As filed with the Securities and Exchange Commission on April 15, 1997
Registration No. 0-15907
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-8
Registration Statement
Under
The Securities Act of 1933
PROFFITT'S, INC.
Tennessee 62-0331040
(State of Incorporation) (IRS Employer Identification No.)
3455 Highway 80 West
Jackson, Mississippi 39209
(423) 983-7000
(Address of Principal Executive Offices)
PROFFITT'S, INC. 401(K) RETIREMENT PLAN
(Full title of the plan)
R. Brad Martin
Chairman of the Board and Chief Executive Officer
Proffitt's, Inc.
5810 Shelby Oaks Drive
Memphis, Tennessee 38134
(901) 372-4300
(Name, address and telephone number of agent for service)
Copies to:
Philip L. McCool, Esq. Brian J. Martin, Esq.
Sommer & Barnard, PC Proffitt's, Inc.
4000 Bank One Tower 750 Lakeshore Parkway
Indianapolis, Indiana 46204 Birmingham, Alabama 35211
(317) 630-4000 (205) 940-4980
___________________________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum offer- maximum aggregate Amount
Title of each class of Amount to be ing price offering of registration
securities to be registered registered (1) per share price fee
Common Stock
$ .10 par value .......... 300,000 $38.25 11,475,000 $3,477.26
Preferred Stock Purchase Rights 300,000 0(3) 0(3) 0 (3)
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be offered
or sold pursuant to the employee benefit plans described above.
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule
457(c) under the Securities Act of 1933 on the basis of the average of the high and
low prices of the Common Shares reported on the Nasdaq National Market System on April
10, 1997.
(3) No additional consideration will be paid for the Preferred Stock Purchase Rights.
Part II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference.
The documents listed below, and all documents filed by registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 subsequent to the filing of this Registration
Statement and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, are deemed to be
incorporated by reference in this registration statement and to be part
hereof from the date of filing of this Registration Statement:
(a) The Registrant's Annual Report filed with the Securities and
Exchange Commission ("SEC") on Form 10-K for the fiscal year
ended February 3, 1996, and Amendments No. 1 and 2 thereto;
(b) The Registrant's Quarterly Report filed with the SEC on Form
10-Q for the quarters ended May 4, 1996 (including Amendment
No. 1 thereto), August 3, 1996 (including Amendments No. 1 and
2 thereto) and November 2, 1996 (including Amendment No. 1
thereto);
(c) The Registrant's Current Reports on Form 8-K, File with the
SEC on February 16, 1996, April 1, 1996, July 18, 1996, August
12, 1996, August 30, 1996, October 25, 1996 (including
Amendment No. 1 thereto filed December 17, 1996) and November
22, 1996, and February 10, 1997, respectively;
(d) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A dated May
27, 1987 and Registration Statement on Form S-3 dated October
19, 1993 (Registration No. 33-70000); and
(e) The Registrant's Registration Statement on Form 8-A dated
April 3, 1995 in respect of the Registrant's Share Purchase
Rights Plan.
Item 4. Description of Securities.
On March 28,1995, the Board of Directors of Proffitt's declared a
dividend distribution of one right (a "Right") for each share of
Proffitt's Common Stock. Each Right entitles the holder to purchase
from Proffitt's one one-hundredth (1/100) of a share of Series C
Preferred Stock at a price of $85 per one one-hundredth (1/100) of a
share. Such Rights will attach to shares of Proffitt's Common Stock
issued stockholders until such Rights become exercisable. The Rights
will become exercisable upon the acquisition by any person of, or the
announcement of the intention of any person to commence a tender or
exchange offer upon the successful consummation of which such person
would be the beneficial owner of, 20% or more of the shares of
Proffitt's Common Stock then outstanding, without the prior approval of
the Proffitt's Board of Directors. The Rights are generally designed to
deter coercive takeover tactics and to encourage all persons interested
in potentially acquiring control of Proffitt's to treat each stockholder
on a fair and equal basis.
Item 5. Interest of Named Experts and Counsel.
N/A
Item 6. Indemnification of Directors and Officers.
The By-Laws of Proffitt's provide that Proffitt's shall indemnify
to the full extent authorized or permitted by the Tennessee Business
Corporation Act any person made, or threatened to be made, a party to
any threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative) by reason of the fact
that such person, or such person's testate or intestate, is or was an
officer or director of Proffitt's or serves or served as an officer or
director of any other enterprise at the request of Proffitt's.
Section 48-18-503 of the Tennessee Business Corporation Act
provides for "mandatory indemnification," unless limited by the charter,
by a corporation against reasonable expenses incurred by a director who
is wholly successful, on the merits or otherwise,
in the defense of any proceeding to which the director was a party by
reason of the director being or having been a director of the
corporation. Section 48-18-504 of the Tennessee Business Corporation
Act states that a corporation may, in advance of the final disposition
of a proceeding, reimburse reasonable expenses incurred by a director
who is a party to a proceeding if the director furnishes the corporation
with a written affirmation of the director's good faith belief that the
director has met the standard of conduct required by Section 48-18-502
of the Tennessee Business Corporation Act, that the director will repay
the advance if it is ultimately determined that such director did not
meet the standard of conduct required by Section 48-18-502 of the
Tennessee Business Corporation Act, and that those making the decision
to reimburse the director determine that the facts then known would not
preclude indemnification under the Tennessee Business Corporation Act.
Section 48-18-507 of the Tennessee Business Corporation Act provides for
mandatory indemnification, unless limited by the charter, of officers
pursuant to the provisions of Section 48-18-503 of the Tennessee
Business Corporation Act applicable to mandatory indemnification of
directors.
Proffitt's By-Laws further provide that Proffitt's may purchase and
maintain insurance on behalf of any person who is or was or has agreed
to become a director or officer of Proffitt's, or is or was serving at
the request of Proffitt's as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such
person or on such person's behalf in any such capacity, or arising out
of such person's status as such, whether or not Proffitt's would have
the power to indemnify such person against such liability under the
By-Laws, provided that such insurance is available on acceptable terms as
determined by a majority of Proffitt's Board of Directors.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4 Proffitt's, Inc. 401(k) Retirement Plan
5.1 Opinion re: Legality. Since the shares will be
purchased on the open market, no opinion re:
legality is required.
5.2 Undertaking to request a Determination Letter from
the Internal Revenue Service for the Plan.
23.1 Consent of Coopers & Lybrand L.L.P. (Re:
Proffitt's, Inc.)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Ernst & Young LLP
23.4 Consent of Coopers & Lybrand L.L.P. (Re: Parisian,
Inc.)
24 Power of Attorney (Included at Page II-4)
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include
any financial statements required by Section 210.3-19 of this chapter at
the start of any delayed offering or throughout a continuous
offering. Financial statements and information otherwise required
by Section 10(a)(3) of the Act need not be furnished, provided that
the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all
other information in the prospectus is at least as current as the
date of those financial statements.
(5) For the purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the Registrant pursuant to the foregoing
provisions described in Item 15, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act
of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirement for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf
by the Undersigned, thereunto duly authorized, in the city of Jackson,
State of Mississippi, on the 9th day of April, 1997.
Proffitt's, Inc.
By: /s/ R. Brad Martin
______________________________
R. Brad Martin
Chief Executive Officer and
Chairman of the Board
The Plan. Pursuant to the requirements of the Securities Act, the
Plan Trustee has duly caused this registration statement to be signed on
its behalf by the Undersigned, thereunto duly authorized, in the City of
Jackson, State of Mississippi, on the 9th day of April, 1997.
Proffitt's, Inc. 401(k) Retirement Plan
By: /s/ Susan H. Hardee
______________________________
Susan H. Hardee
Trustmark National Bank
Plan Trustee
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Brian J. Martin, his true and
lawful attorney-in-fact and agent with full power of substitution for
him in his name, place and stead, in any and all capacities to sign any
and all amendments (including pre-effective and post effective
amendments) to this Registration Statement, and to file the same with
all exhibits thereto and other documents in connection therewith with
the Securities and Exchange Commission, grants unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could
do in person, and hereby ratifies and confirms all that said attorney-in-fact
and agents or their or his substitute or substitutes any
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ R. Brad Martin
________________________ Chief Executive Officer April 9, 1997
R. Brad Martin Chairman of the Board
Principal Executive Officer
/s/ Bernard E. Bernstein
________________________ Director April 9, 1997
Bernard E. Bernstein
/s/ Edmond D. Cicala
________________________ Director April 9, 1997
Edmond D. Cicala
/s/ Gerald K. Donnelly
________________________ Director April 9, 1997
Gerald K. Donnelly
/s/ Donald F. Dunn
________________________ Director April 9, 1997
Donald F. Dunn
________________________ Director April 9, 1997
Michael S. Gross
________________________ Director April 9, 1997
Donald E. Hess
________________________ Director April 9, 1997
G. David Hurd
/s/ Richard D. McRae
________________________ Director April 9, 1997
Richard D. McRae
/s/ C. Warren Neel
________________________ Director April 9, 1997
Warren Neel
/s/ Harwell W. Proffitt
________________________ Director April 9, 1997
Harwell W. Proffitt
/s/ Marguerite W. Sallee
________________________ Director April 9, 1997
Marguerite W. Sallee
/s/ Gerald Tsai, Jr.
________________________ Director April 9, 1997
Gerald Tsai, Jr.
/s/ Ronald de Waal
________________________ Director April 9, 1997
Ronald de Waal
INDEX TO EXHIBITS FILED
TO REGISTRATION STATEMENT ON
FORM S-8 OF PROFFITT'S, INC.
Sequentially
Exhibit Numbered
No. Description Page
__________ ____________________ ___________
4 Proffitt's, Inc. 401(k) Retirement Plan
5.1 Opinion re: Legality. Since the shares
will be purchased on the open market, no
opinion is required.
5.2 Undertaking to request a Determination Letter
from the Internal Revenue Service for the Plan.
23.1 Consent of Coopers & Lybrand L.L.P. (Re:
Proffitt's, Inc.)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Ernst & Young LLP
23.4 Consent of Coopers & Lybrand L.L.P.
(Re: Parisian, Inc.)
24 Power of Attorney (Included at Page II-4)
EXHIBIT NO. 4
Proffitt's, Inc. 401(k) Retirement Plan
PROFFITT'S, INC.
401(k) RETIREMENT PLAN
Amended and Restated Effective January 1, 1997
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-1
1.01 Account. . . . . . . . . . . . . . . . . . . . . . . . . . .1-1
1.02 Adopting Employer. . . . . . . . . . . . . . . . . . . . . .1-1
1.03 Allocation Date. . . . . . . . . . . . . . . . . . . . . . .1-1
1.04 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . .1-1
1.05 Break in Service . . . . . . . . . . . . . . . . . . . . . .1-1
1.06 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-2
1.07 Committee. . . . . . . . . . . . . . . . . . . . . . . . . .1-2
1.08 Compensation . . . . . . . . . . . . . . . . . . . . . . . .1-2
1.09 Controlled Group . . . . . . . . . . . . . . . . . . . . . .1-3
1.10 Disability . . . . . . . . . . . . . . . . . . . . . . . . .1-4
1.11 Early Retirement Date. . . . . . . . . . . . . . . . . . . .1-4
1.12 Effective Date . . . . . . . . . . . . . . . . . . . . . . .1-4
1.13 Employee . . . . . . . . . . . . . . . . . . . . . . . . . .1-4
1.14 Employer . . . . . . . . . . . . . . . . . . . . . . . . . .1-4
1.15 Employer Account . . . . . . . . . . . . . . . . . . . . . .1-4
1.16 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . .1-5
1.17 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . .1-5
1.18 Fiduciary. . . . . . . . . . . . . . . . . . . . . . . . . .1-5
1.19 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . .1-5
1.20 Highly Compensated Employee. . . . . . . . . . . . . . . . .1-5
1.21 Hour of Service. . . . . . . . . . . . . . . . . . . . . . .1-6
1.22 Investment Manager . . . . . . . . . . . . . . . . . . . . .1-7
1.23 Leased Employee. . . . . . . . . . . . . . . . . . . . . . .1-7
1.24 Matching Contributions . . . . . . . . . . . . . . . . . . .1-8
1.25 Merged Plans . . . . . . . . . . . . . . . . . . . . . . . .1-8
1.26 Non-highly Compensated Employee. . . . . . . . . . . . . . .1-8
1.27 Normal Retirement Age. . . . . . . . . . . . . . . . . . . .1-8
1.28 Normal Retirement Date . . . . . . . . . . . . . . . . . . .1-8
1.29 Participant. . . . . . . . . . . . . . . . . . . . . . . . .1-8
1.30 Personal Account . . . . . . . . . . . . . . . . . . . . . .1-8
1.31 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-8
1.32 Plan Administrator . . . . . . . . . . . . . . . . . . . . .1-8
1.33 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . .1-8
1.34 Retired Participant. . . . . . . . . . . . . . . . . . . . .1-9
1.35 Rollover Contributions . . . . . . . . . . . . . . . . . . .1-9
1.36 Salary Deferral Contributions. . . . . . . . . . . . . . . .1-9
1.37 Service. . . . . . . . . . . . . . . . . . . . . . . . . . .1-9
1.38 Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . .1-9
1.39 Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . .1-9
1.40 Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 1-10
1.41 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . 1-10
1.42 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 1-10
1.43 Vesting Service. . . . . . . . . . . . . . . . . . . . . . 1-10
1.44 Year of Service. . . . . . . . . . . . . . . . . . . . . . 1-10
PARTICIPATION IN THE PLAN. . . . . . . . . . . . . . . . . . . . . .2-1
2.01 Eligibility Date . . . . . . . . . . . . . . . . . . . . . .2-1
2.02 Eligibility Determination. . . . . . . . . . . . . . . . . .2-1
2.03 Participation. . . . . . . . . . . . . . . . . . . . . . . .2-1
2.04 Participation Following Reemployment . . . . . . . . . . . .2-2
2.05 Participation Following Change in Classification . . . . . .2-2
2.06 Absence in the Armed Services. . . . . . . . . . . . . . . .2-2
2.07 Family and Medical Leave Act Requirements. . . . . . . . . .2-3
CONTRIBUTIONS TO THE PLAN. . . . . . . . . . . . . . . . . . . . . .3-1
3.01 Employer Contributions . . . . . . . . . . . . . . . . . . .3-1
3.02 Contributions By, or On Behalf of, Participants. . . . . . .3-2
3.03 Coverage and Discrimination Requirements . . . . . . . . . .3-5
3.04 Discrimination Requirements for Other Contributions. . . . .3-7
3.05 Multiple Use of Alternative Limitation . . . . . . . . . . .3-9
3.06 Trustee to Trustee Transfers for Mergers . . . . . . . . . .3-9
3.07 Medium of Financing the Plan . . . . . . . . . . . . . . . .3-9
3.08 Investment Directions by Participants. . . . . . . . . . . .3-9
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. . . . . . . . . . . . . . . .4-1
4.01 Credit of Contributions. . . . . . . . . . . . . . . . . . .4-1
4.02 Allocation of Investment Earnings. . . . . . . . . . . . . .4-2
4.03 Adjustment to Accounts . . . . . . . . . . . . . . . . . . .4-3
4.04 Maximum Annual Additions to Participants' Accounts . . . . .4-3
4.05 Application of Contributions and Forfeitures Among Employers4-5
4.06 Fair Market Value. . . . . . . . . . . . . . . . . . . . . .4-5
IN SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . . . . . . .5-1
5.01 Withdrawals at Age 59-1/2. . . . . . . . . . . . . . . . . .5-1
5.02 Withdrawals from Participants' Personal Accounts . . . . . .5-1
5.03 Hardship Withdrawals . . . . . . . . . . . . . . . . . . . .5-1
5.04 Loans to Participants. . . . . . . . . . . . . . . . . . . .5-3
GENERAL BENEFIT PROVISIONS . . . . . . . . . . . . . . . . . . . . .6-1
6.01 Form of Benefit Payment. . . . . . . . . . . . . . . . . . .6-1
6.02 Time of Payment. . . . . . . . . . . . . . . . . . . . . . .6-1
6.03 Special Commencement and Distribution of Benefits Rule . . .6-2
6.04 Single Sum Distribution of Small Benefits. . . . . . . . . .6-5
6.05 Designation of Beneficiary . . . . . . . . . . . . . . . . .6-6
6.06 Eligible Rollover Distributions. . . . . . . . . . . . . . .6-6
6.07 Optional Forms of Benefits Under Merged Plans. . . . . . . .6-7
6.08 Purchase of Annuities. . . . . . . . . . . . . . . . . . . .6-7
6.09 Failure to Locate. . . . . . . . . . . . . . . . . . . . . .6-8
RETIREMENT, DEATH AND DISABILITY BENEFITS. . . . . . . . . . . . . .7-1
7.01 Benefits Upon Retirement . . . . . . . . . . . . . . . . . .7-1
7.02 Death Benefits . . . . . . . . . . . . . . . . . . . . . . .7-1
7.03 Disability Benefits. . . . . . . . . . . . . . . . . . . . .7-2
TERMINATION BENEFITS . . . . . . . . . . . . . . . . . . . . . . . .8-1
8.01 Benefits Upon Termination of Service . . . . . . . . . . . .8-1
8.02 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . .8-1
8.03 Payment of Benefits. . . . . . . . . . . . . . . . . . . . .8-2
THE COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . .9-1
9.01 Plan Administrator and Appointment of Committee. . . . . . .9-1
9.02 Powers and Duties of the Plan Administrator. . . . . . . . .9-1
9.03 Plan Administrator Procedures. . . . . . . . . . . . . . . .9-2
9.04 Claims and Review Procedures . . . . . . . . . . . . . . . .9-2
9.05 Election Procedures. . . . . . . . . . . . . . . . . . . . .9-3
ESTABLISHMENT OF TRUST . . . . . . . . . . . . . . . . . . . . . . 10-1
10.01 Trust Agreement . . . . . . . . . . . . . . . . . . . . . 10-1
10.02 Trust Agreement Part of Plan. . . . . . . . . . . . . . . 10-1
AMENDMENT AND TERMINATION OF THE PLAN. . . . . . . . . . . . . . . 11-1
11.01 Amendment of Plan . . . . . . . . . . . . . . . . . . . . 11-1
11.02 Intent to Continue the Plan . . . . . . . . . . . . . . . 11-2
11.03 Termination or Partial Termination of the Plan by the
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . 11-2
11.04 Termination of the Plan Upon Certain Events . . . . . . . 11-2
11.05 Distribution of Trust Fund Upon Complete Termination. . . 11-2
11.06 Termination of Plan With Respect to an Adopting Employer. 11-3
CERTAIN PROVISIONS AFFECTING THE EMPLOYER. . . . . . . . . . . . . 12-1
12.01 Duties of the Employer. . . . . . . . . . . . . . . . . . 12-1
12.02 Right of Employer to Discharge Employees. . . . . . . . . 12-1
12.03 Information to be Furnished . . . . . . . . . . . . . . . 12-1
12.04 Communications from Sponsor to Trustee. . . . . . . . . . 12-1
12.05 No Reversion to Employer. . . . . . . . . . . . . . . . . 12-1
12.06 Indemnification by Sponsor. . . . . . . . . . . . . . . . 12-2
12.07 Adoption of Plan by Adopting Employers. . . . . . . . . . 12-2
SPECIAL MERGED PLAN ISSUES . . . . . . . . . . . . . . . . . . . . 13-1
13.01 Generally . . . . . . . . . . . . . . . . . . . . . . . . 13-1
13.02 Parisian Retirement and Savings Plan. . . . . . . . . . . 13-1
13.03 Younkers Associate Profit Sharing and Savings Plan. . . . 13-2
PROVISIONS APPLICABLE TO A TOP HEAVY PLAN. . . . . . . . . . . . . 14-1
14.01 Top Heavy Plans . . . . . . . . . . . . . . . . . . . . . 14-1
14.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . 14-1
14.03 Minimum Allocations in Single Plan. . . . . . . . . . . . 14-4
14.04 Special Limitations and Allocation in Multiple
Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . 14-5
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . 15-1
15.01 Allocation of Responsibility among Fiduciaries for Plan
and Trust Administration . . . . . . . . . . . . . . . . . 15-1
15.02 Alienation or Assignment of Benefits (QDRO's) . . . . . . 15-2
15.03 Headings. . . . . . . . . . . . . . . . . . . . . . . . . 15-2
15.04 Construction of the Plan. . . . . . . . . . . . . . . . . 15-2
15.05 Correction of Errors. . . . . . . . . . . . . . . . . . . 15-2
15.06 Legally Incompetent . . . . . . . . . . . . . . . . . . . 15-2
15.07 Successor Organization. . . . . . . . . . . . . . . . . . 15-3
15.08 Minimum Benefit in Successor Plan . . . . . . . . . . . . 15-3
15.09 Application of Plan Provisions. . . . . . . . . . . . . . 15-3
15.10 Severability of Provisions. . . . . . . . . . . . . . . . 15-3
15.11 Applicable Law. . . . . . . . . . . . . . . . . . . . . . 15-3
15.12 Nonassignability of Duties. . . . . . . . . . . . . . . . 15-3
15.13 Entire Plan . . . . . . . . . . . . . . . . . . . . . . . 15-4
INTRODUCTION
Effective October 1, 1993, Proffitt's, Inc. adopted the Proffitt's,
Inc. 401(k) Retirement Plan to provide retirement benefits for its
eligible Employees.
Now, in order to make changes to the Plan, the Sponsor hereby amends,
restates and continues the Plan effective January 1, 1997 (except as
otherwise indicated herein for specified provisions or as required by
applicable law or regulations).
The purposes of the Plan are to provide the Employees who qualify to
participate in the Plan and their Beneficiaries certain benefits as
stipulated herein in the event of retirement, death or termination of
Service prior to retirement, and to provide such Employees the
opportunity to save for such events on a tax-deferred incentive basis
pursuant to the provisions of section 401(k) of the Code. The Plan is
intended to be qualified under section 401(a) of the Code as a profit
sharing plan and its related Trust is intended to qualify as a tax-exempt
trust under section 501(a) of the Code.
Except as otherwise provided herein, the provisions of the Plan shall
apply only to Employees who have Service with the Employer on or after
January 1, 1997.
ARTICLE 1
DEFINITIONS
The following terms when used herein, unless the context clearly
indicates otherwise, shall have the meanings set forth hereinafter.
1.01 "Account" shall mean the total of a Participant's Employer Account
and Personal Account.
1.02 "Adopting Employer" shall mean the Sponsor and any business
organization, sole proprietorship, professional corporation or
corporation affiliated with the Sponsor through complete or partial
ownership by the Sponsor or by any owner therein, or which is
otherwise cooperating with the Sponsor for purposes of establishing
and maintaining a qualified plan, which is authorized by the
Sponsor to adopt the Plan, and which subsequently adopts the Plan.
The term shall also include any business organization or corporation
into which the Adopting Employer may be merged or consolidated or by
which it may be succeeded.
1.03 "Allocation Date" shall mean each business day that the applicable
trading market and the Plan's recordkeeper are open for business.
1.04 "Beneficiary" shall mean the person, persons or legal entity last
designated in accordance with Section 6.05 hereof, who shall
receive any death benefits that may be payable under the Plan after
the death of a Participant or Retired Participant.
1.05 "Break in Service" shall mean a consecutive twelve (12) month
period, during which the Employee does not perform more than five
hundred (500) Hours of Service. For purposes of determining
eligibility to participate in the Plan, pursuant to Article 2
hereof, the initial twelve (12) month period shall commence on the
date the Employee first performs an Hour of Service, and each
subsequent twelve (12) month period shall be the Plan Year,
beginning with the Plan Year which commences prior to the end of
the initial twelve (12) month period.
For purposes of determining Vesting Service, the consecutive twelve
(12) month period shall be the Plan Year.
For purposes of determining whether a Break in Service has occurred,
Hours of Service shall include any period in which the Employee is
absent from work for maternity or paternity reasons for any of the
following:
(a) by reason of the pregnancy of the Employee,
(b) by reason of the birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee,
or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
Provided, however, that Hours of Service credited for such absence
from work shall not exceed the Hours which would normally have been
credited to such individual but for such absence. Such Hours of
Service shall be credited in the Plan Year in which the absence from
work begins if an Employee would be prevented from incurring a Break
in Service in such Plan Year solely because the period of absence is
treated as Hours of Service or, in any other case, in the immediately
following Plan Year. No credit for Hours of Service for absence by
reason of such pregnancy or placement shall be given hereunder unless
an Employee furnishes to the Plan Administrator such timely
information as the Plan Administrator may reasonably require to
establish that the absence from work is for a reason set forth in (a)
through (d).
1.06 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and as in effect on the relevant date to be
interpreted hereunder.
1.07 "Committee" shall mean the committee as provided in Article 9
hereof which may be appointed to administer the day-to-day
operations of the Plan.
1.08 "Compensation" shall mean, except as otherwise provided,
compensation as defined in (a) or (b) below, as applicable, subject
to (c), which is paid to the Employee by the Employer.
(a) Compensation, for all purposes except Sections 1.19, 3.03 and
3.04, means compensation as reported in the "Wages, Tips and
Other Compensation" box of Form W-2 which shall include wages
within the meaning of Code section 3401(a) and all other
payments of compensation to an Employee by his Employer (in
the course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written
statement under Code sections 6041(d), 6051(a)(3), and 6052.
Compensation shall be determined without regard to any rules
under Code section 3401(a) that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed (such as the exception
for agricultural labor in Code section 3401(a)(2)). However,
Compensation shall not include (whether or not includable in
the Employee's gross income) reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving
expenses, deferred compensation, welfare benefits or severance
pay. Compensation shall include Compensation only for the
portion of the Plan Year in which the Employee was a
Participant.
________ Compensation as defined in this Section 1.08(a) shall include
any amount which is contributed by the Employer with respect
to the applicable period pursuant to a salary reduction
agreement and which is not includible in the gross income of
the Employee under section 125 (dealing with cafeteria plans),
402(e)(3) (dealing with elective deferrals under 401(k)
plans), 402(h) (dealing with simplified employee pensions) or
403(b) (dealing with tax sheltered annuities) of the Code.
Compensation shall not include any other contribution made by the
Employer under this Plan or under any pension plan or other
employee benefit plan or insurance plan maintained by the Employer
for the benefit of such Employee.
(b) For purposes of Section 1.20, Section 3.03 and Section 3.04
hereof, Compensation shall mean the total compensation for
Service by an Employee for the Employer that is includable in
gross income as provided in section 414(s) of the Code. For
purposes of Sections 3.03 and 3.04 hereof, compensation shall
be determined for the period during the Plan Year in which the
Employee is a Participant, or for the entire Plan Year, as
determined by the Plan Administrator.
(c) Notwithstanding any other provision of the Plan to the
contrary, the annual compensation of each Employee taken into
account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
one hundred fifty thousand dollars ($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 twelve (12) months, over which
compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of
fewer than twelve (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
twelve (12).
If compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
Plan Year, the compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period.
1.09 "Controlled Group" shall mean, except as modified by section 415(h)
of the Code for purposes of determining limitations under section
415 of the Code pursuant to Section 4.04 hereof, as follows: any
corporation which is a member of a controlled group of corporations
(as defined by section 414(b) of the Code) of which the Employer is
a member, any other trade or business (whether or not incorporated)
which is under common control (as defined by section 414(c) of the
Code) with respect to the Employer, any organization which is a
member of an affiliated service group (as defined by section 414(m)
of the Code) of which the Employer is a member or any other entity
required to be aggregated with the Employer pursuant to regulations
under section 414(o) of the Code; but only for the period during
which such other corporation, trade or business or organization and
the Employer are members of such controlled group of corporations,
are under such common control or are serving as members of such an
affiliated service group.
1.10 "Disability" shall mean a physical or mental condition of a
Participant resulting in:
(a) evidence that the Participant is deemed by the Social Security
Administration to be eligible to receive a Primary Social
Security Disability benefit, or
(b) evidence that the Participant is eligible for disability
benefits under the long-term disability plan sponsored by the
Employer.
1.11 "Early Retirement Date" shall mean, for a Participant, the first
day of the month coinciding with or following the date the
Participant terminates Service, provided (i) the Participant has
attained age fifty-five (55) and completed five (5) years of
Vesting Service and (ii) the date precedes his Normal Retirement
Date.
1.12 "Effective Date" shall mean October 1, 1993, the date of
establishment of the Plan; provided, however, that the term shall
mean, for an Employee, the effective date of adoption of the Plan
by his Employer if such date is later than October 1, 1993.
The effective date of this amendment, restatement and continuation of
the Plan shall be January 1, 1997, except as otherwise specifically
indicated for provisions herein or as otherwise required by applicable
law or regulation.
1.13 "Employee" shall mean either (a) a person, other than an
independent contractor, who is receiving remuneration from the
Employer for services rendered to, or labor performed for, the
Employer (or who would be receiving such remuneration except for an
authorized leave of absence), or (b) a Leased Employees.
1.14 "Employer" shall mean the Sponsor or an Adopting Employer, or both,
as required by the context of this Plan; provided, however, that if
an Employee is simultaneously employed (or considered to be
employed) by the Sponsor and one (1) or more Adopting Employers or
by two (2) or more Adopting Employers, the term shall mean all such
employers.
1.15 "Employer Account" shall mean the account maintained on behalf of
a Participant to which shall be credited the Participant's share of
Employer contributions, together with the Participant's share of
the investment earnings (or losses) of the Trust Fund allocable to
this account.
For purposes of administrative convenience, each Participant's
Employer Account shall be divided into the following parts:
Part I the portion of the Participant's Employer Account which is
attributable to Matching Contributions, also known as the
Matching Account;
Part II the portion of the Participant's Employer Account which is
attributable to Qualified Matching Contributions made
pursuant to Section 3.01(c) hereof, also known as the QMAC
account; and
Part III the portion of the Participant's Employer Account which is
attributable to trustee to trustee transfers of Employer
contribution accounts, if any, made with respect to a
Participant's benefits pursuant to Section 3.06 hereof,
also known as the Employer Transfer Account.
1.16 "Entry Date" shall mean a date upon which an Employee is eligible
to become a Participant in the Plan, following his satisfaction of
the eligibility requirements pursuant to Section 2.01 hereof.
January 1 and July 1 shall be Entry Dates each Plan Year.
Provided, however, that, only with respect to individuals who
become Employees as a result of the merger or consolidation of
their employing organization into the Employer, or the acquisition
of their employing organization by the Employer, an additional
Entry Date may be named by the Sponsor for such Employees.
Provided, further that April 1, 1997 shall be an Entry Date.
1.17 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and as in effect on the
relevant date to be interpreted hereunder.
1.18 "Fiduciary" shall mean the Employer, the Plan Administrator, the
Trustee, the Investment Manager, if any, and any other business
organization or corporation designated by such a fiduciary to carry
out fiduciary responsibilities under the Plan, which accepts such
designation, but only with respect to the specific responsibilities
for each such fiduciary described herein.
1.19 "Forfeiture" shall mean the portion of a Participant's Employer
Account which is forfeited before full vesting occurs or because of
the operation of Section 4.01(b), 4.04 or 8.02 hereof.
1.20 "Highly Compensated Employee" shall mean:
(a) any Employee who performs Service for the Employer during the
determination year and who, during the look-back year,
received Compensation from the Employer in excess of $80,000
(as adjusted pursuant to section 415(d) of the Code) and was
a member of the top-paid group for such year; or
(b) any Employee who is a five-percent owner (as defined in
section 416(i)(1) of the Code) at any time during the
look-back year or determination year.
For this purpose, the "determination year" shall be the Plan Year and
the "look-back year" shall be the twelve (12) month period immediately
preceding the determination year.
A Highly Compensated Employee includes any Employee whose date of
termination of Service occurred prior to the determination year,
performs no Service for the Employer during the determination year,
and was a Highly Compensated active Employee for either the
termination 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, including
the determinations of the number and identity of Employees in the
top-paid group, and the Compensation that is considered, will be made
in accordance with section 414(q) of the Code and the regulations
thereunder. Such determination may also take into account other
rulings and pronouncements issued by the Secretary of the Treasury,
the Internal Revenue Service or other governmental bodies.
1.21 "Hour of Service" shall mean the following:
(a) An Hour of Service shall mean each actual hour for which an
Employee is paid, or entitled to payment, for the performance
of duties for the Employer. These Hours of Service shall be
credited to the Employee for the Plan Year in which the duties
are performed.
(b) An Hour of Service shall mean 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
authorized Leave of Absence. No more than five hundred and
one (501) Hours of Service shall be credited under this
subsection for any single continuous period (whether or not
such period of service occurs in a single Plan Year). Hours
of Service under this subsection shall be calculated and
credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations, which are incorporated herein by reference
as if fully set forth herein.
(c) An Hour of Service shall mean each hour for which back pay,
irrespective of mitigation of damages, has been either awarded
or agreed to by the Employer. These Hours of Service shall be
credited to the Employee for the Plan Year to which the award
or agreement pertains rather than the Plan Year in which the
award, agreement or payment is made. Hours of Service shall
not be credited under both this and either of the two (2)
preceding subsections of this Section.
(d) No Hour of Service, however, shall be credited for payments
made solely to comply with workmen's or unemployment
compensation or disability insurance laws or as reimbursement
for medical expenses.
Hours of Service shall be credited for employment with other members
of a Controlled Group of which the Employer is a member. Hours of
Service shall also be credited for any individual considered a Leased
Employee for purposes of the Plan.
1.22 "Investment Manager" shall mean any Fiduciary, other than the
Trustee, who
(a) has the power to manage, acquire, or dispose of any asset of
the Plan;
(b) (i) is registered as an investment advisor under the
Investment Advisers Act of 1940; (ii) is a bank, as defined in
that Act; or (iii) is an insurance company qualified to
perform services described in subsection (a) under the laws of
more than one (1) state; and
(c) has acknowledged in writing that he is a Fiduciary with
respect to the Plan.
1.23 "Leased Employee" shall mean any person, other than a common law
employee of the Employer, who provides services for the Employer if
the following conditions are met:
(a) such services are provided pursuant to an agreement between
the Employer and a leasing organization,
(b) such person has performed services for the Employer (or the
Employer and a "related person" as that term is defined in
section 414(n)(6) of the Code) on a substantially full-time
basis for a period of at least one (1) year, and
(c) such services are performed under primary direction or control
of the recipient.
Notwithstanding the foregoing, a Leased Employee shall not be
considered an Employee of the Employer as to services performed after
December 31, 1986 if:
(d) such person is covered by a money purchase pension plan
providing:
(1) a nonintegrated 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 a 401(k) plan, a cafeteria plan
pursuant to Code section 125, a simplified employee pension
(SEP) pursuant to Code section 402(h) or a tax sheltered
annuity pursuant to Code section 403(b),
(2) immediate participation, and
(3) full and immediate vesting; and
(e) Leased Employees do not constitute more than twenty percent
(20%) of the recipient's nonhighly compensated workforce.
For purposes of this Plan, contributions or benefits provided to a
Leased Employee by the leasing organization which are attributable to
services performed for the Employer shall be treated as provided by
the Employer.
1.24 "Matching Contributions" shall mean contributions made by the
Employer pursuant to Section 3.01(a) hereof.
1.25 "Merged Plans" shall mean the plans that have been merged into the
Plan from time to time. Special issues related to such Merged
Plans are addressed in Article 13.
1.26 "Non-highly Compensated Employee" shall mean an Employee who is not
a Highly Compensated Employee.
1.27 "Normal Retirement Age" shall mean for a Participant the date the
Participant attains sixty-five (65) years of age.
1.28 "Normal Retirement Date" shall mean for a Participant the first day
of the month coinciding with or following the date he attains his
Normal Retirement Age.
1.29 "Participant" shall mean an Employee participating in the Plan in
accordance with the provisions of Article 2 hereof.
1.30 "Personal Account" shall mean the account maintained on behalf of
a Participant to which shall be credited the amount of any Salary
Deferral Contributions, Rollover Contributions or trustee to
trustee transfers of employee type accounts resulting from Merged
Plans, together with the Participant's share of the investment
earnings (or losses) of the Trust Fund allocable to this account.
For purposes of reference in this Plan, each Participant's Personal
Account shall be divided into the following parts:
Part I the portion of the Participant's Personal Account which is
attributable to Salary Deferral Contributions made pursuant to
3.02(a) hereof, also known as the Salary Deferral Account;
Part II the portion of the Participant's Personal Account which is
attributable to Participant Rollover Contributions, also
known as the Rollover Account; and
Part III the portion of the Participant's Personal Account which is
attributable to trustee to trustee transfers of employee
type accounts, if any, made with respect to a Participant's
benefits pursuant to Section 3.06 hereof, also known as the
Employee Transfer Account.
1.31 "Plan" shall mean this Plan, entitled the "Proffitt's, Inc. 401(k)
Retirement Plan," as it may be amended from time to time, and as in
effect on the relevant date to be interpreted hereunder.
1.32 "Plan Administrator" shall mean the entity designated as the Plan
Administrator pursuant to Section 9.01 of the Plan to administer
the Plan.
1.33 "Plan Year" shall mean the twelve (12) consecutive month period
from January 1 through the following December 31.
1.34 "Retired Participant" shall mean a former Participant whose
participation in the Plan has terminated and who is entitled to
receive benefits provided by the Plan.
1.35 "Rollover Contributions" shall mean the tax-free rollovers made by
a Participant pursuant to Section 3.02(b).
1.36 "Salary Deferral Contributions" shall mean contributions made by an
Employer on an employee's behalf pursuant to Section 3.02(a)
hereof.
1.37 "Service" shall mean the employment of an Employee by the Employer
and shall be measured in Hours of Service; provided, however, that
the following periods of employment of an Employee shall be
considered Service with the Employer:
(a) employment with any members of a Controlled Group while such
employers are members of the Controlled Group; and
(b) to the extent resolved by the governing body of the Sponsor,
any period of continuous employment of the Employee by any
predecessor organization to the Employer which ended on the
date the predecessor organization merged or consolidated into
the Employer.
In no event shall Service include any period of time during which the
Employee was not a common-law employee, but rather a partner or a
proprietor or an independent contractor. Furthermore, an Employee's
employment with a member of the Controlled Group prior to its becoming
a member shall be considered Service for purposes of determining
eligibility under Section 2.01 of this Plan, except as otherwise
provided in a resolution pursuant to subsection (b) above.
Notwithstanding the foregoing, Service before any period of
consecutive Breaks in Service shall be disregarded if the Employee
does not have a nonforfeitable right to any portion of his Employer
Account before such period of consecutive Breaks in Service, and if
the number of consecutive Breaks in Service equals or exceeds the
greater of (i) five (5) and (ii) the Employee's aggregate number of
years of Vesting Service prior to such period of consecutive Breaks
in Service. The number of years of Vesting Service prior to such
period of consecutive Breaks in Service shall be deemed to exclude any
years of Vesting Service not required to be taken into account by
reason of any prior period of consecutive Breaks in Service.
1.38 "Sponsor" shall mean Proffitt's, Inc., a corporation with corporate
offices in Alcoa, Tennessee, and any business organization or
corporation into which Proffitt's, Inc. may be merged or
consolidated or by which it may be succeeded.
1.39 "Spouse" shall mean the actual spouse or surviving spouse of a
Participant or a former spouse of the Participant, if and to the
extent such former spouse is to be treated as a spouse or surviving
spouse of a Participant under a qualified domestic relations order
described in section 414(p) of the Code.
1.40 "Trust" shall mean the trust established by the Plan under which
the Employer contributions and any contributions by Participants
shall be received, held, invested and disbursed by the Trustee to,
or for the benefit of, Participants, Retired Participants and their
Beneficiaries.
1.41 "Trust Fund" shall mean any and all cash, securities, real estate
and other property held by the Trustee pursuant to the terms of the
Plan.
1.42 "Trustee" shall mean any individual, individuals or financial
institution as shall have accepted the appointment by the Sponsor
as Trustee under the Plan. For purposes hereof, the term "Trustee"
shall include any individual Trustee if more than one (1) Trustee
exists.
1.43 "Vesting Service" shall mean the number of Plan Years during which
an Employee completes at least one thousand (1,000) Hours of
Service; provided, however, that Service which is counted or
disregarded pursuant to Section 1.37 hereof shall be accordingly
counted or disregarded in computing a Participant's period of
Vesting Service under the Plan.
1.44 "Year of Service" shall mean a twelve (12) consecutive month period
during which an Employee completes at least one thousand (1,000)
Hours of Service; provided, however, that Service which is counted
or disregarded pursuant to Section 1.37 hereof shall be accordingly
counted or disregarded in computing a Participant's Years of
Service under the Plan.
For purposes of determining eligibility, the initial twelve (12)
consecutive month period shall commence on the date the Employee first
performs an Hour of Service, and each subsequent twelve (12) month
period shall be the Plan Year, beginning with the Plan Year which
commences prior to the end of the initial twelve (12) month period,
regardless of whether or not the Employee is entitled to be credited
with one thousand (1,000) Hours of Service during the initial twelve
(12) month period.
ARTICLE 2
PARTICIPATION IN THE PLAN
2.01 Eligibility Date.
Each Employee on December 31, 1996, who is a Participant in the Plan
on that date and who continues to be an Employee on January 1, 1997,
shall without further requirements, continue as a Participant hereunder.
Each other Employee on January 1, 1997, and each person who becomes
an Employee after January 1, 1997, shall, subject to the overriding
provisions of the following paragraphs, be eligible to become a
Participant on the first Entry Date coincident with or next following
the date such person has both (a) attained age twenty one (21) and
(b) been credited with one (1) Year of Service, provided he is still an
Employee on such Entry Date.
However, no Employee shall become a Participant prior to the effective
date of adoption of the Plan by the Employee's Employer.
Notwithstanding the above, the following classes of Employees shall
be considered as excluded classes for purposes of the Plan, and
Employees who are members of such classes shall not be eligible to
participate in the plan:
(a) individuals who are represented by a collective bargaining
unit, except as otherwise provided in any applicable
collective bargaining agreement;
(b) Leased Employees.
2.02 Eligibility Determination.
Within a reasonable time prior to the date on which an Employee will
become eligible, if the Employee continues employment with the Employer,
to participate in the Plan, the Plan Administrator shall make available
to the Employee a salary deferral agreement and such application for
participation as the Plan Administrator shall require and shall notify
him of the requirements to become a Participant. Should any question
arise as to eligibility, the Plan Administrator shall decide such
question, and such determination, if made in good faith and in
accordance with the terms of the Plan, shall be final.
2.03 Participation.
An Employee shall become a Participant on the first day on which he
is eligible to become a Participant, and has filed with the Plan
Administrator such application which the Plan Administrator shall
require for participation in the Plan in which he has agreed to abide by
all the provisions hereof and has specified the amount of the Employee's
salary deferral, if any, pursuant to Section 3.02(a) hereof.
Notwithstanding anything in the Plan to the contrary, for purposes of
becoming eligible to make Rollover Contributions, any Employee shall be
eligible regardless of whether the Employee has satisfied the age and
service requirements or the entry date requirements of Section 2.01.
In the event that a Participant's Service terminates, or the
Participant dies, sustains Disability, or retires in accordance with the
provisions of the Plan, he shall thereupon cease to be a Participant.
2.04 Participation Following Reemployment.
Except as otherwise provided in the following sentence, an individual
who has previously met the Plan's age and service requirements and whose
Service has terminated, shall be eligible to participate immediately
upon again being credited with Service. Such an individual who is
re-employed in an excluded class of employees, as described in Section
2.01, shall not be eligible to participate while in such excluded class.
2.05 Participation Following Change in Classification.
In the event a Participant becomes ineligible to participate because
he is no longer a member of an eligible class of Employees, but his
Service has not terminated, such Employee shall be eligible to
participate immediately upon his return to an eligible class of
Employees. If such Participant's Service is terminated, his eligibility
to participate shall be determined as a former Participant pursuant to
Section 2.04 hereof.
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee then
shall participate immediately if such Employee has satisfied the minimum
age and Service requirements and would have previously become eligible
to participate had he been in the eligible class. If such an Employee
has not satisfied the minimum age and Service requirements when he
becomes a member of the eligible class, he shall participate as provided
in Section 2.01 hereof, and his employment in the excluded class shall
be treated as Service in determining his eligibility to participate.
2.06 Absence in the Armed Services.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Code
section 414(u).
2.07 Family and Medical Leave Act Requirements.
Notwithstanding any other provisions of the Plan, in the case of an
Employee who takes family or medical leave as an eligible employee of a
covered employer under the provisions of the Family and Medical Leave
Act of 1993 (FMLA), any period of FMLA leave shall be treated as
continued Service for purposes of eligibility to participate and Vesting
Service to the extent required by applicable law.
ARTICLE 3
CONTRIBUTIONS TO THE PLAN
3.01 Employer Contributions.
Each Plan Year ending after the Effective Date, and during the
continuance of the Plan, the Employer shall make contributions to the
Plan as described below.
(a) Matching Contributions. Each Plan Year the Sponsor shall set
the "match rate" for the Plan Year, which can be zero percent
(0%) or any positive percentage. Each Employer shall make a
Matching Contribution equal to the match rate multiplied by
the "matchable salary deferrals" contributed on behalf of each
Participant entitled to share in this allocation, pursuant to
Section 4.01(b) hereof, for the Plan Year. "Matchable salary
deferrals" shall be Salary Deferral Contributions pursuant to
Section 3.02(a) hereof which do not exceed five percent (5%)
of the Compensation of each Participant making Salary Deferral
Contributions. However, the Employer shall not contribute
amounts which (i) would, if allocated to the Employer Account
of Highly Compensated Employees pursuant to Section 4.01(b),
create excess aggregate contributions (as defined in Section
3.04) or (ii) are attributable to contributions which pursuant
to Sections 3.02(a), 3.03 or 3.04 are to be distributed to
Employees.
Matching Contributions shall be:
(i) subject to the vesting schedule provided in Section
8.01 hereof,
(ii) invested primarily in common stock issued by the
Sponsor, and
(iii) credited to Part II of the Participant's Employer
Account.
(b) Qualified Matching Contribution. The Employer may, in order
to preserve the qualified status of the Plan, contribute a
Qualified Matching Contribution based on the salary deferral
contributions of Non-highly Compensated Employees. Qualified
Matching Contributions shall be fully vested at all times,
shall be subject to the distribution provisions that are
applicable to Salary Deferral Contributions and shall be
credited to Part II of the Participant's Employer Account.
Employer contributions shall be made no later than the due date
(including extensions) for filing the federal income tax return for
the year for which such contributions are made.
However, any Forfeitures arising since the last Allocation Date or
otherwise becoming available shall be applied to reduce Employer
contributions to the Plan for the current Plan Year, or as soon
thereafter as practicable.
In satisfaction of its contribution obligations under this Section,
the Employer shall deliver or cause to be delivered cash to the
Trustee. Contributions made to the Plan by the Employer shall be made
on the condition that they are deductible under section 404 of the
Code.
3.02 Contributions By, or On Behalf of, Participants.
A Participant may elect contributions to the Plan, as described below.
Such amounts shall be fully vested at all times.
(a) Salary Deferral Contributions. Effective with the first
payroll date on or after the date on which he becomes a
Participant, a Participant may voluntarily elect to enter into
a salary deferral agreement with the Employer. Such salary
deferral agreement shall serve to direct the Employer to
contribute, and the Employer shall contribute, to Part I of
the Participant's Personal Account, as Salary Deferral
Contributions, a percentage of the amount which would
otherwise be paid to the Participant as direct Compensation.
The amount of his Compensation which the Participant is to
defer for a Plan Year shall be stated in percentage points of
his Compensation, which may not be more than twenty percent
(20%). In addition, such amount shall be subject also to the
limitations on annual additions for the limitation year under
Section 4.04 hereof. Notwithstanding the preceding, the
Committee may establish rules and procedures to facilitate the
administration of Salary Deferral Contributions, including but
not limited to rules regarding minimum amounts of Salary
Deferral Contributions per accounting period, default
investment fund for small contributions, and whether or not
contribution percentages must be in whole percentages.
A Participant's Salary Deferral Contributions to this Plan in any
taxable year of the Participant shall not be greater than seven
thousand dollars ($7,000), or such increase in this amount,
pursuant to section 402(g) of the Code, for any taxable year as
results from the annual adjustment factor determined by the
Commissioner of the Internal Revenue Service and effective on
January 1 of the taxable year. Salary Deferral Contributions to
this Plan in excess of the preceding limit occurring in any Plan
Year (together with any income allocable to such amount) shall be
automatically distributed not later than the first April 15th
following the close of the Plan Year in which such excess deferrals
occurred, to the Participant on whose behalf the excess was
contributed.
If the Participant makes "elective deferrals," as defined in
regulations issued pursuant to section 402(g) of the Code, to more
than one (1) plan, which exceed the limit described above in the
aggregate, such Participant may elect a distribution of a part or
all of such excess amount (together with any income allocable to
such amount) which has been contributed to this Plan. An election
to receive a distribution of such excess deferrals must be in
writing and must include the Employee's certification that the
specified amount is an excess deferral. Such election must be made
not later than the first March 15th following the close of the Plan
Year in which such excess deferrals occurred. Upon such election,
the excess amount specified by the Participant shall be distributed
to the Participant not later than the first April 15th following
the close of the Plan Year in which such excess deferrals occurred.
Income allocable to such excess amount should be determined in the
same manner as under Section 3.03.
The determination of whether a Participant's elective deferrals
with respect to any taxable year shall exceed the limitations of
Code section 402(g) shall be the sole responsibility of the
Participant and neither the Employer, the Plan Administrator, nor
the Trustee shall have any obligations with respect to such
determination.
Salary Deferral Contributions shall be made by payroll deduction
and shall be considered to be Salary Deferral Contributions for the
Plan Year in which they are actually made.
The direction and agreement by the Participant to defer a portion
of his Compensation as a Salary Deferral Contribution rather than
receive it as a cash benefit shall be in the form of a salary
deferral agreement as set forth in Section 2.03 hereof. A
Participant's salary deferral agreement may be amended to change
the percentage of the Salary Deferral Contribution, prospectively,
as of the first day of the payroll period coincident with or next
following any January 1 or July 1. Participants shall also be
allowed to change the percentage of their Salary Deferral
Contributions on April 1, 1997.
A Participant's salary deferral agreement may be terminated and all
Salary Deferral Contributions ended as of the first day of any
payroll period; provided that following such a complete termination
of Salary Deferral Contributions, Salary Deferral Contributions may
be resumed on the first day of any payroll period after such
termination. A Participant who desires to effect such a change or
termination must make such election in such form and at such time
as may be required by the Plan Administrator prior to the date as
of which the change or termination will become effective.
The Plan Administrator may establish additional procedures for the
renewal, amendment, termination, or revocation of salary deferral
agreements which shall be uniform and nondiscriminatory. However,
the requirement of uniformity (but not nondiscrimination) may be
suspended, and such differences in procedure (provided such
differences are merely procedural) may be permitted between Highly
Compensated Employees and Non-highly Compensated Employees as are
necessary, proper and convenient in order to bring the Plan into
compliance with the coverage and discrimination requirements of
Section 3.03 hereof and thereby preserve, or assure the
preservation of, the qualified status of the Plan.
As a condition precedent for accepting a Participant's salary
deferral agreement, the Employer also may, at any time, as of any
time, and from time to time, amend, terminate or revoke the salary
deferral agreement of a Participant who is a Highly Compensated
Employee in order to comply with the coverage and discrimination
requirements of Section 3.03 hereof and thereby preserve, or assure
the preservation of, the qualified status of the Plan, or for other
reasons deemed appropriate by the Committee. However, any such
amendment or revocation for a Plan Year shall be made within the
time required for the contribution of Salary Deferral Contributions
for a Plan Year as provided in Internal Revenue Service Regulations
regarding Code section 401(k) and, to the extent applicable, in
Department of Labor regulations regarding salary deferral
contributions as plan assets.
The Employer shall contribute to Part I of the Personal Account of
each Participant an amount equal to the reduction in such
Participant's Compensation pursuant to his salary deferral
agreement. The contribution to be made as a result of such
reduction in Compensation shall be paid to the Trustee as soon as
practicable, but no later than the date required by Department of
Labor regulations concerning the contribution to a trust of salary
deferral contributions that are plan assets. Such Salary Deferral
Contributions shall be considered to be Employer contributions
under the Plan and shall be nonforfeitable when made.
If the Committee shall determine that the Salary Deferral
Contributions would exceed the limitations of Section 3.03 hereof,
the Plan Administrator shall, before the end of the Plan Year
following the Plan Year during which such excess contribution
occurs, distribute the amount of such excess (and income,
determined in the same manner as under Section 3.03, allocable
thereto) to the Participant on whose behalf the contribution was
made.
(b) Rollover Contributions. Rollover Contributions by a
Participant (or by an Employee expected to become a
Participant) to his Personal Account in cash or in other
property acceptable to the Trustee shall be allowed from
individual retirement accounts, within the meaning of section
408(a) or (b) of the Code, which have been established as
conduits for other qualified plan distributions pursuant to
section 402 or section 403 of the Code or from another
qualified plan. Acceptance of Rollover Contributions shall be
subject to any procedures governing acceptance of Rollover
Contributions which may be established by the Committee.
However, no portion of any such rollover may be attributable
to nondeductible employee contributions.
Rollover Contributions shall be remitted to the Trustee as soon as
practicable, shall be credited to Part II of the Participant's
Personal Account (the "Rollover Account") and shall be fully vested
at all times. Rollover Contributions shall be treated as
Participant contributions for purposes of investment and allocation
of investment earnings (and losses), and shall be distributed as
provided in Articles 6, 7 and 8 hereof.
Rollover Contributions shall not be considered (i) as contributions
by the Employer under Section 3.01 of this Plan, (ii) in
determining the maximum benefits permissible under the Plan
pursuant to Section 4.04 hereof or (iii) in determining the Top
Heavy Ratio in Section 14.02(j) hereof.
3.03 Coverage and Discrimination Requirements.
Salary Deferral Contributions for any Plan Year shall satisfy one (1)
of the following tests:
(a) the average deferral percentage for all Highly Compensated
Employees who are eligible to participate in the Plan for the
Plan Year shall not be more than the average deferral
percentage of all Participants who were Non-highly Compensated
Employees for the preceding Plan Year (or the current Plan
Year if elected by the Sponsor in accordance with section
401(k)(3) of the Code) multiplied by one and twenty-five
hundredths (1.25); or
(b) the excess of the average deferral percentage for all Highly
Compensated Employees who are eligible to participate in the
Plan for the Plan Year over that of all Participants who were
Non-highly Compensated Employees for the preceding Plan Year
(or the current Plan Year if elected by the Sponsor in
accordance with section 401(k)(3) of the Code) shall not be
more than two percent (2%), nor shall the average deferral
percentage for such Highly Compensated Employees be more than
that of the other group multiplied by two (2).
For purposes of this Section, the term "average deferral
percentage" for a group of Employees shall mean the average of the
percentages, calculated separately for each Employee in the group,
of the amount of Salary Deferral Contributions and, if applicable,
Qualified Matching Contributions, made on behalf of the Employee
for a Plan Year, to the amount of the Employee's Compensation for
such Plan Year (the "deferral percentage"). Qualified Matching
Contributions may be included in the calculation of deferral
percentages only if the conditions described in section
1.401(k)-1(b)(5) of the regulations are satisfied. For purposes of
calculating the average deferral percentage, eligible Employees
with no Salary Deferral Contributions or, if applicable, Qualified
Matching Contributions, shall be included in such calculation with
deferral percentages of zero percent (0%). For purposes of this
Section, the following rules, relating to aggregation of plans,
shall apply:
(c) All Salary Deferral Contributions that are made under this
Plan and any other plan that is aggregated with this Plan for
purposes of sections 401(a)(4) and 410(b) (other than section
410(b)(2)(A)(ii)) of the Code shall be treated as made under
a single plan.
(d) If this Plan is permissively aggregated with any other plan or
plans for purposes of section 401(k) of the Code, such
aggregated plans must satisfy sections 401(a)(4) and 410(b) of
the Code as though they were a single plan.
(e) The deferral percentage for any eligible Employee who is a
Highly Compensated Employee and who is eligible to make salary
deferral contributions under this Plan and any other plan
maintained by the Employer (other than plans that may not be
permissively aggregated) shall be determined as if all such
plans were a single plan.
A Salary Deferral Contribution shall be considered to have been
made with respect to a Plan Year if it (i) is allocated to the
Account of a Participant as of any date within that Plan Year and
(ii) relates to Compensation that either would have been received
by the Participant in the Plan Year but for the Participant's
election to defer under the arrangement, or is attributable to
services performed by the Participant in the Plan Year and, but for
the Participant's election to defer, would have been received by
the Participant within two and one-half (2-1/2) months after the
close of the Plan Year. A contribution shall be considered
allocated as of any date within a Plan Year if the following
conditions are met:
(f) such allocation is not dependent upon participation in the
Plan as of any date subsequent to the allocation date,
(g) the Employer contributions in addition to those attributable
to Salary Deferral Contributions are actually made to the Plan
no later than the end of the period described in Code section
404(a)(6) applicable to the taxable year with or within which
the Plan Year ends, and
(h) the Employer contributions attributable to salary deferrals
are actually made to the Plan no later than the end of the
twelve (12) month period immediately following the end of the
Plan Year to which the contribution relates.
Excess contributions shall mean, with respect to any Plan Year,
"excess contributions" as defined in Code section 401(k)(8)(B).
If, for any Plan Year, Salary Deferral Contributions are made with
respect to the Highly Compensated Employees in excess of that
permissible under subsections (a) or (b) of this Section 3.03, the
Plan Administrator shall, before the end of the Plan Year following
the Plan Year during which such excess contribution occurs
distribute the amount of such excess contributions (and the
earnings or losses allocable thereto) to Highly Compensated
Employees on the basis of the amount of Salary Deferral
Contributions by, or on behalf of, each such employees in
accordance with Code section 401(k)(8)(C).
The income allocable to such excess contribution shall be equal to
the allocable gain or loss for the Plan Year. The income allocable
to excess contributions for the Plan Year is determined by
multiplying the income for the Plan Year allocable to Salary
Deferral Contributions by a fraction in which the numerator is the
excess contributions for the Employee for the Plan Year and the
denominator is the total Account balance of the Employee
attributable to Salary Deferral Contributions as of the end of the
Plan Year, reduced by the gain allocable to such total amount for
the Plan Year and increased by the loss allocable to such amount
for the Plan Year.
Notwithstanding the above, the tests described in this Section and
the corrective measures for insuring passage of such tests may be
performed in any manner permitted under section 401(k) of the Code,
the regulations thereunder and any other related rulings or
pronouncements issued by the Secretary of the Treasury or the
Internal Revenue Service.
3.04 Discrimination Requirements for Other Contributions.
The Plan shall satisfy the nondiscrimination requirements of section
401(m) of the Code and the regulations issued thereunder, which are
incorporated herein by reference. The Plan shall satisfy such
requirements if, with respect to any Plan Year, either of the following
alternative conditions are met:
(a) the average contribution percentage for all eligible Highly
Compensated Employees for the Plan Year is not greater than
the average contribution percentage for all Participants who
were Non-highly Compensated Employees for the preceding Plan
Year (or the current Plan Year if elected by the Sponsor in
accordance with section 401(m)(2) of the Code), multiplied by
one and twenty-five hundredths (1.25).
(b) the excess of the average contribution percentage for all
eligible Highly Compensated Employees for the Plan Year over
that of all Participants who were Non-highly Compensated
Employees for the preceding Plan Year (or the current Plan
Year if elected by the Sponsor in accordance with section
401(m)(2) of the Code) is not more than two percent (2%), nor
is the average contribution percentage for such Highly
Compensated Employees more than that of the other group,
multiplied by two (2).
For purposes of this Section, "Eligible Employee" shall mean any
Employee who is eligible to make or be credited with contribution
percentage amounts. Contribution percentage amounts shall mean
Matching Contributions, voluntary after-tax contributions and
(subject to the conditions hereinafter enumerated and to the extent
taken into account in the calculation of average contribution
percentages) Salary Deferral Contributions and Qualified Matching
Contributions. The Employer may elect to include Salary Deferral
Contributions, and must include Qualified Matching Contributions,
to the extent such contributions are not included in the tests
described in Section 3.03 hereof. Salary Deferral Contributions
may be included only if the conditions described in section
1.401(m)-1(b)(5) of the regulations are satisfied. The term
"average contribution percentage" for a group of Eligible Employees
shall mean the average of the ratios, calculated separately for
each Eligible Employee in the group, of the contribution percentage
amounts made on behalf of an Eligible Employee during the Plan Year
to that Eligible Employee's Compensation for such Plan year (the
"contribution percentage"). For purposes of calculating the
average contribution percentage, Eligible Employees with no
contribution percentage amounts shall be included in such
calculation with contribution percentages of zero percent (0%).
For purposes of this Section, the following rules, relating to
aggregation of plans, shall apply:
(c) All contribution percentage amounts that are made under this
Plan and any other plan that is aggregated with this Plan for
purposes of sections 401(a)(4) and 410(b) (other than section
410(b)(2)(A)(ii) of the Code shall be treated as made under a
single plan.
(d) If this Plan is permissively aggregated with any other plan or
plans for purposes of section 401(m) of the Code, such
aggregated plans must satisfy sections 401(a)(4) and 410(b) of
the Code as though they were a single plan.
(e) The contribution percentage for any Eligible Employee who is
a Highly Compensated Employee and who is eligible to have
contribution percentage amounts credited to him under this
Plan and any other plan maintained by the Employer (other than
plans that may not be permissively aggregated) shall be
determined as if all such plans were a single plan.
"Excess aggregate contributions," plus any income allocable
thereto, shall be forfeited, if forfeitable, or if not forfeitable,
distributed no later than the last day of each Plan Year to Highly
Compensated Employees on the basis of the amount of contributions
on behalf of, or by, each such employee in accordance with Code
section 401(m)(6)(C). Excess aggregate contributions shall be
treated as annual additions, as defined in Section 4.04 hereof.
"Excess aggregate contributions" shall mean, with respect to any
Plan Year, "excess aggregate contributions" as defined in section
401(m)(6)(B) of the Code.
The determination of excess aggregate contributions shall be made
after first determining excess elective deferrals pursuant to
Section 3.02 and then determining excess contributions pursuant to
Section 3.03 hereof.
Excess aggregate contributions shall be adjusted for any income up
to the date of distribution. The income allocable to excess
aggregate contributions for such period is determined in a manner
analogous to the above allocation of income to excess deferrals,
but basing the allocation on excess aggregate contributions and the
income allocable to Matching Contributions.
Forfeitures of excess aggregate contributions shall be applied to
reduce Employer contributions.
Notwithstanding the above, the tests described in this Section and
the corrective measures for insuring passage of such tests may be
performed in any manner permitted under section 401(m) of the Code,
the regulations thereunder and any other related rulings or
pronouncements issued by the Secretary of the Treasury or the
Internal Revenue Service.
3.05 Multiple Use of Alternative Limitation.
Compliance with Section 3.03 and Section 3.04 shall not be achieved
by the use of both the limitation in Section 3.03(b) and the limitation
in Section 3.04(b) for the same Plan Year. The determination and
correction of such a multiple use shall be governed by the rules set
forth in section 401(m) of the Code and in regulations interpreting such
section, which are incorporated herein by reference; provided, however,
that the multiple use shall be corrected through reduction of the
average contribution percentage of all Highly Compensated Employees.
3.06 Trustee to Trustee Transfers for Mergers.
A direct transfer to this Plan of plan assets attributable to a
Participant's participation in another qualified defined contribution
plan may be allowed in cash or other property acceptable to the Trustee
to accommodate the merger of such other plan into this Plan; provided,
however, that any restrictions on distributions of such transferred
assets under such other plan shall be maintained under this Plan with
respect to such assets, to the extent required by section 411(d)(6) of
the Code and the regulations thereunder.
The Plan Administrator may allocate Merged Plan accounts into existing
parts of the Participant's Employer or Personal Accounts, if
appropriate, and/or may establish separate bookkeeping subaccounts for
these amounts under Part III of the Participant's Employer Accounts
and/or Part III of the Participant's Personal Accounts.
3.07 Medium of Financing the Plan.
Investment of all contributions made in accordance with the Plan and
provision for payment of benefits to Retired Participants and
Beneficiaries shall be accomplished by a Trust, as it may be amended
from time to time, which shall constitute a part of the Plan.
3.08 Investment Directions by Participants.
The Committee may permit Participants to direct the investment of
their Accounts or a portion of their Accounts among a variety of
separate investment funds, as specified and identified by the Sponsor,
including a fund invested primarily in common stock of the Sponsor. The
Committee shall establish uniform and nondiscriminatory rules and
restrictions with respect to such directed investments and communicate
such rules and restrictions to the Trustee.
If the Committee permits Participants to direct the investment of the
Accounts in common stock of the Sponsor, the Committee may limit the
percentage of each Participant's Account (not including Part I of the
Participant's Employer Account attributable to Matching Contributions)
which is invested in common stock of the Sponsor. Part I of each
Participant's Employer Account (attributable to Matching Contributions)
shall be primarily invested in common stock of the Sponsor, and shall
not be subject to the Participant investment direction.
Elections of investments shall be made pursuant to uniform and
nondiscriminatory rules established by the Committee, shall be selected
in writing on forms, or by such other method, approved by the Committee,
and shall be filed with the Committee or its designated representative.
Such elections must be made by providing prior notice to the Committee
in such form and manner as the Committee may uniformly and
nondiscriminatorily require prior to the date as of which the transfer
is elected. Accounts not directed pursuant to the Committee's rules
shall be invested in one of the funds designated by the Committee as the
default fund.
A Participant may, by providing prior notice to the Committee in such
form and manner as the Committee may uniformly and nondiscriminatorily
require, modify his election with respect to the investment of his
Account balances and future contributions.
The Trustee shall carry out the investment directions of a Participant
made pursuant to such rules and restrictions as soon as practicable
after receipt of each such direction.
Notwithstanding the foregoing, the Committee may suspend Participants'
rights to direct the investment of their accounts at any time, either
temporarily or permanently. In particular, temporary suspension is
permitted during "blackout periods" that result due to transition of the
Plan's recordkeeping services from one entity to another. The Committee
shall attempt to notify all Participants and Retired Participants with
Accounts in the Plan of such a suspension, whether temporary or
permanent, but failure to notify one or more Participants or Retired
Participants shall not prevent the suspension from applying with respect
to such Participants or Retired Participants.
ARTICLE 4
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
4.01 Credit of Contributions.
Contributions shall be credited as follows:
(a) Salary Deferrals. Salary Deferral Contributions pursuant to
Section 3.02(a) hereof which have been deposited with the
Trustee shall be credited as of each Allocation Date to Part
I of the Personal Account (the "Salary Deferral Account") of
each Participant on whose behalf such contributions were made.
(b) Matching Contributions. Any Matching Contributions made
pursuant to Section 3.01(a) hereof which have been deposited
with the Trustee shall be credited to Part I of the Employer
Account (the "Matching Account") of each Participant entitled
to share in the allocation of Matching Contributions. Each
Participant's share in Matching Contributions shall be the
amount described in Section 3.01(a) hereof. Those
Participants who make Salary Deferral Contributions at any
time during the Plan Year shall be eligible to share in the
allocation of Matching Contributions attributable to that Plan
Year.
No Matching Contribution shall be credited with respect to any
Salary Deferral Contribution that is returned or distributed to the
Participant in accordance with Section 3.02(a), Section 3.03 (ADP
test), Section 3.04 (ACP test) or Section 4.04 (Maximum Annual
Additions). In the event that such a Matching Contribution is
credited to the Matching Account of a Participant, such Matching
Contribution shall be forfeited as of the last day of the Plan Year
in which it was credited. Any Matching Contributions forfeited in
accordance with the preceding sentence shall not be included in the
ACP test in Section 3.04.
(c) Qualified Matching Contributions. Any Qualified Matching
Contributions made pursuant to Section 3.01(b) hereof which
have been deposited with the Trustee shall be credited to Part
II of the Employer Account of each Non-highly Compensated
Employee who was credited with a Matching Contribution for the
Plan Year. Each Participant's share in such Qualified
Matching Contributions shall be that amount which bears the
same ratio to the total Qualified Matching Contributions as
the Participant's Matching Contribution for the Plan Year
bears to the total Matching Contribution for the Plan Year for
all Non-highly Compensated Employees entitled to such a
contribution for the Plan Year.
(d) Rollover Contributions. Rollover Contributions pursuant to
Section 3.02(b) hereof shall be credited to Part II of the
respective Personal Accounts of Participants who contributed
such amounts.
(e) Merged Plan Transfers. Amounts transferred to this Plan
pursuant to a Merged Plan shall be credited to Part III of the
respective Employer Accounts and/or Personal Accounts of
Participants for whom such amounts were transferred, or among
the other Accounts described in Section 4.01(a), (b), (c) or
(d), as determined by the Plan Administrator.
4.02 Allocation of Investment Earnings.
As of each Allocation Date, the investment earnings, as defined
herein, shall be allocated to each Participant's Employer Account and
Personal Account as described below. Investment earnings, for purposes
of this Section, shall mean the net gain or loss of the Trust Fund from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities, other investment
transactions, and expenses paid from the Trust Fund which are not
reimbursed by the Employer or charged directly to the accounts of
Participants. In determining the investment earnings of the Trust Fund
for any period, assets shall be valued on the basis of fair market
value. Investment earnings shall be determined and allocated separately
for each separate investment fund that is established pursuant to
Section 3.08 hereof. The Committee shall determine whether account
recordkeeping is to be maintained on a balance forward recordkeeping
basis or a daily recordkeeping basis for a given period.
(a) Balance Forward Recordkeeping. If the Account recordkeeping
for the period is being maintained on a balance forward basis,
the investment earnings shall be allocated to each
Participant's Accounts in the ratio that the value of each
such Account as of the last Allocation Date bears to the total
value of all Accounts as of the last Allocation Date. These
Account values shall include contributions credited to the
Accounts since the last Allocation Date, adjusted to recognize
the timing of such contributions, but shall not include
amounts withdrawn since the last Allocation Date. For
purposes of this subsection only, the term "Participants"
shall include Retired Participants, present and former
Employees and Beneficiaries who have Account balances, but who
would not otherwise be considered to be Participants under the
Plan.
(b) Daily Recordkeeping. If the Account recordkeeping for the
period is being maintained on a daily recordkeeping basis,
then investment earnings shall be allocated in Accordance with
the attributes of the separate investment funds, in a manner
generally consistent with industry standards for daily
recordkeeping. The Committee shall have sole authority to
make determinations and resolve issues for purposes of this
subsection.
Should the Plan Administrator determine that the strict application
of the foregoing allocation procedures will not result in an
equitable and nondiscriminatory allocation among the Accounts of
Participants, or that another method is appropriate for the
purpose, it may modify its procedures for the purpose of achieving
an equitable and nondiscriminatory allocation in accordance with
the general concepts of the Plan and the provisions of this
Article.
4.03 Adjustment to Accounts.
As soon as practicable after each Allocation Date, the value of each
Account shall be adjusted to be equal to the value of such Account as of
the last Allocation Date, plus any additions to and minus any
subtractions from the Account since the last Allocation Date.
The Committee may direct that any investment or administrative fees
or charges be charged against the Accounts of Participants.
4.04 Maximum Annual Additions to Participants' Accounts.
The annual addition to any Participant's Accounts for any Plan Year
shall not exceed the lesser of thirty thousand dollars ($30,000), or
such increase in this amount for any Plan Year as results from the
annual adjustment factor determined by the Commissioner of the Internal
Revenue Service and effective on January 1 of the Plan Year, or twenty-five
percent (25%) of such Participant's total cash compensation for the
Plan Year.
For purposes of this Section, compensation is Compensation as defined
in Section 1.08(a), provided, however, that for the limitation year
beginning January 1, 1997 and ending December 31, 1997, Compensation
shall not include contributions made by the Employer on behalf of an
Employee to a plan qualified under section 125 or section 401(k) of the
Code.
For purposes of applying the limitations of this article, compensation
for a limitation year is the compensation actually paid or includable in
gross income during such year.
The term "annual addition" for a Participant means the sum of the
following for the Plan Year:
(a) contributions made by the Employer on behalf of the
Participant (including salary deferral contributions made
pursuant to section 401(k) of the Code, if any);
(b) forfeitures allocated to a Participant's Employer Account, if
any; and
(c) contributions made by the Participant, if any;
(d) amounts allocated to an individual medical account which is
part of a defined benefit plan, as described in Code section
415(l)(1); and
(e) amounts attributable to post-retirement medical benefits
allocated to a separate account of a key employee under a
welfare benefit fund as described in Code section
419(A)(d)(2).
If a Participant is, or was, a participant at any time in both a
qualified defined benefit pension plan and a qualified defined
contribution plan ever maintained by the same employer, then, for any
limitation year beginning before January 1, 2000, the sum of the defined
benefit fraction and the defined contribution fraction in any limitation
year may not exceed one (1).
The term "defined benefit fraction" shall mean, for any Plan Year, a
fraction the numerator of which is the projected annual benefit of the
Participant under all qualified defined benefit pension plans maintained
by the Employer (determined as of the close of the Plan Year), if any,
and the denominator of which is the lesser of the following:
(i) one and four tenths (1.4) multiplied by one hundred percent
(100%) of the Participant's average total cash compensation
for the three (3) consecutive limitation years in which he
received the highest aggregate total cash compensation; or
(ii) one and twenty-five hundredths (1.25) multiplied by ninety
thousand dollars ($90,000) (or such greater amount as may be
determined by the Secretary of the Treasury).
The term "defined contribution fraction" shall mean, for any Plan
Year, a fraction the numerator of which is the sum of the annual
additions to the Participant's accounts under all qualified defined
contribution plans maintained by the Employer (determined as of the
close of the Plan Year) and the denominator of which is the sum of the
lesser of the following amounts determined for such year and for each
prior year of service with the Employer:
(i) one and twenty-five hundredths (1.25) multiplied by thirty
thousand dollars ($30,000) (or such greater amount as may be
determined by the Secretary of the Treasury); or
(ii) one and four tenths (1.4) multiplied by twenty-five percent
(25%) of the Participant's total cash compensation for such
Plan Year.
For purposes of determining annual additions, the limitation year
shall be the Plan Year.
All qualified defined benefit pension plans (whether or not termina-
ted) of an employer shall be treated as one (1) qualified defined
benefit pension plan for purposes of applying the limitations of
sections 415(b), (c) and (e) of the Code.
All qualified defined contribution plans (whether or not terminated)
of an employer shall be treated as one (1) qualified defined
contribution plan for purposes of applying the limitations of sections
415(b), (c) and (e) of the Code.
In the case of a group of employers which constitutes a Controlled
Group, all such employers shall be considered a single employer for
purposes of applying the limitations of section 415 of the Code.
If as a result of the allocation of Forfeitures, a reasonable error
in estimating the compensation of a Participant, a reasonable error in
determining the amount of elective deferral contributions (within the
meaning of Code section 402(g)(3)) that may be made with respect to any
individual under the limits of Code section 415, or other facts and
circumstances allowed by regulation, the annual additions limitation is
exceeded in any Plan Year, the excess annual addition shall be charged
against the Participant's Accounts in the following order of priority by
the amount required to insure compliance with this Section:
(i) the annual additions to any other qualified defined
contribution plan;
(ii) Salary Deferral Contributions which are not matchable Salary
Deferral Contributions pursuant to Section 3.01(a); and
(iii) matchable Salary Deferral Contributions pursuant to Section
3.01(a) and Matching Contributions, on a pro rata basis.
The portion of such excess which consists of Salary Deferral
Contributions shall be returned to the Participant. The portion of such
excess attributable to Matching Contributions shall be treated as a
Forfeiture for the Plan Year and shall be allocated to, and maintained
as, a suspense account under the Plan to which investment gains (or
losses) and other income is not allocated and which will be used to
reduce Employer contributions along with other Plan Forfeitures in
accordance with Section 8.02. In addition, no Employer contributions
may be made to the Plan until any excess maintained in a suspense
account is exhausted.
Notwithstanding any provision of the Plan to the contrary, if, in any
limitation year, the sum of the defined benefit fraction and the defined
contribution fraction exceed one (1.0), then the rate of the annual
addition for any Participant shall be automatically reduced to the level
necessary to prevent the limitations of this Section from being exceeded
with respect to such Participant.
4.05 Application of Contributions and Forfeitures Among Employers.
The Sponsor and all such Adopting Employers shall be considered to be
the same Employer for purposes of crediting Employer contributions and
applying Forfeitures.
4.06 Fair Market Value.
The Plan Administrator shall cause to be determined the fair market
value of all assets held by the Trustee in the Trust hereunder as of
each Allocation Date.
ARTICLE 5
IN SERVICE WITHDRAWALS
5.01 Withdrawals at Age 59-1/2.
At any time on or after a Participant shall have attained age
fifty-nine and a half (59-1/2), if the Participant remains employed by the
Employer, the Participant may elect to receive a distribution of all or
part of the vested amount credited to the Account maintained on behalf
of the Participant as of the immediately preceding Allocation Date,
except such amounts attributable to Merged Plans that are subject to
additional distribution restrictions (such as transfers from a money
purchase pension plan which cannot be withdrawn before the Participant's
Normal Retirement Date). A Participant who makes such a withdrawal
shall continue to be eligible to participate in the Plan on the same
basis as any other Employee. The Committee may limit the number of
withdrawals that may be requested in a uniform and nondiscriminatory
manner during any Plan Year.
5.02 Withdrawals from Participants' Personal Accounts.
While a Participant or a Retired Participant is in the Service of the
Employer, he shall be permitted to withdraw as soon as practicable
following his request (i) all or part of Part II of his Personal Account
(attributable to Rollover Contributions) or (ii) Part III of his
Personal Account attributable to after-tax contributions made under a
Merged Plan. The Committee may limit the number of withdrawals that may
be requested in a uniform and nondiscriminatory manner during any Plan
Year.
5.03 Hardship Withdrawals.
While a Participant or a Retired Participant is in the Service of the
Employer, he shall be permitted to withdraw the contributions to Part I
of his Personal Account (attributable to Salary Deferral Contributions)
to the extent necessary to satisfy an immediate and heavy financial need
arising from a hardship. The Committee shall determine whether an
emergency financial hardship has been proven by the Participant in
accordance with regulations issued by the Secretary of the Treasury
pursuant to section 401(k) of the Code and the Secretary of the U.S.
Department of Labor pursuant to ERISA section 408. The Committee may
limit the number of withdrawals that may be requested in a uniform and
nondiscriminatory manner during any Plan Year.
The determination of whether a Participant or a Retired Participant
has an immediate and heavy financial need and no other resources
available to satisfy such need shall be made in accordance with the
following conditions.
(a) Financial Need Test. The immediate and heavy financial needs
for which a hardship withdrawal may be granted shall be
limited to the following:
(1) Expenses for medical care described in Code section 213(d)
previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in
Code section 152) or necessary for these persons to obtain
medical care described in Code section 213(d);
(2) Costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) Payment of tuition and related education fees for the next
twelve (12) months of post-secondary education for the
Participant, or the Participant's spouse, children, or
dependents (as defined in Code section 152);
(4) Payments necessary to prevent the eviction of the Participant
from the Participant's principal residence or foreclosure on
the mortgage on that residence; or
(5) Other expenses which the Commissioner of the Internal Revenue
Service indicates will be deemed to be made on account of such
need.
The amount of any hardship withdrawal granted pursuant to this Section
5.03 shall be limited to the lesser of:
(6) the actual amount of the Salary Deferral Contributions made to
Part I of the Participant's or former Participant's Personal
Account, without regard to income allocable thereto, less the
amount of Salary Deferral Contributions previously withdrawn;
and
(7) the amount required to relieve the financial need plus amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the hardship
distribution.
(b) Resources Test. To qualify for a hardship withdrawal pursuant
to Section 5.03(a), the Participant or Retired Participant
must certify that the financial need giving rise to the
hardship cannot be met from other resources that are
reasonably available to the participant, such as:
(1) insurance reimbursement;
(2) liquidation of assets, including those of the spouse and minor
children of the Participant;
(3) cessation of contributions to the Plan;
(4) other plan distributions or commercial loans.
5.04 Loans to Participants.
Participant loans shall not be allowed under the Plan, except as
provided in Article 13.
ARTICLE 6
GENERAL BENEFIT PROVISIONS
6.01 Form of Benefit Payment.
The only form of payment under the Plan shall be a lump sum payment
of the Participant's entire vested Account; provided, however, that
additional forms of payment may apply with regards to Participants who
are covered by the Merged Plan provisions described in Article 13.
6.02 Time of Payment.
A Participant may elect to receive distribution of his vested Account
as soon as practicable following termination of Service; provided,
however, that unless the Participant elects to delay such distribution,
the distribution shall begin no later than the sixtieth (60th) day after
the close of the Plan Year in which the latest of the following events
occurs:
(a) the date the Participant attains sixty-five (65) years of age;
(b) the date which is the tenth (10th) anniversary of the first
(1st) day of the Plan Year in which the Participant commenced
participation in the Plan; or
(c) the date the Participant terminates Service with the Employer.
If the amount of the payment required to commence on the date
determined under this Section cannot be ascertained by such date, or if
it is not possible to make such payment on such date because the Plan
Administrator has been unable to locate the Participant after making
reasonable efforts to do so, then a payment retroactive to such date may
be made no later than sixty (60) days after the earliest date on which
the amount can be ascertained under the Plan or the date on which the
Participant is located (whichever is applicable).
A Participant's election to receive a distribution before his sixty-fifth
(65th) birthday must be in writing, in such form as the Plan
Administrator shall uniformly and nondiscriminatorily require, and may
be submitted at any time during the ninety (90) day period preceding the
date the amount is paid and following the date which the Participant is
provided with information concerning the Participant's right, if any, to
defer payment of his benefit. Such notice shall be provided at least
thirty (30) and no more than ninety (90) days before the date described
in the preceding sentence. Such distribution may commence less than
thirty (30) days after the notice required under section 1.411(a)-11(c)
of the Income Tax Regulations is given, provided that:
(d) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least thirty
(30) days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if applicable,
a particular distribution option), and
(e) the Participant, after receiving the notice, affirmatively
elects a distribution.
6.03 Special Commencement and Distribution of Benefits Rule.
Notwithstanding any other provisions of the Plan, but in addition to
such provisions (as applicable), the distribution shall comply with the
requirements contained in this Section.
(a) General Rules.
(1) The requirements of this Section shall apply to any
distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
(2) All distributions required under this Section shall be
determined and made in accordance with any applicable
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 proposed regulations.
(b) Required Beginning Date. The entire interest of a Participant
must be distributed or begin to be distributed no later than
the Participant's required beginning date. The consent of the
Participant or of the Participant's Spouse or Beneficiary
shall not be required to make a distribution required under
this Section.
"Required beginning date" shall be determined in accordance with
the following:
(1) Non-five-percent (5%) owners. The required beginning date of
a Participant who is not a "five-percent (5%) owner" (as
defined in (2) below) is the first day of April of the
calendar year following the calendar year in which the later
of retirement and attainment of age seventy and one-half
(70-1/2) occurs.
(2) Five-percent (5%) owners. The required beginning date of a
Participant who is a five-percent (5%) owner is the first day
of April following the later of:
(A) the calendar year in which the Participant attains
age seventy and one-half (70-1/2), and
(B) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant
becomes a five-percent (5%) owner, and the calendar
year in which the Participant retires.
A Participant is treated as a five-percent (5%) owner for
purposes of this subsection (b) if such Participant is a
five-percent (5%) owner as defined in section 416(i) of the Code
(determined in accordance with section 416 but without regard
to whether the Plan is top-heavy) at any time during the Plan
Year ending with or within the calendar year in which such
owner attains age sixty-six and one-half (66-1/2) or any
subsequent Plan Year.
(3) Once distributions have begun to a five-percent (5%) owner
under this Section, those distributions must continue even if
the Participant ceases to be a five-percent (5%) owner in a
subsequent year.
(c) Duration of Benefits. Benefits to a Participant shall be
distributed, beginning not later than the required beginning
date set forth in subsection (b) in accordance with
regulations, for a period not exceeding the life of such
Participant or, if applicable, the joint lives of such
Participant and his Beneficiary, or over the life expectancy
of such Participant or, if applicable, the joint life
expectancies of the Participant and his Beneficiary. For
purposes of this Section, "life expectancy" shall mean 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,
reduced by one (1) for each calendar year which has elapsed
since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life
expectancy shall be the life expectancy as so recalculated.
The applicable calendar year shall be the first distribution
calendar year, and if life expectancy is being recalculated
such succeeding calendar year. If annuity payments commence
before the required beginning date, the applicable calendar
year is the year such payments commence. Life expectancy and
joint and last survivor expectancy are computed by use of the
expected return multiples in Tables V and VI of section 1.72-9
of the Treasury Regulations.
(d) Minimum Amount to be Distributed Each Year. If the
Participant's interest is to be distributed in other than a
single sum, the following distribution rules shall apply on or
after the required beginning date.
(1) 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 (i) the applicable life
expectancy as described in Section 6.03(c) or (ii) if the
Participant's Spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in
Q&A-4 of section 1.401(a)(9)-2 of the proposed regulations.
(2) The minimum distribution required for the Participant's first
distribution calendar year must 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, must be made on or
before December 31 of that distribution calendar year.
(3) Distribution calendar year. For purposes of this Section, the
term "distribution calendar year" means 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 pursuant to Section 6.03(e) below.
(e) Death distribution provisions.
(1) Distribution Beginning Before Death. If the Participant dies
after distribution of his or her interest has begun, 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.
(2) Distribution Beginning After Death. If the Participant dies
before distribution of his or her interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the
extent that an election is made to receive distributions in
accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is
payable to a designated Beneficiary, distributions
may be made over the life or over a period certain
not greater than the life expectancy of the
designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the
Participant died;
(ii) if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are
required to begin in accordance with (i) above
shall not be earlier than the later of (1) December
31 of the calendar year immediately following the
calendar year in which the Participant died and (2)
December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this
subsection (e)(2) by the time of his or her 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 anniversary of the date of death
of the Participant. If the Participant has no designated
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 anniversary of the
Participant's death.
(3) For purposes of subsection (e)(2) above, if the surviving
Spouse dies after the Participant, but before payments to such
Spouse begin, the provisions of subsection (e)(2), with the
exception of paragraph (ii) therein, shall be applied as if
the surviving Spouse were the Participant.
(4) For the purposes of this subsection (e), distributions of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if subsection
(e)(3) above is applicable, the date distribution is required
to begin to the surviving Spouse pursuant to subsection (e)(2)
above). If distribution in the form of an annuity irrevocably
commences to the Participant before the required beginning
date, the date distribution is considered to begin is the date
distribution actually commences.
(f) Limitations on Distribution of Salary Deferrals.
Notwithstanding anything expressed or implied to the contrary
elsewhere in this Plan, amounts attributable to Salary Deferral
Contributions pursuant to Section 3.02(a) hereof shall not be
distributed earlier than upon the occurrence of one of the
following events:
(i) the employee's retirement, death, Disability, or termination
of Service;
(ii) the termination of the Plan without the establishment of a
successor plan;
(iii) the date of the sale or other disposition by the Employer
of substantially all of the assets used by such corporation
in a trade or business of the Employer with respect to an
Employee who continues employment with the corporation
acquiring such assets;
(iv) with regard to an Employee who continues employment with such
subsidiary, the date of the sale or other disposition by the
Employer of such corporation's interest in a subsidiary;
(v) with regard to distributions of Salary Deferral Contributions
only, the Participant's or former Participant's hardship, as
defined in Section 5.03 hereof.
6.04 Single Sum Distribution of Small Benefits.
In the event that a Retired Participant or Beneficiary shall become
entitled to receive any benefit under the Plan, and the value of the
nonforfeitable benefit attributable to Employer and Employee
contributions is not greater than (or at the time of any prior
distribution was not greater than) three thousand five hundred dollars
($3,500), such benefit shall be paid to such person in a single sum
before the end of the second Plan Year following the Plan Year during
which the Participant ceases to participate in the Plan.
Payment under this Section shall be in lieu of the form of benefit
otherwise payable under any provision of this Plan.
6.05 Designation of Beneficiary.
Subject to the rights of a surviving Spouse described herein, each
Participant or Retired Participant shall have the right to designate the
Beneficiary to receive the death benefit on his behalf, and to revoke
any such designation. Each such designation, or revocation thereof,
shall be evidenced by a written instrument filed with the Plan
Administrator and signed by the Participant or Retired Participant.
Unless the conditions which follow for the designation of a Beneficiary
other than the Spouse are satisfied, the Beneficiary of a Participant or
Retired Participant who is married on the date of his death shall be the
surviving Spouse, whether or not so designated in the written instrument
filed with the Plan Administrator and even if no such instrument is
filed. Designation of a Beneficiary other than the Spouse shall be
valid only if either:
(a) the Spouse consents in writing to such designation,
acknowledging the effect thereof, witnessed by a notary public
or Plan representative;
(b) the Retired Participant or Participant, although married at
the time of the designation, is ultimately not survived by his
Spouse; or
(c) the surviving Spouse cannot be located.
Such spousal consent obtained pursuant to (a) shall be irrevocable.
If the Participant or Retired Participant is survived by a Spouse
other than the Spouse who consented to designation of another as
Beneficiary, the consent of the former Spouse shall be ineffective.
If no designation of Beneficiary is on file with the Plan
Administrator at the time of the death of a Participant or Retired
Participant, or if such designation is not effective for any
reason, and if there is no surviving Spouse, the death benefit
shall be payable to the estate of the Participant or Retired
Participant (which shall be conclusively deemed to be the
Beneficiary designated to receive such death benefit).
6.06 Eligible Rollover Distributions.
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
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. Provided, however, that direct
rollovers are not permitted for amounts under two hundred dollars
($200).
(a) Eligible rollover distribution. An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the
Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible retirement plan. An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, 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.
(c) Distributee. A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving Spouse and the Employee's or former Employee's
Spouse 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.
(d) Direct rollover. A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
6.07 Optional Forms of Benefits Under Merged Plans.
In no event shall any Participant who was a participant of a Merged
Plan be precluded from electing an optional form of payment or feature
that is a protected benefit pursuant to Reg. Section 1.411(d)(4) offered under
the applicable Merged Plan for the payment of the Participant's vested
Account balance under the Plan.
6.08 Purchase of Annuities.
If Merged Plan benefits are to be paid in the form of an annuity for
the life of the Participant or the joint lives of the Participant and
his Beneficiary, then the Trustee shall purchase such annuity contracts
from a life insurance company licensed to do business in the state in
which the Sponsor maintains offices, utilizing for such purchase the
entire amount in the Accounts of the Participant. Any annuity contract
which is purchased hereunder to provide benefits otherwise payable under
the Plan, and which is distributed to a former Participant or
Beneficiary, shall be endorsed as "nontransferable." The terms of any
annuity contract purchased and distributed by the Plan to a Participant
or Spouse shall comply with the requirements of this Plan. If Merged
Plan benefits are to be paid in the form of installments, then the
Committee may purchase an installment annuity contract from a life
insurance company in accordance with the provisions above applicable to
life annuity purchases.
6.09 Failure to Locate.
If the Participant or Beneficiary to whom benefits are to be
distributed cannot be located, and reasonable efforts have been made to
find him, including sending notification by certified or registered mail
to his last known address, then the Plan Administrator shall consider
the balances in the Participant's Account forfeited, and such amounts
shall be applied in accordance with Section 8.02. In the event that
such Participant or Beneficiary is subsequently located, the balance in
his Account at the time of forfeiture shall be reinstated and
distributed to him.
ARTICLE 7
RETIREMENT, DEATH AND DISABILITY BENEFITS
7.01 Benefits Upon Retirement.
As of his Normal Retirement Date or his Early Retirement Date, a
Participant may retire from Service or he may elect to continue in
Service. If such a Participant continues in Service, then he shall
continue to be treated in all respects as a Participant until his actual
retirement. Except as provided in Section 6.03 hereof, no retirement
benefit shall be payable until his actual retirement, unless the
Participant elects an in-service withdrawal pursuant to Article 5.
The Participant who retires pursuant to this Section 7.01 shall be
entitled to a retirement benefit equal to one hundred percent (100%) of
the value of both his Employer Account and his Personal Account
determined on the Allocation Date coincident with or immediately
preceding his retirement, increased by any contributions allocated after
such Allocation Date, and reduced by any payments or withdrawals made
from such Accounts since such preceding Allocation Date. Such benefit
shall be subject to the general benefit payment provisions of Article 6
hereof; provided, however, that upon the Participant's request, the
commencement date of any benefits payable to a Participant shall be as
soon as practicable following his retirement date.
Upon attainment of Normal Retirement Age, a Participant shall be one
hundred percent (100%) vested in the value of his Accounts.
7.02 Death Benefits.
In the event of the death of a Participant or Retired Participant
prior to the complete distribution of his Accounts, the amount of the
death benefit on his behalf shall be one hundred percent (100%) of both
his Employer Account and Personal Account, determined on the Allocation
Date coincident with or immediately preceding the date of his death,
increased by any contributions allocated after such Allocation Date, and
reduced by any payments or withdrawals made from such Accounts since
such preceding Allocation Date. However, the death benefit to be
distributed from the Employer Account of a Retired Participant whose
participation in the Plan terminated before the date of his death (other
than a disabled Participant pursuant to Section 7.03 hereof) shall be
determined by application of the vested percentage described in Section
8.01 hereof.
The death benefit shall be subject to the general benefit provisions
of Article 6 hereof. The benefit shall be paid in a single sum, or in
such other optional form as may be elected by the Participant or
Beneficiary, as the case may be, under Section 6.01 hereof, to the
designated Beneficiary of the deceased Participant as soon as
practicable after the last day of the Plan Year during which such death
occurs; provided, however, that upon the Beneficiary's request, the
commencement date of any benefits payable to a Beneficiary shall be as
soon as practicable following the date such death occurs.
7.03 Disability Benefits.
In the event the Committee determines that a Participant incurs
Disability while still an Employee, such Participant shall be entitled
to one hundred percent (100%) of both his Employer Account and Personal
Account, determined on the Allocation Date coincident with or
immediately preceding the date of his Disability, increased by any
contributions allocated after such Allocation Date, and reduced by any
payments or withdrawals made from such Accounts since such preceding
Allocation Date.
Any benefits due a disabled Participant from his Employer Account and
his Personal Account shall be paid or applied for his benefit subject to
the general benefit provisions of Article 6 hereof; provided, however,
that, if the Participant so elects, the commencement date of any
benefits payable to such a Participant may be as soon as practicable
following the date such Disability occurs and prior to the Participant's
Normal Retirement Date.
In the event of the death of the Participant subsequent to the date
his Disability occurred and prior to the commencement of his disability
benefits hereunder, the amount payable on behalf of such Participant
shall be paid as a death benefit as provided otherwise in this article.
ARTICLE 8
TERMINATION BENEFITS
8.01 Benefits Upon Termination of Service.
A Participant whose Service terminates for reasons other than
retirement on or after his Normal Retirement Date, death or Disability
shall be entitled to (i) a vested percentage, determined at the date his
Service terminates, of Part I of his Employer Account (Matching
Account), (ii) one hundred percent (100%) of Part II of his Employer
Account (QMAC Account) and (iii) one hundred percent (100%) of his
Personal Account. The vested percentage of any Accounts established
under Part III of his Employer Account attributable to a Merged Plan
shall be determined pursuant to Article 13. Such Accounts will be
determined as of the Allocation Date coincident with or immediately
preceding the date the Participant's Service terminates, increased by
any contributions allocated after such Allocation Date, and reduced by
any payments or withdrawals made from the Accounts since such preceding
Allocation Date.
The vested percentage of the Matching Account of a Participant shall
be determined from the following schedule:
Years of Vested
Vesting Service Percentage
__________________ ________________
Less than 5 0%
5 or more 100%
Provided, however, that the vested percentage shall be one hundred
percent (100%) for a Participant on and after his Normal Retirement Age.
8.02 Forfeitures.
The portion of a former Participant's Employer Account in which he
does not have a nonforfeitable interest shall be treated as a Forfeiture
as of the earlier of the following dates:
(a) the date the Participant is paid the entire vested amount of
such Account, or
(b) the date the Participant incurs five (5) consecutive Breaks in
Service.
Forfeitures arising under this Section 8.02 or any other provision
of this Plan shall be first applied to reinstate previously forfeited
Accounts of former Participants which are required to be reestablished
pursuant to Section 6.09 and this Section 8.02. Any additional
Forfeitures shall be applied as a credit against Employer contributions
otherwise due in accordance with the provisions of Section 4.01 hereof.
For purposes of the Section, if the value of an Employee's vested
Account balance is zero, the former Participant shall be deemed to have
received a distribution of such vested Account balance and the Employer
Account shall be treated as a Forfeiture as of the date such Employee
terminates Service.
If a former Participant receives or is deemed to have received a
distribution from his Employer Account due to termination of
participation in the Plan, no later than the close of the second Plan
Year following the Plan Year during which he ceases to be a Participant,
which distribution is:
(a) equal to his vested Employer Account, but less than one
hundred percent (100%) of such Account, and
(b) in an amount not exceeding thirty-five hundred dollars
($3,500) or, if greater, which the Participant elected to
receive,
and he subsequently resumes Service before he incurs five (5)
consecutive Breaks in Service, he may repay such distribution to the
Plan. Such repayment must be made before the earlier of the date the
Participant incurs five (5) consecutive Breaks in Service and the fifth
anniversary of the date of the Participant's resumption of Service
following the Break in Service. In the event of such repayment, the
amount of the Participant's Employer Account at the date of the
distribution shall be reestablished.
8.03 Payment of Benefits.
Any amounts due a Retired Participant pursuant to this article
shall be paid or applied for his benefit in accordance with the general
benefit provisions of Article 6 hereof; provided, however, that upon the
Participant's request, the commencement date of any benefits payable to
a Participant shall be as soon as practicable following the date his
Service terminates and before his Normal Retirement Date.
In the event of the death of the Participant subsequent to the date
his Service terminates and prior to the commencement of his benefits,
the amount payable on behalf of such Participant shall be paid as
provided in Article 7 hereof.
ARTICLE 9
THE COMMITTEE
9.01 Plan Administrator and Appointment of Committee.
The Sponsor shall be the Plan Administrator of the Plan. The Board
of Directors of the Sponsor may appoint a Committee consisting of not
less than three (3) persons to assist the Plan Administrator and to
carry out the day to day administrative functions of the Plan as the
Plan Administrator may delegate to the Committee and as the Plan shall
specifically provide. Members of the Committee shall serve without
compensation, but the reasonable expenses of the Committee in
discharging its responsibilities shall be borne by the Sponsor. Any
member of the Committee may at any time be removed, with or without
cause, and his successor appointed by the Chief Executive Officer of the
Sponsor and any vacancy caused by death, resignation or other reason
shall be filled by the Chief Executive Officer of the Sponsor.
The Sponsor will notify the Trustee in writing of the names of the
members of the Committee and of any changes in Committee membership that
may transpire from time to time.
9.02 Powers and Duties of the Plan Administrator.
The Plan Administrator shall administer and supervise the operation
of the Plan in accordance with the terms and provisions of the Plan.
The Plan Administrator shall have all power and authority
(including discretion with respect to the exercise of that power
and authority) necessary, properly advisable, desirable or
convenient for the performance of its duties, which duties shall
include, but not be limited to, the following:
(a) to construe the Plan in good faith;
(b) to determine eligibility of Employees for participation in the
Plan, and to notify Employees of their eligibility and the
requirements for such participation;
(c) to determine and certify eligibility for benefits under the
Plan, and to direct the Trustee concerning the amount, manner
and time of the payment of such benefits and any annuity
contracts to be purchased on behalf of Participants, Retired
Participants and Beneficiaries;
(d) to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information
explaining the Plan;
(e) to require a Participant to complete and file with the Plan
Administrator an application for a benefit and all other forms
approved by the Plan Administrator, and to require that the
Participant furnish all pertinent information requested by the
Plan Administrator, which information may be relied upon by
the Plan Administrator;
(f) to cause the allocations of contributions to the Plan and
investment earnings (or losses) to be made as of each
Allocation Date;
(g) to adopt such rules as it deems necessary, desirable or
appropriate for the administration of the Plan, provided such
rules are consistent with the terms and provisions of the
Plan; all rules and decisions of the Plan Administrator shall
be uniformly and consistently applied to all Participants in
similar circumstances;
(h) to appoint such agents as it may need in the performance of
its duties; and
(i) to receive and review the reports from the Trustee and other
agents.
9.03 Plan Administrator Procedures.
The Plan Administrator may adopt such procedures and regulations as
it deems desirable for the administration of the Plan. Such procedures
and regulations shall be nondiscriminatory and shall to the extent
feasible be maintained in writing.
9.04 Claims and Review Procedures.
The Plan Administrator shall establish reasonable procedures
concerning the filing of claims for benefits hereunder and shall
administer such procedures uniformly. If a claim is wholly or partially
denied, the Plan Administrator shall furnish the claimant, within a
reasonable period of time after receipt of the claim by the Plan
Administrator, a notice of such denial, setting forth at least the
following information in language calculated to be understood by the
claimant:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on which the
denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
(d) an explanation of the claims review procedure in the Plan.
Upon receipt of such a notice of denial, or if such a notice is not
furnished but the claim has not been granted within sixty (60) days of
its filing, the claimant or his duly authorized representative may
appeal to the Plan Administrator for a full and fair review.
In submitting a request for review, the claimant or his duly
authorized representative may request a review upon written application
to the Plan Administrator, may review pertinent documents, and may
submit comments in writing. Such request for review must be made within
sixty (60) days of the receipt by the claimant of the notice of denial
(or within sixty (60) days of the expiry of the sixty (60) day period
beginning with the date of the filing of the claim, if no such notice is
received during such period).
The Plan Administrator shall respond promptly to a request for
review and shall deliver a written decision which shall include, in a
manner calculated to be understood by the claimant, the decision itself,
specific reasons therefor and specific references to the pertinent Plan
provisions on which the decision is based. The decision shall be made
not later than one hundred twenty (120) days after receipt of a request
for review.
Any decision by the Plan Administrator shall be conclusive and
binding upon all persons, subject to the claims review procedure
described in this Section 9.04 and subject to judicial review where it
is shown by clear and convincing evidence that the Plan Administrator
acted in an arbitrary and capricious manner.
9.05 Election Procedures.
Whenever an election or any other type of action is required to be
communicated to the Plan Administrator in writing or on a form
designated by the Plan Administrator, the communication may be in any
other form acceptable to the Plan Administrator, including by means of
a voice response unit.
ARTICLE 10
ESTABLISHMENT OF TRUST
10.01 Trust Agreement.
Contributions made by the Employer and Participants of the Plan and
all other assets of this Plan shall be held in trust under a trust
agreement. The Employer shall enter into a trust agreement with the
Trustee for the administration of the Trust which shall contain the
assets of the Plan. The Trustee shall not be responsible for the
administration of this Plan but only for the Trust established pursuant
to this Plan.
10.02 Trust Agreement Part of Plan
The trust agreement shall be deemed to be a part of this Plan, and
any rights or benefits accruing to any person under this Plan shall be
subject to all of the relevant terms and provisions of the trust
agreement, including any amendments. In addition to the powers of the
Trustee set forth in the trust agreement, the Trustee shall have any
powers, express or implied, granted to it under the Plan. In the event
of any conflict between the provisions of the trust agreement and the
provisions of the Plan, the provisions of the Plan shall control, except
for the duties and responsibilities of the Trustee, in which case the
trust agreement shall control.
ARTICLE 11
AMENDMENT AND TERMINATION OF THE PLAN
11.01 Amendment of Plan.
The Board of Directors of the Sponsor, or its designee, shall have
the right at any time, and from time to time, to modify, alter or amend
the Plan in whole or in part by instrument in writing duly executed.
Notwithstanding the foregoing, the Plan shall not be amended in the
following respects:
(a) the duties, powers and responsibilities of the Trustee shall
not be increased without the written consent of the Trustee;
(b) subject to Section 12.05 hereof, no amendment may be made to
permit any part of the funds of the Trust to be used for or
diverted to purposes other than for the exclusive benefit of
Participants, Retired Participants and their Beneficiaries or
for administration expenses of the Plan;
(c) no amendment may be made, unless it is necessary to meet the
requirements of any federal law or regulation, which shall
reduce the benefits which have accrued or the nonforfeitable
percentage applicable to any Participant, Retired Participant
or Beneficiary prior to the later of the date of adoption or
the effective date of such amendment, nor shall any amendment
to the Plan eliminate an optional form of distribution
provided under Section 6.01 hereof except as may be permitted
by federal law or regulation; and
(d) no amendment to the vesting provision in Section 8.01 hereof
shall become effective with respect to a Participant who has
completed three (3) or more years of Service as of the
expiration of the election period described below, unless such
Participant is given the opportunity, for a period of sixty
(60) days, to elect irrevocably to have his nonforfeitable
benefits computed without regard to such amendment after the
latest of:
(i) the date of adoption of the amendment,
(ii) the effective date of the amendment, and
(iii) the date written notification of the amendment is
furnished such Participant.
An executed copy of any amendment to the Plan shall be furnished
the Trustee as soon as practicable after the date of adoption thereof.
11.02 Intent to Continue the Plan.
The Employer has established the Plan with the bona fide intention
and expectation that from year to year it will make contributions as
herein provided. However, the Employer realizes that it may become
inadvisable to continue such contributions. The Employer shall have the
right to modify, suspend or discontinue contributions to the Plan at any
time and from time to time, and such action shall not be deemed to be a
termination of the Plan unless it constitutes a complete discontinuance
of Employer contributions to the Plan.
11.03 Termination or Partial Termination of the Plan by the Sponsor.
In the event the Sponsor concludes that it is impossible or
inadvisable to continue the Plan, the Board of Directors of the Sponsor
shall have the right to terminate the Plan by an appropriate action
which shall specify the date of termination. A certified copy of a
writing reflecting such action shall be delivered to the Committee and
to the Trustee, and as soon as possible thereafter the Committee shall
send or deliver to each then Participant a notice of such action.
If a determination is made that the Plan has experienced a complete
or partial termination, the Accounts of affected Participants shall
become nonforfeitable without regard to Section 8.01 hereof.
11.04 Termination of the Plan Upon Certain Events.
The Plan shall automatically terminate upon the occurrence of any
of the following events:
(a) liquidation of the Sponsor's business unless the sponsorship
of the Plan is transferred to another employer; or
(b) the merger or consolidation of the Sponsor into any other
corporation, or the sale by the Sponsor of substantially all
of its assets to any corporation or other business
organization which shall fail to adopt and continue the Plan
within ninety (90) days from the effective date of such
consolidation, merger or sale of assets.
11.05 Distribution of Trust Fund Upon Complete Termination.
Upon complete termination of the Plan, or upon complete
discontinuance of Employer contributions to the Plan, the balance in
each Participant's or Retired Participant's Accounts (after payment of
all expenses and proportional adjustment of Participants' Accounts to
reflect such expenses, investment gains or losses and reallocations to
the date of termination) shall become nonforfeitable and each
Participant, Retired Participant or Beneficiary shall be entitled to
receive any amounts then credited to his Accounts in the Trust Fund.
The Trustee may make payment of such amounts in a single sum or
annual installments, either in cash or in assets in kind of the Trust
Fund, or partly in cash and partly in assets in kind of the Trust Fund.
In no event shall any such payment in kind be made in the form of a life
annuity. Upon the distribution of all of the Trust Fund as aforesaid,
the Trustee shall be discharged from all obligations under the Trust and
no Participant, Retired Participant or Beneficiary shall have any
further rights or claim therein.
11.06 Termination of Plan With Respect to an Adopting Employer.
Each Adopting Employer reserves the right to terminate the Plan at
any time with respect to Employees of the Adopting Employer by action of
its governing body. The Adopting Employer shall also have the right to
suspend contributions to the Plan from time to time, and such suspension
of contributions shall not be deemed to be a termination of the Plan
with respect to the Employees of the Adopting Employer unless it
constitutes a complete discontinuance of Employer contributions to the
Plan.
In the event of termination of the Plan only with respect to the
Employees of the Adopting Employer, the Plan Administrator may direct
that the portion of the Trust Fund attributable to Employees of the
Adopting Employer be segregated by the Trustee into a separate fund.
The portion of the Trust Fund which is so segregated shall be
retained in a separate trust fund and applied in one of the following
methods, at the discretion of the Plan Administrator.
(a) If the Adopting Employer shall demonstrate conclusively,
within the one hundred eighty (180) day period immediately
following termination of the Plan with respect to its
Employees, that it has established a successor retirement plan
and trust for the benefit of its Employees which is qualified
under sections 401(a) and 501(a), respectively, of the Code,
then such assets shall be transferred to the successor
trustee.
(b) If the Adopting Employer shall fail, within the one hundred
eighty (180) day period immediately following termination of
the Plan with respect to its Employees, to establish a
successor retirement plan and trust which is qualified under
sections 401(a) and 501(a), respectively, of the Code, then
such assets shall be distributed for the benefit of the
Employees of the Adopting Employer in accordance with the
method described in Section 11.05 hereof.
At the discretion of the Plan Administrator, the one hundred eighty
(180) day period may be extended.
ARTICLE 12
CERTAIN PROVISIONS AFFECTING THE EMPLOYER
12.01 Duties of the Employer.
The Sponsor shall furnish the Trustee with the information required
in the Trust agreement. Each Employer shall make its contributions as
the same may be appropriated by due action, which contributions may be
in cash or in other property acceptable to the Trustee. The Employer
shall keep accurate books and records with respect to its Employees and
their compensation.
2.02 Right of Employer to Discharge Employees.
The adoption and maintenance of the Plan shall not be deemed to
constitute a contract between the Employer and any Employee, or to be a
consideration for, or an inducement or condition of, the employment of
any person.
12.03 Information to be Furnished.
Each Employer shall deliver to the Plan Administrator information
required to perform the allocations described in Article 4 hereof, in
such manner and at such time as is required by the Plan Administrator.
12.04 Communications from Sponsor to Trustee.
The Trustee may rely upon and shall be protected in acting upon any
information furnished to it by the Sponsor in writing subscribed by a
duly authorized agent of the Sponsor. Any certification by the Sponsor
of the information required or permitted to be certified to the Trustee
pursuant to the provisions of the Plan, shall, for all purposes of the
Plan, be binding upon all parties in interest.
12.05 No Reversion to Employer.
The Employer has no beneficial interest in the Trust Fund, and no
part of the Trust Fund shall ever revert or be repaid to the Employer,
directly or indirectly, except, if, and to the extent, permitted by the
Code and applicable regulations thereunder for the following:
(a) in the event that the deduction of an Employer contribution to
the Plan under section 404 of the Code is disallowed, in which
case the contribution (to the extent disallowed) shall be
returned to the Employer, upon the request of the Employer
within one (1) year after the disallowance of the deduction;
or
(b) in the event that the Employer contribution is made by mistake
of fact, in which case the amount of such mistaken
contribution shall be returned to the Employer provided no
more than one (1) year has elapsed since the date of payment
by the Employer of the mistaken contribution.
12.06 Indemnification by Sponsor.
To the extent permitted by law the Sponsor shall indemnify from any
loss or expense the Plan Administrator, any individual member of the
Committee, or any individual serving as Trustee, in connection with the
good faith discharge of duties under the Plan.
12.07 Adoption of Plan by Adopting Employers.
Notwithstanding anything herein to the contrary, with the
authorization of the Board of Directors of the Sponsor or its designee,
any corporation or entity affiliated with the Sponsor through complete
or partial ownership by the Sponsor or by any owner thereof or which is
otherwise cooperating with the Sponsor for purposes of establishing a
retirement plan may adopt the Plan as an Adopting Employer in a manner
satisfactory to the Board of Directors of the Sponsor. Subject to the
provisions of Code section 413(c), each Adopting Employer's
participation in the Plan shall constitute a single plan, within the
meaning of the regulations under section 414(l) of the Code, with the
participation in the Plan of the Sponsor and/or other Adopting
Employers.
An Adopting Employer may terminate participation in the Plan at any
time with respect to Employees of the Adopting Employer by action of its
Board of Directors as provided in Section 11.06 hereof.
ARTICLE 13
SPECIAL MERGED PLAN ISSUES
13.01 Generally.
The purpose of this Article is to provide for the merger of the
certain plans into this Plan, and to specify the terms under which
participants of such plans will participate in this Plan. The rules
described in this Article shall override any other provisions of the
Plan.
13.02 Parisian Retirement and Savings Plan.
Parisian, Inc. ("Parisian") and certain of its affiliates
("Parisian Affiliates") will adopt this Plan and become adopting
Employers under this Plan effective as of February 1, 1997, for the
benefit of their eligible employees, and the Parisian Retirement and
Savings Plan (the "Parisian Plan") will be merged into this Plan as
described below.
(a) Participation. Effective as of February 1, 1997, this Plan
will be extended to each individual employed by Parisian or a
Parisian Affiliate on February 1, 1997, and who was eligible
to participate in the Parisian Plan on that date (each an
"Eligible Employee"). An individual's employment with
Parisian or a Parisian Affiliate prior to February 1, 1997
will be treated as employment with an Employer under this
Plan. Employment with any other organization prior to
February 1, 1997 that was counted under the Parisian Plan will
also be treated as employment with an Employer under this
Plan. February 1, 1997 will be a special Entry Date for
purposes of this Plan, and each Eligible Employee of Parisian
or a Parisian Affiliate on February 1, 1997 will automatically
become a Participant in this Plan as of that date. Each
Employee of Parisian or a Parisian Affiliate who either is
hired after that date or first satisfies the age and service
requirements of Section 2.01 after that date will become a
Participant in this Plan as described in Article 2.
(b) Merger of Plans. The Parisian Plan will be merged into this
Plan as of January 31, 1997 (the "Merger Date") and continued
in the form of this Plan. The merger of the Parisian Plan
into this Plan and the resulting transfer of assets will be
made in accordance with sections 401(a)(12) and 414(l) of the
Code and the regulations thereunder.
(c) Transfer of Assets. The assets of the Trust Fund for the
Parisian Plan will be transferred to the Trustee of this Plan
on or as soon as practicable after the Merger Date.
(d) Transfer of Account Balances. All Accounts maintained under
the Parisian Plan on January 31, 1997 for Participants and
Beneficiaries of the Parisian Plan will be adjusted as of that
date in accordance with the provisions of the Parisian Plan.
The net credit balances in such Accounts as adjusted as of
January 31, 1997 will be transferred to this Plan and credited
as of the Merger Date in such manner as the Committee shall
determine. In addition, the Accounts of any former
Participants of the Parisian Plan which are required to be
restored after January 31, 1997, shall be credited in the same
manner as described in the preceding sentence.
(e) Vesting of Transferred Accounts. The accounts transferred
from the Parisian Plan attributable to "Elective Deferrals,"
"Qualified Matching Contributions," "Qualified Nonelective
Contributions," "Rollover Contributions" and "Thrift
Contributions" shall be one hundred percent (100%) vested at
all times. The accounts transferred from the Parisian Plan
attributable to "Employer Contributions" shall be subject to
the vesting schedule of Section 8.01, that applies to the
Matching Account.
(f) Distribution of Account Balances. Any Participant or
Beneficiary who has a transferred account established under
Section 13.02(d) shall be allowed to elect distribution of his
vested Account under the Plan in such manner or form as they
could have elected under the terms of the Parisian Plan as in
effect immediately prior to the Merger Date.
(g) Loans. Because loans are not permitted under this Plan, no
Participant subject to the provisions of this Section may
receive a new loan or an extension of an existing loan on or
after the Merger Date. Notwithstanding the next preceding
sentence, any loans that had previously been made to
Participants under the Parisian Plan and that remain
outstanding on the Merger Date will be maintained on and after
that date under this Plan until all amounts of principal and
interest thereon have been repaid, or, in the event of
default, recovered, pursuant to the terms of the documents
evidencing such loans and the provisions of the Participant
loan program established under the Parisian Plan.
(h) Insurance Policies. This Plan does not permit any Account to
be applied to purchase an insurance policy. However, this
Plan shall permit the transfer of certain insurance policies
from the Parisian Plan. Such insurance policies shall be
liquidated as soon after such transfer as administratively
feasible.
(i) Matching Contributions. The Matching Contribution for 1997
that is made pursuant to Sections 3.01(a) and 4.01(b) on
behalf of each Participant who was a participant in the
Parisian Plan during the month of January 1997, shall be based
upon that Participant's Compensation as defined in
Section 1.08 for the full calendar year of 1997 and shall be
based on all Salary Deferral Contributions made under this
Plan and "Elective Deferrals" made under the Parisian Plan for
calendar year 1997.
13.03 Younkers Associate Profit Sharing and Savings Plan.
Younkers, Inc. ("Younkers") and certain of its affiliates
("Younkers Affiliates") will adopt this Plan and become Adopting
Employers under this Plan effective as of February 1, 1997, for the
benefit of their eligible employees, and the Younkers Associate Profit
Sharing and Savings Plan (the "Younkers Plan") will be merged into this
Plan as described below.
(a) Participation. Effective as of February 1, 1997, this Plan
will be extended to each individual employed by Younkers or a
Younkers Affiliate on February 1, 1997, and who was eligible
to participate in the Younkers Plan on that date (each an
"Eligible Employee"). An individual's employment with
Younkers or a Younkers Affiliate prior to February 1, 1997
will be treated as employment with an Employer under this
Plan. Employment with any other organization prior to
February 1, 1997 that was counted under the Younkers Plan
(specifically including employment with Shoe Corporation of
America for Employees who became Younkers Employees in 1996)
will also be treated as employment with an Employer under this
Plan. February 1, 1997 will be a special Entry Date for
purposes of this Plan, and each Eligible Employee of Younkers
or a Younkers Affiliate on February 1, 1997 will automatically
become a Participant in this Plan as of that date. Each
Employee of Younkers or a Younkers Affiliate who either is
hired after that date or first satisfies the age and service
requirements of Section 2.01 after that date will become a
Participant in this Plan as described in Article 2.
(b) Merger of Plans. The Younkers Plan will be merged into this
Plan as of January 31, 1997 (the "Merger Date") and continued
in the form of this Plan. The merger of the Younkers Plan
into this Plan and the resulting transfer of assets will be
made in accordance with sections 401(a)(12) and 414(l) of the
Code and the regulations thereunder.
(c) Transfer of Assets. The assets of the Trust Fund for the
Younkers Plan will be transferred to the Trustee of this Plan
on or as soon as practicable after the Merger Date.
(d) Transfer of Account Balances. All Accounts maintained under
the Younkers Plan on January 31, 1997 for Participants and
Beneficiaries of the Younkers Plan will be adjusted as of that
date in accordance with the provisions of the Younkers Plan.
The net credit balances in such Accounts as adjusted as of
January 31, 1997 will be transferred to this Plan and credited
as of the Merger Date in such manner as the Committee shall
determine. In addition, the Accounts of any former
Participants of the Younkers Plan which are required to be
restored after January 31, 1997, shall be credited in the same
manner as described in the preceding sentence.
(e) Vesting of Transferred Accounts. The accounts transferred
from the Younkers Plan attributable to "Salary Deferral
Contributions," "Matching Contributions," "Rollover
Contributions" and "Participant Voluntary Contributions" shall
be one hundred percent (100%) vested at all times. The
accounts transferred from the Younkers Plan attributable to
"Profit Sharing Contributions" shall be vested at the greater
of (i) the vesting percentage under the Younkers Plan as of
January 31, 1997, and (ii) the vesting percentage that applies
to Matching Contributions under Section 8.01 of this Plan.
(f) Distribution of Account Balances. Any Participant or
Beneficiary who has a transferred account established under
subsection 13.03(d) shall be allowed to elect distribution of
his vested Account under the Plan in such manner or form as
they could have elected under the terms of the Younkers Plan
as in effect immediately prior to the Merger Date. The
installment option will be available for all accounts of such
Participants. Terminated or retired Participants in the
Younkers Plan on the Merger Date with Accounts that are
transferred to this Plan shall have the further option of
electing partial lump sums at the times and in the amounts
selected by said Participant. The Committee may establish
rules for the payment of such partial lump sums, and may
direct that expenses associated with the payment of such
partial lump sums be charged against the Accounts of said
Participants.
(g) Reimbursement of Surrender Charges and Market Value
Adjustments. The Employer is expressly permitted to make a
contribution to the Plan to reimburse the Accounts of
Participants which were charged with a surrender charge or
market value adjustment as a result of the liquidation of
assets immediately prior to the plan merger. Such
contribution, if made, shall be credited to the Accounts of
affected Participants in proportion to the surrender charge or
market value adjustment that was charged to their Account, and
shall be treated as a reimbursement of expenses and not as an
Employer contribution for purposes of the Plan.
(h) Exemption from Excluded Class. Notwithstanding the provisions
of Section 2.01 hereof, Eligible Employees as defined in
subsection (a) above who are represented by a collective
bargaining unit on the Merger Date shall not be considered as
being in an excluded class solely as a result of being
represented by a collective bargaining unit.
(i) Amounts Available for Hardship. The transferred Matching
Account shall be included in the determination of amounts
available for hardship withdrawal pursuant to Section 5.03
hereof.
ARTICLE 14
PROVISIONS APPLICABLE TO A TOP HEAVY PLAN
14.01 Top Heavy Plans.
The provisions of this article are designed to meet the
requirements of section 416 of the Code and shall automatically
supersede any conflicting provisions in the Plan in every Plan Year in
which this Plan is or becomes a Top Heavy Plan. Provided, however, that
if the provisions of this article are in conflict with final regulations
issued by the Secretary of the Treasury with respect to Top Heavy Plans,
then such final regulations shall supersede the provisions of this
article to the extent not otherwise specifically prohibited by law.
14.02 Definitions.
For purposes of this article, and only this article, unless a term
defined in this article is the subject of explicit reference elsewhere
in the Plan, the following terms when used herein, unless the context
clearly indicates otherwise, shall have the meanings set forth
hereinafter:
(a) "Compensation" shall mean, for each Employee, Compensation as
that term is defined in Section 4.04 of the Plan, plus, for
1997, amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludible from the employee's
gross income under section 125, section 402(e)(3), section
402(h)(1)(B) or section 403(b) of the Code. However,
"Compensation" shall not include compensation in excess of the
applicable dollar limits in Section 1.08(c) hereof.
(b) "Determination Date" shall mean, with respect to any Plan Year
subsequent to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of the Plan, the
Determination Date shall be the last day of such Plan Year.
(c) "Key Employee" shall mean any Employee or former Employee (or
Beneficiary of such Employee) who, at any time during the
determination period, was (i) an officer of the Employer
having an annual Compensation greater than fifty percent (50%)
of the maximum dollar limitation in effect under section
415(b)(1)(A) of the Code for any such Plan Year, (ii) an owner
of one (1) of the ten (10) largest interests in the Employer
if such interest is greater than one-half percent (1/2%) and
such individual's Compensation exceeds the maximum dollar
limitation under section 415(c)(1)(A) of the Code, (iii) a
five percent (5%) or more owner of the Employer or (iv) a one
percent (1%) or more owner of the Employer who has an annual
Compensation of more than one hundred and fifty thousand
dollars ($150,000). The term "determination period" shall
mean the Plan Year containing the Determination Date and the
four (4) preceding Plan Years. The determination of who is a
Key Employee shall be made in accordance with section
416(i)(1) of the Code and regulations thereunder. For
purposes hereof, the term "officer" shall mean an
administrative executive who is in regular and continued
service. An Employee who merely has the title of an officer,
but not the authority of an officer, is not to be considered
an officer hereunder. Furthermore, for purposes hereof, at
any time during a determination period, no more than fifty
(50) Employees of all members of a Controlled Group, or, if
lesser, the greater of three (3) individuals or ten percent
(10%) of such Employees, shall be treated as officers
hereunder. The officers subject to these preceding
limitations shall be comprised of the individual officers
selected from the group of all individuals who were officers
in the current Plan Year of the determination period or any of
the four (4) preceding Plan Years in the determination period,
who had the largest average annual compensation throughout the
total of those five (5) Plan Years in the determination
period. For purposes of (ii) herein, if two (2) employees
have the same interest in the Employer, the Employee having
the greater annual Compensation (without regard to the dollar
limitation of Section 14.02(a) hereof) from the Employer shall
be treated as having a larger interest. Likewise, for
purposes hereof, the term "owner" shall mean an individual
considered to be an owner within the meaning of section 318 of
the Code; provided, however, that subparagraph (c) of section
318(a)(2) shall be applied by substituting "5 percent" for "50
percent".
(d) "Non-Key Employee" shall mean any Employee who is not a Key
Employee.
(e) "Permissive Aggregation Group" shall mean the Required
Aggregation Group of plans plus any other plan or plans of the
Employer, as selected by the Employer, which, when considered
as a group with the Required Aggregation Group, would continue
to satisfy the requirements of sections 401(a)(4) and 410 of
the Code.
(f) "Present Value" shall mean, if the Employer also now or ever
maintains a qualified defined benefit pension plan, the
present value of a benefit based only on the interest and
mortality rates specified in that plan.
(g) "Required Aggregation Group" shall mean as follows:
(1) each qualified plan of the Employer in which at least one
(1) Key Employee participates or participated at any time
during the determination period (regardless of whether or
not the plan terminated), and
(2) any other qualified plan of the Employer which enables a
plan described in the preceding subsection (1) to meet
the requirements of sections 401(a)(4) or 410 of the
Code.
(h) "Super Top Heavy Plan" shall mean, for any Plan Year, the Plan
if it would be a Top Heavy Plan under Section 14.02(i) hereof
if the words "ninety percent (90%)" were substituted for the
words "sixty percent (60%)" in Section 14.02(i) hereof.
(i) "Top Heavy Plan" shall mean, for any Plan Year, the Plan if
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 of plans exceeds sixty percent (60%).
(3) If this Plan is a part of a Required Aggregation Group
and also is a part of a Permissive Aggregation Group of
plans, and the Top Heavy Ratio for the Permissive
Aggregation Group exceeds sixty percent (60%).
(j) "Top Heavy Ratio" shall mean as follows.
(1) If the Employer maintains one (1) or more defined
contribution plans (including any simplified employee
pension plan under section 408(k) of the Code), and the
Employer has never maintained any defined benefit plan
which has covered or could cover a Participant in this
Plan, then the Top Heavy Ratio is a fraction, the
numerator of which is the sum of the account balances of
all Key Employees as of the Determination Date (including
any part of any account balance distributed in the five
(5) year period ending on the Determination Date), and
the denominator of which is the sum of all account
balances (including any part of any account balance
distributed in the five (5) year period ending on the
Determination Date) of all Participants as of the
Determination Date. Both the numerator and denominator
of the Top Heavy Ratio are adjusted to reflect any
contribution which is due but unpaid as of the
Determination Date.
(2) If the Employer maintains one (1) or more defined
contribution plans (including any simplified employee
pension plan under section 408(k) of the Code), and the
Employer maintains or has maintained one (1) or more
defined benefit pension plans which have covered or could
cover a Participant in this Plan, then the Top Heavy
Ratio is a fraction, the numerator of which is the sum of
account balances under the defined contribution plans for
all Key Employees and the present value of accrued
benefits under the defined benefit pension plans for all
Key Employees, and the denominator of which is the sum of
the account balances under the defined contribution plans
for all Participants and the present value of accrued
benefits under the defined benefit pension plans for all
Participants. Both the numerator and denominator of the
Top Heavy Ratio are adjusted for any distribution of an
account balance or an accrued benefit made in the five
(5) year period ending on the Determination Date and any
contribution due, but unpaid, as of the Determination
Date.
(3) For purposes of the preceding subsections (1) and (2),
the value of account balances and the present value of
accrued benefits shall be determined as of the most
recent Top Heavy Valuation Date that falls within or ends
with the twelve (12) month period ending on the
Determination Date. The account balances and accrued
benefits of a Participant who is a Non-Key Employee, but
who was a Key Employee in a prior year, or who has not
been credited with at least one (1) Hour of Service with
any Employer maintaining the Plan at any time during the
preceding five (5) year period ending on the
Determination Date, shall be disregarded. The
calculation of the Top Heavy Ratio, and the extent to
which distributions, rollovers and transfers are taken
into account shall be made in accordance with section 416
of the Code and the regulations thereunder.
Distributions shall include distributions under a
terminated plan which if it had not been terminated would
have been included in the Required Aggregation Group.
When aggregating plans, the value of account balances and
accrued benefits shall be calculated with reference to
the determination dates that fall within the same
calendar year.
(4) The accrued benefit of a Participant other than a Key
Employee shall be determined under (a) the method, if
any, that uniformly applies for accrual purposes under
all defined benefit plans maintained by the employer, or
(b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of
section 411(b)(1)(C) of the Code.
(k) "Top Heavy Valuation Date" shall mean, with respect to any
Plan Year, for this Plan, the Determination Date, and shall
mean with respect to any Plan Year for a defined benefit
pension plan maintained by the Employer, if any, the day
within the twelve (12) month period ending on the
determination date for such defined benefit pension plan as of
which the actuarial determination of the minimum funding
standard is calculated.
14.03 Minimum Allocations in Single Plan.
Notwithstanding the provisions of Section 4.01 hereof, and before
any contributions are allocated thereunder, minimum Employer
Contributions shall be made and allocated pursuant to this Section in a
Plan Year in which the Plan is a Top Heavy Plan.
(a) The minimum Employer contribution for a Participant who is a
Non-Key Employee for any Plan Year in which the Plan is a Top
Heavy Plan shall not be less than the lesser of (i) three
percent (3%) of his Compensation or (ii) the percentage at
which Employer contributions (including salary deferral
contributions and Employer matching contributions) and
Forfeitures are allocated for the Plan Year in respect of the
Key Employee for whom such percentage is the highest for the
Plan Year, taking into account such Key Employee's
Compensation.
This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have received a
lesser allocation for the Plan Year because of the following:
(1) the Participant's failure to complete one thousand
(1,000) Hours of Service.
(2) the Participant's failure to make mandatory Employee
contributions, if any, required for participation in the
Plan; or
(3) the Participant's Compensation was less than any stated
required amount.
This subsection shall not apply, however, to any Participant
who was not employed by the Employer on the last day of the
Plan Year.
In determining Employer contributions under this Section,
contributions or benefits under Chapter 2 of the Code
(relating to taxes on self-employed income), Chapter 21 of the
Code (relating to the Federal Insurance Contribution Act) or
any other Federal or State laws (including Title II of the
Social Security Act) shall not be taken into account. In
determining Employer contributions under this Section for a
Non-Key Employee, Salary Deferral Contributions and Employer
Matching Contributions needed to satisfy the actual
contribution percentage nondiscrimination test pursuant to
Section 3.04 or the actual deferral percentage
nondiscrimination test pursuant to Section 3.03 shall not be
taken into account.
The minimum allocations required hereunder (to the extent
required to be nonforfeitable under section 416(b) of the
Code) shall not be forfeitable under sections 411(a)(3)(B)
(regarding the suspension of benefits upon reemployment of a
retiree) or 411(a)(3)(D) (regarding withdrawal of mandatory
contributions) of the Code.
(b) Any Employer contributions remaining unallocated shall be
allocated pursuant to the provisions of Section 4.01 hereof;
provided, however, that all allocations under the Plan
pursuant to Section 4.01 shall be determined with respect to
Compensation as that term is defined in Section 1.08 hereof,
but subject to the dollar limitations set forth in Section
1.08(c) hereof.
14.04 Special Limitations and Allocation in Multiple Plans.
If for any Plan Year the Plan is a Top Heavy Plan, and the Employer
maintains, or has ever maintained, a qualified defined benefit pension
plan which is part of a Required or Permissive Aggregation Group, as
appropriate, then the provisions of this Section shall apply.
If none of the Employer's plans are considered a Super Top Heavy
Plan, then the Employer shall provide each Participant who would receive
an allocation under Section 14.03 hereof and who is a participant also
in the qualified defined benefit pension plan an allocation pursuant
only to Section 14.03 hereof in lieu of accruing a benefit that year
under the pension plan, but substituting in Section 14.03(a) hereof the
term "seven and one-half percent (7-1/2%)" for the term "three percent
(3%)". The Employer shall provide each Participant who would receive an
allocation under Section 14.03 hereof, but who is not a participant also
in the qualified defined benefit pension plan, an allocation pursuant to
Section 14.03 hereof, but substituting in subsection (a) thereof the
term "four percent (4%)" for the term "three percent (3%)".
If any of the Employer's plans are considered a Super Top Heavy
Plan, then in applying the limitations of Section 4.04 hereof, the term
"one (1)" shall be substituted for the term "one and twenty-five
hundredths (1.25)" in both the defined benefit fraction and the defined
contribution fraction, as such terms are defined in Section 4.04 hereof.
Furthermore, the Employer shall provide each Participant who would
receive an allocation under Section 14.03 hereof and who is a
participant also in the defined benefit pension plan an allocation
pursuant only to Section 14.03 hereof in lieu of accruing a benefit that
year under the pension plan, but substituting in Section 14.03(a) hereof
the term "five percent (5%)" for the term "three percent (3%)". The
Employer shall provide each Participant who would receive an allocation
under Section 14.03 hereof, but who is not a participant also in the
defined benefit pension plan, an allocation only pursuant to Section
14.03 hereof.
ARTICLE 15
MISCELLANEOUS PROVISIONS
15.01 Allocation of Responsibility among Fiduciaries for Plan and
Trust Administration.
Each Fiduciary shall have only those specific powers, duties,
responsibilities and obligations as are specifically given it under the
Plan. Each Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provi-
sions of the Plan authorizing or providing for such direction,
information or action. Furthermore, each Fiduciary may rely upon any
such direction, information or action of any other Fiduciary as being
proper under the Plan and is not required to inquire into the propriety
of any such direction, information or action. It is intended that each
Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under the Plan and
shall not be responsible for any act or failure to act of another
Fiduciary. No Fiduciary guarantees the Trust Fund in any manner against
investment loss or depreciation in asset value.
Each Fiduciary shall discharge its duties set forth in the Plan
solely in the interests of the Participants, Retired Participants and
their Beneficiaries:
(a) for the exclusive purpose of:
(1) providing benefits to such persons; and
(2) defraying reasonable expenses of administering the Plan;
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like
aims.
The Plan is intended to operate in compliance with Department of
Labor Regulations section 2550.404c-1 with respect to certain
transactions. To the extent that the Plan is operated in compliance
with those regulations, the Plan Fiduciaries shall have the protections
provided by section 404(c) of the ERISA, specifically that: (a) a
Participant exercising control over the assets in his Account shall not
be deemed a fiduciary by reason of his exercise of such control; and
(b) no person who is otherwise a fiduciary shall be liable for any loss,
or by reason of any breach, which results from such exercise of control.
15.02 Alienation or Assignment of Benefits (QDRO's).
The right of any Participant, Retired Participant or Beneficiary in
any benefit or to any payment hereunder or to any segregated account may
not be anticipated, conveyed, assigned, mortgaged or encumbered either
by voluntary or involuntary action or by operation of law nor shall any
such right or interest be in any manner subject to levy, attachment,
execution, garnishment or any other seizure under legal, equitable or
other process, except pursuant to a qualified domestic relations order,
as defined in section 414(p) of the Code, or pursuant to a domestic
relations order entered before January 1, 1985, under which payment of
benefits under that order has commenced as of January 1, 1985.
Otherwise, such interest in this Plan shall be payable only in
accordance with the provisions hereof; provided, however, that
distributions pursuant to a qualified domestic relations order may be
made without regard to the age or employment status of the Participant.
15.03 Headings.
The headings and sub-headings of Articles and Sections are included
solely for convenience of reference, and if there be any conflict
between such headings and the text of the Plan, the text shall control.
15.04 Construction of the Plan.
In the construction of the Plan, the masculine gender shall include
the feminine, the feminine gender shall include the masculine, and the
singular shall include the plural, unless the context clearly indicates
otherwise.
15.05 Correction of Errors.
If any error or change in records results in any Participant,
Retired Participant or Beneficiary receiving from the Plan more or less
than he would have been entitled to receive had the records been correct
or had the error not been made, the Plan Administrator, upon discovery
of such error, shall correct the error by adjusting, as far as
practicable, the payments in such a manner that the benefits to which
such person was correctly entitled shall be paid.
15.06 Legally Incompetent.
If any Participant, Retired Participant or Beneficiary is a minor,
or is in the judgment of the Plan Administrator otherwise legally
incapable of personally receiving and giving a valid receipt for any
payment due him hereunder, the Plan Administrator may, unless and until
claim shall have been made by a guardian or conservator of such person
duly appointed by a court of competent jurisdiction, direct that such
payment, or any part thereof, be made to such person or to such person's
spouse, child, parent, brother or sister, or other person deemed by the
Plan Administrator to be a proper person to receive such payment. Any
payment so made shall be, to the extent of the payment, a complete
discharge to the Employer and Trustee of any liabilities under the Plan.
15.07 Successor Organization.
In the event of a merger or consolidation of any Employer into, or
transfer of all or substantially all of its assets to, any legal entity,
unincorporated business organization or corporation, provision may be
made by such successor legal entity, unincorporated business
organization or corporation for its election of the continuance of this
Plan as to such successor entity. Such successor shall, upon its
election to continue this Plan, be substituted in place of the
transferor Employer by an instrument duly authorizing such substitution
and duly executed by such Employer and its successor. Upon notice of
such substitution, accompanied by a certified copy of the resolutions or
other appropriate written instrument of the governing body of such
Employer and its successor authorizing such substitution and delivered
to the Trustee, the Trustee shall be authorized to recognize such
successor in place of the transferor Employer.
15.08 Minimum Benefit in Successor Plan.
In the event of any merger or consolidation of the Plan with, or
the transfer of assets or liabilities of the Plan to, any other
qualified plan or trust, each Participant, Retired Participant and
Beneficiary shall be entitled upon termination of the successor plan or
trust immediately after the merger, consolidation or transfer to a
benefit in an amount not less than he would have been entitled to
receive if the Plan had terminated immediately before the merger,
consolidation or transfer.
15.09 Application of Plan Provisions.
The provisions of the Plan shall apply only to Employees who
terminate Service, or incur Breaks in Service, on or after the Effective
Date.
15.10 Severability of Provisions.
The provisions of this Plan are severable, and should any provision
be ruled illegal, unenforceable or void, all other provisions not so
ruled shall remain in full force and effect.
15.11 Applicable Law.
The provisions of this Plan shall be interpreted and construed
according to the laws of the State of Tennessee, unless federal law is
exclusively controlling.
15.12 Nonassignability of Duties.
Unless provided herein, the duties and responsibilities of the
Fiduciaries of the Plan shall be nonassignable.
15.13 Entire Plan.
This Plan constitutes the entire qualified profit sharing and
section 401(k) plan of the Sponsor, and no modifications or alterations
to this Plan shall be enforceable unless properly and validly made
pursuant to the amendment provisions of Article 11 hereof.
IN WITNESS WHEREOF, the Sponsor has caused the Plan to be executed
by its duly authorized representative on this ______ day of
______________, 1997.
SPONSOR:
PROFFITT'S, INC.
Attest:__________________________ By:___________________________
Title:________________________
The Plan may be executed in several
counterparts, each of which shall
be deemed an original.
EXHIBIT NO. 5.1
Opinion re: Legality
(Since the shares will be purchased on the open market,
no opinion is required)
EXHIBIT NO. 5.2
Undertaking to request a Determination Letter from the Internal
Revenue Service for the Plan.
PROFFITT'S
INCORPORATED
Brian J. Martin 750 Lakeshore Parkway
Senior Vice President of Birmingham, AL 35211
Human Resources and Law (205)940-4890
General Counsel Fax: (205) 940-4468
April 11, 1997
United Stated Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Proffitt's, Inc. 401(k) Retirement Plan
The Registrant, Proffitt's, Inc., undertakes to submit the
above-referenced plan and any amendments thereto (the "Plan") to the Internal
Revenue Service in a timely manner. In addition, the Registrant will
make all changes required by the IRS in order to qualify the Plan under
the Internal Revenue Code.
Sincerely,
/s/ Brian J. Martin
Proffitt's, Inc.
By: Brian J. Martin
Senior Vice President and
General Counsel
EXHIBIT NO. 23.1
Consent of Coopers & Lybrand L.L.P. (Re: Proffitt's, Inc.)
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report, which includes an explanatory
paragraph regarding the change in method of costing inventory,
accounting for store pre-opening expenses, and accounting for income
taxes in the year ended January 29, 1994 and of valuing inventory int he
year ended January 28, 1995, on our audits of the consolidated financial
statements of Proffitt's, Inc. as of February 3, 1996 and January 28,
1995, and for each of the three years in the period ended February 3,
1996.
/s/ Coopers & Lybrand
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
April 11, 1997
EXHIBIT NO. 23.2
Consent of Deloitte & Touche LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Proffitt's, Inc. on Form S-8 of our reports dated March 3,
1995, with respect to the consolidated financial statements of Younkers,
Inc. and subsidiary for the year ended January 28, 1995 not separately
presented, appearing in the Annual Report on Form 10-K of Proffitt's,
Inc. for the year ended January 25, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Des Moines, Iowa
April 11, 1997
EXHIBIT NO. 23.3
Consent of Ernst & Young LLP
ERNST & YOUNG LLP Suite 3400 Phone: 515 243 2727
801 Grand Avenue
Des Moines, IA 50309-2764
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement of Proffitt's, Inc. (Form S-8) pertaining to the Proffitt's,
Inc. 401(k) Retirement Plan of our report dated March 3, 1994 (with
respect to the consolidated statements of earnings, shareholder's
equity, and cash flows of Younkers, Inc. for the year ended January 29,
1994, not separately presented), appearing in the Annual Report (Form
10-K) of Proffitt's, Inc. for the year ended February 3, 1996.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Des Moines, Iowa
April 10, 1997
EXHIBIT NO. 23.4
Consent of Coopers & Lybrand L.L. P. (Re: Parisian, Inc.)
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report, dated March 22, 1996, on our audits
of the consolidated financial statements of Parisian, Inc. as of January
28, 1995 and February 3, 1996, and for the years ended January 29, 1994,
January 28, 1995, and February 3, 1996.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
EXHIBIT NO. 24
Power of Attorney (Included at Page II-4)