.................................................... 20
Section 3.8: Actual Contribution Percentage Test................................................ 26
Section 3.9: No Requirement For Profits......................................................... 31
ARTICLE IV ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.................................................... 32
Section 4.1: Retirement Accounts And Voluntary Contribution Accounts............................ 32
Section 4.2: Deferred Income Accounts........................................................... 32
Section 4.3: Rollover Contribution Accounts..................................................... 32
Section 4.4: Allocation Of Forfeitures, Gains And Losses........................................ 32
Section 4.5: Allocation Of Non-Elective Contribution............................................ 33
Section 4.6: Accounts In General................................................................ 33
Section 4.7: Limitation On Annual Additions..................................................... 33
Section 4.8: Investment Of Accounts............................................................. 36
ARTICLE V VESTING.................................................................................. 37
Section 5.1: Vesting............................................................................ 37
ARTICLE VI DISTRIBUTION OF BENEFITS................................................................. 38
Section 6.1: Distribution Of Benefits........................................................... 38
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Section 6.2: Survivor Annuity Requirements...................................................... 38
Section 6.3: Optional Methods Of Distribution................................................... 42
Section 6.4: Timing Of Distributions............................................................ 44
Section 6.5: Postponed Retirement............................................................... 46
Section 6.6: Distributions Due Missing Persons.................................................. 47
Section 6.7: Transfers To Another Qualified Plan................................................ 47
Section 6.8: Loans To Participants.............................................................. 48
Section 6.9: Withdrawal at Age 59 1/2........................................................... 49
Section 6.10 Hardship Withdrawals............................................................... 49
Section 6.11: Withdrawal Of Voluntary Contributions.............................................. 51
Section 6.12: Withdrawal of Rollover Contributions............................................... 51
ARTICLE VII TOP-HEAVY PLAN LIMITATIONS............................................................... 52
Section 7.1: Application Of Top-Heavy Rules..................................................... 52
Section 7.2: Definitions........................................................................ 52
Section 7.3: 60% Test - Special Rules........................................................... 55
Section 7.4: Minimum Vesting Requirement........................................................ 56
Section 7.5: Minimum Contribution Requirement................................................... 56
ARTICLE VIII THE COMMITTEE............................................................................ 58
Section 8.1: Members............................................................................ 58
Section 8.2: Committee Action................................................................... 58
Section 8.3: Rights And Duties.................................................................. 59
Section 8.4: Information........................................................................ 60
Section 8.5: Compensation, Indemnity And Liability.............................................. 61
Section 8.6: Administrative Expenses Of The Plan................................................ 61
ARTICLE IX AMENDMENT AND TERMINATION.. ............................................................. 62
Section 9.1: Amendments......................................................................... 62
Section 9.2: Discontinuance Of Plan............................................................. 63
Section 9.3: Failure To Contribute.............................................................. 63
ARTICLE X CLAIMS PROCEDURE......................................................................... 64
Section 10.1: Presentation Of Claim.............................................................. 64
Section 10.2: Notification Of Decision........................................................... 64
Section 10.3: Review Of A Denied Claim........................................................... 65
Section 10.4: Decision On Review................................................................. 65
ARTICLE XI MISCELLANEOUS............................................................................ 67
Section 11.1: Contributions Not Recoverable...................................................... 67
Section 11.2: Limitation On Participants' Rights................................................. 67
Section 11.3: Receipt Or Release................................................................. 68
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Section 11.4: Nonassignability................................................................... 68
Section 11.5: Governing Law...................................................................... 68
Section 11.6: Headings........................................................................... 68
Section 11.7: Counterparts....................................................................... 68
Section 11.8: Successors And Assigns............................................................. 69
Section 11.9: Gender And Number.................................................................. 69
Section 11.10: Merger, Consolidation Or Transfer Of Plan Assets................................... 69
Section 11.11: Joinder Of Parties................................................................. 69
Section 11.12: The Trust.......................................................................... 69
Section 11.13: Special Requirements For USERRA.................................................... 69
Signature Page..................................................................................... 71
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UNIFIED WESTERN GROCERS, INC.
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EMPLOYEE SAVINGS PLAN
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(Formerly Known as the Certified Grocers of California, Ltd.
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Employee Savings Plan)
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Unified Western Grocers, Inc. has adopted the following complete
amendment and restatement of its profit sharing plan that evidences the plan
portion of a profit sharing plan and trust for the benefit of qualified
employees of the Company. Additionally, effective December 31, 2001, the United
Grocers Bargained Employees Savings Plan ("United Plan") is merged with and into
the Plan. Accordingly, effective as of such merger date, the terms and
conditions governing the former participants in the United Plan shall be as set
forth in this Plan. As to the United Employees, the terms of the United Plan
that existed prior to the merger date shall be effective until December 30,
2001, and the terms of this Plan shall only be applicable for one day (i.e.,
December 31, 2001) for the 2001 Plan Year. Notwithstanding the foregoing, those
provisions of the Plan that relate to the Uruguay Round Agreements Act, the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the
Internal Revenue Service Restructuring and Reform Act of 1998, and the Community
Renewal Tax Relief Act of 2000 ("GUST") shall be applicable to the United
Employees as of the dates required by GUST. The terms of the Plan are as
follows:
ARTICLE I
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NAME, DEFINITIONS & FUNDING POLICY
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Section 1.1: Full Name. This profit sharing plan shall be known
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as the:
UNIFIED WESTERN GROCERS, INC.
EMPLOYEE SAVINGS PLAN
The Plan was known, prior to December 31, 2001, as the Certified Grocers of
California, Ltd. Employee Savings Plan. It is hereby designated as constituting
a defined contribution plan intended to qualify under Code Section 401(a) that
includes a cash or deferred arrangement under Code Section 401(k). The Trust
established in connection with the Plan shall be known as the:
UNIFIED WESTERN GROCERS, INC.
EMPLOYEE SAVINGS PLAN TRUST
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Section 1.2: Certain Definitions. As used in this document and in the
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Trust, the following words and phrases shall have the following meanings, unless
a different meaning is specified or clearly indicated by the context:
"Accounts" shall mean, collectively, the Retirement Account, the
Deferred Income Account, the Voluntary Contribution Account, and the Rollover
Contribution Account that may be established under the Plan for a Participant.
If all of such accounts are not established for a Participant, then "Accounts"
shall mean, collectively, all of such accounts that are established for such
Participant.
"Adjustment Factor" shall mean the cost of living adjustment factor
prescribed by the Secretary of the Treasury under Code Section 415(d) for years
beginning after December 31, 1987, as applied to such items and in such manner
as the Secretary of the Treasury shall provide.
"Affiliated Company" shall mean:
(a) a member of a controlled group of corporations of which the
Company is a member;
(b) an unincorporated trade or business that is under common
control with the Company, as determined in accordance with Code Section
414(c) and the applicable Regulations;
(c) a member of an affiliated service group of which the Company
is a member, as determined in accordance with Code Section 414(m) and the
applicable Regulations; or
(d) any other entity required to be aggregated with the Company
pursuant to the Regulations under Code Section 414(o).
For these purposes, a "controlled group of corporations" shall mean a controlled
group of corporations as defined in Code Section 1563(a), determined without
regard to Code Sections 1563(a)(4) and 1563(e)(3)(C).
"Anniversary Date" shall mean the last day of each Plan Year.
"Article" shall mean an Article of the Plan.
"Beneficiary" shall mean the person or persons, as the context
requires, last designated by a Participant to receive any benefit specified in
the Plan that is payable upon such Participant's death. If there is no
designated Beneficiary or surviving Beneficiary, the Beneficiary shall be the
Participant's surviving spouse; or, if
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none, the Participant's surviving descendants (including adopted persons), who
shall take on the principle of representation; or, if none, the Participant's
estate; or, if there is no legal representative appointed to represent the
Participant's estate and if the Participant's vested interest does not exceed
$2,000, a person (or the persons) selected by the Committee who is related to
the Participant by blood, adoption or marriage.
"Board of Directors" shall mean the Board of Directors of the Company.
"Break in Service" shall mean a computation period in which an
Employee has failed to complete more than 500 Hours of Service (unless due to an
authorized, unpaid leave of absence granted by the Company in a
nondiscriminatory manner). The computation period shall be, for eligibility and
vesting purposes, the same computation period used in determining an Employee's
Years of Service. Solely for purposes of determining whether a Break in Service
has occurred in any computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours of Service
that would otherwise have been credited to such individual but for such absence
(or, in any case in which such Hours of Service cannot be determined, eight
Hours of Service per work day of such absence). An absence from work for
maternity or paternity reasons means an absence (i) by reason of the pregnancy
of the individual, (ii) by reason of a birth of a child of the individual, (iii)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
The Hours of Service credited under this provision shall in no event exceed 501
hours, and they shall be credited (1) in the computation period in which the
absence begins if such crediting is necessary to prevent a Break in Service in
that period, or (2) in all other cases, in the following computation period.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
its successors.
"Company" shall mean UNIFIED WESTERN GROCERS, INC.
"Compensation" shall mean:
(a) with respect to Employees who are not United Employees:
(i) for purposes of determining the amount of the
Company's contributions, Compensation shall be calculated on a weekly
basis as a lesser of (A) (1.10) (straight time hourly rate actually
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paid for the week) (40) plus any vacation pay included in the week's
Earnings; or (B) a Participant's actual Earnings for the week.
(ii) for all other purposes, Compensation shall mean a
Participant's Earnings.
(iii) for purposes of the foregoing, and for Plan Years
beginning before January 1, 1998, a Participant's Compensation shall
include the amount of his or her Elective Contributions, if any, and
any amount that is contributed by the Company pursuant to a salary
reduction agreement that is not includable in such Participant's gross
income under Code Sections 125, 402(e)(3), 402(h), or 403(b).
(b) with respect to a United Employee, a Participant's Earnings
during the Plan Year, plus, for Plan Years beginning before January 1,
1998, the amount of his or her Elective Contributions, if any, and any
amount that is contributed on his or her behalf pursuant to a salary
reduction agreement and that is not includable in such Participant's gross
income under Code Sections 125, 402(e)(3), 402(h), or 403(b). For purposes
of Section 3.2, "Compensation" shall exclude severance pay, payment for
forfeited vacation, pay in lieu of notice, referral bonuses, automobile
allowance, tax and legal assistance plan payments, contest award payments,
retroactive pay, or miscellaneous adjustments related to prior payroll
periods. A new Participant's Compensation for the Plan Year in which his
or her participation begins shall include only that Compensation paid for
services rendered from and after his or her Entry Date.
(c) In addition to other applicable limitations set forth in the
Plan, and despite any other provision of the Plan, the Compensation of each
Participant shall not exceed the Compensation Limitation (defined below).
The Compensation Limitation is $150,000, as adjusted for increases in the
cost of living in accordance with Code Section 401(a)(17)(B). The cost-of-
living adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined beginning in
such calendar year. If such a determination period consists of fewer than
12 months, the Compensation Limitation will be multiplied by a fraction,
the numerator of which is the number of months in such determination
period, and the denominator of which is 12. If Compensation for any prior
determination period is taken into account in determining a Participant's
benefits accruing in the current Plan Year, the Compensation for such prior
determination period is subject to the Compensation Limitation in effect
for such prior determination period.
"Deferred Income Account" shall mean the account maintained by the
Committee for each Participant on whose behalf an Elective Contribution is made.
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"Defined Benefit Plan" and "Defined Contribution Plan" shall have the
same meanings as given these terms under ERISA.
"Determination Year" shall mean the Plan Year.
"Earnings" shall mean a Participant's annual "compensation", as that
term is defined in Code Section 415, that is actually paid or made available to
the Participant within the Plan Year. A Participant's Earnings shall include
such Participant's wages, salaries, fees for professional services and other
amounts received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment with the
Company or any Affiliated Company to the extent the amounts are includable in
gross income under the Code (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements, and expense allowances). "Earnings" shall not include:
(a) Any contribution made by the Company to a plan of deferred
compensation to the extent that, before the application of the Code Section
415 limitations to that plan, the contributions are not includable in the
gross income of the Participant for the taxable year in which contributed.
In addition, the Company's contributions, if any, made on behalf of a
Participant to a simplified employee pension plan described in Code Section
408(k) are not considered Earnings for the taxable year in which
contributed to the extent such contributions are deductible by the
Participant under Code Section 219(b)(7). Additionally, any distributions
from a plan of deferred compensation are not considered Earnings,
regardless of whether such amounts are includable in the gross income of
the Participant when distributed. However, any amount received by a
Participant pursuant to an unfunded non-qualified plan may be considered
Earnings in the year such amounts are includable in the gross income of the
Participant.
(b) Any amount realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by a Participant
either becomes freely transferable or is no longer subject to a substantial
risk of forfeiture.
(c) Any amount realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(d) Any other amount that receives special tax benefits, such as
premiums for group term life insurance (but only to the extent that the
premiums are not includable in the gross income of the Participant), or
contributions made by the Company (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in Code
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Section 403(b) (whether or not the contributions are excludable from the
gross income of the Participant).
For Plan Years beginning after December 31, 1997, Earnings paid or made
available during any Plan Year shall include any elective deferral (as defined
in Code Section 402(g)(3)), and any amount that is contributed or deferred by
the Company at the election of the Participant and that is not includable in the
gross income of the Participant by reason of Code Section 125, 132(f)(4) (for
Plan Years beginning after December 31, 2000), or 457.
"Effective Date" shall mean the first day of the 1997 Plan Year, which
is the effective date of this amendment and restatement. Despite the foregoing,
the attached Schedule A shall be effective as of January 1, 2002.
"Eligible Participant" shall mean, as of any Anniversary Date, (i)
each Participant who has completed a Year of Service on such Anniversary Date
and who is an Employee on such date, and (ii) each Participant who ceased to be
an Employee during the Plan Year ending with such Anniversary Date by reason of
his or her retirement on or after his or her Normal Retirement Date, death, or
Total Disability. A United Employee shall not be an Eligible Participant.
"Employee" shall mean every person classified by the Company as a
common law, hourly employee of the Company and any Affiliated Company that has
adopted the Plan with the permission of the Board of Directors. With respect to
persons employed in a United Grocers facility, "Employee" shall mean every
person classified by the Company as a common law, collectively bargained
employee of such a facility ("United Employee"). "Employee" shall not include
any person who is (i) employed by or through a leasing, temporary, or similar
agency or company, or (ii) classified by the Company as a leased employee
(within the meaning of Code Section 414(n)(2)) of the Company or any such
Affiliated Company. If any person described in the preceding sentence is
determined to be a common law employee of the Company by court decision or
otherwise, such person shall nonetheless continue to be treated as not being an
Employee.
"Employer" shall mean, with respect to an Employee, the Company, any
Predecessor Employer and any Affiliated Company.
"Employment Commencement Date" for each Employee shall mean the date
such Employee first is credited with an Hour of Service.
"Entry Date" shall mean the first day of each month.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and its successors.
"Fiduciary" shall mean a person who:
(a) exercises any discretionary authority, discretionary
control, or discretionary responsibility respecting the management or
administration of the Plan;
(b) exercises any authority or control respecting management or
disposition of the Plan's assets; or
(c) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any asset of the Plan, or has any
authority or responsibility to do so.
"Financial Institution" shall mean a bank, trust company, or other
financial institution that is regulated by the United States or any State.
"Highly Compensated Active Employee" shall mean any Participant who
performed service for the Company during the Determination Year and who:
(a) During the Look-Back Year received Earnings from the Company
in excess of $80,000 (as adjusted pursuant to Code Section 415(d)), and, if
the Company so elects, was a member of the Top-Paid Group for such year; or
(b) Was a 5% Owner at any time during the Look-Back Year or the
Determination Year.
It is noted that the Company has not made the Top Paid Group Election.
"Highly Compensated Employee" shall mean any Participant who is a
"Highly Compensated Active Employee" or a "Highly Compensated Former Employee."
"Highly Compensated Former Employee" shall mean any Participant who:
(a) Separated from service (or was deemed to have separated from
service) prior to the Determination Year,
(b) Performed no service for the Company during the
Determination Year, and
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(c) Was a Highly Compensated Active Employee in either (i) the
Determination Year during which the Employee separated from service, or
(ii) any Determination Year ending on or after the Employee's 55th
birthday. For the purposes of this subsection (c), an Employee will be
deemed to have separated from service if, in a Determination Year before
the Employee attained age 55, the Employee received Earnings in an amount
less than 50% of the Employee's average annual Earnings for the three
consecutive calendar years preceding the Determination Year during which
the Employee received the greatest amount of Earnings from the Company.
"Hour of Service" shall mean:
(a) Each hour for which an Employee was paid by, or entitled to
payment from, an Employer. Hours under this subsection (a) shall be
credited to an Employee for the computation period or periods in which the
services were performed. Generally, Hours of Service shall be determined
from the Employer's employment records. Despite the foregoing, if an
Employee's Compensation is not determined on the basis of certain amounts
for each hour worked (such as salaried, commission or piece-work employees)
and if his or her hours are not required to be counted and recorded by any
federal law (such as the Fair Labor Standards Act), such Employee's Hours
of Service need not be determined from employment records. Instead, such
Employee may be credited with 190 Hours of Service for each month in which
he or she would be credited with at least one Hour of Service pursuant to
this subsection (a);
(b) Each hour for which an Employee was paid by, or entitled to
payment from, an Employer on account of a period during which no services
were performed (irrespective of whether the employment relationship had
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than 501 Hours of Service shall be credited under this subsection (b) for
any single continuous period (whether or not such period occurs in a single
computation period);
(c) Each hour for which back pay (irrespective of mitigation of
damages) is either awarded against, or agreed to by, an Employer. The same
Hours of Service shall not be credited under either subsection (a) or (b),
whichever is applicable, and under this subsection (c). Hours of Service
under this subsection (c) shall be credited for the computation period(s)
to which the award or agreement pertains, rather than the computation
period in which the award, agreement or payment is made; and
(d) Hours under subsections (a) through (c) above shall be
calculated and credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations, which is incorporated here by reference.
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"Individual Medical Benefit Account" shall have the same meaning as is
given that term under Code Section 415(l)(2).
"Investment Manager" shall mean a person or entity who (that) is (a)
registered as an investment advisor under the Investment Advisor's Act of 1940,
(b) defined as a bank under that Act, or (c) an insurance company qualified
under the laws of more than one state to manage, acquire and dispose of trust
assets, and who has acknowledged in writing that he (she or it) is a Fiduciary
with respect to the Plan.
"Look-Back Year" shall mean the 12-month period preceding the
Determination Year, or, if the Company elects and allowed by the applicable
Regulations, the calendar year ending with or within the applicable
Determination Year.
"Named Fiduciary" shall have the same meaning as under Section 402(a)
of ERISA and shall be determined as provided in Section 8.3.
"Net Profits" shall mean, with respect to any Plan Year, the current
net earnings of the Company before deduction of its Patronage Dividends and
Incentive Compensation Plan determination for the Plan Year for which the
contribution is being determined, as certified by the Company Treasurer for its
report to members.
"Non-Highly Compensated Employee" shall mean any Participant who is
not a Highly Compensated Employee.
"Normal Retirement Age" shall mean a Participant's 65th birthday.
"Normal Retirement Date" shall mean a Participant's Normal Retirement
Age, except in the case of a United Employee, it shall mean the first day of the
month that coincides with or immediately follows a Participant's Normal
Retirement Age.
"Participant" shall mean any Employee who becomes eligible for
participation in accordance with the provisions of the Plan, and, unless the
context indicates otherwise, includes former Participants.
"Plan" shall mean this document and the plan created by this document
(including, unless the context indicates to the contrary, the Trust established
in connection with the Plan), as it may be amended from time to time.
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"Plan Year" shall mean calendar year; provided, however, that before
January 1, 1999, "Plan Year" shall mean the period beginning on the Sunday
following the Saturday nearest August 31 and ending on the Saturday nearest
August 31 of the following year, and the Plan Year immediately preceding January
1, 1999 shall be a short Plan Year ending on December 31, 1998. The Plan Year
shall be the fiscal year of the Plan. The Plan Year shall be the "limitation
year" for the Plan as defined in the Code.
"Predecessor Employer" shall mean any predecessor employer of an
Employee that maintained the Plan.
"Regulations" shall mean the regulations issued under the Code or
ERISA, or both of them, as well as under any other legislation that applies to
the Plan.
"Retirement Account" shall mean the account maintained by the
Committee for each Participant which is to be credited with such Participant's
share of the Company's contributions to the Trust.
"Rollover Contribution Account" shall mean the account maintained by
the Committee for each Participant who makes a Rollover Contribution.
"Rollover Contribution" shall mean a qualified rollover contribution
as defined in Code Sections 402(c), 403(a)(4), and 408(d)(3), but shall not
include a rollover contribution that is attributable to contributions made on
behalf of a Key Employee in a Top-heavy Plan, unless such a rollover
contribution is permissible under the Code or applicable Regulations.
"Section" shall mean, when used in conjunction with some other
reference (such as the Code or ERISA), a section of such other reference. When
not used in conjunction with some other reference, Section shall refer to a
section of the Plan or Trust, as the context requires. References to a Section
include future amendments, and successors, to it.
"Secretary" shall mean the Secretary or an Assistant Secretary of the
Committee.
"Secretary of the Treasury" shall mean the Secretary of the Treasury,
as defined in Code Section 7701(a)(11).
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"Signature Page" shall mean the page(s) at the end of the Plan
entitled "Signature Page."
"Top-Paid Group" shall mean the group of Employees in a particular
year that consists of the top 20% of the Employees, ranked on the basis of
Earnings received from the Company during such year.
(a) An Employee shall be disregarded for purposes of determining
the Top-Paid Group if the Employee:
(i) Has not performed an Hour of Service during such year;
(ii) Has not completed six months of service;
(iii) Normally works less than 17 1/2 hours per week or six
months during any year;
(iv) Has not attained age 21 by the end of such year; or
(v) Is a non-resident alien and has received no earned
income (within the meaning of Code Section 911(d)(2)) from the Company
constituting United States source income within the meaning of Code
Section 861(a)(3).
(b) In addition, if 90% or more of the Employees of the Company
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Company, and
the Plan covers only Employees who are not covered under such agreements,
then Employees covered by such agreements shall be excluded from both the
total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
(c) All Affiliated Companies shall be taken into account as a
single employer, and leased employees, within the meaning of Code Sections
414(n)(2) and 414(o)(2), shall be considered Employees unless such leased
employees are covered by a plan described in Code Section 414(n)(5) and are
not covered in any qualified plan maintained by the Company. For the
purpose of determining the number of active Employees in any year, the
following Employees shall be excluded:
(i) Employees with less than six months of service;
(ii) Employees who normally work less than 17 1/2 hours per
week;
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(iii) Employees who normally work less than six months
during a year; and
(iv) Employees who have not yet attained age 21.
"Total Disability" or "Totally Disabled" shall each refer to a
physical or mental impairment that, in the Committee's opinion, (a) is expected
to be either of indefinite duration or result in death, and (b) renders a
Participant unable to satisfactorily perform his or her duties for the Company
or the duties of such other position or job that the Company makes available to
such Participant and for which such Participant is qualified by reason of his or
her training, education or experience. The Committee's opinion must be supported
by the opinion of a qualified physician designated or approved by the Committee.
"Total Sales" shall mean the Company's total sales for the Plan Year
for which the contribution is being determined as certified by the Company
Treasurer for its report to members.
"Trust" shall mean the trust established in connection with the Plan,
as it may be amended from time to time.
"Trust Valuation Date" shall mean each Anniversary Date and such other
date or dates selected by the Committee.
"Trustee" shall mean the person(s) or entity, or combination of them,
serving from time to time as the trustee(s) of the Trust.
"Voluntary Contribution Account" shall mean the account maintained by
the Committee for each Participant who makes a Voluntary Contribution.
"Welfare Benefit Fund" shall have the same meaning as is given that
term in Code Section 419(e).
"Year of Service" shall mean, except with respect to a United
Employee, any Plan Year during which such Employee is employed by the Company
and during which he or she has completed one Hour of Service. In order for a
year to constitute a Year of Service, the Employee need not be employed by the
Company on the last day of the Plan Year.
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"1% Owner" shall be determined in the same manner as a 5% Owner,
defined below.
"5% Owner" shall mean a Participant who (i) owns more than 5% of the
outstanding stock (or owns stock possessing more than 5% of the total combined
voting power of all classes of stock) of the Company (or any Affiliated
Company), if the Company (or the Affiliated Company, whichever applies) is a
corporation; or (ii) owns more than 5% of the capital or profit interest in the
Company (or the Affiliated Company, whichever applies), if the Company (or the
Affiliated Company, whichever applies) is not a corporation. A similar rule
shall apply to the determination of a "1% Owner."
Section 1.3: Other Definitions. As used in this document and in the
----------- -----------------
Trust, the following words and phrases shall have the meanings set forth in the
indicated Sections, unless a different meaning is specified or clearly indicated
by the context:
Term Section
---- -------
"Actual Contribution Percentage" 3.9
"Actual Deferral Percentage" 3.8
"Aggregate Account" 7.2
"Aggregation Group" 7.2
"Annual Addition" 4.7
"Annuity Starting Date" 6.2
"Claimant" 10.1
"Committee" 8.1
"Defined Benefit Plan Fraction" 4.7
"Defined Contribution Plan Fraction" 4.7
"Determination Date" 7.2
"Elective Contribution" 3.2
"Eligible Retirement Plan" 6.7
"Eligible Rollover Distribution" 7.2
"Key Employee" 6.7
"Non-Elective Contribution" 3.1
"Non-Key Employee" 7.2
"Preretirement Election Period" 6.2
"Present Value of Accrued Benefit" 7.2
"Qualified Election" 6.2
"Qualified Joint and Survivor Annuity" 6.2
"Qualified Life Annuity" 6.2
"Qualified Preretirement Survivor Annuity" 6.2
"Relevant Time" 5.3
"Retirement Election Period" 6.2
"Top-heavy Group" 7.2
-13-
"Top-heavy Plan" 7.2
"USERRA" 11.13
"Valuation Date" 7.2
"Voluntary Contribution" 3.3
"1.0 Rule" 4.7
Section 1.4: Funding Policy. The Plan is to be funded primarily
----------- --------------
through the Company's contributions and the Participants' contributions as
provided for in the Plan. The Trust's assets shall be invested as provided for
in the trust document in an effort to safely maximize potential retirement
benefits, which shall be paid to Participants and Beneficiaries as provided for
in the Plan.
-14-
ARTICLE II
----------
PARTICIPATION
-------------
Section 2.1: Eligibility Requirements.
----------- ------------------------
(a) Each Employee shall become eligible to participate in the Plan on the
Entry Date coincident with or next following the one-year anniversary of such
Employee's Employment Commencement Date, provided that he or she is still an
Employee on such date. Despite the foregoing, each United Employee shall become
eligible to participate in the Plan on the Entry Date that is the second month
following his or her Employment Commencement Date, provided that he or she is
still a United Employee on such Entry Date.
(b) Notwithstanding any other provision of the Plan, any Employee who is a
participant in, or who is eligible to become a participant in, the Unified
Western Grocers, Inc. Sheltered Savings Plan ("SSP") shall be an ineligible
Employee hereunder.
(c) Notwithstanding any other provision of the Plan, any Participant who is
included in a unit of employees covered by a collective bargaining agreement
wherein retirement benefits were the subject of good faith bargaining (within
the meaning of Code Section 410(b)(3)(A)) shall for the Plan Year(s) of such
inclusion, be an ineligible Employee hereunder, unless such collective
bargaining agreement expressly provides for participation in the Plan; provided,
however, that as to any benefits already earned, such Participant shall remain a
Participant, subject to all the terms of the Plan.
(d) Notwithstanding any other provision of the Plan, any Employee who is a
non-resident alien and who receives no earned income within the meaning of Code
Section 911(b) from the Company that constitutes income from sources within the
United States within the meaning of Code Section 861(a)(3) shall be an
ineligible Employee hereunder.
(e) Notwithstanding any other provision of the Plan, any Employee who is
employed in the job classification of part-time support staff (or such other
designation as may be adopted by the Company) shall be an ineligible Employee
hereunder.
(f) Notwithstanding any other provision of the Plan, any United Employee
who is employed on a temporary basis solely for the purpose of completing a
special project shall be an ineligible Employee hereunder.
(g) Notwithstanding any other provision of the Plan, any person with
respect to a United Grocers facility who performs services but who is treated
for payroll tax purposes as other than an Employee (and regardless of whether
such person may subsequently be determined by governmental agency, by the
conclusion
-15-
of threatened or pending litigation, or otherwise to be or have been an Employee
shall be an ineligible Employee hereunder.
Section 2.2: Application For Participation And Beneficiary
----------- ---------------------------------------------
Designation.
- -----------
(a) Each Employee who becomes eligible to participate in the Plan
shall be given an application for participation. That application shall (a)
specify the beginning date of such Employee's participation, (b) shall contain
such Employee's acceptance of the benefits of the Plan and Trust and his or her
agreement to be bound by the terms of the Plan and Trust, and (c) allow such
Employee to designate the Beneficiary whom he or she desires to receive benefits
in the event of his or her death. A Participant may, from time to time, change
his or her designated Beneficiary by filing a new written designation with the
Committee. The Company, the Trustee, and the Committee may rely upon the
designation of a Beneficiary that was last filed in accordance with the Plan.
Despite the foregoing, a Participant's right to designate a Beneficiary to
receive his or her death benefits shall be subject to the survivor annuity
requirements set forth in Article VI.
(b) Despite the provisions of subsection (a) above, a married
Participant's Beneficiary shall in all events be such Participant's surviving
spouse as to at least 50% of the balance in the Participant's Accounts, unless
such spouse consents to such Participant's designation of a Beneficiary other
than such spouse. A spouse's consent to such a designation must satisfy the
following requirements: (i) it must be in writing; (ii) it must acknowledge the
effect of the Participant's designation of a Beneficiary other than the spouse;
and (iii) it must be witnessed by a designated Plan representative or a notary
public.
Section 2.3: Participation. The participation of a Participant in the
----------- -------------
Plan shall begin as of his or her Entry Date, and shall continue until the
Participant's entire benefit has been distributed in accordance with the Plan's
terms. A Participant (or his or her Beneficiary) may not receive any
distribution of benefits except as provided for in the Plan.
Section 2.4: Re-Employment. In the event an Employee (other than a
----------- -------------
United Employee) who was a Participant is re-employed before five consecutive
Breaks in Service, such Employee shall become a Participant on the date of re-
employment, provided the Employee satisfies the eligibility provisions of
Section 2.1. In the event an Employee (other than a United Employee) who was a
Participant is re-employed after five consecutive Breaks in Service, then such
Employee shall be treated as a new Employee and shall become a Participant upon
satisfying the requirements of Section 2.1.
Section 2.5: Re-Employment Of United Employees. A United Employee who
----------- ---------------------------------
has never participated in the Plan and who is re-employed following a
-16-
Break in Service shall be treated as a new Employee with a new Employment
Commencement Date. A United Employee who is a Participant and who is re-employed
shall participate immediately upon re-employment.
-17-
ARTICLE III
-----------
CONTRIBUTIONS
-------------
Section 3.1: Company's Non-Elective Contributions. The Company has
------------ ------------------------------------
previously made substantial contributions to the Trust. Subject to the Plan's
other provisions, for each Plan Year in which the Plan is in effect, the Company
agrees that, out of its current net earnings, it will contribute to the Trust
for each fiscal year of the Company, an amount determined in accordance with the
following formula (the "Non-Elective Contribution"):
(a) In the event net earnings are less than 1.50% of Total Sales, the
Company will make no contribution hereunder.
(b) In the event net earnings equal or exceed 1.50% but are less than
1.55% of Total Sales, the Company will contribute in the amount equal to 1.00%
of the total Compensation of all Eligible Participants.
(c) In the event net earnings equal or exceed 1.55% but are less than
1.60% of Total Sales, the Company will contribute in the amount equal to 1.45%
of the total Compensation of all Eligible Participants.
(d) In the event net earnings equal or exceed 1.60% but are less than
1.65% of Total Sales, the Company will contribute in the amount equal to 1.90%
of the total Compensation of all Eligible Participants.
(e) In the event net earnings equal or exceed 1.65% but are less than
1.70% of Total Sales, the Company will contribute in the amount equal to 2.35%
of the total Compensation of all Eligible Participants.
(f) In the event net earnings equal or exceed 1.70% but are less than
1.75% of Total Sales, the Company will contribute in the amount equal to 2.80%
of the total Compensation of all Eligible Participants.
(g) In the event net earnings equal or exceed 1.75% but are less than
1.80% of Total Sales, the Company will contribute in the amount equal to 3.40%
of the total Compensation of all Eligible Participants.
(h) In the event net earnings equal or exceed 1.80% but are less than
1.85% of Total Sales, the Company will contribute in the amount equal to 4.20%
of the total Compensation of all Eligible Participants.
(i) In the event net earnings equal or exceed 1.85% of Total Sales,
the Company will contribute in the amount equal to 5.00% of the total
Compensation of all Eligible Participants.
The total amount of the Company contribution to this Plan is limited to 2 1/2%
of total net earnings of the Company (excluding subsidiaries) prior to payment
of Patronage
-18-
Dividends and prior to payment under the Company's Incentive Compensation Plan.
In addition, the Board of Directors may determine and affect other adjustments
which would have the impact of either raising or lowering the total net earnings
of the Company for the purpose expressed herein. Despite the foregoing, the
Company's Non-Elective Contributions are conditioned upon their deductibility
under the Code.
Section 3.2: Elective Contributions Under Code Section 401(k).
----------- ------------------------------------------------
(a) Subject to the limitations contained elsewhere in the Plan, each
Participant who is a United Employee may elect from time to time, by completing
the appropriate forms provided by the Committee, to forgo receipt of up to 15%
(stated in whole numbers only) of his or her Compensation. The Company shall
contribute to the Trust on behalf of each such electing Participant, out of its
current or accumulated Net Profits, an amount equal to the Compensation forgone
by such Participant (the "Elective Contribution"), and it shall be credited to
such Participant's Deferred Income Account. Despite the foregoing, no such
Participant shall have any Elective Contributions under the Plan during any
calendar year in excess of $7,000, as adjusted by the Adjustment Factor.
(b) A Participant's election to forgo receipt of a portion of his or
her Compensation shall be subject to such modification or cancellation as the
Committee, in its discretion, shall permit; provided, however, that the
Committee shall exercise its discretion in a uniform and nondiscriminatory
manner.
Section 3.3: Participants' Contributions.
----------- ---------------------------
(a) A Participant may make a nondeductible, voluntary contribution to
the Plan ("Voluntary Contribution"). Each Participant who so desires may, but
need not, contribute, in integral percentages, each year to the Trust for his or
her benefit up to a maximum of 10% (or such other percentage as may be
determined from time to time by the Committee) of his or her Compensation paid
for or accrued to him or her. Such contributions may be made at the time the
Participant receives his or her Compensation from the Company, and upon
direction of the Participant, shall be withheld by the Company and deposited
with the Trustee for the Voluntary Contribution Account of such Participant. A
Participant may eliminate or change the amount to be contributed by him or her
in any Plan Year as may be determined from time to time by the Committee;
provided, however, that the ability of a Participant to contribute on an annual
basis, shall be restricted to the extent that any contribution would violate the
provisions of Section 4.7 hereof. With respect to United Employees, any such
Voluntary Contributions must be at least $50, and any contribution in excess of
$50 must be in even multiples of $50, and a Participant who is a United Employee
may make one or more such contributions at any time during the Plan Year for
credit with respect to such Plan Year.
-19-
(b) A Participant may make a Rollover Contribution to the Plan or a
trustee-to-trustee transfer described in Code Section 401(a)(31), provided that
any asset so contributed or transferred is acceptable to the Committee and
Trustee.
Section 3.4: Payment Of Non-Elective Contributions To The Trustee. All
----------- ----------------------------------------------------
payments of the Non-Elective Contributions shall be made directly to the Trustee
and may be made on any date(s) selected by the Company. Despite the foregoing,
the Company's total Non-Elective Contribution for each Plan Year must be paid on
or before the date on which the Company's federal income tax return is due,
including any extensions of time obtained for the filing of such return.
Section 3.5: Payment Of Elective Contributions To The Trustee. All
----------- ------------------------------------------------
payments of Elective Contributions shall be made directly to the Trustee. Such
payments shall be made as soon as is administratively practical following the
date the forgone Compensation would have been paid to the electing Participant,
but in no event later than the fifteenth business day of the month following the
month in which the forgone Compensation would have been paid to the Participant.
Section 3.6: Payment Of Participants' Contributions To The Trustee.
----------- -----------------------------------------------------
(a) Voluntary Contributions. All payments of Voluntary Contributions
-----------------------
shall be made directly to the Trustee. Such payments shall be made as soon as is
administratively practical following the date the forgone Compensation would
have been paid to the electing Participant, but in no event later than the
fifteenth business day of the month following the month in which the forgone
Compensation would have been paid to the Participant. The Trustee may commingle
such contributions with the Company's contributions. However, the Committee
shall keep separate records of each Participant's Voluntary Contributions (and
the income, gains and losses on them). The Trustee shall invest a Participant's
Voluntary Contributions in the same manner as provided for the investment of the
Company's contributions.
(b) Rollover Contributions. A Participant's Rollover Contributions
----------------------
shall be paid directly to the Trustee. The Trustee may commingle such
contributions with the Company's contributions. However, the Committee shall
keep separate records of each Participant's Rollover Contributions (and the
income, gains and losses on them). The Trustee shall invest a Participant's
Rollover Contributions in the same manner as provided for the investment of the
Company's contributions.
Section 3.7: Actual Deferral Percentage Test.
----------- -------------------------------
(a) It is the Company's intent that all Elective Contributions shall
satisfy the requirements of Code Section 401(k).
-20-
(i) Accordingly, the amount of Elective Contributions made in
any Plan Year on behalf of all Highly Compensated Employees shall not
result in an Actual Deferral Percentage for such Highly Compensated
Employees that exceeds the greater of:
(A) the Actual Deferral Percentage for all Non-Highly
Compensated Employees for the preceding Plan Year, multiplied by 1.25;
or
(B) the Actual Deferral Percentage for all Non-Highly
Compensated Employees for the preceding Plan Year, multiplied by two,
provided that the Actual Deferral Percentage for all Highly
Compensated Employees does not exceed the Actual Deferral Percentage
for all Non-Highly Compensated Employees for the preceding Plan Year
by more than two percentage points (or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent the multiple use
of this alternative limitation with respect to any Highly Compensated
Employee).
(ii) For the purposes of this subsection (a), the amount of
Elective Contributions shall relate to Compensation that either (A) would
have been received by the Participant in the Plan Year but for the
Participant's election to defer receipt of his or her Compensation pursuant
to the terms of the Plan; or (B) is attributable to services performed by
the Participant in the Plan Year and, but for the Participant's election to
defer, would have been received by the Participant within 2 1/2 months
after the close of the Plan Year.
(iii) In order to prevent the multiple use of the alternative
method described in subsection (i)(B) above and in Code Section
401(m)(9)(A), any Highly Compensated Employee eligible to (A) make elective
deferrals pursuant to this Section, or (B) receive voluntary contributions
under this Plan or under any other plan maintained by the Company or an
Affiliated Company, shall have his actual contribution ratio reduced
pursuant to Treasury Regulation Section 1.401(m)-2.
(iv) For the purposes of subsection (i) above, the Committee may
elect to use the current Plan Year rather than the preceding Plan Year. If
the Committee makes this election, then such election may not be changed
except as allowed for by the Secretary of the Treasury.
(v) For the purposes of subsection (i) above and for purposes
of the first Plan Year, the Actual Deferral Percentage for all Non-Highly
Compensated Employees for the preceding Plan Year shall be: (A) 3%; or (B)
the Actual Deferral Percentage for all Non-Highly Compensated Employees for
the first Plan Year, if so elected by the Committee.
-21-
(vi) Effective for Plan Years beginning after December 31, 1998,
if the Committee elects to apply Code Section 410(b)(4)(B) to determine
whether the cash or deferred arrangement provided for in the Plan satisfies
the coverage requirements provided for in Code Section 410(b)(1), then for
purposes of subsection (i) above, the Committee may exclude all eligible
Employees (other than Highly Compensated Employees) who have not met the
minimum age and service requirements of Code Section 410(a)(1)(A).
(b) Adjustment To Actual Deferral Percentage Tests. If the Committee
----------------------------------------------
determines at any time that the limitation on Elective Contributions set forth
in subsection (a) above will be exceeded for any Plan Year:
(i) the Company may, at its sole option (but still subject to
the limitations contained elsewhere in the Plan), either (A) designate that
all or any portion of its Non-Elective Contribution for such Plan Year (if,
and to the extent, it has been made prior to such date and has not been
previously allocated pursuant to Section 4.5) shall be treated as an
Elective Contribution (the "Deemed Elective Contribution") or (B) make an
additional contribution (the "Additional Contribution") on behalf of all
Participants other than Highly Compensated Employees, or on behalf of all
Participants, in the amount necessary so that the limitation set forth in
subsection (a) will not be exceeded. Any Deemed Elective Contribution or
Additional Contribution shall be (A) prorated among the Participants on
whose behalf it was made, on the basis of each such Participant's
Compensation for such Plan Year, and (B) credited to each such
Participant's Deferred Income Account; or
(ii) the Committee shall reduce the amount of the Elective
Contributions made by the Highly Compensated Employees in the amount
necessary so that the limitation set forth in subsection (a) above will not
be exceeded. The amount by which each Highly Compensated Employee whose
Elective Contributions is reduced (the "Excess Contributions") shall be
returned to the Firm to be paid to such Highly Compensated Employee
pursuant to subsection (h) below. For purposes of the foregoing, the amount
of Excess Contributions made by the Highly Compensated Employees for a Plan
Year is the excess of: (a) the aggregate amount of Elective Contributions
actually taken into account in computing the Actual Deferral Percentage for
all Highly Compensated Employees for such Plan Year, over (b) the maximum
amount of such Elective Contributions permitted by the Actual Deferral
Percentage test (determined by hypothetically reducing contributions made
on behalf of Highly Compensated Employees in order of the Actual Deferral
Percentages, beginning with the highest of such percentages). Such amount
of Excess Contributions shall be allocated to the Highly Compensated
Employees who made the largest amounts of Elective Contributions during the
Plan Year, beginning with the Highly Compensated Employee with the largest
amount of such Elective Contributions and continuing in descending order
until all the Excess Contributions have been allocated. This leveling
method, under which the Elective Contributions made by the Highly
Compensated
-22-
Employee who made the largest amount of Elective Contributions during the
Plan Year is reduced, shall be repeated to the extent required to:
(A) Enable the Plan to satisfy the Actual Deferral
Percentage test described in subsection (a) above, or
(B) Cause such Highly Compensated Employee's Elective
Contributions to equal the Elective Contributions of the Highly
Compensated Employee with the next largest amount of Elective
Contributions.
The amount of Excess Contributions to be distributed pursuant to subsection
(h) below for a Plan Year with respect to any Highly Compensated Employee
shall not exceed the amount of Elective Contributions made on behalf of
such Highly Compensated Employee for such Plan Year.
(c) For the purposes of this Section, the following definitions shall
apply:
(i) "Actual Deferral Percentage" shall mean, with respect to the
groups consisting of (A) all Highly Compensated Employees and (B) all Non-
Highly Compensated Employees, the average of the Actual Deferral Ratios for
each such group, calculated separately for each Participant in each such
Group.
(ii) "Actual Deferral Ratio" shall mean the ratio that:
(A) the amount of the Elective Contributions, Deemed
Elective Contributions, and Additional Contributions made on behalf of
each Participant for a Plan Year, bears to
(B) such Participant's Compensation for such Plan Year.
(d) For the purposes of this Section, the Actual Deferral Percentage
for any Highly Compensated Employee who is eligible to have Elective
Contributions, Deemed Elective Contributions, or Additional Contributions
allocated to his or her account(s) under two or more plans or arrangements
described in Code Section 401(k) that are maintained by the Company or any
Affiliated Company shall be determined as if all such Elective Contributions,
Deemed Elective Contributions, and Additional Contributions were made under a
single arrangement.
(e) The determination and treatment of the Elective Contributions,
Deemed Elective Contributions, Additional Contributions, and Actual Deferral
Percentage of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
-23-
(f) The determination of who is a Highly Compensated Employee,
including the determination of the Compensation that is considered, will be made
in accordance with Code Section 414(q).
(g) Distribution Of Excess Deferrals.
--------------------------------
(i) If any Participant has any Excess Deferrals for any
calendar year, and if he or she makes a claim pursuant to subsection (ii)
below, then the Excess Deferrals allocable to the Plan pursuant to such
claim shall be returned to the Company to be distributed to such
Participant. Such distribution shall be made no later than the April 15th
following the calendar year to which such Excess Deferrals relate.
(ii) A Participant's claim for Excess Deferrals shall be in
writing, signed by such Participant, and submitted to the Committee no
later than the March 1st following the calendar year to which such Excess
Deferrals relate. Such claim shall also specify the amount of such
Participant's Excess Deferrals for such calendar year allocable to the Plan
and shall be accompanied by such Participant's statement that, if such
Excess Deferrals are not distributed, such Excess Deferrals, when added to
all amounts deferred by such Participant under all plans or arrangements
described in Code Sections 401(k), 408(k), or 403(b), exceed the limit
imposed on such Participant by Code Section 402(g) for the year to which
the Excess Deferrals relate.
(iii) For the purposes of this Section, a Participant's "Excess
Deferrals" shall mean the amount of such Participant's Elective
Contributions for a calendar year that are allocated to the Plan pursuant
to subsection (i) above.
(iv) The Excess Deferrals shall be adjusted for income, gain or
loss for the Plan Year pursuant to any reasonable method adopted by the
Committee, provided that the method does not violate Code Section
401(a)(4), is used consistently for all Participants and for all Excess
Deferrals under the Plan for the Plan Year, and is used by the Plan for
allocating income to Participants' Accounts.
(v) The Committee may elect to further adjust the Excess
Deferrals for income, gain or loss for the gap period between (A) the last
day of the Plan Year and (B) the date of distribution of the Excess
Deferrals, provided that such adjustments are made pursuant to any
reasonable method adopted by the Committee that does not violate Code
Section 401(a)(4) and is used consistently for all Participants and for all
Excess Deferrals under the Plan for the Plan Year.
-24-
(h) Distribution Of Excess Contributions.
------------------------------------
(i) Despite any other provision of the Plan, any Excess
Contributions that are to be distributed pursuant to Section 3.7(b), and
the income, gain or loss allocable thereto, shall be distributed no later
than the last day of the Plan Year following the Plan Year to which such
Excess Contributions relate.
(ii) The Excess Contributions shall be adjusted for income, gain
or loss for the Plan Year pursuant to any reasonable method adopted by the
Committee, provided that the method does not violate Code Section
401(a)(4), is used consistently for all Participants and for all Excess
Contributions under the Plan for the Plan Year, and is used by the Plan for
allocating income to Participants' Accounts.
(iii) The Committee may elect to further adjust the Excess
Contributions for income, gain or loss, for the gap period between (A) the
last day of the Plan Year and (B) the date of distribution of the Excess
Contributions, provided that such adjustments are made pursuant to any
reasonable method adopted by the Committee that does not violate Code
Section 401(a)(4) and is used consistently for all Participants and for all
Excess Contributions under the Plan for the Plan Year.
(iv) The Excess Contributions that would otherwise be
distributed to a Participant shall be reduced, in accordance with the
Regulations, by the amount of Excess Deferrals distributed to such
Participant.
(i) Alternative Method of Satisfying the ADP Test. Despite any other
---------------------------------------------
provision of the Plan, effective for Plan Years beginning after December 31,
1998, the Elective Contributions for any Plan Year shall be deemed to satisfy
subsection (a)(i) above if:
(i) Matching Contribution. The Company makes a matching
---------------------
contribution on behalf of each Participant who is a Non-Highly Compensated
Employee. The Company's matching contribution for each such Participant
shall be an amount equal to:
(A) 100% of the Participant's Elective Contributions for
the Plan Year, up to 3% of the Participant's Compensation; plus
(B) 50% of the Participant's Elective Contributions for
the Plan Year that exceed 3% of his or her Compensation but do not
exceed 5% of the Participant's Compensation.
Despite the foregoing, the Committee may choose any other matching
contribution rate, if such alternative rate satisfies the following
requirements:
-25-
(C) The rate does not increase as a Participant's Elective
Contributions increase; and
(D) The total amount of the matching contributions using
this alternative rate must equal or exceed the total amount of
matching contributions using the rate provided for in the second
sentence of subsection (i)(i) above.
For all purposes under this subsection (i)(i), the matching contribution
rate for any Participant who is a Highly Compensated Employee shall not be
greater than the matching contribution rate for any Participant who is a
Non-Highly Compensated Employee.
(ii) Non-Elective Contribution. Alternatively, the Company may
-------------------------
make a Non-Elective Contribution on behalf of each Participant who is a
Non-Highly Compensated Employee. The Company's Non-Elective Contribution
for each such Participant shall be an amount equal to three percent (3%) of
the Participant's Compensation.
(iii) In addition to satisfying either subsection (i) or (ii)
above, the following requirements shall also apply for the Plan Year:
(A) Within a reasonable period before each Plan Year, the
Committee must give each Participant a written notice of the
Participant's rights and obligations under the Plan. The written
notice must be sufficiently accurate and comprehensive to apprise the
Participant of his or her rights and obligations and written in a
manner calculated to be understood by the average Participant; and
(B) The voluntary contributions or Non-Elective
Contributions provided for in subsections (i) and (ii) shall be
treated for all purposes under Articles IV, V, and VI as Elective
Contributions.
Section 3.8: Actual Contribution Percentage Test.
----------- -----------------------------------
(a) It is the Company's intent that all Voluntary Contributions shall
satisfy the requirements of Code Section 401(m).
(i) Accordingly, the "Actual Contribution Percentage" for
eligible Participants who are all Highly Compensated Employees shall not
exceed the greater of:
(A) the Actual Contribution Percentage for all eligible
Participants who are Non-Highly Compensated Employees for the
preceding Plan Year, multiplied by 1.25; or
-26-
(B) the Actual Contribution Percentage for all eligible
Participants who are Non-Highly Compensated Employees for the
preceding Plan Year, multiplied by two, provided that the Actual
Contribution Percentage for all eligible Participants who are Highly
Compensated Employees does not exceed the Actual Contribution
Percentage for all Participants who are Non-Highly Compensated
Employees for the preceding Plan Year by more than two percentage
points (or such lesser amount as required in Treasury Regulation
Section 1.401(m)-2 to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee).
(ii) For the purposes of subsection (i) above, the Committee may
elect to use the current Plan Year rather than the preceding Plan Year. If
the Committee makes this election, then such election may not be changed
except as allowed for by the Secretary of the Treasury.
(iii) For the purposes of subsection (i) above and for purposes
of the first Plan Year, the Actual Contribution Percentage for all Non-
Highly Compensated Employees for the preceding Plan Year shall be (A) 3%,
or (B) the Actual Contribution Percentage for all Non-Highly Compensated
Employees for the first Plan Year, if so elected by the Committee.
(iv) Effective for Plan Years beginning after December 31, 1998,
if the Committee elects to apply Code Section 410(b)(4)(B) to determine
whether the Plan satisfies the coverage requirements provided for in Code
Section 410(b)(1), then for purposes of subsection (i) above, the Committee
may exclude all eligible Employees (other than Highly Compensated
Employees) who have not met the minimum age and service requirements of
Code Section 410(a)(1)(A).
(b) Definitions. For the purposes of this Section, the following
-----------
definitions shall apply:
(i) "Actual Contribution Percentage" shall mean, with respect
to the groups consisting of (A) all Highly Compensated Employees and (B)
all Non-Highly Compensated Employees, the average of the Actual
Contribution Ratios for each such group, calculated separately for each
Participant in each such group.
(ii) "Actual Contribution Ratio" for a Plan Year shall mean the
ratio that:
(A) the amount of the Voluntary Contributions made on
behalf of each Participant for a Plan Year, bears to
(B) such Participant's Compensation for such Plan Year.
-27-
The Actual Contribution Ratio must be rounded to the nearest 100th of 1%.
(iii) "Excess Aggregate Contributions" shall mean, for each
Highly Compensated Employee, the total Voluntary Contributions made on
behalf of such Highly Compensated Employee for such Plan Year, minus the
amount determined by multiplying the Employee's Actual Contribution Ratio
by the Employee's Compensation for such Plan Year.
(c) Elective Deferrals And Non-Elective Contributions. For purposes
-------------------------------------------------
of determining the Actual Contribution Percentage and the amount of Excess
Aggregate Contributions pursuant to this Section, only Voluntary Contributions
contributed to the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Committee may elect to take into account, with
respect to Employees eligible to have Voluntary Contributions pursuant to this
Section allocated to their accounts, elective deferrals (as defined in
Regulation 1.402(g)-1(b)) and qualified nonelective contributions (as defined in
Code Section 401(m)(4)(c)) contributed to any plan maintained by the Company.
Such elective deferrals and qualified non-elective contributions shall be
treated as Voluntary Contributions subject to Treasury Regulation Section
1.401(m)-1(b)(2). However, the Plan Year must be the same as the plan year of
the plan to which the elective deferrals and the qualified nonelective
contributions are made.
(d) Plan Aggregation. For purposes of this Section and Code Sections
----------------
401(a)(4), 410(b) and 401(m), if two or more plans, which are maintained by the
Company or any Affiliated Company, to which voluntary contributions, Employee
contributions, or both, are made, are treated as one plan for purposes of Code
Sections 401(a)(4) or 410(b) (other than the average benefits tests under Code
Section 410(b)(2)(A)(ii)), such plans shall be treated as one plan.
(i) In addition, two or more plans of the Company to which
voluntary contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case,
the aggregated plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single plan.
However, plans may be aggregated under this subsection only if they have
the same plan year.
(ii) Despite the foregoing, an employee stock ownership plan
described in Code Section 4975(e)(7) may not be aggregated with this Plan
for purposes of determining whether the employee stock ownership plan or
this Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(m).
(e) Plan Aggregation. If a Highly Compensated Employee is a
----------------
Participant under two or more plans (other than an employee stock ownership plan
as defined in Code Section 4975(e)(7)) which are maintained by the Company or an
Affiliated Company to which voluntary contributions, Employee contributions, or
both,
-28-
are made, all such contributions on behalf of such Highly Compensated Employee
shall be aggregated for purposes of determining such Highly Compensated
Employee's Actual Contribution Ratio. However, if the plans have different plan
years, this subsection shall be applied by treating all plans ending with or
within the same calendar year as a single plan.
(f) Distribution of Excess Aggregate Contributions.
----------------------------------------------
(i) If the Committee determines at any time that the limitation
on Voluntary Contributions set forth in subsection (a) above will be
exceeded for any Plan Year, the Committee (on or before the 15th day of the
third month following the end of the Plan Year) shall direct the Trustee
to:
(A) distribute to the Highly Compensated Employee who
received the most Voluntary Contributions during the Plan Year, his or
her vested portion of Excess Aggregate Contributions (and income
allocable to such contributions) or,
(B) if forfeitable, forfeit such non-vested Excess
Aggregate Contributions attributable to Voluntary Contributions (and
income allocable to such forfeitures)
until either one of the tests set forth in this Section is satisfied, or
until the amount of Voluntary Contributions that such Highly Compensated
Employee received equals the Voluntary Contributions received by the Highly
Compensated Employee who received the second highest Voluntary
Contributions. This process shall continue until one of the tests set forth
in this Section is satisfied.
(ii) The Excess Aggregate Contribution shall be adjusted for
income, gain or loss for the Plan Year pursuant to any reasonable method
adopted by the Committee, provided that the method does not violate Code
Section 401(a)(4), is used consistently for all Participants and for all
Excess Aggregate Contributions under the Plan for the Plan Year, and is
used by the Plan for allocating income to Participants' Accounts.
(iii) The Committee may elect to further adjust the Excess
Aggregate Contributions for income, gain or loss for the gap period between
(A) the last day of the Plan Year and (B) the date of distribution of the
Excess Aggregate Contributions, provided that such adjustments are made
pursuant to any reasonable method adopted by the Committee that does not
violate Code Section 401(a)(4) and is used consistently for all
Participants and for all Excess Aggregate Contributions under the Plan for
the Plan Year.
(iv) Any distribution (and/or Forfeiture) of less than the
entire amount of Excess Aggregate Contributions (and income) shall be
treated as a pro rata distribution (and/or Forfeiture) of Excess Aggregate
Contributions and income. Distribution of Excess Aggregate Contributions
shall be designated
-29-
by the Company as a distribution of Excess Aggregate Contributions (and
income). Forfeitures of Excess Aggregate Contributions shall be treated in
accordance with Section 4.4. However, no such Forfeiture may be allocated
to a Highly Compensated Employee whose contributions are reduced pursuant
to this Section.
(v) Excess Aggregate Contributions shall be treated as Company
contributions for purposes of Code Sections 404 and 415 even if distributed
from the Plan.
(vi) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to recharacterized as a
Deemed Elective Contribution (as described in Section 3.7(b) above) for the
plan year of any other qualified cash or deferred arrangement (as defined
in Code Section 401(k)) maintained by the Company that ends with or within
the Plan Year.
(vii) Despite the above, within 12 months after the end of the
Plan Year, the Company may make a special qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Employees in an amount
sufficient to satisfy one of the tests set forth in this Section. Such
contribution shall be allocated to the Deferred Income Account of each
Participant who is Non-Highly Compensated Employee in the same proportion
that each such Participant's Compensation for the Plan Year bears to the
total Compensation of all such Participants for such Plan Year. A separate
accounting shall be maintained for the purpose of excluding such
contributions for the "Actual Deferral Percentage" test set forth in
Section 3.7.
(g) Alternative Method of Satisfying the ACP Test. Despite any other
---------------------------------------------
provision of the Plan, effective for Plan Years beginning after December 31,
1998, the Voluntary Contributions for any Plan Year shall be deemed to satisfy
subsection (a)(i) if:
(i) The Company makes the contribution provided for in Section
3.7(i)(i) or (ii);
(ii) The Committee gives each Participant the written notice
provided for in Section 3.7(i)(iii);
(iii) The matching contribution does not exceed 6% of any
Participant's Compensation;
(iv) The rate of the matching contribution does not increase as
the rate of the Elective Contribution increases; and
-30-
(v) The matching contribution rate for any Participant who is a
Highly Compensated Employee is not greater than the matching contribution
rate for any Participant who is a Non-Highly Compensated Employee.
Section 3.9: No Requirement For Profits. Despite any other provision
----------- --------------------------
of the Plan, the Company may, but is not required to, make all contributions to
the Plan for any Plan Year without regard to whether the Company has any Net
Profits for the taxable year or years ending with or within such Plan Year.
Despite the preceding sentence, the Plan shall continue to be designed to
qualify as a profit sharing plan for the purposes of Code Sections 401(a), 402,
412, and 417.
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ARTICLE IV
----------
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
-------------------------------------
Section 4.1: Retirement Accounts And Voluntary Contribution Accounts.
----------- -------------------------------------------------------
(a) The Committee shall open and maintain a Retirement Account in the
name of each Participant, and it shall be credited or charged with the amounts
allocable to it as set forth below.
(b) Committee shall open and maintain a Voluntary Contribution Account
in the name of each Participant for whom a Voluntary Contribution is made. This
Account shall be credited with each such Voluntary Contribution, and it shall be
credited or charged with the amounts allocable to it as set forth below.
Section 4.2: Deferred Income Accounts. The Committee shall open and
----------- ------------------------
maintain a Deferred Income Account in the name of each Participant for whom an
Elective Contribution is made. This Account shall be credited with each such
Elective Contribution (and such Participant's allocable share of any Deemed
Elective Contribution or Additional Contribution) as it is received by the
Trustee, and it shall be credited or charged with the amounts allocable to it as
set forth below.
Section 4.3: Rollover Contribution Accounts. The Committee shall open
----------- ------------------------------
and maintain a Rollover Contribution Account for each Participant who
contributes a Rollover Contribution. This Account shall be credited with such
Participant's Rollover Contributions, and it shall be credited or charged with
the amounts allocable to it as set forth below.
Section 4.4: Allocation Of Forfeitures, Gains And Losses.
----------- -------------------------------------------
(a) Any forfeitures of Excess Aggregate Contributions pursuant to
Section 3.8 above shall be allocated to the Voluntary Contribution Accounts of
the Participants who are Non-Highly Compensated Employees in the same proportion
that each such Participant's Compensation for such Plan Year bears to the total
Compensation of all such Participants for such Plan Year.
(b) Except as to that portion, if any, of the Trust's assets that the
Committee or Board of Directors has elected to allow Participants to manage
pursuant to Section 4.8 below, as of each Anniversary Date (but before any
allocation is made of the Company's Non-Elective Contribution, if any, for the
Plan Year ending on such Anniversary Date, if, and to the extent, made prior to
such date), the Committee shall credit any income and investment gains (whether
realized or unrealized) of the Trust, and shall charge any losses (whether
realized or unrealized) and unallocated expenses of the Trust, to the
Participants' Accounts in the
-32-
same proportion that the balance in each such Account as of such Anniversary
Date bears to the total balance in all Accounts as of such Anniversary Date.
(i) Solely for the purposes of the allocation pursuant to this
Section 4.4, each Participant's Account balances as of such Anniversary
Date shall be adjusted, in a uniform and nondiscriminatory manner, to
reflect transactions that occurred during such Plan Year, including,
without limitation, Elective Contributions and Voluntary Contributions and
withdrawals under Article VI below.
(ii) In determining the unrealized investment gains and losses to
be credited or charged as of each Anniversary Date pursuant to this Section
4.4, the Trustee shall value the assets of the Trust at their fair market
value as of each such Anniversary Date.
Section 4.5: Allocation Of Non-Elective Contribution. Subject to the
------------ ---------------------------------------
limitations contained elsewhere in the Plan, as of each Anniversary Date, the
Company's Non-Elective Contribution (if any) made on account of the Plan Year
ending on such Anniversary Date shall be allocated to the Retirement Accounts of
the Eligible Participants in the same proportion that each Eligible
Participant's Compensation for such Plan Year bears to the total Compensation of
all Eligible Participants for such Plan Year. This allocation shall be made
immediately following the allocations described in Section 4.4.
Section 4.6: Accounts In General. The credits made to a Participant's
----------- -------------------
Accounts shall not vest in such Participant any right, title or interest in the
Trust, except to the extent, at the time or times, and upon the terms and
conditions set forth in the Plan. Neither the Company, the Trustee, nor the
Committee, to any extent, warrant, guarantee or represent that the value of any
Participant's Accounts at any time will equal or exceed the amount previously
allocated or contributed to such Accounts.
Section 4.7: Limitation On Annual Additions.
----------- ------------------------------
(a) The following limitations shall apply to the allocations to each
Participant's Accounts in any Plan Year:
(i) As used in the Plan, a Participant's "Annual Addition" shall
mean the sum for any Plan Year of:
(A) Such Participant's share of the Company's contributions;
plus
(B) Such Participant's voluntary, nondeductible
contributions to the Plan (excluding any Rollover Contribution); plus
-33-
(C) Such Participant's share of any forfeiture; plus
(D) Such Participant's allocable share of the Company's
contributions to any Individual Medical Benefit Account; and plus
(E) With respect to any Participant who is a Key Employee,
any amount that is derived from the Company's contributions paid or
accrued after December 31, 1985 in taxable years ending after such
date, and that is attributable to post-retirement medical benefits
allocated to such Participant's account under a Welfare Benefit Fund
maintained by the Company.
Any excess amount applied under subsection (c) below in a Plan Year to
reduce the Company's contributions on behalf of any Participant shall be
considered to be an Annual Addition for such Participant for such Plan
Year.
(ii) Subject to the adjustments set forth below, during any Plan
Year the maximum Annual Addition for any Participant shall in no event
exceed the lesser of :
(A) $30,000, as adjusted by the Adjustment Factor; or
(B) 25% of the Participant's Earnings for such Plan Year.
(iii) The earnings limitation referred to in subsection (a)(ii)(B)
above shall not apply to (A) any contribution for medical benefits (within
the meaning of Code Section 419A(f)(2)) after separation from service that
is otherwise treated as an Annual Addition, or (B) any amount otherwise
treated as an Annual Addition under Code Section 415(l)(1).
(b) For Plan Years beginning before January 1, 2000, the following
additional limitations shall apply to any Participant when such Participant, in
addition to his or her participation in the Plan (and any Welfare Benefit Fund),
is also a participant in a Defined Benefit Plan maintained by the Company or an
Affiliated Company:
(i) The amount of (A) the Annual Additions to such Participant's
account(s) or (B) such Participant's normal retirement benefit in any such
plan(s) shall be reduced by each such plan's committee to the extent
necessary to prevent the sum of the Defined Benefit Plan Fraction (defined
below) and the Defined Contribution Plan Fraction (defined below) for any
such year from exceeding 1.0 (the "1.0 Rule") (benefits under Welfare
Benefit Funds shall be reduced first, then benefits under profit sharing
plans, then benefits under other Defined Contribution Plans, and, finally,
benefits under Defined Benefit Plans).
-34-
(ii) For the purpose of applying the 1.0 Rule, the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction shall be
applied in a manner consistent with the provisions of Code Section 415 and
the Regulations under it.
(iii) As used above, "Defined Benefit Plan Fraction" shall mean
a fraction, the numerator of which is the Participant's projected annual
benefit under the Defined Benefit Plan (determined as of the end of the
plan year for such plan), and the denominator of which is the lesser of:
(A) 1.25 multiplied by the dollar limitation in effect
for such plan year (determined under Code Section 415(b)(1)(A)); or
(B) 1.4 multiplied by 100% of such Participant's average
Earnings for his or her highest three consecutive years, including
such plan year (determined under Code Section 415(b)(1)(B)).
(iv) As used above, "Defined Contribution Plan Fraction" shall
mean a fraction, the numerator of which is the sum of the annual additions
to the Participant's account(s) as of the end of the Plan Year, and the
denominator of which is the sum of the lesser of the following amounts
determined for such Plan Year and for each of such Participant's prior
years of service with the Company:
(A) 1.25 multiplied by the dollar limitation in effect
for such Plan Year (determined under Code Section 415(c)(1)(A), but
without regard to Code Section 415(c)(6)); or
(B) 1.4 multiplied by 25% of such Participant's Earnings
for such Plan Year (determined under Code Section 415(c)(1)(B), or
Code Section 415(c)(7), if applicable).
(c) If, for any Plan Year, it is necessary to limit the Annual
Addition of any Participant pursuant to subsections (a) or (b) above, the
following reallocations shall be made:
(i) First, the amount of such Participant's nondeductible,
voluntary contributions for that Plan Year that are included in his or her
Annual Addition shall be refunded to him or her;
(ii) Second, the amount of such Participant's Elective
Contribution for such Plan Year that causes such Participant's Annual
Addition to exceed the applicable limitation shall be returned to the
Company to be paid to such Participant;
(iii) Third, the amount of the Company's contribution, inclusive
of forfeitures, that is allocable to such Participant and that causes such
Participant's Annual Addition to exceed the applicable limitation shall,
instead,
-35-
be allocated to all other Participants who are not subject to this
limitation, in proportion to their Compensation for such Plan Year; and
(iv) Fourth, if the amount of the Company's contribution,
inclusive of forfeitures, is so great as to cause all Participants for such
Plan Year to be subject to the limitations of this Section, then the excess
of the Company's contributions that cannot be allocated for such Plan Year
shall be held unallocated in a suspense account and applied against and
reduce the Company's future contributions.
(d) If a suspense account is in existence at any time during a Plan
Year pursuant to subsection (c)(iii) above, it shall not participate in the
Trust's income, gains and losses.
(e) The limitations of this Section with respect to any Participant
who, at any time, has been a participant in any other Defined Contribution Plan
(whether or not terminated) or in more than one Defined Benefit Plan (whether or
not terminated) maintained by the Company or by an Affiliated Company shall
apply as if all such Defined Contribution Plans or all such Defined Benefit
Plans in which the Participant has been a participant were one plan.
Section 4.8: Investment Of Accounts. If so elected by the Committee or
----------- ----------------------
the Board of Directors, Participants shall manage the investment of all or a
portion of the Trust's assets attributable to their Accounts. In such case,
subject to uniform and nondiscriminatory rules adopted by the Committee, a
Participant shall designate the percentage of any one or more of his or her
Accounts that is to be invested in each of several authorized investments
designated by the Committee from time to time. For convenience, such designated
investments are referred to in this Plan individually as a "Fund," and
collectively as the "Funds." Despite the foregoing, the Trustee may invest and
reinvest the principal and income of any Account in short term obligations or
bank accounts, pending investment in designated Funds, and may retain such cash
balances in each of the Accounts as the Committee directs to meet the current
cash needs of the Plan. As of each Trust Valuation Date, each such Participant's
Account shall be credited (or charged) with the income, gains, and losses of the
Funds in which such Account is invested, as such income, gains, and losses are
realized. For purposes of the foregoing, the Trustee shall value the assets of
the Trust at their fair market value as of each such Trust Valuation Date. In
addition, each Participant's Account shall be charged (as the Committee, in a
uniform and nondiscriminatory manner, shall direct) with brokerage commissions
and other direct costs related to investing such Participant's Account pursuant
to his or her directions.
-36-
ARTICLE V
---------
VESTING
-------
Section 5.1: Vesting. Each Participant shall at all times be 100%
----------- -------
vested in all of his or her Accounts.
-37-
ARTICLE VI
----------
DISTRIBUTION OF BENEFITS
------------------------
Section 6.1: Distribution Of Benefits.
----------- ------------------------
(a) Subject to the survivor annuity requirements set forth in Section
6.2, benefits become distributable to a Participant or to the Beneficiary of a
deceased Participant upon the first to occur of such Participant's Normal
Retirement Date, Total Disability, death, or the date that such Participant
ceases to be an Employee prior to his or her Normal Retirement Date for a reason
other than his or her death or Total Disability. A Participant (or the
Beneficiary of a deceased Participant) must make a claim for such Participant's
benefits prior to any distribution. Such benefits shall be the sum of the
following amounts:
(i) The amount credited to his or her Deferred Income Account,
Voluntary Contribution Account, and Rollover Contribution Account, if any,
as of the Trust Valuation Date that coincides with or immediately precedes
the first distribution of his or her benefits, adjusted as of such date if
required by Section 4.4, plus contributions made by the Participant after
such date; and
(ii) The vested amount credited to his or her Retirement Account
as of the Trust Valuation Date that coincides with or immediately precedes
the first distribution of his or her benefits, adjusted as of such date if
required by Sections 4.4 and 4.5.
Section 6.2: Survivor Annuity Requirements.
----------- -----------------------------
(a) Applicability. This Section shall apply to all benefits payable
-------------
from the Plan before April 1, 2002, and, accordingly, shall not apply to the
benefits payable from the Plan on or after April 1, 2002.
(b) Qualified Joint And Survivor Annuity. Unless an optional method
------------------------------------
of distribution is selected, a Participant who is married on his or her Annuity
Starting Date shall receive his or her benefits in the form of a Qualified Joint
and Survivor Annuity. An optional method of distribution may only be selected or
changed pursuant to a Qualified Election made within the Retirement Election
Period.
(c) Qualified Life Annuity. Unless an optional method of distribution
----------------------
is selected, a Participant who is not married on his or her Annuity Starting
Date shall receive his or her benefits in the form of a Qualified Life Annuity.
An optional method of distribution may only be selected or changed pursuant to a
Qualified Election made within the Retirement Election Period.
(d) Qualified Preretirement Survivor Annuity. Unless an optional
----------------------------------------
method of distribution or different Beneficiary has been selected, if a married
-38-
Participant dies before his or her Annuity Starting Date, such Participant's
surviving spouse, if any, shall receive such Participant's benefits in the form
of a Qualified Preretirement Survivor Annuity. If an optional method of
distribution or Beneficiary other than such Participant's surviving spouse has
not been selected, such surviving spouse may direct that the payments under the
Qualified Preretirement Survivor Annuity commence within a reasonable time after
the Participant's death. An optional method of distribution or Beneficiary other
than such Participant's surviving spouse may only be selected or changed
pursuant to a Qualified Election made within the Preretirement Election Period.
Despite the foregoing, and to the extent allowed by law, a deceased
Participant's Beneficiary may, at any time after such Participant's death but
before his or her Annuity Starting Date, select an optional method of
distribution in accordance with Section 6.3(a), provided that such Participant
had not elected against such a selection.
(e) Definitions. For purposes of this Section, the following
-----------
definitions shall apply:
(i) "Annuity Starting Date" shall mean the first day of the
first period for which an amount is payable as an annuity, or in the case
of a benefit not payable in the form of an annuity, the first day on which
all events have occurred that entitled the Participant to such benefit. For
purposes of the foregoing sentence, the first day of the first period for
which a benefit is to be received by reason of disability shall be treated
as the Annuity Starting Date only if such benefit is not an auxiliary
benefit under Code Section 417(f)(2)(B).
(ii) "Preretirement Election Period" shall mean, with respect
to any Participant, the period that begins on the first day of the Plan
Year in which such Participant attains age 35 and ends on the date of such
Participant's death. If a Participant separates from service before the
first day of the Plan Year in which he or she attains age 35, the
Preretirement Election Period shall begin on the date of separation with
respect to benefits accrued before such separation.
(iii) "Retirement Election Period" shall mean, with respect to
any Participant, the 90-day period that ends on his or her Annuity Starting
Date.
(iv) "Qualified Election" shall mean an election to waive the
Qualified Joint and Survivor Annuity, the Qualified Life Annuity, or the
Qualified Preretirement Survivor Annuity form of benefit. Such election
must satisfy the following requirements: (A) it must be in writing; (B) it
must be consented to in writing by the Participant's spouse, if he or she
is married; (C) it must designate a beneficiary (or a form of benefits)
which may not be changed without the consent of the Participant's spouse
(or the Participant's spouse's consent must expressly permit the
Participant to designate a beneficiary without requiring further consent
from the Participant's spouse); (D) such spouse's consent must acknowledge
the effect of the election; and
-39-
(E) such spouse's consent must be witnessed by a Plan representative or a
notary public. Spousal consent is not required if the Participant
establishes to the satisfaction of a Plan representative that such consent
cannot be obtained because there is no spouse, because the spouse cannot be
located, or because of such other circumstances as the Secretary of the
Treasury may prescribe by Regulations. Any consent by a spouse (or
establishment that the consent of a spouse cannot be obtained) shall be
effective only as to such spouse. A Participant may revoke a prior
Qualified Election and choose again to take a Qualified Joint and Survivor
Annuity, Qualified Life Annuity, or Qualified Preretirement Survivor
Annuity without the consent of his or her spouse, at any time and any
number of times, within the applicable election period.
(v) "Qualified Joint and Survivor Annuity" shall mean a
benefit that can be purchased with the vested amount credited to a
Participant's Accounts and that is payable in the form of an annuity for
the life of the Participant with a survivor annuity for the life of such
Participant's spouse. Such survivor annuity must not be less than 50% nor
more than 100% of the amount of the annuity payable during the joint lives
of the Participant and his or her spouse.
(vi) "Qualified Life Annuity" shall mean a benefit that can be
purchased with the vested amount credited to a Participant's Accounts and
that is payable in the form of an annuity for the life of the Participant.
(vii) "Qualified Preretirement Survivor Annuity" shall mean a
benefit that can be purchased with the vested amount credited to a
Participant's Accounts as of the date of such Participant's death (less any
portion that is automatically forfeited upon such Participant's death
pursuant to the Plan's other provisions) that is payable to such
Participant's surviving spouse in the form of an annuity for the life of
such spouse. Despite the foregoing, such annuity shall be the actuarial
equivalent of at least 50% of the vested amount credited to a Participant's
Accounts as of the date of such Participant's death. For the purposes of
the foregoing, (A) any security interest held by the Plan, the Trust or the
Trustee by reason of a loan outstanding pursuant to Section 6.8 to the
Participant shall be taken into account in determining the amount of the
Qualified Preretirement Survivor Annuity, and (B) the vested amount
credited to such Participant's Accounts shall be first reduced by any such
security interest held by reason of such loan.
(f) Information To Participants. A Participant shall be provided with
---------------------------
the following information with regard to the applicable Qualified Election:
(i) With regard to the Qualified Election to waive the Qualified
Joint and Survivor Annuity or Qualified Life Annuity form of benefit, a
Participant shall be provided with a written explanation of (A) the terms
and
-40-
conditions of the Qualified Joint and Survivor Annuity or Qualified Life
Annuity, (B) the Participant's right to elect to waive the Qualified Joint
and Survivor Annuity or Qualified Life Annuity form of benefit, (C) the
right of the Participant's spouse to consent to any election to waive the
Qualified Joint and Survivor Annuity form of benefit, and (D) the right of
the Participant to revoke such an election, and the effect of such a
revocation. Such written explanation shall be provided to a Participant no
less than 30 days and no more than 90 days before the Annuity Starting
Date.
(ii) With regard to the Qualified Election regarding the
Qualified Preretirement Survivor Annuity form of benefit, a Participant
shall be provided with a written explanation of the Qualified Preretirement
Survivor Annuity containing comparable information to that required
pursuant to subparagraph (i) above. Such written explanation shall be
provided to each Participant within whichever of the following periods ends
last: (A) the period beginning with the first day of the Plan Year in which
such Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which such Participant attains age 35, (B) a
reasonable period after such Participant first became a Participant, or (C)
a reasonable period after such Participant ceases to be an Employee in the
case of a Participant who ceases to be an Employee before attaining age 35.
(g) Cash-Out Restrictions.
---------------------
(i) Despite the other provisions of this Section, but
subject to the next sentence, if, when a Participant's benefits become
distributable, the vested amount credited to such Participant's Accounts is
not (nor never has been) in excess of $3,500 (or $5,000, for Plan Years
beginning after August 5, 1997), the Committee may direct that such benefit
be distributed as an immediate cash lump sum. No such distribution may be
made after a Participant's Annuity Starting Date unless such Participant
and his or her spouse (or, in the case of a deceased Participant, the
surviving spouse) consent in writing to such distribution.
(ii) Despite the other provisions of this Section, if, when
a Participant's benefits become distributable, the vested amount credited
to such Participant's Accounts is (or ever has been) in excess of $3,500
(or $5,000, for Plan Years beginning after August 5, 1997), the Committee
may direct that such benefit be distributed as an immediate cash lump sum,
provided the Participant and his or her spouse (or, where the Participant
has died, his or her surviving spouse) consent in writing to such
distribution during the 90-day period ending on the date such benefit is so
distributed. If such Participant or his or her spouse (or surviving spouse)
does not so consent, such failure to consent shall be deemed to be an
election to defer distribution of such benefit until the later of age 62 or
the Participant's Normal Retirement Age.
-41-
(h) The Annuity Starting Date for a distribution in a form other than
a Qualified Joint and Survivor Annuity may be less than 30 days after receipt of
the written explanation described above provided: (i) the Participant has been
provided with information that clearly indicates that the Participant has at
least 30 days to consider whether to waive the Qualified Joint and Survivor
Annuity and elect (with spousal consent) to a form of distribution other than a
Qualified Joint and Survivor Annuity; (ii) the Participant is permitted to
revoke any affirmative distribution election at least until the Annuity Starting
Date or, if later, at any time prior to the expiration of the seven-day period
that begins the date after the explanation of the Qualified Joint and Survivor
Annuity is provided to the Participant; and (iii) the Annuity Starting Date is a
date after the date that the written explanation was provided to the
Participant. For distributions on or after December 31, 1996, the Annuity
Starting Date may be a date prior to the date the written explanation is
provided to the Participant if the distribution does not commence until at least
30 days after such written explanation is provided, subject to the waiver of the
30-day period as provided for above.
(i) Special Limitation. Despite any other provision of the Plan, no
------------------
preretirement death benefit in addition to the Qualified Preretirement Survivor
Annuity shall be permitted to the extent such other benefit would violate the
incidental benefit rule.
Section 6.3: Optional Methods Of Distribution.
----------- --------------------------------
(a) If an optional form of benefit has been selected as set forth in
Section 6.2 or if Section 6.2 is not applicable, then, when a Participant's
benefits become distributable, the Committee shall, with reasonable promptness,
direct the Trustee to distribute such Participant's benefits as follows:
(i) If a Participant's benefits become distributable by reason
of his or her death, the benefits shall be distributed to such deceased
Participant's Beneficiary as an immediate cash lump sum. Such Participant's
vested amount shall be reduced by any security interest held by the Plan,
the Trust or the Trustee by reason of a loan outstanding pursuant to
Section 6.8.
(ii) If a Participant's benefits become distributable for a
reason other than his or her death, the Participant, or the Beneficiary of
a deceased Participant, may elect to receive the vested amount credited to
the Participant's Accounts as an immediate cash lump sum, or for
distributions prior to April 1, 2002, as an immediate cash lump sum or
installments, or any combination of these. Despite the foregoing, if the
vested amount credited to such Participant's Accounts is not (nor never has
been) in excess of $3,500 (or $5,000, for Plan Years beginning after August
5, 1997), the Committee may direct the Trustee to distribute such benefits
as an immediate cash lump sum, without such Participant's consent.
-42-
(iii) If distribution is to be made in installments pursuant to
subsection (a)(ii) immediately above, such installments shall be paid in
equal or nearly equal quarterly, semiannual, or annual installments over a
period not exceeding:
(A) the life expectancy of the Participant; or
(B) the joint life and last survivor expectancy of the
Participant and his or her Beneficiary.
The expected return multiples of Section 1.72-9 of the Regulations under
the Code shall be used to determine such life expectancy periods.
(iv) If a Participant's benefits became distributable for a
reason other than his or her death, and if such Participant properly
elected to receive an optional form of benefit pursuant to this Section
6.3, then, if such Participant dies before his or her entire benefits have
been distributed, his or her Beneficiary(ies) shall receive a death benefit
equal to the balance of the remaining installments (if any) or deferred
cash lump sum (if any) due such deceased Participant.
(v) If a distribution is to be made in a deferred lump sum or in
installments pursuant to subsections (a)(i) or (a)(ii) above, and to the
extent it is directed by the Committee, the Trustee shall segregate a
former Participant's benefit from the Trust and deposit it in a savings
account with a Financial Institution. The former Participant (or his or her
Beneficiary) shall be entitled to receive, in addition to the former
Participant's benefit, the interest, if any, earned from such savings
account, payable with the final installment. Despite the foregoing, the
Committee may, in its discretion, if so requested by the former Participant
or his or her Beneficiary, continue to hold the undistributed benefit as a
segregated part of the Trust, in which event such benefit shall participate
in the income, gains and losses realized by such segregated Trust fund, and
such income or gains, if any, shall be payable with the final installment.
(vi) Despite the foregoing provisions, the Committee may at any
time, with the consent of a Participant or his or her Beneficiary, direct
the Trustee to accelerate or to postpone any installment payment to such
Participant or Beneficiary or to reduce or to increase the period over
which future installments are to be made, in which latter event the Trustee
shall adjust the amount of such installments accordingly. In addition, a
Participant may at any time withdraw any or all of his or her undistributed
benefit, and a Participant's Beneficiary shall, unless such Participant
provided otherwise, have a similar withdrawal right. If less than all of
the undistributed benefit is withdrawn, the remaining installment payments
shall be adjusted accordingly.
-43-
(vii) In addition to the foregoing, prior to April 1, 2002, a
Participant shall have the right to request the Committee, in lieu of the
benefits provided herein, to direct the Trustee to purchase a non-
transferable annuity, the cost of which shall be equal to the benefits to
which such Participant is entitled, and the term of which shall not extend
beyond the life expectancy of the Participant, or the joint life
expectancies of the Participant or his or her spouse if the joint form is
elected, and the Committee may, in its discretion, direct the Trustee to,
and the Trustee shall, purchase such an annuity.
(b) The complete distribution of a Participant's benefit as provided
for above shall constitute full payment and satisfaction of any obligation of
the Company, the Trustee or the Committee to such Participant or to the
Beneficiary of a deceased Participant.
(c) If a distribution is one to which Code Sections 401(a)(11) and
417 do not apply, such distribution may commence fewer than 30 days after the
notice required under Section 1.411(a)-11(c) of the Regulations under the Code
is given, provided that:
(i) the Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
Section 6.4: Timing Of Distributions.
----------- -----------------------
(a) Subject only to the survivor annuity requirements set forth in
Section 6.2, the provisions of this Section shall govern the timing of the
distribution of a Participant's benefit.
(b) If a Participant's benefits become distributable because of his
or her death or Total Disability, such benefits shall begin to be distributed as
soon as is administratively practical after the Trust Valuation Date that
coincides with or first follows the Committee's receipt of (i) written proof of
such Participant's death or Total Disability and (ii) a properly completed claim
for benefits. If a Participant's benefits become distributable for a reason
other than his or her death or Total Disability, such Participant's benefits
shall begin to be distributed as soon as is administratively practical after the
Trust Valuation Date that coincides with or first follows the Committee's
receipt of a properly completed claim for benefits. Despite the foregoing, and
subject to subsections (c) and (d) below, a Participant's benefits must begin to
be distributed no later than 60 days after the latest of the close of the Plan
Year in which:
-44-
(i) the Participant attained age 65 (or Normal Retirement Age,
if earlier);
(ii) occurred the tenth anniversary of the year in which the
Participant began participation in the Plan; or
(iii) the Participant terminated his or her employment with the
Company.
Despite the foregoing, a Participant may elect a later date on which the
distribution of his or her benefit is to begin, in a manner consistent with the
applicable Regulations. Any failure by a Participant (or, if he or she is
married, such Participant's spouse in the event of such Participant's death or
in the event distribution is to be made in a form other than a Qualified Joint
and Survivor Annuity) to consent to an immediate distribution of his or her
benefit (provided that such benefit is otherwise then immediately distributable
pursuant to the foregoing provisions) shall be deemed to be an election to defer
distribution to the later of age 62 or such Participant's Normal Retirement Age.
(c) Despite any other provision of the Plan, one of the following
provisions shall apply:
(i) A Participant's benefit shall be distributed to him or her
not later than April 1 of the calendar year following the later of (A) the
calendar year in which the Participant attains age 70 1/2, or (B) the
calendar year in which the Participant retires, if such Participant is not
a 5% Owner with respect to the Plan Year ending in the calendar year in
which he or she attains age 70 1/2; or
(ii) Alternatively, distributions to a Participant must begin no
later than the date determined under subsection (c)(i) above and must be
made, in accordance with the applicable Regulations, over the life of the
Participant or over the lives of such Participant and his or her designated
Beneficiary (or over a period not extending beyond the life expectancy of
the Participant or the life expectancy of the Participant and his or her
designated Beneficiary).
(d) If a Participant dies before his or her entire interest has been
distributed to him or her, the remaining portion of such Participant's interest
must be distributed at least as rapidly as under the method of distribution
being used as of the date of the Participant's death.
(e) If a Participant dies before distribution of his or her benefits
has begun, the entire benefit of such Participant must be distributed within
five years after his or her death.
-45-
(f) For purposes of subsection (e) above, any portion of a
Participant's benefits that is payable to or for the benefit of his or her
Beneficiary shall be treated as distributed on the date on which such
distribution begins if:
(i) such portion will be distributed in accordance with the
applicable Regulations over such Beneficiary's life (or over a period not
extending beyond such Beneficiary's life expectancy), and
(ii) such distribution must begin not later than the date that is
one year after the date of such Participant's death (or such later date as
the Secretary of the Treasury may by Regulations prescribe). However, if
such Beneficiary is the Participant's surviving spouse, then the date on
which the distribution is required to begin shall be not later than the
date on which the Participant would have attained age 70 1/2, and if such
spouse dies before the distribution to him or her begins, this subsection
shall be applied as if such spouse were the Participant.
(g) For purposes of subsection (f) above, the life expectancy of a
Participant and his or her spouse (other than in the case of life annuity) may
be redetermined on an annual or less frequent basis, and under Regulations
prescribed by the Secretary of the Treasury, any amount paid to a child of a
Participant shall be treated as if it had been paid to such Participant's
surviving spouse if such amount will become payable to such spouse upon such
child attaining majority (or any other designated event permitted under the
applicable Regulations).
(h) Despite the foregoing provisions, the Committee shall not permit
any Participant to receive his or her benefits under a method of distribution
that violates the Regulations under Code Section 401(a)(9), including the
minimum distribution incidental benefit requirements of proposed Regulation
1.401(a)(9)-2, or any successor or final Regulation.
(i) With respect to distributions under the Plan made for calendar
years beginning on or after January 1, 2001, the Plan will apply the minimum
distribution requirements of Section 401(a)(9) of the Internal Revenue Code in
accordance with the regulations under Section 401(a)(9) that were proposed on
January 17, 2001, notwithstanding any provision of the Plan to the contrary.
This amendment shall continue in effect until the end of the last calendar year
beginning before the effective date of final regulations under Section 401(a)(9)
or such other date as may be specified in guidance published by the Internal
Revenue Service.
Section 6.5: Postponed Retirement. If a Participant continues to be
----------- --------------------
an Employee beyond his or her Normal Retirement Date, his or her corresponding
participation in the Plan shall likewise continue. In such case, to the extent
permitted by law and the applicable Regulations, the distribution of such a
Participant's benefits will be postponed until he or she actually ceases to be
an Employee. Such benefits
-46-
will become distributable as of the first day of the month next following such
Participant's actually ceasing to be an Employee.
Section 6.6: Distributions Due Missing Persons. If the Trustee is
----------- ---------------------------------
unable to distribute any benefit due to a missing Participant or Beneficiary,
the Trustee shall (i) so advise the Committee and (ii) segregate such benefit
from the Trust, in which event such benefit shall participate in the income,
gains and losses realized by such segregated Trust Fund. The Committee shall
then send a written notice to such Participant or Beneficiary at his or her last
known address, as reflected in the Company's or Committee's records. If such
Participant or Beneficiary shall not have presented himself or herself to the
Company or to the Committee within three years of the date of such written
notice, any undistributed benefit (and any income gains and losses realized by
such segregated part) may be applied against and reduce the Company's future
contributions to the Plan. Despite the foregoing, if at any subsequent time a
valid claim for any undistributed benefit is presented to the Committee, such
benefit that was so applied (and any income, gains and losses realized by such
segregated part) shall be paid directly by the Company to such claimant.
Section 6.7: Transfers To Another Qualified Plan.
----------- -----------------------------------
(a) If a Participant who is a distributee of any Eligible Rollover
Distribution (as defined below) elects to have such distribution paid directly
to an Eligible Retirement Plan and who specifies the Eligible Retirement Plan to
which such distribution is to be paid (in such form and at such time as the
Committee may prescribe), then such distribution shall be made in the form of a
direct trustee-to-trustee transfer to such Eligible Retirement Plan, provided
that such Eligible Retirement Plan accepts such a transfer. The foregoing
sentence shall apply only to the extent that such Eligible Rollover Distribution
would be includable in gross income if not transferred as provided in such
sentence (determined without regard to Code Sections 402(c) and 403(a)(4)).
(b) "Eligible Rollover Distribution" shall mean any distribution of
all or any portion of the balance to the credit of the distributee, except that
an Eligible Rollover Distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; any hardship distribution described in Code Section
401(k)(2)(B)(i)(IV) received after December 31, 1998; and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
-47-
(c) "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(d) A Participant's (i) surviving spouse and (ii) 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 surviving spouse, spouse, or former spouse and shall have the
same rights as a Participant to make a transfer in accordance with this Section
6.7 as to the interest of the surviving spouse, spouse, or former spouse.
Section 6.8: Loans To Participants.
----------- ---------------------
(a) The Committee shall be the fiduciary with authority to establish
a loan program for Participants and to direct the Trustee concerning the
investment of the Trust's assets pursuant to such a loan program.
(b) A Participant may make a written application to the Committee for
a loan from the Trust. Each such loan must be adequately secured, and if it is
secured by the balance in such Participant's Accounts, then, prior to April 1,
2002, in the case of a married Participant, (i) such loan and security interest
must be consented to in writing by such Participant's spouse during the 90-day
period ending on the date on which the loan is so secured, (ii) such consent
must acknowledge the effect of such loan and security interest, and (iii) such
consent must be witnessed by a Plan representative or a notary public.
(c) The Committee shall have sole discretion in granting or denying
any such loan application; provided, however, that the Committee shall exercise
such discretion in a uniform and nondiscriminatory manner. In connection with
any such loan, a Participant shall sign such notes, evidences of indebtedness,
security agreements and other documents as the Committee may, in its discretion,
require.
(d) Interest on such loans shall be charged at a reasonable rate, not
in excess of that permitted by law, and all notes or other evidences of
indebtedness shall require repayment of the principal amount of the loan and
interest on it over a period certain, which shall not exceed five years. Such
payments of interest and principal shall be made no less frequently than
quarterly and shall provide for the level amortization of the loan over its
term. Despite the foregoing, a loan's term may exceed five years if such loan is
used to acquire any dwelling unit that is used or within a reasonable time
(determined at the time the loan is made) will be used as the principal
residence of the Participant. The Trustee, on receipt of authorization and the
appropriate notes or other evidences of indebtedness from the Committee, shall
-48-
advance the amount of the loan to the Participant and shall treat such loan as
an investment of the Trust.
(e) In no event shall the outstanding principal balance of all loans
from the Trust to any Participant exceed the lesser of:
(i) $20,000, reduced by the excess (if any) of (A) the highest
outstanding balance of all loans from the Trust to such Participant during
the one-year period ending on the day before the date on which such loan is
made, over (B) the outstanding balance of all loans from the Trust to such
Participant on the date on which such loan is made; or
(ii) one-half of the total vested amount credited to such
Participant's Accounts.
Section 6.9: Withdrawal at Age 59 1/2. Despite any other provision
----------- ------------------------
of the Plan, effective as of January 1, 2002, any Participant who has reached at
least age 59 1/2 may elect to withdraw all or any portion of the vested balance
of his or her Accounts, even though he or she is still an Employee. Any such
withdrawal shall be subject to Section 6.2, and in the event an optional form of
distribution is properly elected as set forth in such Section 6.2, such
withdrawal shall be paid only in the form of a cash lump sum.
Section 6.10 Hardship Withdrawals.
------------ --------------------
(a) With respect to his or her Deferred Income Account, a Participant
may request a hardship withdrawal of the smaller of:
(i) the aggregate amount of all of such Participant's Elective
Contributions;
(ii) the current value of such Participant's Deferred Income
Account; or
(iii) the amount required to meet the immediate and heavy
financial need created by the hardship and not available to such
Participant through the Plan or through all non-taxable loans available
through the Company (including a withdrawal pursuant to Section 6.11).
A request for such a withdrawal shall be written, dated and delivered to the
Committee in accordance with rules promulgated by the Committee, and in the case
of a married Participant, it must be consented to in writing by such
Participant's spouse during the 90-day period ending on the date the withdrawal
is made and such consent must be witnessed by a Plan representative or a notary
public. If the Committee approves the withdrawal, distribution shall be made as
soon thereafter as is administratively practical.
-49-
(b) The Committee may, in its sole discretion, approve or deny a
hardship withdrawal request, but the Committee's determination shall be made in
accordance with uniform and nondiscriminatory standards. The Committee shall
approve a hardship withdrawal only if the withdrawal is necessary to satisfy one
of the following immediate and heavy financial needs:
(i) Payments of medical expenses incurred by the Participant
and the Participant's spouse and dependants or payments necessary for those
persons to obtain medical care.
(ii) Payments (excluding mortgage payments) for the
Participant's residence.
(iii) Payments of tuition and related educational fees for the
next 12 months of post-secondary education for the Participant and the
Participant's spouse, children, and dependents.
(iv) Payments to prevent the Participant's eviction from the
Participant's principal residence.
(v) Payments to prevent a foreclosure on the Participant's
mortgage of the Participant's principal residence.
(vi) Such other expenses that the Commissioner of the Internal
Revenue Service deems to be an immediate and heavy financial need through
the publication of revenue rulings, notices, and other documents of general
applicability.
The amount of an immediate and heavy financial need may include any amount that
is necessary to pay federal, state, or local income taxes or penalties that are
reasonably anticipated to result from the distribution. If a Participant has a
balance in his or her Voluntary Contribution Account that is subject to
withdrawal pursuant to Section 6.11, then such Participant must withdraw the
maximum allowed pursuant to Section 6.11 before a withdrawal can be made
pursuant to this Section 6.10(b).
(c) For the purpose of this Section, the Committee may reasonably
rely upon a Participant's representations regarding the Participant's financial
affairs.
(d) The Participant must sign an agreement that he or she will not
make any elective contribution or employee contribution to the Plan or any other
plan maintained by the Employer (including all qualified and nonqualified plans
of deferred compensation, stock option plans, stock purchase plans, and cash or
deferred arrangements that are part of a cafeteria plan) for twelve consecutive
months following a hardship withdrawal.
(e) The total amount of the Participant's Elective Contributions
during the year following the Participant's taxable year in which the
Participant made a hardship withdrawal may be no greater than (i) $7,000, as
adjusted by the
-50-
Adjustment Factor, minus (ii) the amount of the Participant's Elective
Contributions during the Participant's taxable year in which the hardship
withdrawal was made.
(f) Any earnings and gains on a Participant's Elective Contributions
are not subject to withdrawal pursuant to this Section and shall be distributed
only upon the events specified in Section 6.1 above.
Section 6.11: Withdrawal Of Voluntary Contributions. With respect
------------ -------------------------------------
to his or her Voluntary Contribution Account, a Participant may direct that the
smaller of (i) the aggregate amount of all of such Participant's Voluntary
Contributions or (ii) the current value of such Participant's Voluntary
Contribution Account be distributed to him or her. Such direction shall be
written, dated and delivered to the Committee in accordance with the rules
promulgated by the Committee, and in the case of a married Participant, it must
be consented to in writing by such Participant's spouse during the 90-day period
ending on the date the withdrawal is made and such consent must be witnessed by
a Plan representative or a notary public. Such distribution shall be made as
soon thereafter as is practical. Any earnings and gains on such contributions
cannot be withdrawn pursuant to this Section and may be distributed only upon
the events specified in Section 6.1 above, unless otherwise required by Code
Section 72(e)(8).
Section 6.12: Withdrawal of Rollover Contributions. Despite any
----------------------------------------------------
other provision of the Plan, effective as of January 1, 2002, a Participant may
elect to withdraw all or any portion of the balance of his or her Rollover
Contribution Account, even though he or she is still an Employee. Any such
withdrawal shall be subject to Section 6.2, and in the event an optional form of
distribution is properly elected as set forth in such Section 6.2, such
withdrawal shall be paid only in the form of a cash lump sum.
-51-
ARTICLE VII
-----------
TOP-HEAVY PLAN LIMITATIONS
--------------------------
Section 7.1: Application Of Top-Heavy Rules. If the Plan is or
------------ ------------------------------
becomes a Top-heavy Plan, the limitations and requirements contained in this
Article shall apply and shall supersede any conflicting provision of the Plan.
Section 7.2: Definitions.
----------- -----------
(a) Top-heavy Plan. A "Top-heavy Plan" shall mean, with respect to
--------------
any Plan Year, (i) any Defined Benefit Plan maintained by the Company or an
Affiliated Company if, as of the Determination Date, the total Present Value of
Accrued Benefits under such plan for Key Employees exceeds 60% of the total
Present Value of Accrued Benefits under such plan for all participants in such
plan; and (ii) any Defined Contribution Plan maintained by the Company or an
Affiliated Company if, as of the Determination Date, the total Aggregate
Accounts of Key Employees under the plan exceeds 60% of the total Aggregate
Accounts of all participants under such plan. Each plan of the Company required
to be included in an Aggregation Group shall be treated as a Top-heavy Plan if
the Aggregation Group is a Top-heavy Group.
(b) Top-heavy Group. A "Top-heavy Group" shall mean any Aggregation
---------------
Group if the sum of (i) the total Present Value of Accrued Benefits for Key
Employees under all Defined Benefit Plans included in the Aggregation Group
(determined as of the Determination Date for each such plan), and (ii) the total
Aggregate Accounts of Key Employees under all Defined Contribution Plans
included in the Aggregation Group (determined as of the Determination Date for
each such plan) exceeds 60% of a similar sum determined for all participants in
such plans. For purposes of determining whether the plans in a Top-heavy Group
exceed the foregoing 60% test, the plans shall be aggregated by adding together
the results for each plan as of the Determination Dates for such plans that fall
within the same calendar year.
(c) Aggregation Group. An "Aggregation Group" shall mean each plan of
-----------------
the Company or of an Affiliated Company in which a Key Employee is a
participant, and each plan of the Company or of an Affiliated Company that
enables the plan(s) containing a Key Employee to meet the antidiscrimination
requirements of Code Sections 401(a)(4) or 410, including terminating or
terminated plans maintained within the last five years ending on the
Determination Date that would, but for such plan(s) termination, be part of the
Aggregation Group. The Company can elect to include in the Aggregation Group any
plan not otherwise required to be included, if such group, after such election,
would continue to meet the antidiscrimination requirements of Code Sections
401(a)(4) and 410; provided, however, that any such plan will not be otherwise
deemed a Top-heavy Plan by reason of such election.
-52-
(d) Determination Date. With respect to any plan year, "Determination
------------------
Date" shall mean the last day of the preceding plan year or, in the case of the
first plan year of any plan, the last day of such plan year.
(e) Present Value Of Accrued Benefit: A participant's "Present Value
--------------------------------
of Accrued Benefit" as of any Determination Date shall be calculated:
(i) as of the most recent valuation date ("Valuation Date")
which is within the 12-month period ending on such Determination Date;
(ii) for the first plan year, as if (1) the participant
terminated service as of the Determination Date, or (2) the participant
terminated service as of the Valuation Date, but taking into account the
estimated Present Value of Accrued Benefit as of the Determination Date;
(iii) for any other plan year, as if the participant terminated
service as of the Valuation Date; and
(iv) using the interest rate and mortality assumptions set
forth in the Defined Benefit Plan.
(v) Solely for the purposes of determining if the Plan, or any
other plan included in the Aggregation Group, is a Top-heavy Plan, the
accrued benefit of a Non-Key Employee shall be determined under (1) the
method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Company and all Affiliated Companies, or (2) if there is
no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional accrual rate of Code
Section 411(b)(1)(C).
For the foregoing purposes, the Valuation Date must be the same valuation date
used for computing the defined benefit plan minimum funding costs, regardless of
whether a valuation is performed that year.
(f) Aggregate Account: A participant's "Aggregate Account" shall be
-----------------
determined as follows:
(i) For Defined Contribution Plans not subject to the minimum
funding requirements of Code Section 412, a participant's Aggregate Account
as of any Determination Date shall be the sum of:
(A) such participant's account balance as of the most
recent valuation date ("Valuation Date") occurring within the 12-month
period ending on such Determination Date; plus
(B) an adjustment for contributions due as of such
Determination Date. Such adjustment is generally the amount of any
contributions actually made after the Valuation Date but before the
-53-
Determination Date. In the first plan year, such adjustment shall also
reflect any contributions actually made after the Determination Date
that are allocated as of a date in that first plan year.
(ii) For Defined Contribution Plans subject to the minimum
funding requirements of Code Section 412, a participant's Aggregate Account
as of any Determination Date shall be the sum of:
(A) such participant's account balance as of the most
recent valuation date ("Valuation Date") occurring within the 12-month
period ending on such Determination Date, including contributions that
would be allocated as of a date not later than such Determination
Date; plus
(B) an adjustment for contributions due as of such
Determination Date. Such adjustment shall reflect the amount of any
contribution actually made (or due to be made) after the Valuation
Date but before the expiration of the extended payment period
described in Code Section 412(c)(10).
(g) Key Employee. "Key Employee" shall mean any participant of any
------------
plan maintained by the Company or an Affiliated Company who, at any time during
the plan year or any of the four preceding plan years, was:
(i) an officer of the Company or an Affiliated Company whose
annual Compensation exceed 50% of the amount in effect under Code Section
415(b)(1)(A) for any such plan year (provided, however, that no more than
50 employees (or, if lesser, the greater of three employees or 10% of all
employees) shall be treated as officers; provided further, however, that if
the total number of officers exceeds this numerical limitation, only the
highest compensated officers shall be included);
(ii) one of the ten employees who (1) has annual Compensation
for a plan year greater than the dollar limitation in effect under Code
Section 415(c)(1)(A) for the calendar year in which such plan year ends,
and (2) owns (or is considered to own under Code Section 318) both more
than a 1/2% interest and the largest interests in the Company or an
Affiliated Company;
(iii) a 5% Owner of the Company or an Affiliated Company; or
(iv) a 1% Owner of the Company or an Affiliated Company whose
annual Compensation exceed $150,000, or such other amount as may be allowed
under Code Section 416(i) and the applicable Regulations.
In making this determination of a 5% Owner and a 1% Owner for purposes of this
Section, (i) the Code Section 318(a)(2) corporate attribution rules, as modified
by Code Section 416(i)(1)(B)(iii), shall apply, and (ii) the business
aggregation rules of
-54-
Code Section 414 shall not apply. For purposes of the foregoing definition, (i)
the beneficiary of a Key Employee shall be treated as a Key Employee, and (ii)
the beneficiary of a former Key Employee shall be treated as a former Key
Employee. Inherited benefits will retain the character of the benefits of the
Key Employee who performed the services for the Company. For purposes of the
foregoing, the identification of a Key Employee will be determined in accordance
with Code Section 416(i).
(h) Non-Key Employee. "Non-Key Employee" shall include any
----------------
Participant who is not a Key Employee, including any Participant who is a former
Key Employee.
Section 7.3: 60% Test - Special Rules. For purposes of applying the
----------- ------------------------
60% test described in Section 7.2(a), the following special rules shall apply:
(a) Participant Contributions. Benefits derived from both
-------------------------
Participant contributions (whether voluntary or mandatory, but not deductible
contributions) and the Company's contributions shall be considered.
(b) Previous Distributions. In determining the Present Value of
----------------------
Accrued Benefit or the Aggregate Account of any participant under any plan (or
plans that form the Aggregation Group), such present value or account shall be
increased by the aggregate of distributions made to such participant from such
plan (or plans forming the Aggregation Group) during the five-year period ending
on the Determination Date. For this purpose, "participant" shall include an
employee who is no longer employed by the Company or an Affiliated Company.
Despite the foregoing, any distribution to a participant that is made after the
Valuation Date and before the Determination Date for any plan year shall not be
considered a distribution to the extent it is already included in such
participant's Present Value of Accrued Benefit or Aggregate Account as of such
Valuation Date.
(c) Rollover Contributions. Rollover contributions shall be treated
----------------------
as follows:
(i) The following rules shall apply to related rollovers and
plan-to-plan transfers (ones either not initiated by the participant or
made to a plan maintained by the Company or any Affiliated Company). If the
plan provides such rollover or plan-to-plan transfer, it shall not be
counted as a distribution for purposes of this Section 7.3. If the plan
receives such rollover or plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the participant's Present
Value of Accrued Benefit or Aggregate Account, regardless of the date on
which such rollover or plan-to-plan transfer was received.
(ii) The following rules shall apply to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by a participant and
made from a plan maintained by one employer to a plan maintained by another
-55-
employer). If the plan provides such rollover or plan-to-plan transfer, it
shall always consider such rollover or plan-to-plan transfer as a
distribution for purposes of this Section 7.3. If the plan receives such
rollover or plan-to-plan transfer, it shall not consider such rollover or
plan-to-plan transfer as part of the participant's Present Value of Accrued
Benefit or Aggregate Account if it was accepted after December 31, 1983.
(d) Change Of Status. The accrued benefit or account of a
----------------
participant who was formerly a Key Employee, but who ceased to be a Key Employee
in any plan year, will not be taken into account for such plan year.
(e) No Service For Last Five Years. If any individual has not
------------------------------
performed services for the employer maintaining the plan during the five-year
period ending on the Determination Date, the accrued benefit or account of such
individual shall not be taken into account.
Section 7.4: Minimum Vesting Requirement. As the Plan's normal
----------- ---------------------------
vesting schedule equals or exceeds the top-heavy vesting schedule, the normal
vesting schedule shall continue to apply if the Plan becomes a Top-heavy Plan.
Section 7.5: Minimum Contribution Requirement.
----------- --------------------------------
(a) If the Plan is a Top-heavy Plan, then in no event shall the
Company's annual contribution on behalf of any Non-Key Employee be less than 3%
of such Participant's Earnings. This minimum contribution shall be made even
though, under the other provisions of the Plan, the Participant would not
otherwise be entitled to a contribution on his or her behalf, or would have
received a lesser contribution for the Plan Year, because of (i) the
Participant's failure to complete 1,000 Hours of Service, (ii) the Participant's
failure to make mandatory employee contributions to the Plan, or (iii) the
Participant's exclusion from the Plan because such Participant's Earnings is
less than the Plan's stated amount. Despite the foregoing, no minimum
contribution needs to be made under this Section on behalf of a Participant who
was not an Employee on the last day of the Plan Year.
(b) For Plan Years beginning on or after January 1, 1985, any Company
contribution that is attributable to a salary reduction or similar arrangement
shall be considered for purposes of satisfying the minimum contribution required
by this Section. For Plan Years beginning on or after January 1, 1989, Elective
Contributions on behalf of Key Employees are taken into account in determining
the minimum required contribution under Code Section 416(c)(2), but such
contributions on behalf of Non-Key Employees may not be treated as employer
contributions for purposes of the minimum contribution or benefit requirements
of Code Section 416.
(c) If the Company maintains one or more qualified plans in addition
to the Plan, and if the Plan is a Top-heavy Plan, then in accordance with the
applicable Regulations, only one such plan need be designated by the Company to
-56-
provide the minimum benefit provided for in this Section. However, if for Plan
Years beginning before January 1, 2000, such multiple plans, including the Plan,
include a Defined Benefit Plan and a Defined Contribution Plan, the 1.0 Rule (as
it may be modified by the top-heavy plan transitional rule under Code Section
416(h)(3)) shall be in effect if, and only if, the following two requirements
are satisfied:
(i) Minimum Benefit Requirement. The "3%" set forth in this
---------------------------
Section shall be replaced by "4%".
(ii) The 90% Test. The sum of the Present Value of Accrued
------------
Benefits plus the Aggregate Accounts held for all Key Employees under the
plans cannot exceed 90% of a similar sum determined for all participants.
For purposes of the 1.0 Rule, all references to "1.25" shall be replaced by
"1.0," if either of the above additional requirements is not met.
(d) Despite the foregoing, if (i) the total annual contribution
allocated to the Accounts of each Key Employee is less than 3% of each Key
Employee's Earnings and (ii) this Plan is not required to be included in an
Aggregation Group to enable a Defined Benefit Plan to meet the requirements of
Code Section 401(a)(4) or 410, then the total minimum annual contribution on
behalf of each Non-Key Employee shall be equal to the largest percentage
contribution on behalf of any Key Employee.
-57-
ARTICLE VIII
------------
THE COMMITTEE
-------------
Section 8.1: Members.
----------- --------
(a) The Committee shall consist of three or more members and shall be
appointed by the Board of Directors. Its members shall serve at the pleasure of
the Board of Directors. A person so appointed shall become a member by filing a
written notice of acceptance with the Board of Directors. A member of the
Committee may resign by delivering a written notice of resignation to the Board
of Directors. The Board of Directors may remove any member of the Committee by
delivering a written notice of such removal to him or her. A resignation or
removal shall be effective on the date specified in such notice or resolution.
The Trustee shall be promptly notified by the Board of Directors of any change
in the membership of the Committee, and shall be supplied with specimen
signatures of each Committee member.
(b) Vacancies in the membership of the Committee shall be filled
promptly by the Board of Directors. If the Company is not in existence when a
vacancy in the Committee membership arises, such vacancy shall be filled as
follows, in the indicated order of priority:
1st: The remaining member(s) of the Committee shall appoint new
---
member(s) to fill all vacancies.
2nd: A majority of the adults then entitled to benefits from the Plan
---
shall appoint new member(s) to fill all vacancies. If such an
adult is not able to participate in such appointment, then his or
her spouse, if any, shall act for him or her. If there is no such
spouse, then such adult's guardian or conservator shall act for
him or her.
3rd: If vacancies on the Committee are not filled pursuant to the
--- foregoing, then a court of competent jurisdiction shall fill such
vacancies. The Trust shall pay the expenses incurred in
connection with such court appointment.
Section 8.2: Committee Action.
----------- ----------------
(a) The Committee shall choose a Secretary and an Assistant Secretary
(either of whom is referred to below as the "Secretary") who shall keep minutes
of the Committee's proceedings and all records and documents pertaining to the
Committee's administration of the Plan. Any action of the Committee shall be
taken pursuant to the vote of a majority, or pursuant to the written consent of
a majority, of its members. A quorum of the Committee shall consist of two
members. The Secretary may sign any certificate or other document on behalf of
the
-58-
Committee. The Trustee and all other persons dealing with the Committee may
conclusively rely upon any certificate or other document that is signed by the
Secretary and that purports to have been duly authorized by the Committee.
(b) A member of the Committee shall not vote or act upon any matter
that relates solely to himself or herself as a Participant. If a matter arises
affecting one member of the Committee as a Participant and the other members of
the Committee are unable to agree on the disposition of such matter, the Board
of Directors shall appoint a substitute member of the Committee in the place and
stead of the affected member, for the sole purpose of passing upon and deciding
that particular matter. If the Company is not in existence then, such substitute
member of the Committee shall be appointed in the manner provided for in this
Article when there is a vacancy in the Committee's membership.
Section 8.3: Rights And Duties.
----------- -----------------
(a) Except as otherwise set forth in subsections (b), (c) and (d)
below, all fiduciary responsibility respecting the management or administration
of the Plan and its assets are vested in the Committee, and the Committee shall
be the Named Fiduciary with respect to the Plan's assets, and the
"administrator" of the Plan as defined in Section 3(16)(A) of ERISA.
(b) The Trustee shall (i) have custody of the Plan's assets, (ii)
have the powers designated in the trust document and (iii) be the Named
Fiduciary with respect to the custody of the Plan's assets.
(c) The Committee may designate one or more Investment Managers
(including the Trustee, if the Trustee is authorized to be an Investment
Manager) to manage the investment of the Plan's assets, and such Investment
Manager(s) shall be the Named Fiduciary with respect to the management and
investment of the Plan's assets.
(d) The Committee may designate one or more persons or entities to
carry out any of its functions under the Plan, other than those of managing and
controlling the Plan's assets, which may only be done pursuant to subsections
(b) or (c) immediately above.
(e) The Committee, on behalf of the Participants and their
Beneficiaries, shall enforce the Plan in accordance with its terms, and shall be
charged with the general administration of the Plan, except to the extent that
powers are retained by the Company. The Committee shall have the discretion and
authority to interpret the Plan. The Committee's powers shall include (without
limitation) the power and discretion:
(i) to determine all questions relating to the eligibility of
Employees to participate in the Plan;
-59-
(ii) to determine, compute and certify to the Trustee the
amount and kind of benefits payable to the Participants and their
Beneficiaries;
(iii) to authorize all disbursements by the Trustee from the
Trust;
(iv) to direct the Trustee with respect to all investments of
the principal or income of the Trust and with respect to other matters
concerning the Trust's assets;
(v) to maintain all the necessary records for the
administration of the Plan, other than those maintained by the Trustee; and
(vi) to adopt, amend and interpret rules for the administration
or regulation of the Plan that are not inconsistent with its terms and the
applicable law and Regulations.
(f) Members of the Committee and other Fiduciaries shall discharge
their duties with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person, acting in a like capacity
and familiar with such matters, would use in the conduct of an enterprise of a
like character and with like aims. Subject to any right of Participants to
direct how their Accounts will be invested and other provisions of the Plan, the
Committee shall diversify the Plan's investments so as to minimize the risk of
large losses, unless, under the circumstances, it is clearly prudent not to do
so, or unless the Plan specifically provides for the acquisition and holding of
qualifying employer real property or securities, as defined in Sections
407(d)(4) and (5) of ERISA.
(g) A member of the Committee or other Fiduciary shall be liable for
a breach of fiduciary responsibility of another member or another Fiduciary only
if:
(i) such member or Fiduciary participates knowingly in, or
knowingly undertakes to conceal, an act or omission of such other member or
Fiduciary, knowing that such act or omission is a breach;
(ii) such member or Fiduciary has enabled such other member or
Fiduciary to commit a breach by virtue of his or her failure to comply with
the duty of care set forth above in the administration of such member's or
Fiduciary's own responsibilities as a Fiduciary; or
(iii) such member or Fiduciary has knowledge of a breach by such
other member or Fiduciary, unless such member or Fiduciary makes reasonable
efforts under the circumstances to remedy such breach.
Section 8.4: Information. To enable the Committee to perform its
----------- -----------
functions, the Company shall supply complete and timely information to the
Committee on all matters relating to the compensation of all Participants, their
-60-
employment, their retirement, death, or the cause for termination of employment,
and such other pertinent information as the Committee may require. The Committee
shall advise the Trustee of such of the foregoing information as may be
pertinent to the Trustee's administration of the Trust.
Section 8.5: Compensation, Indemnity And Liability.
----------- -------------------------------------
(a) The members of the Committee shall serve without compensation for
their services. No member of the Committee or other Fiduciary need be bonded,
except as required by federal or state law or regulation. The Committee is
authorized to employ such legal counsel or other persons as it may deem
advisable to assist it in the performance of its duties under the Plan.
(b) The Company shall indemnify and hold each member of the Committee
harmless against any and all expenses and liabilities arising out of membership
on the Committee (including reasonable attorneys' fees and disbursements),
excepting only expenses and liabilities arising out of such member's own willful
misconduct or gross negligence. The provisions of this subsection shall survive
the termination of the Plan and the resignation or removal of the Committee
member who is entitled to the indemnity.
Section 8.6: Administrative Expenses Of The Plan. All expenses of
----------- -----------------------------------
administering the Plan shall by paid by the Trustee and shall be a charge
against the trust estate, except to the extent that such expenses may be paid by
the Company. The expense of maintaining errors and omissions liability
insurance, if any, covering members of the Committee, the Trustee, or any other
Fiduciary shall be paid by the Company.
-61-
ARTICLE IX
----------
AMENDMENT AND TERMINATION
-------------------------
Section 9.1: Amendments. The Company may amend the Plan from time
----------- ----------
to time, and may amend or cancel any such amendment. Each amendment must be set
forth in a document that is signed by the Company, and the Plan shall be deemed
to have been amended in the manner and at the time set forth in such document,
and all Participants shall be bound by it. Despite the foregoing, any such
amendment shall be subject to the following provisions:
(a) No amendment shall be effective that attempts to cause any asset
of the Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of the Participants or their Beneficiaries, except for such
changes, if any, that are required to permit the Plan to meet the applicable
requirements of the Code, or as may be made to assure the deductibility for tax
purposes of any contribution by the Company.
(b) No amendment shall have any retroactive effect that would deprive
any Participant of any benefit already vested, nor shall the vesting provisions
of the Plan be amended, unless each Participant with at least three Years of
Service is permitted to elect to continue to have the prior vesting provisions
apply to him or her, except for such changes, if any, that are required to
permit the Plan to meet applicable requirements of the Code, or as may be made
to assure the deductibility for tax purposes of any contribution by the Company.
Any such election must be made during the period beginning with the date the
amendment is adopted and ending 60 days after the latest of:
(i) the date the amendment is adopted;
(ii) the date the amendment becomes effective; or
(iii) the date on which the Participant receives written notice
of the amendment from the Company or the Committee.
(c) No amendment shall create or effect any discrimination in favor
of Participants who are highly compensated Employees.
(d) No amendment shall increase the duties or liabilities of the
Trustee without the Trustee's written consent.
(e) No amendment shall decrease any Participant's account balance or
eliminate an optional form of distribution.
-62-
Section 9.2: Discontinuance Of Plan.
----------- ----------------------
(a) The Company expects that the Plan and the Company's contributions
under it will be continued indefinitely, and the Trust is irrevocable. However,
continuance of the Plan is not assumed as a contractual obligation of the
Company, and the Company reserves the right to reduce, temporarily suspend, or
discontinue contributions under the Plan if, and to the extent, permitted under
ERISA or the Code. Upon a complete discontinuance of the Company's
contributions, the interest of each Participant in each of his or her Accounts
shall become 100% vested, if it is not already fully vested. In addition, upon a
partial termination (within the meaning of Code Section 411(d)(3)), the interest
of each affected Participant in each of his or her Accounts shall become 100%
vested, if it is not already fully vested.
(b) The Company may terminate the Plan at any time upon delivering a
written notice to the Trustee. Upon the Plan's termination, the interest of each
Participant in each of his or her Accounts shall become 100% vested, if it is
not already fully vested. Upon the termination of the Plan without the
establishment of a successor plan (within the meaning of Code Section
401(k)(10)(A)(i)), the Committee shall, as is necessary, direct the Trustee to
liquidate the Trust's assets. After such liquidation, the Committee shall make,
after deducting the estimated expenses of such liquidation and distribution, the
allocations required under the Plan as though the date when such liquidation was
completed were an Anniversary Date. After receiving appropriate instructions
from the Committee, the Trustee shall promptly distribute the Trust's assets in
accordance with such instructions.
(c) The Plan shall automatically terminate upon the happening of any
of the following events:
(i) adjudication of the Company as a bankrupt;
(ii) general assignment by the Company to or for the benefit of
creditors; or
(iii) dissolution of the business of the Company,
provided, however, that the Plan may be continued by any successor business
organization or any business organization into which the Company is merged or
consolidated that employs some or all of the Participants, if such business
organization agrees with the Trustee in writing to accept the obligations of the
Plan and to continue it in full force and effect in accordance with Section
11.10.
Section 9.3: Failure To Contribute. The Company's failure to
----------- ---------------------
contribute to the Trust for any Plan Year shall not, of itself, be a
discontinuance of contributions to the Plan.
-63-
ARTICLE X
---------
CLAIMS PROCEDURE
----------------
Section 10.1: Presentation Of Claim. Any Participant or Beneficiary
------------ ---------------------
of a deceased Participant or duly authorized representative of either (such
Participant or Beneficiary or duly authorized representative being referred to
below as a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts (i) credited to (or deducted from)
such Claimant's Accounts, or (ii) distributable to such Claimant from the Plan.
If such a claim relates to the contents of a notice received by the Claimant,
the claim must be made within 60 days after such notice was received by the
Claimant. The claim must state with particularity the benefit determination
desired by the Claimant.
Section 10.2: Notification Of Decision. The Committee shall consider a
------------ ------------------------
Claimant's claim within a reasonable time, but not later than 90 days after
receipt of the claim by the Plan, unless the Committee determines that special
circumstances require an extension of time for processing the claim. If the
Committee determines that an extension of time for processing is required,
written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of such initial period. The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the Committee expects to render the benefit determination.
Once the benefit determination is made in accordance with the foregoing, the
Committee shall notify the Claimant in writing:
(a) that the Claimant's requested benefit determination has been
made, and that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion adverse, in whole or
in part, to the Claimant's requested benefit determination. The Committee's
notice of adverse benefit determination must be written in a manner calculated
to be understood by the Claimant, and it must contain:
(i) the specific reason(s) for the adverse benefit
determination;
(ii) reference to the specific provisions of the Plan upon
which such adverse benefit determination was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why
such material or information is necessary; and
(iv) a description of the Plan's claim review procedures set
forth in Section 10.3 and the time limits applicable to such procedures,
-64-
including a statement of the Claimant's right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.
Section 10.3: Review Of A Denied Claim. Within 60 days after
------------ ------------------------
receiving a notice from the Committee of an adverse benefit determination, a
Claimant may file with the Board of Directors a written request for a review of
such adverse determination. Thereafter, but not later than 30 days after the
review procedure began, the Claimant:
(a) may submit written comments, documents, records, and other
information relating to the claim for benefits;
(b) shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
to the Claimant's claim for benefits; and/or
(c) may request a hearing, which the Board of Directors, in its
discretion, may grant.
The Board of Directors shall take into account all comments, documents, records,
and other information submitted by the Claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial
benefit determination.
Section 10.4: Decision On Review. The Board of Directors shall render
------------ ------------------
its decision on review within a reasonable time, and not later than 60 days
after the receipt of the Claimant's review request, unless a hearing is held or
other special circumstances require additional time, in which case the Board of
Directors' decision must be rendered within 120 days after the receipt of the
Claimant's review request. If the Board of Directors determines that an
extension of time for processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial 60-
day period. In no event shall such extension exceed a period of 60 days from the
end of the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Board of
Directors expects to render the benefit determination on review. The Board of
Directors' decision must be written in a manner calculated to be understood by
the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) reference to the specific Plan provisions upon which the decision
was based;
(c) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the Claimant's claim for benefits;
-65-
(d) a statement of the Claimant's right to bring an action under
ERISA Section 502(a) concerning an adverse benefit determination; and
(e) such other matters as the Board of Directors deems relevant.
For purposes of this Article, a document, record, or other information shall be
considered "relevant" to a Claimant's claim if such document, record, or other
information was relied upon in making the benefit determination; was submitted,
considered, or generated in the course of making the benefit determination,
without regard to whether such document, record, or other information was relied
upon in making the benefit determination; or demonstrates compliance with the
administrative processes and safeguards required under ERISA in making the
benefit determination.
-66-
ARTICLE XI
----------
MISCELLANEOUS
-------------
Section 11.1: Contributions Not Recoverable. Subject to the next two
------------ -----------------------------
sentences, it shall be impossible for any part of the Trust's principal or
income to be used for, or diverted to, purposes other than the exclusive benefit
of the Participants or their Beneficiaries. Despite any other provision of the
Plan, the Company shall be entitled to recover (within one year of the specified
event):
(a) any contribution made to the Trust if (i) the Commissioner of
Internal Revenue, or his delegate, determines that the Plan and the Trust do not
meet the applicable requirements of the Code upon their initial qualification,
with the result that the Trust is not exempt from federal income tax, (ii) such
contribution was conditioned on such initial qualification of the Plan and
Trust, (iii) the application for determination of such initial qualification was
made within the time prescribed by law for filing the Company's tax return for
the taxable year in which the Plan and Trust was adopted, or such later date as
the Secretary of the Treasury may prescribe, and (iv) such contribution is
returned to the Company within one year after the date the initial qualification
is denied;
(b) any contribution by the Company that was made by a mistake of
fact, provided that such contribution is returned to the Company within one year
of the contribution;
(c) any contribution by the Company (or any portion of it) that was
disallowed by the Internal Revenue Service as a deduction, provided that such
contribution (or such portion of it), to the extent disallowed, is returned to
the Company within one year of the disallowance of the deduction; and
(d) upon termination of the Plan, any assets held in a suspense
account pursuant to Section 4.7(c)(iv).
Subsections (b) and (c) above shall be operative only if, and to the extent,
expressly authorized by the applicable Regulations, or a Revenue Ruling, Revenue
Procedure, or other official promulgation of the Internal Revenue Service.
Section 11.2: Limitation On Participants' Rights. Participation in the
------------ ----------------------------------
Plan and Trust shall not give any Employee the right to be retained in the
Company's employ or any right or interest in the Trust other than as provided in
the Plan. The Company reserves the right to dismiss any Employee without any
liability for any claim against the Trust (except to the extent provided in the
Plan) or against the Company. All benefits payable under the Plan shall be
provided solely from the assets of the Trust.
-67-
Section 11.3: Receipt Or Release. Any payment to any Participant or
------------ ------------------
Beneficiary pursuant to the Plan shall, to the extent of it, be in full
satisfaction of all claims against the Trustee, the Committee, Board of
Directors, and the Company, and the Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to sign a receipt and
release to such effect.
Section 11.4: Nonassignability.
------------ ----------------
(a) None of the benefits, payments, proceeds or claims of any
Participant or Beneficiary shall be subject to any claim of any creditor and, in
particular, they shall not be subject to attachment or garnishment or other
legal process by any creditor. In addition, no Participant or Beneficiary shall
have any right to alienate, anticipate, commute, pledge, encumber or assign any
of the benefits or payments or proceeds that he or she may expect to receive,
contingently or otherwise, under the Plan.
(b) Any restriction or prohibition against the assignment or
alienation of benefits under the Plan shall not apply to (i) a "qualified
domestic relations order" ("QDRO"), as that term is defined in Code Section
414(p), or (ii) a benefit reduction or offset in accordance with Code Section
401(a)(13)(C). To the extent provided in any QDRO, a former spouse of a
Participant shall be treated as the spouse or surviving spouse of such
Participant for all purposes under the Plan. Notwithstanding any other provision
in this Plan, a lump sum distribution may be made to an alternate payee under a
QDRO at any time after the Committee has determined that such QDRO satisfies the
requirements of Code Section 414(p) and Section 206(d) of ERISA, and regardless
of whether or not the Participant who is a party to such QDRO is then eligible
to receive a distribution under the Plan.
Section 11.5: Governing Law. The Plan and the Trust shall be
------------ -------------
construed, administered, and governed in all respects under and by applicable
federal law and, if they are not inconsistent with federal law, the laws of the
State of California. If any provision is susceptible to more than one
interpretation, the controlling interpretation shall be the one that is
consistent with the Plan being a qualified plan under Code Section 401. If any
provision of the Plan is held by a court of competent jurisdiction to be invalid
or unenforceable, the other provisions shall continue to be fully effective.
Section 11.6: Headings. Headings and subheadings in the Plan are
------------ --------
inserted for convenience of reference only, and they are not to be considered in
construing the provisions of the Plan.
Section 11.7: Counterparts. This Agreement may be signed in
------------ ------------
counterparts, each of which shall be deemed an original, and all such
counterparts
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shall constitute but one and the same document, which may be sufficiently
evidenced by any one counterpart.
Section 11.8: Successors And Assigns. This Agreement shall inure to
------------ ----------------------
the benefit of, and be binding upon, the parties to it, and their successors and
assigns.
Section 11.9: Gender And Number. As used in the Plan, the masculine,
------------ -----------------
feminine and neuter gender, and the singular and plural number, each include the
other(s), unless the context indicates otherwise.
Section 11.10: Merger, Consolidation Or Transfer Of Plan Assets. The
------------- ------------------------------------------------
Plan shall not be merged or consolidated with, nor shall its assets or
liabilities be transferred to, any other plan (the "new plan") unless each
Participant would receive in such new plan a benefit immediately after such
merger, consolidation or transfer, if such new plan were then terminated, that
is equal to, or greater than, the benefit he or she would have been entitled to
receive immediately before such merger, consolidation or transfer, if the Plan
had been terminated then.
Section 11.11: Joinder Of Parties. In any action or other judicial
------------- ------------------
proceeding affecting the Plan, it shall be necessary to join as parties only the
Trustee, the Committee and the Company, and no Participant or other person
having an interest in the Plan shall be entitled to any notice or service of
process.
Section 11.12: The Trust. This Plan and the Trust are both part of and
------------- ---------
constitute a single integrated employee benefit plan and trust and shall be
construed together.
Section 11.13: Special Requirements For USERRA.
------------- -------------------------------
(a) Despite any other provision of the Plan, an Employee re-employed
under Chapter 43 of Title 38, United States Code ("USERRA") shall not incur a
Break in Service by reason of such Employee's period of Qualified Military
Service.
(b) Each period of Qualified Military Service served by an Employee
shall, upon re-employment under USERRA with the Company, constitute service with
the Company for the purpose of determining the nonforfeitability of the
Employee's accrued benefits under the Plan and for the purpose of determining
the accrual of benefits under the Plan.
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(c) An Employee re-employed under USERRA shall be entitled to accrued
benefits that are contingent on the making of, or derived from, employee
contributions or elective deferrals only to the extent the Employee makes
payment to the Plan with respect to such contributions or deferrals. No such
payment may exceed the amount the Employee would have been permitted or required
to contribute had the Employee remained continuously employed by the Company
throughout the period of Qualified Military Service. Any payment to the Plan
shall be made during the period beginning on the date of re-employment and whose
duration is three times the period of the Qualified Military Service (but not
greater than five years).
(d) For purposes of this Section, "Qualified Military Service" shall
mean any service in the uniformed services (as defined in USERRA) by any
Employee if such Employee is entitled to re-employment rights under USERRA with
respect to such service.
* * * * * * * * *
[Signature Page Follows]
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Signature Page
--------------
The Company has signed the Plan on the date indicated below, to be
effective as of the Effective Date.
"Company"
UNIFIED WESTERN GROCERS, INC.
December 19, 2001 By: /s/ Don Gilpin
Its: Vice President, Human Resources
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Schedule A
----------
EGTRRA Model Amendment
----------------------
Preamble
1. Adoption and Effective Date of Schedule A. This Schedule of the Plan is
-----------------------------------------
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). This Schedule is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. Except as otherwise provided, this
Schedule shall be effective as of the first day of the first Plan Year beginning
after December 31, 2001.
2. Supersession of inconsistent provisions. This Schedule shall supersede the
---------------------------------------
provisions of the Plan to the extent those provisions are inconsistent with the
provisions of this Schedule.
Section N/A. Plan Loans for Owner-Employees and Shareholder Employees
Effective for Plan loans made after December 31, 2001, Plan provisions
prohibiting loans to any owner-Employee or shareholder-Employee shall cease to
apply.
Section 1. Limitations on Contributions
1. Effective Date. This Section shall be effective for limitation years
--------------
beginning after December 31, 2001.
2. Maximum Annual Addition. Except to the extent permitted under Section
-----------------------
414(v) of the Code, if applicable, the Annual Addition that may be contributed
or allocated to a Participant's Account under the Plan for any limitation year
shall not exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under Section
415(d) of the Code, or
(b) 100 percent of the Participant's Compensation, within the meaning of
Section 415(c)(3) of the Code, for the limitation year.
The Compensation limit referred to in (b) shall not apply to any contribution
for medical benefits after separation from service (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as
an Annual Addition.
Section 2. Increase in Compensation Limit
The annual Compensation of each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001, shall not
exceed $200,000, as adjusted for cost-of-living increases in accordance with
Section
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401(a)(17)(B) of the Code. Annual Compensation means Compensation during the
Plan Year or such other consecutive 12-month period over which Compensation is
otherwise determined under the Plan (the determination period). The cost-of-
living adjustment in effect for a calendar year applies to annual Compensation
for the determination period that begins with or within such calendar year.
Section 3. Modification of Top-Heavy Rules
1. Effective Date. This Section shall apply for purposes of determining
--------------
whether the Plan is a Top-heavy Plan under Section 416(g) of the Code for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies the
minimum benefits requirements of Section 416(c) of the Code for such years.
This Section amends Article VII of the Plan.
2. Determination of top-heavy status.
---------------------------------
2.1 Key Employee. Key Employee means any Employee or former Employee
------------
(including any deceased Employee) who at any time during the Plan Year
that includes the Determination Date was an officer of the Company having
annual compensation greater than $130,000 (as adjusted under Section
416(i)(1) of the Code for plan years beginning after December 31, 2002),
a 5-Percent Owner of the Company, or a 1- Percent Owner of the Company
having annual compensation of more than $150,000. For this purpose,
annual compensation means compensation within the meaning of Section
415(c)(3) of the Code. The determination of who is a Key Employee will be
made in accordance with Section 416(i)(1) of the Code and the applicable
Regulations and other guidance of general applicability issued
thereunder.
2.2 Determination of present values and amounts. This Section 2.2 shall
-------------------------------------------
apply for purposes of determining the present values of accrued benefits
and the amounts of Account balances of Employees as of the Determination
Date.
2.2.1 Distributions during year ending on the Determination Date.
----------------------------------------------------------
The present values of accrued benefits and the amounts of Account
balances of an Employee as of the Determination Date shall be
increased by the distributions made with respect to the Employee
under the Plan and any plan aggregated with the Plan under Section
416(g)(2) of the Code during the 1-year period ending on the
Determination Date. The preceding sentence shall also apply to
distributions under a terminated plan which, had it not been
terminated, would have been aggregated with the Plan under Section
416(g)(2)(A)(i) of the Code. In the case of a distribution made for
a reason other than separation from service, death, or disability,
this provision shall be applied by substituting "5-year period" for
"1-year period."
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2.2.2 Employees not performing services during year ending on the
-----------------------------------------------------------
Determination Date. The accrued benefits and Accounts of any
------------------
individual who has not performed services for the Company during the
1-year period ending on the Determination Date shall not be taken
into account.
3. Minimum benefits.
----------------
3.1 Matching Contributions. Company Matching Contributions shall be taken
----------------------
into account for purposes of satisfying the minimum contribution
requirements of Section 416(c)(2) of the Code and the Plan. The preceding
sentence shall apply with respect to Matching Contributions under the Plan
or, if the Plan provides that the minimum contribution requirement shall be
met in another plan, such other plan. Company Matching Contributions that
are used to satisfy the minimum contribution requirements shall be treated
as Matching Contributions for purposes of the Actual Contribution
Percentage test and other requirements of Section 401(m) of the Code.
N/A Contributions under other plans. The minimum benefit requirement
-------------------------------
shall be met in another plan (including another plan that consists solely
of a cash or deferred arrangement which meets the requirements of Section
401(k)(12) of the Code and Matching Contributions with respect to which the
requirements of Section 401(m)(11) of the Code are met).
N/A Minimum Benefits for Employees Also Covered Under Another Plan: (The
--------------------------------------------------------------
Company should describe below the extent, if any, to which the top-heavy
minimum benefit requirement of Section 416(c) of the Code and Section ___
of the Plan shall be met in another plan. This should include the name of
the other plan, the minimum benefit that will be provided under such other
plan, and the Employees who will receive the minimum benefit under such
other plan.)
Section N/A. Vesting of Company Matching Contributions
1. Applicability. This Section shall apply to Participants with accrued
-------------
benefits derived from Company Matching Contributions who complete an hour of
service under the Plan in a Plan Year beginning after December 31, 2001. This
Section shall also apply to all other Participants with accrued benefits derived
from Company Matching Contributions.
2. Vesting schedule. A Participant's accrued benefit derived from Company
----------------
Matching Contributions shall vest as provided by the attached schedule. If
applicable, the election in Section _______ of the Plan [enter the Section of
the Plan that provides for the election of the former vesting schedule under
Section 411(a)(10) of the Code] shall apply.
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3. Application.
-----------
(Check the following option to apply this Section to all Participants with
accrued benefits derived from Company Matching Contributions, rather than just
those who complete an hour of service under the Plan in a Plan Year beginning
after December 31, 2001.)
____ This Section shall apply to all Participants with accrued benefits derived
from Company Matching Contributions.
Vesting Schedule for Company Matching Contributions:
____ Option 1. A Participant's accrued benefit derived from Company Matching
Contributions shall be fully and immediately vested.
____ Option 2. A Participant's accrued benefit derived from Company Matching
Contributions shall be nonforfeitable upon the Participant's completion of three
years of vesting service.
____ Option 3. A Participant's accrued benefit derived from Company Matching
Contributions shall vest according to the following schedule:
Years of vesting service Nonforfeitable percentage
2 20
3 40
4 60
5 80
6 100
_________________________
Section 4. Direct Rollovers of Plan Distributions
1. Effective Date. This Section shall apply to distributions made after
--------------
December 31, 2001.
2. Modification of definition of Eligible Retirement Plan. For purposes of the
------------------------------------------------------
direct rollover provisions in Section 6.7 of the Plan, an Eligible Retirement
Plan shall also mean an annuity contract described in Section 403(b) of the Code
and an eligible plan under Section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account
for amounts transferred into such plan from this Plan. The definition of
Eligible Retirement Plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or
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former spouse who is the alternate payee under a qualified domestic relation
order, as defined in Section 414(p) of the Code.
3. Modification of definition of Eligible Rollover Distribution to exclude
-----------------------------------------------------------------------
hardship distributions. For purposes of the direct rollover provisions in
- ----------------------
Section 6.7 of the Plan, any amount that is distributed on account of hardship
shall not be an Eligible Rollover Distribution and the distributee may not elect
to have any portion of such a distribution paid directly to an Eligible
Retirement Plan.
4. Modification of definition of Eligible Rollover Distribution to include
-----------------------------------------------------------------------
after-tax Employee contributions. For purposes of the direct rollover
- --------------------------------
provisions in Section 6.7 of the Plan, a portion of a distribution shall not
fail to be an Eligible Rollover Distribution merely because the portion consists
of after-tax Employee contributions which are not includable in gross income.
However, such portion may be transferred only to an individual retirement
account or annuity described in Section 408(a) or (b) of the Code, or to a
qualified defined contribution plan described in Section 401(a) or 403(a) of the
Code that agrees to separately account for amounts so transferred, including
separately accounting for the portion of such distribution which is ineludible
in gross income and the portion of such distribution which is not so includable.
Section 5. Rollovers from Other Plans
1. Effective Date. The Plan will accept Participant Rollover Contributions
--------------
and/or direct rollovers of distributions made after December 31, 2001.
2. Acceptable types of plans.
-------------------------
2.1 Direct Rollovers.
----------------
The Plan will accept a direct rollover of an Eligible Rollover
Distribution from:
. a qualified plan described in Section 401(a) or 403(a) of the Code,
including after-tax Employee contributions.
. an annuity contract described in Section 403(b) of the Code, excluding
after-tax Employee contributions.
. an eligible plan under Section 457(b) of the Code which is maintained
by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state.
2.2 Participant Rollover Contributions from Other Plans.
---------------------------------------------------
The Plan will accept a Participant Contribution of an Eligible Rollover
Distribution from:
. a qualified plan described in Section 401(a) or 403(a) of the Code.
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. an annuity contract described in Section 403(b) of the Code.
. an eligible plan under Section 457(b) of the Code which is maintained
by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state.
2.3 Participant Rollover Contributions from IRAs.
--------------------------------------------
The plan will accept a Participant Rollover Contribution of the portion
of a distribution from an individual retirement account or annuity
described in Section 408(a) or 408(b) of the Code that is eligible to be
rolled over and would otherwise be includable in gross income.
Section 6. Rollovers Disregarded in Involuntary Cash-Outs
1. Effective Date. The provisions of this section shall apply to distributions
--------------
made after December 31, 2001.
2. Application. The provisions of this section shall apply with respect to
-----------
participants who separated from service after December 31, 2001.
3. Valuation. For purposes of Article VI of the Plan, the value of a
---------
Participant's nonforfeitable Account balance shall be determined without regard
to that portion of the Account balance that is attributable to Rollover
Contributions (and earnings allocable thereto) within the meaning of Sections
402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If
the value of the Participant's nonforfeitable account balance as so determined
is $5,000 or less, the Plan shall immediately distribute the participant's
entire nonforfeitable account balance.
Section 7. Repeal of Multiple Use Test
The multiple use test described in Treasury Regulation Section 1.401(m)-2 and
Section 3.8 of the Plan shall not apply for Plan Years beginning after December
31, 2001.
Section 8. Elective Contributions -- Contribution Limitation
No Participant shall be permitted to have Elective Contributions made under this
Plan, or any other qualified plan maintained by the Company during any taxable
year, in excess of the dollar limitation contained in Section 402(g) of the Code
in effect for such taxable year, except to the extent permitted under Section
414(v) of the Code, if applicable.
Section N/A. Maximum Salary Reduction Contributions
Except to the extent permitted under Section 414(v) of the Code, if applicable,
the maximum salary reduction contribution that can be made to this Plan is the
amount determined under Section 408(p)(2)(A)(ii) of the Code for the calendar
year.
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Section 9. Modification of Top-Heavy Rules
The Top-Heavy requirements of Section 416 of the Code and Article VII of the
Plan shall not apply in any year beginning after December 31, 2001, in which the
Plan consists solely of a cash or deferred arrangement which meets the
requirements of Section 401(k)(12) of the Code and Matching Contributions with
respect to which the requirements of Section 401(m)(11) of the Code are met.
Section N/A. Catch-Up Contributions
1. Effective Date. This Section shall apply to contributions made after the
--------------
date selected by the Committee.
2. Eligibility. All Employees who are eligible to make Elective Contributions
-----------
under this Plan and who have attained age 50 before the close of the Plan Year
shall be eligible to make catch-up contributions in accordance with, and subject
to the limitations of, Section 414(v) of the Code. Such catch-up contributions
shall not be taken into account for purposes of the provisions of the Plan
implementing the required limitations of Sections 402(g) and 415 of the Code.
The Plan shall not be treated as failing to satisfy the provisions of the Plan
implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions. Further, any such catch-up contributions shall not be
counted towards any Elective Contribution percentage limitation set forth in
Section 3.2 of the Plan.
3. Limitation. Employees shall not be entitled to receive any Company Matching
----------
Contribution with respect to any catch-up contribution made pursuant to the
foregoing.
Section 11. Suspension Period Following Hardship Distribution
A Participant who receives a distribution of Elective Contributions after
December 31, 2001, on account of hardship shall be prohibited from making
Elective Contributions and Employee contributions under this and all other plans
of the Company for 6 months after receipt of the distribution.
A Participant who receives a distribution of Elective Contributions in calendar
year 2001 on account of hardship shall be prohibited from making Elective
Contributions and Employee contributions under this and all other plans of the
Company for 6 months after receipt of the distribution or until January 1, 2002,
if later.
Section N/A. Distribution upon Severance from Employment
1. Effective Date. This Section shall apply for distributions and severances
--------------
from employment occurring after December 31, 2001, (regardless of when the
severance from employment occurred/ for severances from employment occurring
after_________). (choose one).
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2. New distributable event. A Participant's Elective Contributions, qualified
-----------------------
Nonelective Contributions, qualified Matching Contributions, and earnings
attributable to these contributions shall be distributed on account of the
Participant's severance from employment. However, such a distribution shall be
subject to the other provisions of the Plan regarding distributions, other than
provisions that require a separation from service before such amounts may be
distributed.
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