EXHIBIT 99.8
1994 RESTATEMENT
FISHER-PRICE, INC.
MATCHING SAVINGS PLAN
Effective: July 1, 1994
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TABLE OF CONTENTS
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Page
ARTICLE 1
NAME, EFFECTIVE DATE AND BASIC PLAN DEFINITIONS . . . 3
Section 1.1. Name of Plan . . . . . . . . . . . . . . . . . . 3
Section 1.2. Effective Date . . . . . . . . . . . . . . . . . 3
Section 1.3. Basic Definitions. . . . . . . . . . . . . . . . 3
(a) Affiliated Corporation . . . . . . . . . . 3
(b) Affiliated Service Organization. . . . . . 3
(c) Business Day . . . . . . . . . . . . . . . 3
(d) Code . . . . . . . . . . . . . . . . . . . 3
(e) Company. . . . . . . . . . . . . . . . . . 3
(f) Date of Hire . . . . . . . . . . . . . . . 3
(g) ERISA. . . . . . . . . . . . . . . . . . . 3
(h) Organization Under Common Control. . . . . 3
(i) Plan . . . . . . . . . . . . . . . . . . . 4
(j) Plan Administrator . . . . . . . . . . . . 4
(k) Plan Year. . . . . . . . . . . . . . . . . 4
(l) Related Business . . . . . . . . . . . . . 4
(m) Trust. . . . . . . . . . . . . . . . . . . 4
(n) Trustee. . . . . . . . . . . . . . . . . . 4
Section 1.4. Other Definitions. . . . . . . . . . . . . . . . 4
(a) Annual Addition. . . . . . . . . . . . . . 4
(b) Annuity Starting Date. . . . . . . . . . . 4
(c) Company Contribution . . . . . . . . . . . 4
(d) Company Contribution Account . . . . . . . 4
(e) Compensation . . . . . . . . . . . . . . . 4
(f) Disability Retirement Date . . . . . . . . 4
(g) Discretionary Matching Contribution. . . . 4
(h) Early Retirement Date. . . . . . . . . . . 4
(i) Eligible Employee. . . . . . . . . . . . . 4
(j) Entry Date . . . . . . . . . . . . . . . . 4
(k) Highly Compensated Employee. . . . . . . . 5
(l) Hour of Service. . . . . . . . . . . . . . 5
(m) Key Employee . . . . . . . . . . . . . . . 5
(n) Limitation Year. . . . . . . . . . . . . . 5
(o) Matching Contribution. . . . . . . . . . . 5
(p) Maximum Annual Addition. . . . . . . . . . 5
(q) Maximum Company Contribution . . . . . . . 5
(r) Normal Retirement. . . . . . . . . . . . . 5
(s) Participant. . . . . . . . . . . . . . . . 5
(t) Required Beginning Date. . . . . . . . . . 5
(u) Rollover Account . . . . . . . . . . . . . 5
(v) Salary Reduction Contribution. . . . . . . 5
(w) Savings Account. . . . . . . . . . . . . . 5
(x) Six Months of Participation Service. . . . 5
(y) Top Heavy Plan . . . . . . . . . . . . . . 5
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(z) Total and Permanent Disability . . . . . . 5
(aa) Transfer Account . . . . . . . . . . . . . 5
(bb) Valuation Date . . . . . . . . . . . . . . 5
ARTICLE 2
ELIGIBILITY FOR PARTICIPATION. . . . . . . . 6
Section 2.1. Definitions. . . . . . . . . . . . . . . . . . . 6
(a) Six Months of Participation Service. . . . 6
(b) Entry Date . . . . . . . . . . . . . . . . 6
(c) Eligible Employee. . . . . . . . . . . . . 6
(i) Employees Covered by Collective
Bargaining Agreement. . . . . . . . . 6
(ii) Nonresident Aliens. . . . . . . . . . 6
(iii) Irregular Employees. . . . . . . . . 6
Section 2.2. Age and Service Requirements . . . . . . . . . . 6
Section 2.3. Change in Employment Status. . . . . . . . . . . 7
(a) Employee Becomes Eligible Employee . . . . 7
(b) Participant Becomes a Non-Eligible
Employee . . . . . . . . . . . . . . . . . 7
Section 2.4. Termination and Resumption of Participation. . . 7
(a) Termination of Participation . . . . . . . 7
(b) Inactive Participant . . . . . . . . . . . 7
(c) Resumption of Participation. . . . . . . . 8
Section 2.5. Service with and Transfers Involving
Affiliated Corporations.. . . . . . . . . . . . 8
(a) Service with Organizations Under Common
Control. . . . . . . . . . . . . . . . . . 8
(b) Transfer of Employment.. . . . . . . . . . 8
(c) Change to Eligible Status. . . . . . . . . 9
(d) Change from Eligible Status. . . . . . . . 9
(e) Subsidiary . . . . . . . . . . . . . . . . 9
ARTICLE 3
CONTRIBUTIONS. . . . . . . . . . . . 10
Section 3.1. Salary Reduction Contributions . . . . . . . . . 10
(a) In General . . . . . . . . . . . . . . . . 10
(b) Salary Reduction Contribution Elections. . 10
(c) $7,000 Limit . . . . . . . . . . . . . . . 10
Section 3.2. Matching Contributions by the Company. . . . . . 11
Section 3.3. Discretionary Matching Contributions . . . . . . 11
Section 3.4. Forfeitures. . . . . . . . . . . . . . . . . . . 11
Section 3.5. Limitations on Contributions . . . . . . . . . . 11
Section 3.6. Rollover Contributions . . . . . . . . . . . . . 12
Section 3.7. Transfers From Another Plan. . . . . . . . . . . 13
Section 3.8. Allocations of Contributions and Forfeitures . . 14
(a) Maintenance of Accounts. . . . . . . . . . 14
(b) Allocation of Salary Reduction
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Contributions. . . . . . . . . . . . . . . 14
(c) Allocation of Matching Contributions . . . 14
(d) Allocation of Discretionary Matching
Contributions. . . . . . . . . . . . . . . 15
(e) Qualified Participant. . . . . . . . . . . 15
Section 3.9. Compensation . . . . . . . . . . . . . . . . . . 15
Section 3.10. Limitations on Allocations . . . . . . . . . . . 16
(a) Definitions . . . . . . . . . . . . . . . 16
(i) Annual Addition . . . . . . . . . . . 16
(ii) Compensation. . . . . . . . . . . . . 16
(iii) Maximum Permissible Amount . . . . . 17
(iv) Defined Benefit Fraction. . . . . . . 17
(v) Defined Contribution Fraction . . . . 17
(vi) Limitation Year . . . . . . . . . . . 17
(b) Maximum Company Contribution . . . . . . . 17
(c) Maximum Annual Addition. . . . . . . . . . 17
(d) Excess Annual Additions. . . . . . . . . . 18
Section 3.11. ADP Test . . . . . . . . . . . . . . . . . . . . 19
(a) In General . . . . . . . . . . . . . . . . 19
(i) The 125% Test . . . . . . . . . . . . 19
(ii) The Alternative Limitation Test . . . 20
(b) Definitions. . . . . . . . . . . . . . . . 20
(i) ADP . . . . . . . . . . . . . . . . . 20
(ii) Average ADP . . . . . . . . . . . . . 20
(iii) ADP Compensation . . . . . . . . . . 20
(iv) Highly Compensated Employee . . . . . 21
(v) Nonhighly Compensated Employee. . . . 23
(vi) Nonelective Contributions . . . . . . 23
(vii) Qualified Matching Contributions. . 23
(c) Special Rules. . . . . . . . . . . . . . . 23
(i) Plan Aggregation - 410(b) . . . . . . 23
(ii) Plan Aggregation - Highly
Compensated Employee. . . . . . . . . 23
(iii) Family Aggregation . . . . . . . . . 24
Section 3.12. Distribution of Excess Contributions . . . . . . 24
(a) In General . . . . . . . . . . . . . . . . 24
(b) Excess Contributions . . . . . . . . . . . 25
(c) Family Aggregation . . . . . . . . . . . . 25
(d) Allocable Income/Loss. . . . . . . . . . . 25
Section 3.13. ACP Test . . . . . . . . . . . . . . . . . . . . 26
(a) In General . . . . . . . . . . . . . . . . 26
(i) The 125% Test . . . . . . . . . . . . 26
(ii) The Alternative Limitation Test . . . 26
(b) Definitions. . . . . . . . . . . . . . . . 26
(i) ACP . . . . . . . . . . . . . . . . . 26
(ii) Average ACP . . . . . . . . . . . . . 27
(iii) ACP Compensation . . . . . . . . . . 27
(c) Special Rules. . . . . . . . . . . . . . . 27
(i) Multiple Use. . . . . . . . . . . . . 27
(ii) Plan Aggregation - 410(b) . . . . . . 28
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(iii) Plan Aggregation - Highly
Compensated Employee . . . . . . . . 28
(iv) Family Aggregation. . . . . . . . . . 28
Section 3.14. Distribution of Excess Aggregate
Contributions . . . . . . . . . . . . . . . . . 28
(a) In General . . . . . . . . . . . . . . . . 28
(b) Excess Aggregate Contributions . . . . . . 29
(c) Family Aggregation . . . . . . . . . . . . 29
(d) Allocable Income/Loss. . . . . . . . . . . 29
Section 3.15. Distributions of Excess Deferrals. . . . . . . . 30
(a) In General . . . . . . . . . . . . . . . . 30
(b) Excess Deferrals . . . . . . . . . . . . . 30
(c) Allocable Income/Loss. . . . . . . . . . . 30
Section 3.16. Coordinating Corrective Distributions. . . . . . 31
(a) Correcting Excess Deferrals After
Distributing Excess Contributions. . . . . 31
(b) Correcting Excess Contributions After
Distributing Excess Deferrals. . . . . . . 31
ARTICLE 4
NONFORFEITABLE RIGHT TO BENEFITS . . . . . . . 32
Section 4.1. Definitions. . . . . . . . . . . . . . . . . . . 32
(a) Normal Retirement Date . . . . . . . . . . 32
(b) Early Retirement Date. . . . . . . . . . . 32
(c) Disability Retirement Date . . . . . . . . 32
(d) Total and Permanent Disability . . . . . . 32
(e) Annuity Starting Date. . . . . . . . . . . 32
(f) Deferred Retirement. . . . . . . . . . . . 32
(g) Participant's Required Beginning Date. . . 32
(h) 70-1/2 Year. . . . . . . . . . . . . . . . 32
Section 4.2. Determination of Nonforfeitable Rights . . . . . 33
ARTICLE 5
DISTRIBUTION OF BENEFITS . . . . . . . . . 34
Section 5.1. Forms and Time of Benefit Distributions. . . . . 34
(a) In General . . . . . . . . . . . . . . . . 34
(b) Commencement of Distributions. . . . . . . 34
(c) Form of Distributions. . . . . . . . . . . 34
Section 5.2. Normal Form of Benefit . . . . . . . . . . . . . 34
Section 5.3. Alternative Form of Benefit. . . . . . . . . . . 35
Section 5.4. Designation of Death Beneficiary . . . . . . . . 35
Section 5.5. Death of Participant . . . . . . . . . . . . . . 36
Section 5.6. Early Distribution Consent . . . . . . . . . . . 36
(a) In General . . . . . . . . . . . . . . . . 36
(b) Valid Consent. . . . . . . . . . . . . . . 36
Section 5.7. Minimum Distribution Required. . . . . . . . . . 37
Section 5.8. Cash-Outs. . . . . . . . . . . . . . . . . . . . 37
(a) Definitions. . . . . . . . . . . . . . . . 37
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(i) Cash-Out. . . . . . . . . . . . . . . 37
(ii) Involuntary Cash-Out. . . . . . . . . 37
(iii) Voluntary Cash-Out . . . . . . . . . 37
(b) Involuntary Cash-Outs of Small Benefits. . 37
(c) Cash-Outs of Benefits in Excess of
$3,500 . . . . . . . . . . . . . . . . . . 38
Section 5.9. Hardship Withdrawals . . . . . . . . . . . . . . 38
Section 5.10. Loans to Participants. . . . . . . . . . . . . . 39
(a) Trustees May Make Loans. . . . . . . . . . 39
(b) Written Applications.. . . . . . . . . . . 39
(c) Limit on Amount of Loan. . . . . . . . . . 39
(d) Term and Interest Rate . . . . . . . . . . 40
(e) Promissory Note Required . . . . . . . . . 40
(f) Security . . . . . . . . . . . . . . . . . 40
(g) Directed Investment. . . . . . . . . . . . 41
ARTICLE 6
ACCOUNT VALUATIONS AND ALLOCATION OF NET EARNINGS. . . 42
Section 6.1. Valuation Dates. . . . . . . . . . . . . . . . . 42
Section 6.2. Method of Valuation of Trust Assets. . . . . . . 42
Section 6.3. Allocation of Net Earnings . . . . . . . . . . . 42
Section 6.4. Notification to Participants . . . . . . . . . . 42
Section 6.5. Directed Investment Accounts . . . . . . . . . . 43
ARTICLE 7
THE TRUST. . . . . . . . . . . . . 45
Section 7.1. Continuation of the Trust. . . . . . . . . . . . 45
Section 7.2. Disbursements Limited to Trust Assets. . . . . . 45
Section 7.3. Expenses of Administration and Litigation. . . . 45
Section 7.4. Pooled Investment Fund or Group Trust. . . . . . 45
Section 7.5. Mattel Stock Fund. . . . . . . . . . . . . . . . 46
(a) Voting of Shares in Mattel Stock Fund. . . 46
(b) Tender Offers. . . . . . . . . . . . . . . 46
ARTICLE 8
TOP-HEAVY PROVISIONS . . . . . . . . . . 47
Section 8.1. Definitions. . . . . . . . . . . . . . . . . . . 47
(a) Top-Heavy Plan . . . . . . . . . . . . . . 47
(b) Determination Date . . . . . . . . . . . . 47
(c) Key Employee . . . . . . . . . . . . . . . 47
(d) Cumulative Account Balances. . . . . . . . 47
(e) Aggregation Group. . . . . . . . . . . . . 47
(f) Top-Heavy Valuation Date . . . . . . . . . 48
(g) Top-Heavy Compensation . . . . . . . . . . 48
(h) Qualified Top-Heavy Participant. . . . . . 48
(i) Super Top-Heavy Plan . . . . . . . . . . . 48
Section 8.2. Top-Heavy Rules. . . . . . . . . . . . . . . . . 48
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(a) Application of Top-Heavy Rules . . . . . . 48
(b) Minimum Company Contribution . . . . . . . 48
(c) Limitation on Contributions and Benefit. . 49
(d) Special Rule for Non-Key Employees in
Two Plans. . . . . . . . . . . . . . . . . 49
ARTICLE 9
ADMINISTRATION OF PLAN. . . . . . . . . . 50
Section 9.1. Company as Plan Administrator. . . . . . . . . . 50
Section 9.2. Responsibility for Administration of the Plan. . 50
Section 9.3. Expenses . . . . . . . . . . . . . . . . . . . . 50
Section 9.4. Liability and Indemnification. . . . . . . . . . 50
Section 9.5. Agents . . . . . . . . . . . . . . . . . . . . . 50
Section 9.6. Delegation of Authority. . . . . . . . . . . . . 51
(a) In General . . . . . . . . . . . . . . . . 51
(b) Liability. . . . . . . . . . . . . . . . . 51
Section 9.7. Defect or Omission . . . . . . . . . . . . . . . 51
Section 9.8. Funding Policy . . . . . . . . . . . . . . . . . 51
Section 9.9. Records. . . . . . . . . . . . . . . . . . . . . 51
Section 9.10. Claims Procedure . . . . . . . . . . . . . . . . 51
(a) Filing a Claim for Benefits. . . . . . . . 51
(b) Notification of Decision of Plan
Administrator. . . . . . . . . . . . . . . 52
(c) Claim Review Procedure . . . . . . . . . . 52
ARTICLE 10
RIGHT TO ALTER, AMEND OR TERMINATE. . . . . . . 53
Section 10.1. Plan Amendments. . . . . . . . . . . . . . . . . 53
(a) Right to Alter or Amend. . . . . . . . . . 53
(b) Limitations on Power of Amendment. . . . . 53
(c) Form of Amendment. . . . . . . . . . . . . 53
Section 10.2. Plan Termination . . . . . . . . . . . . . . . . 54
(a) Right to Terminate . . . . . . . . . . . . 54
(b) Vesting on Termination or Partial
Termination. . . . . . . . . . . . . . . . 54
(c) Disposition of Assets on Termination . . . 54
Section 10.3. Merger or Consolidation . . . . . . . . . . . . 54
ARTICLE 11
MISCELLANEOUS PROVISIONS . . . . . . . . . 55
Section 11.1. New York and Applicable Federal Law Govern. . . 55
Section 11.2. Headings for Convenience. . . . . . . . . . . . 55
Section 11.3. Rights of All Interested Parties Determined
by the Terms of the Plan. . . . . . . . . . . . 55
Section 11.4. Spendthrift Clause. . . . . . . . . . . . . . . 55
Section 11.5. Qualified Domestic Relations Order. . . . . . . 55
Section 11.6. Notice to Employees . . . . . . . . . . . . . . 56
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Section 11.7. No Employment Rights Created. . . . . . . . . . 56
Section 11.8. Diversion from Employees Prohibited . . . . . . 56
Section 11.9. Right to Judicial Accounting. . . . . . . . . . 57
Section 11.10. Transfer of Funds to Another Plan . . . . . . . 57
Section 11.11. Forfeiture on Account of Inability to Locate
Participant or Beneficiary. . . . . . . . . . . 57
Section 11.12. Incapacity of Person Entitled to Payment. . . . 57
Section 11.13. Adoption of Plan by Organization Under
Common Control. . . . . . . . . . . . . . . . . 58
ARTICLE 12
DIRECT ROLLOVERS . . . . . . . . . . . 59
Section 12.1. Direct Rollovers. . . . . . . . . . . . . . . . 59
Section 12.2. Definitions . . . . . . . . . . . . . . . . . . 59
(a) Eligible Rollover Distribution . . . . . . 59
(b) Eligible Retirement Plan . . . . . . . . . 59
(c) Distributee. . . . . . . . . . . . . . . . 59
(d) Direct Rollover. . . . . . . . . . . . . . 60
INTRODUCTION
The Board of Directors of Fisher-Price, Inc. authorized
the adoption of the Fisher-Price, Inc. Matching Savings Plan,
having an effective date of January 1, 1992, for the benefit of
eligible employees of the Company. Fisher-Price previously
established the Fisher-Price Profit Sharing and Retirement
Savings Plan, having an effective date of January 15, 1953, for
the benefit of eligible employees of the Company.
The Company wishes to merge the Fisher-Price Profit
Sharing and Retirement Savings Plan into the Fisher-Price, Inc.
Matching Savings Plan effective July 1, 1994. Effective July 1,
1994 the Fisher-Price Profit Sharing and Retirement Savings Plan
shall be merged into the Fisher-Price, Inc. Matching Savings Plan
and all assets previously held by the Fisher-Price Profit Sharing
and Retirement Savings Plan shall be allocated to accounts under
the Fisher-Price, Inc. Matching Savings Plan.
The funds to provide benefits under this Plan shall be
held, managed, invested and disbursed in accordance with the
terms of this Plan and the separate Trust Agreement established
as the funding vehicle under the Plan. This Plan document,
together with such separate Trust Agreement, are designed to
constitute a qualified plan under Section 401 of the Internal
Revenue Code of 1986, as amended.
Thus Fisher-Price, Inc. hereby adopts the Plan as
follows:
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ARTICLE 1
NAME, EFFECTIVE DATE AND BASIC PLAN DEFINITIONS
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Section 1.1. Name of Plan. The Plan as continued by
this instrument shall be called the "Fisher-Price, Inc. Matching
Savings Plan".
Section 1.2. Effective Date. The effective date of
this restated Plan is July 1, 1994. The original effective date
of the Plan was January 1, 1992. The original effective date of
the Fisher-Price Profit Sharing and Retirement Savings Plan was
January 15, 1953.
Section 1.3. Basic Definitions.
(a) Affiliated Corporation means any corporation that
is a member of a controlled group of corporations, as defined in
Section 414(b) of the Code, which includes the Company.
(b) Affiliated Service Organization means any service
organization which is a member of an affiliated service group, as
defined in Section 414(m) of the Code, which includes the
Company.
(c) Business Day means a day on which the New York
Stock Exchange is open for trading.
(d) Code means the Internal Revenue Code of 1986, as
amended from time to time.
(e) Company means Fisher-Price, Inc. and any
Organization Under Common Control that has adopted the Plan in
accordance with Section 11.13.
(f) Date of Hire means the employment commencement
date of the date on which an employee of the Company is first
entitled to be credited with an Hour of Service with the Company
as defined in Title 29, Code of Federal Regulations, Section
2530.200b-2.
(g) ERISA means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(h) Organization Under Common Control means (i) an
Affiliated Corporation, (ii) a Related Business, (iii) an
Affiliated Service Organization or (iv) any other entity required
to be aggregated with the Company pursuant to Section 414(o) of
the Code and the regulations thereunder.
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(i) Plan means the Fisher-Price, Inc. Matching Savings
Plan set forth herein and as it may hereafter be amended from
time to time.
(j) Plan Administrator means Fisher-Price, Inc.
(k) Plan Year means the twelve-month period beginning
each January 1 and ending on the following December 31.
(l) Related Business means any trade or business
included in a group of trades or businesses with the Company
which are under common control, as defined in Section 414(c) of
the Code.
(m) Trust means the assets held in trust pursuant to a
separate Trust Agreement between the Company and the Trustee, the
purpose of which is to provide benefits to Participants under the
Plan.
(n) Trustee means the person or persons appointed by
the Board of Directors of the Company to act as Trustee of the
Trust under the Plan, and with whom the Company has entered into
a separate Trust Agreement.
Section 1.4. Other Definitions.
(a) Annual Addition is defined in Section 3.10.
(b) Annuity Starting Date is defined in
Section 4.1(e).
(c) Company Contribution is defined in Section 3.5.
(d) Company Contribution Account is defined in
Section 3.8.
(e) Compensation is defined in Section 3.9.
(f) Disability Retirement Date is defined in
Section 4.1(c).
(g) Discretionary Matching Contribution is defined in
Section 3.3.
(h) Early Retirement Date is defined in
Section 4.1(b).
(i) Eligible Employee is defined in Section 2.1.
(j) Entry Date is defined in Section 2.1.
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(k) Highly Compensated Employee is defined in
Section 3.11.
(l) Hour of Service is defined in Section 1.3(f).
(m) Key Employee is defined in Section 8.1.
(n) Limitation Year is defined in Section 3.10.
(o) Matching Contribution is defined in Section 3.2.
(p) Maximum Annual Addition is defined in
Section 3.10.
(q) Maximum Company Contribution is defined in
Section 3.10.
(r) Normal Retirement Date is defined in Section 4.1.
(s) Participant is defined in Section 2.2.
(t) Required Beginning Date is defined in Section 4.1.
(u) Rollover Account is defined in Section 3.6.
(v) Salary Reduction Contribution is defined in
Section 3.1.
(w) Savings Account is defined in Section 3.8.
(x) Six Months of Participation Service is defined in
Section 2.1.
(y) Top Heavy Plan is defined in Section 8.1.
(z) Total and Permanent Disability is defined in
Section 4.1.
(aa) Transfer Account is defined in Section 3.7.
(bb) Valuation Date is defined in Section 6.1.
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ARTICLE 2
ELIGIBILITY FOR PARTICIPATION
-----------------------------
Section 2.1. Definitions. The following definitions
apply for purposes of this Article:
(a) Six Months of Participation Service. An employee
shall be considered to have completed Six Months of Participation
Service with the Company at the end of six full months following
the employee's Date of Hire.
(b) Entry Date. The term "Entry Date" means the first
day of each calendar month.
(c) Eligible Employee. Except as otherwise provided,
the term "Eligible Employee" shall mean any common-law employee
of the Company. For purposes of this Article, the term "Eligible
Employee" shall not include:
(i) Employees Covered by Collective Bargaining
Agreement. Employees included in a unit of
employees covered by an agreement which the
Secretary of Labor finds to be a collective
bargaining agreement between the Company and
employee representatives (within the meaning of
Section 7701(a)(46) of the Code) if (i) there is
evidence that retirement benefits were the subject
of good faith bargaining and (ii) the terms of
such collective bargaining agreement do not
specifically provide for participation in the
Plan.
(ii) Nonresident Aliens. Employees who are
nonresident aliens (within the meaning of Section
7701(b)(1)(B) of the Code) and who received no
earned income (within the meaning of Section
911(d)(2) of the Code) from the Company which
constitutes income from sources within the United
States (within the meaning of Section 861(a)(3) of
the Code).
(iii) Irregular Employees. Employees who are
hired on a seasonal basis or who otherwise have an
irregular work schedule.
Section 2.2. Age and Service Requirements. Each
Eligible Employee of the Company shall become a Participant in
the Plan on the first Entry Date coincident with or following the
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latest of:
(a) his or her completion of Six Months of
Participation Service with the Company;
(b) his or her attainment of age 20 1/2; or
(c) the Effective Date.
Each Eligible Employee who has completed the service
requirement in (a) above, but who is separated from the service
of the Company prior to the Entry Date shall become a Participant
immediately upon his or her return to the service of the Company
unless (i) Section 2.4(c) applies, or (ii) such Eligible
Employee, upon the date of his or her return to the service of
the Company, has not yet satisfied the age requirement in (b)
above. Notwithstanding the preceding sentence, an Eligible
Employee shall not in any event commence participation in the
Plan prior to the Entry Date which otherwise would have applied
had the Participant not separated from the service of the
Company.
Section 2.3. Change in Employment Status.
(a) Employee Becomes Eligible Employee. If an
employee's status is changed so that he or she becomes an
Eligible Employee, he or she shall become a Participant in the
Plan on the first Entry Date coincident with or following the
satisfaction of the age and service requirements set forth in
Section 2.2.
(b) Participant Becomes a Non-Eligible Employee. If a
Participant's employment status is changed so that he or she is
no longer an Eligible Employee, such Participant shall not be
entitled to share in any Matching Contributions or Discretionary
Matching Contributions with respect to any Compensation earned
while he or she is not an Eligible Employee.
Section 2.4. Termination and Resumption of
Participation.
(a) Termination of Participation. Except as otherwise
provided by this Section, an Eligible Employee who is a
Participant shall remain a Participant until (1) the date on
which his or her entire nonforfeitable interest is paid to him or
her or to his or her beneficiary, or (2) the date on which his or
her death occurs, if earlier.
(b) Inactive Participant. If a Participant separates
from the service of the Company, he or she will be an Inactive
-8-
Participant (1) for the remainder of the Plan Year of such
separation from service, and (2) for each Plan Year beginning
after such separation from service and during which he or she
continues to be separated from the service of the Company.
(c) Resumption of Participation. An Inactive
Participant shall not be entitled to share in allocations of
Matching Contributions and Discretionary Matching Contributions
under Article 3.00. However, an Inactive Participant shall
immediately resume active participation and be entitled to share
in allocations of Matching Contributions and Discretionary
Matching Contributions in accordance with the terms and
conditions of Article 3.00 immediately upon reemployment by the
Company.
Section 2.5. Service with and Transfers Involving
Affiliated Corporations.
(a) Service with Organizations Under Common Control.
Hours of Service completed by a Participant with an Organization
Under Common Control shall be credited for eligibility and
vesting purposes under this Plan under Articles 2 and 4, but not
for purposes of benefit accrual under Article 3, except as
specifically provided hereunder.
With respect to employees who transfer to the Company
after November 30, 1993 directly from Mattel, Inc. or any
Subsidiary, the service credited under this subsection shall
include all service with such Subsidiary or with Mattel, Inc.,
including service prior to the date the Subsidiary or Mattel,
Inc. became an Affiliated Corporation unless at the time of the
event at which a Subsidiary became an Affiliated Corporation, the
Board of Directors of Fisher-Price, Inc. specifically provides
otherwise. The amount of service to be credited under the
preceding sentence shall be based on the terms of a qualified
plan maintained by Mattel, Inc. or the Subsidiary under which the
transferred employee was participating immediately prior to the
transfer or under the terms of this Plan for crediting service
for eligibility and vesting if the employee was not participating
in such a plan. Notwithstanding the foregoing, the Board of
Directors of Fisher-Price, Inc. may also specifically provide for
the crediting of service under this Section with a predecessor
employer or any entity other than a Subsidiary prior to the date
such predecessor employer or other entity was acquired by an
Affiliated Corporation or otherwise became an Affiliated
Corporation.
(b) Transfer of Employment. If a Participant
transfers employment from the Company or any business entity that
has adopted or is maintaining this Plan to any Organization Under
-9-
Common Control that has not adopted or is not maintaining this
Plan, such transfer shall not be considered a separation from
service or termination of employment under this Plan. Such
Participant shall continue to be credited with Hours of Service
as provided in subsection (a). If a person transfers employment
from any Organization Under Common Control that has not adopted
the Plan to the Company or any business entity that has adopted
or is maintaining this Plan, he or she shall immediately commence
active participation in the Plan if such person is employed in an
eligible status, has satisfied the age and service requirements
under the Plan and if the Entry Date that would otherwise apply
to such person has already occurred.
(c) Change to Eligible Status. If the employment
status of an person changes so that he or she is eligible for
participation hereunder as a result of a transfer from ineligible
status, he or she shall immediately commence active participation
in the Plan following the date of his or her change in employment
status if such person has satisfied the age and service
requirements hereunder and if the Entry Date that would otherwise
apply to such person has already occurred.
(d) Change from Eligible Status. If the employment
status of a Participant changes so that he or she is no longer in
an eligible status under the Plan but he or she is still in the
service of the Company, he or she shall be credited with Hours of
Service for vesting purposes for Hours of Service with the
Company after the change in employment status.
(e) Subsidiary. The term "Subsidiary" means any
corporation included in a chain of corporations connected through
stock ownership with a common parent corporation as defined under
Section 1563(a)(1) of the Code where the common parent is Mattel,
Inc.
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ARTICLE 3
CONTRIBUTIONS
-------------
Section 3.1. Salary Reduction Contributions.
(a) In General. Each Participant, in accordance with
Subsection (b), may elect to contribute to the Plan a whole
percentage amount, not to exceed a percentage amount determined
by the Plan Administrator pursuant to a uniform nondiscriminatory
policy, of his or her Compensation ("Salary Reduction
Contribution"). Salary Reduction Contributions shall be made by
reducing a Participant's Compensation throughout the period
during which his or her election under this Section remains in
effect. The Company shall pay to the Trustees all Salary
Reduction Contributions made by Participants under this Section
no later than the end of a reasonable period after such Salary
Reduction Contributions were withheld from the Participants'
Compensation, or such longer period as may be permitted by
regulations issued under Section 401(k) of the Code, but in no
event later than 30 days after the close of the calendar month in
which such Salary Reduction Contributions were withheld. All
Salary Reduction Contributions are intended to qualify as
"employer contributions" under Section 401(k) of the Code.
(b) Salary Reduction Contribution Elections. The Plan
Administrator shall prescribe uniform rules of general
application concerning all elections under this Section. Such
rules may limit the amount of Salary Reduction Contributions or
the frequency of any changes in elections made by Participants.
Such rules also shall prescribe the effective date of any
elections, or changes in elections, made by Participants under
this Section. All elections under this Section shall remain in
effect until modified or discontinued by the Participant in
accordance with the rules established by the Plan Administrator.
Notwithstanding the foregoing, changes in Participant
elections under this Section shall be permitted no less
frequently than semi-annually. Furthermore, Participants, prior
to any payroll period or other payment of Compensation, may elect
to discontinue Salary Reduction Contributions. Such
discontinuance shall remain in effect until the date a new
election is made in accordance with the provisions of this
Subsection.
(c) $7,000 Limit. Salary Reduction Contributions of a
Participant, together with the other elective deferrals (as
defined in Section 402(g)(3) of the Code) of such Participant,
shall not exceed $7,000, as adjusted by Section 402(g)(5) of the
-11-
Code, during any calendar year. In the event that the limit
under this Subsection is exceeded, the Plan Administrator shall
direct the Trustees to distribute such excess amount in
accordance with this Article.
Section 3.2. Matching Contributions by the Company.
For each Plan Year, the Company shall contribute to the Plan on
behalf of each Participant an amount equal to a percentage of
each such Participant's Salary Reduction Contributions for such
Plan Year (the "Matching Contribution") determined as follows:
Participant Salary Matching Contribution
Reduction Amount Percentage
------------------ ---------------------
$0 to $300 100%
$301 to $500 75%
$501 to 6% of 40%
Participant Compensation
Section 3.3. Discretionary Matching Contributions.
For each Plan Year, the Company shall contribute to the Plan on
behalf of each Qualified Participant (as defined in Section
3.8(e)) an amount determined in the sole discretion of the
Company (the "Discretionary Matching Contribution"). The amount
of the Discretionary Matching Contribution on behalf of any
Qualified Participant shall not exceed 3% of his or her
compensation for such Plan Year.
Section 3.4. Forfeitures. Forfeitures resulting from
the application of Section 11.11 shall not be applied to directly
increase the allocation that any Participant would otherwise
receive under the Plan. Forfeitures shall in the discretion of
the Plan Administrator be used to (1) pay Plan expenses or (2)
reduce (but not below zero) the Matching Contribution under
Section 3.2 for the Plan Year in which the forfeitures become
available. Notwithstanding the foregoing, if (1) all or a
portion of the forfeitures are used to reduce the Matching
Contribution and (2) such forfeitures exceed the Matching
Contribution for the Plan Year in which the forfeitures become
available, such excess shall be held in a suspense account and
shall be used to reduce Matching Contributions or pay expenses
for the next Plan Year (and succeeding Plan Years, as necessary)
all as determined in the discretion of the Plan Administrator.
If a suspense account is in existence at any time during a Plan
Year pursuant to this Section, such account will not participate
in the allocation of the trust's investment gains and losses.
Section 3.5. Limitations on Contributions. Salary
Reduction Contributions, Matching Contributions and Discretionary
Matching Contributions (collectively, the "Company
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Contributions") under this Article shall be subject to the
following limitations:
(a) the sum of the Company Contributions and other
amounts treated as Annual Additions for any Plan Year shall
not exceed the Maximum Company Contribution, as determined
under Section 3.10; and
(b) the amount of the Company Contributions shall not
exceed the maximum amount allowable as a deduction to the
Company under Section 404 of the Code.
Section 3.6. Rollover Contributions. If permitted
under a uniform, nondiscriminatory policy adopted by the Plan
Administrator, a rollover contribution may be made by an Eligible
Employee to the Plan if:
(a) the following conditions are satisfied:
(i) the Eligible Employee was a participant under
another plan that was qualified under Section 401(a) of
the Code or an annuity plan qualified under Section
403(a) of the Code;
(ii) in the case of a plan qualified under Section
401(a) of the Code, the trust under such other plan is
exempt from tax under Section 501(a) of the Code;
(iii) such Eligible Employee receives a
distribution from such other plan which qualifies as a
rollover amount, as described in Section 402(a)(5)(A)
of the Code;
(iv) the Eligible Employee furnishes evidence
satisfactory to the Plan Administrator that such
contribution meets conditions (1), (2) and (3); and
(v) the rollover contribution is transferred by
the Eligible Employee to the Plan within 60 days of his
or her receipt of the distribution; or
(b) the amounts transferred to the Plan are from a
conduit individual retirement account, provided that the
following conditions are satisfied:
(i) such account has no assets other than assets
that were previously distributed to the Eligible
Employee by another qualified plan;
(ii) such amounts met the applicable requirements
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of Section 408(d)(3) of the Code for rollover treatment
or transfer to the conduit individual retirement
account; and
(iii) such amounts are transferred by the
Eligible Employee to the Plan within 60 days of his or
her receipt of such amount from the conduit individual
retirement account.
Rollover contributions shall be held in a separate
"Rollover Account" established and maintained by the Plan
Administrator as a permanent accounting record under the Plan for
the benefit of the Eligible Employee who made such contributions.
An Eligible Employee who has made a rollover contribution shall
at all times have a 100% nonforfeitable right to the value of the
assets held in his or her Rollover Account. Amounts allocated to
a Rollover Account shall be held in trust and invested in
accordance with the terms and conditions of the Plan.
Distributions of amounts allocated to a Rollover Account shall be
made upon the Eligible Employee's retirement, death, disability
or other separation from service in accordance with the terms and
conditions of the Plan.
If an Eligible Employee makes a rollover contribution
to the Plan under this Section, such Eligible Employee
nevertheless shall not become a Participant under the Plan and
shall not participate in the allocations of Company Contributions
under Section 3.8 until such Eligible Employee has satisfied the
age and service requirements for participation set forth in
Section 2.2.
Section 3.7. Transfers From Another Plan. If
permitted under a uniform policy adopted by the Plan
Administrator, a Participant may elect to transfer amounts from
another plan to the Plan if the following conditions are
satisfied:
(a) such other plan is qualified under Section 401(a)
of the Code or is an annuity plan qualified under Section
403(a) of the Code;
(b) in the case of a plan qualified under Section
401(a) of the Code, the trust under such other plan is
exempt from tax under Section 501(a) of the Code;
(c) such other plan and the trust or annuity
thereunder provides that benefits may be transferred;
(d) the Participant furnishes evidence satisfactory to
the Plan Administrator that such transfer meets conditions
-14-
(a), (b) and (c);
(e) the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for
the Company; and
(f) such other plan does not have a history of
providing its participants with "section 411(d)(6) protected
benefits," as defined in Section 1.411(d)-4 of the Treasury
Regulations, that are different from the benefits being
offered under the Plan.
Transfers shall be held in a separate "Transfer
Account" established and maintained by the Plan Administrator as
a permanent accounting record under the Plan for the benefit of
the Participant whose benefits under another plan were
transferred to the Plan. A Participant shall at all times have a
100% nonforfeitable right to the value of assets held in his or
her Transfer Account. Amounts allocated to a Transfer Account
shall be held in trust and invested in accordance with the terms
and conditions of the Plan. Distributions of amounts allocated
to a Transfer Account shall be made upon the retirement, death,
disability or other separation from service of the Participant in
accordance with the terms and conditions of the Plan.
Section 3.8. Allocations of Contributions and
Forfeitures.
(a) Maintenance of Accounts. The Plan Administrator
shall establish and maintain, as a permanent accounting record
under the Plan, a "Company Contribution Account" and a "Savings
Account" in the name of each Participant in the Plan. For each
Participant for whom there was maintained an account or accounts
under the Fisher-Price Profit Sharing and Retirement Savings Plan
prior to the merger of such plan into this Plan, there shall be
maintained such Profit Sharing accounts as may be appropriate as
determined by the Plan Administrator.
(b) Allocation of Salary Reduction Contributions.
Upon the payment of Salary Reduction Contributions by the Company
to the Trustees in accordance with Section 3.1(a), the Plan
Administrator shall allocate the Salary Reduction Contributions
of each Participant to a separate Savings Account maintained for
such Participant under Subsection (a).
(c) Allocation of Matching Contributions. Upon the
payment of the Matching Contribution by the Company to the
Trustees, the Plan Administrator shall allocate so much of the
total Matching Contributions for such Plan Year and the
forfeitures resulting from the application of Section 11.11, if
-15-
any, to the Company Contribution Account of each Participant as
determined by Section 3.2. The allocation determined under this
Subsection (c) shall be adjusted by an amount determined pursuant
to Section 3.10, if any.
(d) Allocation of Discretionary Matching
Contributions. Upon the payment of the Discretionary Matching
Contribution by the Company to the Trustees, the Plan
Administrator shall allocate the Discretionary Matching
Contribution for such Plan Year, if any, to the Company
Contribution Account of each Qualified Participant in the same
proportion that the Salary Reduction Contribution of such
Qualified Participant for the Plan Year bears to the total Salary
Reduction Contributions of all Qualified Participants for such
Plan Year. Notwithstanding the foregoing, the allocation under
this Subsection (d) with respect to any Qualified Participant
shall not exceed 3% of his or her Compensation for such Plan
Year. The allocation determined under this Subsection (d) shall
be adjusted by an amount determined pursuant to Section 3.10, if
any.
(e) Qualified Participant. The term "Qualified
Participant" for any Plan Year means a Participant who (1) is
employed by the Company on the last day of the Plan Year and (2)
is not a corporate vice-president or executive officer.
Section 3.9. Compensation. Unless otherwise provided,
the term "Compensation" for any Plan Year means the total amount
paid or made available by the Company to a Participant during
such Plan Year constituting wages as generally defined in Section
3401(a) of the Code determined without regard to any rules that
limit the amount included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2) of the
Code).
Compensation shall not include amounts representing
cash or merchandise prizes awarded for suggestions or ideas,
commissions, special allowances, expense reimbursements,
severance pay, pay for inactive status pending retirement, any
profits under stock option plans, any payments out of the short
term or long term disability plans or sickness and accident
plans, or any compensation the receipt of which is deferred
pursuant to a plan or contract.
Notwithstanding the foregoing, "Compensation" shall
include any amount which is contributed by the Company pursuant
to a salary reduction agreement and which is not includible in
the gross income of the Participant under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code.
-16-
Any questions as to whether any other amounts paid to a
Participant constitutes Compensation shall be determined by the
Company.
The Compensation of each Participant taken into account
under the Plan for any Plan Year shall not exceed the applicable
limitation under Section 401(a)(17) of the Code for the Plan
Year. Such limitation shall be adjusted at the time and in the
manner permitted under Section 401(a)(17)(B) of the Code. If the
Compensation of a Participant is determined on a period of time
fewer than 12 months, then the limitation shall be prorated for
the number of full calendar months in such period. In
determining the Compensation of a Qualified Participant for
purposes of this limitation, the rules of Section 414(q)(6) of
the Code shall apply, except, in applying such rules, the term
"family" shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained age
19 before the close of the Plan Year. If, as a result of the
application of such rules, the adjusted limitation is exceeded,
then the limitation shall be prorated among the affected
individuals in proportion to each individual's Compensation as
determined under this Section 3.9 prior to the application of
this limitation.
Notwithstanding any provision in this Section to the
contrary, Compensation of a Participant for a Plan Year shall be
limited to his or her Compensation earned while a Participant.
Section 3.10. Limitations on Allocations.
(a) Definitions. The following definitions apply for
purposes of this Section:
(i) Annual Addition shall have the same meaning
as defined under Section 415(c)(2) of the Code and the
regulations thereunder.
(ii) Compensation shall mean wages as defined in
Section 3121(a) of the Code, for purposes of
calculating Social Security taxes, but determined
without regard to the contribution base limitation in
Section 3121(a)(1) of the Code, the special rules in
Code Section 3121(v) (applicable to certain elective
contributions and non-qualified deferred compensation),
any rules that limit covered employment based on type
or location of an employee's employer, and any rules
that limit the remuneration included in wages based on
familial relationship or based on the nature or
location of the employment or the services performed
(such as the exceptions to the definition of employment
-17-
in Section 3121(b)(1) through (20) of the Code).
(iii) Maximum Permissible Amount, for any
Limitation Year, means, with respect to a Participant,
the lesser of:
(1) $30,000 (or, if greater, 25% of the
dollar limitation in effect under Section
415(b)(1)(A) of the Code); or
(2) 25% of Compensation, as defined in (2)
above.
The limitation in (ii) shall not apply to any
contribution for medical benefits (within the meaning
of Section 401(h) of the Code or Section 419A(f)(2) of
the Code) which is otherwise treated as an annual
addition under Section 415(1)(1) or 419A(d)(2) of the
Code.
(iv) Defined Benefit Fraction shall have the same
meaning as defined in Section 415(e)(2) of the Code and
the regulations thereunder.
(v) Defined Contribution Fraction shall have the
same meaning as defined in Section 415(e)(3) of the
Code and the regulations thereunder.
(vi) Limitation Year means the Plan Year.
(b) Maximum Company Contribution. For purposes of the
Plan, the term "Maximum Company Contribution" shall mean the
aggregate of the Maximum Annual Additions of all Participants for
the Plan Year.
(c) Maximum Annual Addition. In no event shall an
amount exceeding the Maximum Annual Addition be allocated to the
accounts of a Participant during any Limitation Year. For
purposes of the Plan, the term "Maximum Annual Additions" shall
mean the following:
(i) if the Company (or an Organization Under
Common Control) does not maintain any other qualified
defined contribution plan and does not maintain and has
never maintained a qualified defined benefit plan, the
Maximum Permissible Amount;
(ii) if, in addition to the Plan, the Company (or
an Organization Under Common Control) maintains another
qualified defined contribution plan or plans, but does
-18-
not maintain and has never maintained a qualified
defined benefit plan, the Maximum Permissible Amount
reduced (but not below zero) by the sum of any Annual
Additions allocated to the Participant during the
Limitation Year under such other defined contribution
plan or plans;
(iii) if, in addition to the Plan, the Company (or
an Organization Under Common Control) maintains, or at
any time maintained, a qualified defined benefit plan
covering any Participant in the Plan, the amount which,
when added to the Annual Additions under any other
qualified defined contribution plan maintained by the
Company (or an Organization Under Common Control), if
any, results in a Defined Contribution Fraction which,
when added to the Defined Benefit Fraction, does not
exceed 1.0 in the Limitation Year.
(d) Excess Annual Additions. If the Participant's
Annual Additions for the Limitation Year exceeds the maximum
Annual Addition for such Limitation Year (the "Excess Annual
Addition"), the Excess Annual Addition shall not be deemed Annual
Additions in that Limitation Year if they are treated in
accordance with any one or more of the following paragraphs as
determined in the Plan Administrator's discretion:
(i) The Excess Annual Additions of such
Participant may be allocated and reallocated to the
accounts of other Qualified Participants in the Plan.
However, if the allocation or reallocation of the
Excess Annual Addition causes the Maximum Annual
Addition of each Participant to be exceeded for the
Limitation Year, then these excess amounts must be held
unallocated in a suspense account. If a suspense
account is in existence at any time during a particular
Limitation Year, other than the Limitation Year
described in the preceding sentence, all amounts in the
suspense account must be allocated and reallocated to
Participants' accounts (subject to the limitations of
this Section) before any Company Contributions and any
employee contributions which would constitute Annual
Additions may be made to the Plan for that Limitation
year.
(ii) The Excess Annual Additions of such
Participant may be used to reduce Company Contributions
for the next Limitation Year (and succeeding Limitation
Years, as necessary) for that Participant if that
Participant is covered by the Plan as of the end of the
Limitation Year. However, if that Participant is not
-19-
covered by the Plan as of the end of the Limitation
Year, then the Excess Annual Additions must be held
unallocated in a suspense account for the Limitation
Year and allocated and reallocated in the next
Limitation Year to all of the remaining Participants in
the Plan in accordance with the rules set forth in the
preceding paragraph. Furthermore, the Excess Annual
Additions must be used to reduce Company Contributions
for the next Limitation Year (and succeeding Limitation
Year, as necessary) for all of the remaining
Participants in the Plan. For purposes of this
paragraph, Excess Annual Additions may not be
distributed to Participants or former Participants.
(iii) The Excess Annual Additions of such
Participant may be held unallocated in a suspense
account for the Limitation Year and allocated and
reallocated in the next Limitation Year to all of the
Participants in the Plan in accordance with the rules
provided in paragraph (1). The Excess Annual Additions
must be used to reduce Company Contributions for the
next Limitation Year (and succeeding Limitation years,
as necessary) for all of the Participants in the Plan.
For purposes of this paragraph, Excess Annual Additions
may not be distributed to Participants or former
Participants.
(iv) Notwithstanding the provisions of paragraphs
(1), (2) or (3) above, the Plan may return employee
contributions, including Salary Reduction
Contributions, to the extent that the return would
reduce the Excess Annual Additions of such Participant.
If the Plan does not return gains attributable to the
returned employee contributions, such earnings will be
considered as an employee contribution for the
Limitation Year in which the returned contribution was
made.
If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section, such suspense
account will not participate in the allocation of the trust's
investment gains and losses.
Section 3.11. ADP Test.
(a) In General. Annual allocations derived from
Salary Reduction Contributions to the Participants' Savings
Accounts must satisfy one of the following tests:
(i) The 125% Test. The Average ADP for
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Participants who are Highly Compensated Employees shall
not exceed the Average ADP for Participants who are
Non-Highly Compensated Employees multiplied by 1.25; or
(ii) The Alternative Limitation Test. The Average
ADP for Participants who are Highly Compensated
Employees shall not exceed the lesser of (i) the
Average ADP for Participants who are Non-Highly
Compensated Employees multiplied by 2 and (ii) the
Average ADP for Participants who are Non-Highly
Compensated Employees plus 2 percentage points or such
lesser amount determined pursuant to the provisions of
Section 3.13(c)(1) to prevent the multiple use of the
alternative limitation under this subsection and
Section 3.13(a)(2).
The Plan Administrator may calculate the ADPs of
Participants and, thus, determine whether the Plan satisfies the
ADP Test under this Section by treating all or part of the
Qualified Matching Contributions made with respect to any or all
of the Participants as Salary Reduction Contributions. The Plan
Administrator may not treat Qualified Matching Contributions as
Salary Reduction Contributions unless the Qualified Matching
Contributions satisfy the conditions set forth in Section
1.401(k)-l(b)(5) of the Treasury Regulations.
The Plan Administrator shall maintain records that
demonstrate satisfaction of the ADP Test under this Section,
including the extent to which the Plan treated Qualified Matching
Contributions as Salary Reduction Contributions to satisfy the
ADP Test.
(b) Definitions. The following definitions apply for
purposes of the Plan:
(i) ADP, with respect to a Participant, shall
mean the ratio (expressed as a percentage) of the amount of
Salary Reduction Contributions and amounts treated as Salary
Reduction Contributions, if any, allocated to the
Participant's account for a Plan Year to the Participant's
ADP Compensation for the Plan Year.
(ii) Average ADP, with respect to a group of
Participants, shall mean the average of the ADPs for the
group of Participants.
(iii) ADP Compensation, with respect to any
Participant, shall be determined by the Plan Administrator
in a manner that satisfies the requirement of Section 414(s)
of the Code and the regulations thereunder. The period used
-21-
to determine a Participant's ADP Compensation for a Plan
Year is either the Plan Year or the calendar year ending
within the Plan Year. Whichever period is selected must be
applied uniformly to determine the ADP Compensation of every
Participant for the Plan Year. If the Participant
participated in the Plan for less than the full Plan Year or
calendar year, the Plan may take into account ADP
Compensation for that portion of the Plan Year or calendar
year during which the Participant actually participated,
provided this limit is applied uniformly for all
Participants for the Plan Year.
(iv) Highly Compensated Employee.
(1) In General. The term "Highly
Compensated Employee" means an employee who is either a
Highly Compensated Active Employee or a Highly
Compensated Former Employee.
(2) Highly Compensated Active Employee. A
"Highly Compensated Active Employee" is any employee
who, with respect to the Company, (A) performs services
during the Look-Back Year and (B) is included in any
one or more of the groups described for purposes of the
Look-Back Year calculation in subparagraph (iii).
(3) Look-Back Year Calculation. For
purposes of subparagraph (ii), the following employees
shall be Highly Compensated Employees with respect to
the Look-Back Year:
(a) employees who are 5-percent owners
at any time during the Look-Back Year;
(b) employees who receive Compensation
in excess of $75,000 during the Look-Back Year;
(c) employees who receive Compensation
in excess of $50,000 during the Look-Back Year and
are members of the Top-Paid Group for the
Look-Back Year; and
(d) employees who are Includible
officers during the Look-Back Year.
(4) Determination Year Calculation. The
Company elects pursuant to Regulation Section 1.414(q)-
lT, Q & A-14(b) to make the calendar year calculation
election. Therefore, no Determination Year Calculation
is required.
-22-
(5) Look-Back Year. The term "Look-Back
Year" means the Plan Year.
(6) Top-Paid Group. The term "Top-Paid
Group" means, with respect to a particular year, the
group consisting of the top 20 percent of the Company's
employees when ranked on the basis of Compensation
received from the Company during such year. The number
of employees in the Top-Paid Group for a particular
year is equal to 20 percent of the total number of
active employees of the Company for such year, reduced
by those active employees excluded under Sections
1.414(q)-lT, Q & A-9(b)(1)(i), (ii) and (iii) of the
Treasury Regulations.
(7) Includible Officers. The term
"Includible Officer" means an employee who is (A) an
officer of the Company (within the meaning of Section
416(i) of the Code and the regulations thereunder) at
any time during the Look-Back Year and (B) receives
compensation during such year that is greater than 50
percent of the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for the calendar year
in which the Look-Back Year begins. If no officer of
the Company satisfies the Compensation requirement of
(B) above, the highest paid officer of the Company for
such year is treated as a Highly Compensated Employee.
Notwithstanding the foregoing, the determination of
which employees are Includible Officers shall be
subject to the maximum inclusion limitations of Section
1.414(q)-lT, Q & A-10(b) of the Treasury Regulations.
(8) Highly Compensated Former Employee. A
"Highly Compensated Former Employee" for a Look-Back
Year is any former employee of the Company who, with
respect to the Company, (A) performs no services for
the Company in the Look-Back Year, (B) had a Separation
Year prior to the Look-Back Year and was (C) a Highly
Compensated Active Employee for either (I) such
employee's Separation Year, or (II) any Look-Back Year
ending on or after the employee's 55th birthday.
(9) Separation Year. The term "Separation
Year" means the Look-Back Year during which the
employee separates from the service of the Company.
(10) Family Aggregation. If an employee is,
during a Look-Back Year, a Family Member of either a
(A) 5-percent owner who is an active or former employee
or (B) a Highly Compensated Employee who is one of the
-23-
ten most highly compensated employees ranked on the
basis of Compensation paid by the Company during such
year, then the Family Member and the 5-percent owner or
top-ten Highly Compensated Employee shall be aggregated
and shall be treated as a single employee receiving
Compensation and Plan contributions equal to the sum of
such Compensation and contributions of the Family
Member and 5-percent owner or top-ten Highly
Compensated Employee.
(11) Family Member. The term "Family Member"
means the spouse, lineal ascendants and descendants of
the employee or former employees, and the spouses of
such lineal ascendants and descendants.
(v) Nonhighly Compensated Employee shall mean an
Eligible Employee who is not a Highly Compensated Employee.
(vi) Nonelective Contributions are contributions
to the Plan made by the Company which are not made pursuant
to a Participant's salary reduction contribution election
under Section 3.1.
(vii) Qualified Matching Contributions are
Matching Contributions or Discretionary Matching
Contributions that are 100% nonforfeitable at all times and
satisfy the requirements set forth in Section 1.401(k)-
1(g)(13)(iii) of the Treasury Regulations.
(c) Special Rules.
(i) Plan Aggregation - 410(b). For purposes of
this Section, if the Plan and one or more other plans which
include cash or deferred arrangements actually are
aggregated for purposes of Section 410(b) (other than for
purposes of the average benefit percentage test) of the
Code, the cash or deferred arrangements included in the Plan
and such other plans shall be treated as a single cash or
deferred arrangement for purposes of Section 401(k) of the
Code and Section 1.401(k)-1(b) of the Treasury Regulations.
Plans are aggregated under this paragraph only if they have
the same plan year.
(ii) Plan Aggregation - Highly Compensated
Employee. For purposes of this Section, if a Highly
Compensated Employee is a participant in two or more cash or
deferred arrangements of the Company, all such cash or
deferred arrangements shall be treated as one cash or
deferred arrangement for purposes of determining the ADP of
the Highly Compensated Employee unless such aggregation is
-24-
prohibited by Section 1.401(k)-1(g)(1)(ii)(B) of the
Treasury Regulations. If the cash or deferred arrangements
have different plan years, this paragraph shall be applied
by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
(iii) Family Aggregation. If a Highly Compensated
Employee is subject to the family aggregation rules of
Section 414(q)(6) of the Code because such employee is
either a five-percent owner or one of the ten most Highly
Compensated Employees, the combined ADP for the family group
(which is treated as one Highly Compensated Employee) must
be determined by combining the Salary Reduction
Contributions, Compensation, and amounts treated as Salary
Reduction Contributions, if any, of all the eligible family
members. The Salary Reduction Contributions, Compensation,
and amounts treated as Salary Reduction Contributions, if
any, are disregarded for purposes of determining the Average
ADP for the Non-Highly Compensated Employees. If a
Participant is required to be aggregated as a member of more
than one family group in the Plan, all Participants who are
members of those family groups that include that Participant
are aggregated as one family group.
Section 3.12. Distribution of Excess Contributions.
(a) In General. If for any Plan Year there are any
Excess Contributions, then on or before the 15th day of the third
month following the end of such Plan Year, each Highly
Compensated Employee having the highest ADP shall have his or her
portion of the Excess Contributions distributed to him or her
until one of the two tests set forth in Section 3.11(a) is
satisfied, or until his or her ADP equals the ADP of the Highly
Compensated Employee or Employees having the next highest ADP.
This process must be repeated until one of the two tests set
forth in Section 3.11(a) is satisfied. In no case may the amount
of Excess Contributions be distributed for a Plan Year with
respect to a Highly Compensated Employee exceed the Highly
Compensated Employee's Salary Reduction Contribution for the Plan
Year.
Distributions of Excess Contributions shall be made
first from unmatched Salary Reduction Contributions and,
thereafter, simultaneously from Salary Reduction Contributions
that are matched and Matching Contributions that relate to such
Salary Reduction Contributions. However, any such Matching
Contributions which are not vested shall be forfeited in lieu of
being distributed.
Notwithstanding the foregoing, if the Plan
-25-
Administrator treats Qualified Matching Contributions as Salary
Reduction Contributions for purposes of the ADP Test,
distributions of Excess Contributions shall be made first from
unmatched Salary Reduction Contributions and, thereafter,
simultaneously from Salary Reduction Contributions and Qualified
Matching Contributions that relate to such Salary Reduction
Contributions.
(b) Excess Contributions. The term "Excess
Contributions" means, with respect to a Plan Year, the excess of
Salary Reduction Contributions, and Qualified Matching
Contributions, to the extent they are treated as Salary Reduction
Contributions for purposes of the ADP Test, over the maximum
amount of such contributions permitted under Section 3.11(a).
Excess Contributions also shall include the income allocable to
the excess described in the preceding sentence. The income
allocable to Excess Contributions shall be determined in
accordance with subsection (d).
(c) Family Aggregation. The determination and
correction of Excess Contributions of a Highly Compensated
Employee whose ADP is determined in accordance with the family
aggregation rules of Section 3.11(c)(3) is accomplished by
reducing the ADP as required by Subsection (a) and allocating the
Excess Contributions for the family group among the family
members in proportion to the Salary Reduction Contributions of
each family member that is combined to determine the ADP.
(d) Allocable Income/Loss. A Participant's Excess
Contributions with respect to a Plan Year shall be adjusted for
any income or loss up to the date of distribution. The income or
loss allocable to Excess Contributions is the sum of (1) income
or loss for the Plan Year allocable to Salary Reduction
Contributions and amounts treated as Salary Reduction
Contributions multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the Plan Year and the
denominator of which is the sum of (i) the total account balance
of the Participant attributable to Salary Reduction Contributions
and amounts treated as Salary Reduction Contributions, if any, as
of the beginning of the Plan Year, plus (ii) the Participant's
Salary Reduction Contributions and amounts treated as Salary
Reduction Contributions, if any, for the Plan Year and for the
Gap Period; and (2) ten percent of the amount determined under
(1) above multiplied by the number of whole calendar months that
have elapsed during the Gap Period. When calculating the number
of calendar months in (2) above, a distribution occurring on or
before the 15th day of the month will be treated as having been
made on the last day of the preceding month, and a distribution
occurring after such 15th day will be treated as having been made
on the first day of the next subsequent month. For purposes of
-26-
this subsection, the Term "Gap Period" means the period between
the end of the Plan Year and the date of distribution.
Section 3.13. ACP Test.
(a) In General. Annual allocations derived from
Matching Contributions to the Company Contribution Accounts must
satisfy one of the following tests:
(i) The 125% Test. The Average ACP for
Participants who are Highly Compensated Employees shall not
exceed the Average ACP for Participants who are Nonhighly
Compensated Employees multiplied by 1.25.
(ii) The Alternative Limitation Test. The Average
ACP for Participants who are Highly Compensated Employees
shall not exceed the lesser of (i) the Average ACP for
Participants who are Nonhighly Compensated Employees
multiplied by two and (ii) the Average ACP for Participants
who are Nonhighly Compensated Employees plus two percentage
points or such lesser amount determined pursuant to the
provisions of Section 3.13(c)(1) to prevent the multiple use
of the alternative limitation under this Subsection and
Section 3.11(a)(2).
The Plan Administrator may calculate the ACPs of
Participants and, thus, determine whether the Plan satisfies the
ACP Test under this Section by taking into account Salary
Reduction Contributions that are treated as Matching
Contributions. The Plan Administrator may not treat Salary
Reduction Contributions as Matching Contributions unless the
Salary Reduction Contributions satisfy the conditions set forth
in Section 1.401(m)-l(b)(5) of the Treasury Regulations. The
Plan Administrator may not include Salary Reduction Contributions
in the ACP Test unless the Plan satisfies the ADP Test both with
and without the Salary Reduction Contributions included in this
ACP Test.
The Plan Administrator shall maintain records that
demonstrate satisfaction of the ACP Test under this Section,
including the extent to which the Plan treated Salary Reduction
Contributions as Matching Contributions to satisfy the ACP Test.
(b) Definitions. The following definitions apply for
purposes of the Plan:
(i) ACP, with respect to a Participant, shall
mean the ratio (expressed as a percentage) of the amount of
Matching Contributions and Discretionary Matching
Contributions and amounts treated as Matching Contributions
-27-
allocated to the Participant's account for a Plan Year to
the Participant's ACP Compensation for the Plan Year.
(ii) Average ACP, with respect to a group of
Participants, shall mean the average of the ACPs for the
group of Participants.
(iii) ACP Compensation shall have the same meaning
as the term ADP Compensation, as defined in Section
3.11(b)(3).
(c) Special Rules.
(i) Multiple Use. If (i) the sum of the Average
ADP of the entire group of eligible Highly Compensated
Employees under the Plan and the Average ACP of the entire
group of eligible Highly Compensated Employees under the
Plan exceeds the Aggregate Limit, (ii) the Average ADP of
the entire group of eligible Highly Compensated Employees
exceeds the amount described in the 125% Test under Section
3.11(a)(1), and (iii) the Average ACP of the entire group of
eligible Highly Compensated Employees exceeds the amount
described in the 125% Test under Section 3.13(a)(1), then
the Average ADP or ACP of those Highly Compensated Employees
will be reduced so that the Aggregate Limit is not exceeded.
The amount of the reduction of the Average ADP or ACP of the
entire group of Highly Compensated Employees needed to
satisfy the Aggregate Limit is calculated in the manner
described in Section 3.12(a) or 3.14(a) and shall be treated
as Excess Contributions or Excess Aggregate Contributions.
For purposes of the Multiple Use Test, the ADP and the ACP
are determined after any corrections required to meet the
ADP Test and the ACP Test.
The "Aggregate Limit" shall mean the greater of:
(a) the sum of (i) 1.25 times the greater of (I)
the Average ADP of the Nonhighly Compensated Employees for the
Plan Year (the "Relevant ADP") or (II) the Average ACP of the
Nonhighly Compensated Employees for the Plan Year (the "Relevant
ACP"), and (ii) two percentage points plus the lesser of the
Relevant ADP or the Relevant ACP, provided that this amount does
not exceed two times the lesser of the Relevant ADP or the
Relevant ACP; or
(b) sum of (i) 1.25 times the lesser of the
Relevant ADP or the Relevant ACP, and (ii) two percentage points
plus the greater of the Relevant ADP or the Relevant ACP, above,
provided that this amount does not exceed two times the greater
of the Relevant ADP or the Relevant ACP.
-28-
(ii) Plan Aggregation - 410(b). For purposes of
this Section, if the Plan and one or more other plans
actually are aggregated for purposes of Section 410(b)
(other than for purposes of the average percentage test) of
the Code, then the Plan and such other plans shall be
treated as a single plan for purposes of Section 401(m) of
the Code. Plans are aggregated under this paragraph only if
they have the same plan year.
(iii) Plan Aggregation - Highly Compensated
Employee. For purposes of this Section, if a Highly
Compensated Employee is a participant in two or more plans
of the Company to which employer contributions, matching
contributions or both are made, all such plans shall be
treated as one plan for purposes of determining the ACP of
the Highly Compensated Employee unless such aggregation is
prohibited by Section 1.401(m)-1(b)(3)(ii) of the Treasury
Regulation. If the plans have different plan years, this
paragraph shall be applied by treating all plans ending with
or within the same calendar year as a single arrangement.
(iv) Family Aggregation. If a Highly Compensated
Employee is subject to the family aggregation rules of
Section 414(q)(6) of the Code because such employee is
either a five-percent owner or one of the ten most Highly
Compensated Employees, the combined ACP for the family group
(which is treated as one Highly Compensated Employee) must
be determined by combining the Matching Contributions,
Discretionary Matching Contributions, Compensation, and
amounts treated as Matching Contributions, if any, of all
the eligible family members. The Matching Contributions,
Discretionary Matching Contributions, amounts treated as
Matching Contributions, if any, and Compensation of all
family members are disregarded for purposes of determining
the Average ACP for the Highly Compensated Employees and the
Non-Highly Compensated Employees. If a Participant is
required to be aggregated as a member of more than one
family group in the Plan, all Participants who are members
of those family groups that include that Participant are
aggregated as one group.
Section 3.14. Distribution of Excess Aggregate
Contributions.
(a) In General. If for any Plan Year there are Excess
Aggregate Contributions, then on or before the 15th day of the
third month following the end of such Plan Year, each Highly
Compensated Employee having the highest ACP shall have his or her
portion of the Excess Aggregate Contributions distributed to him
or her, or, if forfeitable, forfeit such nonvested Excess
-29-
Aggregate contributions attributable to Matching Contributions
until one of the two tests set forth in Section 3.13(a) is
satisfied, or until his or her ACP equals the ACP of the Highly
Compensated Employee or Employees having the next highest ACP.
This process must be repeated until one of the two tests set
forth in Section 3.13(a) is satisfied.
The Plan Administrator will treat a Highly Compensated
Employee's allocable share of Excess Aggregate Contributions, on
a pro rata basis, as attributable to Matching Contributions,
Discretionary Matching Contributions, and to Salary Reduction
Contributions treated as Matching Contributions for purposes of
the ACP Test.
(b) Excess Aggregate Contributions. The term "Excess
Aggregate Contributions" means, with respect to a Plan Year, the
excess of Matching Contributions, Discretionary Matching
Contributions and Salary Reduction Contributions, to the extent
they are treated as Matching Contributions for purposes of the
ACP Test, over the maximum amount of such contributions permitted
under Section 3.13(a). Excess Aggregate Contributions shall also
include the income allocable to the excess described in the
preceding sentence. The income allocable to Excess Aggregate
Contributions shall be determined in accordance with
Subsection (d).
(c) Family Aggregation. The determination and
correction of Excess Aggregate Contributions of a Highly
Compensated Employee whose ACP is determined in accordance with
the family aggregation rules of Section 3.13(c)(4) is
accomplished by reducing the ACP as required by subsection (a)
and allocating the Excess Aggregate Contributions for the family
group among the family members in proportion to the Matching
Contributions, Discretionary Matching Contributions and amounts
treated as Matching Contributions for purposes of the ACP Test,
if any, of each family member that are combined to determine this
ACP.
(d) Allocable Income/Loss. A Participant's Excess
Aggregate Contributions with respect to a Plan Year shall be
adjusted for any income or loss up to the date of distribution.
The income or loss allocable to Excess Aggregate Contributions is
the sum of (1) income or loss for the Plan Year allocable to
Matching Contributions, Discretionary Matching Contributions and
amounts treated as Matching Contributions, if any, multiplied by
a fraction, the numerator of which is the Participant's Excess
Aggregate Contributions for the Plan Year and the denominator of
which is the sum of (i) the total account balance of the
Participant attributable to Matching Contributions, Discretionary
Matching Contributions and amounts treated as Matching
-30-
Contributions, if any, as of the beginning of the Plan Year, plus
(ii) the Participant's Matching Contributions, Discretionary
Matching Contributions, and amounts treated as Matching
Contributions, if any, for the Plan Year and for the Gap Period,
and (2) ten percent of the amount determined under (1) above
multiplied by the number of whole calendar months that have
elapsed during the Gap Period. When calculating the number of
months in (2) above, a distribution occurring on or before the
15th day of the month will be treated as having been made on the
last day of the preceding month, and a distribution occurring
after such 15th day will be treated as having been made on the
first day of the next subsequent month. For purposes of this
subsection, the term "Gap Period" means the period between the
end of the Plan Year and the date of distribution.
Section 3.15. Distributions of Excess Deferrals.
(a) In General. Excess Deferrals by a Participant
shall be distributed to such Participant no later than the first
April 15 following the close of the Participant's taxable year,
unless the Participant notifies the Plan that such Excess
Deferrals or a portion thereof shall be distributed from a plan
other than the Plan. Notice under the preceding sentence must be
submitted to the Plan Administrator in writing no later than the
first March 1 following the close of the Participant's taxable
year. Notwithstanding the foregoing, a Participant is deemed to
have notified the Plan of Excess Deferrals for the taxable year
taking into account only Salary Reduction Contributions under the
Plan.
(b) Excess Deferrals. The term "Excess Deferrals"
means, with respect to a Participant, Salary Reduction
Contributions, together with other elective deferrals (as defined
in Section 402(g)(3) of the Code), in excess of the dollar
limitation under Section 3.1(c). Excess Deferrals also shall
include the income allocable to the excess described in the
preceding sentence. The income allocable to Excess Deferrals
shall be determined in accordance with Subsection (c).
(c) Allocable Income/Loss. A Participant's Excess
Deferrals with respect to a taxable year shall be adjusted for
any income or loss up to the date of distribution. The income or
loss allocable to Excess Deferrals is the sum of (1) income or
loss for the taxable year allocable to Salary Reduction
Contributions multiplied by a fraction, the numerator of which is
the Participant's Excess Deferrals for the taxable year and the
denominator of which is the sum of (i) the total account balance
of the Participant attributable to Salary Reduction Contributions
as of the beginning of the taxable year, plus (ii) the
Participant's Salary Reduction Contributions for the taxable year
-31-
and for the Gap Period, and (2) ten percent of the amount
determined under (1) above, multiplied by the number of whole
calendar months that have elapsed during the Gap Period. When
calculating the number of months in (2), a distribution occurring
on or before the 15th day of the month will be treated as having
been made on the last day of the preceding month, and a
distribution occurring after such 15th day will be treated as
having been made on the first day of the next subsequent month.
For purposes of this subsection, the term "Gap Period" means the
period between the end of the taxable year and the date of
distribution.
Section 3.16. Coordinating Corrective Distributions.
(a) Correcting Excess Deferrals After Distributing
Excess Contributions. The amount of Excess Deferrals that may be
distributed under Section 3.15 with respect to a Participant for
a taxable year shall be reduced by any Excess Contributions
previously distributed with respect to such Participant for the
Plan Year beginning with or within such taxable year.
(b) Correcting Excess Contributions After Distributing
Excess Deferrals. The amount of Excess Contributions to be
distributed under Section 3.12(a) with respect to a Participant
for a Plan Year shall be reduced by any Excess Deferrals
previously distributed to such Participant for the Participant's
taxable year ending with or within such Plan Year.
-32-
ARTICLE 4
NONFORFEITABLE RIGHT TO BENEFITS
--------------------------------
Section 4.1. Definitions. The following definitions
will apply for purposes of the Plan:
(a) Normal Retirement Date means the later of the
Participant's 65th birthday and the fifth anniversary of the date
the Participant commenced participation in the Plan.
(b) Early Retirement Date means the later of the
Participant's 55th birthday and the date on which the Participant
completes five Years of Service. A Year of Service means a Plan
Year during which an employee completes at least 1,000 Hours of
Service.
(c) Disability Retirement Date means the date on which
a determination is made by the Plan Administrator that a
Participant has a Total and Permanent Disability.
(d) Total and Permanent Disability means a mental or
physical condition, as determined by the Plan Administrator, or
by a licensed practicing physician selected by the Plan
Administrator, which is expected to be permanent or of long and
indefinite duration, and which renders the Participant incapable
of performing his or her customary duties for the Company.
(e) Annuity Starting Date means either (i) the first
day of the first period for which a benefit is paid as an annuity
to the Participant, or (ii) if the Participant's benefit is not
payable in the form of an annuity, the first day on which all
events have occurred which entitle the Participant to such
benefit.
(f) Deferred Retirement means the period beginning
with a Participant's Normal Retirement Date and ending with the
date that he or she actually retires from the Employer.
(g) Participant's Required Beginning Date means either
(i) with regard to any Participant whose date of birth is after
June 30, 1917, April 1 of the calendar year following the
Participant's 70-1/2 Year, or (ii) with regard to any Participant
whose date of birth is before July 1, 1917, April 1 of the
calendar year following the later of (A) the Participant's 70-1/2
Year or (B) the calendar year in which the Participant retires.
(h) 70-1/2 Year means, with respect to any
Participant, the calendar year which includes the date that is
-33-
six months after the Participant's 70th birthday.
Section 4.2. Determination of Nonforfeitable Rights.
A Participant shall at all times be fully vested in, and have a
100% nonforfeitable right to his or her Savings Account and
Company Contribution Account.
-34-
ARTICLE 5
DISTRIBUTION OF BENEFITS
------------------------
Section 5.1. Forms and Time of Benefit Distributions.
(a) In General. A Participant shall be entitled to
receive a distribution of his or her benefits under the Plan if
such Participant has separated from the service of the Company
(or Organization Under Common Control).
(b) Commencement of Distributions. Unless a
Participant elects otherwise, distributions of benefits to which
a Participant becomes entitled under Subsection (a) shall
commence as soon as practicable following the satisfaction of the
conditions set forth in such Subsection (a). Notwithstanding the
foregoing, distributions of a benefit to a Participant under the
Plan shall commence no later than the earlier of:
(i) the Participant's Required Beginning Date; or
(ii) the 60th day after the close of the Plan Year
in which occurs the latest of the following:
(1) the date on which the Participant
attains the earlier of age 65 or his or her Normal
Retirement Date,
(2) the 10th anniversary of the year in
which the Participant commenced participation in the
Plan,
(3) the date the Participant terminates his
service with the Company (or Organization Under Common
Control), or
(4) a date which is later than the dates
described in (i), (ii) and (iii) above and which is
specified in a written election made by the
Participant.
(c) Form of Distributions. At the time a Participant
becomes entitled to receive a distribution of a benefit in
accordance with this Section he or she shall receive such benefit
in the Normal Form of Benefit unless the alternative form of
benefit set forth in Section 5.3 is properly elected.
Section 5.2. Normal Form of Benefit. The Normal Form
of Benefit is a single lump sum payment in cash or property of
-35-
the Participant's entire nonforfeitable interest in the Plan.
Section 5.3. Alternative Form of Benefit. A
Participant who separates from service with the Company on or
after his or her Normal Retirement Date, Early Retirement Date or
Disability Retirement Date and who properly waives the Normal
Form of Benefit may elect the following alternative form of
benefit. Such alternative form of benefit shall be actuarially
equivalent to the Participant's nonforfeitable interest in his or
her accounts under the Plan.
Under this alternative form, a Participant receives his
or her benefit in installments payable at least annually for a
period of years which shall not be greater than or equal to the
Participant's life expectancy determined as of his or her Annuity
Starting Date. The sum of the installments for each year shall
be a fixed dollar amount (as elected by the Participant with the
consent of the Plan Administrator) which shall not be less than
the annual installment determined under the requirements of
Section 401(a)(9) of the Code.
All such installments shall be in cash or other
property and the installment or installments for the
Participant's 70-1/2 Year and all subsequent years shall be paid
to the Participant on or before December 31 of such year. The
frequency of the installments shall be determined by the
Participant after consultation with the Plan Administrator, but
shall be made no less frequently than annually.
Section 5.4. Designation of Death Beneficiary. Each
Participant shall designate the beneficiary for the benefits
provided on his or her death under the Plan. Such designation
may be changed from time to time. All designations shall be made
on forms provided by and filed with the Plan Administrator.
A designation made by a Participant under the Fisher-
Price Profit Sharing and Retirement Savings Plan will continue to
remain in effect after the merger of such plan into this Plan
only for a Participant who had no account balance under this Plan
immediately prior to such merger. In all other cases, a death
beneficiary designation made under this Plan shall supersede a
designation made under the Fisher-Price Profit Sharing and
Retirement Savings Plan after the merger of the two plans on or
about July 1, 1994.
A married Participant may designate a beneficiary other
than his or her spouse if such spouse consents in writing to such
designation. Such consent shall acknowledge the effect of such
designation and must be witnessed by a representative of the Plan
Administrator or a notary public. No such designation shall be
-36-
effective if the beneficiary may be changed without the consent
of the spouse, unless the spouse's consent expressly permits
changes in beneficiary designations by the Participant without
any requirement of further consent of the spouse. Any consent by
a spouse under this Section 5.4 shall be effective only with
respect to such spouse.
In the absence of an otherwise effective designation
under the Plan, death benefits shall be payable in the following
order of priority:
(a) to the Participant's spouse, or if there is none;
(b) to the Participant's estate.
Section 5.5. Death of Participant.
If a Participant dies prior to what would otherwise
have been his or her Annuity Starting Date, the Participant's
entire nonforfeitable interest in the Plan shall be distributed
to his or her beneficiary in a single lump sum payment in cash or
property by December 31 of the calendar year in which occurs the
fifth anniversary of the Participant's death.
Section 5.6. Early Distribution Consent.
(a) In General. If the Participant's nonforfeitable
interest in the Plan exceeds $3,500, or has ever exceeded $3,500
at the time of any prior distribution, no benefit shall be paid
to the Participant prior to the later of his Normal Retirement
Date or age 62 unless the Participant consents in writing to the
commencement of the distribution of the benefit. If the required
consent is not obtained, payment of the benefit shall commence as
otherwise provided under this Article.
(b) Valid Consent. A Participant's consent under this
Section shall not be valid unless the Participant has received a
notice containing a general description of the material features
of, and an explanation of, the relative values of the alternative
form of benefit available under the Plan. The notice must be
written in a manner that would satisfy the notice requirements of
section 417(a)(3) of the Code. Such notice shall be provided no
less than 30 days and no more than 90 days before the Annuity
Starting Date. In addition, the Participant must be informed of
his or her right to defer receipt of the distribution. A consent
also will not be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution. Finally, written consent of the Participant to the
distribution must not be made before the Participant receives the
aforementioned notice and must not be made more than 90 days
-37-
before the Annuity Starting Date.
Notwithstanding the foregoing, if a distribution is one
to which Sections 401(a)(11) and 417 of the Code do not apply,
such distribution may commence less than 30 days after the
aforementioned notice is given, provided that:
(i) the Plan Administrator 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 a particular distribution option, and
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
Section 5.7. Minimum Distribution Required. If the
Deferred Retirement of any Participant extends to the
Participant's Required Beginning Date, the Participant must begin
to receive his or her benefit under the Plan pursuant to the
Normal Form of Benefit. Notwithstanding anything in the Plan to
the contrary, the sum of payments made under this Section during
a calendar year must be greater than or equal to the annual
installment required by Section 401(a)(9) of the Code and the
regulations thereunder.
Section 5.8. Cash-Outs.
(a) Definitions. The following definitions will apply
for purposes of this Article:
(i) Cash-Out means Involuntary Cash-Outs and
Voluntary Cash-Outs.
(ii) Involuntary Cash-Out means a distribution
made in accordance with Subsection (b).
(iii) Voluntary Cash-Out means a distribution made
in accordance with Subsection (c).
(b) Involuntary Cash-Outs of Small Benefits.
Notwithstanding any other provision of this Article, a
Participant who has separated from the service of the Company and
who is no longer employed by any Organization Under Common
Control shall receive a distribution of his or her entire
nonforfeitable interest in the Plan in a single lump sum payment
of cash or property, provided that the value of such
nonforfeitable interest is equal to or less than $3,500,
determined as of the Valuation Date coincident with or
immediately preceding his or her separation from service. A
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distribution under this Subsection shall be made as soon as
administratively feasible following the Participant's separation
from service.
(c) Cash-Outs of Benefits in Excess of $3,500.
Notwithstanding any other provision of this Article, a
Participant who has separated from the service of the Company,
and who is no longer employed by any Organization Under Common
Control and whose nonforfeitable interest in the Plan exceeds
$3,500 may elect to receive a distribution of his or her entire
nonforfeitable interest in the Plan prior to attaining his or her
Normal Retirement Date or Disability Retirement Date. If a
Participant elects to receive a distribution of his or her
nonforfeitable interest in the Plan in accordance with this
Subsection, he or she shall receive such benefit in the form of a
single lump sum payment in cash or property. A distribution
under this Subsection shall commence as soon as administratively
feasible following the Participant's separation from service.
Section 5.9. Hardship Withdrawals. Upon the
application of a Participant, the Plan Administrator, in
accordance with a uniform, nondiscriminatory policy, may permit
such Participant to withdraw all or a portion of his or her
interest in any account under the Plan needed for the purpose of
alleviating extraordinary financial hardship. Only those
Participants who are employed by the Company shall be permitted
to apply for such withdrawals. Participants who are retired,
terminated, on leave of absence or on layoff will not be
permitted distributions under this Section. For purposes of this
Section, a distribution is on account of extraordinary financial
hardship if the distribution is made on account of immediate and
heavy financial need of the Participant and is necessary to
satisfy such financial need. The determination of whether a
Participant has an immediate and heavy financial need is to be
made on the basis of all relevant facts and circumstances. A
financial need shall not fail to qualify as immediate and heavy
merely because such need was reasonably foreseeable or
voluntarily incurred by the Participant. A distribution will be
treated as necessary to satisfy the financial need to the extent
that it cannot be satisfied from other resources that are
reasonably available to the Participant. Unless otherwise
proscribed by applicable Treasury Regulations, a hardship may be
determined to exist as a result of:
(a) extraordinary expenses arising from the
sickness or disability of a Participant or a member of
his or her family;
(b) purchasing real property which is to serve as
the principal residence of the Participant;
-39-
(c) financing the cost of education beyond the
secondary level for the Participant or a member of his
or her family; or
(d) the need to prevent the eviction of the
Participant from his or her principal residence or
foreclosure on the mortgage on the Participant's
principal residence.
A Participant making application under this Section
shall have the burden of presenting to the Plan Administrator
proof of such need and the amount required to meet the immediate
financial need created by the hardship and not reasonably
available from other resources of the Participant. The Plan
Administrator shall not permit withdrawal under this Section 5.9
without first receiving such proof.
The Plan Administrator shall adopt uniform rules of
general applicability regarding maximum amounts, timing and
frequency of withdrawals permitted under this Section and shall
also adopt rules regarding which accounts shall be charged with
any such withdrawal.
Section 5.10. Loans to Participants.
(a) Trustees May Make Loans. Upon written direction
of the Plan Administrator, the Trustees shall make loans to
Participants, who are employed by the Company, pursuant to the
terms and conditions set forth in this Section and any additional
rules that may be adopted. Such loans shall be made available to
Participants who are on the active payroll of the Company on a
reasonably equivalent basis and shall not be made available to
Highly Compensated Employees, officers or shareholders in an
amount greater than the amount made available to other
Participants. Loans shall not be made available to Participants
who are retired, terminated, on leave of absence or on layoff.
(b) Written Applications. Loan applications must be
in writing, signed by the applying Participant and submitted to
the Plan Administrator. The application of the Participant shall
be executed within 90 days prior to the making of the loan.
(c) Limit on Amount of Loan. The dollar amount of a
loan to any Participant, when added to any other loans granted
under this Section, shall not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of-
(a) the highest outstanding balance of loans
from the Plan during the one-year period
-40-
ending on the day before the date on
which such loan was made, over
(b) the outstanding balance of loans from
the Plan on the date on which such loan
was made; or
(ii) one-half of the present value of the
nonforfeitable accrued benefit of the employee under
the Plan.
The Plan Administrator, pursuant to nondiscriminatory
uniform rules of general application, may impose a minimum loan
amount requirement and may limit the maximum number of loans
which may be outstanding under the Plan.
(d) Term and Interest Rate. The term of any loan
granted under this Section shall not exceed four years.
Notwithstanding the previous sentence, in the case of a loan used
to acquire a dwelling unit which within a reasonable time is to
be used as a principal residence of the Participant the term of
such loan shall not exceed fifteen years. The unpaid balance of
any loan shall bear a fixed rate of interest equal to one percent
plus the annual prime rate announced by the Trustee (or any other
financial institution selected by the Plan Administrator) for its
nonfiduciary business customers as in effect at the beginning of
the month in which the loan is granted or such other reasonable
rate of interest established by the Plan Administrator. The loan
must be repaid in substantially level payments (with payments not
less frequently than quarterly) over the term of the loan.
(e) Promissory Note Required. Each such loan shall be
evidenced by a promissory note or notes made, executed and
delivered by the applying Participant to the Plan Administrator,
and each such note or notes shall be in such form and contain
such terms and conditions as the Plan Administrator shall
require.
(f) Security. Each loan to a Participant under this
Section must be adequately secured by the Participant's
nonforfeitable interest in the Plan. No more than 50% of the
Participant's nonforfeitable interest in the Plan may be
considered by the Plan as security for the outstanding balance of
all Plan loans made to that Participant.
On default, the balance of the amount owed by a
Participant may be charged by the Plan Administrator or Trustee
against such Participant's interest in the Plan. However,
foreclosure on a note and attachment of security shall not occur
until a distribution under the Plan occurs. If any balance
-41-
remains owing on the loan after the balance of the amount owed
has been charged against such interest in the Plan, such
Participant shall remain liable for such remaining balance and
the Plan Administrator or Trustee may take any action it deems
advisable to collect such remaining balance from such
Participant.
(g) Directed Investment. Any application for a loan
under this Section shall constitute a direction by the
Participant that his or her nonforfeitable interest in the Plan
be invested in such loan. If a loan is made under this Section,
the value of a Participant's account shall be adjusted as of each
valuation date to reflect any principal and interest credited to
such account as a result of the repayment of the loan by the
Participant hereunder.
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ARTICLE 6
ACCOUNT VALUATIONS AND ALLOCATION OF NET EARNINGS
-------------------------------------------------
Section 6.1. Valuation Dates. The Plan Administrator
shall direct the Trustee to determine the value of the Trust on
each Valuation Date. For purposes of the Plan, "Valuation Date"
means each of the following dates:
(a) the last Business Day of each Plan Year; and
(b) any other Business Day of the Plan Year as
determined by the Plan Administrator pursuant to a
nondiscriminatory policy.
Section 6.2. Method of Valuation of Trust Assets. As
of each Valuation Date, the Trustee shall value the assets held
in the Trust at their fair market value on such date. In
determining the fair market value of assets other than securities
for which trading or bid prices can be obtained or cash or cash
equivalents, the Trustee may appraise such assets themselves, or
in its discretion employ one or more appraisers for that purpose
and rely on the values established by such appraiser or
appraisers. All items of income and expenses shall be taken into
account either on a cash receipts and disbursements basis or on
an accrual basis, as determined by the Trustee in a consistent
manner.
Section 6.3. Allocation of Net Earnings. As of each
Valuation Date, the Plan Administrator shall (or direct the
Trustee to) allocate the net earnings or losses of the Trust for
the period ending with respect to such Valuation Date to each
Participant's account or accounts in the ratio that each such
account balance bears to all Participants' account balances as of
the immediately preceding Valuation Date adjusted for charges
against and credits to each such account for all payments,
distributions and contributions that occurred during such period.
Notwithstanding the foregoing, in making the adjustments required
by this Section the amount of any net earnings or losses with
respect to each Separate Fund, as hereafter defined, shall be
allocated solely with respect to such Separate Fund.
Section 6.4. Notification to Participants. The Plan
Administrator shall, upon request, make available to each
Participant a notice of the amount of his or her interest in the
Trust as of the close of each Plan Year. Such interest shall
consist of an amount equal to the total amounts credited to his
or her accounts as a result of the adjustments under Section 6.3.
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Section 6.5. Directed Investment Accounts.
Notwithstanding any other provisions of the Plan or the Trust, a
Participant or beneficiary may direct in writing that the funds
allocable to his or her accounts be invested by the Trustee in
one or more investment funds established by the Plan
Administrator (referred to collectively as the Separate Funds and
individually as a Separate Fund). By way of illustration but not
limitation, such Separate Funds may include mutual funds or the
following:
(i) One or more Separate Funds which may be
invested primarily in stocks, other securities or other
property including bonds, notes and debentures, the
income from which may be fixed or limited. Such
Separate Funds may be established to provide a variety
of investment objectives and varying degrees of risk
such as (a) capital preservation and generation of
income, (b) capital appreciation and (c) liquidity with
a high degree of assurance of repayment.
(ii) If it is permitted, in the sole discretion of
the Plan Administrator, a "Mattel Stock Fund" shall be
established, which shall be primarily invested by the
Trustee in the common stock of Mattel, Inc.,
hereinafter called "Mattel Stock". The Mattel Stock
Fund may be unitized for valuation purposes, and a
portion of its assets may be held in cash or other
short-term investments.
Notwithstanding the preceding, and without the
adoption of any Plan amendment, the Plan Administrator may
discontinue any of the funds established under this Section and
it may establish such substitute funds or additional funds as it
may determine in its sole discretion.
The Plan Administrator shall establish uniform
rules of general applicability designating the amounts of each
Participant's accounts with respect to any Plan Year which may be
invested in such Separate Funds. The Plan Administrator shall
make available to each Participant an election form or electronic
or telephonic procedures to designate the percentage or the
amount allocable to his or her accounts which shall be invested
in each Separate Fund. In the discretion of the Plan
Administrator, investment elections hereunder may be made at such
time or times during a Plan Year as determined by the Plan
Administrator.
Any written election forms or other written
designations shall be filed with the Plan Administrator not later
than a date fixed by the Plan Administrator in order for such
-44-
form or designation to be effective by a specified date. An
election form or other designation filed by a Participant in
connection with the Plan shall be deemed to be filed when it is
actually received by the Plan Administrator at the address
specified on such form or any accompanying instructions.
Procedures for electronic or telephonic elections under this
Section may be established, changed or modified by the Plan
Administrator in its discretion and shall be communicated to
Participants. Electronic or telephonic elections shall be
effective as provided in the procedures governing such elections.
Any Participant who does not provide an election
hereunder may be deemed to have elected the same investment
directions as last previously specified. If no effective
election has been made by a Participant, his or her accounts
shall be invested by the Trustee in such fund or funds designated
by the Plan Administrator.
To the extent investment of assets are directed
herein by the Participants, the fiduciary responsibility of the
Trustee shall be limited to the extent provided in Section 404(c)
of ERISA.
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ARTICLE 7
THE TRUST
---------
Section 7.1. Continuation of the Trust. The Company
shall continue a Trust under the Plan. The Trust was established
pursuant to a separate Trust Agreement executed by the Company
and the Trustee. The Trust shall consist of such sums of money
and such other property acceptable to the Trustee as shall be
paid or delivered to the Trustee, together with the earnings and
profits thereon. All such money and other property, all
investments made therewith and the proceeds thereof, and all
earnings and profits thereon, less the payments and distributions
therefrom, are part of the Trust to be administered in accordance
with the Trust and the terms of the Plan.
Section 7.2. Disbursements Limited to Trust Assets.
Nothing contained in this Plan shall be construed as obligating
the Company or the Trustee to make any payment or disbursements
except from funds or property held under the Trust.
Section 7.3. Expenses of Administration and
Litigation. The reasonable costs, expenses, taxes and
liabilities incurred in connection with the administration of the
Plan (including, without limitation, Trustee compensation, legal
fees, and accounting and actuarial expenses) or in connection
with any litigation involving the Trust shall be paid from the
assets of the Trust, unless paid by the Company. No person who
is a disqualified person (as defined in Section 4975 of the Code)
and who receives full-time compensation from the Company, may
receive compensation from the Trust, although he or she may be
reimbursed for expenses properly and actually incurred in
connection with the administration of the Plan. The Plan
Administrator shall direct the Trustee in the payment of expenses
and liabilities pursuant to this Section.
Section 7.4. Pooled Investment Fund or Group Trust.
Part or all of the assets of the Trust, from time to time, may be
transferred to (a) any pooled investment fund of an insurance
company or (b) a common or collective trust fund or pooled
investment fund maintained by a bank or trust company which
contemplates the commingling for investment purposes of such
Trust assets with assets of other trusts. Such transfers shall
be made in a manner consistent with the provisions of Section
4975(d)(8) of the Code.
-46-
Section 7.5. Mattel Stock Fund.
(a) Voting of Shares in Mattel Stock Fund.
Participants with amounts invested in the Mattel Stock Fund may
direct the Trustee with respect to the voting of shares held in
such Funds in accordance with this Section.
The Company or the Trustee shall provide each
Participant who has any portion of his or her accounts invested
in the Mattel Stock Fund with the regular proxy materials or
other information relating to the voting of Mattel Stock normally
given to shareholders. Under rules administered by the Company
and set forth under the terms of the Trust Agreement, such
Participants may direct the Trustee as to the manner in which
shares of Mattel Stock held by the Trustee are to be voted.
Pursuant to such rules and on forms provided by the Company, each
Participant may submit a direction as to the voting of the number
of shares of Mattel Stock equal in value to his or her
proportionate interest in the Mattel Stock Fund. The Trustee
shall then vote such shares in accordance with the directions
received from Participants. The Trustee shall not vote shares of
Mattel Stock for which it has receive no direction from the
Participants.
(b) Tender Offers. If a tender offer (for which a
filing has been made with the SEC which purports to comply with
the requirements of Section 14(b) of the Securities Exchange Act
of 1934 and the corresponding SEC Rules) is made for Mattel
Stock, each Participant who has any portion of his or her
accounts invested in the Mattel Stock Fund may direct the Trustee
to tender the number of shares equal in value to his or her
proportionate interest in the Mattel Stock Fund. Directions to
the Trustee with respect to tender offers under this Section
shall be made in accordance with the rules administered by the
Company and set forth under the terms of the Trust Agreement. If
any Participant fails to direct the Trustee to tender shares
hereunder, the Trustee shall not tender such shares. Any cash or
securities received by the Trustee as a result of a tender offer
for shares of Mattel Stock shall be transferred to such Separate
Fund as the Participant may elect.
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ARTICLE 8
TOP-HEAVY PROVISIONS
--------------------
Section 8.1. Definitions. The following definitions
will apply for purposes of this Article:
(a) Top-Heavy Plan. The Plan shall be considered a
Top-Heavy Plan for a Plan Year if, on the Determination Date, the
Cumulative Account Balances of Key Employees exceed 60% of the
Cumulative Account Balances of all employees under the Plan or
under all plans included in an Aggregation Group if the Plan is
included in an Aggregation Group. The computation in the
preceding sentence shall be made in accordance with Section 416
of the Code and the regulations thereunder.
(b) Determination Date means the last day of the
preceding Plan Year or, in the case of the first Plan Year, the
last day of such first Plan Year.
(c) Key Employee means any employee of the Company
(including a beneficiary of such employee) who at any time during
the Plan Year, or any of the four preceding Plan Years, is a key
employee as defined in Section 416 of the Code and the
regulations thereunder. Former Key Employees are not Key
Employees and are excluded entirely in determining whether the
Plan is a Top-Heavy Plan.
(d) Cumulative Account Balances, with respect to any
Participant means, the value, determined as of the Top-Heavy
Valuation Date, of the Participant's accounts under the Plan,
plus the sum of the present value of the cumulative accrued
benefits for such Participant under all defined benefit plans
included in an Aggregation Group and the aggregate of the
accounts of such Participant under all defined contribution plans
included in an Aggregation Group. For purposes of the preceding
sentence, Cumulative Account Balances shall not include the value
of the accounts or the present value of the cumulative accrued
benefits of any Participant who has not performed services for
the Company at any time during the 5-year period ending on the
Determination Date. Except to the extent provided in the
regulations, any rollover contribution (or similar transfer)
initiated by the Participant, and made after December 31, 1983,
to a plan shall not be taken into account with respect to the
Plan for purposes of determining whether the Plan is a Top-Heavy
Plan.
(e) Aggregation Group shall include (1) each plan
(including terminated plans) of the Company in which a Key
-48-
Employee is a participant during the Plan Year, or any of the
four preceding Plan Years, and (2) each other plan (including
terminated plans) of the Company which enables any plan in which
a Key Employee participates to meet the requirements of Sections
401(a)(4) or 410 of the Code. Any other plan of the Company may
be included in an Aggregation Group if such Aggregation Group
would continue to meet the requirements of Sections 401(a)(4) and
410 of the Code with such plan being taken into account. In
computing the value of accounts and benefits under this
Subsection, any distribution made with respect to a Participant
from the Plan during the 5-year period ending on the
Determination Date and any distribution under a terminated plan
which, if it had not been terminated, would have been required to
be included in an Aggregation Group shall be added to the
Participant's Cumulative Account Balances.
(f) Top-Heavy Valuation Date means, with respect to
each Plan Year, the last Valuation Date of such Plan Year.
(g) Top-Heavy Compensation has the same meaning as
defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Company pursuant to a salary reduction
agreement which are excludable from the Participant's gross
income under Sections 125, 402(a)(8), 402(h) or 403(b) of the
Code.
(h) Qualified Top-Heavy Participant, for any Plan Year
in which the Plan is a Top-Heavy Plan, means any Participant who
has not separated from service at the end of such Plan Year,
regardless of the Participant's Hours of Service or Compensation
for such year.
(i) Super Top-Heavy Plan. The Plan shall be
considered a Super Top-Heavy Plan if the Plan would meet the
definition of a Top-Heavy Plan if 90% were substituted for 60% in
each place it appears in Subsection (a).
Section 8.2. Top-Heavy Rules.
(a) Application of Top-Heavy Rules. If the Plan is a
Top-Heavy Plan with respect to a Plan Year, the provisions of
this Section shall become applicable for such Plan Year,
notwithstanding any other provision of the Plan to the contrary.
(b) Minimum Company Contribution. In any Plan Year in
which the Plan is a Top-Heavy Plan, there shall be allocated to
each Qualified Top-Heavy Participant, before any other
allocations are made under the Plan, the lesser of 3% of the
Participant's Top-Heavy Compensation or the percentage at which
contributions and forfeitures are allocated under the Plan for
-49-
the Plan year for the Key Employee for whom such percentage is
the highest for the Plan Year. The latter percentage shall be
determined by dividing the contributions (including Salary
Reduction Contributions) and forfeitures allocated to such Key
Employee by his or her Top Heavy Compensation for the Plan Year.
For purposes of this Section, Salary Reduction Contributions,
matching contributions required to pass the actual deferral
percentage test of Section 401(k)(3) of the Code, and matching
contributions required to pass the actual contribution percentage
test of Section 401(m) of the Code, of a non-Key Employee may not
be considered in meeting this minimum contribution requirement.
If in any Plan Year the Plan is a Top-Heavy Plan, and a non-Key
Employee who is eligible to be a participant hereunder also
participates in a defined benefit plan of the Company, the
minimum contribution shall be provided under the defined benefit
plan. If in any Plan Year this Plan is a Top-Heavy Plan, and a
non-Key Employee who is eligible to be a participant hereunder
also participates in a defined benefit plan of the Company, the
minimum contribution shall be provided under the Plan.
(c) Limitation on Contributions and Benefit. If the
Plan is a Top-Heavy Plan in any Plan Year, 1.00 shall be
substituted for 1.25 in calculating the Defined Benefit Fraction
and the Defined Contribution Fraction under Section 3.10.
Notwithstanding the preceding sentence, in any Plan Year in which
the Plan is a Top-Heavy Plan but not a Super Top-Heavy Plan, 1.00
shall not be substituted for 1.25 if the Company makes an
additional minimum Company contribution under Subsection (b) by
substituting 4% for 3%.
(d) Special Rule for Non-Key Employees in Two Plans.
If (1) the Plan is a Top-Heavy Plan in any Plan Year, and (2) a
non-Key Employee participates both in the Plan and in a defined
benefit plan which is top-heavy and which is included in an
Aggregation Group, 5% shall be substituted for 3% in
Subsection (b) and 7-1/2% shall be substituted for 4% in
Subsection (c).
-50-
ARTICLE 9
ADMINISTRATION OF PLAN
----------------------
Section 9.1. Company as Plan Administrator. The
Company is the Plan Administrator and shall be a "named
fiduciary" under Section 402(a)(1) of ERISA.
Section 9.2. Responsibility for Administration of the
Plan. The Plan Administrator shall have the authority to control
and manage the operation and administration of the Plan for the
exclusive benefit of the Participants and their beneficiaries as
required under ERISA and the Code, subject to the specific terms
of the Plan.
The Plan Administrator shall have the responsibility to
file and distribute reports and returns to government agencies
and Participants and beneficiaries as required of Plan
Administrators under ERISA and the Code.
The Plan Administrator shall have the authority to
determine, in accordance with the terms of the Plan, any
questions as to the eligibility of an employee to become a
Participant, the amount of contribution allocated to a
Participant or the determination of a Participant's interest in
the Trust at any time.
Section 9.3. Expenses. The Company or the Trust, as
determined in accordance with Section 7.3, may pay the expenses
of the Plan Administrator incurred in connection with the
administration of the Plan.
Section 9.4. Liability and Indemnification. Except
for their own negligence, willful misconduct, or breach of
fiduciary duty, the Plan Administrator and any individual to whom
responsibilities have been delegated under Section 9.6 shall not
be liable to anyone for any act or omission in the course of the
administration of the Plan or management of the Trust. In any
case, to the extent permitted by law, the Company shall indemnify
any employee of the Company to whom responsibilities have been
delegated under Section 9.6 against any liability (not reimbursed
by insurance) incurred in the course of the administration of the
Plan or the management of Trust assets, except liability arising
from their own negligence, willful misconduct or breach of
fiduciary duty.
Section 9.5. Agents. The Plan Administrator may
employ such agents, including counsel, as it may deem advisable
for the administration of the Plan. Such agents need not be
-51-
Participants under the Plan.
Section 9.6. Delegation of Authority.
(a) In General. The Company, by a written resolution
approved by its Board of Directors, may delegate responsibilities
under the Plan among employees, officers, offices or committees
to carry out such responsibilities in accordance with the terms
of the Plan or the Trust Agreement.
(b) Liability. If the Plan Administrator delegates
responsibilities to certain persons under subsection (a), such
persons shall not be liable for any act or omission of other
persons to whom such responsibilities are delegated except as
provided in Section 405(c)(2) of ERISA.
Section 9.7. Defect or Omission. The Plan
Administrator shall refer any defect, omission or inconsistency
in the Plan to the Board of Directors of the Company for such
action as may be necessary to correct such defect, supply such
omission, or reconcile such inconsistency.
Section 9.8. Funding Policy. The Board of Directors
of the Company or a committee authorized by the Board shall
establish and review the funding policy of the Plan taking into
consideration the short-term need for liquidity in Trust assets
and the long-term goals for investment growth. The Board of
Directors or the authorized committee shall communicate the
funding policy and any changes of funding policy in writing to
the Plan Administrator and the Trustee.
Section 9.9. Records. The acts and decisions of the
Plan Administrator shall be duly recorded. The Plan
Administrator shall make available for examination by any
Participant during the business hours of the Company a copy of
the Plan and those records which demonstrate the determination of
amounts credited to the account of and held by the Plan
Administrator for the benefit of such Participant.
Section 9.10. Claims Procedure.
(a) Filing a Claim for Benefits. If an employee
disputes a decision of the Plan Administrator with respect to
such employee's eligibility to become a Participant, if a
Participant disputes the amount of contribution allocated to such
Participant or the determination of his or her interest in the
Trust, or if an employee, a Participant or his or her beneficiary
does not receive benefits to which he or she believes he or she
is entitled, such person (the "Claimant") may file a claim in
writing with the Plan Administrator.
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(b) Notification of Decision of Plan Administrator.
If the claim is totally or partially denied, the Plan
Administrator shall notify the Claimant in writing within 90 days
after the claim has been received (unless special circumstances
require an extension of up to 90 additional days). The written
notice shall state the specific reason for denial of the claim
and a specific reference to the Plan provisions on which the
denial is based. It shall describe any additional material the
Claimant may need to submit to the Plan Administrator to have the
claim approved, and shall give the reasons such material is
necessary. in addition, the notice shall explain the claim review
procedure.
(c) Claim Review Procedure. If the Claimant receives
a notice that the claim has been denied, the Claimant, or his or
her authorized representative, may appeal to the Plan
Administrator for a review of the claim. The Claimant must
submit a request for review in writing to the Plan Administrator
within 60 days after the date the written notice of denial of the
claim is received. The Claimant, or his or her representative,
may then review Plan documents which pertain to the claim and may
submit issues and comments in writing to the Plan Administrator.
The Plan Administrator shall then deliver to the Claimant a
written determination of the claim, including specific reasons
for the decision, no later than 60 days after the date the Plan
Administrator received the request for review (unless special
circumstances require an extension of up to 60 additional days).
The decision of the Plan Administrator shall be final and
conclusive.
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ARTICLE 10
RIGHT TO ALTER, AMEND OR TERMINATE
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Section 10.1. Plan Amendments.
(a) Right to Alter or Amend. Subject to Subsection
(b), the Board of Directors of the Company reserves the right to
amend, alter, modify or suspend, in whole or in part, any
provision or provisions of the Plan and the Trust at any time,
retroactively or otherwise. The authority under this Section may
be delegated to a committee or an officer pursuant to a
resolution adopted by the Board of Directors.
(b) Limitations on Power of Amendment. No such
amendment, alteration, modification or suspension shall be
effective if it:
(i) increases the duties or responsibilities of
the Trustee without its written consent;
(ii) vests in the Company any right, title or
interest in or to any property or funds held under the
Trust;
(iii) diverts any part of the Trust for purposes
other than for the exclusive benefit of Participants or
their beneficiaries;
(iv) reduces the accrued benefit of any
Participant or decreases a Participant's nonforfeitable
interest; or
(v) eliminates or reduces a "protected benefit"
(within the meaning of Section 411(d)(6) of the Code
and the regulations thereunder) with respect to
benefits attributable to service rendered before the
later of the adoption date or effective date of such
amendment, alteration, modification or suspension,
except as permitted by Section 411(d)(6) of the Code
and the regulations thereunder.
(c) Form of Amendment. Any such amendment,
alteration, modification or suspension shall be set forth in a
written instrument executed by an authorized officer of the
Company.
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Section 10.2. Plan Termination.
(a) Right to Terminate. The Board of Directors of the
Company reserves the right to revoke or terminate the Plan and
the Trust at any time with respect to its employees, in whole or
in part, or to reduce, suspend or discontinue its contributions
under the Plan. Such revocation, termination, reduction,
suspension or discontinuance shall be effective upon the date set
forth in the resolution of the Board of Directors of the Company
authorizing such action.
(b) Vesting on Termination or Partial Termination. In
the event of termination or partial termination of the Plan, the
account balance of each affected Participant shall be
nonforfeitable.
(c) Disposition of Assets on Termination. Upon
termination (but not partial termination) of the Plan, the
Trustees shall dispose of the assets of the Trust by (1) valuing
such assets, (2) allocating such assets to the accounts of each
Participant, and (3) distributing to such Participants their
nonforfeitable interest as soon as practicable following the
termination in accordance with Article 5.
Section 10.3. Merger or Consolidation. This Plan
shall not be merged or consolidated with, nor shall its assets or
liabilities be transferred to, any other plan unless each
Participant would receive a benefit immediately after the merger,
consolidation or transfer (if the Plan then terminated) which is
equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation
or transfer (if the Plan then terminated).
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ARTICLE 11
MISCELLANEOUS PROVISIONS
------------------------
Section 11.1. New York and Applicable Federal Law
Govern. The Plan shall be construed and all Plan provisions
shall be administered according to the laws of the State of New
York and applicable federal law.
Section 11.2. Headings for Convenience. The headings
and subheadings of the Plan are inserted for convenience and
reference only, and are not to be used in construing the Plan or
any of its individual provisions.
Section 11.3. Rights of All Interested Parties
Determined by the Terms of the Plan. The Plan and Trust are
purely voluntary on the part of the Company. The Trust shall be
the sole source of benefits and in no event shall the Company be
liable or otherwise responsible for such benefits. The Plan
shall be binding upon the Company and all Participants under the
Plan, and upon their respective heirs, executors, administrators,
successors and assigns, and upon all persons having or claiming
to have any interest of any kind or nature in or under the Plan
or the Trust.
Section 11.4. Spendthrift Clause. Except as provided
in Sections 11.5 and 5.10, and otherwise required by law, none of
the rights, benefits, payments or proceeds arising out of or by
virtue of the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge.
Section 11.5. Qualified Domestic Relations Order.
Section 11.4 shall not apply to a Qualified Domestic Relations
Order. Qualified Domestic Relations Orders shall have the same
meaning as defined in Section 414(p) of the Code.
The Plan Administrator shall establish a written
procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified
orders. Upon receipt of a domestic relations order made pursuant
to state law the Plan Administrator shall:
(i) promptly notify the Participant and any other
Alternate Payee, as defined by Section 414(p)(8) of the
Code, of the receipt of such order and the Plan's
procedures for determining its qualified status;
(ii) determine within a reasonable period after
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its receipt whether such order is a Qualified Domestic
Relations Order, and notify the Participant and any
other Alternate Payee of such determination; and
(iii) segregate in a separate account in the Plan
the amounts which would have been payable to the
Alternate Payee designated in such order during such
period of determination specified in paragraph (2), if
the order had been determined to be a Qualified
Domestic Relations Order.
If the Plan Administrator determines that the order is
a Qualified Domestic Relations Order, then it shall direct the
Trustees to comply with the terms of the order and shall release
the amounts held in the segregated account to the Alternate Payee
designated in such order.
To the extent provided under a Qualified Domestic
Relations Order, a former spouse of a Participant shall be
treated as the spouse or surviving spouse for all purposes under
the Plan.
Section 11.6. Notice to Employees. Notice of the
existence and the provisions of the Plan and amendments thereto
shall be communicated by the Plan Administrator to all
individuals who are or who become Participants.
Section 11.7. No Employment Rights Created. The
creation and maintenance of the Plan shall not confer on any
employee any right to continued employment, and all employees
shall remain subject to discharge to the same extent as if the
Plan had never been established.
Section 11.8. Diversion from Employees Prohibited.
Except as otherwise permitted by law, no part of the corpus or
income of any trust fund maintained pursuant to the Plan or of
any funds contributed to any such trust fund shall be used for,
or diverted to purposes other than the exclusive benefit of
Participants or their beneficiaries. In the event the Company
shall make an excessive contribution under a mistake of fact
pursuant to Section 403(c)(2)(A) of ERISA, the Company may demand
repayment of such excess contribution at any time within one year
following the time of payment and the Trustee shall return such
amount to the Company within the one year period. Earnings of
the Plan attributable to the excess contributions may not be
returned to the Company but any losses attributable thereto must
reduce the amount returned. All contributions made by the
Company are conditioned on the deductibility of such amount under
Section 404 of the Code, and shall be returned to the Company to
the extent of any disallowance of a deduction within one year
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after the disallowance.
Section 11.9. Right to Judicial Accounting. Nothing
contained in the Plan shall be construed as depriving the Trustee
of the right to have a judicial settlement of its accounts. Upon
any proceeding by the Trustee for such judicial settlement or for
instructions, the only necessary party thereto in addition to the
Trustee shall be the Company. None of the Participants or other
beneficiaries of the Plan shall have any right to compel an
accounting, judicial or otherwise, by the Trustee, and all such
parties shall be bound with respect to all accounts submitted by
the Trustee to the Company as provided by the Plan and Trust.
Section 11.10. Transfer of Funds to Another Plan. If
(1) a Participant under the Plan becomes a participant under any
other plan qualified under Section 401(a) of the Code, (2) the
trust under such other plan is exempt from tax under Section
501(a) of the Code, and (3) such other plan provides that amounts
may be transferred to it from other qualified plans in which the
employee has been eligible to participate, then such Participant
may elect, subject to approval by the Plan Administrator, to
transfer such amount from the Plan to such other plan to be held
in trust and invested in accordance with the terms and conditions
of that plan. In the case of a transfer to another plan made
under this Section, the entire amount available for transfer
shall be transferred as soon as administratively feasible.
Section 11.11. Forfeiture on Account of Inability to
Locate Participant or Beneficiary. Notwithstanding any other
provision of the Plan, if a benefit becomes payable to a
Participant or to his or her beneficiary and if the Company,
after all reasonable efforts, is unable to locate such
Participant or beneficiary within one year of the date such
benefit became payable, the benefit payable to the Participant or
beneficiary shall be forfeited.
If a benefit has been forfeited due to the Company's
inability to locate a Participant or beneficiary, and such
Participant or his or her beneficiary subsequently makes a claim
for such benefit, such benefit shall then be reinstated. Any
reinstatement of forfeited amounts under this Section shall first
be made from forfeitures, if any, occurring during the Plan Year
in which such reinstatement occurs, and then, if necessary, by an
additional contribution by the Company.
Section 11.12. Incapacity of Person Entitled to
Payment. If any person entitled to receive any benefits under
the Plan ("distributee") is, in the judgment of the Plan
Administrator, legally, physically, or mentally incapable of
personally caring for his or her affairs, unless prior claim has
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been made by a duly qualified guardian or other legal
representative, the Plan Administrator may instruct the Trustee
to make distribution to such other person, persons, or
institutions as, in the judgment of the Plan Administrator,
maintains, has custody of, or is otherwise responsible for such
distributee. Any such payment shall be a payment for such
distributee's account and shall be a complete discharge of any
liability of the Plan therefor.
Section 11.13. Adoption of Plan by Organization Under
Common Control. With the consent of the Board of Directors of
the Company the Plan may be adopted by any Organization Under
Common Control with the Company for the benefit of all or a
limited group of such organization's employees as specified in an
agreement to adopt the Plan executed by such organization and the
Board of Directors of the Company. If an Organization Under
Common Control adopts the Plan, the term "Company" shall also
refer to such organization.
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ARTICLE 12
DIRECT ROLLOVERS
----------------
Section 12.1. Direct Rollovers. This Article applies
to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this
Article, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover.
Section 12.2. Definitions.
(a) Eligible Rollover Distribution. An eligible
rollover distribution is an 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 on 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; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(b) Eligible Retirement Plan. An eligible retirement
plan is an individual retirement account described in section
408(a) of the Code, and 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.
(c) Distributee. A distributee includes a Participant
or former Participant. In addition, the Participant's or former
Participant's surviving spouse and the Participant's or former
Participant's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
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(d) Direct Rollover. A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
IN WITNESS WHEREOF, the Company has caused the Plan to
be executed by its duly authorized officer this 27th day of
September, 1994.
FISHER PRICE, INC.
By: /s/ Karen L. Kemp
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