PRIMESOURCE CORPORATION
401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
PrimeSource Corporation (formerly known as Phillips & Jacobs,
Incorporated), a Pennsylvania corporation, (the "Company") adopted the
PrimeSource Corporation 401(k) Savings Plan (formerly known as Phillips &
Jacobs, Incorporated 401(k) Savings Plan) (the "Plan"). The Plan was amended
from time to time.
The Company hereby amends and completely restates the Plan
effective January 1, 1997, except as expressly stated to the contrary herein,
subject to the subsequent condition that the Internal Revenue Service issues a
determination that the Plan as amended and restated herein meets all applicable
requirements of section 401(a) of the Code (as defined in subsection 1(f)), that
employer contributions thereto remain deductible under section 404 of the Code
and that the trust fund maintained with respect thereto remains tax exempt under
section 501(a) of the Code. The Plan, as herein amended and restated, shall
apply only to an Employee who is credited with an Hour of Service (as defined in
subsection 1(p)) on or after January 1, 1997, except as expressly stated to the
contrary herein. The rights and benefits, if any, of a former employee shall be
determined in accordance with the provisions of the Plan as in effect on the
date he last was credited with an Hour of Service.
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
Section Page
1 DEFINITIONS............................................. 1
(a) Accrued Benefit...................................... 1
(b) Administrator or Plan Administrator.................. 1
(c) Annual Additions..................................... 1
(d) Board of Directors................................... 1
(e) Break in Service..................................... 1
(f) Code................................................. 2
(g) Committee............................................ 2
(h) Company.............................................. 2
(i) Compensation......................................... 2
(j) Disability........................................... 2
(k) Employee............................................. 3
(l) Entry Date........................................... 3
(m) ERISA................................................ 3
(n) Fiduciary............................................ 3
(o) Fund................................................. 4
(p) Hour of Service...................................... 4
(q) Investment Category.................................. 6
(r) Investment Manager................................... 6
(s) Limitation Year...................................... 6
(t) Matching Account..................................... 7
(u) Member............................................... 7
(v) Normal Retirement Date............................... 7
(w) Participating Company................................ 7
(x) Period of Service.................................... 7
(y) Period of Severance.................................. 7
(z) Plan................................................. 8
(aa) Prior Year........................................... 8
(ab) PrimeSource Stock.................................... 8
(ac) Prior Plan........................................... 8
(ad) Related Entity....................................... 8
(ae) Restatement Effective Date........................... 9
(af) Rollover Account..................................... 9
(ag) Salary Reduction Account............................. 9
(ah) Service.............................................. 9
(ai) Severance Date....................................... 10
(aj) Transferred Account.................................. 11
(ak) Trust Agreement...................................... 11
(al) Trustee.............................................. 11
(am) Valuation Date....................................... 11
(an) Voluntary Contributions Account...................... 11
(ao) Year of Service for Eligibility...................... 11
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
Section Page
2 ADMINISTRATION OF THE PLAN............................... 12
(a) Allocation of Responsibility.......................... 12
(b) Plan Administrator.................................... 12
(c) Committee............................................. 12
(d) Powers of Board of Directors.......................... 13
(e) Powers of Trustee..................................... 14
(f) Claims................................................ 14
(g) Fiduciary Compensation................................ 15
(h) Plan Expenses......................................... 15
(i) Fiduciary Insurance................................... 15
(j) Indemnification....................................... 15
3 PARTICIPATION IN THE PLAN................................ 16
(a) Initial Eligibility.................................. 16
(b) Measuring Service.................................... 17
(c) Termination and Requalification...................... 17
(d) Commencement of Participation........................ 18
(e) Special Rule for Rollovers........................... 18
(f) Termination of Membership............................ 18
4 MEMBER AND PARTICIPATING COMPANY CONTRIBUTIONS........... 19
(a) Salary Reduction Contributions....................... 19
(b) Salary Reduction Contribution Limitations............ 19
(c) Salary Reduction Account............................. 21
(d) Participating Company Matching Contributions......... 21
(e) Matching Account..................................... 22
(f) Compliance with Salary Reduction Contributions
Discrimination Tests................................ 22
(g) Compliance with Participating Company Matching
Contributions Discrimination Tests.................. 26
(h) Payroll Taxes........................................ 31
(i) Rollovers............................................ 31
(j) Other Member Contributions........................... 31
(k) Transferred and Voluntary Contributions Accounts..... 31
(l) Deductibility........................................ 32
5 MAXIMUM CONTRIBUTIONS AND BENEFITS....................... 33
(a) Defined Contribution Limitation...................... 33
(b) Combined Limitation.................................. 34
(c) Combined Limitation Computation...................... 34
(d) Definition of "Compensation" for Code Limitations.... 35
(e) Transition Provision................................. 37
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
Section Page
6 ADMINISTRATION OF FUNDS.................................. 38
(a) Investment Control.................................... 38
(b) Employer Stock........................................ 38
(c) Member Elections...................................... 39
(d) No Member Election.................................... 39
(e) Facilitation.......................................... 39
(f) Valuations............................................ 40
(g) Allocation of Gain or Loss............................ 40
(h) Bookkeeping........................................... 40
(i) Tender Offers......................................... 40
(j) Voting Company Stock.................................. 41
7 BENEFICIARIES AND DEATH BENEFITS......................... 42
(a) Designation of Beneficiary............................ 42
(b) Beneficiary Priority List............................. 42
(c) Proof of Death........................................ 43
(d) Divorce............................................... 43
8 BENEFITS FOR MEMBERS..................................... 44
(a) Retirement Benefit.................................... 44
(b) Death Benefit......................................... 44
(c) Disability Benefit.................................... 44
(d) Termination of Employment Benefit..................... 44
(e) Time of Forfeiture.................................... 47
9 DISTRIBUTION OF BENEFITS................................. 48
(a) Commencement.......................................... 48
(b) Benefit Forms......................................... 49
(c) Benefit Election...................................... 49
(d) Distributions in Kind................................. 49
(e) Deferred Payments and Installments.................... 49
(f) Withholding........................................... 50
(g) Compliance with Code Requirements..................... 50
(h) Distribution Limitations ............................. 50
(i) Rollover Election . . . .............................. 51
10 IN-SERVICE DISTRIBUTIONS................................. 53
(a) General Rule.......................................... 53
(b) Elective Distributions................................ 53
(c) Age 59-1/2............................................ 53
(d) Hardship.............................................. 53
(e) Special Vested Balance Calculation Rule............... 55
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
Section Page
11 LOANS.................................................... 57
(a) Availability............................................ 57
(b) Minimum Requirements.................................... 57
(c) Accounting.............................................. 59
12 TITLE TO ASSETS.......................................... 60
13 AMENDMENT AND TERMINATION................................ 61
(a) Amendment.............................................. 61
(b) Termination............................................ 61
(c) Conduct on Termination................................. 61
14 LIMITATION OF RIGHTS..................................... 63
(a) Alienation............................................. 63
(b) Qualified Domestic Relations Order Exception........... 63
(c) Employment............................................. 63
15 MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS...... 65
(a) General Rule........................................... 65
(b) Protected Benefits..................................... 65
(c) Special Provisions Applicable to Transferred Accounts
from The Momentum Money-Maker 401(k)
Retirement Plan and the Onondaga Litho Supply Co.,
Inc. Employees' Profit Sharing and Retirement Plan.... 65
(d) In-Service Distribution from Certain Transferred
Accounts............................................. 69
(e) Vesting -- Dixie Plan.................................. 69
(f) Code Requirements...................................... 69
16 PARTICIPATION BY RELATED ENTITIES........................ 70
(a) Commencement........................................... 70
(b) Termination............................................ 70
(c) Single Plan............................................ 70
(d) Delegation of Authority................................ 70
17 TOP-HEAVY REQUIREMENTS................................... 71
(a) General Rule............................................ 71
(b) Calculation of Top-Heavy Status......................... 71
(c) Definitions............................................. 71
(d) Combined Benefit Limitation............................. 74
(e) Vesting................................................. 74
(f) Minimum Contribution.................................... 74
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
Section Page
18 MISCELLANEOUS............................................ 76
(a) Incapacity.............................................. 76
(b) Reversions.............................................. 76
(c) Employee Data........................................... 77
(d) In Writing Requirement.................................. 77
(e) Doubt as to Right to Payment............................ 77
(f) Inability to Locate Distributee......................... 77
(g) Estoppel of Members and Their Beneficiaries............. 78
(h) Law Governing........................................... 78
(i) Pronouns................................................ 78
(j) Interpretation.......................................... 78
Schedule A............................................................. A-1
1. DEFINITIONS
(a) "Accrued Benefit" shall mean on any date of determination the
value of a Member's share of the Fund. (b) "Administrator" or
"Plan Administrator" shall mean a plan administrator within the
meaning of the Code and ERISA. The Company shall be the
Administrator. (c) "Annual Additions" shall mean the sum for any
Limitation Year of (i) employer contributions, (ii) employee
contributions, (iii) forfeitures and (iv) amounts described in
sections 415(l) and 419A(d) of the Code, which are (A) allocated
to an account which provides medical benefits under section
401(h) or 419(e) of the Code and (B) treated as "Annual
Additions" to the account of a Member under such provisions of
the Code. "Annual Additions" shall include excess contributions
as defined in section 401(k)(8)(B) of the Code, excess aggregate
contributions as defined in section 401(m)(6)(B) of the Code and
excess deferrals as described in section 402(g) of the Code,
regardless of whether such amounts are distributed or forfeited.
"Annual Additions" shall not include (i) rollover contributions
(as defined in sections 402(c), 403(a)(4), 403(b)(8) and
408(d)(3) of the Code), (ii) employee contributions to a
simplified employee pension plan which are excludable from gross
income under section 408(k)(6) of the Code or (iii) "buy-back"
contributions made under subsection 8(d)(iv) of the Plan. (d)
"Board of Directors" shall mean the Board of Directors of the
Company or any committee or delegee thereof designated in
accordance with subsection 2(d). (e) "Break in Service" shall
mean for purposes of Section 3 a specified twelve-month
computation period in which an Employee is credited with less
than 501 Hours of Service and for purposes of Section 8 a Period
of Severance of at least five years.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the same as may be further amended from time to
time. (g) "Committee" shall mean the individual or group of
individuals designated to control and manage the operation and
administration of the Plan to the extent set forth herein. (h)
"Company" shall mean PrimeSource Corporation, a Pennsylvania
corporation. (i) "Compensation" shall mean the total cash
remuneration for services paid to an Employee by a Participating
Company for services during the portion of a plan Year such
Employee is eligible to participate under subsections 3(a) and
3(d). "Compensation" shall also include amounts of cash
remuneration for services which an Employee elects to have
withheld from his remuneration for services under this Plan or a
plan which meets the requirements of section 125 of the Code.
"Compensation" shall not include (i) income from exercise of
stock options, receipt or vesting of restricted stock grants,
exercise of stock appreciation rights or similar equity-based
compensation arrangements, (ii) severance pay, (iii) deferred
compensation, (iv) expense reimbursements or allowances of any
kind, including, but not limited to, tuition reimbursement and
car allowances, (v) moving expenses, and (vi) the value of
welfare benefits or perquisites or similar items. "Compensation"
with respect to any Member for any Plan Year shall be limited to
$150,000 (or an increased amount permitted in accordance with a
cost of living adjustment under section 415(d) of the Code).
(j) "Disability" shall mean a medically determinable
physical or mental impairment which would qualify a
Member for benefits under the Company's long-term disability plan, without
regard to whether the Member participates in such plan and is of a potentially
permanent character which prevents a Member from continuing his usual and
customary employment with a Participating Company. Disability shall be
determined by the Committee in its absolute discretion on the basis of such
medical evidence as the Committee deems necessary or desirable.
(k) "Employee" shall mean each and every person who
is an employee of a Participating Company or a Related
Entity. The term "Employee" shall also include a person who is a "leased
employee" (within the meaning of section 414(n)(2) of the Code) with respect to
a Participating Company or a Related Entity. Notwithstanding the foregoing, no
person who is a "leased employee" or who a Participating Company determines is
not its employee for purposes of wage withholding required under section 3401,
et. seq. of the Code (regardless of whether an administrative agency or court
rules that such person is a Participating Company's employee for any purpose)
shall be eligible to participate in this Plan or be deemed an "Employee" for
purposes of eligibility to participate in this Plan.
(l) "Entry Date" shall mean the first day of each January,
April, July and October of each Plan Year.
Effective July 1, 1999, "Entry Date" shall mean the first day of each calendar
month.
(m) "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended, and the same as
may be further amended from time to time.
(n) "Fiduciary" shall mean a person who, with
respect to the Plan, (i) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control with respect to management or disposition of
the Plan's assets, (ii) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any monies or other property
of the Plan, or has any authority or responsibility to do so, or (iii) has any
discretionary authority or discretionary responsibility in the administration of
the Plan.
(o) "Fund" shall mean the assets of the Plan. All Investment
Categories shall be part of the Fund.
(p) "Hour of Service"
(i) General Rule. "Hour of Service" shall mean each hour (A) for
which an Employee is directly or indirectly paid, or entitled to
payment, by a Participating Company or a Related Entity for the
performance of duties or (B) for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by a
Participating Company or a Related Entity. These hours shall be
credited to the Employee for the period or periods in which the
duties were performed or to which the award or agreement pertains
irrespective of when payment is made. The same hours shall not be
credited under both (A) and (B) above.
(ii) Paid Absences. An Employee shall also be credited with one
"Hour of Service" for each hour for which the Employee is
directly or indirectly paid, or entitled to payment, by a
Participating Company or a Related Entity for reasons other than
the performance of duties or absence due to vacation, holiday,
illness, incapacity, disability, layoff, jury duty or authorized
leave of absence for a period not exceeding one year for any
reason in accordance with a uniform policy established by the
Committee; provided, however, not more than 501 "Hours of
Service" shall be credited to an Employee under this subsection
1(p)(ii) on account of any single, continuous period during which
the Employee performs no duties and provided, further, that no
credit shall be given if payment (A) 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 or (B) is made solely to reimburse an Employee for
medical or medically related expenses incurred by the Employee.
(iii) Military. An Employee shall also be credited with one "Hour
of Service" for each regularly scheduled work hour during which
the Employee is absent on active duty in the military service of
the United States under leave of absence granted by a
Participating Company or a Related Entity provided he returns to
employment with a Participating Company or a Related Entity
within 90 days after his release from active duty.
Notwithstanding the foregoing or any provision of this Plan to
the contrary, Hours of Service credit with respect to qualified
military service will be provided in accordance with section
414(u) of the Code if that provides greater credit.
(iv) Maternity/Paternity. For purposes of subsection 1(e), an
Employee shall be credited with one "Hour of Service" for each
hour that otherwise would normally have been credited to the
Employee but during which such Employee is absent from work for
any period (A) by reason of the Employee's pregnancy, (B) by
reason of the birth of the Employee's child, (C) by reason of the
placement of a child with such Employee in connection with an
adoption of such child by the Employee or (D) for purposes of
caring for a child for a period beginning immediately following
such birth or placement, provided that an Employee shall be
credited with no more than 501 "Hours of Service" on account of
any single continuous period of absence by reason of any such
pregnancy, birth or placement and provided further that "Hours of
Service" credited to an individual on account of such a period of
absence shall be credited in the Plan Year in which such absence
begins if an Employee would otherwise fail to be credited with
501 or more "Hours of Service" in such Plan Year or, in any other
case, in the immediately following Plan year.
(v) Equivalencies. If, for Plan purposes, an Employee's records
are kept on other than an hourly basis as described above, the
Committee, according to uniform rules applicable to a class of
Employees or Members, may apply the following equivalencies for
purposes of crediting "Hours of Service":
Basis Upon Which Records Credit Granted to Individual if Individual Earns
are Maintained One or More Hours of Service During Period
Shift Actual hours for full shift
Day 10 Hours of Service
Week 45 Hours of Service
Semi-Monthly Payroll Period 95 Hours of Service
Months of Employment 190 Hours of Service
(vi) Miscellaneous. For purposes of this subsection 1(p), the
regulations issued by the Secretary of Labor at 29 CFR
ss.2530.200b-2(b) and (c) are incorporated by reference. Nothing
herein shall be construed as denying an Employee credit for an
"Hour of Service" if credit is required by separate federal law.
(q) "Investment Category" shall mean any separate investment fund
which is made available under the terms of the Plan.
(r) "Investment Manager" shall mean any Fiduciary (other than a
Trustee) who:
(i) has the power to manage, acquire, or
dispose of any asset of the Plan;
(ii) is:
(A) registered as an investment
advisor under the Investment Advisers
Act of 1940; (B) a bank, as defined
in that Act; or (C) an insurance
company qualified to perform services
described in subsection 1(r)(i)
above under the laws of more than one state; and
(iii) has acknowledged in writing that he
is a Fiduciary with respect to the Plan.
(s) "Limitation Year" shall mean the consecutive
twelve-month period commencing on January 1st and ending on December 31st.
(t) "Matching Account" shall mean the portion of the
Member's Accrued Benefit derived from Participating
Company contributions under subsection 4(d) hereof and the corresponding
provisions of the Plan as heretofore effective, adjusted as provided in
subsection 4(e).
(u) "Member" shall mean each Employee of a
Participating Company who satisfies the requirements for participation under
Section 3 hereof and each other person who has an AccruedBenefit held under the
Plan.
(v) "Normal Retirement Date" shall mean the date on
which a Member attains age 65.
----------------------
(w) "Participating Company" shall mean each Related
Entity with respect to the Company which adopts or is
---------------------
deemed to adopt this Plan pursuant to Section 16. The term shall also include
the Company, unless the context otherwise requires.
(x) "Period of Service" shall mean the period of
time commencing on the date on which an Employee first is
-----------------
credited with an Hour of Service or, if applicable, on the date following a
Period of Severance of one year or more on which an Employee first is credited
with an Hour of Service provided he requalifies for participation under
subsection 3(c), and ending on the next following Severance Date; provided,
however, the period beginning on the anniversary of the date of an Employee's
absence due to maternity or paternity and ending on the second anniversary
thereof shall not be included in a Period of Service. A Period of Severance of
less than one year shall be included in a Period of Service for all purposes.
(y) "Period of Severance" shall mean the period of
time commencing on an Employee's Severance Date and
-------------------
ending on the date on which the Employee first again is credited with an Hour of
Service, exclusive of periods during which an Employee is on an unpaid leave
pursuant to the Family and Medical Leave Act of 1993.
(z) "Plan" shall mean the PrimeSource Corporation
401(k) Savings Plan as amended and restated as set forth
----
herein effective January 1, 1997, and the same as may be amended from time to
time.
(aa) "Plan Year" shall mean the consecutive twelve-
month period commencing on January 1st and ending on December 31st.
(ab) "PrimeSource Stock" shall mean PrimeSource
Corporation common stock.
-----------------
(ac) "Prior Plan" shall mean any retirement plan
which satisfies the applicable requirements of section
----------
401(a) of the Code and from which assets and liabilities are transferred to this
Plan in accordance with section 414(l) of the Code so that this Plan is subject
to the requirements of section 411(d)(6) of the Code with respect to transferred
accounts.
(ad) "Related Entity" shall mean (i) all corporations
which are members with a Participating Company in a
controlled group of corporations within the meaning of section 1563(a) of the
Code, determined without regard to sections 1563(a)(4) and (e)(3)(C) of the
Code, (ii) all trades or businesses (whether or not incorporated) which are
under common control with a Participating Company as determined by regulations
promulgated under section 414(c) of the Code, (iii) all trades or businesses
which are members of an affiliated service group with a Participating Company
within the meaning of section 414(m) of the Code and (iv) any entity required to
be aggregated with a Participating Company under regulations prescribed under
section 414(o) of the Code (to the extent provided in such regulations);
provided, however, for purposes of Section 5, the definition shall be modified
to substitute the phrase "more than 50%" for the phrase "at least 80%" each
place it appears in section 1563(a)(1) of the Code. Furthermore, for purposes of
crediting Hours of Service for eligibility to participate and Service for
purposes of vesting, employment as a "leased employee," within the meaning of
section 414(n) of the Code, of a Participating Company or a Related Entity shall
be treated as employment for a Participating Company or a Related Entity. For
purposes of subsection 3(a) governing Hours of Service and periods of employment
credited for purposes of eligibility to participate, Bell Industries, Inc. shall
be deemed a "Related Entity" for periods through September 14, 1998 for persons
who become Employees on September 14, 1998 as a result of an asset acquisition
from Bell Industries, Inc. on that date. An entity the stock or assets of which
a Participating Company acquires on or after September 1, 1999 which is listed
on Schedule A shall be deemed a "Related Entity" for the purposes and the
periods prior to the date set forth in Schedule A for persons who become
Employees incident to and within 30 days of such acquisition. In any other case,
an entity is a "Related Entity" only during those periods in which it is
included in a category described in this subsection.
(ae) "Restatement Effective Date" shall mean January
1, 1997.
--------------------------
(af) "Rollover Account" shall mean the portion of the
Member's Accrued Benefit derived from contributions
----------------
made under subsection 4(i)(i) hereof and the corresponding provisions of the
Plan as heretofore effective, adjusted as provided in subsection 4(i)(ii).
(ag) "Salary Reduction Account" shall mean the
portion of the Member's Accrued Benefit derived from
------------------------
contributions made under subsection 4(a) hereof and the corresponding provisions
of the Plan as heretofore effective, adjusted as provided in subsection 4(c).
(ah) "Service" shall mean the sum of an Employee's
Periods of Service. Service is measured in completed
-------
years and days, where 365 days of Service equal one completed year of Service.
(ai) "Severance Date" shall mean the earlier of (i)
the date an Employee quits, is discharged (or severed,
if later), retires or dies or (ii) the first anniversary of the date an Employee
is absent from the employ of all Participating Companies and all Related
Entities for any reason other than an approved leave of absence granted in
writing by the Company according to a uniform rule applied without
discrimination or in accordance with applicable law provided the Employee
returns to the employ of a Participating Company or a Related Entity upon
completion of the leave. However, if the Employee was on any period of unpaid
leave taken pursuant to the Family and Medical Leave Act of 1993, he shall not
incur a Severance Date for purposes of subsection 1(e) until the leave expires
or, if applicable, the date determined under the last sentence of this
subsection. Further, an Employee who terminates Service to enter the military
service of the United States shall not suffer a Severance Date as of such date
provided (i) such Employee's rights are protected by the Uniform Services
Employment and Reemployment Rights Act of 1994 or other federal law and (ii)
such Employee returns to employment with a Participating Company or a Related
Entity within the period required by law for preservation of his rights. Under
such circumstances, an Employee shall receive credit for Service for his entire
period of absence. If an Employee on an approved leave of absence or qualified
military service does not return to the employ of a Participating Company or a
Related Entity upon completion of his leave or expiration of the period provided
by law in the case of qualified military service, his Severance Date generally
shall be the last day for which he received his regular pay. In addition, for
purposes of subsection 1(e), an Employee shall not suffer a Severance Date until
the second anniversary of the date on which such Employee is absent from work
(i) by reason of the Employee's pregnancy, (ii) by reason of the birth of the
Employee's child, (iii) by reason of the placement of a child with such Employee
in connection with an adoption of
such child by the Employee or (iv) for purposes of caring for a child for a
period beginning immediately following birth or placement.
(aj) "Transferred Account" shall mean the portion of
the Member's Accrued Benefit transferred to this Plan
from a Prior Plan by reason of a plan merger or direct transfer from another
plan without the Member's consent.
(ak) "Trust Agreement" shall mean the agreement or
agreements between the Company and a Trustee under which all or a portion of the
Fund is held.
(al) "Trustee" shall mean such person, persons or
corporate fiduciary designated to manage and control all or a portion of the
Fund pursuant to the terms of the Plan and a Trust Agreement.
(am) "Valuation Date" shall mean any business day the
New York Stock Exchange is open for trading and such other dates as the
Committee may specify from time to time. With respect to a
Member's Accrued Benefit, the business day of initial investment of new
contributions or liquidation of a Member's investment credited to an Investment
Category for reinvestment or distribution shall be the "Valuation Date" for
purposes of determining the amount of investment, reinvestment or distribution.
(an) "Voluntary Contributions Account" shall mean the
portion of a Member's Accrued Benefit derived from his contributions under a
Prior Plan which were includable in gross income forfederal income tax purposes.
(ao) "Year of Service for Eligibility" shall mean a
consecutive twelve-month measuring period specified in Section 3 in which an
Employee is credited with 1,000 Hours of Service or more.
20 ADMINISTRATION OF THE PLAN
(a) Allocation of Responsibility. The Board of
Directors, the Administrator, the Committee, each Trustee
and each Investment Manager (if any) possess certain specified powers, duties,
responsibilities and obligations under the Plan's governing instruments. It is
intended under this Plan that each Fiduciary be responsible solely for the
proper exercise of its own functions and that each not be responsible for any
act or failure to act of another, unless otherwise responsible as a breach of
its fiduciary duty or for breach of duty by another Fiduciary under ERISA's
rules of co-fiduciary responsibility. Any person may serve in more than one
fiduciary capacity.
(b) Plan Administrator. The Plan Administrator
shall file all reports and distribute to Members and
beneficiaries reports and other information required under ERISA or the Code and
shall discharge all other duties of a plan administrator under ERISA or the Code
with respect to the Plan.
(c) Committee. The Committee shall be the Plan's
named fiduciary (within the meaning of ERISA) and shall
have the power and duty to control and manage the operation and administration
of the Plan which shall include, but shall not be limited to, the performance of
the following acts:
(i) the filing of all reports required of
the Plan, other than those which are the responsibility of the Administrator;
(ii) the distribution to Members and
beneficiaries of all reports and other information required of the Plan, other
than reports and information required to be distributed by the Administrator;
(iii) the keeping of complete records of
the administration of the Plan;
(iv) the promulgation of rules and
regulations for administration of the Plan consistent with the terms and
provisions of the Plan and the Trust Agreement and the establishment of a
procedure to determine the qualified status of a domestic relations order;
(v) the establishment of a funding policy
and method for the Plan, including, but not limited
to, selecting or establishing Investment Categories for the Plan; and
(vi) the absolute discretion to interpret
the Plan and its terms, including the absolute
discretion to determine any questions of fact arising under the Plan and to make
all decisions required by the Plan. The Committee's interpretation of the Plan
and any actions and decisions taken in good faith by the Committee based on its
interpretation shall be final and conclusive. The Committee may correct any
defect, or supply any omission, or reconcile any inconsistency in the Plan in
such manner and to such extent as shall be expedient to carry the Plan into
effect and shall be the sole judge of such expediency. The Committee may (i)
delegate all or a portion of the responsibilities of controlling and managing
the operation and administration of the Plan to one or more persons, and (ii)
appoint agents, investment advisers, counsel, physicians or other
representatives to render advice with regard to any of its responsibilities
under the Plan.
(d) Powers of Board of Directors. The Board of
Directors is responsible for appointing and removing each
Trustee, each Investment Manager (if any) and the Committee and for amending the
Plan, each Trust Agreement, and each asset management agreement (if any). The
Board of Directors may delegate any power or duty it has under the Plan or a
Trust Agreement, including, but not limited to, amending the Plan or a Trust
Agreement, to a committee of the Board of Directors, to any officer(s) or
Employee(s) of the Company or a Related Entity or to any other person or entity,
in which case such delegee and not the Board of Directors, shall be responsible
for exercise of the delegated functions.
(e) Powers of Trustee. Each Trustee and each
Investment Manager (if any) is responsible for the
management and control of the portion of the Fund over which it
has control to the extent provided in its Trust Agreement or asset management
agreement, respectively.
(f) Claims. If, pursuant to the rules, regulations
or other interpretations of the Plan, the Committee
denies the claim of a Member or beneficiary for benefits under the Plan, the
Committee shall provide written notice, within 90 days after receipt of the
claim, setting forth in a manner calculated to be understood by the claimant:
(i) the specific reasons for such denial;
(ii) the specific reference to the Plan
provisions on which the denial is based;
(iii) a description of any additional
material or information necessary to perfect the claim and
an explanation of why such material or information is needed; and
(iv) an explanation of the Plan's claim
review procedure and the time limitations of this
subsection applicable thereto.
A Member or beneficiary whose claim for benefits has been denied may request
review by the Committee of the denied claim by notifying the Committee in
writing within 60 days after receipt of the notification of claim denial. As
part of said review procedure, the claimant or his authorized representative may
review pertinent documents and submit issues and comments to the Committee in
writing. The Committee shall render its decision to the claimant in a manner
calculated to be understood by the claimant not later than 60 days after receipt
of the request for review, unless special circumstances require an extension of
time, in which case decision shall be rendered as soon after the sixty-day
period as possible, but not later than 120 days after receipt of the request for
review. The decision on review shall state the specific reasons therefor and the
specific Plan references on which it is based.
(g) Fiduciary Compensation. Each Fiduciary who
already receives full-time pay from a Participating
Company or a Related Entity shall serve without compensation from the Plan for
his services as such, but he shall be reimbursed pursuant to subsection 2(h) for
any reasonable expenses incurred by him in the administration of the Plan. A
Fiduciary who is not already receiving full-time pay from a Participating
Company may be paid such reasonable compensation as shall be agreed upon.
(h) Plan Expenses. All expenses of administration
of the Plan shall be paid out of the Fund unless paid
by the Company or a Member. According to uniform rules, the Committee may charge
expenses to a particular Investment Category, a particular Member's Accrued
Benefit or a particular Member if the Committee determines that such allocation
of expense or charge is desirable for the equitable administration of the Plan.
(i) Fiduciary Insurance. If the Committee so
directs, the Plan shall purchase insurance to cover the Plan
from liability or loss occurring by reason of the act or omission of a Fiduciary
provided such insurance permits recourse by the insurer against the Fiduciary in
the case of a breach of a fiduciary obligation by such Fiduciary.
(j) Indemnification. The Company shall indemnify
and hold harmless to the maximum extent permitted by its
by-laws each Fiduciary who is an Employee or who is an officer or director of a
Participating Company or any Related Entity from any claim, damage, loss or
expense, including litigation expenses and attorneys' fees, resulting from such
person's service as a Fiduciary of the Plan provided the claim, damage, loss or
expense does not result from the Fiduciary's gross negligence or intentional
misconduct.
30 PARTICIPATION IN THE PLAN
(a) Initial Eligibility
(i) Service Requirement
(A) Prior to January 1,1999. Each
and every Employee of a Participating Company not
excluded under subsection 3(a)(ii) shall be eligible to make contributions under
subsection 4(a) and be allocated matching contributions for payroll periods
commencing coincident with or next following the Entry Date the Employee is
credited with one Year of Service for Eligibility, or, if later, the Entry Date
after the Employee attains age 21.
(B) After December 31, 1998. Each
and every Employee of a Participating Company not
excluded under subsection 3(a)(ii) shall be eligible to make contributions under
subsection 4(a) and be allocated matching contributions for payroll periods
commencing coincident with or next following the Entry Date the Employee is
credited with at least 250 Hours of Service in a consecutive period of three
calendar months, or, if later, the first Entry Date after the Employee attains
age 21.
(ii) Excluded Employees. Notwithstanding the
foregoing provision of this subsection,
(A) no Employee whose terms and
conditions of employment are determined by a collective
bargaining agreement between employee representatives and a Participating
Company shall be eligible to participate unless such collective bargaining
agreement provides to the contrary, in which case such Employee shall be
eligible to participate upon compliance with such provisions for eligibility and
participation as such agreement shall provide; except that no Employee who has
selected, or in the future selects, a union shall become ineligible during the
period between his selection of the union and the execution of the first
collective bargaining agreement which covers him; (B) no person who is an
Employee by reason of the second sentence of subsection 1(k) shall be eligible
to participate;
(C) no person a Participating Company
determines is not its employee for purposes of
federal income tax withholding shall be eligible to participate, regardless of
whether an administrative agency or court rules that such person is a
Participating Company's employee for any purpose; and
(D) no Employee who is a nonresident
alien and who receives no earned income (within the
meaning of section 911(d)(2) of the Code) from a Participating Company which
constitutes income from sources within the United States (within the meaning of
section 861(a)(3) of the Code) shall be eligible to participate.
(b) Measuring Service
(A) Prior to January 1, 1999.
For purposes of measuring service to satisfy the
eligibility provisions, the Year of Service for Eligibility computation period
shall begin with the date on which the Employee first is credited with an Hour
of Service; provided, however, if an Employee is credited with less than 1,000
Hours of Service in such measuring period, then subsequent measuring periods
shall begin with the January 1st next following the Employee's date of hire and
continue on a Plan Year basis thereafter.
(B) After December 31, 1998.
For purposes of measuring Service to satisfy the
eligibility provisions, the computation period shall begin with the date on
which the Employee first is credited with an Hour of Service.
(c) Termination and Requalification. An Employee
who has satisfied
the applicable service requirement of subsection 3(a) and who subsequently
becomes ineligible for any reason shall requalify for participation on the date
on which he is next
credited with an Hour of Service in an eligible job classification under
subsection 3(a), or, if later, the Entry Date after he attains age 21.
(d) Commencement of Participation. An Employee who
satisfies all the requirements for eligibility under
subsection 3(a) shall become a Member on the Entry Date following his timely
election authorizing amounts be withheld from his Compensation and be credited
to his Salary Reduction Account under the Plan. An Employee who satisfies all
the requirements for eligibility under subsection 3(a) and who does not elect to
have amounts withheld from his Compensation shall be deemed a participant in the
Plan to the extent required by ERISA on the first Entry Date as of which his
election to have amounts withheld could have become effective.
(e) Special Rule for Rollovers. An Employee of a
Participating Company who will be eligible to
participate in the Plan after satisfying the Service requirement of subsection
3(a) may make a contribution to the Plan under subsection 4(i). An individual
who makes a contribution under subsection 4(i) shall become a Member on the date
of his contribution; however, such individual shall not be considered to be a
Member for purposes of the remainder of Section 4 until he satisfies the Service
requirement of subsection 3(a).
(f) Termination of Membership. An Employee who
becomes a Member shall remain a Member as long as he has
an Accrued Benefit held under the Plan.
40 MEMBER AND PARTICIPATING COMPANY CONTRIBUTIONS
(a) Salary Reduction Contributions. Each Employee
who becomes eligible to participate under subsection
3(a) may contribute any even multiple of 1.0%, but not less than 2% or more than
15%, of his Compensation for a payroll period, as he shall elect in a manner
prescribed by the Committee. The Committee may limit further the amount of
contribution for all Members or a class of Members as the Committee determines
is necessary or desirable to facilitate Plan administration or comply with
applicable Code provisions. The initial election to contribute may be effective
as of any Entry Date. Such contribution shall be accomplished through direct
reduction of Compensation in each payroll period that the election is in effect.
For purposes of the Code, such contribution shall be deemed to be made by the
Member's employer. A Member may elect to increase or reduce his contributions as
of an Entry Date or terminate his contributions as of any date. All such
elections shall be made in a manner and shall become effective on the date the
Committee prescribes as the effective date. Contributions made by Participating
Companies under this subsection shall be made at such times as the Company
determines and shall be allocated to the Salary Reduction Accounts of the
Members from whose Compensation the contributions were withheld in an amount
equal to the amount withheld.
(b) Salary Reduction Contribution Limitations.
Contributions under subsection 4(a) shall be limited as provided below:
(i) Exclusion Limit. The maximum amount
of contribution which any Member may make in any
calendar year under subsection 4(a) is $9,500 (or such increased annual amount
resulting from a cost of living adjustment pursuant to sections 402(g)(5) and
415(d)(1) of the Code), reduced by the amount of elective deferrals by such
Member under all other plans, contracts or arrangements of any Participating
Company or Related Entity. If the contribution under subsection 4(a) for a
Member for any calendar year exceeds $9,500 (or such increased annual amount
resulting from an adjustment described above), the Committee shall direct the
Trustee to distribute the excess amount (plus any income and minus any loss
allocable to such amount) to the Member not later than the April 15th following
the close of such calendar year. If (A) a Member participates in another plan
which includes a qualified cash or deferred arrangement or other program subject
to the limitations of section 402(g) of the Code, (B) such Member contributes in
the aggregate more than the exclusion limit under this Plan and the
corresponding provisions of the other plan and (C) the Member notifies the
Committee not later than the March 1st following the close of such calendar year
of the portion of the excess the Member has allocated to this Plan, then the
Committee may direct the Trustee to distribute to the Member not later than
April 15th following the close of such calendar year the excess amount (plus any
income and minus any loss allocable to such amount) which the Member allocated
to this Plan. A Member shall be deemed to have given the notification described
in (C) above if the excess results from contributions solely to this Plan or
plans sponsored by Related Entities.
(ii) Discrimination Test Limits. The
Committee may limit the maximum amount of contribution for
Members who are "highly compensated employees" (as defined below) to the extent
it determines that such limitation is necessary to keep the Plan in compliance
with section 401(a)(4) or section 401(k)(3) of the Code. Any limitation shall be
effective for all payroll periods following the announcement of the limitation.
For purposes of Section 4 of the Plan, the term "highly compensated employee"
shall mean an Employee who is described in either or both of the following
groups:
(A) an Employee who is a 5%
owner, as defined in section 416(i)(1) of the Code, at any
time during the current Plan Year or the last preceding Plan Year;
(B) an Employee who receives
"compensation" (as defined below) in excess of $80,000
(or an increased amount resulting from a cost of living adjustment) during the
preceding Plan Year and was in the "top-paid" group (as defined below) for the
preceding Plan Year.
For purposes hereof, the following rules and
definitions shall apply:
(C) The "top-paid" group consists
of the top 20% of Employees ranked on the basis of
"compensation" received during the year. For purposes of determining the number
of Employees in the "top-paid" group, Employees described in section 414(q)(5)
of the Code and Q&A 9(b) of section 1.414(q)-1T of the regulations thereunder
are excluded.
(D) "Compensation" is
compensation within the meaning of section 415(c)(3) of the
Code, and for the 1997 Plan Year also includes elective or salary reduction
contributions to a cafeteria plan, cash or deferred arrangement or tax-sheltered
annuity under sections 125, 402(e)(3), 402(h)(3), and 403(b) of the Code.
(E) Employers aggregated under
section 414(b), (c), (m), or (o) of the Code are
treated as a single employer, subject to application of the "separate line of
business rules" exception under section 410(b)(5) of the Code.
(c) Salary Reduction Account. Each Member's salary
reduction contributions, as adjusted for investment
gain or loss and income or expense, constitute such Member's Salary Reduction
Account. A Member shall at all times have a nonforfeitable interest in the
portion of his Accrued Benefit derived from his Salary Reduction Account.
(d) Participating Company Matching Contributions.
--------------------------------------------
(i) Amount. Each Participating Company
shall contribute with respect to each Member employed
by it who is eligible under subsection 3(a) a percentage set by the Company, but
not to exceed 100%, on or before the first day of the Plan Year of the Member's
salary reduction contribution for each payroll period; provided, however, the
maximum amount of contribution under this subsection for any Member for any Plan
Year shall be $450.
(ii) Forfeitures. Amounts in the Matching
Accounts of Members which have been forfeited
pursuant to the provisions of subsections 8(d) and 8(e) hereof during a Plan
Year shall be applied to reduce Participating Company contributions required
under subsection 4(d)(i).
(iii) Payment Date. The Participating
Companies shall pay over to the Fund all contributions
required under this subsection no later than the due date, including extensions,
for filing the Participating Companies' federal income tax returns for the
taxable year ended coincident with or immediately following the end of the Plan
Year with respect to which such contributions are to be made.
(e) Matching Account. The Participating Company
contributions allocated to a Member under subsection 4(d)
and the corresponding provisions of the Plan as heretofore effective, all as
adjusted for the investment gain or loss and income or expense, constitute the
Member's Matching Account. A Member shall have a nonforfeitable interest in the
portion of his Accrued Benefit derived from his Matching Account to the extent
provided under Section 8.
(f) Compliance with Salary Reduction Contributions
Discrimination Tests.
(i) Rule. In no event shall the "actual
deferral percentage" (as defined below) for Members
who are "highly compensated employees" in a testing group for any Plan Year bear
a relationship to the "actual deferral percentage" for Members who are not
"highly compensated employees" in such testing group which does not satisfy
either
subsection 4(f)(i)(A) or (B) below. The test shall be separately performed for
each testing group. Each group of Members who participate in the Plan pursuant
to a collective bargaining agreement shall be a separate testing group and all
other Members shall be a separate testing group.
(A) The requirement shall be
satisfied for a Plan Year if the "actual deferral
percentage" for the Plan Year for the group of Members who are "highly
compensated employees" for the Plan Year is not more than the "actual deferral
percentage" for the preceding Plan Year of all other Members multiplied by 1.25.
(B) The requirement shall be
satisfied for a Plan Year if (1) the excess of the
"actual deferral percentage" for the Plan Year for the Members who are "highly
compensated employees" for the Plan Year over the "actual deferral percentage"
for the preceding Plan Year of all Members who are not "highly compensated
employees" for the preceding Plan Year is not more than two percentage points
(or such lower amount as may be required by applicable regulations under the
Code) and (2) the "actual deferral percentage" for Members who are "highly
compensated employees" for the Plan Year is not more than the "actual deferral
percentage" of all Members who are not "highly compensated employees" for the
preceding Plan Year multiplied by two (or such lower multiple as may be required
by applicable regulations under the Code).
(C) The Plan may test using the
"actual deferral percentage" for non-highly
compensated employees for the current Plan Year rather than the preceding Plan
Year if the Administrator so elects in accordance with applicable rules
promulgated pursuant to the Code. The Administrator may only revoke such an
election in accordance with applicable rules promulgated pursuant to the Code.
For the 1997 Plan Year, the Plan shall use the current Plan Year for the test.
For the 1998 Plan Year, the Plan shall use the preceding Plan Year for the test.
(D) If the Company elects to
apply section 410(b)(4)(B) of the Code in determining
whether the Plan satisfies the requirements of subsection 4(f) for Plan Years
beginning after December 31, 1998, the Company may exclude from consideration
all non-highly compensated employees who would not have been eligible to
participate if the Plan contained the greatest age and service requirements
permitted under section 410(a)(1)(A) of the Code.
(ii) QNEC or Refund. If the relationship
of the "actual deferral percentages" does not satisfy
subsection 4(f)(i) for any Plan Year, the Participating Companies may make
"qualified nonelective contributions" (within the meaning of the regulations
promulgated under section 401(k) of the Code) in an equal dollar amount for all
or a class of eligible "nonhighly compensated employees". Such contributions
shall be treated for all purposes of the Plan as contributions made by a Member
under subsection 4(a) for the Plan Year for which they are made and shall be a
subaccount of the Member's Salary Reduction Account. If the Participating
Companies do not make such contributions or such contributions do not result in
satisfaction of subsection 4(f)(i), then the Committee shall direct the Trustee
to distribute the "excess contribution" (as defined below) for such Plan Year
(plus any income and minus any loss allocable thereto for the Plan Year in which
the contributions were made as determined under the Plan's method for allocating
income and loss) within twelve months after the close of the Plan Year to the
"highly compensated employees" on the basis of the amount of contributions
attributable to each until the "excess contribution" is eliminated. The portion
of the "excess contribution" attributable to a "highly compensated employee" is
determined by reducing the dollar amount of contributions paid over to the Fund
on behalf of the "highly compensated employees", starting with the highest
dollar amount of such contributions, until the "excess contribution" is
eliminated. The amount of "excess contributions" to be distributed shall be
reduced by excess deferrals previously distributed for the taxable year ending
in the same Plan Year and excess deferrals to be distributed for a taxable year
shall be reduced by excess contributions previously distributed for the Plan
Year beginning in such taxable year. Any refund made to a Member in accordance
with this subsection shall be drawn from his Salary Reduction Account.
(iii) Additional Definitions. For purposes
of this subsection 4(f), the term "Member" shall mean
each Employee eligible to make contributions under subsection 4(a) at any time
during a Plan Year. The "actual deferral percentage" for a specific group of
Members for a Plan Year shall be the average of the "actual deferral ratio" for
each Member in the group for such Plan Year. The "actual deferral ratio" for a
particular Member for a Plan Year shall be the ratio of the amount of
contributions made under subsection 4(a) no later than twelve months after the
close of the Plan Year for such Member out of amounts that would have been
received by him in the Plan Year but for his election under subsection 4(a) and
which are allocated to the Member on or before the last day of the Plan Year
without regard to participation or performance of services thereafter to the
Member's "compensation" for such Plan Year. For this purpose, "compensation"
means compensation for service performed for a Participating Company which is
currently includable in gross income or which is excludable from gross income
pursuant to an election under a qualified cash or deferred arrangement under
section 401(k) of the Code or a cafeteria plan under section 125 of the Code;
provided, however, the Committee may elect to limit compensation for all Members
to amounts paid during the portion of the Plan Year during which the Member was
eligible to participate in the Plan or use any definition of compensation
permissible under section 414) of the Code and the regulations thereunder. The
"excess contribution" for any Plan Year is the excess of the aggregate amount of
contributions paid over to the Fund pursuant to subsection 4(a) on behalf of
"highly
compensated employees" for such Plan Year over the maximum amount of such
contributions permitted for "highly compensated employees" under subsection
4(f)(i).
(iv) Aggregation of Contributions. The
"actual deferral ratio" for any Member who is a "highly compensated employee"
for the Plan Year and who is eligible to make elective
contributions excludable from income under sections 401(k) and 402(a)(8) of the
Code to any plan maintained by a Participating Company or a Related Entity shall
be determined as if all such contributions were made under this Plan.
(v) Aggregation of Plans. In the event
that this Plan satisfies the requirements of section
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of section 401(a)(4) or
410(b) of the Code only if aggregated with this Plan, then subsection 4(f)(i)
shall be applied by determining the "actual deferral ratios" of Members as if
all such plans were a single plan.
(vi) Testing Alternatives. To the extent
permitted by the Code, the Plan may treat
contributions made under subsection 4(a) as contributions made under subsection
4(d), and vice versa, to facilitate satisfaction of any applicable
nondiscrimination requirement.
(g) Compliance with Participating Company Matching
Contributions Discrimination Tests.
(i) Rule. In no event shall the "actual
contribution percentage" (as defined below) for
Members who are "highly compensated employees" for any Plan Year bear a
relationship to the "actual contribution percentage" for Members who are not
"highly compensated employees" which does not satisfy either subsection
4(g)(i)(A) or (B) below. The requirement of this subsection shall not apply to
Members who participate in this Plan pursuant to a collective bargaining
agreement, and any such Members shall be excluded from the testing group.
(A) The requirement shall be
satisfied for a Plan Year if the "actual contribution
percentage" for the Plan Year for the group of Members who are "highly
compensated employees" for the Plan Year is not more than the "actual
contribution percentage" for the preceding Plan Year of all Members who are not
"highly compensated employees" for the preceding Plan Year multiplied by 1.25.
(B) The requirement shall be
satisfied for a Plan Year if (1) the excess of the
"actual contribution percentage" for the Plan Year for the Members who are
"highly compensated employees" for the Plan Year over the "actual contribution
percentage" of all Members who are not "highly compensated employees" for the
preceding Plan Year is not more than two percentage points (or such lower amount
as may be required by applicable regulations under the Code) and (2) the "actual
contribution percentage" for the Plan Year for Members who are "highly
compensated employees" for the Plan Year is not more than the "actual
contribution percentage" for the preceding Plan Year of all Members who are not
"highly compensated employees" for the preceding Plan Year multiplied by two (or
such lower multiple as may be required by applicable regulations under the
Code).
(C) The Plan may test using the
"actual contribution percentage" for non-highly
compensated employees for the current Plan Year rather than the preceding Plan
Year if the Administrator so elects in accordance with applicable rules
promulgated pursuant to the Code. The Administrator may only revoke such an
election in accordance with applicable rules promulgated pursuant to the Code.
For the 1997 Plan Year, the Plan shall use the current Plan Year for the test.
For the 1998 Plan Year, the Plan shall use the preceding Plan Year for the test.
(D) If the Company elects to
apply section 410(b)(4)(B) of the Code in determining
whether the Plan satisfies the requirements of subsection 4(g) for Plan Years
beginning after December 31, 1998, the Company may exclude from consideration
all non-highly compensated employees who would not have been eligible to
participate if the Plan contained the greatest age and service requirements
permitted under section 410(a)(1)(A) of the Code.
(ii) Refund. If the relationship of the
"actual contribution percentages" does not satisfy
subsection 4(g)(i) for any Plan Year, then the Administrator shall direct the
Trustee to distribute the "excess aggregate contribution" (as defined below) for
such Plan Year (plus any income and minus any loss allocable thereto for the
Plan Year in which the contributions were made as determined under the Plan's
method for allocating income and loss) within twelve months after the close of
the Plan Year to the "highly compensated employees" on the basis of the amount
of contributions attributable to each until the "excess aggregate contribution"
is eliminated. The portion of the "excess aggregate contribution" attributable
to a "highly compensated employee" is determined by reducing the dollar amount
of contributions paid over to the Fund on behalf of the "highly compensated
employees", starting with the highest dollar amount of such contributions, until
the "excess aggregate contribution" is eliminated. Any refund made to a Member
in accordance with this subsection shall be drawn from his Matching Account.
Notwithstanding the foregoing, if a Member does not have a 100% nonforfeitable
right to his Matching Account under subsection 8(d)(ii), the forfeitable portion
of any amount withdrawn from his Matching Account shall be forfeited and the
vested portion shall be distributed to the Member.
(iii) Allocation of Forfeitures. Any
amounts forfeited by "highly compensated employees" under
this subsection shall be applied to reduce Participating Company contributions
made pursuant to subsection 4(d). Notwithstanding the foregoing, no forfeiture
arising under this subsection shall be allocated to the account of any "highly
compensated employee."
(iv) Additional Definitions. For purposes
of this subsection 4(g), the term "Member" shall mean
each Employee not covered by a collective bargaining agreement eligible to
receive a matching contribution under subsection 4(d) at any time during a Plan
Year. The "actual contribution percentage" for a specific group of Members for a
Plan Year shall be the average of the "actual contribution ratio" for each
Member in the group for such Plan Year. The "actual contribution ratio" for a
particular Member for a Plan Year shall be the ratio of the sum of (A) the
amount of contributions made under subsection 4(d) no later than twelve months
after the close of the Plan Year for such Member which are allocated to the
Member on or before the last day of the Plan Year without regard to
participation or performance of services thereafter plus (B) elective
contributions of a non-highly compensated employee which are permitted to be
treated as matching contributions under regulations promulgated under section
401(m) of the Code and (C) after tax employee contributions which are Annual
Additions, to the Member's "compensation" for such Plan Year. For this purpose,
"compensation" means compensation for service performed for a Participating
Company which is currently includable in gross income or which is excludable
from gross income pursuant to an election under a qualified cash or deferred
arrangement under section 401(k) of the Code or a cafeteria plan under section
125 of the Code; provided, however, the Administrator may elect to limit
compensation for all Members to amounts paid during the portion of the Plan Year
during which the Member was eligible to participate in the Plan or use any
definition of compensation permissible under section 414(s) of the Code and the
regulations thereunder. The "excess aggregate contribution" for any Plan Year is
the excess of the aggregate amount of matching contributions paid over to the
Fund pursuant to subsection 4(d) on behalf of "highly compensated employees" for
such Plan Year over the maximum amount of such matching contributions permitted
for "highly compensated employees" under subsection 4(g)(i).
(v) Aggregation of Contributions. The
"actual contribution ratio" for any Member who is a
"highly compensated employee" for the Plan Year and who is eligible to make
after-tax contributions to any plan subject to section 415 of the Code
maintained by a Participating Company or a Related Entity or to have employer
matching contributions within the meaning of section 401(m)(4)(A) of the Code
allocated to his account under two or more plans described in section 401(a) of
the Code that are maintained by a Participating Company or a Related Entity
shall be determined as if all such contributions were made under this Plan and
each other plan.
(vi) Aggregation of Plans. In the event
that this Plan satisfies the requirements of section
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of section 401(a)(4) or
410(b) of the Code only if aggregated with this Plan, then subsection 4(g)(i)
shall be applied by determining the "actual contribution ratios" of Members as
if all such plans were a single plan.
(vii) Aggregate Limit -- Multiple Use of
Alternative Limitation. The provisions of section
1.401(m)-2(b) of the regulations under section 401(m) of the Code are hereby
incorporated by reference. If the limitation thereof is exceeded, it shall be
corrected through reduction of the "actual contribution percentage" in the
manner specified in subsection 4(g)(ii) with respect to "highly compensated
employees" eligible under both subsection 4(a) and subsection 4(d) of the Plan.
(viii) Testing Alternatives. To the extent
permitted by the Code, the Plan may treat
contributions made under subsection 4(a) as contributions made under subsection
4(d), and vice versa, to facilitate satisfaction of any applicable
nondiscrimination requirement.
(h) Payroll Taxes. The Participating Companies
shall withhold from the Compensation of the Members and
remit to the appropriate government agencies such payroll taxes and income
withholding as the Company determines is or may be necessary under applicable
statutes or ordinances and the regulations and rulings thereunder.
(i) Rollovers.
---------
(i) Contributions. Each Employee
eligible under subsection 3(e) and each Member actively
employed by a Participating Company may contribute to the Fund an amount
constituting an "eligible rollover distribution" from a "qualified trust," both
within the meaning of section 402(c)(4) of the Code, from a previous employer's
retirement plan (or an individual retirement account consisting solely of an
"eligible rollover distribution" from a "qualified trust").
(ii) Rollover Account. Each Member's
contributions under subsection 4(i)(i), as adjusted for
investment gain or loss and income or expense, constitute such Member's Rollover
Account. A Member shall at all times have a nonforfeitable interest in the
portion of his Accrued Benefit derived from his Rollover Account.
(iii) Refunds. If an Employee makes a
contribution under this subsection 4(i) which the
Committee subsequently determines is not eligible for contribution under section
402 of the Code, then the Committee shall take such corrective action as it
determines is necessary or appropriate under applicable law.
(j) Other Member Contributions. A Member shall not
be permitted to make contributions to the Plan other
than as permitted under subsection 4(a), 4(i) or 8(d)(iv).
(k) Transferred and Voluntary Contributions Accounts.
A Member's Transferred Account and/or Voluntary
Contributions Account, if any, shall not be allocated any additional
contributions but shall be adjusted for investment gain or loss and income or
expense. A Member shall at all times have a nonforfeitable interest in the
portion of his Accrued Benefit derived from his Transferred and/or Voluntary
Contributions Accounts.
(l) Deductibility. All Participating Company
contributions are expressly conditioned upon their
deductibility for federal income tax purposes.
Nondeductible contributions shall be abated and to the extent permitted by
applicable law, refunded, starting with contributions made under subsection
4(d).
50 MAXIMUM CONTRIBUTIONS AND BENEFITS
(a) Defined Contribution Limitation. In the event
that the amount allocable to a Member from
contributions to the Fund with respect to any Plan Year would cause the Annual
Additions allocated to any Member under this Plan plus the Annual Additions
allocated to such Member under any other plan maintained by a Participating
Company or a Related Entity to exceed for any Limitation Year the lesser of (i)
$30,000 (or an increased amount resulting from a cost-of-living increase
pursuant to subsection 415(d) of the Code) or (ii) 25% of such Member's
compensation (as defined in subsection 5(d)) for such Limitation Year, then such
amount allocable to such Member shall be reduced by the amount of such excess to
determine the actual amount of the contribution allocable to such Member with
respect to such Plan Year. If the excess amount results from a reasonable error
in determining the amount of contribution that may be made under subsection 4(a)
without violating the limitation of this subsection, then the excess amount with
earnings attributable thereto shall be refunded to the Member. If, (i) as a
result of allocation of forfeitures, (ii) a reasonable error in estimating a
Member's annual compensation (as defined in subsection 5(d)), or (iii) under
other limited facts and circumstances that the Commissioner of Internal Revenue
finds justify the availability of the remedy next following, the excess amount
with earnings attributable thereto allocable to a Member's Accrued Benefit shall
be held in a suspense account and shall be used to reduce contributions
allocable to the Member for the next Limitation Year (and succeeding Limitation
Years as necessary) provided the Member is covered by the Plan as of the end of
the Limitation Year. However, if the Member is not covered by the Plan as of the
end of the Limitation Year, then the excess amount shall be held unallocated in
a suspense account and shall be allocated, after adjustment for investment gains
or losses, among all Employees eligible to make contributions under subsection
4(a) for such Limitation Year as an equal percentage of their Compensation for
such Limitation Year. No excess amount may be distributed to a Member or former
Member.
(b) Combined Limitation. In addition to the
limitation of subsection 5(a), if a Participating Company or
a Related Entity maintains or maintained a defined benefit plan and the amount
required to be contributed to the Fund with respect to any Plan Year would cause
the aggregate amount allocated to any Member under all defined contribution
plans maintained by any Participating Company or Related Entity to exceed the
maximum allocation as determined in subsection 5(c), then such amount required
to be contributed with respect to such Member shall be reduced by the amount of
such excess to determine the actual amount of the contribution with respect to
such Member for such Plan Year. Notwithstanding the foregoing, if an excess
amount is contributed with respect to any Member, then the excess allocation
shall be reallocated or held in a suspense account in accordance with subsection
5(a). The limitation of this subsection shall be applied to the Member's benefit
from the defined benefit plan prior to reduction of the Member's Annual
Additions under this Plan.
(c) Combined Limitation Computation. The maximum
allocation is the amount of Annual Additions which may
be allocated to a Member's benefit without permitting the sum of the defined
benefit plan fraction (as hereinafter defined) and the defined contribution plan
fraction (as hereinafter defined) from exceeding 1.0 for any Limitation Year.
The defined benefit plan fraction applicable to a Member for any Limitation Year
is a fraction, the numerator of which is the projected annual benefit of the
Member under the plan determined as of the close of the Limitation Year and the
denominator of which is the lesser of (i) the product of 1.25 multiplied by the
maximum then permitted dollar amount of straight life annuity payable under the
defined benefit plan maximum benefit provisions of the Code and (ii) the product
of 1.4 multiplied by the maximum permitted amount of straight life annuity,
based on the Member's compensation, payable under the defined benefit plan
maximum benefit provisions of the Code. For purposes of this subsection 5(c), a
Member's projected annual benefit is equal to the annual benefit, expressed in
the form of a straight life annuity, to which the Member would be entitled under
the terms of the defined benefit plan based on the assumptions that (i) the
Member will continue employment until reaching his normal retirement age under
the plan (or current age, if later) at a rate of compensation equal to that for
the Limitation Year under consideration and (ii) all other relevant factors used
to determine benefits under the plan for the Limitation Year under consideration
will remain constant for future Limitation Years. The defined contribution plan
fraction applicable to a Member for any Limitation Year is a fraction, the
numerator of which is the sum of the Annual Additions for all Limitation Years
allocated to the Member as of the close of the Limitation Year and the
denominator of which is the sum of the lesser, separately determined for each
Limitation Year of the Member's employment with a Participating Company or
Related Entity, of (i) the product of 1.25 multiplied by the maximum dollar
amount of Annual Additions which could have been allocated to the Member under
the Code for such Limitation Year and (ii) the product of 1.4 multiplied by the
maximum amount, based on the Member's compensation, of Annual Additions which
could have been allocated to the Member for such Limitation Year. (d) Definition
of "Compensation" for Code Limitations. For purposes of the limitations on the
allocation of Annual Additions to a Member and maximum benefits under a defined
benefit plan as provided for in this Section 5, "compensation" for a Limitation
Year shall mean the sum of amounts paid by a Participating Company or a Related
Entity to the Member with respect to personal services rendered by the Member
during the Limitation Year plus (i) amounts received by the Member (A) through
accident or health insurance or under an accident or health plan maintained or
contributed to by a Participating Company or a Related Entity and which are
includable in the gross income of the Member, (B) through a plan contributed to
by a Participating Company or a Related Entity providing payments in lieu of
wages on account of a Member's permanent and total disability, or (C) as a
moving expense allowance paid by a Participating Company or a Related Entity and
which are not deductible by the Member for federal income tax purposes; (ii) the
value of a non-statutory stock option granted by a Participating Company or a
Related Entity to the Member to the extent included in the Member's gross income
for the taxable year in which it was granted; and (iii) the value of property
transferred by a Participating Company or a Related Entity to the Member which
is includable in the Member's gross income due to an election by the Member
under section 83(b) of the Code. For Plan Years beginning after December 31,
1997, (i) elective deferrals as defined in section 402(g)(3) of the Code, and
(ii) any amount which is contributed or deferred by a Participating Company or
Related Entity at the election of an Employee and which is not included in gross
income of the Employee by reason of section 125 or 457 of the Code shall be
included in "Compensation". "Compensation" shall not include (i) contributions
made by a Participating Company or a Related Entity to a deferred compensation
plan to the extent that, before application of the limitations of section 415 of
the Code to the plan, such contributions are not includable in the Member's
gross income for the taxable year in which contributed, except as provided in
the preceding provision; (ii) Participating Company or Related Entity
contributions made on behalf of a Member to a simplified employee pension plan
to the extent they are deductible by the Member under section 219(b) of the
Code, (iii) distributions from a deferred compensation plan (except from an
unfunded nonqualified plan when includable in gross income), (iv) amounts
realized from the exercise of a nonqualified stock option, or when restricted
stock (or property) held by a Member 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 a qualified or
incentive stock option, and (vi) other amounts which receive special tax
benefits such as premiums for group term life insurance (to the extent
excludable from gross income), except that for periods after December 31, 1997,
elective deferrals under sections 402(g)(3), 125 or 457 of the Code shall not be
excluded.
(e) Transition Provision. Notwithstanding the
foregoing provisions of this Section 5, the benefit of a
Member on January 1, 1987 under a defined benefit pension plan shall not be less
than it was on December 31, 1986 by reason of the reduction in the dollar limit
of section 415(b) of the Code which then became effective. However, amounts in
excess of the limitation by reason of changes in the terms and conditions of a
defined benefit pension plan made after May 5, 1986 shall not be preserved.
60 ADMINISTRATION OF FUNDS
(a) Investment Control. The management and control
of the assets of the Plan shall be vested in the
Trustee designated from time to time by the Company through its Board of
Directors; provided, however, the Company through its Board of Directors may
appoint one or more Investment Managers to manage, acquire or dispose of any
assets of the Plan. The Committee shall instruct the Trustee or an Investment
Manager to establish Investment Categories for selection by the Members and may
at any time add to or delete from the Investment Categories.
(b) Employer Stock. The Committee also shall direct
the Trustee to establish two frozen Investment
Categories, one consisting solely of PrimeSource Stock and the other consisting
solely of the common stock of Tasty Baking Company. Each such Investment
Category shall hold shares of common stock transferred to this Plan from a Prior
Plan. No amounts invested in any other Investment Category and no new
contributions shall be transferred or allocated to such Investment Categories.
All dividends or other distributions, other than distributions of stock, with
respect to a frozen Investment Category shall be invested in accordance with
uniform procedures specified by the Committee, in additional shares or, if the
Committee permits, in one or more of the Investment Categories established under
subsection 6(a). A Member may elect in accordance with subsection 6(c) that all
or a portion of the common stock held for his benefit in a frozen Investment
Category be liquidated for reinvestment in one or more Investment Categories
established under subsection 6(a). Notwithstanding the foregoing, no person who
is an officer of the Company shall be permitted to liquidate his interest in
such Investment Categories until such time as determined by counsel to the
Company that such liquidation can be made without penalty or violation of any
applicable securities law.
(c Member Elections. In accordance with rules
established by the Committee and subject to subsection
6(b), each Member shall have the right to designate the Investment Category or
Categories in which new contributions allocated to and prior balances held for
such Member are invested. Any designation or change in designation of Investment
Category shall be made in such manner and subject to such limitations as the
Committee shall from time to time specify. The designation or change shall
become effective as of the date specified by the Committee on or after which it
is received. Any election of Investment Category by any Member shall, on its
effective date, cancel any prior election. The right to elect Investment
Categories as set forth herein shall be the sole and exclusive investment power
granted to Members. The Committee may limit the right of a Member (i) to
increase or decrease his contributions to a particular Investment Category, (ii)
to transfer amounts to or from a particular Investment Category or (iii) to
transfer amounts between particular Investment Categories, if such limitation is
required by the rules establishing an Investment Category. The Committee may
promulgate separate accounting and administrative rules to facilitate the
establishment or maintenance of an Investment Category.
(d No Member Election. If a Member does not make a
written election of Investment Category, then, except
as provided at subsection 6(b), the Committee shall direct that all amounts
allocated to such Member be invested in the Investment Category which, in the
opinion of the Committee, best protects principal.
(e Facilitation. Notwithstanding any instruction
from any Member for investment of funds in an
Investment Category as provided for herein, the Trustee shall have the right to
hold uninvested or invested in a short-term investment fund any amounts intended
for investment or reinvestment until such time as investment may be made in
accordance with subsection 6(b) or 6(c) and the Trust Agreement.
(f Valuations. The Fund and each Investment
Category shall be valued at fair market value as of each Valuation Date.
(g Allocation of Gain or Loss. The Trustee may
maintain separate accounts for each Member's investment
in each Investment Category. If separate accounts are not maintained, then any
increase or decrease in the market value of each Investment Category of the Fund
since the preceding Valuation Date and all accrued income or expense and
realized profit or loss shall be added to or deducted from the account of each
Member in the ratio that each Member's account in such Investment Category at
the prior Valuation Date adjusted on a uniform basis to reflect contributions
and withdrawals during the valuation period bears to the total of all such
adjusted accounts in such Investment Category; provided, however, such
allocation for the first period following the establishment of an Investment
Category shall be made based on the ratio that the amount allocated to each
Member in such Investment Category in the period bears to the total amount
allocated to such Investment Category in the period.
(h Bookkeeping. The Committee shall direct that
separate bookkeeping accounts be maintained to reflect
each Member's Salary Reduction Account, elective contributions under subsection
4(a), Matching Account, Rollover Account, Transferred Account and Voluntary
Contributions Account.
(i Tender Offers. Upon commencement of a tender
offer for PrimeSource Stock or Tasty Baking Company
common stock, the Trustee shall notify each Member whose Accrued Benefit is
invested in the stock which is the subject of the tender offer and utilize its
best efforts to timely distribute or cause to be distributed to the Member the
same information that is distributed to shareholders of the issuer in connection
with the tender offer. Each affected Member shall have the right to direct the
Trustee in writing to tender or not to tender some or all of the shares credited
to him. The Trustee shall tender or not tender shares as the Member directs. The
Trustee shall not tender shares for which it has received no directions from the
Member.
(j Voting Company Stock. Each Member shall have the
right to direct the Trustee as to the manner in
which the Trustee is to vote that number of shares of PrimeSource Stock or Tasty
Baking Company common stock credited to his accounts in accordance with
procedures established by the Trustee. The Trustee shall vote the shares as the
Member directs. The Trustee shall vote shares for which it has received no
directions from the Member in the same proportion as the shares for which it has
received instructions.
7. BENEFICIARIES AND DEATH BENEFITS
(a Designation of Beneficiary. Each Member shall
have the right to designate one or more beneficiaries
and contingent beneficiaries to receive any benefit to which such Member may be
entitled hereunder in the event of the death of the Member prior to the complete
distribution of such benefit by filing a written designation with the Committee
on the form prescribed by the Committee. Such Member may thereafter designate a
different beneficiary at any time by filing a new written designation with the
Committee. Notwithstanding the foregoing, if a married Member designates a
beneficiary other than his spouse, such designation shall not be valid unless
the spouse consents thereto in writing witnessed by a notary public or
authorized representative of the Plan. A spouse's consent given in accordance
with the Committee's rules shall be irrevocable by the spouse with respect to
the beneficiary then designated by the Member unless the Member makes a new
beneficiary designation. Any written designation shall become effective only
upon its receipt by the Committee or its designee. If the beneficiary designated
pursuant to this subsection dies on or before the commencement of distribution
of benefits and the Member fails to make a new designation, then his beneficiary
shall be determined pursuant to subsection 7(b). Notwithstanding the above, to
the extent provided in a qualified domestic relations order (within the meaning
of section 414(p) of the Code) the former spouse of the Member may be treated as
the spouse of the Member for purposes of this subsection, and the current spouse
will not be treated as the Member's spouse for such purposes.
(b Beneficiary Priority List.If (i) a Member omits
or fails to designate a beneficiary, (ii) no
designated beneficiary survives the Member or (iii) the Committee determines
that the Member's beneficiary designation is invalid for any reason, then the
death benefits shall be paid to the Member's surviving spouse, or if the Member
is not survived by his spouse, then to the Member's estate. If the Member's
designated
beneficiary dies after the Member but before distribution of benefits, then the
death benefits shall be paid to the beneficiary's estate.
(c Proof of Death. The Committee may, as a
condition precedent to making payment to any beneficiary,
require that a death certificate, burial certificate or other evidence of death
acceptable to it be furnished.
(d Divorce. If a Member designates his spouse as
beneficiary and subsequent to making the designation a
decree of divorce is issued which terminates the Member's marriage to such
spouse, then the Member's prior beneficiary designation shall be invalid and,
unless the Member makes a new designation, the Member shall be treated as having
died without designating a beneficary.
8. BENEFITS FOR MEMBERS
The following are the only post-employment benefits provided by the
Plan:
(a Retirement Benefit
(i Valuation. Each Member who retires
on or after his
Normal Retirement Date shall be entitled to a retirement benefit equal to 100%
of the Member's Accrued Benefit on the Valuation Date as of which his Accrued
Benefit is liquidated for distribution. Distribution will be made at the time
and in the manner provided by Section 9. The Accrued Benefit of a Member who
continues in Service after his Normal Retirement Date shall become
nonforfeitable upon his attaining his Normal Retirement Date.
(ii Late Retirement. A Member who
continues employment beyond his Normal Retirement Date shall
continue to participate in the Plan.
(b Death Benefit. In the event of the death of a
Member, 100% of the Member's Accrued Benefit on the
Valuation Date after his death as of which his Accrued Benefit is liquidated for
distribution shall constitute his death benefit and shall be distributed
pursuant to Sections 7 and 9 (i) to his designated beneficiary or (ii) if no
designation of beneficiary is then in effect, to the beneficiary determined
pursuant to subsection 7(b).
(c Disability Benefit. In the event a Member
suffers a Disability before actual retirement, 100% of the
Member's Accrued Benefit on the Valuation Date after his Disability occurs as of
which his Accrued Benefit is liquidated for distribution shall constitute his
Disability benefit.
(d Termination of Employment Benefit
(i Valuation. In the event a Member
terminates employment with all Participating Companies
and all Related Entities for reasons other than those covered by subsections
8(a)-8(c) above, the Member shall be entitled to receive a benefit equal to 100%
of his Accrued Benefit derived from his Salary Reduction, Rollover, Transferred
and Voluntary Contributions Accounts and the nonforfeitable portion (as
determined under the vesting schedule at subsection 8(d)(ii)) of the Member's
Matching Account, on the Valuation Date on which his Accrued Benefit is
liquidated for distribution.
(ii Vesting Schedule. The nonforfeitable
portion of a Member's Accrued Benefit derived from
his Matching Account is determined from the table below.
Nonforfeitable
Period of Service Percentage
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
(iii) Special Vesting Rules
(A) Any Member who was a
participant in the Plan on January 1, 1994 shall have a 100%
nonforfeitable right to his Matching Account without regard to his length of
Service.
(B) Any Member who was a
participant in the Dixie Type and Supply Co. Inc. 401(k)
Retirement Plan on September 30, 1998 shall have a 100% nonforfeitable right to
his Matching Account without regard to his length of Service.
(iii Crediting Service. For purposes of
determining Service under subsection 8(d)(ii), the
following rules shall apply.
(A0 If a Member has a Break in
Service, then his Period of Service thereafter shall
not be taken into account for purposes of determining the nonforfeitable
percentage of the Member's Accrued Benefit derived from Participating Company
contributions which accrued prior to such Break in Service.
(B0 If a Member has a Break in
Service and no nonforfeitable interest, then his
Periods of Service prior to such Break in Service shall not be credited for any
purpose.
(C0 In all other cases, a Member
shall receive credit for all his Periods of Service.
(iv Cashouts. If a Member has no
nonforfeitable interest in his Matching Account upon
termination of employment or if distribution of his Matching Account is made to
a Member on account of termination of employment prior to the date on which the
Member has a Break in Service and the Member returns to employment covered by
the Plan, the Member's Matching Account shall subsequently be determined without
regard to the portion thereof derived from predistribution employment provided
the Member (A) received distribution of the entire present value of the
nonforfeitable portion of his Matching Account at the time of distribution, (B)
the amount of the distribution was not more than $5,000 or the Member
voluntarily elected to receive the distribution, and (C) the Member upon return
to employment covered by the Plan does not repay the full amount of the
distribution before the earlier of suffering a Break in Service commencing after
the withdrawal or five years after the first date on which the Member is
subsequently reemployed by a Participating Company. If timely repayment is made,
the Member's Matching Account shall equal the sum of the repayment and the
forfeitable portion of the Member's Matching Account on the date of
distribution, unadjusted by gains or losses subsequent to the distribution. If a
Member who had no nonforfeitable interest in his Matching Account returns to
employment, he shall be deemed to have made repayment on the date he first again
is credited with an Hour of Service. Restoration shall be made first from
forfeitures in the Plan Year of repayment and second from Participating Company
contributions.
(v Transition Rules. No Member's
nonforfeitable percentage shall be less on the Restatement
Effective Date that it was on the day before the Restatement Effective Date for
any reason other than a forfeiture which occurred on such date. For Plan Years
prior to 1999, "$3,500" shall be substituted for "$5,000" in subsection
8(d)(iv).
(e Time of Forfeiture. The nonvested portion of the
Matching Account of a Member (i) who separates with
no vested interest therein or (ii) who receives a distribution prior to a Break
in Service shall be forfeited on the date of (i) separation or (ii)
distribution, as the case may be, subject to the right to restoration. The
nonvested portion of the Matching Account of any other Member shall be forfeited
on the last day of the Plan Year in which the Member suffers a Break in Service.
Forfeitures shall be applied to offset the Participating Company matching
contributions for the Plan Year in which the forfeiture occurs or to pay Plan
expenses.
9. DISTRIBUTION OF BENEFITS
(a Commencement
(i Vested and Retirement Benefits.
Generally, vested and retirement benefits shall begin to
be paid as soon after the Member's termination of employment as the Member
requests in writing, but not sooner than 30 days after the Member receives the
notice required by section 1.411(a)-11(c) of the regulations under section
411(a)(11) of the Code unless the Member receives written notice that he has a
right to a period of at least 30 days after receipt of the notice to consider
whether or not to elect a distribution and affirmatively elects after receipt of
the notice to accept a distribution rather than the rollover provided for under
subsection 9(i).
(ii Limitation and Required Commencement
Date. In no event other than with the written consent
of the Member shall the payment of benefits commence later than the 60th day
after the close of the Plan Year in which the latest of the following occurs:
(A0 The Member's Normal Retirement
Date;
(B0 The Member's termination of
employment; or
(C0 The tenth anniversary of the
year in which the Member first
commenced
participation in the Plan.
Furthermore, distribution of benefits must commence on or before the April 1st
of the calendar year following the calendar year in which the Member attains age
70-1/2 or has a Severance Date, whichever is later; provided, however, if a
Member was a 5% owner (as defined in section 416 of the Code) with respect to
the Plan at any time during the Plan Year ending in the calendar year in which
he attained age 70-1/2, then distribution of benefits must commence no later
than the April 1st of the calendar year following the calendar year in which the
Member attains age 70-1/2.
(iii Death Benefits. The payment of death
benefits under the Plan shall be made at such time as
the Member's beneficiary shall request but not later than the December 31st of
the fifth calendar year following the calendar year of the Member's date of
death.
(b Benefit Forms
(i Vested and Retirement Benefits. A
Member entitled to benefit distribution under subsection
8(a), 8(c) or 8(d) may elect a lump sum distribution, installment payments over
a period not to exceed the life expectancy of the Member and his beneficiary, or
a portion paid as a lump sum and a portion paid in installments over a period
not to exceed life expectancy of the Member and his beneficiary commencing
before the required commencement date under subsection 9(a)(ii).
(ii Transferred Accounts. Subsection 15
(c) provides additional forms of distribution for certain Transferred Accounts.
(iii Death Benefits. Death benefits shall
be distributed in one lump sum; provided, however, if
distribution in installments commenced before the Member's death, then the
installment payments shall continue unless the Member's beneficiary elects a
lump sum payment.
(c Benefit Election. The election or change of
election of a time or method of distribution of benefits
shall be in writing on forms prescribed by the Committee.
(d Distributions in Kind. A Member may direct that
the portion of his Accrued Benefit held in
PrimeSource Stock or Tasty Baking Company common stock be distributed to him in
kind, except that the value of a fractional share shall be distributed in cash.
(e Deferred Payments and Installments. If benefits
are to be paid directly by the Trustee in
installments or if the payment of benefits is to be deferred, the undistributed
value of the benefit shall be retained in the Fund subject to the administrative
provisions of the Plan and the Trust Agreement.
(f Withholding. All distributions under the Plan
are subject to federal, state and local tax withholding
as required by applicable law as in effect from time to time.
(g Compliance with Code Requirements. All forms of
benefit distributions and required benefit
commencement dates shall be subject to and in compliance with section 401(a)(9)
of the Code and the regulations thereunder, including the minimum distribution
incidental benefit requirement. Unless the Member irrevocably elects to the
contrary at the time required distributions under section 401(a)(9) of the Code
begin, required minimum distributions shall be based on the life expectancy of
the Member, as determined under the Code, without recalculation. The provisions
of section 401(a)(9) of the Code and the regulations thereunder, including
proposed regulation sections 1.401(a)(9)-1 and 2, shall override any provision
of the Plan inconsistent therewith.
(h Distribution Limitations. Amounts contributed
pursuant to subsection 4(a) of the Plan shall not be
distributed earlier than upon occurrence of one of the following events:
(i) The Member's retirement, death,
disability or separation from service (within the meaning
of sections 401(a) and (k) of the Code);
(ii) The termination of the Plan without
establishment or maintenance of another defined
contribution plan (other than an ESOP or SEP);
(iii) The Member's attainment of age 59-1/2
or suffering hardship;
(iv) The sale or other disposition by a
Participating Company to an unrelated corporation of
substantially all of the assets used in a trade or business, but only with
respect to employees who continue employment with the acquiring corporation and
provided the acquiring corporation does not maintain the Plan after the
disposition; and
(v) The sale or other disposition by a
Participating Company of its interest in a subsidiary to
an unrelated entity but only with respect to employees who continue employment
with the subsidiary and provided the acquiring entity does not maintain the Plan
after the disposition. Subsections 9(h)(ii), (iv) and (v), above, apply only if
the distribution is in the form of a lump sum. Subsections 9(h)(iv) and (v),
above, apply if the transferor corporation continues to maintain the Plan. This
subsection 9(h) shall not be construed as giving a Member a right to a
distribution not otherwise expressly provided for by another subsection of the
Plan.
(i Rollover Election. Notwithstanding any provision
of the Plan to the contrary that would otherwise
limit a "distributee's" election under this subsection, a "distributee" may
elect, at the time and in the manner prescribed by the Committee, to have any
portion of an "eligible rollover distribution" paid directly to an "eligible
retirement plan" specified by the "distributee" in a "direct rollover". For
purposes of this subsection, the definitions specified below shall apply:
(i) Eligible Rollover Distribution. 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 life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section 401(a)(9)
of the Code; any hardship distribution described in section 401(k)(2)(B)(i)(IV)
of the Code made after December 31, 1999; 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).
(ii) Eligible Retirement Plan. An eligible
retirement plan is an individual retirement account
described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in section
403(a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or an individual
retirement annuity.
(iii) Distributee. 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 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.
(iv) Direct Rollover. A direct rollover
is a payment by the Plan to the eligible retirement
plan specified by the distributee.
10. IN-SERVICE DISTRIBUTIONS
(a General Rule. Except as provided in subsections
10(b)-10(d) below or in Section 15, a Member shall
not be permitted to receive any distribution from the Plan prior to his
Severance Date.
(b Elective Distributions. A Member may elect that
all or a portion of his Rollover and Voluntary
Contributions Accounts be distributed to him by delivery of a request to the
Committee on the form or in the manner the Committee prescribes for that
purpose.
(c Age 59-1/2. A Member who has attained age 59-1/2
may elect that all or a portion of his
nonforfeitable Accrued Benefit be distributed to him by delivery of a request to
the Committee on the form or in the manner the Committee prescribes for that
purpose.
(d Hardship.A Member shall have the right to
receive an in-service distribution from his nonforfeitable
Accrued Benefits on account of hardship. A distribution is on account of
hardship only if the distribution both (i) is made on account of an immediate
and heavy financial need of the Member and (ii) is necessary to satisfy such
financial need.
(i Need. A distribution shall be deemed
to be made on account of an immediate and heavy
financial need of the Member if the distribution is on account of (A) medical
expenses described in section 213(d) of the Code incurred or to be incurred by
the Member, the Member's spouse or any dependent of the Member (as defined in
section 152 of the Code); (B) purchase (excluding mortgage payments) of a
principal residence for the Member; (C) payment of tuition and related
educational fees, including room and board expenses, for the next twelve months
of post-secondary education for the Member, the Member's spouse, child or any
dependent of the Member (as defined in section 152 of the Code); (D) the need to
prevent the eviction of the Member from his principal residence or foreclosure
on the mortgage of the Member's principal residence; or (E) such other reason as
the Commissioner of Internal Revenue specifies as a deemed immediate and heavy
financial need through the publication of regulations, revenue rulings, notices
or other documents of general applicability.
(ii Satisfaction of Need. A distribution
shall be deemed to be necessary to satisfy an
immediate and heavy financial need of a Member only if all of the requirements
or conditions set forth below are satisfied or agreed to by the Member, as
appropriate.
(A0 The distribution is not in
excess of the amount of the immediate and heavy
financial need of the Member, which amount shall be deemed to include
anticipated federal, state and local income taxes and penalties.
(B0 The Member has obtained all
distributions, other than hardship distributions, and
all nontaxable loans currently available under all plans subject to section 415
of the Code maintained by any Participating Company or any Related Entity.
(C0 The Member's elective
contributions under this Plan and each other deferred
compensation plan (within the meaning of regulations under section 401(k) of the
Code) maintained by a Participating Company or a Related Entity in which the
Member participates shall be suspended for twelve full calendar months after
receipt of the distribution.
(D0 The Member does not (and
is not permitted to) make elective contributions under
this Plan or any other plan maintained by a Participating Company or a Related
Entity for the year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under section 402(g) of the Code
for
such next taxae year reduced by the amount of the Member's elective
contributions for the taxable year of the hardship distribution.
(iii Limitations. Distributions on account
of hardship shall be limited to the sum of (A) the
-----------
Member's elective contributions under subsection 4(a) plus elective
contributions to a Prior Plan, (B) income credited to the Member's Transferred
Account for elective contributions as of December 31, 1988, (C) the
nonforfeitable portion of the Member's Matching Account and (D) the Member's
Rollover Account. A distribution under subsection 10(d) shall be charged first
against the Member's Rollover Account then against the nonforfeitable portion of
the Member's Matching Account and then against the Member's Salary Reduction
Account. The Committee may prescribe rules with respect to the order of
Investment Category from which the distribution shall be paid.
(iv Prior Withdrawal. A Member shall not
be permitted to receive a distribution under this
subsection 10(d) until he has withdrawn all amounts which are withdrawable under
subsections 10(b) and (c).
(e Special Vested Balance Calculation Rule. If a
distribution is made to a Member under this Section
from a Member's Matching Account at a time when his interest therein is not 100%
nonforfeitable, then a separate bookkeeping account and calculation shall be
established for such Member and be retained until the earlier of the date on
which the Member's Matching Account becomes 100% nonforfeitable or the Member
forfeits the forfeitable portion of his Matching Account to reflect the Member's
nonforfeitable interest in the remainder of his Matching Account. Under such
separate accounting, the Member's nonforfeitable interest at any relevant time
shall be determined according to the formula X = P [AB + (RxD)] - (RxD) where:
P = the Member's nonforfeitable
percentage under subsection 8(d) at the relevant time;
AB = the Member's Accrued Benefit
derived from his Matching Account at the relevant time;
D = the amount of the distribution
from the Member's Accrued Benefit deriving from his
Matching Account; and
R = the ratio of the Member's
Accrued Benefit derived from
his Matching Account at the
relevant time to such Accrued
Benefit after the
distribution.
11. LOANS
(a Availability. The Committee shall direct that a
bona fide loan be made from the Fund to any Member
who requests the same, provided the Member (i) pays any application or
processing fee which the Committee uniformly charges with respect to loan
requests and (ii) on the date the loan would be disbursed is employed by a
Participating Company or Related Entity. All such loans shall be subject to the
requirements of this Section which shall be deemed to include written rules
prescribed by the Committee from time to time with respect to loans. Eligibility
for and the rules with respect to loans shall be uniformly applied.
(b Minimum Requirements. Loans shall be subject to
the following rules:
(i Principal Amount.The principal amount
of the loan to a Member may not be less than $1,000
----------------
and may not exceed, when added to the outstanding balance of all other loans to
the Member from the Plan, the lesser of (A) $50,000, reduced by the excess of
the highest outstanding balance of loans to the Member from the Plan during the
one-year period ending on the day before the date on which such loan was made
over the outstanding balance of loans to the Member from the Plan on the date on
which such loan is made or (B) 50% of the Member's nonforfeitable Accrued
Benefit on the date on which the loan is made.
(ii Maximum Term. The term of the loan
may not exceed five years. If a Member's employment
with all Participating Companies and Related Entities terminates for any reason,
the loan shall be due and payable on the last day of the calendar quarter
following the calendar quarter in which employment terminated.
(iii Interest Rate. The interest rate
shall be a rate charged by commercial lenders for comparable loans on the date
the loan request is approved, as determined by the Committee.
(iv Repayment. The loan shall be repaid
over its term in level installment payments
corresponding to the Member's payroll period. As a condition precedent to
approval of the loan, the Member shall be required to authorize payroll
withholding in the amount of each installment for all periods he is employed by
a Participating Company. Notwithstanding the foregoing, the loan repayment of a
Member who is in qualified military service within the meaning of section 414(u)
of the Code shall be suspended to the extent permitted by section 414(u) of the
Code.
(v Collateral. The loan shall be secured
by 50% of the Member's nonforfeitable Accrued Benefit.
(vi Distribution of Accrued Benefit. If
the nonforfeitable portion of a Member's Accrued
Benefit is to be distributed prior to the Member's payment of all principal and
accrued interest due on any loan to such Member, the distribution shall include
as an offset the amount of unpaid principal and interest due on the loan and the
note shall be distributed.
(vii Notes. All loans shall be evidenced
by a note containing such terms and conditions as the Committee shall require.
(viii Multiple Loans. A Member shall be
permitted only one outstanding loan at any time.
(ix) Fees. The Committee may adopt a rule
pursuant to subsections 2(h) and 11(a) of the Plan
imposing a reasonable fee on a Member who borrows under this Section 11 for
processing his loan application, preparing his loan documentation or
administering his loan.
(c Accounting. The Committee may prescribe rules
with respect to the order of the accounts and
Investment Categories from which the principal amount of any loan shall be
drawn. The loan shall be treated as a separate Investment Category of the
borrowing Member. All payments of principal and interest with respect to such
loan shall be credited to the borrowing Member, with repayment of principal
credited to the Member's accounts from which it was withdrawn in the order the
Committee prescribes. The repayment shall be invested in accordance with the
Member's current election for new contributions.
12. TITLE TO ASSETS
No person or entity shall have any legal or equitable right or
interest in the contributions made by any Participating Company, or otherwise
received into the Fund, or in any assets of the Fund, except as expressly
provided in the Plan.
13. AMENDMENT AND TERMINATION
(a Amendment. The provisions of this Plan may be
amended by the Board of Directors (or its delegee as
authorized by subsection 2(d)) from time to time and at any time in whole or in
part, provided that no amendment shall be effective unless the Plan as so
amended shall be for the exclusive benefit of the Members and their
beneficiaries, and that no amendment shall operate to deprive any Member of any
rights or benefits accrued to him under the Plan prior to such amendment.
Further, no amendment to the Plan's vesting schedule shall reduce the
nonforfeitable percentage of any Member to an amount less than it was on the
later of the amendment's effective date or adoption date as determined without
regard to such amendment. Further, each Member who has completed three years of
Service on the later of the date an amendment to the Plan's vesting schedule is
adopted or effective shall have his nonforfeitable percentage determined without
regard to the amendment if such disregard provides a greater nonforfeitable
percentage.
(b Termination. While it is the Company's intention
to continue the Plan in operation indefinitely, the
Company nevertheless expressly reserves the right by action of the Board of
Directors to terminate the Plan in whole or in part or discontinue
contributions. Any such termination, partial termination or discontinuance of
contributions shall be effected only upon condition that such action is taken as
shall render it impossible for any part of the corpus of the Fund or the income
therefrom to be used for, or diverted to, purposes other than the exclusive
benefit of the Members and their beneficiaries.
(c Conduct on Termination. If the Plan is to be
terminated at any time, the Company shall give written
notice to the Trustee which shall thereupon revalue the assets of the Fund and
the accounts of the Members as of the date of termination, partial termination
or discontinuance of contributions and, after discharging and satisfying any
obligations of the Plan, shall allocate all unallocated assets to the Accrued
Benefits of the Members at the date of termination, partial termination or
discontinuance of contributions in accordance with subsection 6(g). Upon
termination, partial termination or discontinuance of contributions, the Accrued
Benefits of Members affected thereby shall become fully vested and shall not
thereafter be subject to forfeiture in whole or in part. The Committee shall
instruct the Trustee to continue to control and manage the Fund for the benefit
of Members to whom distributions will be made at the time and in the manner
provided in Section 9. Notwithstanding the foregoing, incident to a termination
or a discontinuance of contributions, the Company may amend the Plan and the
Trust Agreement to provide for distribution of Accrued Benefits to each affected
Member provided such distribution does not violate any applicable provision of
subsection 9(h) of the Plan or section 401(a) or 401(k) of the Code.
14. LIMITATION OF RIGHTS
(a Alienation. None of the payments, benefits or
rights of any Member shall be subject to any claim of
any creditor of such Member and, in particular, to the fullest extent permitted
by law, shall be free from attachment, garnishment, trustee's process, or any
other legal or equitable process available to any creditor of such Member. No
Member shall have the right to alienate, anticipate, commute, pledge, encumber
or assign any of the benefits or payments which he may expect to receive,
contingently or otherwise, under this Plan, except the right to designate a
beneficiary or beneficiaries in accordance with the Plan. This subsection shall
not apply to the enforcement of a federal tax levy made pursuant to the Code,
the collection by the United States on a judgment resulting from an unpaid tax
assessment, the pledging of a Member's Accrued Benefit as security for a loan
made to such Member under Section 11 or any other exception set forth in the
regulations under section 401(a)(13) of the Code.
(b Qualified Domestic Relations Order Exception.
Subsection 14(a) shall not apply to the creation,
assignment or recognition of a right to any benefit payable with respect to a
Member under a qualified domestic relations order within the meaning of section
414(p) of the Code. Notwithstanding Sections 8-10, distribution to an alternate
payee pursuant to a qualified domestic relations order shall be made (i) at the
time specified in such order or (ii) if the order permits, as soon after the
Committee approves the order as is administratively feasible provided such
distribution is permitted under applicable provisions of the Code.
(c Employment. Neither the establishment of the
Plan, nor any modification thereof, nor the creation of
any fund, trust or account, nor the payment of any benefit shall be construed as
giving any Member or Employee, or any person whomsoever, any legal or equitable
right against any Participating Company, the Trustee or the Committee, unless
such right shall be specifically provided for in the Trust Agreement or the Plan
or conferred by affirmative action of the Company, the Trustee or the Committee
in accordance with the terms and provisions of the Plan or as giving any Member
or Employee the right to be retained in the employ of any Participating Company.
All Members and other Employees shall remain subject to discharge to the same
extent as if the Plan had never been adopted.
15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
(a General Rule. In the case of any Plan merger or
Plan consolidation with, or transfer of assets or
liabilities of the Plan to, any other plan, each Member in the Plan must be
entitled to receive a benefit immediately after the merger, consolidation, or
transfer (if the Plan were then to terminate) which is equal to or greater than
the benefit he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had been terminated).
(b Protected Benefits. A Member shall have all of
the benefits, rights or features provided by the Prior
Plan which are protected under section 411(d)(6) of the Code with respect to a
Transferred Account. The Committee shall provide for separate recordkeeping for
a Member's Transferred Account and such additional subaccounts as may be
necessary to comply with the requirements of this subsection. Except to the
extent necessary to comply with the requirements of this subsection or an
express provision of the Plan, all Transferred Accounts shall be subject to the
general provisions of the Plan applicable to the type of account to which they
would have been credited had the amounts initially been contributed to this
Plan.
(c Special Provisions Applicable to Transferred
Accounts from the Momentum Money-Maker 401(k) Retirement Plan and the Onondaga
Litho Supply Co., Inc. Employees' Profit Sharing and Retirement Plan.
(i Distribution Options. The following
additional distribution options shall apply to Transferred Accounts from the
Momentum and Onondaga Plans.
(A0 a straight life annuity for the
Member's life;
(B0 a joint and survivor annuity
with the Member's spouse as
contingent annuitant for an
amount at least equal to 50% but not
more than 100% of the monthly amount
which is payable to the Member during
his lifetime; (C0 a life annuity for
the Member's life, with a minimum of
60, 120 or 180 monthly
payments guaranteed;
(D0 approximately equal monthly or
quarterly payments over a period
certain; (E0 a joint and survivor
annuity with any contingent annuitant
for an amount at least
equal to 50% but not more than 100% of the
amount which is payable to the Member
during his lifetime; (F0 a lump sum
payment; or (G0 any combination of
the foregoing.
Notwithstanding the foregoing, payments may not extend beyond the Member's life
expectancy on the date of the Member's election, or, if the Member has a
designated beneficiary, the joint life expectancy of the Member and the Member's
designated beneficiary. For purposes of this subsection, unless the Member
irrevocably elects to the contrary at the time benefit payments commence, life
expectancy shall be determined based on the life expectancy of the Member,
without recalculation, as determined under section 401(a)(9) of the Code and the
regulations thereunder.
Death benefits shall be distributed as the Member's beneficiary shall elect (A)
in one lump sum or (B) in installments over a period not extending beyond five
years of the Member's date of death unless payment of benefit commenced before
the Member's date of death in which case continuing payments to the Member's
beneficiary shall be made at least as rapidly as under the method of
distribution in effect on the Member's date of death; provided,
however, if any portion of the Member's Accrued Benefit is payable to or for the
benefit of a designated beneficiary, such portion may be distributed over a
period of time not exceeding the life expectancy of such designated beneficiary,
provided distribution begins not later than one year after the date of the
Member's death or such later date as applicable regulations under the Code may
permit; or if the designated beneficiary referred to above is the Member's
surviving spouse, the date on which distribution is required to begin shall not
be earlier than the date on which the Member would have attained age 70-1/2, the
benefit amount will be used to purchase a straight life annuity for the spouse's
life commencing as soon after the Member's date of death as is administratively
feasible unless the spouse elects another form of settlement permitted under the
Plan and if the surviving spouse should die before distribution to such spouse
begins, this provision shall apply as if the surviving spouse were the Member.
(ii Married Member's Annuity. If a Member
is married to his then spouse for at least one year
on the date on which benefit payments are to commence and his Transferred
Account exceeds $5,000, the Member may not elect that benefits be distributed in
any form of settlement other than the form of annuity described in subsection
15(c)(i)(B) unless the Member receives the written consent of his spouse for
such election witnessed by a notary public or authorized representative of the
Plan on forms prescribed by the Committee. A Member may change his election at
any time during the election period set forth herein. No less than 30 days and
no more than 90 days before the payment of benefits begins, the Committee shall
furnish to the Member a written notification of the availability of the benefit
election hereunder, including the joint and survivor annuity and the effect of
electing not to take such annuity. A Member may at any time after receipt of the
written notification and prior to his actual retirement elect in writing the
form of benefit he desires. A Member may change his election at any time prior
to the expiration of the election period described above. If a Member requests
additional information within 60 days after receipt of the notification of
election, the minimum election period shall be extended an additional 60 days
following his receipt of such additional information.
(iii Single Member's Annuity. If, on the
date benefits are to commence, a Member is single or
has not been married to his then spouse for at least one year and his
Transferred Account exceeds $5,000, benefits will be distributed in the form
described in subsection 15(c)(i)(A) unless the Member elects an alternate form
of settlement.
(iv Annuity Purchases. If benefits are to
be paid in a form of an annuity, the Committee shall
direct the Trustee to apply the Member's Transferred Account to purchase an
appropriate nontransferable annuity contract and to deliver it to the Member.
(v In-Service Distributions and Loans.
If a Member is married to his then spouse for at least
one year on the date on which an in-service distribution or loan is to be made
from his Transferred Account and his Transferred Account then exceeds $5,000,
the Member may not receive a distribution or a loan from his Transferred Account
without the prior written consent of his spouse given in accordance with
subsection 15(c)(ii) no more than 90 days before the distribution or loan is
made.
(vi Explanation of Death Benefit. The
Committee shall provide to the Member within the
"applicable period" a written explanation of the terms and conditions of the
spouse's right to death benefits with respect to the Transferred Account. For
purposes of this subsection "applicable period" shall mean whichever of the
following periods ends last:
(A0 the period beginning with the
first day of the Plan Year in which
the Member attains
age 32 and ending with the close of
the Plan Year preceding the Plan Year
in which the Member attains age 35;
(B0 a reasonable period after the
Member commences participation in the
Plan; or
(C0 in the case of a Member who
separates from service before attaining age 35, a reasonable period after such
separation from service.
(vii Transition Rule. For periods prior
to January 1, 1999, "$3,500" shall be substituted for
"$5,000" each place it appears in this Section.
(d In-Service Distribution from Certain Transferred
Accounts. A Member may withdraw all or a portion of
his Transferred Account reflecting matching contributions or employer
contributions from a Prior Plan sponsored by Tasty Baking Company by submitting
a request for distribution to the Committee on a form and in a manner which the
Committee prescribes for that purpose.
(e Vesting -- Dixie Plan. All Transferred Accounts
from the Dixie Type and Supply Co., Inc. 401(k)Retirement Plan are 100%
nonforfeitable.
(f Code Requirements. The Plan shall be deemed an
amendment to each plan which merges into this Plan on
or after January 1, 1997 to the extent necessary for such plan to satisfy
applicable provisions of section 401(a) of the Code which became effective with
respect to such plan on or after January 1, 1997.
16. PARTICIPATION BY RELATED ENTITIES
(a Commencement Any entity which is a Related
Entity with respect to the Company may, with the
permission of the Board of Directors, elect to adopt this Plan and the
accompanying Trust Agreement. If the Board of Directors designates a Related
Entity as a Participating Company, then it shall be deemed a Participating
Company without the necessity for action by its separate board of directors.
(b Termination. The Company may, by action of the
Board of Directors, determine at any time that any
such Participating Company shall withdraw and establish a separate plan and
fund. The withdrawal shall be effected by a duly executed instrument delivered
to the Trustee instructing the Trustee to segregate the assets of the Fund
allocable to the Employees of such Participating Company and pay them over to
the separate fund. On the date a Participating Company ceases to be a Related
Entity, its participation in the Plan shall terminate and Members in its employ
shall be treated as having a Severance Date; however, no affected Member shall
be eligible for distribution of his Accrued Benefit unless the Committee
determines that distribution will not adversely affect the Plan's qualified
status under the Code. Alternatively, the Board of Directors may, but is not
required to, provide for a transfer in accordance with Section 15 of the Accrued
Benefits of affected Members to a separate plan which the former Related Entity
adopts.
(c) Single Plan. The Plan shall at all times be
administered and interpreted as a single plan for the
benefit of the Employees of all Participating Companies.
(d) Delegation of Authority. Each Participating
Company, by adopting (or being deemed to have adopted)
the Plan, acknowledges that the Company has all the rights and duties thereof
under the Plan and the Trust Agreement, including the right to amend the same.
17. TOP-HEAVY REQUIREMENTS
(a) General Rule. For any Plan Year in which the
Plan is a top-heavy plan or included in a top-heavy
group, as determined under subsection 17(b), the special requirements of this
Section shall apply.
(b) Calculation of Top-Heavy Status. The Plan shall
be a top-heavy plan (if it is not included in an
"aggregation group") or a plan included in a top-heavy group (if it is included
in an "aggregation group") with respect to any Plan Year if the sum as of the
"determination date" of the "cumulative accounts" of "key employees" for the
Plan Year exceeds 60% of a similar sum determined for all "employees," excluding
"employees" who were "key employees" in prior Plan Years only.
(c) Definitions. For purposes of this Section 17,
the following definitions shall apply to be interpreted in accordance with the
provisions of section 416 of the Code and the regulations thereunder.
(i) "Aggregation Group" shall mean the
plans of a Participating Company or a Related Entity
included below within the following categories:
(A) each such plan in which a
"key employee" is a participant including a terminated
plan in which a "key employee" was a participant within the five-years ending on
the "determination date";
(B) each other such plan which
enables any plan in subsection (A) above to meet the
requirements of section 401(a)(4) or 410 of the Code; and
(C) each other plan not required
to be included in the "aggregation group" which the
Company elects to include in the "aggregation group" in accordance with the
"permissive aggregation group" rules of the Code if such group would continue to
meet the requirements of sections 401(a) and 410 of the Code with such plan
being taken into account.
(ii) "Cumulative Account" for any
"employee" shall mean the sum of the amount of his accounts
under this Plan plus all defined contribution plans included in the "aggregation
group" (if any) as of the most recent valuation date for each such plan within a
twelve-month period ending on the "determination date," increased by any
contributions due after such valuation date and before the "determination date"
plus the present value of his accrued benefit under all defined benefit pension
plans included in the "aggregation group" (if any) as of the "determination
date." For a defined benefit plan, the present value of the accrued benefit as
of any particular "determination date" shall be the amount determined under (A)
the method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Participating Companies and all Related Entities, or (B) if
there is no such method, as if such benefit accrued not more rapidly than under
the slowest accrual rate permitted under the fractional accrual rule of section
411(b)(1)(C) of the Code, as of the most recent valuation date for the defined
benefit plan, under actuarial equivalent factors specified therein, which is
within a twelve-month period ending on the "determination date." For this
purpose, the valuation date shall be the date for computing plan costs for
purposes of determining the minimum funding requirement under section 412 of the
Code. "Cumulative accounts" of "employees" who have not performed services for
any Participating Company or a Related Entity for the five-year period ending on
the "determination date" shall be disregarded. An "employee's" "cumulative
account" shall be increased by the aggregate distributions during the five-year
period ending on the "determination date" made with respect to him under any
plan in the aggregation group. Rollovers and direct plan-to-plan transfers to
this Plan or to a plan in the "aggregation group" shall be included in an
"employee's" "cumulative account" unless the transfer is initiated by the
"employee" and made from a plan maintained by an employer which is not a
Participating Company or a Related Entity.
(iii) "Determination Date" shall mean with
respect to any Plan Year the last day of the preceding Plan Year.
(iv) "Employee" shall mean any person
(including a beneficiary thereof) who has or had an
accrued benefit held under this Plan or a plan in the "aggregation group"
including this Plan at any time during the current or any one of the four
preceding Plan Years. Any "employee" other than a "key employee" described in
subsection 17(c)(v) shall be considered a "non-key employee" for purposes of
this Section 17.
(v) "Key Employee" shall mean any
"employee" or former "employee" (including a beneficiary
thereof) who is, at any time during the Plan Year, or was, during any one of the
four preceding Plan Years any one or more of the following:
(A) an officer of a Participating
Company or a Related Entity whose compensation (as
defined in subsection 5(d)) exceeds 50% of the dollar limitation in effect under
section 415(b)(1)(A) of the Code, unless 50 other such officers (or, if lesser,
a number of such officers equal to the greater of three or 10% of the
"employees") have higher annual compensation;
(B) one of the ten persons
employed by a Participating Company or a Related Entity
both having annual compensation (as defined in subsection 5(d)) greater 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) the largest
interests (but at least more than a 0.5% interest) in the Participating
Companies and all Related Entities. For purposes of this subsection (B), if two
"employees" have the same interest, the one with the greater compensation shall
be treated as owning the larger interest;
(C) any person owning (or
considered as owning within the meaning of section 318 of
the Code) more than 5% of the outstanding stock of all
Participating Companies or Related Entities or
stock possessing more than 5% of the
total combined voting power of such
stock; (D) a person who would be
described in subsection (C) above if
1% were substituted for
5% each place the same appears in subsection (C) above, and who has annual
compensation of more than $150,000.
For purposes of determining ownership under this subsection, section
318(a)(2)(C) of the Code shall be applied by substituting 5% for 50%.
(d) Combined Benefit Limitation. For purposes of
the calculation of the combined limitation of subsection
5(c), "1.0" shall be substituted for "1.25" each place the same appears in that
subsection.
(e) Vesting. The nonforfeitable portion of a
Member's Accrued Benefit derived from his Matching Account shall continue to
vest according to the schedule set forth in subsection 8(d)(ii).
(f) Minimum Contribution. Minimum Participating
Company contributions for a Member who is not a "key
employee" shall be required in an amount equal to the lesser of 3% of
compensation (as defined in subsection 5(d)) or the highest percentage of such
compensation limited to $150,000 (or an increased amount resulting from a cost
of living adjustment under section 415(d) of the Code) contributed for any "key
employee" under subsections 4(a) and 4(d). For purposes of meeting the minimum
contribution requirement, employer social security contributions and elective
contributions on behalf of "employees" other than "key employees" shall be
disregarded. Each "non-key employee" of a Participating Company who has not
separated from service at the end of the Plan Year and who has satisfied the
eligibility requirements of subsection 3(a) shall receive any minimum
contribution provided under this Section 17 without regard to (i) whether he is
credited with 1,000 Hours of Service in the Plan Year, (ii) earnings level for
the Plan Year or (iii) whether he elects to make contributions under subsection
4(a). If an "employee" participates in both this Plan and another defined
contribution plan maintained by a Participating Company or a Related Entity, the
minimum benefit shall be provided under the other plan. Furthermore, if an
"employee" participates in both this Plan and a defined benefit plan maintained
by a Participating Company or a Related Entity, the minimum benefit shall be
provided under the defined benefit plan.
18. MISCELLANEOUS
(a) Incapacity. If the Committee receives a copy of
a certified court order, or other binding legal
certification, that a person entitled to receive any benefit payment is under a
legal disability or is incapacitated in any way so as to be unable to manage his
financial affairs, the Committee shall direct that payments be made to such
person's legally appointed guardian or other representative. Any payment of a
benefit in accordance with the provisions of this subsection shall be a complete
discharge of any liability to make such payment.
(b) Reversions. In no event, except as provided
herein, shall the Trustee return to a Participating
Company any amount contributed by it to the Plan.
(i) Mistake of Fact. In the case of a
contribution made by a good faith mistake of fact, the
Trustee shall return the erroneous portion of the contribution, without increase
for investment earnings, but with decrease for investment losses, if any, within
one year after payment of the contribution to the Fund.
(ii) Deductibility. To the extent
deduction of any contribution determined by the Company to be
deductible is disallowed, the Trustee shall return that portion of the
contribution, without increase for investment earnings but with decrease for
investment losses, if any, for which deduction has been disallowed within one
year after the disallowance of the deduction.
(iii) Limitation. No return of contribution
shall be made under this subsection which adversely
affects the Plan's qualified status under regulations, rulings or other
published positions of the Internal Revenue Service or reduces a Member's
Accrued Benefit below the amount it would have been had such contributions not
been made.
(iv) Compliance Refunds. This subsection
shall not preclude refunds made in accordance with
subsection 4(b)(i), 4(f)(ii), 4(g)(ii) or 4(i)(iii).
(c) Employee Data. The Committee or the Trustee may
require that each Employee provide such data as it
deems necessary upon his becoming a Member in the Plan. Each Employee, upon
becoming a Member, shall be deemed to have approved of and to have acquiesced in
each and every provision of the Plan for himself, his personal representatives,
distributees, legatees, assigns, and beneficiaries.
(d) In Writing Requirement. Unless otherwise
required by law, a requirement that a transaction or consent
under the Plan be "in writing" may, at the discretion of the Committee, be
effected through an interactive telephone system or by other types of electronic
communication.
(e) Doubt as to Right to Payment. If at any time
any doubt exists as to the right of any person to any
payment under the Plan or the amount or time of such payment (including, without
limitation, any case of doubt as to identity, or any case in which any notice
has been received from any other person claiming any interest in amounts payable
hereunder, or any case in which a claim from other persons may exist by reason
of community property or similar laws), the Committee may direct the Trustee to
hold such sum as a segregated amount in trust until such right or amount or time
is determined or until order of a court of competent jurisdiction, or to pay
such sum into court in accordance with appropriate rules of law or to make
payment only upon receipt of a bond or similar indemnification (in such amount
and in such form as is satisfactory to the Committee).
(f) Inability to Locate Distributee. Notwithstanding
any other provision of the Plan, if the Committee
cannot locate any person to whom a payment is due under this Plan, the benefit
in respect of which such payment is to be made shall be forfeited at such time
as the Committee shall determine in its sole discretion (but in all events prior
to
the time such benefit would otherwise escheat under any applicable state law);
provided, that such benefit shall be reinstated if such person subsequently
makes a valid claim for such benefit.
(g) Estoppel of Members and Their Beneficiaries.
The Participating Companies, Committee and Trustee may
rely upon any certificate, statement or other representation made to them by an
Employee, Member or beneficiary with respect to age, length of service, leave of
absence, date of cessation of employment, marital status, or other fact required
to be determined under any other provisions of this Plan, and shall not be
liable on account of the payment of any moneys or the doing of any act in
reliance upon any such certificate, statement or other representation. Any such
certificate, statement or other representation made by an Employee or Member
shall be conclusively binding upon such Employee or Member and his beneficiary,
and such Employee, Member or beneficiary shall thereafter and forever be
estopped from disputing the truth and correctness of such certificate, statement
or other representation. Any such certificate, statement or other representation
made by a Member's beneficiary shall be conclusively binding upon such
beneficiary and such beneficiary shall thereafter and forever be estopped from
disputing the truth and correctness of such certificate, statement or other
representation.
(h) Law Governing. This Plan shall be construed,
administered and applied in a manner consistent with the laws of the
Commonwealth of Pennsylvania where those laws are not superseded by federal law.
(i) Pronouns. The use of the masculine pronoun
shall be extended to include the feminine gender wherever appropriate.
(j) Interpretation. The Plan is a profit sharing
plan including a qualified, tax exempt trust under
sections 401(a) and 501(a) of the Code and a qualified cash
or deferred arrangement under section 401(k)(2) of the Code. The Plan shall be
interpreted in a manner consistent with its satisfaction of all requirements of
the Code applicable to such a plan.
IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by
the Company, it has caused the same to be signed by its officers thereunto duly
authorized, and its corporate seal to be affixed hereto, this day of , 1999.
PRIMESOURCE CORPORATION
Attest:
By:Corporate
- ----------------------------------------- -------------------------
(Corporate Seal)
PRIMESOURCE CORPORATION 401(k) SAVINGS PLAN
(Amended and Restated Effective January 1, 1997)
Schedule A
(September 1, 1999)
[Intentionally Left Blank]
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