SODEXHO MARRIOTT SERVICES, INC.
401(k) EMPLOYEES' RETIREMENT SAVINGS PLAN AND TRUST
EFFECTIVE MARCH 27, 1998
TABLE OF CONTENTS
ARTICLE
I. DEFINITIONS........................................................................................2
II. ELIGIBILITY.......................................................................................15
2.1 Conditions of Eligibility.............................................................15
2.2 Effective Date of Participation.......................................................15
2.3 Determination of Eligibility..........................................................15
2.4 Termination of Eligibility............................................................15
2.5 Eligibility Rules Regarding Terminated Participants...................................15
2.6 Readmission of Former Participant.....................................................16
2.7 Omission of Eligible Employee.........................................................16
2.8 Inclusion of Ineligible Employee......................................................16
2.9 Classes of Employees..................................................................16
2.10 Military Service......................................................................17
III. CONTRIBUTIONS AND ALLOCATIONS.....................................................................17
3.1 Employer Discretionary Contribution...................................................17
3.2 Employer Matching Contribution........................................................18
3.3 Salary Reduction Contributions........................................................19
3.4 After-Tax Savings.....................................................................22
3.5 Time of Payment of Contributions......................................................22
3.6 Allocation of Contributions, Earnings and Forfeitures.................................22
3.7 Overall Limitation of Benefits........................................................24
3.8 Adjustment for Excessive Contributions................................................26
3.9 Additional Coordinating Limits on Contributions to Multiple Plans.....................26
3.10 Transfers from Qualified Plans........................................................27
3.11 Participant Directed Investment Account...............................................28
3.12 Recharacterization of Excess 401(k) Contributions.....................................31
3.13 Distribution of Excess 401(k) Contributions...........................................32
3.14 Distributions of Aggregate 401(m) Contributions.......................................32
3.15 Qualified Nonelective Contributions...................................................33
IV. VALUATIONS........................................................................................34
4.1 Valuation of the Trust Fund/Directed Investment Accounts..............................34
4.2 Method of Valuation...................................................................34
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V. DETERMINATION AND DISTRIBUTION OF BENEFITS........................................................35
5.1 Determination of Benefits Upon Retirement.............................................35
5.2 Determination of Benefits Upon Death..................................................35
5.3 Determination of Benefits Upon Disability.............................................36
5.4 Determination of Benefits Upon Termination............................................36
5.5 Distribution of Benefits Generally....................................................39
5.6 Distribution of Benefits Upon Death...................................................45
5.7 Time of Segregation or Distribution...................................................46
5.8 Distribution to Minor Beneficiary.....................................................47
5.9 Location of Participant or Beneficiary Unknown........................................47
5.10 Pre-Retirement Distribution...........................................................47
5.11 Advance Against Distribution for Financial Need.......................................48
5.12 Distribution Pursuant to Qualified Domestic Relations Order ..........................49
5.13 Direct Rollover Distribution..........................................................49
VI. MULTIPLE-EMPLOYER PROVISIONS......................................................................50
6.1 Adoption by Other Companies...........................................................50
6.2 Participation.........................................................................50
6.3 Administration........................................................................50
6.4 Transfer 51
6.5 Termination...........................................................................51
VII. TOP HEAVY RULES AND ADMINISTRATION................................................................52
7.1 Top Heavy Plan Requirements...........................................................52
7.2 Determination of Top Heavy Status.....................................................52
7.3 Special Top Heavy Definitions.........................................................54
7.4 Powers and Responsibilities of the Employer...........................................55
7.5 Assignment and Designation of Administrative Authority................................56
7.6 Allocation and Delegation of Responsibilities.........................................56
7.7 Powers, Duties and Responsibilities...................................................56
7.8 Records and Reports...................................................................57
7.9 Appointment of Advisers...............................................................58
7.10 Information from Employer.............................................................58
7.11 Payment of Expenses...................................................................58
7.12 Majority Actions......................................................................58
7.13 Claims Procedure......................................................................58
7.14 Claims Review Procedure...............................................................59
VIII. TRUSTEE...........................................................................................59
8.1 Responsibilities of the Trustee.......................................................59
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8.2 Investment Powers and Duties of the Trustee...........................................60
8.3 Other Powers of the Trustee...........................................................60
8.4 Loans to Participants.................................................................63
8.5 Duties of the Trustee Regarding Payments..............................................65
8.6 Trustee Compensation and Expenses and Taxes...........................................65
8.7 Annual Report of the Trustee..........................................................65
8.8 Audit.................................................................................66
8.9 Resignation, Removal and Succession of Trustee........................................67
8.10 Separate Trust Agreement............................................................68
IX. AMENDMENT, TERMINATION AND MERGER.................................................................68
9.1 Amendment.............................................................................68
9.2 Termination...........................................................................69
9.3 Merger or Consolidation...............................................................69
X. MISCELLANEOUS.....................................................................................69
10.1 Participant's Rights..................................................................69
10.2 Alienation............................................................................70
10.3 Construction of Agreement.............................................................70
10.4 Gender and Number.....................................................................71
10.5 Legal Action..........................................................................71
10.6 Prohibition Against Diversion of Funds................................................71
10.7 Bonding...............................................................................71
10.8 Employer's and Trustee's Protective Clause............................................72
10.9 Receipt and Release for Payments......................................................72
10.10 Action by the Employer................................................................72
10.11 Named Fiduciaries and Allocation of Responsibility....................................72
10.12 Headings..............................................................................72
10.13 Approval by Internal Revenue Service..................................................73
10.14 Uniformity............................................................................73
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THE SODEXHO MARRIOTT SERVICES, INC.
401(K) EMPLOYEES' RETIREMENT SAVINGS PLAN AND TRUST
THIS AGREEMENT is made and entered into this 27th day of March, 1998, by
SODEXHO MARRIOTT SERVICES, INC. (herein referred to as the "Employer").
W I T N E S S E T H:
WHEREAS, MARRIOTT INTERNATIONAL, INC. established the MARRIOTT
INTERNATIONAL, INC. EMPLOYEES' PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND
TRUST (the "Marriott Plan") to enable the employees of MARRIOTT INTERNATIONAL,
INC. and its subsidiaries to share in the profits and cash flow from MARRIOTT
INTERNATIONAL, INC. business operations, to encourage savings by the employees
and to help them prepare for retirement, old age and death; and
WHEREAS, MARRIOTT INTERNATIONAL, INC. intends to pay a special
dividend, the "Distribution" to its shareholders of all of the stock of SPINCO,
a newly-formed subsidiary to the shareholders of MARRIOTT INTERNATIONAL, INC.,
following approval of the distribution by the shareholders at the 1998 Annual
Meeting of Shareholders of MARRIOTT INTERNATIONAL, INC.; and
WHEREAS, immediately following the Distribution, INTERNATIONAL CATERING
CORPORATION will merge with a subsidiary of MARRIOTT INTERNATIONAL, INC., and
MARRIOTT INTERNATIONAL, INC., will be renamed "SODEXHO MARRIOTT SERVICES, INC.";
and
WHEREAS, immediately following the Distribution, SPINCO will be
renamed "MARRIOTT INTERNATIONAL, INC."; and
WHEREAS, upon the consummation of the Distribution, the employees of
MARRIOTT INTERNATIONAL, INC. shall become employees of SODEXHO MARRIOTT
SERVICES, INC. or MARRIOTT INTERNATIONAL, INC. (as SPINCO shall be renamed as of
the Distribution); and
WHEREAS, the MARRIOTT INTERNATIONAL, INC. Board of Directors, at its
meeting on February 5, 1998, approved the spin-off of a portion of the Marriott
Plan containing the benefits attributable to employees of SODEXHO MARRIOTT
SERVICES, INC. and the assumption of sponsorship of the spun-off plan by SODEXHO
MARRIOTT SERVICES, INC.; and
WHEREAS, SODEXHO MARRIOTT SERVICES, INC. desires to assume sponsorship
of a new plan and to continue to provide benefits under the new plan on behalf
of its employees and those of its subsidiaries after the Distribution; and
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WHEREAS, in accordance with the Distribution, the Marriott Plan desires
to transfer the assets and liabilities representing the account balances (both
vested and unvested) of any participant in the Marriott Plan who, upon the
Distribution becomes an employee of SODEXHO MARRIOTT SERVICES, INC. and to
transfer such liabilities and assets to THE SODEXHO MARRIOTT SERVICES, INC.
401(k) EMPLOYEES' RETIREMENT SAVINGS PLAN AND TRUST.
NOW, THEREFORE, effective as of March 27, 1998, the Employer hereby
establishes this tax-deferred savings plan and trust (which plan and trust are
hereinafter called the "Plan") for the exclusive benefit of the Participants and
their Beneficiaries on the following terms:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.2 "Actual Deferral Percentage" means the ratio (calculated separately
for each Participant) of (1) the amount of Employer contributions actually paid
to the Trust on behalf of such Participant for the Plan Year to (2) the
Participant's total compensation (as defined in Code Section 414(s)) for such
Plan Year (whether or not the Employee was a Participant for the entire Plan
Year), including any salary deferral amounts under Section 401(k) or 125 of the
Code. "Employer contributions" on behalf of any Participant shall include: (1)
any Elective Deferrals made pursuant to the Participant's Salary Reduction
Agreement, including Excess Elective Deferrals of Highly Compensated Employees,
but excluding Elective Deferrals that are taken into account in the average
contribution percentage test (provided the average deferral percentage test is
satisfied both with and without exclusion of these Elective Deferrals); and (2)
at the election of the Employer, Qualified Nonelective Contributions and
Qualified Matching Contributions. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for the failure to make
Elective Deferrals shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
1.3 "Additional After-Tax Savings" means After-Tax Savings in excess of
six percent (6%) of a Participant's Compensation in a Fiscal Year (five percent
(5%) with respect to After-Tax Savings made prior to December 28, 1979).
1.4 "Administrator" means the person or persons designated by the
Employer to administer the Plan on behalf of the Employer.
1.5 "Affiliated Employer" means the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Section 414(b)
of the Code) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Section 414(c) of the
Code) with the Employer; any organization (whether or not incorporated) which is
a member of an affiliated service group (as defined in Section 414(m) of the
Code) which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to regulations under Section 414(o) of the
Code.
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1.6 "After-Tax Savings" means the After-Tax Savings deposited into the
Trust Fund pursuant to Section 3.4.
1.7 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 3.11.
1.8 "Agreement" or "Plan" means this instrument including all
amendments thereto.
1.9 "Anniversary Date" means the last day of the Plan Year.
1.10 "Average Actual Deferral Percentage" or "ADP" means, for a
specified group of Participants for a Plan Year, the average (expressed as a
percentage) of the Actual Deferral Percentages in such group.
1.11 "Average Contribution Percentage" or "ACP" means, for a specified
group of Participants for a Plan Year, the average (expressed as a percentage)
of the Contribution Percentages in such group.
1.12 "Basic After-Tax Savings" means After-Tax Savings up to six
percent (6%) of a Participant's Compensation in a Fiscal Year (five percent (5%)
with respect to After-Tax Savings made prior to December 28, 1979).
1.13 "Basic Contribution Account" means the portion of a Participant's
Aggregate Account which is derived from amounts contributed by the Employer
pursuant to Section 3.1.
1.14 "Beneficiary" or "Beneficiaries" means the person or persons to
whom a deceased Participant's account is payable. For purposes of determining
whether the Plan is a Top Heavy Plan, a Beneficiary of a deceased Participant
shall be considered a Key Employee or a Non-Key Employee, as the case may be.
1.15 "Code" means the Internal Revenue Code of 1986, as amended and the
underlying regulations.
1.16 "Compensation" means earned income, wages, salary, overtime, cash
bonus, commissions, annual leave, sick leave, holiday pay paid by the Employer
to the Employee, and tips reported by the Employee to the Employer and the
Internal Revenue Service. Compensation shall include only that compensation
which is actually paid by the Employer to a Participant within the Plan Year.
Compensation also includes salary deferral amounts under Code Sections 401(k)
and 125.
Compensation shall exclude the following:
(1) distributions from a plan of deferred compensation whether
or not includable in the gross income of the Employee when distributed;
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(2) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an Employee becomes
freely transferable or is no longer subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(4) other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the premiums
are not includable in the gross income of the Employee).
The annual Compensation of each Employee taken into account under the
Plan shall not exceed the OBRA '93 annual compensation limit of $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost of living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12. Any reference in this Plan to the limitation under Section
401(a)(17) of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.
1.17 "Contribution Percentage" means the ratio (expressed as a
percentage) of a Participant's Contribution Percentage Amounts for the Plan Year
to the Participant's total compensation (as defined in Code Section 414(s)),
including any salary deferral amounts under Sections 401(k) or 125 of the Code,
for the Plan Year in which the Plan is being tested for compliance with the
nondiscrimination tests (whether or not the Employee was a Participant for the
entire Plan Year).
1.18 "Contribution Percentage Amounts" means the sum of the After-Tax
Savings, Matching Contributions, Qualified Nonelective Contributions, and
Qualified Matching Contributions (to the extent not taken into account for
purposes of the ADP test) made on behalf of the Participant for the Plan Year.
Such Contribution Percentage Amounts shall include forfeitures of Excess
Aggregate 401(m) Contributions or Matching Contributions allocated to the
Participant's account which shall be taken into account in the year in which
such forfeiture is allocated. The Employer also may elect to use Elective
Deferrals in the Contribution Percentage Amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and continues to be met
following the exclusion of those Elective Deferrals that are used to meet the
ACP test.
1.19 "Defined Contribution Dollar Limitation" means Thirty Thousand
Dollars ($30,000) or, if greater, one-fourth (1/4) of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as in effect for the
limitation year.
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1.20 "Distribution" means the special dividend distribution to the
shareholders of Marriott of all of the stock of SPINCO.
1.21 "Distribution Date" means the date on which Marriott makes the
Distribution.
1.22 "Effective Date" means March 27, 1998 or, if later, the date
Marriott makes a special dividend distribution to the shareholders of Marriott
of all of the stock of SPINCO.
1.23 "Elective Deferrals" means contributions made to the Plan during
the Plan Year by the Employer, pursuant to a Salary Reduction Agreement. No
amount that has become currently available to an Employee or that is designated
or treated, at the time of deferral or contribution, as an after-tax
contribution may be treated as an Elective Deferral. With respect to any taxable
year, a Participant's Elective Deferral is the sum of all employer contributions
made on behalf of such Participant pursuant to an election to defer under any
qualified CODA as described in Code Section 401(k), any simplified employee
pension cash or deferred arrangement as described in Code Section 402(h), any
eligible deferred compensation plan under Code Section 457, and any employer
contributions made on behalf of a Participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a salary reduction agreement.
Elective Deferrals will be maintained in the Elective Contribution Account.
1.24 "Eligible Employee" means any Employee who has satisfied the
provisions of Section 2.1, except Employees whose employment is governed by the
terms of a collective bargaining agreement between Employee representatives and
the Employer under which retirement benefits were the subject of good faith
bargaining.
1.25 "Employee" means any person who is employed by the Employer
maintaining the Plan, but excludes any person who serves only as a director, and
any person who is retained as an independent contractor. Notwithstanding the
foregoing, the Employer shall have the authority by adopting written resolutions
to include as Employees any U.S. citizens employed by an Affiliated Employer
which has not joined the Plan and which is either (a) a "foreign affiliate" (as
defined in Section 3121(1)(8) of the Code), provided that the provisions of
Section 406 of the Code are complied with as to such U.S. citizens and such
Affiliated Employer, or (b) a "domestic subsidiary" (as defined in Section
407(a)(2)(A) of the Code), provided that the provisions of Section 407 of the
Code are complied with as to such U.S. citizens and such Affiliated Employer.
Employees are classified as follows:
CLASS A consists of all Employees not included in Class B whose base
compensation is stated in terms of hourly rates of pay including those who
receive gratuities collected and distributed by the Employer.
CLASS B consists of all management and professional Employees whose
base compensation at the time determination is stated in terms of a weekly or
annual salary, or whose base compensation is stated in terms of hourly rates but
who receive management benefits, regardless of whether such
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Employees are exempt from overtime pay requirements of the Fair Labor Standards
Act, as amended from time to time.
Unless specifically referring to a particular class, any and all
provisions of this Plan shall apply to all Employees regardless of
classification.
"Leased employees" within the meaning of Section 414(n)(2) of the Code
shall not be treated as Employees of the Employer for purposes of benefit
accrual. Notwithstanding any other provisions of the Plan, for purposes of
determining the number or identity of Highly Compensated Employees or for
purposes of the requirements of Section 414(n)(3) of the Code, the Employees of
the Employer shall include leased employees within the meaning of Section
414(n)(2) of the Code.
A leased employee shall not be considered an Employee of the Employer
for purposes other than benefit accrual if: (1) such Employee is covered by a
money purchase pension plan providing: (a) a non-integrated employer
contribution rate of at least ten percent (10%) of compensation, as defined in
Section 415(c)(3) of the Code, but including amounts contributed pursuant to a
salary reduction agreement which are excludable from the Employee's gross income
under Section 125, Section 401(k), Section 402(h) or Section 403(b) of the Code,
(b) immediate participation, and full and immediate vesting; and (2) leased
employees do not constitute more than twenty percent (20%) of the Employer's
nonhighly compensated workforce.
1.26 "Employer" means Sodexho Marriott Services, Inc., a corporation,
with its principal office in the State of Maryland, which assumes the
obligations of the Plan with respect to its employees, and any Affiliated
Employer which adopts this Plan. If more than one corporation shall become an
Employer hereunder, then, unless the context otherwise requires, whenever any
act of the Employer is required or permitted hereunder, such act shall be deemed
to have been taken or performed if taken or performed by the Employer first
named above.
1.27 "Excess Aggregate 401(m) Contributions" means with respect to any
Plan Year, the excess of: (1) the aggregate Contribution Percentage Amounts
taken into account in computing the Contribution Percentage on behalf of Highly
Compensated Employees for such Plan Year, over (2) the maximum Contribution
Percentage Amounts permitted by the average contribution percentage test
(determined by reducing contributions made on behalf of Highly Compensated
Employees, beginning with the Highly Compensated Employees with the largest
dollar amount of Contribution Percentage Amounts as described under Code Section
401(m)(6)(C)). Such determination shall be made after the determination of
Excess Elective Deferrals pursuant to Section 3.3 and then the determination of
Excess 401(k) Contributions pursuant to Section 3.12.
1.28 "Excess 401(k) Contributions" means, with respect to any Plan
Year, the excess of: (1) the aggregate amount of contributions actually taken
into account in computing the numerator of the Average Actual Deferral
Percentage of Highly Compensated Employees for such Plan Year, over (2) the
maximum amount of such contributions permitted by the average deferral
percentage tests under Section 401(k) of the Code (determined by reducing
contributions made on behalf of
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Highly Compensated Employees, beginning with the greatest of such amounts as
described under Code Section 401(k) (8)(C)).
1.29 "Excess Elective Deferrals" means those Elective Deferrals that
are includable in a Participant's gross income under Section 402(g) of the Code
to the extent such Participant's Elective Deferrals for a taxable year exceed
the dollar limitation under such Code Section. Excess Elective Deferrals shall
be treated as annual additions under this Plan.
1.30 "Fiscal Year" means the Employer's accounting year commencing on
September 1st of each year and ending on the Friday closest to August 31st. The
Employer's fiscal year is an annual period which varies from fifty-two (52) to
fifty-three (53) weeks. The Employer's initial Fiscal Year shall commence March
28, 1998.
1.31 "Forfeiture" means that portion of a Participant's Aggregate
Account that is not Vested and is forfeited in accordance with Section 5.4,
subsection B.
1.32 "Former Participant" means any Employee who has been a
Participant, but who has ceased to be a Participant for any reason.
1.33 "Highly Compensated Employee" means any Employee who performs
services for the Employer and who
(1) was a five percent (5%) owner during the
determination year or the look-back year or
(2) for the look-back year, received Compensation from the
Employer in excess of Eighty Thousand Dollars ($80,000)(as adjusted pursuant to
Section 415(d) of the Code) and, if elected by the Employer, was in the group
consisting of the top twenty percent (20%) of the highest paid Employees of the
Employer.
The "determination year" shall be the Plan Year. The "look-back year"
shall be the 12-month period immediately preceding the determination year.
The term "Highly Compensated Employee" includes highly compensated
Employees and Highly Compensated Former Employees. A "Highly Compensated Former
Employee" includes any Employee who separated from service (or was deemed to
have separated) prior to the determination year, performs no service for the
Employer during the determination year, and was a Highly Compensated Employee
for either the separation year or any determination year ending on or after the
Employee's fifty-fifth (55th) birthday.
The determination of who is a Highly Compensated Employee will be
made in accordance with Section 414(q) of the Code.
1.34 "Hour of Service" means:
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(1) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. Hours will be credited
to the Employee for the computation period in which the duties are performed.
(2) each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more than
five hundred and one (501) Hours of Service will be credited under (2) for any
single continuous period (whether or not such period occurs in a single
computation period). Hours under (2) will be calculated and credited pursuant to
Section 2530.200b-2 of the Department of Labor Regulations, which is
incorporated herein by this reference, except that (i) any Employee without an
actual regular work schedule shall be deemed to have a regular work schedule of
forty (40) hours per week and eight (8) hours per work day; and (ii) any
Employee whose Compensation is not determined on the basis of certain amounts
for each hour worked and whose hours are not required to be counted and recorded
by any federal law, shall be deemed to have a regular work schedule of
forty-five (45) hours per week and nine (9) hours per day.
(3) each hour for which back pay is awarded or agreed to by
the Employer, irrespective of mitigation of damages.
The same Hours of Service will not be credited both under (1) or (2),
as the case may be, and under (3). Hours under (3) will be credited to the
Employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement or
payment is made.
Notwithstanding (2) above: (a) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (b) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of determining whether a One-Year Break in Service, as
defined in Section 1.44, for participation purposes has occurred in a
computation period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, eight (8) Hours of Service per
day of such absence. An absence from work for maternity or paternity reasons
means an absence: (1) by reason of the Employee's pregnancy, (2) by reason of
the birth of the Employee's child, (3) by reason of the placement of a child
with the Employee in connection with the Employee's adoption of such child, or
(4) for purposes of caring for such child for a period beginning immediately
following such birth or
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placement. The Hours of Service credited under this paragraph shall be credited
(1) in the computation period in which the absence begins if the credit is
necessary to prevent a One-Year Break in Service in that period, or (2) in all
other cases, in the following computation period. No more than 501 Hours of
Service may be credited under this paragraph by reason of any one pregnancy or
placement. No credit for Hours of Service will be given pursuant to this
paragraph unless the Employee furnishes such timely information as the
Administrator may require, under reasonable and uniform rules, to establish (i)
that the absence from work is for the reason described in this paragraph, and
(ii) the number of days for which there was such an absence.
Solely for purposes of determining whether a One-Year Break in Service
for eligibility purposes has occurred in a computation period, Hour of Service
shall include each hour credited during the period in which an Employee is on an
"Authorized Leave of Absence" (as defined below). The number of hours to be so
credited shall be at a rate per week equal to such Employee's regularly
scheduled working hours per week immediately prior to such "Authorized Leave of
Absence" (or, in the case of an Employee without an actual regular work
schedule, then at the rate of forty (40) hours per week).
An "Authorized Leave of Absence" means any absence authorized by the
Employer under the Employer's standard personnel practices provided that the
Employee or Participant returns within the period of the authorized absence. An
absence due to service in the Armed Forces of the United States shall be
considered an Authorized Leave of Absence provided that the absence is caused by
war or other emergency, or provided that the Employee or Participant is required
to serve under the laws of conscription in time of peace, and further provided
that the Employee or Participant returns to employment with the Employer within
the period provided by law. Except for service in the Armed Forces of the United
States in accordance with the preceding sentence, an Authorized Leave of Absence
may not extend beyond two (2) years.
A payment shall be deemed to be made by or due from the Employer
regardless of whether such payment is made by or due from the Employer directly,
or indirectly through, among others, a trust fund or insurer to which the
Employer contributes or pays premiums and regardless of whether contributions
made or due to the trust fund, insurer or other entity are for the benefit of
particular Employees or are on behalf of a group of Employees in the aggregate.
Hours of Service shall be counted for the purpose of determining a
One-Year Break in Service. The provisions of Department of Labor Regulations
Section 2530.200b-2(b) and (c) are incorporated herein by reference.
1.35 "Investment Manager" means any person, firm or corporation who is
a registered investment adviser under the Investment Advisers Act of 1940, a
bank or an insurance company, and (1) who has the power to manage, acquire, or
dispose of Plan assets, and (2) who acknowledges in writing his fiduciary
responsibility to the Plan.
1.36 "Key Employee" means any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the determination period
was:
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(1) an officer of the Employer whose annual compensation
exceeded fifty percent (50%) of the dollar limit under Code Section 415(b)(1)(A)
as amended;
(2) one of the ten employees owning (by attribution or
otherwise) both a more than one-half percent (1/2%) ownership interest and the
largest percentage ownership interest in the Employer, if such individual's
annual compensation exceeded Thirty Thousand Dollars ($30,000) (or other dollar
limit under Code Section 415(c)(1)(A) as amended);
(3) a 5-percent owner of the Employer (by attribution within
the meaning of Code Section 318 or otherwise); or
(4) a 1-percent owner of the Employer (by attribution within
the meaning of Code Section 318 or otherwise) whose annual compensation exceeded
One Hundred Fifty Thousand Dollars ($150,000).
Annual compensation means compensation as defined in Section 415(c)(3)
of the Code, but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludable from the Employee's gross income
under Section 125, 401(k), 402(h) or 403(b) of the Code. The determination
period is the Plan Year containing the Determination Date and the four (4)
preceding Plan Years. If a former Employee has performed no services for the
Employer during the determination period, he shall not be considered a Key
Employee. The determination of who is a Key Employee will be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
1.37 "Late Retirement Date" means a Participant's actual Retirement
Date after having reached his Normal Retirement Date.
1.38 "Marriott" means Marriott International, Inc., a Delaware
corporation, or any corporation successor thereto, by merger, consolidation or
the acquisition of substantially all of the assets and business thereof.
1.39 "Matching Contribution" means any contribution to the Plan made by
the Employer, pursuant to Section 3.2, for the Plan Year and allocated to a
Participant's Account by reason of the Participant's Elective Deferrals.
1.40 "Matching Contribution Account" means, with respect to each
Participant, the value of all Matching Contributions made by the Employer and
allocated to a Participant pursuant to Section 3.2, together with any amounts
allocated thereon as earnings or losses and Forfeitures, as the case may be, in
accordance with Section 3.6.
1.41 "Non-Highly Compensated Employee" means any Employee who is not a
Highly Compensated Employee.
1.42 "Non-Key Employee" means any Employee who is not a Key
Employee.
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1.43 "Normal Retirement Date" means the earliest of (i) the date a
Class A Participant reaches his 45th birthday, (ii) the date a Class B
Participant reaches his 55th birthday, or (iii) the date a Participant completes
two hundred and forty (240) "months of credit" with the Employer. For purposes
of this definition, a "month of credit" is a full month during the entire period
of which an Employee is employed by the Employer. A Participant's "month of
credit" shall commence on the date the Participant completes one Hour of Service
for the Employer and end on the close of business on the day preceding the next
month's anniversary thereof. A Participant shall in all cases be fully Vested in
his Account upon attaining his Normal Retirement Date.
1.44 "One-Year Break in Service" means the twelve consecutive month
period measured from the date an Employee performs an Hour of Service (and
anniversaries of that date) during which an Employee does not complete more than
five hundred (500) Hours of Service with the Employer, for reasons other than
absences referred to in Section 1.34.
1.45 "Participant" means any Eligible Employee who has not for any
other reason become ineligible to participate in the Plan.
1.46 "Participant-Insider" means any Participant who is, pursuant to
Section 16 of the Securities Exchange Act of 1934, 15 U.S.C. 78p (1988) (the
"Exchange Act"), an officer or director of the Employer, or a person who is
directly or indirectly the beneficial owner of more than ten percent (10%) of
any class of equity securities of the Employer registered pursuant to Section 12
of the Exchange Act, and who is subject to the reporting requirements of the
Exchange Act (and accompanying rules issued by the Securities and Exchange
Commission).
1.47 "Participant's Account" or "Account" means the separate accounts
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust, including, to the extent
applicable:
(1) The Employer's discretionary contributions to the Basic
Contribution Account pursuant to Section 3.1;
(2) The Employer's Matching Contributions to each
Participant's Matching Contribution Account pursuant to Section 3.2;
(3) Elective Deferrals to the Elective Contribution Account,
pursuant to Section 3.3;
(4) After-Tax Savings contributed to the After-Tax Savings
Account pursuant to Section 3.4;
(5) The Employer's Qualified Nonelective Contributions
pursuant to Section 3.15;
(6) Qualified Matching Contributions pursuant to Section 3.2
or 3.1, if applicable; and
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(7) A Participant's Rollover Contributions pursuant to Section
3.10.
1.48 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending on the Friday closest to
December 31st, except for the initial Plan Year beginning March 27th and ending
on the Friday closest to December 31st.
1.49 "Qualified Domestic Relations Order" means a court order pursuant
to Section 414(p) of the Code which provides for an apportionment of the
Participant's accrued benefit between the Participant and any alternate payee.
1.50 "Qualified Employer Contribution Account" means, with respect to
each Participant, the value of all amounts contributed by the Employer and
allocated to a Participant pursuant to Section 3.2, and the Elective Deferrals
allocated to a Participant pursuant to Section 3.3, to the extent taken into
account to demonstrate compliance with the nondiscrimination requirements of
Section 401(m) of the Code, together with any amounts allocated thereon as
earnings or losses and Forfeitures, as the case may be, in accordance with
Section 3.6.
1.51 "Qualified Employer Deferral Contributions" means the Qualified
Matching Contributions and Qualified Nonelective Contributions taken into
account to demonstrate compliance with the nondiscrimination requirements of
Section 401(k) of the Code.
1.52 "Qualified Employer Deferral Contribution Account" means, with
respect to each Participant, the value of all amounts contributed by the
Employer and allocated to a Participant pursuant to Section 3.2, and the
Qualified Matching Contributions contributed by the Employer and allocated to a
Participant pursuant to Section 3.2, to the extent taken into account to
demonstrate compliance with Section 401(k) of the Code, together with any
amounts allocated thereon as earnings or losses and Forfeitures, as the case may
be, in accordance with Section 3.6.
1.53 "Qualified Employer Real Property" means parcels of real property
(and related personal property) which are leased to the Employer or an
Affiliated Employer (1) if a substantial number of the parcels are dispersed
geographically; and (2) if each parcel and the improvements thereon are suitable
(or adaptable without excessive cost) for more than one use.
1.54 "Qualifying Employer Securities" means (1) any stocks or other
equity securities issued by the Employer or an Affiliated Employer; or (2) any
bonds, debentures, notes or certificates or other evidences of indebtedness of
the Employer or an Affiliated Employer which are described in Section 503(e) of
the Code and Section 407(e) of ERISA.
1.55 "Qualified Joint and Survivor Annuity" means an immediate annuity
for the life of the Participant with a survivor annuity for the life of the
Participant's spouse which is not less than fifty percent (50%) of the amount of
the annuity which is payable during the joint lives of the Participant and the
Participant's spouse and which is the actuarial equivalent of a single life
annuity for the life of the Participant.
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1.56 "Qualified Matching Contributions" means Matching Contributions
made by the Employer and allocated to a Participant's Account that are one
hundred percent (100%) Vested when made; and that are not distributable to
Participants or their beneficiaries before the earliest of:
(1) separation from service, death or disability of the
Participant;
(2) attainment of age fifty-nine and one-half (59 1/2) by the
Participant;
(3) termination of the Plan without establishment of a
successor plan; or
(4) the events described in Section 5.7.
1.57 "Qualified Preretirement Survivor Annuity" means a survivor
annuity for the life of the surviving spouse of the Participant which is the
actuarial equivalent of the benefit to which the surviving spouse would have
been entitled if benefits had commenced on the Participant's Earliest Retirement
Date.
1.58 "Qualified Nonelective Contributions" means contributions (other
than Matching Contributions) made by the Employer and allocated to a
Participant's Account that the Participant may not elect to receive in cash
until distributed from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions applicable to
Elective Deferrals.
1.59 "Retired Participant" means a person who has been a Participant,
but who reached his Retirement Date and has begun to receive retirement benefits
under the Plan.
1.60 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or other Retirement Date.
1.61 "Rollover Contribution" means a tax-free transfer of cash or other
assets from one qualified retirement plan to another, or from an individual
retirement account that is established for the sole purpose of receiving a
distribution from a qualified plan so that the assets can subsequently be rolled
over into another qualified plan.
1.62 "Salary Reduction Agreement" means a written agreement between a
Participant and the Employer or some other form of direction as authorized by
the Administrator (such as telephonic direction) to reduce the Participant's
Compensation for the purpose of making contributions to the Plan.
1.63 "Sodexho Marriott" means Sodexho Marriott Services, Inc., a
Delaware corporation, or any corporation successor thereto, by merger,
consolidation or the acquisition of substantially all of the assets and business
thereof.
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1.64 "Super Top Heavy Plan" means a Plan as to which, as of the
Determination Date, (1) the Present Value of Accrued Benefits of Key Employees,
or (2) the sum of the Aggregate Accounts of Key Employees under this Plan and
any plan of an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits or the Aggregate Accounts of all Participants under
this Plan and any plan of an Aggregation Group.
1.65 "Suspense Account" means the total forfeitable portion of all
Former Participants' Accounts which has not yet been applied to reduce future
Employer contributions pursuant to Section 3.6, or the amount of contributions
in excess of a Participant's limitations pursuant to Section 3.8.
1.66 "Terminated Participant" means any former Employee who had been a
Participant and who terminated employment with a vested former benefit in the
Plan.
1.67 "Top Heavy Plan" means a Plan as to which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees, or (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and any plan of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of Accrued
Benefits or the Aggregate Accounts of all Participants under this Plan and any
plan of an Aggregation Group.
1.68 "Total and Permanent Disability" means the permanent inability to
engage in any occupation for which a Participant is reasonably qualified by
education, training, or experience, by reason of any medically determinable
physical or mental impairment. The foregoing shall include disability
attributable to the permanent loss or loss of use of a member or function of the
body, or the permanent disfigurement of the Participant. The permanence and
degree of such impairment shall be supported by medical evidence from a
competent medical authority chosen by the Employer.
1.69 "Trust" means the trust established under the Plan for the
exclusive benefit of Eligible Employees and their Beneficiaries.
1.70 "Trustee" means the person or persons named as trustee herein or
in any separate trust forming a part of this Plan, and his, their, or its
successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.72 "Valuation Date" means the end of each business day.
1.73 "Vested" means the portion of a Participant's Account that is
nonforfeitable according to Section 5.4, subsection B.
1.74 "Year of Service" means the computation period of twelve (12)
consecutive months, measured from the date the Employee completes one Hour of
Service for the Employer and anniversaries of that date, during which an
Employee has at least one thousand (1,000) Hours of Service with the Employer.
For eligibility purposes, an Employee's Years of Service with an
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Affiliated Employer will be counted and an Employee's Hours of Service with
Marriott or its subsidiaries on or before March 27, 1999 will be counted. An
Employee's Years of Service completed before and after the entity becomes an
Affiliated Employer will be counted if the Affiliated Employer adopts the Plan
in accordance with Article VI.
ARTICLE II
ELIGIBILITY
2.1 CONDITIONS OF ELIGIBILITY
Any Employee who was a Participant in the Marriott Plan prior to the
Effective Date of this Plan shall be eligible to participate in this Plan,
subject to the One-Year Break in Service rules. Thereafter, any Eligible
Employee who has completed one (1) Year of Service and has reached his
twenty-first (21st) birthday shall be eligible to participate hereunder as of
the entry date specified in Section 2.2.
2.2 EFFECTIVE DATE OF PARTICIPATION
Each Eligible Employee who satisfies the eligibility requirements of
Section 2.1 shall become a Participant as of the beginning of the first pay
period immediately following receipt by the Administrator of an application for
admission to the Plan in writing, or in some other form authorized by the
Administrator, such as telephonic enrollment.
2.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made in accordance with this Agreement and the Act.
2.4 TERMINATION OF ELIGIBILITY
A Participant shall cease to be eligible to participate in the Plan as
of the first day of a Plan Year during which he has a One-Year Break in Service.
In the event a Participant shall go from classification as an Eligible
Employee to a non-eligible Employee, such Former Participant shall continue to
vest in his interest in the Plan. Additionally, his interest in the Plan shall
continue to share in the earnings of the Fund.
2.5 ELIGIBILITY RULES REGARDING TERMINATED PARTICIPANTS
A. VESTED PARTICIPANT. If a Terminated Participant has a Vested right
to all or a part of his Account balance derived from Employer contributions
(including Elective Deferrals and
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Qualified Matching Contributions) at the time of termination, he shall become a
Participant immediately upon his return to employment with the Employer.
B. NON-VESTED PARTICIPANT. If a Terminated Participant does not have a
Vested right to any portion of his Account balance derived from Employer
contributions at the time of termination, and if the number of consecutive
One-Year Breaks in Service equals or exceeds the greater of (1) five (5)
consecutive One-Year Breaks in Service, or (2) the aggregate number of Years of
Service before such breaks, he shall be considered a new Employee on his return
to employment with the Employer. Otherwise, he shall become a Participant
immediately upon his return to employment.
2.6 READMISSION OF FORMER PARTICIPANT.
Any Former Participant may be readmitted to the Plan as a Participant
as of the pay period immediately following receipt by the Administrator of a
written application (or some other form of application) in accordance with
Section 2.2.
2.7 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Fiscal Year, an Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by the Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the Employer would have contributed with respect to
him had he not been omitted. Such contribution shall be made regardless of
whether it is deductible in whole or in part in any taxable year by such
Employer.
2.8 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Fiscal Year, an Employee who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has been
made, the Employer shall not be entitled to recover the contribution made with
respect to the ineligible Employee regardless of whether a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible Employee shall constitute a
Forfeiture for the Fiscal Year in which the discovery is made.
2.9 CLASSES OF EMPLOYEES
A. CHANGE FROM ELIGIBLE TO INELIGIBLE CLASS. If a Participant becomes
ineligible to participate because he is no longer a member of the eligible class
of Employees, but has not incurred a One-Year Break in Service, he shall be
entitled to participate immediately upon his return to the eligible class. If he
incurs a One-Year Break in Service, his eligibility to participate shall be
determined under Section 2.5 above.
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B. CHANGE FROM INELIGIBLE TO ELIGIBLE CLASS. In the event an Employee
who is not a member of an eligible class of Employees becomes a member of an
eligible class, such Employee will participate immediately if such Employee has
satisfied the minimum age and service requirements and would have otherwise
previously become a Participant.
2.10 MILITARY SERVICE.
Notwithstanding any provisions of this Plan to the contrary,
contributions, benefits and service credits with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code. In
addition, loan repayments will be suspended under this Plan as permitted by
Section 414(u)(4) of the Code.
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
3.1 EMPLOYER DISCRETIONARY CONTRIBUTION
A. CONTRIBUTION. For the Fiscal Year during which the Plan is adopted
and each Fiscal Year thereafter, the Employer shall contribute to the Plan such
discretionary amount as shall be determined by the Employer. In determining such
contribution, the Employer shall be entitled to rely upon the total Compensation
for all Participants.
B. MAXIMUM CONTRIBUTION. The Employer's discretionary contribution for
any Plan Year shall not exceed the maximum amount allowable as a deduction to
the Employer under the provisions of Section 404 of the Code, as amended. All
contributions by the Employer shall be made in cash, Qualifying Employer
Securities (including treasury stock or previously unissued stock), Qualifying
Employer Real Property or in such property as is acceptable to the Trustee.
C. DETERMINATION OF EMPLOYER CONTRIBUTION. The Employer's determination
of the contribution in subsection A shall be by resolution adopted on or before
the date for filing the Employer's tax return (including extensions thereof) to
the extent allowed by law and shall not be subject to change as a result of a
subsequent audit by the Internal Revenue Service or as a result of any
subsequent adjustment of the Employer's records.
D. LAST DAY RULE. The Employer shall not contribute on behalf of a
Participant who was not employed on the last day of the Plan Year, except in the
case of a Participant who retires, incurs a Total and Permanent Disability, or
dies during the Plan Year. Notwithstanding the above, for any Top Heavy Plan
Year a Participant shall share in the Employer's contribution for such year as
required pursuant to Section 3.6.
E. VESTING OF EMPLOYER CONTRIBUTIONS. Amounts contributed by the
Employer pursuant to this Section shall be subject to the vesting schedule in
Section 5.4 and shall be
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accounted for in a separate account hereinafter referred to as the "Basic
Contribution Account," to the extent the Employer Discretionary Contribution is
not designated as a Qualified Matching Contribution.
3.2 EMPLOYER MATCHING CONTRIBUTION
A. CONTRIBUTION. The Employer shall determine on an annual basis the
amount of the Matching Contribution to the Plan for each Plan Year. The Matching
Contribution shall be allocated in accordance with Section 3.6.
B. MAXIMUM CONTRIBUTION. The Employer's Matching Contribution for any
Plan Year shall not exceed the maximum amount allowable as a deduction to the
Employer under the provisions of Section 404 of the Code, as amended. All
Matching Contributions by the Employer shall be made in cash.
C. DETERMINATION OF EMPLOYER MATCHING CONTRIBUTION. The Employer's
determination of the contribution in subsection A shall be by resolution adopted
on or before the date for filing the Employer's tax return (including extensions
thereof) to the extent allowed by law and shall not be subject to change as a
result of a subsequent audit by the Internal Revenue Service or as a result of
any subsequent adjustment of the Employer's records. Notwithstanding the
foregoing, the Employer's Matching Contribution for the Plan's initial year will
be established by Marriott prior to the Plan's Effective Date.
D. VESTING OF EMPLOYER MATCHING CONTRIBUTIONS. Employer Matching
Contributions shall be subject to the vesting schedule set forth in Section 5.4
and accounted for in the Participant's Matching Contribution Account to the
extent that the Employer does not designate the Matching Contributions as
Qualified Matching Contributions.
Qualified Matching Contributions shall be one hundred percent (100%)
Vested at all times, and shall be accounted for in a separate account for each
Participant herein referred to as the Qualified Employer Deferral Contribution
Account, to the extent taken into account to comply with the nondiscrimination
requirements of Section 401(k) of the Code, or as the Qualified Employer
Contribution Account, to the extent taken into account to comply with the
nondiscrimination requirements of Section 401(m) of the Code.
E. AVERAGE CONTRIBUTION PERCENTAGE TEST. The Average Contribution
Percentage ("ACP") for Participants who are Highly Compensated Employees for
each Plan Year and the ACP for Participants who are Non-Highly Compensated
Employees for the same Plan Year shall satisfy the requirements of Code Section
401(m)(2) and the underlying regulations which are incorporated by reference.
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F. SPECIAL RULES FOR AVERAGE CONTRIBUTION PERCENTAGE TEST.
(1) In computing the Average Contribution Percentage Test, the
Employer may elect to substitute "Plan Year" for "preceding Plan Year," except
that if such an election is made, it may not be changed except as provided by
the Secretary of the Treasury.
(2) In the Plan's initial Plan Year, the ACP for Participants
who are Non-Highly Compensated Employees for the "preceding" Plan Year shall be
three percent (3%) or, if the Employer elects, the actual ACP for that first
Plan Year, in accordance with Code Section 401(m)(3).
(3) The Contribution Percentage for any Participant who is a
Highly Compensated Employee and who is eligible to have Contribution Percentage
Amounts allocated to his account under two or more plans described in Section
401(a) of the Code, or arrangements described in Section 401(k) of the Code that
are maintained by the Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more CODAs that have different plan
years, all CODAs ending with or within the same calendar year shall be treated
as a single arrangement.
(4) The determination and treatment of the Contribution
Percentage of any participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury, including the requirements of Code
Section 401(m)(9) and Treas. Reg. (S)1.401(m)-1 and Treas. Reg. (S)1.401(m)-2
which are incorporated by reference.
3.3 SALARY REDUCTION CONTRIBUTIONS
A. ELECTIVE DEFERRALS. Subject to the rules of subsection C, a
Participant may elect to enter into a Salary Reduction Agreement with the
Employer which shall be applicable to such Plan Year and subsequent Plan Years
unless cancelled or modified. Any Salary Reduction Agreement shall provide that
the Participant accepts a reduction in Compensation from the Employer equal to
any whole percentage of his Compensation, or a fixed dollar amount which is at
least three dollars ($3.00) per week; provided, however, that such Participant
may not contribute more than fifteen percent (15%) of his Compensation for that
pay period.
Notwithstanding the foregoing, in no event shall the aggregate amounts
deferred under the Salary Reduction Agreement for any calendar year exceed Ten
Thousand Dollars ($10,000.00) as indexed. Furthermore, no Participant shall be
permitted to have Elective Deferrals made under this Plan, or any other
qualified plan maintained by the Employer, during any calendar year in excess of
the dollar limitation contained in Section 402(g) of the Code in effect at the
beginning of such calendar year.
In the event a Participant has Excess Elective Deferrals in any one
calendar year, such Participant may assign to this Plan any Excess Elective
Deferrals made during the calendar year by notifying the Administrator, on forms
provided by the Administrator, and in accordance with the procedures established
by the Administrator, as to the amount of such Excess Elective Deferrals to
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be assigned to the Plan within forty-five (45) days after the end of the
calendar year in which the excess occurs. Upon receiving such notice, the
Administrator will distribute the Excess Elective Deferrals, together with
applicable earnings or losses thereon, to the Participant by April 15th of the
calendar year following the calendar year of the Excess Elective Deferrals.
Excess Elective Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess Elective
Deferrals is the sum of: (1) income or loss allocable to the Participant's
Elective Contribution Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Elective Deferrals for the year
and the denominator is the Participant's Account balance attributable to
Elective Deferrals without regard to any income or loss occurring during such
taxable year; and (2) ten percent (10%) of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the
Participant's taxable year and the date of the distribution, counting the month
of distribution if distribution occurs after the 15th of such month.
A Participant's Elective Deferrals shall be suspended for twelve (12)
months after he receives a hardship distribution pursuant to Section 5.11. The
maximum amount of Elective Deferrals for a Participant for the calendar year
following the calendar year in which he receives a hardship distribution
pursuant to Section 5.11 shall be the excess of the limit described above for
that calendar year over his Elective Deferrals for the calendar year in which he
receives the hardship distribution.
B. VESTING. Contributions made by the Employer attributable to the
Participant's Salary Reduction Agreement shall be one hundred percent (100%)
Vested at all times, and shall be accounted for in a separate account
hereinafter referred to as the "Elective Contribution Account".
C. INITIAL ELECTION/CANCELLATION/MODIFICATION OF SALARY REDUCTION
AGREEMENT. The Administrator shall determine the method by which an election may
be made pursuant to a Salary Reduction Agreement. An election shall become
effective (unless previously revoked) upon the first day of the payroll period
of the Employer immediately following receipt by the Administrator of the
election, and shall remain in effect until it is cancelled or modified.
D. AVERAGE DEFERRAL PERCENTAGE TESTS. The Employer shall take all steps
necessary to comply with Section 401(k) of the Code and to satisfy one of the
average deferral percentage tests described in Section 401(k) of the Code, as
set forth below:
(1) The Average Actual Deferral Percentage for Participants
who are Highly Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Participants who are Non-Highly
Compensated Employees for the preceding Plan Year multiplied by 1.25; or
(2) The Average Actual Deferral Percentage for Participants
who are Highly Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Participants who are Non-Highly
Compensated Employees for the preceding Plan Year multiplied by two, provided
that the Average Actual Deferral Percentage for Participants who are Highly
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Compensated Employees does not exceed the Average Actual Deferral Percentage for
Participants who are Non-Highly Compensated Employees by more than two (2)
percentage points or such lesser amount as the Secretary of Treasury shall
prescribe to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee. The Plan hereby incorporates by
reference the requirements of Code Section 401(k) and the underlying
regulations.
E. SPECIAL RULES FOR AVERAGE DEFERRAL PERCENTAGE TESTS.
(1) In computing the Average Deferral Percentage Test, the
Employer may elect to substitute "Plan Year" for "preceding Plan Year", except
that if such an election is made, it may not be changed except as provided by
the Secretary of Treasury.
(2) In the Plan's initial Plan Year, the Average Actual
Deferral Percentage for Participants who are Non-Highly Compensated Employees
for the preceding Plan Year is three percent (3%) or, if the Employer elects,
the Average Actual Deferral Percentage for that first Plan Year, in accordance
with Code Section 401(k)(3)(E).
(3) The Actual Deferral Percentage for any Participant who is
a Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals or Qualified Employer Deferral Contributions allocated to his
Account under two or more plans or arrangements described in Section 401(k) of
the Code that are maintained by the Employer or an Affiliated Employer shall be
determined as if all such Elective Deferrals and Qualified Employer Deferral
Contributions were made under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement. In the event
that this Plan satisfies the requirements of Section 401(k), 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 any such sections of the Code only if
aggregated with this Plan, then Section 3.3, subsection D(1) shall be applied by
determining the Actual Deferral Percentages of Employees as if all such plans
were a single plan. Plans may be aggregated in order to satisfy Section 401(k)
of the Code only if they have the same plan year.
(4) For purposes of satisfying one of the average deferral
percentage tests set forth in Section 401(k) of the Code, all or part of the
Qualified Nonelective Contributions and Qualified Matching Contributions made
with respect to those Employees who are Eligible Employees under the cash or
deferred arrangement being tested may be treated as Elective Deferrals, provided
the requirements of Treasury Regulations (S)1.401(k)-l(b) (to the extent
applicable) are satisfied.
F. MAXIMUM CONTRIBUTION. Notwithstanding the above, the Employer's
contribution for any Fiscal Year shall not exceed the maximum amount allowable
as a deduction to the Employer under the provisions of Section 404 of the Code,
as amended.
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3.4 AFTER-TAX SAVINGS.
A. PARTICIPANT AFTER-TAX SAVINGS. Subject to the provisions of Section
2.1, each Participant may elect to deposit After-Tax Savings into the Trust
Fund. A Participant may deposit a whole percentage of Compensation, or a fixed
dollar amount which is at least three dollars ($3.00) per week; provided,
however, that such Participant may not deposit, in any given pay period, more
than fifteen percent (15%) of his Compensation for that pay period. The amount
of a Participant's After-Tax Savings may not result in a cumulative amount for
all such After-Tax Savings (plus all of the Participant's contributions to any
other plan, if any, maintained by the Employer or an Affiliated Employer which
is qualified under Section 401(a) of the Code) which exceeds fifteen percent
(15%) of such Participant's Compensation for the Plan Year.
B. INITIAL ELECTION/CANCELLATION/MODIFICATION OF AFTER-TAX SAVINGS. The
Administrator shall determine the method by which an election may be made to
contribute After-Tax Savings. An election shall become effective (unless
previously revoked) upon the first day of the payroll period of the Employer
immediately following receipt by the Administrator of the election, and shall
remain in effect until it is cancelled or modified.
C. COORDINATION WITH 401(k) ELECTIVE DEFERRALS. The maximum amount of
After-Tax Savings which may be made by a Participant during any Plan Year under
subsection B shall be further reduced by any Elective Deferrals made by the
Participant under Section 3.3.
D. VESTING. After-Tax Savings shall be one hundred percent (100%)
Vested at all times and shall be accounted for in a separate account hereinafter
referred to as the "After-Tax Savings Account".
3.5 TIME OF PAYMENT OF CONTRIBUTIONS
The Employer shall pay to the Trustee its total contribution to the
Plan pursuant to Sections 3.1 and 3.2 for each Fiscal Year within the time
prescribed by law, including extensions of time, for filing of the Employer's
annual federal income tax or other information return for the Fiscal Year. The
Employer shall pay to the Trustee Elective Deferrals pursuant to Section 3.3 and
the After-Tax Savings contributions pursuant to Section 3.4 at the earliest date
on which such assets can reasonably be segregated from the Employer's general
assets, but in no event shall such contributions be made later than the
fifteenth (15th) business day following the end of the month in which a
Participant would otherwise have received the Elective Deferrals and After-Tax
Savings in cash.
3.6 ALLOCATION OF CONTRIBUTIONS, EARNINGS AND FORFEITURES
A. ACCOUNT. The Administrator shall credit to each Participant's
Account as of each Anniversary Date or such earlier date as required by law or
as administratively feasible all amounts allocated to each such Participant as
hereafter set forth. However, the Administrator may separately account for that
portion of each Participant's Account attributable to Top Heavy Plan Years and
non-Top Heavy Plan Years.
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B. ALLOCATION OF CONTRIBUTIONS.
(1) EMPLOYER DISCRETIONARY CONTRIBUTIONS. The Employer shall
provide the Administrator with all information required to make a proper
allocation of the Employer's contributions pursuant to Section 3.1 for each Plan
Year. The Employer shall determine on an annual basis whether the Discretionary
Contribution which shall be allocated only among Participants who were employed
on the last day of the Plan Year or who died, retired or incurred a Total and
Permanent Disability during the Plan Year shall be (i) allocated in the same
proportion that each Participant's Compensation for the year bears to the total
Compensation of all Participants for such year; or (ii) treated as an additional
Employer Matching Contribution and allocated in accordance with the requirements
of 3.6, subsection B(2).
(2) EMPLOYER MATCHING CONTRIBUTION. The Employer shall provide
the Administrator with all information required to make a proper allocation of
the Employer's Matching Contribution, pursuant to Section 3.2 for each Plan
Year. Employer Matching Contributions shall be to restore the forfeitures of
Terminated Participants and the balance shall be allocated among the
Participants in the same proportion that each Participant's aggregate After-Tax
Savings and Elective Deferrals for the Plan Year bears to the total After-Tax
Savings and Elective Deferrals of all Participants for such Plan Year. For
purposes of the numerator and denominator of this ratio, After-Tax Savings and
Elective Deferrals shall be considered only to the extent the aggregate amounts
do not exceed six percent (6%) of each Participant's Compensation for the Plan
Year.
(3) ELECTIVE DEFERRALS AND AFTER-TAX SAVINGS. The Employer
shall also provide the Administrator with all information required to make a
proper allocation of the Elective Deferrals and After-Tax Savings, pursuant to
Sections 3.3 and 3.4 for each Fiscal Year.
C. ALLOCATION OF EARNINGS OR LOSSES. As of each Valuation Date, before
allocation of Employer Discretionary or Matching Contributions, Elective
Deferrals, After-Tax Savings, and Forfeitures, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund shall be allocated in the
same proportion that a Participant's Account bears to the total of all
Participants' Accounts as of such date.
D. ALLOCATION OF FORFEITURES. Any amounts which became Forfeitures
shall be applied as soon as administratively feasible to reduce administrative
expenses and any excess amounts will be applied towards the Employer Matching
Contributions in accordance with Section 3.6, subsection B.
E. TERMINATED PARTICIPANTS. Any Participant who terminated employment
during the Plan Year for reasons other than death, Total and Permanent
Disability or retirement shall not share in the allocation of the Employer
Discretionary Contribution.
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F. MINIMUM ALLOCATIONS REQUIRED FOR TOP HEAVY PLAN YEARS.
(1) For any Top Heavy Plan Year, the Employer contributions
and Forfeitures allocated on behalf of any Participant who is not a Key Employee
shall equal at least the lesser of (i) three percent (3%) of the Participant's
Compensation or (ii) the percentage rate (expressed as a percentage of
Compensation) at which Employer contributions and Forfeitures are made for such
year to the Key Employee for whom such percentage rate is the highest. The
minimum contribution shall not apply to any Participant who was not employed by
the Employer on the last day of the Plan Year. The minimum allocation required
(to the extent required to be nonforfeitable under Section 416(b) of the Code)
may not be forfeited under Sections 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(2) If a Key Employee is a participant in both a defined
contribution plan and a defined benefit plan that are both part of a Top Heavy
Group (but neither of such plans is a Super Top Heavy Plan), the defined
contribution and the defined benefit fractions referenced in Section 3.7, shall
remain unchanged, provided the Participant's Account of each Non-Key Employee
who is a Participant receives an extra allocation (in addition to the minimum
allocation set forth above) equal to not less than one percent (1%) of such
Non-Key Employee's Compensation. This Plan incorporates by references Code
Section 416 and the underlying regulations.
3.7 OVERALL LIMITATION OF BENEFITS
A. MAXIMUM ANNUAL ADDITION. The annual addition that may be contributed
or allocated to a Participant's Account under the Plan for any limitation year
shall not exceed the lesser of the Defined Contribution Dollar Limitation, or
twenty-five percent (25%) of the Participant's compensation for the limitation
year.
The compensation limitation shall not apply to any contribution for
medical benefits (within the meaning of Section 401(h) or Section 419A(f)(2) of
the Code) which is otherwise treated as an annual addition under Section
415(l)(1) or 419A(d)(2) of the Code.
The term "annual addition" means the sum of the following amounts
credited to a Participant's Account for the limitation year:
(1) Employer contributions;
(2) Employee contributions, if any; and
(3) Forfeitures, if any.
Amounts allocated to an individual medical account, as defined in Section
415(1)(2) of the Code, which is part of a pension or annuity plan maintained by
the Employer, are treated as annual additions to a defined contribution plan.
Also, amounts derived from contributions which are attributable to
post-retirement medical benefits, allocated to the separate account of a Key
Employee, as defined in Section 419A(d)(3) of the Code, or under a welfare
benefit fund, as defined in Section 419(e) of the
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Code, maintained by the Employer are treated as annual additions to a defined
contribution plan. Rollover Contributions (per Section 3.10) are not included in
the term annual addition.
If a short limitation year is created because of an amendment changing
the limitation year to a different 12-consecutive month period, the maximum
annual addition will not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
In addition, all defined contribution plans of the Employer, terminated
or not, shall, for purposes of these limitations, be considered as one plan.
Any excess amount applied under Section 3.8 in the limitation year to
reduce Employer contributions will also be considered annual additions for such
limitation year.
B. MULTIPLE PLAN REDUCTION. The Plan incorporates by reference the
requirements of Code Section 415(e) and the underlying regulations. This Section
does not apply to limitation years that begin after December 31, 1998.
C. LIMITATION YEAR. For purposes of determining annual additions, the
"limitation year" shall be the Plan Year. All qualified plans maintained by the
Employer shall use the same limitation year. If the limitation year is amended
to a different 12-consecutive month period, the new limitation year shall begin
on a date within the limitation year in which the amendment is made.
D. CONTROLLED GROUP. In the case of a group of employers which
constitutes either a controlled group of corporations, trades or businesses
under common control, or an affiliated service group, all such employers shall
be considered a single employer for purposes of applying these limitations.
E. FURTHER DEFINITIONS REGARDING LIMITATIONS. For purposes of Sections
3.7-3.9, the following terms have the following meanings:
(1) "Compensation" means a Participant's total renumeration
received for personal services rendered in the course of employment with the
Employer as reflected in Box 1 (or similar item subsequently designated) of the
Participant's IRS Form W-2 for the Plan Year. Compensation also includes
excluded amounts contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Employee under
Code Section 125, 402(e)(3), 402(h) or 403(b).
(2) "Excess Amount" means the excess of the Participant's
annual additions for the limitation year over the maximum annual additions
pursuant to Section 3.7.
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3.8 ADJUSTMENT FOR EXCESSIVE CONTRIBUTIONS
A. REASONABLE ERRORS. If as a result of the allocation of Forfeitures,
a reasonable error in estimating a Participant's annual compensation, or other
facts and circumstances to which Section 1.415-6(b)(6) of the Treasury
Regulations, as amended, shall be applicable, the annual addition to a
Participant's Account shall exceed the maximum provided in Section 3.7, the
Administrator shall dispose of the "Excess Amount" (as defined in Section 3.7)
as follows:
(1) Any After-Tax Savings starting with those in excess of six
percent (6%) of a Participant's Compensation in a Plan Year will be returned to
a Participant, to the extent that they would reduce the Excess Amount.
(2) If, after the application of paragraph (1), an Excess
Amount still exists, and the Participant is covered by the Plan at the end of
the limitation year, the Excess Amount in the Participant's Account will be used
to reduce Employer contributions (including any allocation of Forfeitures) for
such Participant in the next limitation year, and each succeeding limitation
year if necessary.
(3) If, after the application of paragraph (1), an Excess
Amount still exists, and the Participant is not covered by the Plan at the end
of the limitation year, the Excess Amount will be held unallocated in a Suspense
Account. The Suspense Account will be applied to reduce future Employer
contributions (including allocation of any Forfeitures) for all remaining
Participants in the next limitation year, and each succeeding limitation year if
necessary.
(4) If a Suspense Account is in existence at any time during
the limitation year, it will not participate in the allocation of the trust's
investment gains and losses.
B. MISTAKES OF FACT. In the event the Employer shall make an excessive
contribution to the Trust under a mistake of fact, as that term is used in
Section 403(c)(2)(A) of the Act, the Employer may demand repayment of such
excess amount at any time within one (1) year following the time of payment, and
the Trustee shall return such amount to the Employer within the one (1) year
period. Earnings of the Plan attributable to the excessive contributions may not
be returned to the Employer, but any losses attributable thereto must reduce the
amount so returned.
3.9 ADDITIONAL COORDINATING LIMITS ON CONTRIBUTIONS TO MULTIPLE PLANS
A. ANNUAL ADDITIONS. The annual additions which may be credited to a
Participant's Account under this Plan for any limitation year will not exceed
the maximum annual addition pursuant to Section 3.7, subsection A, of this Plan
reduced by the annual additions credited to a Participant's Account under the
other plans and welfare benefit funds for the same limitation year. If the
annual additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Employer are less
than the maximum annual addition, and the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account
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under this Plan would cause the annual additions for the limitation year to
exceed this limitation, the amount contributed or allocated will be reduced so
that the annual additions under all such plans and funds for the limitation year
will equal the maximum annual addition. If the annual additions with respect to
the Participant under such other defined contribution plans and welfare benefit
funds in the aggregate are equal to or greater than the maximum annual
additions, no amount will be contributed or allocated to the Participant's
Account under this Plan for the limitation year.
B. EXCESS ANNUAL ADDITIONS. If, pursuant to subsection A above, a
Participant's annual additions under this Plan and such other plans would result
in an Excess Amount (as defined in Section 3.7) for a limitation year, the
Excess Amount will be deemed to consist of the annual additions last allocated,
except that annual additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been allocated first
regardless of the actual allocation date.
C. EXCESS ADDITIONS FROM OTHER PLANS. If an excess amount was allocated
to a Participant on an allocation date of this Plan which coincides with an
allocation date of another plan, the excess amount attributed to this Plan will
be the product of (1) the total excess amount allocated as of such date, and (2)
the ratio of the annual additions allocated to the Participant for the
limitation year as of such date under this Plan to the total annual additions
allocated to the Participant for the limitation year as of such date under this
and all other qualified defined contribution plans.
D. DISPOSAL OF EXCESS AMOUNTS. Any Excess Amount attributed to
this Plan will be disposed of in the manner described in Section 3.8.
E. PLAN FRACTION. If the Employer maintains, or at any time maintained,
a qualified defined benefit plan covering any Participant in this Plan, the sum
of the Participants' defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any limitation year.
3.10 TRANSFERS FROM QUALIFIED PLANS
A. PARTICIPANT'S ROLLOVER CONTRIBUTION ACCOUNT. With the consent of the
Administrator, an Employee may transfer amounts from other qualified plans,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the Plan or Trust or
create adverse tax consequences for the Employer. Such an Employee shall be
treated as a Participant only for the purposes of the rollover account. Amounts
transferred must be contributed in cash and shall be set up in a separate
account herein referred to as a "Participant's Rollover Contribution Account."
B. NON-FORFEITABILITY OF ROLLOVER CONTRIBUTION ACCOUNT. Amounts in a
Participant's Rollover Contribution Account shall be held by the Trustee
pursuant to the provisions of this Plan, and such amounts shall not be subject
to Forfeiture for any reason and may not be withdrawn by or distributed to the
Participant, in whole or in part, except as provided in subsection C.
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C. DISTRIBUTION OF FAIR MARKET VALUE. At Normal Retirement Date, or
such other date when the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Participant's Rollover
Contribution Account shall be used to provide additional benefits to the
Participant or his Beneficiary pursuant to Section 5.5.
D. DIRECTED INVESTMENT ACCOUNT. All amounts allocated to a
Participant's Rollover Contribution Account may be treated as a Directed
Investment Account pursuant to Section 3.11.
E. DEFINITION OF TRANSFER. A transfer from another qualified plan shall
include: (1) amounts transferred to this Plan directly from another qualified
plan; (2) a lump-sum distribution received by an Employee from another qualified
plan which is eligible for tax-free rollover treatment and which is transferred
by the Employee to this Plan within sixty (60) days following his receipt
thereof; (3) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual retirement account has
no assets other than assets which were previously distributed to the Employee by
another qualified plan as a lump-sum distribution which were eligible for
tax-free rollover treatment and which were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof and other than
earnings on such assets; and (4) amounts distributed to the Employee from a
conduit individual retirement account meeting the requirements of (3) above, and
transferred by the Employee to this Plan within sixty (60) days of his receipt
thereof from such conduit individual retirement account. Prior to accepting any
transfers to which this Section applies, the Administrator may require the
Employee to establish that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee to provide an
opinion of counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
F. QUALIFIED PLAN. For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan under Code Section 401(a).
3.11 PARTICIPANT DIRECTED INVESTMENT ACCOUNTS.
A. PARTICIPANT DIRECTION. Subject to such limitations as may from time
to time be required by law, imposed by the Employer or the Trustee or contained
elsewhere in the Plan, a Participant shall have the right to designate the
percentage (in either increments of one percent (1%) or in any specified dollar
amount, except as the Employer shall otherwise determine) of his Aggregate
Account which is to be invested in any one or more designated investment funds
as may be made available from time to time by the Trustee or the Employer, and
shall have the right thereafter to designate amounts to be withdrawn from any
one or more designated investment funds, in accordance with the rules outlined
herein. For purposes of this Section, the term "Participant" shall include a
Beneficiary and an alternate payee. To the extent so directed, the Employer is
relieved of its fiduciary responsibilities to the extent provided in Section 404
of the Act.
(1) Except as the Employer shall otherwise determine, any
initial or subsequent investment designation shall be in writing, on a form
supplied by and filed with the Employer, and
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shall be effective as of the next "transfer date" which occurs within a
reasonable time after receipt of such designation by the Employer, unless the
election is revoked in writing before the transfer date. The Employer shall
establish one or more "transfer dates" in each Fiscal Year; provided, however,
that such transfer dates shall occur no less frequently than quarterly.
(2) All contributions and other amounts added to a
Participant's Aggregate Account, except for investment earnings, shall be
allocated among the designated investment funds in accordance with the current
investment designation. Except as the Employer shall otherwise determine, any
distribution shall be taken proportionately from each designated investment fund
in which the Aggregate Account is invested at the time of the next designation.
As of the effective date of any new investment designation, the entire balance
of the Participant's Aggregate Account at that date shall be reallocated among
the designated investment funds according to the percentages specified in the
investment designations (unless the Employer permits, and the Participant has
designated, different allocations as between existing balances and future
contributions), but no reallocations of the Participant's Aggregate Account are
to be made merely to adjust for disproportionate investment growth among such
funds.
(3) In the event the Employer receives an initial or revised
investment designation which it deems to be incomplete, unclear, not in accord
with procedures established pursuant to this Section, or otherwise improper, the
Participant's investment designation then in effect shall remain in effect (or,
in the case of a deficiency in an initial designation, the Participant shall be
deemed to have filed no designation) until the next transfer date (as defined in
subparagraph (1)), unless the Employer provides for, and permits the application
of, corrective action prior thereto.
(4) The Employer, at any time and in its sole discretion, may
suspend or terminate the operation of this Section in its entirety or with
respect to a portion of the Trust.
(5) It is intended that all Participants be required to direct
the investment of their Aggregate Accounts to the extent set forth in this
Section. In the event that the Trustee possesses at any time instructions as to
the investment of less than all of a Participant's Aggregate Accounts, the
Participant shall be deemed to have designated that the non-directed portion of
his Aggregate Account be invested in accordance with the sole discretion of the
Trustee or the Employer, if applicable, until an election is made.
B. SEPARATE SUBACCOUNTS FOR DIRECTED INVESTMENTS. Each Participant's
Account shall be further divided into subaccounts to reflect the investment
designations. Transfers within the Participant's Account shall be charged and
credited to each account as the case may be. The Account shall be charged or
credited as appropriate with the net earnings, gains, losses and expenses, as
well as any appreciation or depreciation in market value during each Plan Year,
attributable to such account.
C. AVAILABLE FUNDS. As of the Effective Date, the Employer shall make
available to the Participants the funds listed below. The Employer reserves the
right to add, freeze, delete or modify this list in any way it deems prudent.
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(1) STABLE VALUE FUND. The assets of the Stable Value Fund
shall be invested in a manner which will emphasize a high level of stability and
preservation of principal over capital appreciation or income.
(2) BOND FUND. The assets of the Bond Fund shall be invested
in a manner which will emphasize relatively high and stable income over capital
appreciation, with a moderate level of risk.
(3) BALANCED FUND. The assets of the Balanced Fund shall be
invested in a manner which will emphasize long-term growth of capital as well as
providing income, with a moderate level of risk.
(4) STOCK FUND. The assets of the Stock Fund shall be invested
in a manner which will emphasize long-term capital appreciation with a level of
risk concomitant with the potential for increased growth in value through
prudent investments in stock.
(5) MARRIOTT INTERNATIONAL COMMON STOCK FUND. The assets of
the Marriott International Common Stock Fund shall be invested primarily in
Marriott common stock which constitutes Qualifying Employer Securities. This
Fund will accept amounts which are transferred from the Marriott International,
Inc. Employees' Profit Sharing, Retirement and Savings Plan and Trust as a
result of the Distribution, but otherwise shall be frozen as of the Plan's
Effective Date and shall not accept any new investment dollars.
(6) INTERNATIONAL STOCK FUND. The assets of the International
Stock Fund shall be invested in a manner which will emphasize long-term capital
growth, principally through investment in a portfolio of diversified common
stocks of established non-U.S. companies.
(7) T. ROWE PRICE NEW HORIZONS FUND. The assets of the New
Horizons Fund shall be invested in a manner which will emphasize long-term
capital growth, primarily by investing in stocks of small, rapidly growing
companies.
(8) FIDELITY CONTRAFUND. The assets of the Fidelity ContraFund
shall be invested in a manner which will emphasize long-term capital growth,
primarily by investing in common stocks of companies that are currently
undervalued or out of favor but that show a potential for capital growth.
(9) T. ROWE PRICE MID-CAP GROWTH FUND. The assets of the
Mid-Cap Growth Fund shall be invested in a manner which will emphasize long-term
capital growth, primarily by investing in common stocks of mid-sized companies
(with a market value between $300 and $5 billion).
(10) MORGAN STANLEY INSTITUTIONAL EQUITY GROWTH FUND. The
assets of the Morgan Stanley Institutional Equity Growth Fund shall be invested
in a manner which will seek long-term
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capital appreciation by investing in growth-oriented equity securities of medium
and large capitalization companies.
(11) FRANKLIN TEMPLETON MUTUAL SHARES FUND - CLASS 1. The
assets of the Franklin Templeton Mutual Shares Fund - Class 1 shall be invested
in a manner which will emphasize capital appreciation, as well as providing
income, primarily by investing in common and preferred stocks and corporate debt
securities of any credit quality.
(12) T. ROWE PRICE EQUITY INCOME FUND. The assets of the T.
Rowe Price Equity Income Fund shall be invested in a manner which will emphasize
dividend income as well as long-term capital appreciation, primarily by
investing in common stocks of established U.S. companies that pay above-average
dividends.
(13) SODEXHO MARRIOTT SERVICES COMPANY STOCK FUND. The assets
of the Sodexho Marriott Services Company Stock Fund shall be invested primarily
in Sodexho Marriott common stock which constitutes Qualifying Employer
Securities. This Fund will accept amounts which are transferred from the
Marriott International, Inc. Employees' Profit Sharing, Retirement and Savings
Plan and Trust as a result of the Distribution, but otherwise shall be frozen as
of the Plan's effective date and shall not accept any new investment dollars
until (i) the proper regulatory approval has been obtained and (ii) the
Administrator notifies the Participants.
D. PARTICIPANT-INSIDER PROVISIONS. Notwithstanding anything contained
herein to the contrary, all investments in the Marriott Stock Fund by
Participant-Insiders shall comply with the requirements of Section 16 of the
Securities Exchange Act of 1934, 15 U.S.C. 78p (1988) (and accompanying rules
issued by the Securities and Exchange Commission).
E. VOTING REQUIREMENTS. All voting rights with respect to shares of
common stock held under the Marriott International Common Stock Fund and the
Sodexho Marriott Services Company Stock Fund will be passed through to the Plan
Participants.
3.12 RECHARACTERIZATION OF EXCESS 401(k) CONTRIBUTIONS.
A Participant may treat his Excess 401(k) Contributions as After-Tax
Savings. Recharacterized amounts will remain nonforfeitable and subject to the
same distribution requirements as Elective Deferrals as set forth in Section
5.4.
Recharacterization shall occur no later than two and one-half months
after the last day of the Plan Year in which such Excess 401(k) Contributions
arose and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount recharacterized and
the consequences thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's taxable year in which the Participant would
have received them in cash.
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3.13 DISTRIBUTION OF EXCESS 401(k) CONTRIBUTIONS.
A. DISTRIBUTIONS TO PARTICIPANTS. Notwithstanding any other provision
of this Plan, Excess 401(k) Contributions, plus any income and minus any loss
allocable thereto (up to the date of distribution), may be distributed no later
than the last day of each Plan Year to Participants to whose Accounts such
Excess 401(k) Contributions were allocated for the preceding Plan Year. If such
Excess 401(k) Contributions are distributed more than two and one-half (2 1/2)
months after the last day of the Pan Year in which such Excess 401(k)
Contributions arose, a ten percent (10%) excise tax will be imposed on the
Employer maintaining the Plan with respect to such amounts. Such distributions
shall be made to Highly Compensated Employees on the basis of the respective
portions of the Excess 401(k) Contributions attributable to each of such
Employees in the manner discussed under Code Section 401(k)(8)(C) and in its
regulations.
B. DETERMINATION OF INCOME OR LOSS. Excess 401(k) Contributions shall
be adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess 401(k) Contributions is the sum of: (1) income or loss
allocable to the Participant's Elective Contribution Account (and, if
applicable, the Qualified Employer Deferral Contribution Account or the
Qualified Employer Contribution Account or both) for the Plan Year multiplied by
a fraction, the numerator of which is such Participant's Excess Contributions
for the year and the denominator is the Participant's Account balance
attributable to Elective Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if any of such contributions are
included in the average deferral percentage test) without regard to any income
or loss occurring during such Plan Year; and (2) ten percent (10%) of the amount
determined under (1) multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions shall be
distributed from the Participant's Elective Contribution Account and Qualified
Employer Deferral Contribution Account (if applicable) in proportion to the
Participant's Elective Deferrals and Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Nonelective Contributions only to
the extent that such Excess Contributions exceed the balance in the
Participant's Elective Contribution Account and Qualified Employer Deferral
Contribution Account.
3.14 DISTRIBUTION OF EXCESS AGGREGATE 401(m) CONTRIBUTIONS
A. FORFEITURE/DISTRIBUTION. Excess Aggregate 401(m) Contributions and
income or loss allocable thereto (up to the date of forfeiture or distribution,
as the case may be) shall be forfeited, if otherwise forfeitable under the terms
of this Plan, or if not forfeitable, distributed no later than the last day of
each Plan Year to Participants to whose Accounts Employee Contributions or
Matching Contributions were allocated for the preceding Plan Year. If such
Excess Aggregate 401(m) Contributions are distributed more than two and one-half
(2 1/2) months after the last day of the Plan Year in which such excess amounts
arose, a ten percent (10%) excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such distributions shall be
made
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to Highly Compensated Employees on the basis of the respective portions of the
Excess Aggregate 401(m) Contributions attributable to each of such Employees in
the manner under Code Section 401(m)(6)(c) and its regulations. Excess Aggregate
401(m) Contributions shall be treated as annual additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS. The income or loss allocable to
Excess Aggregate 401(m) Contributions is the sum of: (1) income or loss
allocable to the Participant's Employee Contributions, Matching Contribution
Account (if any, and if all amounts therein are not used in the average deferral
percentage test) and, if applicable, Qualified Employer Deferral Contribution
Account and Elective Contribution Account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess Aggregate 401(m)
Contributions for the year and the denominator is the Participant's Account
balances attributable to Contribution Percentage amounts without regard to any
income or loss occurring during such Plan Year; and (2) ten percent (10%) of the
amount determined under (1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
C. MINIMUM DISTRIBUTION AMOUNT. The Excess Aggregate 401(m)
Contributions to be distributed to a Participant shall be adjusted for income or
loss up to the date of distribution, and, if there is a loss allocable to the
Excess Aggregate 401(m) Contributions, shall in no event be less than the lesser
of the Participant's Account under the Plan or the Participant's Employee
Contributions and Matching Contributions for the Plan Year.
D. ACCOUNTING FOR EXCESS AGGREGATE 401(m) CONTRIBUTIONS. Excess
Aggregate 401(m) Contributions shall be distributed from the Participant's
Employee Contributions, and forfeited, if otherwise forfeitable under the terms
of the Plan (or, if not forfeitable, distributed), from the Participant's
Matching Contributions in his Matching Contribution Account in proportion to the
Participant's Employee Contributions and Matching Contributions for the Plan
Year.
E. ALLOCATION OF FORFEITURES. Amounts forfeited by Highly Compensated
Employees under this Section shall be treated as annual additions under Section
3.7 of the Plan and treated as additional Employer Matching Contributions under
Section 3.2. To the extent administratively possible, the Forfeitures arising
under this Section shall be segregated and allocated only after all other
Forfeitures in the Plan have been allocated. Notwithstanding the foregoing, no
Forfeitures arising under this Section shall be allocated to the Account of any
Highly Compensated Employee.
3.15 QUALIFIED NONELECTIVE CONTRIBUTIONS
A. AMOUNT. The Employer may elect to make Qualified Nonelective
Contributions to the Plan on behalf of Non-Highly Compensated Employee
Participants. If the Employer does make such contributions to the Plan, then the
amount of such contributions for each Plan Year shall be determined by
resolution adopted by the Employer on or before the date for filing the
Employer's tax return (including extensions thereof) and shall not be subject to
change as a result of a subsequent
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audit by the Internal Revenue Service or as a result of any subsequent
adjustment of the Employer's records.
B. ALLOCATION. Allocation of Qualified Nonelective Contributions shall
be made in the ratio which each Non-Highly Compensated Employee Participant's
Compensation for the Plan Year bears to the total Compensation of all Non-Highly
Compensated Employee Participants for such Plan Year.
C. AVERAGE DEFERRAL/CONTRIBUTION PERCENTAGE TESTS. In lieu of using any
of the other correction materials set forth in the Plan, the Employer may make
Qualified Nonelective Contributions on behalf of Non-Highly Compensated
Employees that are sufficient to satisfy either the average deferral percentage
tests described in Section 401(k) of the Code with the average contribution
percentage tests described in Section 401(m) of the Code.
D. SEPARATE ACCOUNT. Separate accounts for Qualified Nonelective
Contributions, if any, will be maintained for each Participant. Each account
will be credited with the applicable contributions and earnings thereon.
ARTICLE IV
VALUATIONS
4.1 VALUATION OF THE TRUST FUND/DIRECTED INVESTMENT ACCOUNTS
The Administrator shall direct the Trustee, as of each Valuation Date,
to determine the net worth of the assets comprising the Trust Fund as they exist
on the Valuation Date, prior to taking into consideration any contribution yet
to be allocated. In determining such net worth, the Trustee shall value the
assets comprising the Trust Fund at their fair market value as of the Valuation
Date and shall deduct all expenses for which the Trustee has not yet obtained
reimbursement from the Employer, or the Trust Fund, as the case may be.
4.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself or employ one or more appraisers for that purpose and rely on the
values established by such appraiser or appraisers.
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ARTICLE V
DETERMINATION AND DISTRIBUTION OF BENEFITS
5.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. Upon such Normal
Retirement Date, all amounts credited to such Participant's Account shall become
distributable to him in accordance with this Article. The value of the Retired
Participant's Account, as of the Valuation Date coinciding with the date shares
or units are redeemed, shall be used for purposes of this Section. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan
shall continue until his Late Retirement Date. Following a Participant's Normal
Retirement Date, or Late Retirement Date, as the case may be, the Trustee shall
distribute all amounts credited to such Participant's Account in accordance with
Section 5.5.
5.2 DETERMINATION OF BENEFITS UPON DEATH
A. DEATH OF PARTICIPANT OR FORMER PARTICIPANT BEFORE RETIREMENT OR
TERMINATION. Upon the death of a Participant or Former Participant before his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's or Former Participant's Account as of the Valuation Date
immediately following the Participant's or Former Participant's date of death
shall become or continue to be fully Vested, as the case may be. As soon as
administratively feasible, the Administrator shall direct the Trustee, in
accordance with Sections 5.6 and 5.7 to distribute the value of the deceased
Participant's or Former Participant's Account to the Participant's or Former
Participant's spouse, if living, or if there is no spouse then living, or the
surviving spouse consents according to Section 5.6, to any surviving Beneficiary
designated by the Participant or Former Participant or, if none, to the
Participant or Former Participant's estate. The value of the deceased
Participant's Account as of the Valuation Date coinciding with the date shares
or units are redeemed shall be used for purposes of this Section.
B. DEATH OF TERMINATED PARTICIPANT. As soon as administratively
feasible, the Trustee in accordance with the provisions of Sections 5.6 and 5.7,
shall distribute all or any remaining amounts credited to the Account of such
deceased Terminated Participant to such Terminated Participant's spouse, if
living, or if there is no spouse living, or the surviving spouse consents
according to Section 5.6, to any surviving Beneficiary designated by him, or if
none, to the Terminated Participant's estate. The value of the deceased
Participant's Account, as of the Valuation Date coinciding with the date shares
or units are redeemed, shall be used for purposes of this Section.
C. PROOF OF DEATH. The Administrator may require such proof of death
and such evidence of the right of any person to receive payment of the value of
the Account of a deceased Participant, Former Participant or Terminated
Participant as the Administrator may deem prudent and
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necessary. The Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
D. BENEFICIARY DESIGNATION. Each Employee, upon becoming a Participant,
may designate in writing a primary and contingent Beneficiary of his own
choosing. Such designation shall be made in a form satisfactory to the
Administrator. The Beneficiary of a Participant who is married at the time of
his death shall automatically be his spouse, unless the spouse consents to a
different Beneficiary according to Code Section 417(a)(2). Subject to his
spouse's consent, a Participant may at any time revoke his designation of
Beneficiary or change his Beneficiary by filing written notice of such
revocation or change with the Administrator.
5.3 DETERMINATION OF BENEFITS UPON DISABILITY
In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or separation from service, all amounts credited to such
Participant's Account as of the Valuation Date coinciding with the Participant's
date of Total and Permanent Disability shall become or continue to be fully
Vested, as the case may be. As soon as administratively feasible, but not later
than the Anniversary Date next following the event of a Participant's Total and
Permanent Disability prior to his Retirement Date or separation from service,
the Trustee, in accordance with the provisions of Sections 5.5 and 5.7, shall
distribute to such Participant all amounts credited to his Account as of the
Valuation Date coinciding with the date shares or units are redeemed by the
Participant.
5.4 DETERMINATION OF BENEFITS UPON TERMINATION
A. DISTRIBUTION. In the event that a Participant's employment is
terminated for any reason other than death, Total and Permanent Disability or
retirement, the Terminated Participant's Account shall remain in the Trust and
share only in the allocations of earnings and losses until such time as a
distribution is made to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall be
payable to such Terminated Participant in accordance with Section 5.5 as soon as
administratively feasible following termination. The value of the Terminated
Participant's Account as of the Valuation Date coinciding with the date shares
or units are redeemed by the Participant shall be used for purposes of this
Section.
Notwithstanding anything herein to the contrary, if an Employee
terminates service, and the present value (or the value at the time of any prior
distribution) of his Vested Account balance derived from Employer and Employee
contributions is Five Thousand Dollars ($5,000) or less, the Terminated
Participant will receive a distribution of the value of his entire Vested
Account balance and the distribution will be made as soon as administratively
feasible following the Participant's termination date. For purposes of this
section, if the value of a Participant's Vested Account balance is zero, the
Employee shall be deemed to have received an immediate distribution of such
Account balance.
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A Terminated Participant's Vested Account balance may not be paid
without his written consent if the present value (or the value at the time of
any prior distribution) exceeds Five Thousand Dollars ($5,000).
B. VESTING.
(1) BASIC CONTRIBUTION ACCOUNT AND MATCHING CONTRIBUTION
ACCOUNT.
(a) The Vested portion of a Participant's Basic
Contribution Account and Matching Contribution Account shall be a percentage of
the total amount credited to such account[s] determined on the basis of the
Participant's number of Periods of Service according to the following schedule:
Vesting Schedule
PERIODS OF SERVICE PERCENTAGE
------------------ ----------
Less than 2 years 0%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
(b) Service to be Credited Upon Resumption of
Employment. Upon an Employee's resumption of employment, all "Service" (as
defined below) with the Employer (including Service before and after such
reemployment, regardless of the period of time between the employment and
reemployment) shall be counted for purposes of determining his vested interest
in his Basic Contribution Account and Matching Contribution Account, if any.
(c) Definition of "Service". For purposes of
determining his vested interest in his Basic Contribution Account and Matching
Contribution Account, "Service" means the aggregate of the period or periods
during which the Participant or Former Participant was an Employee with the
Employer, as measured from an Employee's Employment Date through the Employee's
Separation Date, subject to the following rules:
(1) "Service" shall also include any periods
of absence from active employment followed by a Separation Date, and periods of
approved leaves of absence granted in accordance with a nondiscriminatory leave
policy; provided, however, that if the Participant or Former Participant does
not resume status as an Employee of the Employer at the time agreed upon by the
Employer and the Participant, the Participant shall be deemed to be discharged
at such time.
(2) "Service" includes an Employee's period
of employment with an Affiliated Employer if the Affiliated Employer elects to
join the Plan. For this purpose, the Service
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would include the Employee's employment with the Affiliated Employer, both prior
to and after it became an Affiliated Employer.
(d) For purposes of this Article, the following terms
are defined:
(i) "Employment Date" means the first day on
which the Employee performs an Hour of Service.
(ii) "Separation Date" means the
earliest of:
(a) Any date on which an Employee's
employment with the Employer terminates by reason of voluntary termination,
discharge, retirement or death; or
(b) The expiration (other than by
reason of the performance of an Hour of Service) of a leave of absence that has
lasted at least twelve consecutive months.
(e) Special Rules for Employees who are transferred
from the payroll of Marriott to the Employer on March 27, 1998. The "Service" of
any Employee who (i) was employed by Marriott or one of its subsidiaries on
March 27, 1998 and (ii) is transferred onto the payroll of the Employer on March
27, 1998 shall be determined by including any Service with Marriott or its
subsidiaries.
(f) Special Rules for Employees who are transferred
from the payroll of Marriott to the Employer on or between March 28, 1998 and
March 27, 1999. Notwithstanding the foregoing, in the case of an Employee who
(i) was employed by Marriott or one of its subsidiaries on March 27, 1998 and
(ii) is transferred onto the payroll of the Employer on or between March 28,
1998 and March 27, 1999, the Employee's most recent date of hire with Marriott
or its subsidiary shall be treated as the Employment Date and his Service shall
be counted accordingly.
(2) OTHER ACCOUNTS. The interest of each Participant in the
assets of the Trust Fund derived from Elective Deferrals, Matching
Contributions, After-Tax Savings, Qualified Matching Contributions, Qualified
Nonelective Contributions and Rollover Contributions, as the case may be,
including Forfeitures and earnings or losses thereon, shall be one hundred
percent (100%) Vested at all times.
(3) The non-Vested portion of a Participant's Basic
Contribution Account and Matching Contribution Account shall be forfeited at the
time a Participant terminates employment. The amount forfeited will be based on
the Valuation Date immediately preceding the date the Participant terminates
employment.
C. NO REDUCTION OF ACCRUED BENEFIT. No amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a Participant's
accrued benefit. Notwithstanding the preceding sentence, a Participant's Account
may be reduced to the extent
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permitted under Section 412(c)(8) of the Code. A Plan amendment which has the
effect of decreasing a Participant's Account or eliminating an optional form of
benefit, with respect to benefits attributable to service before the amendment,
shall be treated as reducing an accrued benefit. Furthermore, no amendment to
the Plan shall have the effect of decreasing a Participant's Vested interest
determined without regard to such amendment as of the later of the date such
amendment is adopted or the date it becomes effective.
D. AMENDMENTS TO VESTING SCHEDULE. If the Plan's vesting schedule is
amended, or if the Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, or the Plan is amended in any way that directly or
indirectly affects the computation of the Participant's nonforfeitable
percentage, each Participant with at least five (5) Periods of Service with the
Employer may elect, within a reasonable period after the adoption of the
amendment or change, to have the nonforfeitable percentage computed under the
Plan without regard to such amendment or change. The period during which the
election may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the latest of (1) sixty (60) days after the
adoption date of the amendment, (2) sixty (60) days after the effective date of
the amendment, or (3) sixty (60) days after the date the Participant receives
written notice of the amendment from the Employer or Administrator.
E. ACCOUNT RESTORATION UPON REEMPLOYMENT. If a Terminated Participant
receives or is deemed to receive a distribution pursuant to Section 5.5,
subsection A, and the Employee resumes employment covered under this Plan, the
Employee's employer-derived Account balance will be restored to the amount on
the date of distribution if the Terminated Participant repays to the Plan the
full amount of his distribution before the earlier of five (5) years after the
first date on which the Terminated Participant is subsequently reemployed by the
Employer, or the date he incurs five (5) consecutive One-Year Breaks in Service
after the distribution. The Participant's Account shall be restored by crediting
the amount of his repayment plus any amount actually forfeited by him (which
shall be credited out of current Forfeitures). If the repayment and current
Forfeitures are insufficient to restore the Participant's Account, the Employer
shall make an additional contribution sufficient to do so.
5.5 DISTRIBUTION OF BENEFITS GENERALLY
A. OPTIONAL FORMS OF DISTRIBUTION. Subject to the options listed below,
a Participant (or a deceased Participant's Beneficiary) shall have the right to
choose the form of his distribution. Notwithstanding the foregoing, each
Participant who selects the annuity option shall be subject to a reasonable
administrative fee in order to offset the costs of obtaining various annuity
quotes from insurance companies. The fee will be withdrawn from the
Participant's Aggregate Account and applied against the Trustee fees. The
Administrator shall direct the Trustee to distribute to the Participant or his
Beneficiary the amount to which he is entitled under the Plan in either of the
following methods:
(1) One lump-sum payment; or
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(2) Payment in monthly, quarterly, semi-annual, or annual cash
installments or installments in any amount or over any period of time specified
by the Participant. The period for such distribution shall not exceed the
Participant's life expectancy at the date such payments commence, or the joint
life and last survivor expectancy of the Participant and his Beneficiary; or
(3) Purchase of an annuity (such annuity shall be a Qualified
Joint and Survivor Annuity for a married Participant unless waived pursuant to
Section 5.5, subsection B(3)); or
(4) For benefits accrued before January 1, 1994, variable
payment accounts with regulated companies.
B. QUALIFIED JOINT AND SURVIVOR ANNUITY ("QJSA") FOR MARRIED
PARTICIPANTS.
(1) GENERAL RULES. If elected by a Participant, a married
Participant's Vested Account will be paid in the form of a Qualified Joint and
Survivor Annuity. The Participant may retire on the Plan's earliest retirement
date. If the present value (or the value at the time of any prior distribution)
(as determined under Section 417(e)(3) of the Code) of the Qualified Joint and
Survivor Annuity exceeds Five Thousand Dollars ($5,000), and the Participant and
the Participant's spouse (or where the Participant or surviving spouse have
died, the survivor), if any, consent in writing to a distribution, the Plan may
immediately distribute the present value of such annuity. The present value of a
Qualified Joint and Survivor Annuity or life annuity will be immediately
distributed if such value does not (or at the time of any prior distribution,
did not) exceed Five Thousand Dollars ($5,000). No distribution may be made
under the preceding sentence after the Participant's Retirement Date unless the
Participant and the Participant's spouse, if any, consent in writing to such
distribution.
(2) REQUIRED NOTICE. In the case of a QJSA, the Administrator
shall, no less than seven (7) days and no more than ninety (90) days prior to
each Participant's annuity starting date, provide each Participant a written
explanation of: (a) the terms and conditions of a QJSA; (b) the Participant's
right to make and the effect of an election to waive the QJSA form of benefit;
(c) the rights of a Participant's spouse; and (d) the right to make, and the
effect of, a revocation of a previous election to waive the QJSA.
(3) WAIVER. A married Participant who has selected a QJSA may
elect to waive the QJSA payment option. The waiver must be made within ninety
(90) days before the first day of the first period for which an amount is paid
as an annuity. Any waiver of a QJSA shall not be effective unless: (a) the
Participant's spouse consents in writing to the election; (b) the election
designates a specific Beneficiary, including any class of Beneficiaries or any
contingent Beneficiaries, which may not be changed without spousal consent (or
the spouse expressly permits designations by the Participant without any further
spousal consent); (c) the spouse's consent acknowledges the effect of the
election; and (d) the spouse's consent is witnessed by a Plan representative or
notary public. Additionally, a Participant's waiver of the QJSA shall not be
effective unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the spouse expressly permits designations
by the Participant without any further spousal consent). If it is
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established to the satisfaction of a Plan representative that there is no spouse
or that the spouse cannot be located, spousal consent need not be obtained.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be obtained) shall be
effective only with respect to such spouse. A consent that permits designations
by the Participant without any requirement of further consent by such spouse
must acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and that the
spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this provision shall
be valid unless the Participant has received notice as provided in (2), above.
(4) DEATH. In the event a married Participant who has selected
a QJSA dies before his annuity starting date (which is the first period for
which an amount is paid as an annuity), the Participant's surviving spouse will
be entitled to a qualified preretirement survivor annuity as described in
subsection (C).
C. QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY.
(1) GENERAL RULES.
(a) Death On Or After Earliest Retirement Date. If a
married Participant selects a QJSA and dies before the annuity starting date,
but on or after the Plan's earliest retirement date, the Participant's surviving
spouse, if any, will receive the benefit described in Section 5.5, subsection
C(3).
(b) Death Before Earliest Retirement Date. If a
married Participant selects a QJSA and dies before the annuity starting date,
but before the Plan's earliest retirement date, the Participant's surviving
spouse, if any, will receive the benefit described in Section 5.3, subsection
C(3).
(2) COMMENCEMENT. The surviving spouse may elect to commence
payment under this option within a reasonable period after the Participant's
death. The actuarial value of benefits which commence later than the date on
which payments would have been made to the surviving spouse under a Qualified
Joint and Survivor Annuity in accordance with this Section shall be adjusted to
reflect the delayed payment.
Pursuant to subsection (3), the surviving spouse will begin to
receive payment on the first day of the month in which the Participant would
have reached the Plan's earliest retirement date had he survived to such date.
Benefits commencing after the Plan's earliest retirement date will be the
actuarial equivalent of the benefit to which the surviving spouse would have
been entitled if benefits had commenced on that date as an immediate Qualified
Joint and Survivor Annuity in accordance with subsection (3)(b).
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(3) AMOUNT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. The
Plan shall provide a "Qualified Preretirement Survivor Annuity" to the surviving
spouse of a Participant in an amount which is equal to the value of the
Participant's Vested Aggregate Account and which would be payable as a survivor
annuity under the Plan if:
(a) In the case of a Participant who dies after
reaching the Plan's earliest retirement date, as if he had retired with an
immediate Qualified Joint and Survivor Annuity on the day before his death; or
(b) In the case of a Participant who dies on or
before reaching the Plan's earliest retirement date, as if he had (i) separated
from service on his date of death; (ii) survived to the Plan's earliest
retirement date; (iii) retired with an immediate Qualified Joint and Survivor
Annuity at the Plan's earliest retirement date; and (iv) died the next day.
(4) IMMEDIATE DISTRIBUTION OF VESTED ACCOUNT. Notwithstanding
the foregoing, if the present value (or the value at the time of any prior
distribution, if any) (as determined under Section 417(e)(3) of the Code) of a
Qualified Preretirement Survivor Annuity exceeds Five Thousand Dollars ($5,000),
and the surviving spouse consents in writing to a distribution, the Plan may
immediately distribute the present value of such annuity. The present value of
the annuity for the life of the surviving spouse will be immediately distributed
if the present value (and the value at the time of any prior distribution, if
any) does not exceed Five Thousand Dollars ($5,000).
(5) SPOUSAL WAIVER AFTER PARTICIPANT'S DEATH. If a Participant
dies before his Retirement Date after having elected a Qualified Joint and
Survivor Annuity and if the value (or the value at the time of any prior
distribution) of the Participant's Vested Account balance exceeds Five Thousand
Dollars ($5,000), the Administrator may distribute such Account balance, as of
any Valuation Date after the Participant's death, to the surviving spouse in one
lump-sum payment, if the spouse consents in writing to such distribution. Any
spousal consent under this paragraph must be witnessed by the Administrator or a
notary public and must acknowledge the effect of the consent.
D. DELEGATING CHOICE TO BENEFICIARY. In addition to making the
elections provided above, a Participant may give his Beneficiary the right to
elect how his Account will be distributed to the Beneficiary if the Participant
dies before receiving his entire Account or commencing to receive his Account.
In such event, the Beneficiary will have the same rights as the Participant had
when alive, except that if the Participant dies after distribution of his
interest has commenced, the remaining portion of such interest will continue to
be distributed at least as rapidly as under the method of distribution being
used prior to the Participant's death.
E. DISTRIBUTION OF AFTER-TAX SAVINGS ACCOUNT. Distribution under any of
the payment options provided under Section 5.5 shall, if requested by the
Participant and to the extent consistent with such payment option, consist first
of the Participant's After-Tax Savings. These After-Tax Savings shall be
nontaxable to the Participant provided that they do not exceed the amount of all
After-Tax Savings deposited by the Participant into the Trust Fund before
January 1, 1987. After the amount of After-Tax Savings so distributed equals the
amount of all After-Tax
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Savings deposited by the Participant into the Trust Fund before January 1, 1987
and not previously distributed, a portion of all future distributions shall be
treated as consisting in part of taxable earnings, determined in accordance with
Section 72(e) of the Code.
F. MODE OF PAYMENT. Distributions may be in cash or employer
securities, except that any distribution of employer securities shall be limited
to the amount of such securities credited to the Participant's Account under the
Marriott Stock Fund or the Sodexho Marriott Fund.
G. MINIMUM DISTRIBUTION RULES. Notwithstanding anything herein to the
contrary, all distributions required under this Section 5.5 shall be determined
and made in accordance with the Income Tax Regulations under Section 401(a)(9)
of the Code, including the minimum distribution incidental benefit requirement
of Section 1.401(a)(9)-2 of the regulations. The provisions of Code Section
401(a)(9) as in effect from time to time, and the regulations thereunder, are
incorporated herein by reference.
H. COMMENCEMENT. Distributions from a Participant's Account shall
commence as soon as administratively feasible after a Participant separates from
service for any reason. In no event will distributions from a Participant's
Account commence later than the Participant's required beginning date.
I. NON-LUMP SUM DISTRIBUTION RULES. If the Participant's interest is to
be distributed in other than a lump sum, the following minimum distribution
rules shall apply on or after the required beginning date:
(1) If a Participant's benefit is to be distributed over (a) a
period not extending beyond the life expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the Participant's
designated beneficiary, or (b) a period not extending beyond the life expectancy
of the designated beneficiary, then the amount required to be distributed for
each calendar year, beginning with distributions for the first distribution
calendar year, must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(2) The amount to be distributed each year, beginning with
distributions for the first distribution calendar year shall not be less than
the quotient obtained by dividing the Participant's benefit by the lesser of (a)
the applicable life expectancy or (b) if the Participant's spouse is not the
designated beneficiary, the applicable divisor determined from the table set
forth in Section 1.401(a)(9)-2 of the Income Tax Regulations. Distributions
after the death of the Participant shall be made using the applicable life
expectancy in paragraph (1) above as the relevant divisor without regard to
Regulations Section 1.401(a)(9)-2.
(3) The minimum distribution required for the Participant's
first distribution calendar year shall be made on or before the Participant's
required beginning date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year in which
the Employee's required beginning date occurs, shall be made on or before
December 31 of that distribution calendar year.
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J. DEFINITIONS REGARDING DISTRIBUTIONS UNDER SECTIONS 5.5 AND 5.6.
(1) Applicable Life Expectancy: The life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or designated beneficiary) as of the Participant's (or designated
beneficiary's) birthday in the applicable calendar year.
(2) Designated Beneficiary: The individual who is designated
as the Beneficiary under the Plan in accordance with Code Section 401(a)(9) and
the Regulations thereunder.
(3) Distribution Calendar Year: A calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Participant's
required beginning date. For distributions beginning after the Participant's
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin.
(4) Life Expectancy: Life Expectancy and joint and last
survivor expectancy are computed by use of the expected return multiples in
Section 1.72-9 of the Income Tax Regulations.
Life Expectancies shall be recalculated annually.
(5) Participant's Benefit:
(a) The Account balance as of the last valuation date
in the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions or
Forfeitures allocated to the Account balance as of dates in the valuation
calendar year after the valuation date and decreased by distributions made in
the valuation calendar year after the valuation date.
(b) For purposes of paragraph (5)(a) above, if any
portion of the minimum distribution for the first Distribution Calendar Year is
made in the second Distribution Calendar Year on or before the required
beginning date, the amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
(6) Required Beginning Date: A Participant's Required
Beginning Date is the first day of April following the later of: (i) the
calendar year in which the Participant attains age seventy and one-half (70 1/2)
or (ii) the calendar year in which the Participant terminates employment with
the Employer. Notwithstanding the foregoing, the required beginning date of a
Participant who is a 5% owner within the meaning of Code Section 416 shall be
April 1st following the calendar year in which the Participant turned 70 1/2.
K. MULTIPLE DISTRIBUTIONS. In the event a Participant retires, dies or
incurs a Total and Permanent Disability during a Plan Year, the Participant may
be eligible to receive an
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allocation of the Employer Discretionary Contribution made for that Plan Year
pursuant to Section 3.1. In the event the Participant has received a
distribution of his Account when the Employer Discretionary Contribution is
awarded, the Participant shall be entitled to an additional distribution to be
made as soon as administratively feasible after the close of the Fiscal Year.
5.6 DISTRIBUTION OF BENEFITS UPON DEATH
A. BENEFICIARY. The death benefit shall be paid to the Participant's
surviving spouse, or, if there is no surviving spouse or the surviving spouse
consents, to the Designated Beneficiary. The spouse's consent shall be effective
only if the spouse consents in writing, the consent acknowledges the effect of
the election contained therein, and it is witnessed by the Administrator or a
notary public. Any consent by a spouse obtained under this provision (or
establishment that the consent of the spouse may not be obtained) shall be
effective only with respect to such spouse. A consent that permits designations
by the Participant without any requirement of further consent by such spouse
must acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit, where applicable, and that the
spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the spouse at any time before the commencement of benefits. The number of
revocations shall not be limited.
The death benefit shall be paid in one of the optional methods set
forth in Section 5.5, to be determined by either the Participant through use of
a designation of Beneficiary form or the Participant's named Beneficiary, if no
method has been selected by the Participant. The death benefit shall be paid as
soon as administratively feasible after the Beneficiary's election and in
accordance with Section 5.5, subsection K.
B. DEATH BEFORE DISTRIBUTION COMMENCES. If a Participant dies before
distribution of his interest begins, distribution of the Participant's entire
interest shall be completed by December 31 of the calendar year containing the
fifth (5th) anniversary of the Participant's death, except to the extent that an
election is made to receive distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's interest is payable to
a Designated Beneficiary, distributions may be made in substantially equal
installments over the life or over a period certain not greater than the life
expectancy of the Designated Beneficiary beginning on or before December 31 of
the calendar year immediately following the calendar year in which the
Participant died; or
(2) If the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to begin in accordance
with (1) above shall not be earlier than the later of (a) December 31 of the
calendar year immediately following the calendar year in which the Participant
died and (b) December 31 of the calendar year in which the Participant would
have attained age seventy and one half (70 1/2).
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If the Participant has not made an election pursuant to this
Section 5.6 by the time of his death, the Participant's Designated beneficiary
must elect the method of distribution no later than the earlier of (1) December
31 of the calendar year in which distributions would be required to begin under
this section or (2) December 31 of the calendar year which contains the fifth
(5th) anniversary of the date of death of the Participant. If the Participant
has no Beneficiary, or if the Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth (5th)
anniversary of the Participant's death.
C. DEATH AFTER DISTRIBUTION COMMENCES. If a Participant dies after
distribution of his interest has begun, the remaining portion of his Account
shall be distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
D. DEATH OF SPOUSE. If the surviving spouse dies after the Participant,
but before payments to such spouse begin, the provisions of this Section, with
the exception of subsection C, shall be applied as if the surviving spouse were
the Participant.
E. PAYMENT TO CHILDREN. Any amount paid to a child of the Participant
will be treated as if it had been paid to the surviving spouse if the amount
becomes payable to the surviving spouse when the child reaches the age of
majority.
F. BEGINNING DATE OF DISTRIBUTION. Distribution of a Participant's
interest is considered to begin on the Participant's Required Beginning Date (as
defined in Section 5.5) (or, if Section 5.6 above is applicable, the date
distribution is required to begin to the surviving spouse pursuant to Section
5.6 above).
The definitions of Section 5.5 shall apply for purposes of this Section 5.6.
5.7 TIME OF SEGREGATION OR DISTRIBUTION
Whenever the Trustee is to make a distribution or to commence a series
of payments on or as of any Valuation Date, the distribution or series of
payments may be made or begun on such date or as soon thereafter as is
practicable, but in no event later than one hundred eighty (180) days after the
Valuation Date. Except, however, unless otherwise elected in writing by the
Terminated Participant (such election may not result in a death benefit that is
more than incidental), a distribution as the result of Normal or Late Retirement
shall begin not later than the 60th day after the close of the Plan Year in
which the latest of the following events occurs: (1) the date on which a Class A
or Class B Participant attains age forty-five (45) or fifty-five (55),
respectively, or (2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or (3) the date the Participant terminates
his service with the Employer.
Elective Deferrals, Qualified Nonelective Contributions and Qualified
Matching Contributions, and income or loss allocable to each, are not
distributable to a Participant or his Beneficiary or Beneficiaries, in
accordance with such Participant's or Beneficiary's election, earlier than upon
separation from service, death or Total and Permanent Disability of the
Participant. Such
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amounts may also be distributed upon: (1) termination of the Plan without
establishment of another defined contribution plan, (2) the disposition by a
corporation to an unrelated corporation of substantially all of the assets
(within the meaning of Section 409(d)(2) of the Code) used in a trade or
business of such corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who continue
employment with the corporation acquiring such assets, (3) the disposition by a
corporation to an unrelated entity of such corporation's interest in a
subsidiary (within the meaning of Section 409(d)(3) of the Code) if such
corporation continues to maintain this Plan, but only with respect to Employees
who continue employment with such subsidiary, or (4) the Participant's
attainment of age fifty-nine and one-half (59 1/2). Elective Deferrals, and the
income allocable thereto, may also be distributed pursuant to Section 5.11 upon
the hardship of a Participant.
5.8 DISTRIBUTION TO MINOR BENEFICIARY
If a distribution is to be made to a minor, then the Administrator may
direct that such distribution be paid to the legal guardian, or if none, to a
parent of such Beneficiary or a responsible adult with whom the Beneficiary
maintains his residence, or to the custodian for such Beneficiary under the
Uniform Gifts to Minors Act, Gifts to Minors Act, or Uniform Transfers to Minors
Act, if such is permitted by the laws of the state in which the Beneficiary
resides. Such a payment to the legal guardian or parent of a minor Beneficiary
or to the custodian shall fully discharge the Trustee, Employer, and Plan from
further liability on account thereof.
5.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that benefit payments owing to a Participant or his
Beneficiary have not been claimed by the Participant within three (3) years of
the date on which such benefits first became payable, the Administrator shall,
at the end of the Fiscal Year during which such three (3) year anniversary
occurs treat the amount as a Forfeiture and add it to the Employer Matching
Contribution. If subsequent to such reallocation, the Participant or his
Beneficiary entitled to such benefits makes claim therefor, the Administrator
shall promptly pay such forfeited benefit. Funds with which to pay any such
benefits shall be provided as set forth in Section 3.6, subsection B(2).
5.10 PRE-RETIREMENT DISTRIBUTION
A. WITHDRAWAL OF ADDITIONAL AFTER-TAX SAVINGS. A Participant or Former
Participant may withdraw his Additional After-Tax Savings at any time and
continue to participate in the Plan after such withdrawal. Such withdrawal shall
be made in a single lump sum payment and shall be based on the Account balances
as of the Valuation Date coinciding with the date shares or units are redeemed
by the Participant.
B. WITHDRAWAL OF BASIC AFTER-TAX SAVINGS. A Participant or Former
Participant may withdraw his Basic After-Tax Savings at any time. However, upon
withdrawing such Basic After-Tax Savings, the Participant shall cease to
participate in the Plan and shall in all respects become a Former Participant,
except as otherwise provided in subsection C. Such withdrawal shall
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be made in a single lump sum payment and shall be based on the Account balance
as of the Valuation Date coinciding with the date shares or units are redeemed
by the Participant.
C. DISTRIBUTIONS UPON ATTAINMENT OF AGE 59 1/2. At such time as a
Participant or Former Participant shall have attained the age of fifty-nine and
one-half (59 1/2) years, he may elect to withdraw the entire Vested balance of
his Account. The Administrator shall, upon receiving a written election from the
Participant, direct the Trustee to distribute the entire Vested amount then
credited to the Participant's Account as of the Valuation Date coinciding with
the date shares or units are redeemed by the Participant. In the event that the
Participant or Former Participant elects to take such a distribution, the
Participant shall continue to be eligible to participate in the Plan on the same
basis as any other Employee.
5.11 ADVANCE AGAINST DISTRIBUTION FOR FINANCIAL NEED
In accordance with uniform principles consistently applied, the
Administrator may direct the Trustee to distribute to any Participant or his
Beneficiary in any one (1) Fiscal Year all Elective Deferrals, together with
income allocable to Elective Deferrals credited to such Participant's Elective
Contribution Account as of December 31, 1988, plus the amount of the
Participant's Elective Deferrals after December 31, 1988; provided the
Participant has an immediate and heavy financial need and other resources are
not reasonably available to meet the need. A distribution pursuant to this
Section may not exceed the total value of a Participant's Elective Deferrals if
the total value falls below the December 31, 1988, level. Distribution of Vested
benefits under this Section shall be authorized only for the expenses (1) listed
under Treas. Reg. (S)1.401(k)-1(d)(2)(iv)(A) which is incorporated by reference
or (2) events set forth by the Administrator in writing.
A distribution pursuant to this Section shall be deemed to be made as
of the Valuation Date coinciding with the date shares or units are redeemed and
the Participant's Account shall be reduced accordingly.
A distribution will be deemed necessary to satisfy one of the immediate
and heavy financial needs described above if the Administrator reasonably relies
upon a Participant's representation that the need cannot be met through the
following means: (1) by reimbursement or compensation by insurance or otherwise;
(2) by reasonable liquidation of the Participant's assets, to the extent the
liquidation does not itself cause an immediate and heavy financial need; (3) by
cessation of the Participant's elective contributions, if any; or (4) by other
distributions or nontaxable loans from plans maintained by the Employer or by
any other employer, or by borrowing from commercial sources on reasonable
commercial terms.
A Participant will also be deemed to lack other resources reasonably
available to meet an immediate and heavy financial need if all of the following
requirements are satisfied: (1) the Participant has obtained all distributions,
other than hardship distributions, and all non-taxable loans available under all
plans maintained by the Employer; (2) all plans maintained by the Employer
provide that the Participant's elective contributions, if any, are suspended for
a minimum of twelve months after receipt of the hardship distribution; (3) the
distribution is not in excess of the amount
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of an immediate and heavy financial need and (4) all plans maintained by the
Employer provide that the maximum amount of elective contributions for the
Participant for the tax year following the tax year in which he receives the
hardship distribution is the excess of the limitation described in Section 3.3,
for that tax year over his Elective Deferrals for the tax year in which he
receives the hardship distribution. Notwithstanding the foregoing, a Participant
who receives a hardship shall be prohibited for twelve months from the date of a
distribution from electing any Elective Deferrals or making contributions of
Basic or Additional After-Tax Savings under this Plan or making any employee
contributions under any deferred compensation plan of the Employer.
5.12 DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDER
A Qualified Domestic Relations Order (hereinafter "QDRO") may provide
for the payment to an alternate payee (i.e., a person other than the
Participant) of all or part of the benefits payable to a Participant from his
Account. A QDRO may require that such an alternate payee begin receiving
payments on or after he attains the "earliest retirement age" (as defined under
Code Section 414(p)(2)(B)) under the Plan, regardless of whether the Participant
whose benefits he is receiving has separated from service with the Employer.
All such payments pursuant to a QDRO shall be subject to reasonable
rules and regulations promulgated by the Administrator respecting the time of
payment pursuant to such order and the valuation of the Participant's Account
from which payment is made, provided that all such payments are made in
accordance with such order and Section 414(p) of the Code. Notwithstanding the
foregoing, any alternate payee who is awarded Plan assets is entitled to receive
a pro rata portion of each fund in which the Participant has invested, based on
the aggregate amount awarded to the Alternate Payee from the Participant's
Aggregate Account.
5.13 DIRECT ROLLOVER DISTRIBUTION.
A. GENERAL RULE. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this section,
a Distributee may elect, at the time and in the manner prescribed by the
Trustee, to have any portion of an Eligible Rollover Distribution paid directly
to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
B. DEFINITIONS.
(1) "Eligible Rollover Distribution" means 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
Beneficiary, or for a specified period of ten years or more; any distribution to
the extent such distribution is required under Section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
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(2) "Eligible Retirement Plan" means an individual retirement
account described in section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(3) "Distributee" means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
(4) "Direct Rollover" means a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
ARTICLE VI
MULTIPLE-EMPLOYER PROVISIONS
6.1 ADOPTION BY OTHER COMPANIES.
Subject to the approval of the Employer, the Plan may be adopted by any
other Affiliated Employer (hereinafter in this Article VI referred to as a
"Participating Company"). Such adoption and approval shall be evidenced by the
execution of an adoption agreement by the Employer and the Participating
Company.
6.2 PARTICIPATION.
The participation of any Participating Company in the Plan shall become
effective as of the date an adoption agreement is executed and approved as
provided in Section 6.1, or on such other date as may be set forth in the
adoption agreement.
6.3 ADMINISTRATION.
The term "Employer" as used in this Article and in Article VIII,
pertaining to administration of the Plan, refers only to Sodexho Marriott
Services, Inc. and the Administrator appointed by Sodexho Marriott Services,
Inc., although any other Participating Company may appoint its own separate
committee, or otherwise act, to administer the Plan. Unless the Employer
otherwise so states in its instructions to the Trustee, its directives to the
Trustee shall apply to the entire Trust, without distinction as to the portion
thereof contributed by any one Participating Company.
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6.4 TRANSFER.
Any Participating Company shall have the right to transfer its
participation in the Plan and the portion of the assets of the Trust
attributable thereto to a separate plan established solely for the benefit of
employees of that Participating Company. Such a transfer may be made without the
consent of the Employer or any other Participating Company, but shall be subject
to the right of the Employer to review the transferee plan, summary plan
description, and application for Internal Revenue Service determination letter
with respect to the transfer and/or the transferee plan, and to require, as a
condition precedent to any transfer of funds, delivery of: (i) a favorable
Internal Revenue Service determination letter with respect to the transfer
and/or the transferee plan covering the effective date of the transfer (or,
alternatively, in the discretion of the Employer, evidence that such
determination letter was timely requested, together with an undertaking of the
Participating Company to take any action required by the Internal Revenue
Service to cause the Plan to be qualified retroactively to the effective date of
the transfer), and/or (ii) an opinion of counsel for the Participating Company
to the effect that the transferee plan does not constitute an amendment of the
transferor plan which would: (A) divest participants of previously vested
benefits, (B) reduce, restrict or eliminate any protected benefits, or (C)
contain any adverse vesting changes without providing the required participant
election. The effective date of such transfer shall be as set forth in a written
transfer notice delivered by the Participating Company to the Employer and the
Trustee (except that such effective date may not be earlier than thirty (30)
days following delivery of such transfer notice, except as the Employer and the
Participating Company otherwise mutually agree). As of the effective date of the
transfer, contributions to this Plan shall cease, and, in the event of the death
or other termination of employment of any affected Participant, his benefits
shall be paid by, and determined solely by reference to, the transferee plan.
As interim measures prior to the actual transfer of funds to the
transferee plan: (i) the Employer or the Participating Company may direct the
Trustee to hold the portion of the Trust assets attributable to the
Participating Company in a separate account (within the Trust) for the exclusive
benefit of the affected Participants, and (ii) the Employer may direct the
Trustee either to transfer from such portion to the transferee plan such Trust
assets as may be needed to pay benefits or otherwise meet the operating needs of
the transferee plan, or pay such benefits and expenses directly from such
portion without transfer.
The Employer may require a Participating Company to implement a
transfer in the manner above described; failure of the Participating Company to
implement such a transfer within a reasonable period of time after notification
by the Employer shall be deemed to be a termination of the Plan (to the extent
of the participation therein by the Participating Company) pursuant to Section
6.5.
6.5 TERMINATION.
A Participating Company may terminate its participation in the Plan or
discontinue its contributions at any time. Any such termination or
discontinuance of contributions shall operate only as to the Participants
employed by that Participating Company.
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ARTICLE VII
TOP HEAVY RULES AND ADMINISTRATION
7.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the provisions of Sections 7.2 and 7.3
will supersede any conflicting provisions in the Plan, and the Plan shall
provide the following: (1) a minimum allocation to all Participants who are
Non-Key Employees meeting the requirements of Code Section 416(c); and (2)
vesting provisions meeting the requirements of Code Section 416(b).
7.2 DETERMINATION OF TOP HEAVY STATUS
A. TOP HEAVY PLAN. The Plan shall be a Top Heavy Plan for any Plan Year
in which, as of the Determination Date, any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans;
(2) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the Top Heavy Ratio for
the Required Aggregation Group exceeds sixty percent (60%); or
(3) If the Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top Heavy Ratio for the
Permissive Aggregation Group exceeds sixty percent (60%).
B. TOP HEAVY RATIO.
(1) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Employer has not
maintained any defined benefit plan which during the 5-year period ending on the
Determination Date(s) has or has had accrued benefits, the Top Heavy Ratio for
this Plan alone or for the Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of the Aggregate
Accounts of all Key Employees as of the Determination Date(s) (including any
part of any Account balance distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which is the sum of all Aggregate
Accounts (including any part of any Account balance distributed in the 5-year
period ending on the Determination Date(s)), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both the numerator and
denominator of the Top Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required to be taken
into account on that date under Section 416 of the Code.
(2) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more defined benefit plans which during the
5-year period ending on the Determination Date(s) has or has had any accrued
benefits, the Top Heavy Ratio for any Required or Permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the sum of Aggregate
Accounts under the
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aggregated defined contribution plan or plans for all Key Employees, determined
in accordance with (1) above, and the Present Value of Accrued Benefits under
the aggregated defined benefit plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of the Aggregate
Accounts under the aggregated defined contribution plan or plans for all
participants, determined in accordance with (1) above, and the Present Value of
Accrued Benefits under the defined benefit plan or plans for all participants as
of the Determination Date(s), all determined in accordance with Section 416 of
the Code and the regulations thereunder. The accrued benefits under a defined
benefit plan in both the numerator and denominator of the Top Heavy Ratio are
increased for any distribution of an accrued benefit made in the 5-year period
ending on the Determination Date.
(3) For purposes of (1) and (2) above, the value of Aggregate
Account balances and the Present Value of Accrued Benefits will be determined as
of the most recent valuation date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Section 416 of
the Code for the first and second plan years of a defined benefit plan. The
Aggregate Account balances and accrued benefits of a Participant (1) who is not
a Key Employee but who was a Key Employee in a prior year, or (2) who has not
been credited with at least one Hour of Service with any Employer maintaining
the Plan at any time during the 5-year period ending on the Determination Date
will be disregarded. The calculation of the Top Heavy Ratio, and the extent to
which distributions, rollovers and transfers are taken into account will be made
in accordance with Section 416 of the Code. Deductible employee contributions
will not be taken into account for purposes of computing the Top Heavy Ratio.
When aggregating plans, the value of Aggregate Account balances and accrued
benefits will be calculated with reference to the Determination Dates that fall
within the same calendar year.
C. SUPER TOP HEAVY PLAN. The Plan shall be a Super Top Heavy Plan for
any Plan Year in which, as of the Determination Date, any of the following
conditions exists:
(1) If the Top Heavy Ratio for this Plan exceeds ninety
percent (90%) and this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of Plans; or
(2) If this Plan is part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the Top Heavy Ratio for
the Required Aggregation Group of plans exceeds ninety percent (90%); or
(3) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top Heavy Ratio for the
Permissive Aggregation Group exceeds ninety percent (90%).
D. DETERMINATION OF ACCRUED BENEFIT. Solely for the purpose of
determining if the Plan, or any other plan included in a Required Aggregation
Group of which this Plan is a part, is top heavy, the accrued benefit of a
Participant, other than a Key Employee, shall be determined (1) under the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (2) if there is no such method, as
if such benefit accrued
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not more rapidly than the slowest accrual rate permitted under the fractional
accrual rate of Section 411(b)(1)(C) of the Code.
E. DISREGARD OF CERTAIN PARTICIPANTS. In determining top-heavy status
under this Section 7.2, the value of Aggregate Account balances and the Present
Value of Accrued Benefits of those Participants who have performed no service
for the Employer during the Plan Year shall be disregarded.
7.3 SPECIAL TOP HEAVY DEFINITIONS
A. AGGREGATION GROUP. "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, (a) each qualified plan of the Employer in which at
least one Key Employee participates or participated at any time during the
Determination Period (regardless of whether the plan has terminated), and (b)
each other qualified plan of the Employer which enables any plan described in
(a) to meet the requirements of Code Section 401(a)(4) or 410 shall be
aggregated. Such group shall be known as a "Required Aggregation Group."
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required Aggregation Group is a
Top Heavy Group. No plan in the Required Aggregation Group will be considered a
Top Heavy Plan if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the Required Aggregation
Group, provided the resulting group, taken as a whole, would continue to satisfy
the provisions of Code Section 401(a)(4) or 410. Such group shall be known as a
"Permissive Aggregation Group."
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be aggregated in
order to determine whether such plans are Top Heavy Plans.
B. DETERMINATION DATE. "Determination Date" means (1) the last day of
the preceding Plan Year, or (2) in the case of the first Plan Year, the last day
of such Plan Year.
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C. PRESENT VALUE OF ACCRUED BENEFIT. A Participant's "Present Value of
Accrued Benefit" under a defined benefit plan shall be as determined under the
provisions of such defined benefit plan.
D. TOP HEAVY GROUP. "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of (1) the Present Value of Accrued
Benefits of Key Employees under all defined benefit plans included in the group,
and (2) the Aggregate Accounts of Key Employees under all defined contribution
plans included in the group, exceeds sixty percent (60%) of a similar sum
determined for all Participants.
E. VALUATION DATE. For purposes of computing the Top Heavy Ratio, the
"Valuation Date" shall be the last day of each Plan Year.
F. TOP HEAVY PLAN YEAR. "Top Heavy Plan Year" means a particular Plan
Year during which the Plan is a Top Heavy Plan.
7.4 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
A. APPOINTMENT AND REMOVAL. The Employer shall be empowered to appoint
and remove the Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan to assure that the Plan is
being operated for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of this Agreement, the Code, and the
Act.
B. FUNDING POLICY AND METHOD. The Employer shall establish a "funding
policy and method," i.e., it shall determine whether the Plan has a short term
need for liquidity (e.g., to pay benefits) or whether liquidity is a long-term
goal and investment growth (and stability of same) is a more current need, or
shall appoint a qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate such Plan
needs with its investment policy. The communication of such a "funding policy
and method" shall not, however, constitute a directive to the Trustee as to
investment of the Trust Funds.
C. INVESTMENT MANAGER. The Employer may in its discretion appoint an
Investment Manager to manage all or a designated portion of the assets of the
Plan. In such event, the Trustee shall follow the directive of the Investment
Manager in investing the assets of the Plan managed by the Investment Manager.
D. PERFORMANCE REVIEW. The Employer shall periodically review the
performance of any fiduciary or other person to whom duties have been delegated
or allocated by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal periodic
review by the Employer or by a qualified person specifically designated by the
Employer, through day-to-day conduct and evaluation, or through other
appropriate ways.
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7.5 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint a Committee comprised of not more than ten
(10) people to serve as the Administrator. Any person, including, but not
limited to the Employees of the Employer, shall be eligible to serve. Any person
so appointed shall signify his acceptance by filing written acceptance with the
Employer. An Administrator may resign by delivering his written resignation to
the Employer. An Administrator may be removed by the Employer by delivery of
written notice of removal, to take effect at a date specified therein, or upon
delivery to the Administrator if no date is specified. No Administrator shall
have the right to vote or decide upon any matter relating solely to himself or
solely to any of his rights or benefits under the Plan.
The Employer, upon the resignation or removal of an Administrator,
shall promptly designate in writing a successor to this position. If the
Employer does not appoint an Administrator, the Employer will function as the
Administrator.
7.6 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
7.7 POWERS, DUTIES AND RESPONSIBILITIES
A. PRIMARY RESPONSIBILITY. The primary responsibility of the
Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the Plan.
The Administrator shall administer the Plan in accordance with its terms and
shall have the power to determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of
this Agreement; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan under the
terms of Section 401(a) of the Code as amended from time to time, and shall
comply with the terms of the Act and all regulations issued pursuant thereto.
The Administrator shall have all powers necessary or appropriate to accomplish
its duties under the Plan.
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B. GENERAL ADMINISTRATION. The Administrator shall be charged with the
duties of general administration, including the duties to:
(1) Determine all questions relating to the eligibility of
Employees to participate or remain Participants hereunder;
(2) Compute, certify and direct the Trustee with respect to an
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(3) Authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(4) Maintain necessary records for administration of the Plan;
(5) Interpret the provisions of the Plan and make and publish
such rules for regulation of the Plan as are consistent with the terms hereof;
(6) Determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which such
Contract shall be purchased;
(7) Compute and certify to the Employer and to the Trustee
from time to time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(8) Consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish specific
objectives;
(9) Assist any Participant regarding his rights, benefits or
elections available under the Plan; and
(10) Appoint those persons necessary to handle the ministerial
and routine tasks in connection with the day-to-day operations of the Plan, and
appointing one individual from the Committee to have the authority to review and
approve routine administrative requests..
7.8 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
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7.9 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection with
the administration of the Plan.
7.10 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, termination of
employment, and such other pertinent facts as the Administrator may require; and
the Administrator shall advise the Trustee of such of the foregoing facts as may
be pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
7.11 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists, and other costs of administering
the Plan. Until paid, the expenses shall constitute a liability of the Trust
Fund. However, the Employer may reimburse the Trust for any administration
expense incurred pursuant to the above. Any administration expense paid to the
Trust as a reimbursement shall not be considered an Employer contribution.
7.12 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority, if there shall be more than one (1) Administrator,
they shall act by a majority of their number, but may authorize one or more of
them to sign all papers on their behalf.
7.13 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with the Administrator.
Written notice of the disposition of a claim shall be furnished to the claimant
within thirty (30) days after the application is filed. In the event the claim
is denied, the reasons for denial shall be specifically set forth in the notice
in language calculated to be understood by the claimant, pertinent provisions of
the Plan shall be cited, and, where appropriate, an explanation as to how the
claimant can perfect the claim will be provided. In addition, the claimant shall
be furnished with an explanation of the Plan's claims review procedure.
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7.14 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator shall be entitled to request
the Administrator to give further consideration to his claim by filing with the
Administrator such a written request. Such request, together with a written
statement of the reasons why the claimant believes his claim should be allowed,
shall be filed with the Administrator no later than thirty (30) days after
receipt of the written notification of denial. The claimant or his
representative shall have an opportunity to review all documents in the
possession of the Administrator which are pertinent to the claim at issue and
its disallowance.
A final decision as to the allowance of the claim shall be made by the
Administrator and communicated to the claimant within thirty (30) days of
receipt of the appeal (unless there has been an extension of sixty (60) days due
to special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the thirty (30) day
period). Such communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on which the decision
is based.
ARTICLE VIII
TRUSTEE
8.1 RESPONSIBILITIES OF THE TRUSTEE
A. GENERAL RESPONSIBILITIES. The Trustee shall have the following
categories of responsibilities:
(1) Consistent with the "funding policy and method" determined
by the Employer, to invest, manage and control the Plan assets subject, however,
to the direction of an Investment Manager if the Employer should appoint such
manager as to all or a portion of the assets of the Plan;
(2) At the direction of the Administrator, to pay benefits
required to be paid to Participants, or, in the event of their death, to their
Beneficiaries;
(3) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Fiscal Year a written
annual report.
B. AUTHORIZATION. If there shall be more than one (1) Trustee, they
shall act by a majority of their number, but may authorize one or more of them
to sign papers on their behalf. No Trustee shall have the right to vote or
decide upon any matter relating solely to himself or solely to any of his rights
or benefits under the Plan.
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8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
A. IN GENERAL. Except in the case of Directed Investment Accounts, the
Trustee shall invest and reinvest the Trust Fund to keep the Trust Fund invested
without distinction between principal and income and in such securities
(including Qualifying Employer Securities in an unlimited amount acquired or
sold in accordance with Section 408(e) of the Act), or property, real or
personal, wherever situated (including Qualifying Employer Real Property in an
unlimited amount acquired or sold in accordance with Section 408(e) of the Act),
as the Trustee shall deem advisable, including, but not limited to, stocks,
common or preferred, (including stock upon which call options traded on the
Chicago Board Option Exchange or other organized exchange will be written and
subsequently traded), bonds and other evidences of indebtedness or ownership,
and real estate or any interest therein. The Trustee shall at all times in
making investments of the Trust Fund consider, among other factors, the short
and long-term financial needs of the Plan on the basis of information furnished
by the Employer. In making such investments, the Trustee shall not be restricted
to securities or other property of the character expressly authorized by
applicable law for trust investments; however, the Trustee shall give due regard
to any limitations imposed by the Code or the Act so that at all times this Plan
shall be a qualified Plan and Trust.
B. EMPLOYMENT OF AGENTS. The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a custodial, clerical
and record-keeping nature.
C. POOLED TRUST. The Trustee may, from time to time with the consent of
the Employer, transfer to a common, collective, or pooled trust fund maintained
by any "party-in-interest" within the meaning of Section 3(14) of the Act, which
is a bank or trust company supervised by a State or Federal Agency, all or such
part of the Trust Fund as the Trustee may deem advisable, and such part or all
of the Trust Fund so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund which contemplate the
commingling for investment purposes of such trust assets with trust assets of
other trusts and as such are hereby adopted and declared to be a part of this
Plan. The Trustee may, from time to time with the consent of the Employer,
withdraw from such common, collective or pooled trust fund all or such part of
the Trust Fund as the Trustee may deem advisable. The Trustee may also engage in
any transaction with a pooled investment fund of an insurance company qualified
to do business in a State if (1) the transaction is a sale or purchase of an
interest in such fund and (2) the bank, trust company or insurance company
receives not more than reasonable compensation.
8.3 OTHER POWERS OF THE TRUSTEE
A. IN GENERAL. The Trustee, in addition to all powers and authorities
under common law, statutory authority, and other provisions of this Agreement,
shall have the following powers, to be exercised in the Trustee's sole
discretion:
(1) To purchase, or subscribe for, any securities or other
property and to retain the same;
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(2) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or to
inquire into the validity, expediency or propriety of any such sale or other
disposition, with or without advertisement;
(3) To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds, securities
or other property;
(4) To cause any securities or other property to be registered
in the Trustee's own name or in the name of one or more of the Trustee's
nominees, and to hold any investments in bearer form, but the books and records
of the Trustee shall at all times show that all such investments are part of the
Trust Fund;
(5) To borrow or raise money for the purposes of the Plan in
such amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as Trustee,
and to secure the repayment thereof by pledging all, or any part, of the Trust
Fund; and no person lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity, expediency or
propriety of any borrowing;
(6) To keep such portion of the Trust Fund in cash as the
Trustee may deem to be in the best interests of the Plan, without liability for
interest thereon;
(7) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired hereunder,
whether or not such securities or other property would normally be purchased as
investments hereunder;
(8) To make, execute, acknowledge, and deliver any documents
of transfer and conveyance and any other instruments that may be necessary or
appropriate to carry out the powers herein granted;
(9) To settle, compromise, or submit to arbitration any
claims, debts or damages due or owing to or from the Plan, to commence or defend
suits or legal or administrative proceedings, and to represent the Plan in all
suits and legal and administrative proceedings;
(10) To employ agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be agent or
counsel for the Employer;
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(11) To apply for and procure from responsible insurance
companies, selected by the Administrator, as an investment of the Trust Fund
such Contracts (on the life of any Participant) as the Administrator shall deem
proper; to exercise, at any time or from time to time, whatever rights and
privileges may be granted under such Contracts; to collect, receive and settle
for the proceeds of all such Contracts as and when entitled to do so under the
provisions thereof;
(12) To invest funds in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(13) To invest in Treasury Bills and other forms of United
States government obligations;
(14) Except as expressly authorized herein, the Trustee is
prohibited from selling or purchasing stock options. The Trustee is expressly
authorized to write and sell call options under which the holder of the option
has the right to purchase shares of stock held by the Trustee as a part of the
assets of this Trust, if such options are traded on and sold through a national
securities exchange registered under the Securities Exchange Act of 1934, as
amended, which exchange has been authorized to provide a market for option
contracts pursuant to Rule 9B-1 promulgated under such Act, and so long as the
Trustee at all times up to and including the time of exercise or expiration of
any such option holds sufficient stock in the assets of this Trust to meet the
obligations under such option if exercised. In addition, the Trustee is
expressly authorized to purchase and acquire call options for the purchase of
shares of stock covered by such options if the options are traded on and
purchased through a national securities exchange as described in the immediately
preceding sentence, and so long as any such option is purchased solely in a
closing purchase transaction, meaning the purchase of an exchange traded call
option the effect of which is to reduce or eliminate the obligations of the
Trustee with respect to a stock option contract or contracts which it has
previously written and sold in a transaction authorized under the immediately
preceding sentence;
(15) To deposit monies in savings accounts or certificates of
deposit in banks or savings and loan associations;
(16) To pool all or any of the Trust Fund, from time to time,
with assets belonging to any other qualified employee pension benefit trust
created by the Employer or an Affiliated Employer, and to commingle such assets
and make joint or common investments and carry joint accounts on behalf of this
Plan and such other trust or trusts, allocating undivided shares or interests in
such investments or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests; and
(17) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
B. DIRECTED INVESTMENT ACCOUNTS. Subject to any restrictions imposed by
the Employer, each Participant is authorized and empowered, in his sole and
absolute discretion, to
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give directions to the Trustee in such form as the Trustee may require
concerning the investment of the Participant's Account, which directions must be
followed by the Trustee. Neither the Trustee nor any other persons including the
Administrator or otherwise shall be under any duty to question any such
direction of the Participant or to review any securities or other property, real
or personal, or to make any suggestions to the Participant in connection
therewith, and the Trustee shall comply as promptly as practicable with
directions given by the Participant hereunder. Any such direction may be of a
continuing nature or otherwise and may be revoked by the Participant at any time
in such form as the Employer may require. The Trustee shall not be responsible
or liable for any loss or expense which may arise or result from compliance with
any directions from the Participant. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in its sole and
absolute discretion, deems such direction improper by virtue of applicable law
or the terms of the Plan. Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's Account.
The Trustee shall not invest any portion of an Account in
"collectibles" as that term is defined in Code Section 408.
8.4 LOANS TO PARTICIPANTS
A. GUIDELINES. The Trustee may, upon written request of and pursuant to
the Participant loan program established by the Administrator, make loans to
Participants under the following circumstances:
(1) Loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis;
(2) Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in an amount greater than
the amount made available to other employees;
(3) Loans must be adequately secured and bear a reasonable
interest rate (comparable to rates charged by commercial lending institutions
for loans of similar terms);
(4) No Participant loan shall exceed the present value of the
Participant's Vested Account;
(5) The minimum loan amount is Four Hundred Dollars ($400);
(6) In the event of default, foreclosure on the note and
attachment of security will occur in accordance with subsection E;
B. OUTSTANDING BALANCE. No loan to any Participant or Beneficiary shall
be made to the extent that such loan when added to the outstanding balance of
all other loans to the Participant or Beneficiary would exceed the lesser of:
(1) Fifty Thousand Dollars ($50,000) reduced
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by the excess (if any) of the highest outstanding balance of loans during the
one year period ending on the day before the loan is made, over the outstanding
balance of loans from the Plan on the date the loan is made, or (2) one-half
(1/2) the value of the Participant's Vested Account. For the purpose of this
limitation, all loans from all plans of the Employer are aggregated.
C. TERMS OF REPAYMENT. Each loan shall by its terms require
amortization of principal and interest in level payments, not less frequently
than quarterly, over a period not extending beyond five (5) years from the date
of the loan. However, if such loan is used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made) will be used
as the principal residence of the Participant, the maximum repayment period
shall be ten (10) years from the date of the loan.
D. SECURITY. Upon the granting of a loan to a Participant, the Trustee
shall obtain from the Participant a promissory note in the amount of the loan.
The promissory note shall be secured by up to fifty percent (50%) of the Vested
amount in the Participant's Account, as evidenced by a written security
agreement of even date with the promissory note. In the event the Participant
defaults in repayment of the loan, the Trustee may foreclose on the loan after a
distributable event occurs in the Plan, by distributing from the Participant's
Account the amount sufficient to repay the loan, and simultaneously retaining
such amount under the terms of the security agreement, in full payment of the
outstanding loan.
E. DEFAULT. In the event a Participant defaults on the repayment of a
loan (under uniform and nondiscriminatory written standards adopted by the
Administrator as to what constitutes default), the Trustee may treat the loan as
a distribution and pay the principal and interest owing under the loan from the
Account in the following order of priority:
(1) After-Tax Savings contributions which were made by the
Participant prior to January 1, 1987, if any, and which are credited to his
After-Tax Savings Account, without adjustment for income, gains or losses
therefrom;
(2) After-Tax Savings contributions which were made after
December 31, 1986, credited to the Participant's After-Tax Savings Account, as
adjusted for income, gains, or losses thereon;
(3) Income and gain, if any, on the Participant's After-Tax
Savings contributions made by the Participant prior to January 1, 1987;
(4) Amounts credited to the Participant's rollover account;
(5) The Vested portion of the Participant's Employer
Discretionary and Matching Contribution Account; and
(6) If the Participant has had a hardship or attained age 59
1/2, the Participant's Elective Contribution Account.
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Notwithstanding the foregoing, the Administrator shall defer making any
distribution from the Participant's Elective Contribution Account to repay any
unpaid loan balance until such time as the Participant has become a Terminated
Participant, qualifies for a hardship withdrawal or attains the age of 59 1/2,
or until an event described in Section 401(k)(10) of the Code has occurred. In
the event that a Participant is not a Terminated Participant, does not qualify
for a hardship withdrawal or has not attained age 59 1/2 or if an event
described in Section 401(k)(10) of the Code has not occurred, the Administrator
shall not pay the principal or interest of a loan out of his Elective
Contribution Account and shall take such other collection action as it deems
fit, in accordance with written standards adopted by the Administrator.
F. PARTICIPANT LOAN PROGRAM. The Participant loan program established
by the Administrator shall be incorporated herein by this reference and shall
comply in all material respects with Department of Labor Proposed Regulation
(S)2550.408b-1(d), as amended.
8.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
8.6 TRUSTEE COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall, from
time to time, be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
8.7 ANNUAL REPORT OF THE TRUSTEE
A. GENERAL REQUIREMENTS. Within sixty (60) days after the later of the
Anniversary Date or receipt of the Employer's contribution for each Fiscal Year,
the Trustee shall furnish to the Employer and Administrator a written statement
of account with respect to the Fiscal Year for which such contribution was made
setting forth:
(1) The net income, or loss, of the Trust Fund;
(2) The gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(3) The increase, or decrease, in the value of the Trust Fund;
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(4) All payments and distributions made from the
Trust Fund; and
(5) Such further information as the Trustee and/or
Administrator deem appropriate.
B. EMPLOYER ACKNOWLEDGMENT. The Employer, promptly upon its receipt of
each such statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval thereof.
Failure by the Employer to disapprove any such statement of account within
thirty (30) days after its receipt thereof shall be deemed an approval thereof.
The approval by the Employer of any statement of account shall be binding as to
all matters embraced therein as between the Employer and the Trustee to the same
extent as if the account of the Trustee had been settled by judgment or decree
in an action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all persons having or
claiming an interest in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
8.8 AUDIT
A. USE OF ACCOUNTANT. If an audit of the Plan's records shall be
required by the Act for any Plan Year, the Administrator shall direct the
Trustee to engage on behalf of all Participants an independent qualified public
accountant for that purpose. Such accountant shall, after an audit of the books
and records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of his audit setting forth his
opinion as to whether each of the following statements, schedules or lists, or
any others that are required by the Act or the Secretary of Labor to be filed
with the Plan's annual report, are presented fairly in conformity with generally
accepted accounting principles applied consistently:
(1) Statement of the assets and liabilities of the Plan;
(2) Statement of changes in net assets available to the Plan;
(3) Statement of receipts and disbursements, a schedule of all
assets held for investment purposes, a schedule of all loans or fixed income
obligations in default at the close of the Plan Year;
(4) A list of all leases in default or uncollectible during
the Plan Year;
(5) The most recent annual statement of assets and liabilities
of any bank common or collective trust fund in which Plan assets are invested or
such information regarding separate accounts or trusts with a bank or insurance
company as the Trustee and Administrator deem necessary; and
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(6) A schedule of each transaction or series of transactions
involving an amount in excess of five percent (5%) of Plan assets.
All auditing and accounting fees shall be an expense of and
may, at the election of the Administrator, be paid from the Trust Fund.
B. ACTIONS REQUIRED BY BANK/INSURANCE COMPANY. If some or all of the
information necessary to enable the Administrator to comply with the Act is
maintained by a bank, insurance company, or similar institution, regulated and
supervised and subject to periodic examination by a state or federal agency, it
shall transmit and certify the accuracy of that information to the Administrator
as provided in Section 103(b) of the Act within one hundred twenty (120) days
after the end of the Plan Year or such other date as may be prescribed under
regulations of the Secretary of Labor.
8.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
A. WRITTEN NOTICE. The Trustee may resign at any time by delivering to
the Employer and each of the remaining Trustees, at least thirty (30) days
before its effective date, a written notice of his resignation.
B. REMOVAL. The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at his last known
address, at least ten (10) days before its effective date, a written notice of
his removal.
C. APPOINTMENT OF SUCCESSOR. Upon the death, resignation, incapacity,
or removal of any Trustee, a successor may be appointed by the Employer; and
such successor, upon accepting such appointment in writing and delivering same
to the Employer, shall, without further act, have all the rights, powers,
discretion, and duties of his predecessor with like respect as if he were
originally named as a Trustee herein. Until such a successor is appointed, the
remaining Trustee or Trustees shall have full authority to act under this
Agreement. If, for any reason, there are no Trustees appointed, then the
Employer may elect to be Trustee until a successor Trustee is appointed.
D. AUTOMATIC SUCCESSOR. The Employer may designate one or more
successors prior to the death, resignation, incapacity, or removal of a Trustee.
In the event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, have all the rights,
powers, discretion, and duties of his predecessor with like effect as if he were
originally named as Trustee immediately upon the death, resignation, incapacity,
or removal of his predecessor.
E. STATEMENT OF ACCOUNT. Whenever any Trustee ceases to serve as such,
he shall furnish to the Employer and Administrator a written statement of
account with respect to the portion of the Fiscal Year during which he served as
Trustee. This statement shall be either (1) included as part of the annual
statement of account for the Fiscal Year required under Section 8.7, or (2) set
forth in a special statement. Any such special statement of account shall be
rendered to the
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Employer no later than ninety (90) days after the removal or resignation of any
Trustee. The procedures set forth in Section 8.7 for the approval by the
Employer of annual statements of account shall apply to any special statement of
account rendered hereunder and approval by the Employer of any such special
statement in the manner provided in Section 8.7 shall have the same effect upon
the statement as the Employer's approval of an annual statement of account. No
successor Trustee shall have any duty or responsibility to investigate the acts
or transactions of any predecessor who has rendered all statements of account
required by Section 8.7 and this subsection.
8.10 SEPARATE TRUST AGREEMENT.
The Employer has entered into a Trust Agreement with a service provider
effective March 27, 1998, in order to fund the benefits to be provided by this
Plan. The Trust Agreement shall be deemed a part of this Plan, and shall provide
for the duties, obligations and powers of the Trustee. The separate Trust
Agreement shall remain in effect until it is superceded or otherwise terminated,
and such action shall not require a separate Plan amendment. In the event that
the Employer appoints a Trustee which does not require a separate trust
agreement, the provisions of Article VIII shall govern automatically without the
necessity of any Plan amendment. To the extent a separate trust agreement
exists, the Trustee shall hold, subject to the terms of the trust agreement and
upon the uses and trusts and for the purposes herein set forth, the funds and
assets received by it.
ARTICLE IX
AMENDMENT, TERMINATION, AND MERGER
9.1 AMENDMENT
The Employer shall have the right, at any time and from time to time,
to amend, in whole or in part, any or all of the provisions of this Agreement.
However, no such amendment shall authorize or permit any part of the Trust Fund
(other than such part as is required to pay taxes and administration expenses)
to be used for or diverted to purposes other than for the exclusive benefit of
the Participants or their Beneficiaries or estates; no such amendment shall
cause any reduction in the amount credited to the account of any Participant
theretofore, or cause or permit any portion of the Trust Fund to revert to or
become the property of the Employer; and no such amendment which affects the
rights, duties or responsibilities of the Trustee and Administrator may be made
without the Trustee's and Administrator's written consent. Any such amendment
shall become effective upon delivery of a duly executed instrument to the
Trustee, provided that the Trustee shall in writing consent to the terms of such
amendment if the Trust provisions contained therein are a part of this
Agreement.
A plan amendment which has the effect of (1) eliminating or reducing an
early retirement benefit or a retirement-type subsidy, or (2) eliminating an
optional form of benefit, with respect to benefits attributable to service
before the amendment shall be treated as reducing accrued benefits. In the case
of a retirement-type subsidy, the preceding sentence shall apply only with
respect to a Participant who satisfies (either before or after the amendment)
the preamendment conditions for the subsidy. In general, a retirement-type
subsidy is a subsidy that continues after retirement, but does
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not include a qualified disability benefit, a medical benefit, a social security
supplement, a death benefit (including life insurance), or a plant shutdown
benefit (that does not continue after retirement age). Furthermore, no amendment
to the plan shall have the effect of decreasing a Participant's Vested interest
determined without regard to such amendment as of the later of the date such
amendment is adopted, or becomes effective.
9.2 TERMINATION
A. FULL TERMINATION. The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator written notice
of such termination. A complete discontinuance of the Employer's contributions
to the Plan shall be deemed to constitute a termination. In the event of
termination of the Plan, or complete discontinuance of contributions under the
Plan, the Account balance of each affected Participant shall be nonforfeitable,
and all unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof. Upon termination of the
Plan, the Employer, by written notice to the Trustee and Administrator, may
direct either:
(1) Complete distribution of the assets in the Trust Fund to
the Participants, in cash or in kind, in one "lump-sum payment" (as such term is
defined in the Code) as soon as the Trustee deems it to be in the best interests
of the Participants, but in no event later than two years after such
termination; or
(2) Continuation of the Trust created by this Agreement and
distribution of benefits at such time and in such manner as though the Plan had
not been terminated.
B. PARTIAL TERMINATION. In the event of a partial termination of the
Plan, the Account Balance of each affected Participant shall become
nonforfeitable.
9.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to, any other Plan and Trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the Plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation.
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or
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Employee. Nothing contained in this Plan shall be deemed to give any Participant
or Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discharge any Participant or
Employee at any time regardless of the effect which such discharge shall have
upon him as a Participant of this Plan.
10.2 ALIENATION
Subject to Code Section 401(a)(13)(C), no benefit which shall be
payable out of the Trust Fund to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, judgment or charge, and any attempt
to anticipate, alienate, sell, transfer, assign, pledge, encumber, offset or
charge the same shall be void; and no such benefit shall in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the Trustee, except
to such extent as may be required by law. Except, however, this provision shall
not apply to the extent a Participant or Beneficiary is indebted to the Plan,
for any reason, under any provision of this Agreement. At the time a
distribution is to be made to or for a Participant's or Beneficiary's benefit,
such proportion of the amount distributed as shall equal such indebtedness shall
be paid by the Trustee to the Trustee or the Administrator, at the direction of
the Administrator, to apply against or discharge such indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must be given written
notice by the Administrator that such indebtedness is to be deducted in whole or
part from his Participant's Account. If the Participant or Beneficiary does not
agree that the indebtedness is a valid claim against his Vested Participant's
Account, he shall be entitled to a review of the validity of the claim in
accordance with the procedures in Article VI.
If a Participant's benefits are garnished or attached by order of any
court, the Administrator may bring an action for a declaratory judgment in a
court of competent jurisdiction to determine the proper recipient of the
benefits to be paid by the Plan. During the pendency of such action, benefits
that become payable shall be paid into the court as they become payable, to be
distributed by the court to the recipient it deems proper at the close of such
action.
The general prohibition against assignment or alienation shall not
apply to the creation, assignment or recognition of a right to any benefit
payable with respect to a Participant pursuant to a qualified domestic relations
order, as defined in Section 414(p) of the Code. "Domestic relations order"
means a judgment, decree, or order (1) relating to provision of child support,
alimony or marital property rights, and (2) made pursuant to a state domestic
relations law. Such an order is "qualified" if it recognizes an alternate
payee's right to all or part of the benefits payable to a Participant from his
Account.
10.3 CONSTRUCTION OF AGREEMENT
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of Maryland, other than its laws respecting choice
of law, to the extent not preempted by the Act.
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10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
10.5 LEGAL ACTION
In the event any claim, suit or proceeding is brought regarding the
Trust and/or Plan to which the Trustee or the Administrator may be a party, and
such claim, suit, or proceeding is resolved in favor of the Trustee or
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, reasonable attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
A. EXCLUSIVE BENEFIT. It shall be impossible by operation of the Plan
or of the Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any trust fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to purposes other than the exclusive benefit of Participants, Former
Participants, or their Beneficiaries.
B. RETURN OF EXCESSIVE CONTRIBUTIONS. In the event the Employer shall
make an excessive contribution under a mistake of fact pursuant to Section
403(c)(2)(A) of the Act, the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of payment and
the Trustee shall return such amount to the Employer within the one (1) year
period. Earnings of the Plan attributable to the Excess 401(k) Contributions may
not be returned to the Employer, but any losses attributable thereto must reduce
the amount so returned.
10.7 BONDING
Every fiduciary, except a bank or an insurance company, unless exempted
by the Act, shall be bonded in an amount not less than ten percent (10%) of the
amount of funds such Fiduciary handles; provided, however, that the minimum bond
shall be One Thousand Dollars ($1,000) and the maximum bond, Five Hundred
Thousand Dollars ($500,000). The amount of funds handled shall be determined at
the beginning of each Plan Year by the amount of funds handled by such person,
group, or class to be covered and their predecessors, if any, during the
preceding Plan Year, or if there is no preceding Plan Year, then by the amount
of the funds to be handled during the then current year. The bond shall provide
protection to the Plan against any loss by reason of acts of fraud or dishonesty
by the fiduciary alone or in connivance with others. The surety shall be a
corporate surety company (as such term is used in Section 412(a)(2) of the Act),
and the bond shall be in a form approved by the
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Secretary of Labor. The cost of such bond shall be an expense of and may, at the
election of the Administrator, be paid from the Trust Fund or by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
10.9 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Agreement, shall, to the extent thereof,
be in full satisfaction of all claims hereunder against the Trustee and the
Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
10.10 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of this Agreement is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee and (4) any Investment Manager appointed
hereunder. The named fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under this
Agreement or in the separate Trust Agreement. Each named fiduciary warrants that
any directions given, information furnished, or action taken by it shall be in
accordance with the provisions of this Agreement, authorizing or providing for
such direction, information or action. Furthermore, each named fiduciary may
rely upon any such direction, information or action of another named fiduciary
as being proper, and is not required to inquire into the propriety of any such
direction, information or action. Each named fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under this Agreement. No named fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any person or
group may serve in more than one fiduciary capacity.
10.12 HEADINGS
The headings and subheadings of this Agreement have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
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10.13 APPROVAL BY INTERNAL REVENUE SERVICE
A. QUALIFICATION. Notwithstanding anything herein to the contrary, if,
pursuant to an application filed by or in behalf of the Plan, the Internal
Revenue Service should determine that the Plan does not initially qualify as a
tax-exempt plan and trust under Sections 401 and 501 of the Code, and such
determination is not contested, or if contested, is finally upheld then the Plan
shall be void ab initio and all amounts contributed to the Plan by the Employer,
less expenses paid, shall be returned to the Employer within one (1) year after
the date the initial application is denied, but only if the application for
qualification is made by the time prescribed by law for filing the Employer's
return for the Taxable Year in which the Plan is adopted, or such later date as
the Secretary of the Treasury may prescribe. The Plan shall then terminate and
the Trustee shall be discharged from all further obligations.
B. CONTRIBUTIONS DEPENDENT UPON DEDUCTIBILITY. Notwithstanding any
provisions to the contrary, except Sections 3.5 and 3.6, any contribution by the
Employer to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1) year following a final
determination of the disallowance, whether by agreement with the Internal
Revenue Service or by final decision of a court of competent jurisdiction,
demand repayment of such disallowed contribution and the Trustee shall return
such contribution within one (1) year following the disallowance. Earnings of
the Plan attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount so
returned.
10.14 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
IN WITNESS WHEREOF, this Agreement has been executed the day and year
first above written.
ATTEST: SODEXHO MARRIOTT SERVICES, INC.
BY:
- ------------------------------------- --------------------------------
Randall C. Harris
Senior Vice President,
Human Resources
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FIRST AMENDMENT
TO THE
SODEXHO MARRIOTT SERVICES, INC.
401(k) EMPLOYEES' RETIREMENT SAVINGS PLAN AND TRUST
_________________________________________________________________________
Pursuant to the rights reserved in Section 9.1 of the Sodexho Marriott
Services, Inc. 401(k) Employees' Retirement Savings Plan and Trust (the "Plan"),
the Plan is hereby amended, effective as of March 27, 1998 as follows:
1. Section 1.30 is deleted and replaced with the following:
1.30 "Fiscal Year" means the Employer's accounting year commencing on
the Saturday following the Friday which is closest to August 31st. The
Employer's fiscal year is an annual period which varies from fifty-two
(52) to fifty-three (53) weeks. The Employer's initial Fiscal Year
commenced March 27, 1998.
2. Section 2.6 is deleted and replaced with the following:
Any Former Participant may be readmitted to the Plan as a Participant
as of the pay period immediately following receipt by the Administrator
of a written application (or some other form of application) in
accordance with Section 2.2; provided however that if a Former
Participant who has not yet attained the age of fifty- nine and one
half (591/2) withdraws any portion of his Basic After- Tax Savings
pursuant to Section 5.10, subsection B, he shall not be eligible for
readmission to the Plan until six months have elapsed from the date of
the withdrawal.
3. Section 3.6B(1) is clarified by the addition of the following sentence:
In the event any Employer contribution under Section 3.1 is allocated
proportionately based on a Participant's Compensation, any amounts paid
to a Participant before he became eligible to participate in the Plan
shall be excluded from the computation.
4. Section 3.11D is revised by deleting the reference to the "Marriott
Stock Fund" and replacing it with the "Marriott International Common
Stock Fund".
5. Section 5.5F is revised by replacing the current references to
"Marriott Stock Fund" and "Sodexho Marriott Fund" with "Marriott
International Common Stock Fund" and "Sodexho Marriott Services Company
Stock Fund," respectively.
6. Section 5.10B is deleted and replaced with the following:
B. WITHDRAWAL OF BASIC AFTER-TAX SAVINGS. A Participant or Former
Participant may withdraw his Basic After-Tax Savings at any time. Any
Participant or Former Participant who has not attained the age of
fifty-nine and one-half (591/2) at the time of the withdrawal of the
Basic After-Tax Savings shall become ineligible to participate in the
Plan for a period of six months from the date of the withdrawal. Any
Participant or Former Participant who has attained the age of
fifty-nine and one-half (591/2) at the time of the withdrawal of the
Basic After-Tax Savings shall continue to be eligible to participate in
accordance with the terms of the Plan. Such withdrawal shall be made in
a single lump sum payment and shall be based on the Account balance as
of the Valuation Date coinciding with the date shares or units are
redeemed by the Participant.
IN WITNESS WHEREOF, the parties hereto have executed these presents
this day of , 1998.
ATTEST: SODEXHO MARRIOTT SERVICES, INC.
By:
Randall C. Harris
Senior Vice President,
Human Resources
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