THE MACERICH PROPERTY MANAGEMENT COMPANY
PROFIT SHARING PLAN
(Amended and Restated Effective as of February 1, 1999)
ARTICLE I
TITLE AND DEFINITIONS
Section 1.1 - Title 2
Section 1.2 - Definitions 2
ARTICLE II
PARTICIPATION
Section 2.1 - Eligibility Requirements 18
Section 2.2 - Participation 18
Section 2.3 - Reemployment 19
Section 2.4 - Designation of Beneficiary 19
Section 2.5 - Designation of Investments 21
Section 2.6 - Special Rules for Employees of Acquired
Properties 21
ARTICLE III
CONTRIBUTIONS
Section 3.1 - Company Contributions 23
Section 3.2 - Compensation Deferrals 23
Section 3.3 - Employer Profit Sharing Contributions 25
Section 3.4 - Rollover Contributions 26
Section 3.5 - Section 402(g) Limit on Compensation
Deferrals 26
Section 3.6 - Section 401(k) Limitations on Compensation
Deferrals 27
Section 3.7 - Investment Funds 31
Section 3.8 - Valuation of Accounts 34
Section 3.9 - Forfeitures 35
ARTICLE IV
LIMITATION ON ANNUAL ADDITIONS
Section 4.1 - Limitation on Annual Additions. 36
ARTICLE V
VESTING
Section 5.1 - Fully Vested Accounts 37
Section 5.2 - Employer Profit Sharing Contributions
Accounts 37
ARTICLE VI
DISTRIBUTIONS
Section 6.1 - Distribution of Benefits 41
Section 6.2 - Normal Retirement Age Withdrawal 44
Section 6.3 - Hardship Withdrawals 45
Section 6.4 - Qualified Domestic Relations Orders 48
Section 6.5 - Inability to Locate Participant 49
Section 6.6 - Limitations on Distributions 50
Section 6.7 - Direct Rollovers 51
ARTICLE VII
THE COMMITTEE
Section 7.1 - Members 54
Section 7.2 - Committee Action 54
Section 7.3 - Rights and Duties 55
Section 7.4 - Procedure for Establishing Funding Policy
-- Transmittal of Information 59
Section 7.5 - Other Information 60
Section 7.6 - Compensation, Bonding, Expenses and
Indemnity 60
Section 7.7 - Manner of Administering 61
Section 7.8 - Duty of Care 62
Section 7.9 - Committee Report 62
Section 7.10 - Expenses of Plan and Trust 62
ARTICLE VIII
AMENDMENT AND TERMINATION
Section 8.1 - Amendments 63
Section 8.2 - Discontinuance of Plan 64
Section 8.3 - Failure to Contribute 65
Section 8.4 - Plan Merger or Consolidation; Transfer of
Plan Assets 65
ARTICLE IX
MISCELLANEOUS
Section 9.1 - Contributions Not Recoverable 66
Section 9.2 - Limitation on Participant's Rights 67
Section 9.3 - Receipt or Release 67
Section 9.4 - Alienation 67
Section 9.5 - Persons Under Incapacity 69
Section 9.6 - Governing Law 69
Section 9.7 - Headings, etc. Not Part of Plan 69
Section 9.8 - Masculine Gender Includes Feminine 69
Section 9.9 - Instruments in Counterparts 70
Section 9.10 - Successors and Assigns; Reorganization
of Company 70
Section 9.11 - Loans to Participants 70
Section 9.12 - Top-Heavy Plan Requirements 70
Section 9.13 - Rule 16b-3 Provisions 70
THE MACERICH PROPERTY MANAGEMENT
COMPANY PROFIT SHARING PLAN
(Amended and Restated Effective as of February 1, 1999)
The Macerich Property Management Company, a
California corporation (hereinafter sometimes called the
"Company"), maintains The Macerich Property Management
Company Profit Sharing Plan (hereinafter sometimes called
the "Plan"). The Plan was first established by the Macerich
Management Company effective January 1, 1984 as the
"Macerich Management Company Profit Sharing Plan" and was
subsequently assumed by the Company and renamed "The
Macerich Property Management Company Profit Sharing Plan."
The Plan is hereby amended and restated in its entirety,
effective as of the first day of February, 1999.
The Company desires to encourage loyalty,
efficiency, continuity of service and productivity of its
employees. In order to accomplish these purposes, the
Company has established the Plan to provide incentives and
retirement income security for its Eligible Employees and
their Beneficiaries. The Trust created pursuant to the Plan
(incorporated herein by this reference) and its assets shall
not be used for, or diverted to, purposes other than the
exclusive benefit of Participants or their beneficiaries, as
prescribed in Section 401(a) of the Code.
It is also intended that the Plan constitute an
accident and health plan so that amounts distributed on
account of disability are excluded from income under Section
105(c) of the Code to the extent provided by law.
ARTICLE I
TITLE AND DEFINITIONS
Section 1.1 - Title.
The Plan is intended to be a profit sharing plan
and shall be known as The Macerich Property Management
Company Profit Sharing Plan. Contributions may be made to
the Plan without regard to the current or accumulated
profits of the Company. It is also intended that the Plan
constitute a qualified cash or deferred arrangement under
Section 401(k) of the Code.
Section 1.2 - Definitions.
Whenever the following terms are used in the Plan,
with the first letter capitalized, they shall have the
meanings specified below.
"Account" or "Accounts" shall mean the accounts
maintained by the Committee for each Participant that are
credited with the amounts provided for herein. The
following "Accounts" are maintained under the Plan:
Compensation Deferral Accounts, and Employer Profit Sharing
Contributions Accounts.
"Anniversary Date" shall mean the last day of each
Plan Year.
"Approved Absence" shall mean a leave of absence
(without pay) granted to an Employee under the Company's
established leave policy.
"Beneficiary" or "Beneficiaries" shall mean the
person or persons, including a trustee, personal
representative or other fiduciary, last designated in
writing by a Participant in accordance with the provisions
of Section 2.4 to receive the benefits specified hereunder
in the event of the Participant's death. If there is no
valid Beneficiary designation in effect that complies with
the provisions of Section 2.4, or if there is no surviving
designated Beneficiary, then the Participant's surviving
spouse shall be the Beneficiary. If there is no surviving
spouse to receive any benefits payable in accordance with
the preceding sentence, then the Participant's surviving
children (including any adopted children) shall be the
Beneficiaries of the Participant's benefits in equal shares.
If there is no surviving child to receive any benefits
payable in accordance with the preceding sentence, the duly
appointed and currently acting personal representative of
the Participant's estate (which shall include either the
Participant's probate estate or living trust) shall be the
Beneficiary. In any case where there is no such personal
representative of the Participant's estate duly appointed
and acting in that capacity within 90 days after the
Participant's death (or such extended period as the
Committee determines is reasonably necessary to allow such
personal representative to be appointed, but not to exceed
180 days after the Participant's death), then Beneficiary or
Beneficiaries shall mean the person or persons who can
verify by affidavit or court order to the satisfaction of
the Committee that they are legally entitled to receive the
benefits specified hereunder.
In the event any amount is payable under the Plan
to a minor, payment shall not be made to the minor, but
instead shall be paid (i) to that person's then living
parent(s) to act as custodian, (ii) if that person's parents
are then divorced, and one parent is the sole custodial
parent, to such custodial parent, or (iii) if no parent of
that person is then living, to a custodian selected by the
Committee to hold the funds for the minor under the Uniform
Transfers or Gifts to Minors Act in effect in the
jurisdiction in which the minor resides. If no parent is
living and the Committee decides not to select another
custodian to hold the funds for the minor, then payment
shall be made to the duly appointed and currently acting
guardian of the estate for the minor or, if no guardian of
the estate for the minor is duly appointed and currently
acting within 60 days after the date the amount becomes
payable, payment shall be deposited with the court having
jurisdiction over the estate of the minor.
"Board of Directors" and "Board" shall mean the
Board of Directors of the Macerich Property Management
Company.
"Break in Employment" shall mean an Employee's
termination of Employment as a result of resignation,
discharge, retirement, Disability, or death. In determining
whether and when a Break in Employment has occurred, the
following rules shall apply:
(a) A Break in Employment shall not occur
during an Approved Absence, or during a vacation period
or military leave.
(b) Failure to return to work after the
expiration of any leave of absence shall be considered
a resignation effective as of the expiration of such
leave of absence.
(d) Failure of any Employee on military
leave to make application for reemployment within the
period of time during which he is entitled to retention
of reemployment rights under applicable laws of the
United States shall be considered a resignation
effective as of the expiration date of such
reemployment rights.
"Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
"Committee" shall mean the Committee appointed
pursuant to the provisions of the Plan.
"Company" shall mean the Macerich Property
Management Company, a California corporation, any
predecessor corporation, or any successor corporation
resulting from merger, consolidation, or transfer of assets
substantially as a whole which shall expressly agree in
writing to continue the Plan and/or, where the context so
warrants, any Participating Affiliate.
"Company Contributions" shall mean an amount
contributed to the Plan by the Company or by a Participating
Affiliate in accordance with Section 3.1.
"Compensation" shall mean all compensation paid by
the Company or a Participating Affiliate to the Eligible
Employee during the Plan Year and reportable on Form W-2,
including any amounts contributed to a plan qualifying under
Section 401(k) of the Code as salary reduction contributions
or to a cafeteria plan under Section 125 of the Code.
Compensation shall not include (i) any amounts paid to an
Eligible Employee prior to the date on which he became a
Participant pursuant to Section 2.1 or 2.3, as applicable,
(ii) any amount of moving or relocation expenses paid or
reimbursed by the Company or a Participating Affiliate,
(iii) contributions to a plan of deferred compensation which
are not includible in the Eligible Employee's gross income
for the taxable year in which contributed (except amounts
contributed to a plan qualifying under Section 401(k) of the
Code as salary reduction contributions or to a cafeteria
plan under Section 125 of the Code), or any distributions
from a plan of deferred compensation, (iv) amounts realized
from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by the Eligible Employee
either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture, (v) amounts realized
from the sale, exchange or other disposition of stock
acquired under an incentive stock option, (vi) forgiveness
of debt income, and (vii) life insurance premiums paid by
the Company. Notwithstanding the foregoing, for purposes of
allocating Company contributions or forfeitures for a Plan
Year in which a Participant begins or resumes participation
in the Plan, such Participant's Compensation shall be
determined without applying the limitation in clause (i) of
the preceding sentence, but such Participant's Compensation
for such Plan Year shall not include any amounts paid to him
prior to the date on which he became (or again qualified as)
an Employee.
Notwithstanding the foregoing, the maximum amount
of an Eligible Employee's Compensation which shall be taken
into account under the Plan for any Plan Year (the "Maximum
Compensation Limitation") shall be (i) $200,000 for Plan
Years beginning on or after January 1, 1989, and (ii)
$150,000 for Plan Years beginning on or after January 1,
1994, such limitation adjusted at the same time and in the
same manner as under Sections 401(a)(17) and 415(d) of the
Code. For any Plan Year of fewer than twelve months, the
Maximum Compensation Limitation shall be reduced to the
amount obtained by multiplying such limitation by a fraction
having a numerator equal to the number of months in the Plan
Year and a denominator equal to twelve.
"Compensation Deferral Account" shall mean the
Account maintained for each Participant that is credited
with Company payments to the Plan attributable to the
Participant's Compensation Deferrals that are credited in
accordance with Section 3.2 on behalf of each such Employee,
together with the allocations thereto as required by the
Plan.
"Compensation Deferrals" shall mean an amount
contributed to the Plan by the Company in lieu of being paid
to a Participant as salary or wages. Compensation Deferrals
shall be made under salary reduction arrangements between
each Participant and the Company with respect to salary or
wages not yet paid or otherwise available to the Participant
as of the date of the Participant's election under the
arrangement. Section 3.2 contains the provisions under
which Compensation Deferrals may be made.
"Disability" shall mean the total and permanent
incapacity, as determined by the Committee based upon
competent medical advice, of a Participant to render
substantial services to the Company by reason of mental or
physical disability.
"Effective Date" shall mean January 1, 1984, which
was the original effective date of the Plan. This amendment
to and restatement of the Plan is effective as of February
1, 1999 except as otherwise specified herein.
"Eligible Employee" shall mean any Employee of the
Company; except that there shall be excluded (i) all "leased
employees" (as such term is defined in Section 414(n) of the
Code), (ii) those Employees covered by a collective
bargaining agreement between the Company and any collective
bargaining representative if retirement benefits were the
subject of good faith bargaining between such representative
and the Company, unless the Employee is a member of a group
of employees to whom the Plan has been extended by such a
collective bargaining agreement, and (iii) Employees who are
nonresident aliens and receive no United States source
income.
For purposes of this definition of "Eligible
Employee," and notwithstanding any other provisions of the
Plan to the contrary, individuals who are not classified by
the Company, in its discretion, as employees under Section
3121(d) of the Code (including, but not limited to,
individuals classified by the Company as independent
contractors and non-employee consultants) and individuals
who are classified by the Company, in its discretion, as
employees of any entity other than the Company or a Related
Company (other than "leased employees" as defined in Section
414(n) of the Code or other individuals required to be
treated as employed by the Company or a Related Company
under Section 414(o) of the Code) do not meet the definition
of Eligible Employee and are ineligible for benefits under
the Plan, even if the classification by the Company is
determined to be erroneous, or is retroactively revised. In
the event the classification of an individual who is
excluded from the definition of Eligible Employee under the
preceding sentence is determined to be erroneous or is
retroactively revised, the individual shall nonetheless
continue to be excluded from the definition of Eligible
Employee and shall be ineligible for benefits for all
periods prior to the date the Company determines its
classification of the individual is erroneous or should be
revised. The foregoing sets forth a clarification of the
intention of the Company regarding participation in the Plan
for any Plan Year, including Plan Years prior to the
amendment of this definition of "Eligible Employee."
"Eligibility Computation Period" shall mean:
(a) The 12-consecutive month period
commencing with the first day that an Employee
completes an Hour of Service for the Company or a
Related Company;
(b) The first 12-consecutive month period
coinciding with the Plan Year which includes the first
anniversary of the first day that an Employee completes
an Hour of Service for the Company or a Related
Company; and
(c) Succeeding 12-consecutive month periods
coinciding with the Plan Year.
Notwithstanding the above, if an Employee completes more
than 500 Hours of Service during any such Eligibility
Computation Period and then fails to complete more than 500
Hours of Service during a subsequent Eligibility Computation
Period, then future Eligibility Computation Periods shall be
measured from the first day that the Employee completes an
Hour of Service following the Eligibility Computation Period
in which the Employee has been credited with not more than
500 Hours of Service. In addition, any reemployed
individual described in the preceding sentence who
terminates employment again shall measure Eligibility
Computation Periods from the date of subsequent reemployment
if no Hours of Service are performed during an Eligibility
Computation Period ending subsequent to the termination.
"Employee" shall mean every person who renders
services to the Company or a Related Company in the status
of an "employee" as the term is defined in Section 3121(b)
of the Code.
"Employer Profit Sharing Contributions" shall mean
an amount contributed to the Plan by the Company in
accordance with Section 3.3.
"Employer Profit Sharing Contributions Account"
shall mean the Account maintained for each Participant that
is credited in accordance with Section 3.3 on behalf of each
such Participant.
"Employment" shall mean that period of actual
service to the Company or a Related Company as an Employee
following an Employee's date of employment, or his most
recent date of reemployment, whichever is later. It shall
also include the following period or periods of absence from
actual service if the Employee was in the service of the
Company or a Related Company on the day prior to such a
period:
(a) Service in the Armed Forces of the
United States or the Public Health Service of the
United States as a result of which such Employee is
entitled to reemployment rights from the Company
pursuant to the provisions of Section 2021 et seq. of
Title 38 of the United States Code, provided that the
Employee returns to work within the time period
specified in such provisions.
(b) Leaves of absence granted (either before
or after the absence) by the Company in accordance with
nondiscriminatory policies for any purpose, including,
but not limited to, sickness or accident, or for the
convenience of the Company, and vacation periods and
temporary layoffs for lack of work.
"Entry Date" shall mean the first day of each of
first and seventh months in a Plan Year (January 1 and July 1).
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Fiduciary" shall mean all persons defined in
Section 3(21) of ERISA associated in any manner with the
control, management, operation, and administration of the
Plan or the assets of the Plan, and such term shall be
construed as including the term "Named Fiduciary" with
respect to those Fiduciaries named in the Plan or who are
identified as Fiduciaries pursuant to procedures specified
in the Plan.
"Highly Compensated Employee" shall mean:
(a) Any Employee who performs services for
the Company or any Related Company who (i) was a 5%
owner of the Company or any Related Company at any time
during the Plan Year or the preceding Plan Year; or
(ii) for the preceding Plan Year, received compensation
from the Company or any Related company in excess of
$80,000 (as adjusted pursuant to Section 415(d) of the
Code) and for the preceding Plan Year was a member of
the "top-paid group" for such year.
(b) Any Employee who separated from service
(or was deemed to have separated) prior to the current
Plan Year, who performs no services for the Company or
any Related Company during the current Plan Year, and
who met the description in (a) above for the year of
his separation or any year after he attained age 55.
(c) The top-paid group for a Plan Year shall
consist of the top 20% of Employees ranked on the basis
of compensation received during the year excluding
Employees described in Section 414(q)(5) of the Code
and Treasury Regulations thereunder. For purposes of
this definition of "Highly Compensated Employee",
"compensation" means compensation within the meaning of
Section 415(c)(3) of the Code, but including elective
or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity.
(d) This definition of "Highly Compensated
Employee" shall be effective for Plan Years beginning
on or after January 1, 1997, except that for purposes
of determining if an Employee was a Highly Compensated
Employee in 1997, this definition will be treated as
having been in effect in 1996.
"Hour of Service" shall mean an hour
(1) for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company or a
Related Company;
(2) for which the Employee is paid or entitled to
payment by the Company or a Related Company on account of a
period during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of
absence; or
(3) for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Company or a Related Company.
The following additional rules shall apply in
calculating Hours of Service:
(1) No more than 501 Hours of Service are
required to be credited to an Employee on account of any
single period during which the Employee performs no duties;
(2) An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a
period during which no duties are performed is not required
to be credited to the Employee if the payment is made or due
under a plan maintained solely for the purpose of complying
with applicable worker's compensation, unemployment
compensation, or disability insurance laws;
(3) Hours of Service are not required to be
credited for a payment which solely reimburses an Employee
for medical or medically related expenses incurred by the
Employee;
(4) A payment shall be deemed to be made by or
due from a Company or Related Company regardless of whether
such payment is made by or due from the Company or a Related
Company directly, or indirectly through, among others, a
trust fund, or insurer, to which the Company or a Related
Company contributes or pays premiums and regardless of
whether contributions made or due to the trust fund,
insurer, or other entity are for the benefit of particular
Employees or on behalf of a group of Employees in the
aggregate; and
(5) No more than one Hour of Service shall be
credited with respect to any hour of time.
The definition of "Hour of Service" set forth
herein shall also be construed in accordance with, and shall
include any additional periods of service, that may be
required by regulations promulgated by the United States
Department of Labor. The hour of service rules stated in
the Department of Labor Regulations Section 2530.200b-2(b)
and -2(c) are herein incorporated by reference.
"Investment Fund" shall mean one of the funds
established by the Committee for the investment of the
assets of the Plan pursuant to Section 3.7.
"Investment Manager" shall mean a Fiduciary
designated by the Committee under the Plan to whom has been
delegated the responsibility and authority to manage,
acquire or dispose of Plan assets (i) who (1) is registered
as an investment adviser under the Investment Advisers Act
of 1940; (2) is a bank, as defined in that Act; or (3) is an
insurance company qualified to perform investment advisory
services under the laws of more than one state; and (ii) who
has acknowledged in writing that he is a Fiduciary with
respect to the management, acquisition, and control of Plan
assets.
"Macerich Stock" shall mean the common stock of
The Macerich Company.
"Normal Retirement Age" shall mean a Participant's
65th birthday, or, if later, the fifth anniversary of the
date the Participant commences participation in the Plan.
"One-Year Break in Service Year" shall mean any
Plan Year in which an Employee fails to complete more than
500 Hours of Service. Notwithstanding the preceding
sentence and solely for purposes of this paragraph, if an
Employee fails to complete more than 500 Hours of Service
during a Plan Year by reason of an absence that arises
because of her pregnancy, the birth or adoption of the
Employee's child (or child care for a period immediately
following such birth or adoption), such Employee shall not
necessarily incur a One-Year Break in Service Year; rather,
the Employee shall be credited for such Plan Year with
(i) the Hours of Service for which the Employee would have
received credit (but for such absence), if determinable, or
(ii) eight Hours of Service per day during such absence. If
a One-Year Break in Service Year would not occur in the Plan
Year that includes the beginning of such absence even in the
absence of the preceding sentence, the Employee shall
receive credit for the hours specified under (i) or (ii)
above in the Plan Year immediately following the Plan Year
in which such absence initially occurs solely to prevent the
occurrence of a One-Year Break in Service Year in such Plan
Year. Notwithstanding any other provision of this
paragraph, any Employee shall not be credited with more than
501 Hours of Service by reason of such absence.
"Participant" shall mean any Eligible Employee who
becomes eligible for participation in accordance with the
provisions of the Plan.
"Participating Affiliate" shall mean any Related
Company or other entity which, with the approval of the
Committee, elects to participate in the Plan. By electing
to participate in the Plan, a Participating Affiliate agrees
to be bound by any Plan or Trust amendment adopted by
resolution of the Board of Directors or the Committee, by
the written instrument of any person to whom the Board or
the Committee has delegated its authority to adopt the
amendment or by any other method of amendment permitted
under the Plan. If a Participating Affiliate ceases to be a
Related Company, except by merger with its parent, the
employment of each Employee of the Participating Affiliate
shall be deemed to have terminated for purposes of the Plan,
except to any extent any such Employee is required by law to
continue to be treated under the Plan as an Employee of the
Company.
As of February 1, 1999, the Macerich Management
Company and The Macerich Company were the only Participating
Affiliates in the Plan.
"Plan" shall mean The Macerich Property Management
Company Profit Sharing Plan as set forth herein, now in
effect or hereafter amended.
"Plan Year" shall mean the twelve-consecutive
month period ending on each December 31. The Plan Year
shall be the limitation year for purposes of Section 415 of
the Code.
"Related Company" shall mean (i) each corporation
which is a member of a controlled group of corporations
(within the meaning of Section 1563(a) of the Code,
determined without regard to Section 1563(a)(4) and
(e)(3)(C) thereof) of which the Company is a component
member, (ii) each entity (whether or not incorporated) which
is under common control with the Company, as such common
control is defined in Section 414(c) of the Code and
Regulations issued thereunder, (iii) any organization which
is a member of an affiliated service group (within the
meaning of Section 414(m) of the Code) of which the Company
or a Related Company is a member, and (iv) any organization
which is required by regulations issued under Section 414(o)
of the Code to be treated as a Related Company. For the
purposes of Article IV of the Plan the phrase "more than 50
percent" shall be substituted for the phrase "at least 80
percent" each place it appears in Section 1563(a)(1) of the
Code. The term "Related Company" shall also include each
predecessor employer to the extent required by Section
414(a) of the Code. Notwithstanding the foregoing, an
organization shall not be considered a Related Company for
any purpose under the Plan prior to the date it is
considered affiliated under clauses (i) through (iv) above.
"The Macerich Company" shall mean The Macerich
Company, a Maryland corporation, an affiliate of the
Company.
"Trust" shall mean the trust which is established
to hold and invest contributions under the Plan.
"Trustee" (or "Trustees," if more than one is
appointed and acting) shall mean the trustee or trustees,
whether original or successor, appointed under the Trust.
"Year of Eligibility Service" shall mean each
Eligibility Computation Period during which the Employee is
credited with at least 1,000 Hours of Service.
"Year of Vesting Service" shall mean a Plan Year
during which an Employee is credited with at least 1,000
Hours of Service.
ARTICLE II
PARTICIPATION
Section 2.1 - Eligibility Requirements.
Each Eligible Employee who was a Participant on
January 31, 1999, shall continue as a Participant. Each
other Employee shall become a Participant on the Entry Date
coinciding with or immediately after the later of (i) his
completion of one Year of Eligibility Service, or (ii) the
date on which he attains age 21; provided that he is an
Eligible Employee on such Entry Date.
Section 2.2 - Participation.
Participation of a Participant shall commence as
of the Entry Date specified in Section 2.1, 2.3 or 2.6, as
applicable, and shall continue during the Participant's
Employment with the Company and until the occurrence of a
Break in Employment or until the Participant is no longer an
Eligible Employee.
An Eligible Employee on Approved Absence shall not
become a Participant until the end of his Approved Absence;
but a Participant who is on Approved Absence shall continue
as a Participant during the period of his Approved Absence.
Notwithstanding any other provision of the Plan to
the contrary, contributions, benefits, and service credit
with respect to qualified military service will be provided
in accordance with Section 414(u) of the Code.
Section 2.3 - Reemployment.
(a) An Eligible Employee who has met the eligibility
requirements described in Section 2.1 but who incurs a Break
in Employment prior to becoming a Participant and is later
reemployed as an Eligible Employee shall become a
Participant as of the Entry Date which falls on or
immediately after the date of his reemployment; provided
that he is an Eligible Employee on such Entry Date.
(b) A Participant who incurs a Break in Employment and is
later reemployed as an Eligible Employee shall resume
participation immediately upon his reemployment.
(c) An Employee who incurs a Break in Employment prior to
having a vested interest in an Account attributable to
Company Contributions, Compensation Deferrals or Employer
Profit Sharing Contributions under the Plan, shall forfeit
all Years of Eligibility Service prior to the break if,
during the Break in Employment, the Employee incurred a
number of One-Year Break in Service Years at least equal to
the greater of five or the aggregate number of Years of
Eligibility Service the Employee had in the Plan before the
Break in Employment. For the purpose of this subsection
only and notwithstanding anything to the contrary in the
Plan, a One-Year Break in Service Year shall be computed
with reference to Eligibility Computation Periods, not Plan
Years.
Section 2.4 - Designation of Beneficiary.
Upon forms provided by the Committee, each
Eligible Employee who becomes a Participant shall designate
in writing the Beneficiary or Beneficiaries whom such
Employee desires to receive any benefits payable under the
Plan in the event of such Employee's death. A Participant
may from time to time change his designated Beneficiary or
Beneficiaries without the consent of such Beneficiary or
Beneficiaries by filing a new designation in writing with
the Committee. However, if a married Participant wishes to
designate a person other than his spouse as Beneficiary,
such designation shall be consented to in writing by the
spouse, which consent shall acknowledge the effect of the
designation and be witnessed by a Plan representative or a
notary public. The Participant may change any election
designating a Beneficiary or Beneficiaries without any
requirement of further spousal consent if the spouse's
consent so provides. Notwithstanding the foregoing, spousal
consent shall be unnecessary if it is established (to the
satisfaction of a Plan representative) that there is no
spouse or that the required consent cannot be obtained
because the spouse cannot be located, or because of other
circumstances prescribed by Treasury Regulations. The
Company, the Committee and the Trustee may rely upon a
Participant's designation of Beneficiary or Beneficiaries
last filed in accordance with the terms of the Plan. Upon
the dissolution of marriage of a Participant, any
designation of the Participant's former spouse as a
Beneficiary shall be treated as though the Participant's
former spouse had predeceased the Participant, unless (i)
the Participant executes another Beneficiary designation
that complies with this Section 2.4 and that clearly names
such former spouse as a Beneficiary, or (ii) a court order
presented to the Committee prior to distribution on behalf
of the Participant explicitly requires the Participant to
continue to maintain the former spouse as the Beneficiary.
In any case in which the Participant's former spouse is
treated under the Participant's Beneficiary designation as
having predeceased the Participant, no heirs or other
beneficiaries of the former spouse shall receive benefits
from the Plan as a Beneficiary of the Participant except as
provided otherwise in the Participant's Beneficiary
designation.
Section 2.5 - Designation of Investments.
(a) Subject to the restrictions contained herein and in
Section 3.7, each Participant shall designate on a form
provided by the Committee whether and to what extent the
contributions allocated to his Accounts are to be invested
in the respective Investment Funds. Any Participant who
does not notify the Committee of his initial choice of
Investment Fund(s) shall be deemed to have elected the
"default fund" designated by the Committee and announced to
Participants in accordance with Section 3.7.
(b) A Participant may change the designation of
Investment Funds for the investment of new contributions as
well as change the allocation of his Accounts among the
Investment Funds, each in accordance with Section 3.7.
(c) A former Participant who has deferred distribution of
his Accounts may continue to designate the Investment Funds
for the investment of his Accounts in accordance with this
Section 2.5 and Section 3.7.
Section 2.6 - Special Rules for Employees of Acquired Properties.
(a) Notwithstanding any provisions contained herein to the
contrary (but subject to the nondiscrimination rules of
Section 401(a)(4) of the Code), in the event that the
Company or a Participating Affiliate acquires a direct or
indirect interest in, or agrees to become the manager of, a
shopping mall or other property and the Committee or its
delegate determines that this Section 2.6 shall apply with
respect to such property, an individual who was employed in
the management of such property immediately prior to such
acquisition, or commencement of such management, and who
becomes an Employee of the Company or a Participating
Affiliate shall, for purposes of eligibility and vesting
under this Plan, be credited with service in the management
of such property prior to the acquisition, or commencement
of management, by the Company or a Participating Affiliate.
(b) Each Employee described in Section 2.6(a) shall
become a Participant on and shall have an Entry Date which is the
first day of the month coinciding with or immediately after
his completion of the applicable employment probationary
period with the Company or a Participating Affiliate (which
in no case shall exceed 90 days); provided that he (i) has
then completed one Year of Eligibility Service (including
for this purpose, service described in Section 2.6(a)), (ii)
has then attained age 21, and (iii) is then an Eligible
Employee. For an Employee described in Section 2.6(a) who
does not satisfy the requirements of the preceding sentence,
such Employee shall become a Participant on the Entry Date
generally applicable under the Plan coinciding with or
immediately after the later of (i) his completion of the
applicable employment probationary period with the Company
or a Participating Affiliate (which in no case shall exceed
90 days), (ii) his completion of one Year of Eligibility
Service (including for this purpose, service described in
Section 2.6(a)), or (iii) the date on which he attains age
21; provided that he is an Eligible Employee on such Entry
Date.
ARTICLE III
CONTRIBUTIONS
Section 3.1 - Company Contributions.
(a) The Company and each Participating Affiliate shall
contribute to the Trust for each Plan Year, the amounts
required pursuant to Section 3.2, and may contribute amounts
pursuant to Section 3.3.
(b) In no event shall the aggregate contribution for
any Plan Year made by the Company and any Participating
Affiliates under Sections 3.2, 3.3 and 3.4, and under any
other profit sharing or stock bonus plan(s) maintained by
the Company or a Participating Affiliate, exceed 15% of the
Compensation paid or accrued to all Participants, plus the
amount of any "unused pre-87 limitation carryforwards"
available under Section 404(a)(3)(A) of the Code. The
Compensation taken into account for purposes of the
preceding sentence shall be Compensation paid or accrued
during the Company's taxable year ending with or within the
Plan Year to which the Company contribution relates, but
shall not include any salary reduction contributions which
are excludable from Participants' income in accordance with
Code Sections 125 or 402(g).
Section 3.2 - Compensation Deferrals.
(a) Subject to the limitations in Sections 3.1, 3.6, 3.7
and 4.1, each Participant may elect Compensation Deferrals,
in the manner prescribed by the Committee, in whole
percentages from 1% to 15% of the Participant's
Compensation. A Participant's election to commence
Compensation Deferrals shall be effective at the time
established by the Committee, but no earlier than the first
day of the first payroll period commencing after the
Committee's receipt of such election. The Committee may
permit telephonic elections and may adopt rules establishing
the specific pay periods for which Compensation Deferrals
may be made. The Participant's Compensation shall be
reduced by the amount of his Compensation Deferrals, which
shall be credited to the Participant's Compensation Deferral
Account, and shall be made in accordance with rules
established by the Committee.
(b) A Participant's Compensation Deferral percentage
will remain in effect, notwithstanding any change in
Compensation, until the Participant elects to change the
percentage. A Participant may elect at any time to suspend,
change or resume Compensation Deferrals, provided he makes
an election in the manner prescribed by the Committee. The
Committee may permit telephonic elections and may adopt
rules specifying the frequency with which elections may be
changed and the effective times of such change elections.
After the Committee receives a Participant's election to
suspend, change or resume Compensation Deferrals, such
election shall be effective no earlier than the first day of
the first payroll period following the Committee's receipt
of such election.
(c) To make Compensation Deferrals under this Section
3.2, the Company will reduce the Participant's Compensation in
the amount authorized by the Participant and make a
contribution to the Trustee equal to such reduction as of
the earliest date on which such amount can reasonably be
segregated from the Company's general assets; provided,
however, that such contribution shall be made no later than
the fifteenth business day of the month following the date
on which such amount would otherwise have been payable to
the Participant in cash, or as of such earlier or later date
(in the case of any available extensions of time) as may be
required or permitted by regulations issued pursuant to
ERISA. Compensation Deferrals constitute Company
contributions under the Plan and are intended to qualify as
elective contributions under Code Section 401(k).
(d) As of the last day of the Plan Year, the Committee
shall determine the amount of Compensation Deferrals in
excess of those permitted under Section 3.6 of the Plan, and
any excess shall be distributed to the Participant
responsible for the excess Compensation Deferral in
accordance with the Code, Treasury Regulations and Section
3.6.
Section 3.3 - Employer Profit Sharing Contributions.
Subject to the limitations of Sections 3.1 and
4.1, the Board of Directors, in its sole discretion, may
provide that the Company and each Participating Affiliate
shall make an Employer Profit Sharing Contribution for any
Plan Year. The amount and timing of any such contribution
shall be determined by the Board. As of the last day of the
payroll period in which an Employer Profit Sharing
Contribution is made, there shall be allocated to the
Employer Profit Sharing Contributions Account of each
Qualified Participant (as hereinafter defined) an amount
equal to that portion of the total allocable Employer Profit
Sharing Contribution that the Qualified Participant's
Compensation for the Plan Year with respect to which the
contribution is being made bears to the total Compensation
of all such Qualified Participants for the Plan Year with
respect to which the contribution is being made. For
purposes of this Section 3.3, a "Qualified Participant"
means a Participant: (i) who was credited with at least
1,000 Hours of Service during the Plan Year with respect to
which the contribution pursuant to this Section 3.3 is being
made and who was a Participant on the related Anniversary
Date; or (ii) who terminated employment during the Plan Year
with respect to which the contribution is being made due to
Disability, death, or retirement on or after attaining
Normal Retirement Age.
Section 3.4 - Rollover Contributions.
The Plan shall not accept rollover contributions.
Section 3.5 - Section 402(g) Limit on Compensation
Deferrals.
(a) Compensation Deferrals made on behalf of any
Participant under the Plan and all other plans (which are
described in Section 3.5(c)) maintained by the Company or a
Related Company shall not exceed the limitation under Code
Section 402(g)(1) for the taxable year of the Participant,
as adjusted annually under Section 402(g)(5) of the Code,
and shall be effective as of January 1 of each calendar
year.
(b) In the event that the dollar limitation provided
for in Section 3.5(a) is exceeded, the Participant is deemed to
have requested a distribution of the excess amount by the
first March 1 following the close of the Participant's
taxable year, and the Committee shall distribute such excess
amount, and any income allocable to such amount, to the
Participant by the first April 15th thereafter.
(c) In the event that a Participant is also a participant
in (i) another qualified cash or deferred arrangement as
defined in Section 401(k) of the Code, (ii) a simplified
employee pension, as defined in Section 408(k) of the Code,
or (iii) a salary reduction arrangement, within the meaning
of Section 3121(a)(5)(D) of the Code, and the elective
deferrals, as defined in Section 402(g)(3) of the Code, made
under such other arrangement(s) and the Plan cumulatively
exceed the dollar limit under Section 3.5(a) for such
Participant's taxable year, the Participant may, not later
than March 1 following the close of his taxable year, notify
the Committee in writing of such excess and request that the
Compensation Deferrals made on his behalf under the Plan be
reduced by an amount specified by the Participant. The
Committee may then determine to distribute such excess in
the same manner as provided in Section 3.5(b).
Section 3.6 - Section 401(k) Limitations on Compensation
Deferrals.
(a) The Committee will estimate, as soon as practical
before the close of the Plan Year and at such other times as
the Committee in its discretion determines, the extent, if
any, to which Compensation Deferral treatment under Section
401(k) of the Code may not be available to any Participant
or class of Participants. In accordance with any such
estimate, the Committee may modify the limits in Section
3.2(a), or set initial or interim limits, for Compensation
Deferrals relating to any Participant or class of
Participants. These rules may include provisions
authorizing the suspension or reduction of Compensation
Deferrals above a specified dollar amount or percentage of
Compensation.
(b) For each Plan Year, an actual deferral percentage
will be determined for each Participant equal to the ratio of the
total amount of the Participant's Compensation Deferrals
allocated under Section 3.2(a) for the Plan Year divided by
the Participant's Compensation in the Plan Year. For
purposes of this Section 3.6, "Compensation" shall meet the
requirements of Section 414(s) of the Code and Treasury
Regulations issue thereunder, and shall include elective or
salary reduction contributions to a cafeteria plan or cash
or deferred arrangement, other than a tax-sheltered annuity
under Code Section 403(b). An Employee's Compensation taken
into account for this purpose shall be limited to
Compensation received during the Plan Year while the
Employee is a Participant. Except as otherwise provided in
this Section 3.6(b), with respect to Participants who have
made no Compensation Deferrals under the Plan, such actual
deferral percentage will be zero.
(c) The average of the actual deferral percentages for
Highly Compensated Employees in any Plan Year beginning on
or after January 1, 1997 (the "High Average") when compared
with the average of the actual deferral percentages for non-
Highly Compensated Employees in the preceding Plan Year (the
"Low Average") must meet one of the following requirements:
(1) The High Average is no greater than 1.25 times
the Low Average; or
(2) The High Average is no greater than two times
the Low Average, and the High Average is no greater than the Low
Average plus two percentage points.
(d) If, at the end of a Plan Year, a Participant or class
of Participants has excess Compensation Deferrals, then the
Committee may elect, at its discretion, to pursue any of the
following courses of action or any combination thereof:
(1) Excess Compensation Deferrals, and any
earnings
attributable thereto through the end of the Plan Year, may
be distributed to the Participant within the 2-1/2 month
period following the close of the Plan Year to which the
excess Compensation Deferrals relate to the extent feasible,
but in all events no later than 12 months after the close of
such Plan Year.
Any such excess Compensation Deferrals
distributed from the Plan with respect to a
Participant for a Plan Year shall be reduced by
any amount previously distributed to such
Participant under Section 3.5(b) for the
Participant's taxable year ending with or within
such Plan Year.
(2) The Company, in its discretion, may make a
contribution to the Plan, which will be allocated as a fixed dollar
amount among the Accounts of some or all non-Highly
Compensated Employees (as determined by the Company) who
have (i) met the eligibility requirements of Section 2.1 or
Section 2.3, as applicable, and (ii) who are Eligible
Employees on the last day of the Plan Year. Such
contributions shall be fully (100%) vested at all times, and
shall be subject to the withdrawal restrictions which are
applicable to Compensation Deferrals. Such contributions
shall be considered "Qualified Non-Elective Contributions"
under applicable Treasury Regulations.
(e) Excess Compensation Deferrals for Plan Years beginning
on or after January 1, 1997 shall be determined by the
Committee in accordance with this Section 3.6(e). The
Committee shall calculate a tentative reduction amount to
the Compensation Deferrals of the Highly Compensated
Employee(s) with the highest actual deferral percentage
equal to the amount which, if it were actually reduced,
would enable the Plan to meet the limits in (c) above, or to
cause the actual deferral percentage of such Highly
Compensated Employee(s) to equal the actual deferral
percentage of the Highly Compensated Employee(s) with the
next-highest actual deferral percentage, and the process
shall be repeated until the limits in (c) above are
satisfied. The aggregate amount of the tentative reduction
amounts in the preceding sentence shall constitute
"Refundable Contributions". The entire aggregate amount of
the Refundable Contributions shall be refunded to Highly
Compensated Employees. The amount to be refunded to each
Highly Compensated Employee (which shall constitute his
excess Compensation Deferrals) shall be determined as
follows: (i) the Compensation Deferrals of the Highly
Compensated Employee(s) with the highest dollar amount of
Compensation Deferrals shall be refunded to the extent that
there are Refundable Contributions or to the extent
necessary to cause the dollar amount of Compensation
Deferrals of such Highly Compensated Employee(s) to equal
the dollar amount of Compensation Deferrals of the Highly
Compensated Employee(s) with the next-highest Compensation
Deferrals, and (ii) the process in the foregoing clause
shall be repeated until the total amount of Compensation
Deferrals refunded equals the total amount of Refundable
Contributions. The earnings attributable to excess
Compensation Deferrals will be determined in accordance with
Treasury Regulations. The Committee will not be liable to
any Participant (or his Beneficiary, if applicable) for any
losses caused by inaccurately estimating or calculating the
amount of any Participant's excess Compensation Deferrals
and earnings attributable to the Compensation Deferrals.
(f) If the Committee determines that an amount to be
deferred pursuant to the election provided in Section 3.2
would cause Company contributions under this and any other
tax-qualified retirement plan maintained by any Company to
exceed the applicable deduction limitations contained in
Section 404 of the Code, or to exceed the maximum Annual
Addition determined in accordance with Article IV, the
Committee may treat such amount in accordance with the rules
in Section 3.6(d)(1).
(g) In the discretion of the Committee, the tests
described in this Section 3.6 may be applied by aggregating the Plan
with any other defined contribution plans permitted under
the Code. For purposes of determining whether the Plan
satisfies the requirements of this Section 3.6, all
Compensation Deferrals and Elective Contributions under any
other Plan maintained by the Company which is aggregated
with the Plan for purposes of Section 401(a) or 410(b) of
the Code (other than Section 410(b)(2)(A)(ii)) are to be
treated as made under a single plan. Furthermore, if two or
more plans are permissively aggregated for purposes of the
test described in this Section 3.6, the aggregated plans
must also satisfy Code Sections 401(a)(4) and 410(b) as
though they were a single plan.
Section 3.7 - Investment Funds.
(a) Separate Investment Funds shall be established and
maintained by the Committee under the Plan. The Committee
may, in its discretion, terminate any Investment Fund.
Pursuant to Section 7.3(b), the Committee shall determine
the number of Investment Funds and the Committee, the
Trustee or the Investment Manager, whichever is applicable,
shall determine the investments to be made under each of the
Investment Funds. One Investment Fund shall be The Macerich
Company Common Stock Fund, which is a pool of assets
maintained by the Trustee, invested in Macerich Stock
(except for cash or cash equivalents pending distribution or
investment and a short-term investment component which may
be retained in the Committee's discretion to provide
liquidity for such fund). The Committee shall establish such rules as it deems
appropriate for determining the purchase price of any shares purchased under The
Macerich Company Common Stock Fund; provided, that in no event shall the minimum
purchase price per share be less than the par value thereof. Any cash dividends
on Macerich Stock in The Macerich Company Common Stock Fund shall be
reinvested in Macerich Stock.
(b) Pursuant to rules established by the Committee and
subject to the provisions of this Section 3.7, each
Participant shall have the right and obligation to designate
in which of the Investment Funds his Accounts will be
invested, and to change such designation. The designation
shall be made in a manner and on such forms as are
established by the Committee or pursuant to such other
methods (including telephonic transfers) authorized by the
Committee. The Committee shall describe to the Participants
the investments to be made under each Investment Fund in
such detail as the Committee deems appropriate in its sole
discretion. Up to 100% of the Trust assets may be invested
in Macerich Stock; the amount of Trust assets that may be
invested in Macerich Stock will be the amount selected by
the Participants to be so invested. Notwithstanding
anything to the contrary in this Section 3.7 or in Section
2.5, a Participant may not elect (i) that more than 25% of
the contributions allocated to his Accounts be invested in
The Macerich Company Common Stock Fund, or (ii) a transfer
between Investment Funds that would result in more than 25%
of the value of his Accounts being invested in The Macerich
Company Common Stock Fund (although more than 25% of the
value of a Participant's Accounts may, in fact, be invested,
as a result of the crediting of earnings and losses with
respect to the Investment Funds, in The Macerich Company
Common Stock Fund). If a Participant does not make an
election with respect to the investment of his Accounts,
they will be invested in the "default" Investment Fund
selected by the Committee as announced to Participants. The
Committee may establish other rules, regulations, and
procedures regarding the Investment Funds as it deems
appropriate in its sole discretion.
(c) After the Committee has made the annual allocations
to the Accounts for each Participant pursuant to Section 3.9,
it shall notify each Participant with respect to the status
of such Participant's Accounts as of such date. Such
notification shall in any event be made not later than 180
days after the end of each Plan Year. The total amounts to
credited to each Participant's Accounts shall represent each
Participant's contingent share of the Trust as of such date.
In addition, the Committee may notify each Participant of
the status of his Accounts as of any other date chosen by
the Committee. Such allocation and notification shall not
vest in any Participant any right, title or interest in the
Trust, except to the extent, at the time or times, and upon
the terms and conditions set forth herein. Neither the
Company, the Trustee, nor the Committee to any extent
warrants, guarantees or represents that the value of any
Participant's Accounts at any time will equal or exceed the
amount previously allocated or contributed thereto.
(d) For such period of time that The Macerich Company
is intended to qualify as a "real estate investment trust"
within the meaning of Section 856 of the Code, no
Participant shall invest any portion of his Accounts in The
Macerich Company Common Stock Fund to the extent that such
investment would cause the Participant to own (or be deemed
to own, after taking into consideration the constructive
ownership rules applicable to Section 856(h)(i)(A) of the
Code) more than 9.8% of the outstanding stock of The
Macerich Company. The Committee may adopt such other rules
or more restrictive limitations as it deems advisable with
respect to Participant investments in The Macerich Company
Common Stock Fund in order to assure that The Macerich
Company does not become "closely held" within the meaning of
Section 856(a)(6) of the Code.
Section 3.8 - Valuation of Accounts.
(a) The value of the Accounts invested in the Investment
Funds shall be established on each business day by the
Trustee or the applicable Investment Manager, and investment
gains and losses shall be allocated to such Accounts
according to the investment elections of Participants.
(b) Notwithstanding anything to the contrary herein, if
the Committee determines that an alternative method of
allocating earnings and losses would better serve the
interests of Participants and Beneficiaries or could be more
readily implemented, the Committee may substitute such
alternative; provided that any such alternative method must
result in Plan earnings being allocated on the general basis
of Account balances.
(c) Amounts invested in The Macerich Company Common Stock
Fund shall be invested in Macerich Stock (except for cash or
cash equivalents pending distribution or investment and a
short-term investment component which may be retained in the
Committee's discretion to provide liquidity for such fund).
Cash dividends received on the Company Stock shall be used
to purchase additional shares of Macerich Stock. Stock
dividends and stock splits on the Macerich Stock shall be
reflected by an adjustment to the number of shares of
Macerich Stock held in The Macerich Company Common Stock
Fund.
Section 3.9 - Forfeitures.
Any amount which has been forfeited under the Plan
during the Plan Year shall be used as described in this
Section 3.9. Forfeitures during a Plan Year shall be
allocated on the last day of that Plan Year to the Employer
Profit Sharing Contributions Account of each Qualified
Participant (as hereinafter defined). The amount of
forfeitures allocated to each Qualified Participant's
Employer Profit Sharing Contributions Account shall equal
that portion of the total allocable forfeitures that the
Qualified Participant's Compensation for the Plan Year with
respect to which the forfeitures are being allocated bears
to the total Compensation of all such Qualified Participants
for that Plan Year. For purposes of this Section 3.9, a
"Qualified Participant" means a Participant: (i) who was
credited with at least 1,000 Hours of Service during the
Plan Year with respect to which the forfeitures are being
allocated and who was a Participant on the related
Anniversary Date; or (ii) who terminated employment during
the Plan Year with respect to which the forfeitures are
being allocated due to Disability, death, or retirement on
or after attaining Normal Retirement Age.
ARTICLE IV
LIMITATION ON ANNUAL ADDITIONS
Section 4.1 - Limitation on Annual Additions.
Notwithstanding anything else contained herein,
the Annual Additions (as defined in Appendix A attached
hereto) to all the Accounts of a Participant shall not
exceed the lesser of $30,000 (adjusted as permitted under
Section 415(d)(1) of the Code and regulations issued
thereunder) or 25% of the Participant's Section 415
Compensation from the Company and all Related Companies
during the Plan Year. This Section 4.1 shall be construed
and interpreted in accordance with the provisions of
Appendix A attached hereto.
ARTICLE V
VESTING
Section 5.1 - Fully Vested Accounts.
A Participant's Compensation Deferral Account
shall be 100% vested and nonforfeitable.
Section 5.2 - Employer Profit Sharing Contributions Accounts.
(a) The interest of each Participant in his Employer Profit
Sharing Contributions Account shall vest and become
nonforfeitable up to a maximum of 100% as follows:
(i) A Participant shall become 100% vested if, while an
Employee, he attains his Normal Retirement Age, incurs a
Disability, or dies; or
(ii) A Participant shall become vested in accordance with
the following schedule:
Years of
Vesting Service Percentage Vested
--------------- -----------------
less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
(b) If a Participant incurs a One-Year Break in Service
Year before he has a vested interest in his Employee Profit
Sharing Contributions Account under this Article V, in
determining his Years of Vesting Service under this Section
5.2, all Years of Vesting Service earned before the One-Year
Break in Service Year shall be forfeited if the consecutive
number of One-Year Break in Service Years equals or exceeds
the greater of five or the Years of Vesting Service earned
before the One-Year Break in Service Year.
(c) All Years of Vesting Service shall be taken into
account in determining the vested percentage in a
Participant's Employer Profit Sharing Contributions Account.
If a Participant incurs a Break in Employment which is
followed by five consecutive One-Year Break in Service Years
and is subsequently reemployed, no Year of Vesting Service
after such five consecutive One-Year Break in Service Years
shall be taken into account in determining the vested
percentage in a Participant's Employer Profit Sharing
Contributions Account accrued up to any such One-Year Break
in Service Year.
(d) When a Participant ceases to participate and receives
distribution of his Employer Profit Sharing Contributions
Account, such portion of his Employer Profit Sharing
Contributions Account as of the coinciding or next following
Anniversary Date as is not vested shall be forfeited and
allocated in the manner provided in Section 3.9 as of such
Anniversary Date. For purposes of the preceding sentence, a
Participant who ceases to participate in the Plan and whose
nonforfeitable percentage in his Employer Profit Sharing
Contributions Account is zero, shall be deemed to have
received a complete distribution of the nonforfeitable
portion of his Employer Profit Sharing Contributions
Account. If a former Participant who has suffered a
forfeiture on account of his termination of participation in
accordance with this subsection (d) is reemployed as an
Employee by the Company before incurring five consecutive
One-Year Break in Service Years and repays to the Plan all
money distributed from his Employer Profit Sharing
Contributions Account prior to 60 months after such
reemployment, any amounts so forfeited (unadjusted for any
increase or decrease in the value of Trust assets subsequent
to the Anniversary Date on which the forfeiture occurred)
shall be reinstated to the Participant's Employer Profit
Sharing Contributions Account within a reasonable time after
such repayment. Such reinstatement shall be made from
forfeitures of Participants occurring during the Plan Year
in which such reinstatement occurs to the extent such
forfeitures are attributable to contributions by the same
Company (or a Company that is a Related Company to that
Company) and earnings on such contributions; provided,
however, if such forfeitures are not sufficient to provide
such reinstatement, the reinstatement shall be made from the
current year's contribution by that Company to the Plan.
When a Participant ceases to participate and incurs five
consecutive One-Year Break in Service Years, such portion of
his Employer Profit Sharing Contributions Account as is not
vested (and was not previously forfeited in accordance with
the foregoing provisions of this subsection) shall be
forfeited and allocated in the manner provided in Section
3.9 as of the Anniversary Date occurring on or immediately
following the date the Participant incurred such five
consecutive One-Year Break in Service Years.
(e) Notwithstanding the preceding subsections, in
the case of a Participant who incurs a Break in Employment prior to
the first Plan Year beginning after 1984, the word "one"
shall be substituted for "five" in subsections (b), (c)
and/or (d) if such substitution results in the following
conditions being met: in the case of subsection (b), the
described forfeiture would have occurred prior to the first
Plan Year beginning after 1984; or, in the case of
subsections (c) and (d), a One-Year Break in Service Year
would have occurred before the first Plan Year beginning
after 1984.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 - Distribution of Benefits.
(a) Benefits shall become distributable to a Participant or
his Beneficiary (in the case of death) upon the
Participant's Break in Employment.
(b) The amount of the benefits distributable to a
Participant shall be the vested amount credited to such
Participant's Accounts as of the date (or, if installments
are elected in accordance with Section 6.1(c), dates) on
which the amount representing the distribution is liquidated
from the appropriate Investment Funds pending distribution.
(c) Distributions shall be in the form of a single cash
lump sum paid as soon as administratively practicable after
the date benefits become distributable unless an alternative
form of distribution is elected in accordance with this
Section 6.1(c).
Subject to the other provisions of this Section
6.1(c) and such rules and procedures as the Committee may
adopt, a participant may elect to receive his distribution
in the form of annual or more frequent cash installments to
be paid over a period not longer than the joint life and
last survivor expectancy of the Participant and his spouse,
if any, reasonably determined from the expected return
multiples prescribed in Treas. Reg. Section 1.72-9. If
installment payments are elected, the balance of the
Participant's Accounts remaining in the Plan during the
period in which installments are being paid shall continue
to be invested in the Investment Funds in accordance with
the Participant's elections in accordance with Section 2.5
and Section 3.7. Installment payments shall be made as soon
as administratively practicable after the dates elected by
the Participant.
A Participant may elect an alternate form of
distribution (or elect to change a prior alternate form of
distribution election) in such manner and at such time as
the Committee may prescribe; provided that (i) such election
must be in writing and on a form approved by the Committee,
and (ii) in order to be valid, the election must be received
by the Committee (or its delegate) prior to the date that
benefits are actually paid (or, in the case of installments,
the date installments commence).
(d) The value of the amount distributed in the form of cash
from the portion of a Participant's Accounts invested in The
Macerich Company Common Stock Fund shall be the net proceeds
at the sale of the Macerich Stock liquidated pending
distribution, plus cash for any fractional share which is
not liquidated. If a Participant's Accounts are invested in
The Macerich Company Common Stock Fund on the record date
for a dividend payment declared by The Macerich Company on
its Common Stock and a distribution from The Macerich
Company Common Stock Fund is made to the Participant or his
Beneficiary after such record date but before the actual
payment of the dividend by The Macerich Company or the
crediting of such dividend to the Participant's Accounts,
the Participant's benefits in respect of such dividend shall
be distributed to the Participant as soon as
administratively practicable after the date of actual
payment of the dividend by The Macerich Company.
(e) Notwithstanding the foregoing, if the nonforfeitable
balance in the Participant's Accounts has ever exceeded
$5,000 (or, if greater, such other amount as may be provided
for under Section 411(a)(11)(A) of the Code or the Treasury
Regulations promulgated thereunder), distribution shall be
made upon a Break in Employment only if the Participant so
requests or consents to a distribution of the nonforfeitable
balance of his Accounts in writing. An explanation of the
Participant's right to defer distribution of the
nonforfeitable balance of his Accounts shall be provided to
the Participant no less than 30 and no more than 90 days
before the date such distribution is to be made (consistent
with such regulations as the Secretary of the Treasury may
prescribe). If a Participant does not so request or
consent, (unless Treasury Regulations otherwise provide and
the Committee adopts different rules) distribution of the
amounts payable shall be delayed until after the end of the
Plan Year in which the Participant attains Normal Retirement
Age.
(f) If a terminating Participant consents to immediate
distribution (in a lump sum or installments), the nonvested
portion of his Accounts, if any, shall be forfeited and his
rights with respect to the forfeited portion shall be
governed by Section 5.2.
(g) If the nonforfeitable balance of a terminating
Participant's Accounts is a distribution to which Sections
401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the notice
described in subsection (e) is given, provided that: (i)
the Committee clearly informs the Participant that the
Participant has the right to a period of at least 30 days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable,
a particular distribution option), and (ii) the Participant,
after receiving the notice, affirmatively elects an
immediate distribution.
(h) In the event of the death of a Participant prior to
distribution, distribution of his Accounts shall be made to
his Beneficiary as soon as practicable after the
Participant's death, but in no event shall distribution be
made (or installments commence) later than the last day of
the calendar year following the calendar year in which the
death occurs. Such distribution shall be made in the form
of a single lump sum unless, at the time of the
Participant's or former Participant's death, he was
receiving installment payments or had elected installment
payments pursuant to Section 6.1(c), in which case payment
shall be made or shall continue to be made in accordance
with the installment schedule elected by the Participant or
former Participant.
(i) Installment payments pursuant to Section 6.1(c) may be
elected only by Participants who are entitled to receive a
distribution of at least $5,000 (or, if greater, such other
amount as may be provided for under Section 411(a)(11)(A) of
the Code or the Treasury Regulations promulgated
thereunder). The Committee may establish other rules,
regulations, and procedures regarding installments available
and elected under Section 6.1(c) as it deems appropriate in
its sole discretion.
Section 6.2 - Normal Retirement Age Withdrawal.
A Participant who has not incurred a Break in
Employment may withdraw all or a portion of his vested
Accounts after he attains Normal Retirement Age. Such
withdrawal shall be made in the manner prescribed by the
Committee. A Participant may make only one (1) withdrawal
pursuant to this Section 6.2.
Section 6.3 - Hardship Withdrawals.
(a) Subject to the approval of the Committee and guidelines
promulgated by the Committee, withdrawals from the
Participant's Compensation Deferral Account and/or Employer
Profit Sharing Contributions Account may be permitted to
meet a financial hardship resulting from:
(1) Uninsured medical expenses previously incurred by the
Participant, or the Participant's spouse or dependent or
necessary to obtain such medical care;
(2) The purchase (excluding mortgage payments) of a
principal residence of the Participant;
(3) The payment of tuition for the next 12 months of
post-secondary education for the Participant, or the
Participant's spouse, children or dependents;
(4) The prevention of eviction of the Participant from his
principal residence, or foreclosure on the mortgage of the
Participant's principal residence; and
(5) Any other event described in Treasury Regulations or
rulings as an immediate and heavy financial need and
approved by the Committee as a reason for permitting
distribution under this Section 6.3.
The Committee shall determine, in a non-discriminatory
manner, whether a Participant has a financial hardship. A
distribution may be made under this Section 6.3 only if such
distribution does not exceed the amount required to meet the
immediate financial need created by the hardship (including
taxes or penalties reasonably anticipated from the
distribution) and is not reasonably available from other
resources of the Participant.
(b) The withdrawal amount shall not in any event exceed the
value of the Participant's Compensation Deferral Account
and/or Employer Profit Sharing Contributions Account, as
applicable, as of the date immediately preceding the date of
the Committee's acceptance of the Participant's written
application for a hardship withdrawal. In addition, except
as provided otherwise in the following sentence, the amount
of any withdrawal pursuant to this Section 6.3 from a
Participant's Compensation Deferral Account shall not exceed
the value of the Participant's Compensation Deferrals to
such Account, less previous withdrawals and excluding
earnings. Notwithstanding the foregoing, any distribution
under this Section 6.3 may include earnings accrued to the
Participant's Compensation Deferral Account prior to 1989.
No withdrawal from a Participant's Employer Profit Sharing
Contributions Account may be made pursuant to this
Section 6.3 until after the date that the Participant
becomes 100% vested in such Account. Payment of the
withdrawal shall be in a single sum as soon as
administratively practicable after the withdrawal is
approved by the Committee and in no event later than the end
of the month following the month in which the withdrawal is
approved by the Committee.
(c) A Participant shall not be permitted to make any
withdrawals under this Section 6.3 until he has obtained all
distributions, other than hardship distributions, and all
non-taxable loans currently available under all qualified
profit sharing and retirement plans maintained by the
Company or a Related Company. A Participant may not make
more than one withdrawal pursuant to this Section 6.3 in any
12-month period.
(d) The Participant's request for a withdrawal shall
include his written statement that the need cannot be
relieved: (i) through reimbursement or compensation by
insurance or otherwise; (ii) by reasonable liquidation of
the Participant's assets, to the extent such liquidation
would not itself cause immediate and heavy financial need;
(iii) by cessation of Compensation Deferrals under the Plan;
(iv) by other distributions or nontaxable loans currently
available from plans maintained by the Company or a Related
Company; or (v) by borrowing from commercial sources on
reasonable commercial terms.
(e) If a Participant withdraws any amount from his
Compensation Deferral Account pursuant to this Section 6.3,
he must agree in writing that he shall be unable to elect
that any Compensation Deferrals or any other employee
contributions (excluding mandatory employee contributions to
a defined benefit plan) be made on his behalf under the Plan
or under any other plan maintained by the Company or a
Related Company until one year after receipt of the
withdrawal. For purposes of the preceding sentence, a plan
includes any qualified plan or nonqualified plan of deferred
compensation and any stock purchase or stock option plan,
but does not include cafeteria plans or any other health or
welfare benefit plans. In addition, a Participant who
withdraws any amount from his Compensation Deferral Account
pursuant to this Section 6.3 shall be unable to elect any
Compensation Deferrals under the Plan or under any other
plan maintained by the Company or a Related Company for the
Participant's taxable year immediately following the taxable
year of the withdrawal to any extent that such Compensation
Deferral would exceed the applicable limit under Section
402(g) of the Code for such taxable year, reduced by the
amount of such Participant's Compensation Deferrals for the
taxable year of the withdrawal.
Section 6.4 - Qualified Domestic Relations Orders.
Subject to the procedures established by the
Committee under Section 9.4(b), benefits may be paid from
the nonforfeitable balance of a Participant's Accounts in
accordance with a qualified domestic relations order as
defined in Section 414(p) of the Code without regard to
whether the Participant has attained the "earliest
retirement age," as defined in Section 414(p) of the Code.
Section 6.5 - Inability to Locate Participant.
In the case of any distribution of an account
under the Plan, if the Committee is unable to make such
payment within three years after payment is due a
Participant or Beneficiary because it cannot locate such
Participant or Beneficiary, the Trustee shall direct that
such amount shall be forfeited and such amount shall be
allocated as described in Section 3.9. If, after such
forfeiture, the Participant or Beneficiary later claims such
benefit, such account shall be reinstated from forfeitures
of Participants in the Plan occurring during the Plan Year
in which such reinstatement occurs; provided, however, that
if such forfeitures are not sufficient to provide such
reinstatement, an additional Company contribution shall be
made for the Plan Year in which reinstatement occurs to
cover such reinstatement. Establishment of an account
through such reinstatement shall not be deemed an "annual
addition" under Section 415 of the Code or Article IV of the
Plan.
Section 6.6 - Limitations on Distributions.
(a) When benefits become distributable, the Committee shall
direct the Trustee to distribute the amount described above
promptly, the payment of such benefits to commence,
notwithstanding anything to the contrary contained herein,
no later than 60 days following the close of the later of
the Plan Year in which (i) a Participant reaches Normal
Retirement Age, (ii) the Participant incurs a Severance from
Service, or (iii) occurs the 10th anniversary of the year in
which the Participant commenced participation in the Plan
(unless the amount of the Participant's benefit has not been
calculated by that date or the Participant cannot be
located, in which case distribution shall begin no later
than 60 days after the payment can be calculated or the
Participant located).
(b) Notwithstanding anything to the contrary contained
herein, the distribution options under the Plan shall comply
with Section 401(a)(9) of the Code and regulations
promulgated thereunder, which are hereby incorporated by
this reference as a part of the Plan. Accordingly, unless
otherwise permitted by law, the entire interest of each
Participant shall be distributed in a single lump sum, by
April 1 of the calendar year following the calendar year in
which the Participant reaches age 70-1/2. Except as
provided by law, a Participant who reached age 70-1/2 before
January 1, 1988 and who was not a five percent owner of the
Company at any time during the Plan Year ending with or
within the calendar year in which the Participant attains
age 66-1/2 or thereafter, is not required to receive
distribution of his interest until he separates from
service. If a Participant receives a distribution upon his
or her required beginning date (described above) and
continues employment past the required beginning date,
additional distributions shall be made annually to reflect
additional accruals in accordance with Treasury Regulations.
Effective January 1, 1997, the requirement that
distributions commence following age 70-1/2, but before
termination of employment, shall only apply in the case of a
Participant who is a five percent (5%) owner with respect to
the Plan Year in which the Participant attains age 70-1/2.
For all Participants other than the 5% owners referred to in
the preceding sentence, it is intended that distributions
prior to termination of employment be limited to the amount,
if any, required under Code Section 411(d)(6)(B)(ii).
Accordingly, (i) no distribution to such a Participant shall
be made unless the Participant elects to commence
distributions, (ii) the amount of the distributions to such
a Participant shall not exceed the amount which the
Participant would have been required to receive, based upon
the Participant's Account balance as of December 31, 1996
under the terms of this Plan as they existed at such time,
and (iii) if, by regulation, ruling or otherwise, it is
established that it is permissible to delay any
distributions for such a Participant until the Participant
terminates employment, then distributions shall be so
delayed. In the case of any Participant whose distributions
commenced before January 1, 1997, distributions shall cease
for the 1997 and subsequent Plan Years if the employee so
elects.
(c) Distributions from the Plan are subject to all
applicable employment and income tax withholding
requirements of the Code.
Section 6.7 - Direct Rollovers.
(a) This Section 6.7 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 (as defined below) election under this Section
6.7, if a Distributee will receive an Eligible Rollover
Distribution (as defined below) of at least $200, the
Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan (as defined below) specified by the
Distributee in a Direct Rollover; provided, however, that a
Distributee may not elect to have an Eligible Rollover
Distribution of less than $500 paid directly to an Eligible
Retirement Plan unless the Distributee elects to have his
entire Eligible Rollover Distribution paid directly to the
Eligible Retirement Plan.
(b) Definitions.
(1) An "Eligible Rollover Distribution" is any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
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 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); and any other type of distribution
which the Internal Revenue Service announces (pursuant to
regulation, notice or otherwise) is not an Eligible Rollover
Distribution.
(2) An "Eligible Retirement Plan" is an individual
retirement account described in Section 408(a) of the Code,
an individual retirement annuity described 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.
(3) A "Distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
Surviving Spouse and the Employee's or former Employee's
Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are Distributees with regard to the
interest of the Spouse or former Spouse.
(4) A "Direct Rollover" is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
ARTICLE VII
THE COMMITTEE
Section 7.1 - Members.
A committee (hereinafter referred to as the
"Committee") shall be appointed by, and shall serve at the
pleasure of, the Board. The number of members comprising
the Committee shall be determined by the Board which may
from time to time vary the number of members. A member of
the Committee may resign by delivering a written notice of
resignation to the Board. The Board may remove any member
by delivering a certified copy of its resolution of removal
to such member. Vacancies in the membership of the
Committee shall be filed promptly by the Board.
Section 7.2 - Committee Action.
The Committee shall choose a Chairman for the
Committee and a Secretary. The Secretary shall keep
minutes of the Committee's proceedings and all records and
documents pertaining to the Committee's administration of
the Plan. Any action of the Committee shall be taken
pursuant to the vote or written consent of a majority of its
members present, and such action shall constitute the action
of the Committee and be binding upon the same as if all
members had joined therein. A member of the Committee shall
not vote or act upon any matter which relates solely to
himself as a Participant. The Chairman or any other member
or members of the Committee designated by the Chairman may
execute any certificate or other written direction on behalf
of the Committee. The Trustee or any third person dealing
with the Committee may conclusively rely upon any
certificate or other written direction so signed.
Section 7.3 - Rights and Duties.
(a) The Company shall be the Plan Administrator (as defined
in Section 3(16)(A) of ERISA.) The Company delegates its
duties under the Plan to the Committee. The Committee shall
act as the Fiduciary with respect to control and management
of the Plan for purposes of ERISA on behalf of the
Participants and their Beneficiaries, shall enforce the Plan
in accordance with its terms, shall be charged with the
general administration of the Plan, and shall have all
powers necessary to accomplish its purposes, including, but
not by way of limitation, the following:
(1) To determine all questions relating to the eligibility
of Employees to participate;
(2) To construe and interpret the terms and provisions of
the Plan;
(3) To compute, certify to, and direct the Trustee with
regard to the amount and kind of benefits payable to
Participants and their Beneficiaries;
(4) To authorize all disbursements by the Trustee from the
Trust;
(5) To maintain all records that may be necessary for the
administration of the Plan other than those maintained by
the Trustee;
(6) To provide for the disclosure of all information and
the filing or provision of all reports and statements to
Participants, Beneficiaries or governmental agencies as
shall be required by ERISA or other law, other than those
prepared and filed by the Trustee;
(7) To make and publish such rules for the regulation of
the Plan as are not inconsistent with the terms hereof;
(8) To appoint a plan administrator or, any other agent,
and to delegate to them or to the Trustee such powers and
duties in connection with the administration of the Plan as
the Committee may from time to time prescribe, and to
designate each such administrator or agent as Fiduciary with
regard to matters delegated to him; and
(9) To make decisions on claims in a manner consistent with
regulations of the Secretary of Labor for presentation of
claims by Participants and Beneficiaries for Plan benefits,
which shall include consideration of such claims, review of
claim denials and issuance of a decision on review. Such
claims decisions shall at a minimum consist of the
following:
(A) The Committee shall notify Participants and,
where appropriate, Beneficiaries of their right to claim
benefits under the claims procedures, and shall provide the
name of the person or persons with whom such claims should be
filed.
(B) The Committee shall act upon claims initially made
and communicate a decision to the claimant promptly and, in any
event, not later than 90 days after the claim is received by
the Committee, unless special circumstances require an
extension of time for processing the claim. If an extension
is required, notice of the extension shall be furnished the
claimant prior to the end of the initial 90-day period,
which notice shall indicate the reasons for the extension
and the expected decision date. The extension shall not
exceed 90 days. The claim may be deemed by the claimant to
have been denied for purposes of further review described
below in the event a decision is not furnished to the
claimant within the period described in the three preceding
sentences. Every claim for benefits which is denied shall
be denied by written notice setting forth in a manner
calculated to be understood by the claimant (i) the specific
reason or reasons for the denial, (ii) specific reference to
any provisions of the Plan on which denial is based,
(iii) description of any additional material or information
necessary for the claimant to perfect his claim with an
explanation of why such material or information is
necessary, and (iv) an explanation of the procedure for
further reviewing the denial of the claim under the Plan.
(C) The Committee shall review claim denials if
review is timely requested. The review given after denial of any
claim shall be a full and fair review with the claimant or
his duly authorized representative having 60 days after
receipt of denial of his claim to request such review, the
right to review all pertinent documents and the right to
submit issues and comments in writing.
(D) The Committee shall issue a decision not
later than 60 days after receipt of a request for review from
a claimant unless special circumstances, such as the need to
hold a hearing, require a longer period of time, in which case
a decision shall be rendered as soon as possible but not
later than 120 days after receipt of the claimant's request
for review. The decision on review shall be in writing and
shall include specific reasons for the decision written in a
manner calculated to be understood by the claimant with
specific reference to any provisions of the Plan on which
the decision is based.
(b) With respect to management or control of investments,
the Committee shall have the power to direct the Trustee in
writing with respect to the investment of the Trust assets
or any part thereof. Where investment authority, management
and control of Trust assets have been delegated to the
Trustee by the Committee, the Trustee shall be the Fiduciary
with respect to the investment, management and control of
the Trust assets contributed by the Company and Participants
with full discretion in the exercise of such investment,
management and control. Except as otherwise provided by
law, the Committee may appoint one or more Investment
Manager(s), as defined in Section 1.2 of the Plan, to invest
the Trust assets or any part thereof. Where investment
authority, management, and control of Trust assets is not
specifically delegated to the Trustee, the Trustee shall be
subject to the direction of the Committee or the Investment
Manager(s) appointed by the Committee, if any, regarding the
investment, management and control of such assets, and in
such case the Committee, or the Investment Manager(s), as
the case may be, shall be the Fiduciary with respect to the
investment, management and control of such assets.
(c) Each Fiduciary under the Plan and Trust shall be solely
responsible for its own acts or omissions. Except to the
extent required by ERISA or the Code, no Fiduciary shall
have the duty to question whether any other Fiduciary is
fulfilling any or all of the responsibilities imposed upon
such other Fiduciary by ERISA or by any regulations or
rulings issued thereunder. No Fiduciary shall have any
liability for a breach of fiduciary responsibility of
another Fiduciary with respect to the Plan or Trust unless
he knowingly participates in such breach, knowingly
undertakes to conceal such breach, has actual knowledge of
such breach and fails to take reasonable remedial action to
remedy said breach or, through his negligence in performing
his own specific fiduciary responsibilities, has enabled
such other Fiduciary to commit a breach of the latter's
fiduciary responsibilities.
Section 7.4 - Procedure for Establishing Funding Policy --
Transmittal of Information.
In order to enable the Committee to establish a
funding policy and perform its other functions under the
Plan, the Company shall supply full and timely information
to the Committee on all matters relating to the
Compensation, employment, retirement, death, or the cause
for termination of employment of each Participant and such
other pertinent facts as may be required. The Committee
shall advise the Trustee and the Investment Manager, as
appropriate, of such of the foregoing facts as may be
pertinent to the duties of the Trustee and Investment
Manager under the Plan.
Section 7.5 - Other Information.
To enable the Committee to perform its functions,
the Company shall supply full and timely information to the
Committee on all matters relating to the compensation of all
Participants, their employment, retirement, death or other
cause for termination of employment, and such other
pertinent facts as the Committee may require; and the
Committee shall advise the Trustee of such of the foregoing
facts as may be pertinent to the Trustee's duties under the
Plan.
Section 7.6 - Compensation, Bonding, Expenses and
Indemnity.
(a) The members of the Committee shall serve without
compensation for their services hereunder.
(b) Members of the Committee and any delegates shall be
bonded to the extent required by Section 412(a) of ERISA and
the regulations thereunder. Bond premiums and all expenses
of the Committee or of any delegate who is an employee of
the Company shall be paid by the Company and the Company
shall furnish the Committee and any such delegate with such
clerical and other assistance as is necessary in the
performance of their duties.
(c) The Committee is authorized at the expense of the
Company to employ such legal counsel as it may deem
advisable to assist in the performance of its duties
hereunder. Expenses and fees in connection with the
administration of the Plan and the Trust shall be paid from
the Trust assets to the fullest extent permitted by law,
unless the Company determines otherwise.
(d) To the extent permitted by applicable state law, the
Company shall indemnify and save harmless the Committee and
each member thereof, the Board of Directors and any delegate
of the Committee who is an employee of the Company against
any and all expenses, liabilities and claims, including
legal fees to defend against such liabilities and claims
arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than
expenses and liabilities arising out of willful misconduct.
This indemnity shall not preclude such further indemnities
as may be available under insurance purchased by the Company
or provided by the Company under any by-law, agreement or
otherwise, as such indemnities are permitted under state
law. Payments with respect to any indemnity and payment of
any expenses and fees under this Section 7.6 shall be made
only from assets of the Company and shall not be made
directly or indirectly from Trust assets.
Section 7.7 - Manner of Administering.
The Committee shall have full discretion to
construe and interpret the terms and provisions of the Plan,
which interpretation or construction shall be final and
binding on all parties, including but not limited to the
Company and any Participant or Beneficiary, except as
otherwise provided by law. The Committee shall administer
such terms and provisions in a uniform and nondiscriminatory
manner and in full accordance with any and all laws
applicable to the Plan.
Section 7.8 - Duty of Care.
In the exercise of the powers and duties of the
Committee as Plan Administrator and Fiduciary with respect
to the investment, management and control of the Plan, each
member of the Committee shall use the care, prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a
like character and with like aims.
Section 7.9 - Committee Report.
The Committee shall apprise the Board of Directors
of the investment results of the Plan and shall report such
other information as may be appropriate to inform the Board
of Directors of the status and operation of the Plan and
Trust.
Section 7.10 - Expenses of Plan and Trust.
Expenses of administering the Plan and Trust
shall, unless paid by the Company, be paid from the Trust.
ARTICLE VIII
AMENDMENT AND TERMINATION
Section 8.1 - Amendments.
The Company shall have the right to amend or
modify the Plan by resolution of the Board of Directors and
to amend or cancel any amendments. Furthermore, the
Committee has the authority to adopt any amendment to the
Plan which does not have the effect of changing applicable
vesting schedules or increasing the obligation of the
Company or any Participating Affiliate to make contributions
to the Plan. Any amendment shall be stated in an instrument
in writing, executed in the same manner as the Plan. Except
as may be required to permit the Plan and Trust to meet the
requirements for qualification and tax exemption under the
Code, or the corresponding provisions of other or subsequent
revenue laws or of ERISA, no amendment may be made which
may:
(a) Cause any of the assets of the Trust, at any time prior
to the satisfaction of all liabilities with respect to
Participants and their Beneficiaries, to be used for or
diverted to purposes other than for the exclusive benefit of
Participants or their Beneficiaries;
(b) Decrease the accrued benefit of any Participant or
Beneficiary within the meaning of Section 411(d)(6) of the Code;
(c) Create or effect any discrimination in favor of
Participants who are Highly Compensated Employees; and
(d) Increase the duties or liabilities of the Trustee
without its written consent.
If the Company adopts an amendment changing the
vesting schedule under the Plan, a Participant may
irrevocably elect that such amendment shall not apply to him
if he has completed at least three Years of Service prior to
the end of an election period which begins on the date the
amendment is adopted and ends on a date sixty days after the
latest of (i) the date the amendment is adopted, (ii) the
date the amendment becomes effective, or (iii) the date the
Participant is issued written notice of the amendment by the
Committee.
Section 8.2 - Discontinuance of Plan.
(a) It is the Company's expectation that the Plan and the
payment of contributions hereunder will be continued
indefinitely, but continuance of the Plan by the Company is
not assumed as a contractual obligation, and the Company
reserves the right to permanently discontinue contributions
hereunder. In the event of the complete discontinuance of
contributions by the Company, the entire interest of each
Participant affected thereby shall immediately become 100%
vested. The Company shall not be liable for the payment of
any benefits under the Plan and all benefits hereunder shall
be payable solely from the assets of the Trust.
(b) The Company may terminate the Plan at any time. Upon
complete termination or partial termination of the Plan, the
entire interest of each of the affected Participants shall
become 100% vested. The Trustee shall thereafter, upon
direction of the Committee, distribute to the Participants
the amounts in their Accounts in the same manner as set
forth in Article VI.
Section 8.3 - Failure to Contribute.
Any failure by the Company to contribute to the
Trust in any year when no contribution is required under
the Plan shall not of itself be a discontinuance of
contributions under the Plan.
Section 8.4 - Plan Merger or Consolidation; Transfer of
Plan Assets.
(a) The Plan shall not be merged or consolidated with, nor
shall its assets or liabilities be transferred to, any other
plan unless each Participant in the Plan (if the Plan then
terminated) would receive a benefit immediately after the
merger, consolidation or transfer which is equal to or
greater than the benefit such Participant would have been
entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had been terminated).
Where the foregoing requirement is satisfied, the Plan and
its related Trust may be merged or consolidated with another
qualified plan and trust.
(b) The Committee may, in its discretion, authorize a plan
to plan transfer, provided such a transfer will meet the
requirements of Section 414(l) of the Code and that all
other actions legally required are taken. In the event of a
transfer of assets from the Plan pursuant to this
subsection, any corresponding benefit liabilities shall also
be transferred.
ARTICLE IX
MISCELLANEOUS
Section 9.1 - Contributions Not Recoverable.
Except where contributions or earnings are
required to be returned to the Company by the provisions of
the Plan as permitted or required by ERISA or the Code, it
shall be impossible for any part of the contributions or
earnings made under the Plan to be used for, or diverted to,
purposes other than the exclusive benefit of Participants or
their Beneficiaries. Notwithstanding this or any other
provision of the Plan, the Company shall be entitled to
recover, and the Participants under the Plan shall have no
interest in (i) any contributions made under the Plan by
mistake of fact, so long as the contribution is returned
within one year after payment, and (ii) in the event that
the Company receives an adverse determination from the
Internal Revenue Service with respect to the Plan's initial
qualification with the result that the Trust is not exempt
from Federal income tax and the Company's contributions to
the Trust are not deductible in determining its Federal
income tax, any contributions and earnings made prior to
that time, so long as such amounts are returned within one
year after such determination and the application for
determination was made by the time prescribed by law for
filing the Company's return for the taxable year in which
the Plan was adopted or such later date as the Secretary of
the Treasury may prescribe, and (iii) any contributions for
which deduction is disallowed under Section 404 of the Code,
so long as the contributions are returned to the Company
within one year following such disallowance or as permitted
or required by the Code or ERISA. In the event of such
mistake of fact, determination by the Commissioner, or
disallowance of deductions, contributions shall be returned
to the Company, subject to the limitations, if any, of
Section 403(c) of ERISA. All contributions to the Plan
(other than rollover contributions) are conditioned upon the
deductibility of the contributions under Code Section 404.
Section 9.2 - Limitation on Participant's Rights.
Participation in the Plan shall not give any
Employee the right to be retained as an Employee of the
Company or any right or interest under the Plan other than
as herein provided. The Company reserves the right to
dismiss any Employee without any liability for any claim
either against the Trustee, the Trust except to the extent
provided in the Trust, or against the Company. All benefits
under the Plan shall be provided solely from the assets of
the Trust.
Section 9.3 - Receipt or Release.
Any payment to any Participant or Beneficiary in
accordance with the provisions of the Plan shall, to the
extent thereof, be in full satisfaction of all claims
against the Trustee, the Committee, and the Company. The
Trustee may require such Participant or Beneficiary, as a
condition precedent to such payment, to execute a receipt
and release to such effect.
Section 9.4 - Alienation.
(a) None of the benefits, payments, proceeds or claims of
any Participant or Beneficiary shall be subject to any
claim of any creditors and, in particular, the same shall
not be subject to attachment or garnishment or other legal
process by any creditor, nor shall any such Participant or
Beneficiary have the right to alienate, anticipate, commute,
pledge, encumber or assign any of the benefits or payments
or proceeds which such Participant or Beneficiary may expect
to receive, contingently or otherwise, under the Plan.
(b) Notwithstanding subsection (a), the right to a
benefit payable with respect to a Participant pursuant to a
"qualified domestic relations order" (within the meaning of
Code Section 414(p)) may be created, assigned or recognized.
The Committee shall establish reasonable procedures to
determine the qualified status of domestic relations orders
and to administer distributions under such qualified orders.
In the event a qualified domestic relations order exists
with respect to a benefit payable under the Plan, the
benefits otherwise payable to a Participant or Beneficiary
shall be payable to the alternate payee specified in the
qualified domestic relations order. In addition, anything
in the Plan to the contrary notwithstanding, the Committee
shall follow any distribution requirement contained in a
Qualified Domestic Relations Order which provides for an
earlier lump sum distribution than would otherwise be
permitted under the Plan.
(c) Notwithstanding subsection (a), the Plan may offset
against the Account(s) of a Participant any amount that the
Participant is ordered or required to pay under a judgment,
order, decree or settlement agreement described in ERISA
Section 206(d)(4), subject to the joint and survivor
requirements of ERISA Section 206(d)(4)(C) and ERISA Section
206(d)(5), if applicable.
Section 9.5 - Persons Under Incapacity.
In the event any amount is payable under the Plan
to a person for whom a conservator has been legally
appointed, the payment shall be distributed to the duly
appointed and currently acting conservator, without any duty
on the part of the Committee to supervise or inquire into
the application of any funds so paid.
Section 9.6 - Governing Law.
The Plan shall be construed, administered, and
governed in all respects under applicable federal law, and
to the extent that federal law is inapplicable, under the
laws of the State of California; provided, however, that if
any provision is susceptible to more than one
interpretation, such interpretation shall be given thereto
as is consistent with the Plan's remaining qualified within
the meaning of Section 401(a) of the Code. If any
provisions of this instrument shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully
effective.
Section 9.7 - Headings, etc. Not Part of Plan.
Headings and subheadings in the Plan are inserted
for convenience of reference only and are not to be
considered in the construction of the provisions hereof.
Section 9.8 - Masculine Gender Includes Feminine.
As used in the Plan, the masculine gender shall
include the feminine gender.
Section 9.9 - Instruments in Counterparts.
The Plan may be executed in several counterparts,
each of which shall be deemed an original, and said
counterparts shall constitute but one and the same
instrument, which may be sufficiently evidenced by any one
counterpart.
Section 9.10 - Successors and Assigns; Reorganization of Company.
The Plan shall inure to the benefit of, and be
binding upon the parties hereto and their successors and
assigns. If the Company merges or consolidates with or into
a successor, the Plan shall continue in effect unless the
successor terminates the Plan.
Section 9.11 - Loans to Participants.
No Loans to Participants shall be permitted under
this Plan.
Section 9.12 - Top-Heavy Plan Requirements.
For any Plan Year for which the Plan is a Top-
Heavy Plan, as defined in Section B.3 of Appendix B,
attached hereto, and despite any other provisions of the
Plan to the contrary, the Plan will be subject to the
provisions of Appendix B.
Section 9.13 - Rule 16b-3 Provisions.
The Committee may (but need not) adopt such rules
and/or take such actions or implement such measures and/or
limitations as it deems desirable in order to comply with 17
C.F.R. 140.16b-3, promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended ("SEC Section
16"). Neither the Company, the Board, the Committee, the
Trustee nor the Plan shall have any liability to any
Participant in the event that any Participant has any
liability under SEC Section 16 due to any rule so adopted,
the failure to adopt any rule, any Plan provision (or lack
thereof), any transaction in the Plan or otherwise.
IN WITNESS WHEREOF, the undersigned has caused
this document to be executed by its duly authorized officer
on this 20 day of December, 1998.
MACERICH PROPERTY MANAGEMENT
COMPANY
By /s/ Richard A. Bayer
Its General Counsel & Secretary
APPENDIX A
ANNUAL ADDITION LIMITS
Article IV of the Plan shall be construed in
accordance with this Appendix A. Unless the context clearly
requires otherwise, words and phrases used in this
Appendix A shall have the same meanings that are assigned to
them under the Plan.
A.1 - Definitions.
As used in this Appendix A, the following terms
shall have the meanings specified below.
"Annual Additions" shall mean the sum credited to
a Participant's Accounts for any Plan Year of (i) Company
contributions, (ii) voluntary contributions,
(iii) forfeitures, (iv) amounts credited after March 31,
1984 to an individual medical account, as defined in Section
415(l)(2) of the Code which is part of a Defined Benefit
Plan maintained by the Company, and (v) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the
separate account required with respect to a key employee (as
defined in Section B.2(e) of Appendix B to the Plan) under a
welfare benefit plan (as defined in Section 419(e) of the
Code) maintained by the Company.
"Defined Benefit Plan" means a plan described in
Section 414(k)(1) of the Code.
"Defined Contribution Plan" means a plan described
in Section 414(k)(1) of the Code.
"Defined Benefit Plan Fraction" shall mean a
fraction, the numerator of which is the projected annual
benefit (determined as of the close of the relevant Plan
Year) of the Participant under all Defined Benefit Plans
maintained by one or more Related Companies, and the
denominator of which is the lesser of (i) the product of
1.25 multiplied by the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for the Plan Year, or
(ii) the product of 1.4 multiplied by the amount which may
be taken into account under Section 415(b)(1)(B) of the Code
with respect to the Participant for the Plan Year.
"Defined Contribution Plan Fraction" shall mean a
fraction, the numerator of which is the sum of the annual
additions to a Participant's accounts under all Defined
Contribution Plans maintained by one or more Related
Companies, and the denominator of which is the sum of the
lesser of (i) or (ii) for such Plan Year and for each prior
Plan Year of service with one or more Related Companies,
where (i) is the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of the Code
for the Plan Year (determined without regard to Section
415(c)(6) of the Code), and (ii) is the product of 1.4
multiplied by the amount which may be taken into account
under Section 415(c)(1)(B) of the Code (or Section 415(c)(7)
of the Code, if applicable) with respect to the Participant
for the Plan Year. Solely for purposes of this definition,
contributions made directly by an Employee to a Defined
Benefit Plan which maintains a qualified cost-of-living
arrangement as such term is defined in Section 415(k)(2)
shall be treated as Annual Additions. Notwithstanding the
foregoing, the numerator of the Defined Contribution Plan
Fraction shall be adjusted pursuant to Treasury Regulations
1.415-7(d)(1), Questions T-6 and T-7 of Internal Revenue
Service Notice 83-10, and Questions Q-3 and Q-14 of Internal
Revenue Service Notice 87-21.
"Section 415 Compensation" shall mean a
Participant's wages within the meaning of Code Section
3401(a) and all other payments of compensation to the
Participant by the Company (in the course of the Company's
business) for which the Company is required to provide the
Participant a written statement under Code Sections 6041(d),
6051(a)(3) and 6052. Section 415 Compensation shall be
determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based
on the nature or location of the employment or the services
performed. Compensation for any limitation year is the
compensation actually paid or includible in gross income
during such year. Effective January 1, 1998, "Section 415
Compensation" shall include elective deferrals as defined in
Section 402(g)(3) of the Code and any amount which is
contributed or deferred by the Company or a Related Company
at the election of an Employee and which is not includible
in the gross income of the Employee by reason of Code
Section 125.
A.2 - Annual Addition Limitations.
(a) The compensation limitation of Section 4.1 of
the Plan shall not apply to any contribution for medical
benefits (within the meaning of Section 419A(f)(2)) after
separation from service which is treated as an Annual
Addition. In the event that Annual Additions to all the
accounts of a Participant would exceed the limitations of
Section 4.1 of the Plan, they shall be reduced in the
following priority: (i) return of voluntary contributions
to the Participant; (ii) reduction of Company contributions.
(b) If any Company or any Related Company
contributes amounts, on behalf of Participants covered by
the Plan, to other Defined Contribution Plans, the
limitation on Annual Additions provided in Article IV of the
Plan shall be applied to Annual Additions in the aggregate
to the Plan and such other plans. Reduction of Annual
Additions, where required, shall be accomplished by first
refunding any voluntary contributions to Participants, then
by reducing contributions under such other plans pursuant to
the directions of the fiduciary for administration of such
other plans or under priorities, if any, established by the
terms of such other plans, and then, if necessary, by
reducing contributions under the Plan.
(c) In any case where a Participant under the
Plan is also a participant under a Defined Benefit Plan or a
Defined Benefit Plan and other Defined Contribution Plans
maintained by the Company or a Related Company, the sum of
the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction shall not exceed 1.0. Reduction
of contributions to or benefits from all plans, where
required, shall be accomplished by first reducing benefits
under such other Defined Benefit Plan or plans, then by
allocating any excess in the manner set out above with
respect to the Plan, and finally by reducing contributions
or allocating any excess contributions with respect to other
Defined Contribution Plans, if any; provided, however, that
adjustments necessary under this or the next preceding
paragraph may be made in a different manner and priority
pursuant to the agreement of the Committee and the
administrators of all other plans covering such Participant,
provided such adjustments are consistent with procedures and
priorities prescribed by Treasury Regulations under Section
415 of the Code.
(d) In the event the limitations of Section 4.1
of the Plan or this Appendix A are exceeded and the
conditions specified in Treasury Regulations Section 1.415-
6(b)(6) are met, the Committee may elect to apply the
procedures set forth in Treasury Regulations Section 1.415-
6(b)(6).
APPENDIX B
TOP-HEAVY PROVISIONS
Section 9.12 of the Plan shall be construed in
accordance with this Appendix B. Definitions in this
Appendix B shall govern for the purposes of this Appendix B.
Any other words and phrases used in this Appendix B,
however, shall have the same meanings that are assigned to
them under the Plan, unless the context clearly requires
otherwise.
B.1 - General.
This Appendix B shall be effective for Plan Years
beginning on or after January 1, 1984. This Appendix B
shall be interpreted in accordance with Section 416 of the
Code and the regulations thereunder.
B.2 - Definitions.
(a) The "Benefit Amount" for any Employee means
(i) in the case of any defined benefit plan, the present
value of his normal retirement benefit, determined on the
Valuation Date as if the Employee terminated on such
Valuation Date, plus the aggregate amount of distributions
made to such Employee within the five-year period ending on
the Determination Date (except to the extent already
included on the Valuation Date) and (ii) in the case of any
defined contribution plan, the sum of the amounts credited,
on the Determination Date, to each of the accounts
maintained on behalf of such Employee (including accounts
reflecting any nondeductible employee contributions) under
such plan plus the aggregate amount of distributions made to
such Employee within the five-year period ending on the
Determination Date. For purposes of this Section, the
present value shall be computed using a 5% interest
assumption and the mortality assumptions contained in the
defined benefit plan for benefit equivalence purposes,
provided that, if more than one defined benefit plan is
being aggregated for top-heavy purposes, the actuarial
assumptions which shall be used for testing top-heaviness
are those of the plan with the lowest interest assumption,
provided further that if the lowest interest assumption is
the same for two or more plans, the actuarial assumptions
used shall be that of the plan with the greatest value of
assets on the applicable date.
(b) "Company" means any company (including
unincorporated organizations) participating in the Plan or
plans included in the "aggregation group" as defined in this
Appendix B.
(c) "Determination Date" means the last day of
the preceding Plan Year or, in the case of the first Plan
Year of the Plan, the last day of the Plan Year.
(d) "Employees" means employees, former
employees, beneficiaries, and former beneficiaries who have
a Benefit Amount greater than zero on the Determination
Date.
(e) "Key Employee" means any Employee who, during
the Plan Year containing the Determination Date or during
the four preceding Plan Years, is:
(1) one of the ten Employees of a Company
having annual compensation from such Company of more
than the limitation in effect under Section
415(c)(1)(A) of the Code and owning (or considered as
owning within the meaning of Section 318 of the Code)
both more than a 1/2% interest and the largest
interests in such Company (if two Employees have the
same interest the Employee having the greater annual
compensation from the Company shall be treated as
having a larger interest);
(2) a 5% owner of a Company;
(3) a 1% owner of a Company who has an
annual compensation above $150,000; or
(4) an officer of a Company having an annual
compensation greater than 50% of the amount in
effect under Section 415(b)(1)(A) of the Code for
any such Plan Year (however, no more than the
lesser of (i) 50 employees or (ii) the greater of
3 employees or 10% of the Company's employees
shall be treated as officers). For purposes of
determining the number of employees taken into
account under this Section B.2(e)(4), employees
described in Section 414(q)(5) of the Code shall
be excluded.
(f) A "Non-Key Employee" means an Employee who is
not a Key Employee.
(g) "Valuation Date" means the first day (or such
other date which is used for computing plan costs for
minimum funding purposes) of the 12-month period ending on
the Determination Date.
(h) A "Year of Service" shall be calculated using
the Plan rules that normally apply for determining vesting
service.
These definitions shall be interpreted in
accordance with Section 416(i) of the Code and the
regulations thereunder and such rules are hereby
incorporated by reference. The term "Key Employee" shall
not include any officer or employee of an entity referred to
in Section 414(d) of the Code. For the purpose of this
subsection, "compensation" shall mean compensation as
defined in Section 414(q)(4) of the Code and shall be
determined without regard to Sections 125, 402(a)(8),
402(h)(1)(B) or, in the case of employer contributions made
pursuant to a salary reduction agreement, Section 403(b).
B.3 - Top-Heavy Definition.
The Plan shall be top-heavy for any Plan Year if,
as of the Determination Date, the "top-heavy ratio" exceeds
60%. The top-heavy ratio is the sum of the Benefit Amounts
for all employees who are Key Employees divided by the sum
of the Benefit Amounts for all Employees. For purposes of
this calculation only, the following rules shall apply:
(a) The Benefit Amounts of all Non-Key Employees
who were Key Employees during any prior Plan Year
shall be disregarded.
(b) The Benefit Amounts of all employees who have
not performed any services for any Company at any
time during the five-year period ending on the
Determination Date shall be disregarded; provided,
however, if an Employee performs no services for
five years and then again performs services, such
Employee's Benefit Amount shall be taken into
account.
(c) (1) Required Aggregation. This calculation
shall be made by aggregating any plans, of the
Company or a Related Company, qualified under
Section 401(a) of the Code in which a Key Employee
participates or which enables the Plan to meet the
requirements of Section 401(a)(4) or 410 of the
Code; all plans so aggregated constitute the
"aggregation group."
(2) Permissive Aggregation. The Company may
also aggregate any such plan to the extent that
such plan, when aggregated with this aggregation
group, continues to meet the requirements of
Section 401(a)(4) and Section 410 of the Code.
If an aggregation group includes two or more defined
benefit plans, the actuarial assumptions used in
determining an Employee's Benefit Amount shall be the
same under each defined benefit plan and shall be
specified in such plans. The aggregation group shall
also include any terminated plan which covered a Key-
Employee and which was maintained within the five-year
period ending on the Determination Date.
(d) This calculation shall be made in accordance
with Section 416 of the Code (including
416(g)(3)(B) and (g)(4)(A)) and the regulations
thereunder and such rules are hereby incorporated
by reference. For purposes of determining the
accrued benefit of a Non-Key Employee who is a
Participant in a defined benefit plan, this
calculation shall be made using the method which
is used for accrual purposes for all defined
benefit plans of the Company, or if there is no
such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted
under Section 411(b)(1)(C) of the Code.
B.4 - Vesting.
Notwithstanding the vesting provisions of the
Plan, if the Plan is top-heavy for any Plan Year, any
Participant who completes one Hour of Service during any day
of such Plan Year or any subsequent Plan Year and who
terminates during any day of such Plan Year or any
subsequent Plan Year shall be entitled to a vested benefit
which is the greater of his vested interest pursuant to
Section 5.2 of the Plan, or a vested interest at least equal
to the product of (x) the benefit such Participant would
receive under the Plan if he was 100% vested on the date of
such termination times (y) the percentage shown below:
Number of Completed
Years of Service Percentage
------------------- ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Notwithstanding the foregoing, the nonforfeitable percentage
of a Participant's benefit under the Plan shall not be less
than that determined under the Plan without regard to the
preceding vesting schedule. Such benefit shall be payable
in accordance with the provisions of the Plan regarding
payments to terminated Participants.
Notwithstanding the preceding paragraph, if the
Plan is no longer top-heavy in a Plan Year following a Plan
Year in which it was top-heavy, a Participant's vesting
percentage shall be computed under the vesting schedule that
otherwise exists under the Plan. However, in no event shall
a Participant's vested percentage in his accrued benefit be
reduced. In addition, a Participant shall have the option
of remaining under the vesting schedule set forth in this
Section if he has completed three years of Vesting Service.
The period for exercising such option shall begin on the
first day of the Plan Year for which the Plan is no longer
top-heavy and shall end 60 days after the later of such
first day or the day the Participant is issued written
notice of such option by the Company or the Committee.
B.5 - Minimum Benefits or Contributions, Compensation
Limitations and Section 415 Limitations.
If the Plan is top-heavy for any Plan Year, the
following provisions shall apply to such Plan Year:
(a) (1) Except to the extent not required by
Section 416 of the Code or any other provision of
law, notwithstanding any other provision of the
Plan, if the Plan and all other plans which are
part of the aggregation group are defined
contribution plans, each Participant (and any
other Employee required by Section 416 of the
Code) other than Key employees shall receive an
allocation of employer contributions and
forfeitures from a plan which is part of the
aggregation group at least equal to 3% (or, if
lesser, the largest percentage allocated to any
Key Employee for the Plan Year) of such
Participant's compensation for such Plan Year (the
"defined contribution minimum"). For purposes of
this subsection, salary reduction contributions on
behalf of a Key Employee must be taken into
account. For purposes of this subsection, a non-
Key Employee shall be entitled to a contribution
if he is employed on the last day of the Plan Year
(i) regardless of his level of compensation, (ii)
without regard to whether he has made any
mandatory contributions required under the Plan,
and (iii) regardless of whether he has less than
1,000 Hours of Service (or the equivalent) for the
accrual computation period.
(2) Except to the extent not required by
Section 416 of the Code or any other provision of
law, notwithstanding any other provisions of the
Plan, if the Plan or any other plan which is part
of the aggregation group is a defined benefit plan
each Participant who is a participant in any such
defined benefit plan (who is not a Key Employee)
who accrues a full Year of Service during such
Plan Year shall be entitled to an annual normal
retirement benefit from a defined benefit plan
which is part of the aggregation group which shall
not be less than the product of (i) the employee's
average compensation for the five consecutive
years when the employee had the highest aggregate
compensation and (ii) the lesser of 2% per Year of
Service or 20% (the "defined benefit minimum"). A
Non-Key Employee shall not fail to accrue a
benefit merely because he is not employed on a
specified date or is excluded from participation
because (i) his compensation is less than a stated
minimum or (ii) he fails to make mandatory
employee contributions. For purposes of
calculating the defined benefit minimum,
(i) compensation shall not include compensation in
Plan Years after the last Plan Year in which the
Plan is top-heavy and (ii) a Participant shall not
receive a Year of Service in any Plan Year before
January 1, 1984 or in any Plan Year in which the
Plan is not top-heavy. This defined benefit
minimum shall be expressed as a life annuity (with
no ancillary benefits) commencing at normal
retirement age. Benefits paid in any other form
or time shall be the actuarial equivalent (as
provided in the plan for retirement benefit
equivalence purposes) of such life annuity.
Except to the extent not required by Section 416
of the Code or any other provisions of law, each
Participant (other than Key Employees) who is not
a participant in any such defined benefit plan
shall receive the defined contribution minimum (as
defined in paragraph (a)(1) above).
(3) If a non-Key Employee is covered by
plans described in both paragraphs (1) and (2)
above, he shall be entitled only to the minimum
described in paragraph (1), except that for the
purpose of paragraph (1) "3% (or, if lesser, the
largest percentage allocated to any key employee
for the Plan Year)" shall be replaced by "5%".
Notwithstanding the preceding sentence, if the
accrual rate under the plan described in (2) would
comply with this Section B.4 absent the
modifications required by this Section, the
minimum described in paragraph (1) above shall not
be applicable.
(b) For purposes of this Section, "compensation"
shall mean all earnings included in the Employee's Form W-2
for the calendar year that ends within the Plan Year, not in
excess of $150,000, adjusted at the same time and in the
same manner as under Section 415(d) of the Code.
(c) (1) Unless the Plan qualifies for an
exception under Section B.4(c)(2), "1.0" shall be
substituted for "1.25" in the definitions of
Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction used in Appendix A to
the Plan.
(2) A Plan qualifies for an exception
from the rule of Section B.4(c)(1) if the Benefit
Amount of all Employees who are Key Employees does not
exceed 90% of the sum of the Benefit Amounts for all
Employees and one of the following requirements is met:
(A) A defined benefit minimum of
3% per Year of Service (up to 30%) is provided;
(B) For Participants covered only
by a defined contribution plan, a defined
contribution minimum of 4% is provided;
(C) For Participants covered by
both types of plans, benefits from the defined
contribution minimum are comparable to the 3%
defined benefit minimum;
(D) The plan provides a floor
offset where the floor is a 3% defined benefit
minimum; or
(E) A defined contribution minimum
of 7-1/2% of compensation is provided for any non-
Key Employee who is covered under both a defined
benefit plan and a defined contribution plan (each
of which is top-heavy) of a Company.