Exhibit 10.17
WORKING COPY OF
ESKIMO PIE CORPORATION
SAVINGS PLAN AND TRUST
(As Restated Effective January 1, 1997)
Including:
1. First Amendment
2. Second Amendment
3. Third Amendment
TABLE OF CONTENTS
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ARTICLE I
Definition of Terms
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1.1 Accrued Benefit................................................... 1
1.1(a) After-Tax Account................................................. 1
1.1(b) Matching Account or Matching Accounts............................. 2
1.1(c) Pre-Tax Account................................................... 2
1.1(d) Profit Sharing Account or Profit Sharing Accounts................. 2
1.1(e) QNEC Account...................................................... 3
1.1(f) Rollover Account.................................................. 3
1.2 Act............................................................... 3
1.3 Active Participant................................................ 3
1.4 Adjustment Factor................................................. 3
1.5 Administrator..................................................... 3
1.6 Affiliate......................................................... 3
1.7 Beneficiary....................................................... 4
1.8 Board............................................................. 4
1.9 Code.............................................................. 4
1.10 Company Stock..................................................... 4
1.11 Compensation...................................................... 4
1.12 Compensation Limit................................................ 4
1.13 Contract.......................................................... 5
1.14 Covered Participant............................................... 5
1.15 Custodian......................................................... 5
1.16 Date of Hire...................................................... 5
1.17 Effective Date.................................................... 5
1.18 Eligible Employee................................................. 6
1.19 Employee.......................................................... 6
1.20 Employer.......................................................... 6
1.21 Family Member..................................................... 7
1.22 Fund.............................................................. 7
1.23 Highly Compensated Employee....................................... 8
1.24 Hour of Service................................................... 10
1.25 Inactive Participant.............................................. 10
1.26 Insurer........................................................... 10
1.27 Investment Manager................................................ 10
1.28 Key Employee...................................................... 10
1.29 Leased Employee................................................... 11
1.30 Non-Highly Compensated Employee................................... 12
1.31 Non-Key Employee.................................................. 12
1.32 Normal Retirement Age............................................. 12
1.33 Participant....................................................... 12
1.34 Plan.............................................................. 12
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1.35 Plan Sponsor............................................................................. 12
1.36 Plan Year................................................................................ 12
1.37 Policy................................................................................... 12
1.38 QDRO..................................................................................... 12
1.39 Spouse................................................................................... 12
1.40 Statutory Compensation................................................................... 13
1.41 Super Top Heavy Plan..................................................................... 13
1.42 Top Heavy Plan........................................................................... 13
1.43 Total Compensation....................................................................... 13
1.44 Trustee.................................................................................. 14
1.45 Valuation Date........................................................................... 14
1.46 Year of Broken Service................................................................... 14
1.47 Year of Vesting Service.................................................................. 14
ARTICLE II
Eligibility and Participation
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2.1 Eligibility and Date of Participation as a Regular Participant........................... 14
2.2 Eligibility for Rollover Contributions as a Rollover Eligible Participant................ 15
2.3 Length of Participation.................................................................. 15
ARTICLE III
Funding
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3.1 Amount and Timing of Employer Contributions.............................................. 15
3.2 Special Rules for Employer's Share of and Form of Contribution........................... 17
3.3 Participant After-Tax and Pre-Tax Contributions.......................................... 18
3.4 Elective Deferral Dollar Limitation on Pre-Tax Contributions............................. 18
3.5 Participant Rollover Contributions....................................................... 19
3.6 Procedure for and Time of Making Participant Contributions............................... 19
3.7 Use of Forfeitures and Unallocated Annual Additions...................................... 20
3.8 No Duty of Trustee to Determine or Enforce Contributions................................. 20
ARTICLE IV
Participants' Accounts and Adjustments
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4.1 Accounts................................................................................. 21
4.2 Allocation of Contributions.............................................................. 22
4.3 Dollar/25% Limitations on Annual Additions............................................... 22
4.4 Additional Limitations on Annual Additions Where Employer Maintains More Than One Plan... 23
4.5 Special Account for Unallocated Annual Additions......................................... 24
4.6 Valuation of Assets and Allocation of Valuation Adjustments.............................. 25
4.7 Determination of Account Balances........................................................ 27
4.8 Suspense Accounts........................................................................ 28
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4.9 Equitable Adjustment in Case of Error or Omission......................................... 29
4.10 Special Rules for Reemployed Veterans..................................................... 29
4.11 Limitation on and Distribution of After-Tax, Pre-Tax and Matching Contributions
Made by or on behalf of Highly Compensated Employees..................................... 31
ARTICLE V
Retirement Dates
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5.1 Normal Retirement Date.................................................................... 31
5.2 Delayed Retirement Date................................................................... 31
5.3 Early Retirement Date..................................................................... 31
5.4 Disability Retirement Date................................................................ 31
ARTICLE VI
Vesting
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6.1 Vesting at Retirement or Attainment of Normal Retirement Age.............................. 32
6.2 Vesting at Death.......................................................................... 32
6.3 Vesting in Matching and Profit Sharing Active Accounts at Other Times..................... 32
6.4 Vesting in Accrued Benefit Other Than Matching and Profit Sharing Active Accounts......... 33
6.5 Vesting Service Rules..................................................................... 33
6.6 Forfeiture and Restoration of Matching and Profit Sharing Active Accounts................. 33
ARTICLE VII
Death Benefits
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7.1 Death after Benefit Commencement Date..................................................... 34
7.2 Death before Benefit Commencement Date.................................................... 34
7.3 Beneficiary Designation................................................................... 34
7.4 Consent to Beneficiary Designation........................................................ 34
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ARTICLE VIII
Payment of Benefits
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8.1 Time of Payment........................................................................... 35
8.2 Form of Payment When Participant Is the Initial Recipient................................. 38
8.3 Form of Payment When Beneficiary Is the Initial Recipient................................. 38
8.4 Payment Definitions and Rules............................................................. 38
8.5 Plan to Plan Direct Rollover as a Distribution Option..................................... 39
8.6 Notice, Election and Consent Procedures Regarding Accrued Benefit Payment................. 40
8.7 Benefit Determination and Payment Procedure............................................... 41
8.8 Claims Procedure.......................................................................... 41
8.9 Payments to Minors and Incompetents....................................................... 42
8.10 Distribution of Benefit When Distributee Cannot Be Located................................ 42
ARTICLE IX
Withdrawals and Loans
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9.1 In-Service Non-Hardship Withdrawals from
After-Tax Optional Account and/or Rollover Account....................................... 43
9.2 In-Service Non-Hardship Withdrawals from
Matching Optional Account and/or Profit Sharing Account.................................. 43
9.3 In-Service Non-Hardship Withdrawals from After-Tax Basic Account,
Pre-Tax Optional Account and/or QNEC Account............................................. 43
9.4 In-Service Hardship Withdrawals from After-Tax Basic Account,
Pre-Tax Account, Matching Account and/or Profit Sharing Account.......................... 43
9.5 Withdrawal Restrictions and Procedure..................................................... 45
9.6 Payment of Withdrawals.................................................................... 45
9.7 No Withdrawal Restoration................................................................. 46
9.8 Loans..................................................................................... 46
9.9 Instructions to Trustee................................................................... 49
ARTICLE X
The Fund
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10.1 Trust Fund and Exclusive Benefit.......................................................... 49
10.2 Plan and Fund Expenses.................................................................... 49
10.3 Reversions to the Employer................................................................ 50
10.4 No Interest Other Than Plan Benefit....................................................... 50
10.5 Payments from the Fund.................................................................... 50
10.6 Fund Divisions............................................................................ 50
10.7 Participant Investment Directions......................................................... 51
10.8 Investment Authority of the Administrator................................................. 52
10.9 Provisions Relating to Insurer............................................................ 53
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ARTICLE XI
Fiduciaries
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11.1 Named Fiduciaries and Duties and Responsibilities......................................... 53
11.2 Limitation of Duties and Responsibilities of Named Fiduciaries............................ 54
11.3 Service by Named Fiduciaries in More Than One Capacity.................................... 54
11.4 Allocation or Delegation of Duties and Responsibilities by Named Fiduciaries.............. 54
11.5 Investment Manager........................................................................ 54
11.6 Assistance and Consultation............................................................... 54
11.7 Indemnification........................................................................... 54
11.8 Funding Policy............................................................................ 55
11.9 Standard of Conduct....................................................................... 55
ARTICLE XII
The Trust Fund
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12.1 Trustee Powers and Duties................................................................. 55
12.2 Accounts.................................................................................. 58
12.3 Two or More Trustees...................................................................... 58
12.4 Management of Fund by Investment Manager.................................................. 58
12.5 Trustee Compensation and Expenses......................................................... 58
12.6 Bond...................................................................................... 58
12.7 Trustee Resignation, Removal or Death and Appointment of Successor or Additional Trustee.. 58
12.8 Establishment of Separate Trusts.......................................................... 59
12.9 Automatic Successor Trustee by Corporate Transaction...................................... 60
ARTICLE XIII
Plan Administration
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13.1 Appointment of Plan Administrator......................................................... 60
13.2 Plan Sponsor as Plan Administrator........................................................ 61
13.3 Compensation and Expenses................................................................. 61
13.4 Procedure if a Committee.................................................................. 61
13.5 Action by Majority Vote if a Committee.................................................... 61
13.6 Appointment of Successors................................................................. 61
13.7 Additional Duties and Responsibilities.................................................... 61
13.8 Power and Authority....................................................................... 62
13.9 Availability of Records................................................................... 62
13.10 No Action with Respect to Own Benefit..................................................... 62
13.11 Limitation on Powers and Authority........................................................ 62
ARTICLE XIV
Amendment and Termination of Plan
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14.1 Amendment................................................................................. 62
14.2 Merger, Consolidation or Transfer of Assets............................................... 62
14.3 Plan Permanence and Termination........................................................... 63
14.4 Lapse in Contributions.................................................................... 63
14.5 Termination Events........................................................................ 63
14.6 Termination Allocations and Separate Accounts............................................. 64
14.7 Holding of Separate Accounts.............................................................. 65
14.8 Distribution of Separate Accounts after Termination....................................... 65
14.9 Effect of Employer Merger, Consolidation or Liquidation................................... 66
ARTICLE XV
Matters Relating to Company Stock
---------------------------------
15.1 Voting Directions......................................................................... 66
15.2 Acquisitions and Dispositions of Company Stock............................................ 67
15.3 Sales Prohibited if Registration or Qualification Required................................ 68
15.4 Limitation on Insiders' Interests in Company Stock........................................ 68
15.5 No Guarantee of Values.................................................................... 68
15.6 Legend Regarding Securities Laws Restriction on Sale or Transfer.......................... 68
15.7 Confidentiality of Participant Directions regarding and Holdings of Company Stock......... 68
ARTICLE XVI
Miscellaneous
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16.1 Headings.................................................................................. 69
16.2 Gender and Number......................................................................... 69
16.3 Governing Law............................................................................. 69
16.4 Employment Rights......................................................................... 69
16.5 Conclusiveness of Employer Records........................................................ 69
16.6 Right to Require Information and Reliance Thereon......................................... 69
16.7 Alienation and Assignment................................................................. 70
16.8 Notices and Elections..................................................................... 70
16.9 Delegation of Authority................................................................... 70
16.10 Service of Process........................................................................ 70
16.11 Construction.............................................................................. 70
ARTICLE XVII
Adoption of the Plan
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17.1 Restated Adoption and Failure to Obtain Qualification..................................... 71
17.2 Adoption by Additional Employers......................................................... 71
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Appendices
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Appendix A - Determination of Hours of Service
Appendix B - Determination of Top Heavy Plan Status
Appendix C - List of Participating Employers
Appendix D - Rules Pertaining to Limitations on After-Tax, Pre-Tax and Matching
Contributions
Appendix E - List of Named Fund Divisions
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THIS PLAN AND TRUST is executed as of the date noted below by ESKIMO PIE
CORPORATION, a Virginia corporation (the "Plan Sponsor"), for itself and for
other participating employers who may participate in the Plan as provided herein
(collectively or individually hereinafter called the "Employer"), FIRST UNION
NATIONAL BANK OF NORTH CAROLINA, as Separate Trustee for all Fund divisions
other than the Company Stock Fund and as Custodian for the Company Stock Fund,
and THOMAS M. MISHOE, JR., as Separate Trustee for the Company Stock Fund;
WITNESSETH:
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THAT, WHEREAS, effective April 6, 1992, the Plan Sponsor adopted the Eskimo
Pie Corporation Savings Plan and a related trust for its employees, which Plan
and trust have been subsequently amended and restated; and
WHEREAS, effective January 1, 1995, Eskimo, Inc. and Sugar Creek Foods, Inc.
adopted the Plan; and
WHEREAS, the Plan Sponsor deems it desirable to further amend and restate
the Plan and related trust as hereinafter set forth (sometimes referred to as
this "Restatement of the Plan"); and
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree that the Plan, as it affects any
rights in respect to any person entitled to benefits under the Plan on or after
January 1, 1997, shall be amended and restated in its entirety as herein set
forth, provided, however, that any new provision of this Restatement of the Plan
shall have no force and effect if the Internal Revenue Service determines that
it causes the Plan to cease to meet the applicable qualification requirements of
a defined contribution plan under Section 401 of the Internal Revenue Code
unless the same is amended to so qualify:
(i) The Accrued Benefit (including any benefit considered as an
accrued benefit for purposes of Section 411(d)(6)(B) of the Code) of any
Participant (or the benefit payable to his Beneficiary) shall not be
decreased by virtue of this Restatement of the Plan.
(ii) The non-forfeitable percentage of the Accrued Benefit of any
Participant shall not be decreased by virtue of this Restatement of the
Plan.
(iii) The form of payment of benefits in pay status on December 31,
1995 shall not be affected by virtue of this Restatement of the Plan, except
as may be expressly provided herein in the case of re-employment or
continued employment.
ARTICLE I
Definition of Terms
-------------------
The following words and terms as used herein shall have the meaning set
forth below, unless a different meaning is clearly required by the context:
1.1 "Accrued Benefit": The sum of the balances of the following accounts
of a Participant under the Plan as of the most recent Valuation Date (or as
otherwise provided herein):
1.1(a) "After-Tax Account": The account of a Participant in the Fund
attributable to his After-Tax Contributions, consisting of his After-Tax Basic
Account and his After-Tax Optional Account as follows:
(i) "After-Tax Basic Account": The Participant's account in the
Fund attributable to his After-Tax Basic Contributions to the Plan. This
account was last referred to as the "Mandatory Contributions Account" in the
Plan as in effect immediately prior to this Restatement of the Plan.
(ii) "After-Tax Optional Account": The Participant's account in the
Fund attributable to his After-Tax Optional Contributions to the Plan. This
account was last referred to as the "Employee Contributions Account" in the
Plan as in effect immediately prior to this Restatement of the Plan.
1.1(b) "Matching Account" or "Matching Accounts": The account or accounts
of a Participant in the Fund attributable to Matching and Supplemental
Contributions by the Employer, consisting of his Matching Active Account and his
Matching Non-forfeitable Account as follows:
(i) "Matching Active Account": The Participant's account in the
Fund attributable to allocations of Matching and Supplemental Contributions
by the Employer made with respect to his service since his most recent
forfeiture and loss of forfeiture restoration rights under the Plan or, if
he has incurred no forfeiture and loss of forfeiture restoration rights
under the Plan, since his commencement of participation in the Plan.
(ii) "Matching Non-forfeitable Account": In the case of a
Participant who has incurred a forfeiture and loss of forfeiture restoration
rights under the Plan, the vested portion of his Matching Active Account
transferred to this account and attributable to allocations of Matching and
Supplemental Contributions by the Employer and made with respect to his
service prior to such forfeiture and loss of forfeiture restoration rights.
Each Matching Active and Non-forfeitable Account shall be subdivided into two
accounts. One account shall be known as the "Company Stock Matching Account"
and consists of contributions made thereto for periods after February, 1997
allocated thereto pursuant to subparagraph 3.2(c) which are required to be
invested in the Company Stock Fund; and the other account shall be known as the
"Unrestricted Matching Account" and consists of contributions which are not
required to, but may, be invested in the Company Stock Fund. The Matching
Account was last referred to as the "Regular Matching Contributions Account" in
the Plan as in effect immediately prior to this Restatement of the Plan.
1.1(c) "Pre-Tax Account": The account of a Participant in the Fund
attributable to his Pre-Tax Contributions (whether Basic or Optional). This
account was last referred to as the "Deferral Contributions Account" in the Plan
as in effect immediately prior to this Restatement of the Plan.
1.1(d) "Profit Sharing Account" or "Profit Sharing Accounts": The account
or accounts of a Participant in the Fund attributable to Profit Sharing,
Supplemental and Top Heavy Contributions by the Employer, consisting of his
Profit Sharing Active Account and his Profit Sharing Non-forfeitable Account as
follows:
(i) "Profit Sharing Active Account": The Participant's account in
the Fund attributable to allocations of Profit Sharing, Supplemental and Top
Heavy Contributions by the Employer made with respect to his service since
his most recent forfeiture and loss of forfeiture restoration rights under
the Plan or, if he has incurred no such forfeiture and loss of forfeiture
restoration rights, since his commencement of participation in the Plan.
(ii) "Profit Sharing Non-forfeitable Account": In the case of a
Participant who has incurred a forfeiture and loss of forfeiture restoration
rights under the Plan, the vested portion of his Profit Sharing Active
Account transferred to this account and attributable to allocations of
Profit Sharing, Supplemental and Top Heavy Contributions by the Employer
made with respect to his service prior to such forfeiture and loss of
forfeiture restoration rights.
Each Profit Sharing Active and Non-forfeitable Account shall be subdivided into
two accounts. One account shall be known as the "Company Stock Profit Sharing
Account" and consists of contributions made thereto for periods after February,
1997 allocated thereto pursuant to subparagraph 3.2(c) which are required to be
invested in the Company Stock Fund; and the other
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account shall be known as the "Unrestricted Profit Sharing Account" and consists
of contributions which are not required to, but may, be invested in the Company
Stock Fund. This account was last referred to as the "Employer Contributions
Account" in the Plan as in effect immediately prior to this Restatement of the
Plan.
1.1(e) "QNEC Account": The account of a Participant in the Fund
attributable to QNEC Contributions by the Employer. The QNEC Account shall be
subdivided into two accounts. One account shall be known as the "Company Stock
QNEC Account" and consists of contributions made thereto for periods after
February, 1997 allocated thereto pursuant to subparagraph 3.2(c) which are
required to be invested in the Company Stock Fund; and the other account shall
be known as the "Unrestricted QNEC Account" and consists of contributions which
are not required to, but may, be invested in the Company Stock Fund. This
account was last referred to as the "Qualified Nonelective Contributions
Account" in the Plan as in effect immediately prior to this Restatement of the
Plan.
1.1(f) "Rollover Account": The account of a Participant in the Fund
attributable to his Rollover Contributions. This account was last referred to as
the "Rollover Contributions Account" in the Plan as in effect immediately prior
to this Restatement of the Plan.
1.2 "Act": The Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time, or the corresponding sections of any
subsequent legislation which replaces it, and, to the extent not inconsistent
therewith, the regulations issued thereunder.
1.3 "Active Participant": A Participant who is an Eligible Employee.
There are two classes of Active Participants - Regular Participants (described
in paragraph 2.1) who are eligible to make After-Tax, Pre-Tax and Rollover
Contributions and receive a share of any contributions by the Employer to the
Plan or forfeitures, and Rollover Eligible Participants (described in paragraph
2.2) who are only eligible to and have made one or more Rollover Contributions
to the Plan.
1.4 "Adjustment Factor": The cost of living adjustment factor prescribed
by the Secretary of the Treasury or his delegate under Section 415(d) of the
Code for years beginning after December 31, 1987, applied to such items and in
such manner as the Secretary of the Treasury or his delegate shall prescribe.
1.5 "Administrator": The Plan Administrator provided for in ARTICLE XIII
hereof.
1.6 "Affiliate": The Employer and each of the following business
entities or other organizations (whether or not incorporated) which during the
relevant period is treated (but only for the portion of the period so treated
and for the purpose and to the extent required to be so treated) together with
the Employer as a single employer pursuant to the following sections of the Code
(as modified where applicable by Section 415(h) of the Code):
(i) Any corporation which is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) which includes the
Employer,
(ii) Any trade or business (whether or not incorporated) which is
under common control (as defined in Section 414(c) of the Code) with the
Employer,
(iii) Any organization (whether or not incorporated) which is a
member of an affiliated service group as defined in Section 414(m) of the
Code) which includes the Employer, and
(iv) Any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
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1.7 "Beneficiary": The person or persons designated by a Participant or
otherwise entitled pursuant to paragraph 7.3 to receive benefits under the Plan
attributable to such Participant after the death of such Participant.
1.8 "Board": The present and any succeeding Board of Directors of the
Plan Sponsor, unless such term is used with respect to a particular Employer and
its Employees, in which event it shall mean the present and any succeeding Board
of Directors of that Employer.
1.9 "Code": The Internal Revenue Code of 1986, as the same may be
amended from time to time, or the corresponding section of any subsequent
Internal Revenue Code, and, to the extent not inconsistent therewith,
regulations issued thereunder.
1.10 "Company Stock": The common stock of the Plan Sponsor.
1.11 "Compensation": An Employee's:
(i) Regular base salary for salaried employees,
(ii) Straight time earnings for all hours worked and paid non-work
hours, which shall include shift differential, vacation, sick, jury,
witness, bereavement and non-worked holiday pay, for hourly employees,
(iii) Guaranteed commissions for salespersons who are not
compensated strictly on a commissioned basis (i.e., who have a guaranteed
base), and
(iv) Ninety percent (90%) of commissions for salespersons who are
compensated strictly on a commissioned basis (i.e., who have no guaranteed
base),
payable to the Employee for services as an Eligible Employee and while a Regular
Participant, directly from the Employer (but not from any Affiliate which is not
a participating employer unless otherwise expressly provided) for a Plan Year,
including in any case employee elective salary reduction or similar
contributions under a cafeteria plan described in Section 125 of the Code and
employee elective salary reduction or similar contributions (such as Pre-Tax
Contributions) under a cash or deferred arrangement described in Section 401(k)
of the Code (to the extent not already included therein), and not including in
any case any contribution by the Employer to or benefits under this Plan or any
other employee benefit plan or trust in connection therewith, nor any amount
otherwise paid as compensation but finally determined not to be deductible as
compensation in determining the Employer's federal taxable income. Any such
compensation in excess of the Compensation Limit for a Plan Year shall be
disregarded.
1.12 "Compensation Limit":
1.12(a) $150,000 (as adjusted in $10,000 increments by the applicable
Adjustment Factor determined on the basis of a base period of the calendar
quarter beginning October 1, 1993).
1.12(b) For purposes of applying the Compensation Limit:
(i) The Compensation Limit applicable to each Plan Year (or other
applicable computation period) shall be the Compensation Limit in effect for
each such Plan Year (or other applicable computation period), determined
without increases in the Compensation Limit for subsequent periods.
(ii) If any Plan Year is a period of less than twelve (12) months,
then any dollar limitation referred to in this paragraph shall be prorated
by multiplying the otherwise applicable dollar limitation for such Plan Year
by a
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fraction, the numerator of which is the number of months in such Plan Year
and the denominator of which is twelve (12).
(iii) The Compensation Limit shall be applied on a plan by plan
basis, except that a group of plans which are treated as a single plan for
applicable non-discrimination purposes under Section 410(b) of the Code
shall share a single Compensation Limit.
1.13 "Contract": A group annuity contract, deposit administration
contract, immediate participation guarantee contract, or other investment-
oriented or funding contract or agreement issued by an Insurer to hold the
assets of the Plan.
1.14 "Covered Participant": With respect to a Plan Year, a Regular
Participant:
(i) Who is an Eligible Employee on the last day of such Plan Year,
or
(ii) Who died or retired under the Plan while an Eligible Employee
during such Plan Year.
1.15 "Custodian": Any custodian for any separate trust constituting part
of the Fund and established pursuant to paragraph 12.8. For periods prior to
March 31, 1997, none; for periods on or after March 31, 1997, First Union
National Bank of North Carolina, serving in the capacity as a Separate Trustee
(as provided in paragraph 12.8) First Union National Bank of North Carolina for
the Company Stock Fund, for so long as and to the extent serving; or any
successor or additional person(s) or entity(ies) appointed pursuant hereto as
Custodian of any separate trust constituting part of the Fund and currently
serving.
1.16 "Date of Hire": The date on which an Employee is first credited
with an Hour of Service, determined without regard to any cessation of
employment.
1.17 "Effective Date":
(i) The Effective Date of the Plan is April 6, 1992.
(ii) The Effective Date of this Restatement of the Plan is January
1, 1997, provided, however, that any provision which is contained in this
Restatement of the Plan (as the same may be amended) and which is required
to be effective before January 1, 1997 in order to retain the qualification
of the Plan under Section 401 of the Code shall nevertheless be effective as
of its required effective date under the Code.
(iii) With respect to any employer adopting the Plan as a
participating employer as of a date after the Effective Date of this
Restatement of the Plan, the Effective Date of the Plan as to such Employer
is the same as may be set forth in its adoption agreement or in the Plan.
The Administrator shall maintain as Appendix C to the Plan a list of the
Effective Dates of participation of all Employers participating in the Plan.
1.18 "Eligible Employee":
1.18(a) Any common law employee of the Employer other than:
(i) An employee who is a non-resident alien and who receives no
earned income (within the meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources within the United States
(within the meaning of Section 861(a)(3) of the Code),
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(ii) An employee who is included in a unit of persons covered by a
collective bargaining agreement between representatives of such unit and the
Employer, unless such collective bargaining agreement provides for
participation in the Plan, or
(iii) An employee who is classified by the Employer under its
standard personnel policies and practices as a straight-time hourly paid
employee.
1.18(b) For purposes hereof, a "straight-time hourly paid employee"
generally is an employee whose pay is calculated on an hourly basis and who
normally is not compensated for time off due to holidays, vacation or illness.
1.18(c) In no event shall Leased Employees be considered as Eligible
Employees or be eligible to actively participate in the Plan.
1.19 "Employee": Any individual employed in the service of the Employer
as a common law employee, any sole proprietor or partner of a partnership
constituting an Affiliate, and any Leased Employee (but only for the purpose and
to the extent treated under Section 414(n) of the Code as an employee of the
Employer).
1.20 "Employer":
1.20(a) The Plan Sponsor and each other employer heretofore or hereafter
executing or adopting the Plan as a participating employer, collectively unless
the context otherwise indicates, for as long as it remains a participating
employer; and with respect to any Employee, any one or more of such Employers by
which he is at any time employed (unless or to the extent otherwise specified by
resolution of the Board or in a merger or acquisition agreement or plan approved
by the Board or in any applicable asset transfer, plan merger or consolidation
or adoption agreement). The Administrator shall maintain as Appendix C to the
Plan a list of all such Employers who are, from time to time, participating
employers in the Plan.
1.20(b) For purposes of determining:
(i) Service for all purposes of the Plan (other than for purposes
of determining non-Top Heavy Plan benefit accrual, Eligible Employees,
Covered Participants and Years of Benefit Service unless otherwise
specifically provided) and commencement of service and termination of
employment with the Employer,
(ii) Employees, Family Members, Highly Compensated Employees, Key
Employees, and Leased Employees,
(iii) Top Heavy Plan status, contributions and benefits,
(iv) Statutory Compensation and Total Compensation,
(v) Any limitations of contributions and forfeitures or on loans
hereunder, and
(vi) Maintenance of or participation in other qualified plans under
Section 401(a) of the Code, tax sheltered annuities under Section 403(b) of
the Code, simplified employee pensions under Section 408(k) of the Code, and
any other plan required or, as applicable, permitted to be aggregated with
this Plan for purposes of the Code,
the term "Employer" shall include each Affiliate which during any year
commencing after December 31, 1975 is treated as an Affiliate and each
predecessor employer which maintained this Plan (but not beyond the time it
ceased to maintain the Plan) within the meaning of Section 414(a) of the Code,
but only for the portion of any such year or years so treated and for the
purpose and to the extent required to be so treated.
- 6 -
1.20(c) For purposes of determining compensation and service with any
business entity, or predecessor thereto, which is merged into an Employer, or a
predecessor thereto, or all or substantially all the assets or the operating
assets acquired by an Employer, or predecessor thereto, compensation from and
service with such business entity and predecessor thereto shall be treated as
compensation from and service with an Employer to the extent provided by
resolution of the Board or in any corporation or plan merger, consolidation or
asset transfer agreement or any adoption agreement approved by the Board.
1.20(d) For purposes of determining service and compensation under the
Plan, service with and compensation from Reynolds Metals Company, a Delaware
corporation, and any of its "affiliates" (determined on the same basis as
Affiliates are determined, but substituting Reynolds Metals Company for the Plan
Sponsor) which was rendered or payable for service before April 6, 1992 shall be
considered as service with the Employer for all purposes of the Plan.
1.20(e) Notwithstanding anything to the contrary in the forgoing, service
prior to March 1, 1994 with Sugar Creek Foods of Russellville, Inc. (which is
the predecessor to Sugar Creek Foods, Inc.) shall not be considered service with
an Employer or Affiliate for purposes of the Plan
1.21 "Family Member":
1.21(a) With respect to a Plan Year, an individual (whether or not himself
a Highly Compensated Employee) who is considered a family member described in
Section 414(q)(6)(A) of the Code with respect to an Employer; and, to the extent
not inconsistent therewith, an individual who is a member of the family
(consisting, with respect to an Employee, of such Employee's spouse and lineal
ascendants and descendants and the spouses of lineal ascendants and descendants)
on any day of the Determination Year or Look-Back Year with respect to such Plan
Year of a Highly Compensated Employee who is either (i) a more than five percent
(5%) owner of the Employer or (ii) in the group consisting of the ten (10)
Highly Compensated Employees with the greatest Statutory Compensation for the
relevant Determination Year or Look-Back Year.
1.21(b) For purposes hereof, the terms "Determination Year", "Look-Back
Year", and "more than five percent (5%) owner of the Employer" have the same
meaning provided herein for purposes of determining Highly Compensated
Employees.
1.22 "Fund": The trust fund, including any separate trusts, created
under and subject to the Plan. The Fund shall be held in divisions (sometimes
referred to as "divisions of the Fund", "Fund divisions" or "investments funds"
herein) as described in paragraph 10.6 and Appendix E to the Plan.
1.23 "Highly Compensated Employee":
1.23(a) For Plan Years beginning on or after January 1, 1997, an individual
who is considered a "highly compensated employee" with respect to the Employer
within the meaning of Section 414(q) of the Code; and, to the extent not
inconsistent therewith, any Employee who is considered a Highly Compensated
Active Employee or a Highly Compensated Former Employee for the Determination
Year ending with or within such Plan Year, defined as follows:
(i) The term "Highly Compensated Active Employee" means, with respect
to a Determination Year, an Employee who is an Active Employee during the
Determination Year and who either:
(A) Was at any time a more than five percent (5%) owner of the
Employer (as defined for purposes of determining Key Employees) for
the Determination Year or the Look-Back Year, or
(B) Received Statutory Compensation in excess of $80,000 (as
adjusted by the Adjustment Factor, but with the base period being the
calendar quarter ending September 30, 1996) and, at the election of
the Plan Sponsor or the Administrator in accordance with Section
414(q) of the Code, was a member of the twenty percent (20%) top-paid
group of Employees for the Look-Back Year.
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(ii) The term "Highly Compensated Former Employee" means:
(A) With respect to a Determination Year, a Former Employee
who has had a Separation Year prior to the Determination Year and
who was a Highly Compensated Active Employee for either such
Separation Year or any Determination Year ending on or after his
attainment of the age of fifty-five (55).
(B) Notwithstanding the foregoing, an Employee shall not be
treated as a Highly Compensated Former Employee by reason of having
a Deemed Separation Year after such Employee actually separates
from service with the Employer if, after such Deemed Separation
Year and before his Actual Separation Year, his services for the
Employer and Statutory Compensation for a Determination Year
increase significantly so that the Employee is treated as having a
Deemed Resumption of Employment.
1.23(b) For purposes hereof:
(i) The term "Active Employee" means, with respect to a
Determination Year, a current Employee who performs services for the
Employer as an Employee at any time during the Determination Year.
(ii) The term "Deemed Resumption of Employment" means an increase
in both services performed for the Employer as an Employee and Statutory
Compensation, based on the facts and circumstances, and at a minimum shall
include an increase in Statutory Compensation to the extent that such
increased Statutory Compensation would not result in a Deemed Separation
Year.
(iii) The term "Determination Year" means the Plan Year.
(iv) The term "Former Employee" means, with respect to a
Determination Year, a current or former Employee who performs no services
for the Employer as an Employee during the Determination Year.
(v) The term "Look-Back Year" means, with respect to a
Determination Year, the immediately preceding year to the Determination Year
in question, provided, however, that if the Determination Year is the
calendar year and the Administrator elects in accordance with Section 414(q)
of the Code to determine the status of individuals as Highly Compensated
Employees on the basis of a Look-Back Year and Determination Year which are
the same year, then the Look-Back Year shall be the Determination Year.
(vi) The term "Separation Year" means:
(A) An "Actual Separation Year" which is a Determination Year
in which a Former Employee last performed services for the Employer
as an Employee prior to becoming a Highly Compensated Former
Employee; or
(B) A "Deemed Separation Year" which is a Determination Year
prior to the Employee's attainment of the age of fifty-five (55) in
which he is an Active Employee and in which his Statutory
Compensation is less than fifty percent (50%) of his average annual
Statutory Compensation for the three (3) consecutive calendar years
preceding the Determination Year during which his Statutory
Compensation was the highest (or the total period of the Employee's
service with the Employer if less). A Deemed Separation Year is
relevant for purposes of determining whether an Employee is a
Highly Compensated Former Employee after he has an Actual
Separation Year, but is not relevant for purposes of identifying
him as an Active or Former Employee.
1.23(c) For purposes hereof:
- 8 -
(i) The Adjustment Factor for a Determination Year or a Look-Back
Year shall be applied on the basis of the calendar year in which such
Determination Year or Look-Back Year begins.
(ii) The Administrator may adopt any rounding or tie-breaking rules
it desires in making relevant determinations so long as such rules are
reasonable, non-discriminatory and uniformly and consistently applied.
(iii) An Employee is a member of the twenty percent (20%) top-paid
group for a year if he is one of the top twenty percent (20%) of Active
Employees for the year when ranked on the basis of descending Statutory
Compensation for such year (whether or not the Employee in question is
excluded in determining the number of Employees in the twenty percent (20%)
top-paid group). For this purpose, if bargaining unit Employees are not
taken into account in determining the number of Employees in the twenty
percent (20%) top-paid group pursuant to clause (iv)(E) of this
subparagraph, they also shall not be taken into account in determining other
Employees who are in twenty percent (20%) top-paid group.
(iv) For purposes of determining the number of persons in the
twenty percent (20%) top-paid group and the number of persons who may be
considered officers for a year, the following rules shall apply:
(A) The number of Employees who are in the twenty percent
(20%) top-paid group for a year is twenty percent (20%), rounded to
the nearest integer, of the total number of Active Employees who
are not excluded Employees for such year.
(B) The number of Employees equal to ten percent (10%) of
total Employees for a year is ten percent (10%), rounded to the
nearest integer, of the total number of Active Employees who are
not excluded Employees for such year.
(C) All Former Employees for the year are excluded.
(D) Employees who are non-resident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer that constitutes income from sources within the
United States for the year are excluded.
(E) Employees who are in a unit of employees covered by a
collective bargaining agreement between the Employer and employee
representatives for the year are excluded if and only if ninety
percent (90%) or more of the total Employees for the year are
covered by a collective bargaining agreement with the Employer and
the Active Participants in the Plan do not include any such
bargaining unit Employees.
(F) Employees shall not be excluded on the basis of age or
length of prior service.
(v) If any Plan Year is a period of less than twelve (12) months,
then any dollar amount referred to in this paragraph shall be prorated by
multiplying the otherwise applicable dollar amount for such Plan Year by a
fraction, the numerator of which is the number of months in such Plan Year
and the denominator of which is twelve (12).
1.24 "Hour of Service":
(i) Each hour for which an Employee is paid by the Employer, or
entitled to payment, for the performance of duties for the Employer or for
periods during which no duties are required to be performed, including each
hour for which credit has not theretofore been given and for which back pay,
irrespective of mitigation of damages, has either been awarded or agreed to
by the Employer, and
- 9 -
(ii) Solely for purposes of determining Years of Broken Service,
each hour of absence from work for which credit is expressly given under the
Plan,
all as more specifically provided in Appendix A.
1.25 "Inactive Participant": A Participant who is not an Eligible
Employee.
1.26 "Insurer": Any insurance company which issues a Contract to hold
assets of the Plan or a Policy to provide for payment of benefits under the
Plan.
1.27 "Investment Manager": A fiduciary of the Plan appointed to manage
all or part of the assets of the Fund and serving pursuant to ARTICLE XI and
qualifying as an "investment manager" within the meaning of Section 3(38) of the
Act.
1.28 "Key Employee":
1.28(a) With respect to a Plan Year, any Employee or former Employee (or
his Beneficiary if he is deceased) considered to be a "key employee" with
respect to the Employer at the time in question within the meaning of Section
416(i)(1) of the Code; and to the extent not inconsistent therewith, any
Employee or former Employee (or his Beneficiary if he is deceased) who at any
time during such Plan Year, or any of the preceding four (4) Plan Years, is
either:
(i) One of the fifty (50) (or if less, the greater of three (3) or
ten percent (10%) of total Employees, as determined for purposes of
determining Highly Compensated Employees) officers of the Employer having
the largest annual Statutory Compensation during any such Plan Year and
having Statutory Compensation in excess of $45,000 (or fifty percent (50%)
of any other amount, as adjusted by the Adjustment Factor, in effect for the
relevant Plan Year under Section 415(b)(1)(A) of the Code);
(ii) One of the ten (10) Employees having Statutory Compensation in
excess of $30,000 (or any other amount, as adjusted by the Adjustment
Factor, in effect for the relevant Plan Year under Section 415(c)(1)(A) of
the Code) and owning more than a one-half percent (.5%) interest in the
Employer, who owns the largest interests in the Employer, provided that if
two such Employees have the same interest in the Employer, the Employee
having the greater Statutory Compensation shall be treated as having a
larger interest;
(iii) A more than five percent (5%) owner of the Employer; or
(iv) A more than one percent (1%) owner of the Employer having an
annual Statutory Compensation of more than $150,000.
1.28(b) In determining ownership in the Employer for purposes hereof the
constructive ownership rules of Section 318 of the Code (as modified by Section
416(i)(1)(B)(iii) of the Code) shall apply, and the rules of Sections 414(b),
(c), (m) and (o) of the Code shall not apply.
1.29 "Leased Employee":
1.29(a) An individual who is considered a leased employee of the Employer
within the meaning of Section 414(n)(2) of the Code and, to the extent not
inconsistent therewith, any person:
(i) Who, pursuant to an agreement between the recipient Employer
and any other person (the "leasing organization"), has performed services
for the recipient Employer or for the recipient Employer and related persons
(determined in accordance with Section 414(n)(6) of the Code),
- 10 -
(ii) Whose services are performed on a substantially full-time
basis for a period of at least one year, and
(iii) For years beginning before January 1, 1997, whose services are
of a type historically performed by employees in the business field of the
recipient Employer; and for years beginning after December 31, 1996, whose
services are performed under the primary control or direction of the
recipient Employer.
1.29(b) Notwithstanding the foregoing, if such leased employees constitute
less than twenty percent (20%) of the Employer's non-highly compensated work
force within the meaning of Section 414(n)(1)(C)(ii) of the Code, individuals
otherwise considered to be Leased Employees shall not include those leased
employees covered by a plan described in Section 414(n)(5) of the Code (unless
otherwise provided by the terms of the Plan) and, to the extent not inconsistent
therewith, which:
(i) Is maintained by the leasing organization,
(ii) Is a money purchase pension plan with a non-integrated
employer contribution rate of at least seven and one-half percent (7-1/2%)
of compensation in the case of services performed before January 1, 1987 or
ten percent (10%) of compensation in the case of services performed after
December 31, 1986,
(iii) Provides full and immediate vesting, and
(iv) Provides for immediate participation by each employee of the
leasing organization (other than employees who perform substantially all
their services for the leasing organization or whose compensation from the
leasing organization in each of the four (4) Plan Years ending with the Plan
Year in question is less than $1,000).
For purposes hereof, "compensation" means compensation as defined in Section
415(c)(3) of the Code, but determined without regard to Sections 125, 402(e)(3)
and 402(h)(1)(B) of the Code and without regard to employer contributions made
pursuant to salary reduction agreements under Section 403(b) of the Code for
Plan Years beginning before January 1, 1998.
1.30 "Non-Highly Compensated Employee": Any Employee who is not a Highly
Compensated Employee.
1.31 "Non-Key Employee": Any Employee (including the Beneficiary of such
Employee) who is not a Key Employee.
1.32 "Normal Retirement Age": The age of sixty-five (65) years.
1.33 "Participant": An Eligible Employee or other person qualified to
participate in the Plan for so long as he is considered a Participant as
provided in ARTICLE II hereof. There are two classes of Participants - Active
Participant and Inactive Participants.
1.34 "Plan": This Plan and Trust Agreement, including the Appendices
hereto, as contained herein or duly amended. The Plan maintained pursuant
hereto shall be known as the "Eskimo Pie Corporation Savings Plan".
1.35 "Plan Sponsor": Eskimo Pie Corporation, a Virginia corporation (or
its corporate successor).
1.36 "Plan Year": The year commencing upon the first day of January of
each year
1.37 "Policy": A group or individual policy, contract or other agreement
(including a certificate) issued by an Insurer which is not a Contract and which
is obtained to provide for the accumulation and/or payment of benefits under the
Plan.
- 11 -
1.38 "QDRO": A qualified domestic relations order within the meaning of
Section 206(d)(3) of the Act and Section 414(p) of the Code and as determined by
the Administrator pursuant to the Plan.
1.39 "Spouse":
1.39(a) For the purpose of entitlement to receive death benefits as a
Spouse under subparagraph 7.3(a) of the Plan and consenting to a Beneficiary
designation as a Spouse under subparagraph 7.3(a) and paragraph 7.4 of the Plan,
the individual to whom the Participant was married throughout the one year
period ending on the date of his death.
1.39(b) The determination of the marital status of a Participant shall be
made pursuant to applicable local law; provided, however, that a Participant's
former spouse shall continue to be considered married to the Participant, and a
Participant's current spouse shall be considered not married to the Participant,
to the extent provided under a QDRO.
- 12 -
1.40 "Statutory Compensation":
1.40(a) For Plan Years beginning before January 1, 1998, an Employee's
Total Compensation plus employee elective salary reduction or similar
contributions excluded from Total Compensation by reason of Sections 125,
402(e)(3), 402(h), 403(b), 414(h)(2) and 457(b) of the Code. Statutory
Compensation for a Plan Year (or other applicable computation period) shall be
limited by the Compensation Limit for all purposes other than determining Family
Members, Highly Compensated Employees and Key Employees.
1.40(b) For Plan Years beginning on or after January 1, 1998, an Employee's
Total Compensation. Statutory Compensation for a Plan Year (or other applicable
computation period) shall be limited by the Compensation Limit for all purposes
other than determining Highly Compensated Employees and Key Employees.
1.41 "Super Top Heavy Plan": The Plan, if it would still be considered a
Top Heavy Plan if ninety percent (90%) were substituted for sixty percent (60%)
in each place it appears in the definition of a Top Heavy Plan.
1.42 "Top Heavy Plan": The Plan, for any Plan Year beginning after
December 31, 1983, if the sum of the present values of the cumulative Accrued
Benefits of Key Employees under the Plan, and the present values of the
cumulative accrued benefits of Key Employees under all plans aggregated with it,
exceeds sixty percent (60%) of the aggregate of the present value of the
cumulative Accrued Benefits under this Plan and accrued benefits under such
plan(s) at the applicable determination date. For purposes hereof, aggregation,
accrued benefits (including Accrued Benefits) taken into account, the
determination date and all other standards and criteria for determining top-
heaviness under this Plan and such other plan(s) shall be determined under
Section 416 of the Code. Subject to the foregoing, more specific rules for
determining whether the Plan is a Top Heavy Plan are provided in Appendix B.
1.43 "Total Compensation":
1.43(a) For Plan Years (or Limitation Years, as applicable) beginning
before January 1, 1998, the total compensation from the Employer received by or
made available to an Employee during any Plan Year or, for purposes of the
limitations imposed by Section 415 of the Code, any Limitation Year (as defined
in paragraph 4.3):
(i) Including, but not limited to, wages, salary, earned income
(in the case of self-employed individuals), vacation pay, sick pay, overtime
pay, bonuses and commissions, and as reportable to the Internal Revenue
Service on Form W-2 (or its successor), where applicable, for federal income
tax purposes, but
(ii) Excluding paid or reimbursed expenses, contributions or
benefits under a simplified employee pension plan, contributions (to the
extent not includible in the Employee's gross income when contributed) or
benefits under this or any other plan of deferred compensation (other than
an unfunded, non-qualified plan), contributions or benefits under any other
employee benefit plan or arrangement (to the extent excludible from or not
includible in gross income), now, heretofore or hereafter adopted, amounts
paid or received or deemed received in connection with stock options or
rights, other amounts which receive special tax benefits, or any amount
otherwise paid as compensation but finally determined not to be deductible
as compensation in determining the Employer's federal taxable income.
1.43(b) For Plan Years (or Limitation Years, as applicable) beginning on or
after January 1, 1998, the total compensation from the Employer received by or
made available to an Employee during any Plan Year or, for purposes of the
limitations imposed by Section 415 of the Code, any Limitation Year (as defined
in paragraph 4.3):
(i) Including, but not limited to, wages, salary, earned income
(in the case of self-employed individuals), vacation pay, sick pay, overtime
pay, bonuses and commissions, and as reportable to the Internal Revenue
Service on Form W-2 (or its successor), where applicable, for federal income
tax purposes, but
- 13 -
(ii) Including employee elective salary reduction or similar
deferral contributions excluded from W-2 compensation by reason of Section
125, 402(g)(3) or 457(b) of the Code (and elective deferrals or
contributions under any other sections of the Code covered by Section
415(c)(3)(D) of the Code), and
(iii) Excluding, except as otherwise expressly included by clause
(ii) above, paid or reimbursed expenses, contributions or benefits under a
simplified employee pension plan, contributions (to the extent not
includible in the Employee's gross income when contributed) or benefits
under this or any other plan of deferred compensation (other than an
unfunded, non-qualified plan), contributions or benefits under any other
employee benefit plan or arrangement (to the extent excludible from or not
includible in gross income), now, heretofore or hereafter adopted, amounts
paid or received or deemed received in connection with stock options or
rights, other amounts which receive special tax benefits, or any amount
otherwise paid as compensation but finally determined not to be deductible
as compensation in determining the Employer's federal taxable income.
1.44 "Trustee": For periods prior to March 31, 1997, First Union
National Bank of North Carolina, serving in the capacity as sole Trustee; for
periods on or after March 31, 1997, First Union National Bank of North Carolina,
serving in the capacity as a Separate Trustee (as provided in paragraph 12.8)
for all Fund divisions other than the Company Stock Fund, and Thomas M. Mishoe,
Jr., serving in the capacity as a Separate Trustee (as provided in paragraph
12.8) for the Company Stock Fund, for so long as and to the extent each is
serving under such Trustee; or any other Trustee, Separate Trustees (as provided
in paragraph 12.8), any Co-Trustee (as provided in subparagraph 15.1(e)), or any
successor or additional person(s) or entity(ies) appointed pursuant hereto as
trustee of the Fund and currently serving. Any reference to a Trustee herein is
intended to be a reference to any sole Trustee, any separate Trustee or any Co-
Trustee then serving unless the context indicates otherwise.
1.45 "Valuation Date": Each business day (based on the days the
underlying investment funds are valued and transactions are effectuated in the
applicable financial markets) of the Plan Year, or such other dates (which must
be at least annually) as the Administrator may designate from time to time.
1.46 "Year of Broken Service": A Plan Year (which is the computation
period), commencing with or after the date an individual becomes an Employee,
during which such Employee is not credited with more than five hundred (500)
Hours of Service.
1.47 "Year of Vesting Service": A Plan Year (which is the computation
period), commencing with or after the date an individual becomes an Employee,
during which such Employee is credited with at least one thousand (1,000) Hours
of Service.
ARTICLE II
Eligibility and Participation
-----------------------------
2.1 Eligibility and Date of Participation as a Regular Participant.
--------------------------------------------------------------
2.1(a) Each individual who has met the age and service requirements for
participation in the Plan and has become a Participant in the Plan entitled to
make After-tax and Pre-Tax Contributions and receive a share of any
contributions by the Employer (that is, he is a Regular Participant) on the day
before the Effective Date of this Restatement of the Plan shall continue to be a
Regular Participant in the Plan at the Effective Date of this Restatement of the
Plan.
2.1(b) Each other Eligible Employee who is not a Regular Participant at the
Effective Date of this Restatement of the Plan shall become a Regular
Participant on the earlier of the following dates:
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(i) The first day of the first calendar month (A) which occurs both
twelve (12) months after his Date of Hire and by which he has attained the
age of twenty one (21) years and (B) on which he is an Eligible Employee, or
(ii) If he is not an Eligible Employee on the date referred to in
clause (i) above, on the first day he becomes an Eligible Employee
thereafter.
2.1(c) An individual who was, but ceased to be, a Regular Participant shall
again be a Regular Participant if and when he again becomes an Eligible
Employee.
2.1(d) An individual who becomes a Regular Participant shall be or remain a
Regular Participant for so long as he remains an Eligible Employee.
2.2 Eligibility for Rollover Contributions as a Rollover Eligible
-------------------------------------------------------------
Participant. Notwithstanding the foregoing, an Employee who is not a Regular
- -----------
Participant shall be eligible to become a Rollover Eligible Participant whenever
he is an Eligible Employee. An Eligible Employee who is not a Regular
Participant may become a Rollover Eligible Participant by making a Rollover
Contribution to the Plan. A Rollover Eligible Participant shall not be eligible
to make After-Tax or Pre-Tax Contributions or receive a share of any
contributions by the Employer or forfeitures unless and until he becomes a
Regular Participant pursuant to paragraph 2.1 A Participant shall cease to be a
Rollover Eligible Participant when he becomes a Regular Participant.
2.3 Length of Participation. An individual who becomes a Participant
-----------------------
shall be or remain a Participant for so long as he remains an Eligible Employee
and thereafter while he is entitled to future benefits under the terms of the
Plan.
ARTICLE III
Funding
-------
3.1 Amount and Timing of Employer Contributions.
-------------------------------------------
3.1(a) With respect to each Allocation Period of a Plan Year, each Employer
shall make a Matching Contribution to the Fund on behalf of each Regular
Participant who has made After-Tax and/or Pre-Tax Contributions to the Plan at
any time during such Allocation Period in the amount equal to fifty-percent
(50%) of the lesser of (i) the Regular Participant's aggregate After-Tax and
Pre-Tax Contributions for such Allocation Period or (ii) six percent (6%) of his
Compensation for such Allocation Period. The "Allocation Period" is each
calendar month.
3.1(b) With respect to each Plan Year, each Employer's Profit Sharing
Contribution to the Fund shall be such amount, if any, as the Plan Sponsor may
determine.
3.1(c) With respect to each Plan Year, each Employer's QNEC Contribution to
the Fund shall be such amount, if any, as the Plan Sponsor may determine. QNEC
Contributions are intended to be non-elective contributions within the meaning
of Section 401(m)(4)(C) of the Code (that is, employer contributions (other than
matching contributions) which an Employee may not elect to have paid to him
instead of being contributed to the Plan, which are subject to the restrictions
on distributions contained in Section 401(k)(2)(B) of the Code (generally
prohibiting distribution before separation from service, death, or disability
unless, if the Plan permits such payment, the Employee has a hardship or has
reached age fifty-nine and one-half (59-1/2) or after plan termination), and
which are immediately fully vested and non-forfeitable.
3.1(d) For any Plan Year for which the Plan is a Top Heavy Plan, the Plan
Sponsor shall cause a Top Heavy Contribution by the Employer to be made on
behalf of each Non-Key Employee who is a Regular Participant for such Plan Year,
who is an Eligible Employee on the last day of such Plan Year and who is not
covered by a collective bargaining agreement under which retirement benefits
were the subject of good faith bargaining with the Employer so that the total
- 15 -
allocation of contributions by the Employer (other than Supplemental
Contributions to the Plan and similar contributions to other plans) and
forfeitures for each such Non-Key Employee is at least equal to the lesser of:
(i) Three percent (3%) of his Top Heavy Compensation for such Plan
Year, or
(ii) Such lesser percentage of his Top Heavy Compensation for such
Plan Year which is equal to the percentage of Top Heavy Compensation of the
Key Employee for such Plan Year for whom an allocation of contributions by
the Employer (other than Supplemental Contributions to this Plan and similar
contributions to other plans) and forfeitures under this Plan and any other
qualified defined contribution plan or simplified employee pension plan
maintained by the Employer is made which is the highest such percentage for
such Plan Year (calculated by aggregating all such contributions and
forfeitures); provided, however, that this clause (ii) shall not apply if
this Plan enables a defined benefit plan to meet the requirements of Section
401(a)(4) or 410 of the Code.
For purposes hereof, contributions considered made by the Employer which are
attributable to a salary reduction or similar arrangement (such as Pre-Tax
Contributions) and matching contributions within the meaning of Section 401(m)
of the Code (such as Matching Contributions) shall only be taken into account
for purposes of determining the highest percentage of any Key Employee pursuant
to clause (ii) of this subparagraph. For purposes hereof, "Top Heavy
Compensation" means a Regular Participant's Total Compensation, not in excess of
the Compensation Limit, for a Plan Year.
3.1(e) With respect to each Plan Year, the Employer shall make a
Supplemental Contribution to the Fund on behalf of Participants in such amount
as may be required pursuant to paragraph 6.6.
3.1(f) In no event shall the sum of the Matching, QNEC, Profit Sharing and
Top Heavy Contributions made by the Employer and the Pre-Tax Contributions
considered made by the Employer for purposes of Section 404 of the Code for any
taxable year of the Employer exceed the maximum amount deductible from the
Employer's income for such taxable year under the Code, including the maximum
amount deductible under the "carry over" provisions relating to contributions in
previous years of more or less than the maximum amount permissible and any
amount deductible as a contribution on behalf of an Affiliate, in which latter
case any such contribution shall be deemed, for purposes of this Plan, to have
been made by such Affiliate. Each contribution by the Employer shall be
conditioned on its deductibility. If a reduction is thereby required, the
excess amount shall be reduced in the following manner:
(i) First, to the extent directed by the Plan Sponsor by the date,
including extensions thereof, on which its federal income tax return is due
to be filed for such taxable year, the Pre-Tax Contributions for such
taxable year of the Eligible Participants (as defined in Appendix D to the
Plan) who are Highly Compensated Employees for such taxable year shall first
be refunded to such Eligible Participant and shall be considered as gross
income to the Participant. Among such Participants, the reduction shall be
effected by reducing contributions in order of the highest Deferral
Percentages (as defined in Appendix D to the Plan),
(ii) Then, the Profit Sharing Contribution for such taxable year
shall be reduced,
(iii) Then, the QNEC Contribution for such taxable year shall be
reduced,
(iv) Then, the Matching Contribution for such taxable year shall be
reduced,
(v) Then, the Top Heavy Contribution for such taxable year shall
be reduced, and
(vi) Then the Supplemental Contributions for such taxable year
shall be reduced,
- 16 -
to the extent necessary to reduce the excess amount to zero. Unless otherwise
directed by the Plan Sponsor, any such reductions (other than those referred to
in clause (i) of this subparagraph) shall be effected pro rata based on the
entire class of contributions for such taxable year to be reduced.
3.1(g) The contribution by the Employer for any Plan Year may be made in one
or more payments at any time, subject to the prohibition of paragraph 4.5,
provided that the total amount of the contribution with respect to any taxable
year of the Employer shall be paid not later than the date, including extensions
thereof, on which the Employer's federal income tax return for such taxable year
is due to be filed. Notwithstanding the foregoing, if a contribution is not
timely made, it may still be allocated as a contribution for the Plan Year for
which contributed if so directed by the Plan Sponsor.
3.2 Special Rules for Employer's Share of and Form of Contribution.
--------------------------------------------------------------
3.2(a) Unless some other allocation of the contributions by the Employer is
directed by the Plan Sponsor, each Employer shall contribute to the Fund for
each Plan Year:
(i) That portion of the Matching Contribution made with respect to
each Participant's After-Tax and Pre-Tax Contributions for an Allocation
Period (as defined in subparagraph 3.1(a)) determined by multiplying the
Matching Contribution for such Participant for such Allocation Period by a
fraction, the numerator of which is the After-Tax and Pre-Tax Contribution
made by such Participant out of his Compensation payable by it for such
Allocation Period and the denominator of which is the aggregate After-Tax
and Pre-Tax Contributions of such Participant for such Allocation Period;
plus
(ii) That portion of the QNEC Contribution for a Plan Year
determined to be made by it; plus
(iii) That portion of the Profit Sharing Contribution for a Plan
Year determined to be made by it; plus
(iv) That portion of the Supplemental and Top Heavy Contribution
for a Plan Year equal to its proportion of the Matching Contribution made by
it for such Plan Year.
3.2(b) Notwithstanding the foregoing allocation provisions of subparagraph
3.2(a), if or to the extent an Employer is unable for any reason to make its
share of the contribution for a Plan Year, such share or portion thereof shall
be made by the other participating Employers for such Plan Year either in
proportion to their relative shares of their otherwise due contribution for such
Plan Year or in such proportion or amount as the Plan Sponsor otherwise directs.
3.2(c) The contributions made by the Employer for any Allocation Period (as
defined in subparagraph 3.1(a)) beginning on or after March 1, 1997 or any Plan
Year may be made in cash and in cash, Company Stock or some combination thereof,
as determined by the Plan Sponsor. If a contribution is made by the Employer in
cash, the Plan Sponsor may direct the Trustee to treat the cash contribution as
a contribution made for the purpose of acquiring Company Stock by directing that
it be allocated to the Company Stock Fund; and such cash contributions and all
contributions made in the form of Company Stock shall be considered to be
Company Stock contributions for purposes of allocations under the Plan. It is
the intent that Company Stock contributions (and cash contributions treated as
Company Stock contributions) shall be allocated to the Company Stock Fund, and
the appropriate Company Stock Matching Account, Company Stock Profit Sharing
Account, or Company Stock QNEC Account, without regard to any Participant
contribution investment direction otherwise then in effect.
3.3 Participant After-Tax and Pre-Tax Contributions. Subject to
-----------------------------------------------
applicable suspensions as provided in ARTICLE IX, Regular Participants may make
After-Tax Contributions and Pre-Tax Contributions as follows:
3.3(a) Each Regular Participant may make After-Tax Contributions and/or Pre-
Tax Contributions to the Plan through payroll deduction while he is an Eligible
Employee.
- 17 -
(i) The aggregate amount of a Regular Participant's After-Tax
Contributions and Pre-Tax Contributions for any payroll period shall be an
amount equal to the product obtained by multiplying (A) such Participant's
rate of contribution by (B) his Compensation for such payroll period.
(ii) A Regular Participant's rate of contribution may be any rate,
in whole multiples of one percent (1%), from one percent (1%) through twelve
percent (12%).
(iii) Each Regular Participant shall designate the type(s) of
contribution, whether After-Tax or Pre-Tax, and rate(s) thereof he is
making.
3.3(b) For each payroll period contributed, each Regular Participant's
After-Tax and Pre-Tax Contributions made by payroll deduction contributions
shall automatically be designated as follows, subject however to such other
designation by the Participant as the Administrator may from time to time permit
and subject further to redesignation as provided in other applicable provisions
of the Plan.
(i) Such Pre-Tax Contributions shall be designated as "Pre-Tax
Basic Contributions" to the extent of the lesser of (A) six percent (6%) of
the Regular Participant's Compensation for such payroll period or (B) the
amount of such Pre-Tax Contributions;
(ii) Such After-Tax Contributions shall be designated as "After-Tax
Basic Contributions" to the extent of the lesser of (A) the excess of six
percent (6%) of the Regular Participant's Compensation for such payroll
period over the amount of his Pre-Tax Basic Contributions for such payroll
period or (B) the amount of such After-Tax Contributions for such payroll
period; and
(iii) The balance of the After-Tax Contributions and Pre-Tax
Contributions of the Regular Participant for such payroll period shall be
designated as "After-Tax Optional Contributions" and "Pre-Tax Optional
Contributions", respectively.
3.3(c) All Pre-Tax Contributions are intended to be payments to the Plan by
the Employer under a cash or deferred arrangement described in Section 401(k) of
the Code, and any reference herein to such contributions as employee or
Participant contributions is for convenience only and is not intended as a
designation of such contributions as employee contributions within the meaning
of Section 414(h)(1) of the Code.
3.4 Elective Deferral Dollar Limitation on Pre-Tax Contributions. The
------------------------------------------------------------
aggregate amount of a Participant's Pre-Tax Contributions made to the Plan for a
Plan Year shall not exceed the applicable limits thereon under Section 402(g) of
the Code and in Appendix D to the Plan.
3.5 Participant Rollover Contributions.
----------------------------------
3.5(a) Any Participant who is an Eligible Employee may make or direct there
to be made a Rollover Contribution in the form of a lump sum in cash.
3.5(b) For purposes hereof, a "Rollover Contribution" is a qualifying
rollover amount distributed from or attributable to a distribution, including a
plan to plan direct rollover of an eligible rollover distribution under Section
402(c) of the Code, from a plan qualified under Section 401 or 403(a) of the
Code. Notwithstanding the foregoing, no Rollover Contribution may consist of
any amount constituting "accumulated deductible employee contributions" within
the meaning of Section 72(o)(5)(B) of the Code or an eligible rollover
distribution from an annuity contract described in Section 403(b)(1) of the
Code, a custodial account described in Section 403(b)(7) of the Code or a
retirement income account described in the Section 402(e) of the Code.
- 18 -
3.5(c) The Administrator may require as a condition of any such Rollover
Contribution that the Participant, and/or the trustee, custodian or issuer of
any plan, trust, bond, annuity or account from which the amount to be rolled
over or transferred is attributable, make such certification as the
Administrator deems necessary respecting the qualification of the distributing
or transferor plan, trust, or annuity, the amount and nature of the distribution
or transfer, the qualification of the Rollover Contribution as a rollover amount
with respect to this Plan, and any other information the Administrator may
reasonably require.
3.5(d) In the event it is discovered that any Rollover Contribution made by
or on behalf of a Participant is not a qualifying rollover amount or an eligible
rollover distribution or otherwise is a contribution or transfer which is not
permitted to be received as a Rollover Contribution under the Plan, the Accrued
Benefit of the Participant attributable to such non-qualifying Rollover
Contribution shall be returned to the Participant (or if deceased, his
Beneficiary).
3.6 Procedure for and Time of Making Participant Contributions.
----------------------------------------------------------
3.6(a) A Participant's contributions which may be made by payroll deduction
shall commence to be made starting as of the effective date of his application
to make such contribution. A Participant who is an Eligible Employee may
commence making payroll deduction contributions initially as of the date he
first becomes a Participant and thereafter he may commence, change the rate or
recommence his payroll deduction contributions as of the first day of any
calendar month (or at such other time as the Administrator may permit on a
uniform and non-discriminatory basis) by delivering a payroll deduction election
to the Administrator no later than the fifteenth (15th) day of the calendar
month immediately preceding the date it is to become effective (or such shorter
period as the Administrator may permit on a uniform and non-discriminatory
basis) and prior to the time the amounts in question are payable or otherwise
made available to the Participant.
3.6(b) A Participant may terminate his payroll deduction contributions as of
the end of any calendar month (or at such other time as the Administrator may
permit on a uniform and non-discriminatory basis) by delivering an election to
the Administrator at least fifteen (15) days (or such other period as the
Administrator may permit on a uniform and non-discriminatory basis) before the
end of the calendar month (or other time) such contributions will be terminated,
which notice shall specify the date of termination. A Participant who has
voluntarily terminated his payroll deduction contributions to the Plan may
recommence his payroll deduction contributions as of the first day of any
calendar month (or at such other time as the Administrator may permit on a
uniform and non-discriminatory basis) by delivering a new payroll deduction
election to the Administrator no later than the fifteenth (15th) day of the
calendar month immediately preceding the date it is to become effective (or such
shorter period as the Administrator may permit on a uniform and non-
discriminatory basis) and prior to the time that the amounts in question are
payable or otherwise made available to the Participant.
3.6(c) If a Participant ceases to be an Eligible Employee, his contributions
to the Plan shall cease to be made. Except as otherwise prohibited herein, if
such individual again becomes an Eligible Employee, he shall again be entitled
to recommence his payroll deduction contributions at a rate designated by him as
of the date he again becomes an Eligible Employee by delivering a new payroll
deduction election to the Administrator no later than the fifteenth (15th) day
of the calendar month immediately preceding the date it is to become effective
(or such shorter period as the Administrator may permit on a uniform and non-
discriminatory basis) and prior to the time that the amounts in question are
payable or otherwise made available to the Participant.
3.6(d) A Participant's Rollover Contributions shall be made by delivering
the same to the Administrator together with an appropriate contribution
election.
3.6(e) Each Participant shall when electing to make contributions designate
the rate and type(s) of contribution in the applicable election.
3.6(f) Participant contributions received by the Administrator or withheld
by the Employer shall be paid over to the Trustee as soon as is reasonably
practical after the applicable election is received in the case of lump sum
contributions and as
- 19 -
soon as is reasonably practical after the amount can be segregated from the
general assets of the Employer and in no event later than the fifteen (15)
business days after the calendar month of contribution, in the case of payroll
deduction contributions. In all events, After-Tax and Pre-Tax Contributions
shall be paid over to the Trustee not later than the end of the Plan Year
immediately following the Plan Year for which withheld by the Employer.
3.6(g) Notwithstanding anything to the contrary herein, the Administrator
may on a non-discriminatory basis at any time and from time to time:
(i) Permit changes by Participants in the rate of their payroll
deduction contributions prospectively, and/or
(ii) Unilaterally and prospectively limit After-Tax and/or Pre-Tax
Contributions which may be made to the Plan,
to the extent considered advisable by the Administrator in order to satisfy the
requirements of paragraphs 4.3 and/or 4.11 and/or to prevent the sum of Pre-Tax
Contributions by Participants and Matching, QNEC, Profit Sharing and Top Heavy
Contributions by the Employer for a taxable year of the Employer from exceeding
the amount thereof deductible for such taxable year by the Employer for federal
income tax purposes.
3.7 Use of Forfeitures and Unallocated Annual Additions. Forfeitures
---------------------------------------------------
shall be held in the Fund and applied to reduce the next due contributions by
the Employer in the Plan Year following the Plan Year in which the forfeiture
occurs on a pro rata basis without regard to which Employer's contributions the
forfeitures are attributable as hereinafter provided until exhausted, and to the
extent thus used to reduce contributions by the Employer shall be treated as a
contribution by the Employer for purposes of administering the Plan. In lieu
of the foregoing use of forfeitures, forfeitures may be used to pay Plan
administrative expenses if so directed by the Plan Sponsor. In no event shall
any such forfeitures be used to otherwise increase the benefits to which a
Participant is entitled under the Plan. In the event that the amount of
forfeitures at any time exceed the required contribution, such excess
forfeitures shall be held in the special account in the Fund provided for in
subparagraph 4.5 and applied to reduce future contributions by the Employer.
3.8 No Duty of Trustee to Determine or Enforce Contributions. The
--------------------------------------------------------
Trustee shall not be required to determine the amount of any contribution for
any Plan Year or to enforce the duty of the Employer to make or pay over such
contributions; but the Trustee shall provide the Employer with such information
as it may reasonably require to determine the amount of its contribution.
ARTICLE IV
Participants' Accounts and Adjustments
--------------------------------------
4.1 Accounts.
--------
4.1(a) The Administrator shall establish and maintain on the books of the
Fund for all Participants and all other persons having an interest therein
separate accounts reflecting the Accrued Benefit of each Participant. Such
accounts of each Participant shall be separate with respect to the Accrued
Benefit of such Participant represented by his accounts in each Fund division.
4.1(b) As of each Valuation Date (or as otherwise provided herein), accounts
shall generally be adjusted in accordance with the applicable provisions of the
Plan as follows:
- 20 -
(i) Benefit payments, withdrawals and other distributions and
transfers out of the Fund shall be determined and allocated.
(ii) The net increase or decrease in value of accounts and Fund
divisions shall be determined and allocated.
(iii) Contributions, amounts held in the special account under
paragraph 4.5 and direct transfers shall be allocated.
(iv) Company Stock acquisitions by purchase or internal adjustment
shall be determined and allocated.
(v) Other adjustments required under the Plan shall be made.
4.1(c) The Administrator shall establish procedures for, and may thereafter
from time to time modify such procedures for, accounting for interests in each
Fund division. Such procedures may include dollar or unit accounting for one or
more of the Fund divisions.
4.1(d) The Administrator shall establish procedures for, and may thereafter
from time to time modify such procedures for, making the adjustments to accounts
required under the Plan. Such procedures shall include records of the cost or
other basis of Company Stock.
4.1(e) Whenever the Plan's Valuation Date is daily, the Administrator may
utilize such rules as it deems appropriate for crediting valuation and other
adjustments to Participants' accounts and the Fund divisions and for determining
balances therein which reflect the time amounts are actually received or
charged, rather than the time as of which an allocation is normally provided for
under the Plan.
4.1(f) If the Administrator determines in making any valuation, allocation
or other adjustments to any Participant's account under the provisions of the
Plan that the strict application of the provisions of the Plan will not produce
equitable and non-discriminatory allocations among the Participants' accounts,
it may modify any procedures specified in the Plan for the purpose of achieving
an equal and non-discriminatory allocation in accordance with the general
concepts and purposes of the Plan; provided, however, that any such modification
shall not be inconsistent with the provisions of Section 401(a)(4) and, where
applicable, Section 401(k) or (m) of the Code and other qualification and excise
tax sections of the Code applicable to the Plan.
4.2 Allocation of Contributions. Subject to the applicable limitations
---------------------------
contained herein:
4.2(a) Each Regular Participant's Pre-Tax Contributions to the Fund for a
Plan Year shall be allocated to his Pre-Tax Account as of the last Valuation
Date of the period in such Plan Year for which such contributions are made.
4.2(b) Each Participant's Rollover Contribution shall be allocated to his
Rollover Account when made.
4.2(c) The Employer's Matching Contribution to the Fund made on behalf of a
Regular Participant for an Allocation Period (as defined in subparagraph 3.1(a))
shall be allocated to the Matching Active Account (including the Company Stock
Matching Account or the Unrestricted Matching Account, as applicable) of such
Participant as of the last Valuation Date of the Allocation Period for which
such contribution is made.
4.2(d) Each Employer's Profit Sharing Contribution to the Fund for a Plan
Year shall be allocated as of the last Valuation Date of such Plan Year among
the Profit Sharing Active Accounts (including the Company Stock Profit Sharing
Account or the Unrestricted Profit Sharing Account, as applicable) of the
Covered Participants for such Plan Year in proportion to their Compensation for
such Plan Year.
4.2(e) The Employer's QNEC Contribution to the Fund for a Plan Year shall be
allocated as of the last Valuation Date of such Plan Year among the QNEC
Accounts (including the Company Stock QNEC Account or the QNEC Account, as
- 21 -
applicable) of the Regular Participants who are Non-Highly Compensated Employees
for such Plan Year in proportion to their Compensation for such Plan Year.
4.2(f) The Employer's Top Heavy Contribution to the Fund made on behalf of a
Regular Participant for a Plan Year shall be allocated to the Profit Sharing
Active Account (including the Company Stock Profit Sharing Account or the
Unrestricted Profit Sharing Account, as applicable) of such Participant as of
the last Valuation Date of such Plan Year.
4.2(g) Each Employer's Supplemental Contribution made to the Fund on behalf
of a Participant for each Plan Year and amounts repaid to the Plan by the
Participant pursuant to paragraph 6.6 shall be allocated to the account of such
Participant as of the last Valuation Date of such Plan Year and when repaid,
respectively, from which forfeited or distributed (including the Company Stock
Matching Account or the Unrestricted Matching Account, as applicable, and the
Company Stock Profit Sharing Account or the Unrestricted Profit Sharing Account,
as applicable).
4.2(h) If a contribution by the Employer is made in cash and Company Stock,
the same proportions of each shall be allocated to each Participant receiving an
allocation of the contribution in question.
4.3 Dollar/25% Limitations on Annual Additions.
------------------------------------------
4.3(a) Notwithstanding any other provision of the Plan, the sum of all
Annual Additions (as defined in subparagraph 4.3(c)) allocated to the accounts
of any Participant for any Limitation Year may not exceed the lesser of:
(i) $30,000 (referred to herein as the "Dollar Limitation"), or
(ii) Twenty-five percent (25%) of such Participant's Total
Compensation for such Limitation Year,
which limitations are jointly referred to herein as the "Dollar/25%
Limitations".
4.3(b) The Dollar Limitation shall be automatically adjusted by the
Adjustment Factor, from time to time, to reflect any annual cost of living
adjustments and any such adjustment (which with the original Dollar Limitation
is referred to herein as the "adjusted Dollar Limitation") shall be effective
for the Limitation Year which ends with or within the calendar year for which
such increase is effective.
4.3(c) The term "Annual Additions" means the sum of the following amounts
allocated to a Participant's account under the Plan for a Limitation Year:
(i) All contributions by the Employer other than Supplemental
Contributions;
(ii) All forfeitures other than those used to restore accounts
pursuant to paragraph 6.6;
(iii) All After-Tax Contributions and Pre-Tax Contributions by
Participants; and
(iv) Any other amounts defined as "annual additions" under Section
415 of the Code.
Notwithstanding anything to the contrary herein, amounts repaid by a Participant
pursuant to paragraph 6.6 in order to have a forfeiture restored and amounts
which are excluded from being "annual additions" under Section 415 of the Code
shall not be considered Annual Additions for purposes hereof.
4.3(d) For purposes hereof, the term "Limitation Year" means the Plan Year.
- 22 -
4.3(e) For purposes hereof, the rules of Section 415 of the Code are
incorporated by reference for purposes of determining "Annual Additions" and
applying the "Dollar/25% Limitations".
4.4 Additional Limitations on Annual Additions Where Employer Maintains
-------------------------------------------------------------------
More Than One Plan.
- ------------------
4.4(a) If any Participant is or has been a participant in another Qualified
Defined Contribution Plan or in a Qualified Defined Benefit Plan (whether or not
terminated), the limitations contained in paragraph 4.3 shall be appropriately
adjusted when and as required by Section 415 of the Code, as modified where
applicable by Section 416 of the Code, which provisions are incorporated by
reference and shall control over any contrary or omitted or inconsistent
provisions in the Plan.
4.4(b) If any Participant is or has been a participant in more than one
Qualified Defined Contribution Plan (whether or not terminated), the limitations
under Section 415 of the Code apply as if all such Qualified Defined
Contribution Plans were one plan. The following rules shall also apply:
(i) In the event that the Dollar/25% Limitations would otherwise
be exceeded for a Limitation Year, the applicable limitation shall be
applied for such Participant by limiting the allocation of Annual Additions
to the accounts of such Participant in the following order: first,
allocations under all plans not hereinafter described, then profit sharing
plan allocations, then stock bonus plan allocations, then money purchase
pension plan allocations, then target benefit plan allocations, then
employee stock ownership plan allocations, then tax credit employee stock
ownership plan allocations, and lastly welfare benefit fund and individual
medical benefit account allocations.
(ii) If such Participant is a participant in two or more plans of
the same type, the applicable limitation shall be applied to non-
contributory plans or aspects thereof first and thereafter to contributory
plans or aspects thereof and shall be applied pro rata among such plans or
aspects thereof in the same limitation category on the basis of allocations
thereunder before operation of the applicable limitation.
4.4(c) If any Participant is or has been a Participant in both a Qualified
Defined Benefit Plan and a Qualified Defined Contribution Plan, then the Annual
Additions for such Participant shall be reduced (after the accrued benefit, the
annual benefit, the projected annual benefit and the rate of accrual under all
Qualified Defined Benefit Plans are reduced) to the extent necessary so that the
sum of the defined benefit plan fraction (not to exceed one) and the defined
contribution plan fraction (not to exceed one) determined pursuant to section
415(e) of the Code shall not exceed 1.0 for such Participant for any Plan Year
and in order to achieve the objective of compliance with the applicable rules of
limitation contained in Section 415(e) of the Code and, if the Plan is a Top
Heavy Plan or a Super Top Heavy Plan, in Section 416(h) of the Code.
Notwithstanding anything to the contrary in this paragraph, the limitations
provision of this subparagraph shall not apply with respect to Plan Years
beginning on or after January 1, 2000.
4.4(d) Solely for purposes of paragraphs 4.3, 4.4 and 4.5, the following
words and terms shall have the meaning set forth below in this subparagraph:
(i) The term "Qualified Defined Contribution Plan" means any plan
maintained by the Employer or portion thereof described or treated as a
defined contribution plan within the meaning of Sections 414(i) and 415(k)
of the Code, including, but not limited to, defined contribution plans
qualified under Section 401(a) of the Code, tax sheltered annuity contracts
described in Section 403(b) of the Code, simplified employee pension plans
described in Section 408(k) of the Code, any employee contribution portion
of and any cost-of-living protection arrangement under a defined benefit
plan qualified under Section 401(a) of the Code, any individual medical
account under a pension or annuity plan within the meaning of Section 415(l)
of the Code, and any welfare benefit fund within the meaning of Section
419(e) of the Code.
(ii) The term "Qualified Defined Benefit Plan" means any plan
maintained by the Employer or portion thereof described or treated as a
defined benefit plan within the meaning of Sections 414(j) and 415(k) of the
Code.
- 23 -
4.4(e) In complying with the limitations of Section 415 of the Code, all
other transitional rules under any law enacting or amending Section 415, or
Section 416 as applicable to Section 415, of the Code shall be applicable as
determined by the Plan Sponsor.
4.5 Special Account for Unallocated Annual Additions.
------------------------------------------------
4.5(a) In the event a Participant's Annual Additions for a Plan Year exceed
his Dollar/25% Limitations of paragraph 4.3, the excess Annual Additions of such
Participant shall be eliminated by refunding to him that amount of his After-Tax
and Pre-Tax Contributions for the Plan Year which are included in the Annual
Additions taken into account under the provisions of paragraph 4.3 in the
following order:
(i) First, there shall be returned to such Participant first that
amount of his After-Tax Optional Contributions, if any, and then of his Pre-
Tax Optional Contributions, if any (including in each case any income
allocable thereto for such Limitation Year), and
(ii) Then, there shall be returned to such Participant first that
amount of his After-Tax Basic Contributions, if any, and then of his Pre-Tax
Basic Contributions, if any, (including in each case any income allocable
thereto for such Limitation Year),
and by the loss of Matching Contributions otherwise to be allocated to him with
respect to such After-Tax and Pre-Tax Contributions, to the extent necessary to
achieve compliance with the Dollar/25% Limitations of paragraph 4.3. Any such
After-Tax and Pre-Tax Contributions so returned shall be disregarded for
purposes of determining Excess Elective Deferrals in Appendix D to the Plan,
actual deferral percentages under Section 401(k) of the Code (and Deferral
Percentages in Appendix D to the Plan) and, if ever recharacterized and then
returned, actual contribution percentages under Section 401(m) of the Code (and
Contribution Percentages in Appendix D to the Plan). After the return to such
Participant of any After-Tax and Pre-Tax Contributions and loss of Matching
Contributions pursuant to the preceding provisions of this subparagraph, any
elimination of allocations to his accounts made in accordance with this
subparagraph shall be made first from Profit Sharing Contributions allocated to
him, next from QNEC Contributions allocated to him, and then from Top Heavy
Contributions allocated to him for such Plan Year.
4.5(b) Any Annual Additions allocable to Participants' accounts for the Plan
Year which consist of the Profit Sharing Contribution or QNEC Contributions and
which exceed the Dollar/25% Limitations of paragraph 4.3 shall be withdrawn for
the affected Participants' accounts and retained as an undesignated account on
the books of the Fund for allocation among the accounts of the Participants as a
part of the Employer's contribution next due for the next following Plan Year.
Any such amounts so used shall be treated for allocation purposes of the Plan as
a part of the contribution by the Employer.
4.5(c) The undesignated special account maintained pursuant to this
paragraph shall be adjusted at each Valuation Date for its share of net increase
or decrease in value of the Fund, and such account shall be held in such Fund
divisions as the Administrator shall direct.
4.5(d) Notwithstanding any other provisions of the Plan, no contributions by
the Employer which would constitute amounts subject to the Dollar/25%
Limitations of paragraph 4.3 for a Plan Year may be made to the Plan until any
balance at the beginning of such Plan Year in the undesignated account
maintained pursuant to this paragraph 4.5 has been allocated among the accounts
of Participants.
4.6 Valuation of Assets and Allocation of Valuation Adjustments.
-----------------------------------------------------------
Earnings, losses and valuation change adjustments (referred to herein
collectively as the "net increase or decrease in value" or as the "valuation
adjustments") shall be made at least annually to Participants' accounts as
hereinafter provided.
- 24 -
4.6(a) As of and within a reasonable time after each Valuation Date and as
of the date of any transfer out of or benefit payment from a segregated account
in the Loan Fund, the Trustee shall value the assets held in each such affected
segregated account in the Loan Fund and the Administrator shall adjust each such
account to reflect its net increases and decreases in value since the last
valuation thereof. Expenses incurred and paid out of Plan assets in connection
with the administration and investment by such a segregated account shall be
charged to the segregated account incurring the same in such non-discriminatory
manner as determined by the Administrator.
4.6(b) Within a reasonable time after each Valuation Date, the Trustee shall
determine the value of assets (including Company Stock) held by the Fund in
unsegregated accounts in each Fund division other than the Loan Fund as of such
Valuation Date and the Administrator shall then adjust each such account on the
books of the Fund proportionately to reflect the net increase or decrease in
such value since the last Valuation Date. Such valuation and adjustments shall
be made separately with respect to each such Fund division and with respect to
each of the Participant's accounts in such Fund division. Solely for purposes
of determining such net increase or decrease in value and the proportionate
adjustment to each such account, the rules set forth in either (i) or (ii) below
will apply with respect to "post-valuation additions" and "post-valuation
reductions". "Post-valuation additions" are the amounts of the following
additions or allocations made to such accounts as of a date after the last
Valuation Date: contributions by the Employer; transfers from accounts in
another Fund division; Participant contributions; Participant loan repayments;
and direct transfers. "Post-valuation reductions" are the amounts of
distributions or other payments which have been made from the Fund and charged
to such accounts and transfers to accounts in another Fund division since the
last Valuation Date.
(i) Except as otherwise provided in clause (ii) of this
subparagraph, in determining such values and in making such adjustments
there shall not be taken into consideration any post-valuation additions or
reductions.
(ii) Notwithstanding the foregoing provisions of clause (i), if the
Administrator shall so determine, the determination of such values and
adjustments shall be made by considering a portion of any one or more
individual items of post-valuation additions which have not been distributed
or otherwise paid out of the Fund since the last Valuation Date and a
portion of any one or more individual items of post-valuation reductions for
transfers to accounts in another Fund division on a uniform and non-
discriminatory basis to reflect their contribution to the net increase or
decrease in value. The portion of any such item taken into account for such
purposes shall be determined in one of the following two ways:
(A) By multiplying such item by a fraction, the numerator of which
is the number of whole calendar months (or payroll periods or calendar
weeks or days as determined by the Administrator) since the last
Valuation Date during which such item was held in an account in the
Fund and the denominator of which is the number of whole calendar
months (or payroll periods or calendar weeks or days) since the last
Valuation Date; or
(B) By multiplying such item by a fraction, the numerator of which
is one and the denominator of which is the number of whole calendar
months since the last Valuation Date.
4.6(c) The valuation adjustment contemplated by this paragraph shall be made
before amounts are forfeited from accounts each Plan Year.
4.6(d) Notwithstanding anything to the contrary in the foregoing:
(i) In making such adjustments, expenses of the Plan and Fund in
connection with any Participant or Beneficiary (such as for loan fees or
charges) may, after direction of the Administrator on a uniform and non-
discriminatory basis and then only if permitted by the Act and the Code, be
charged directly to the account of the Participant or Beneficiary to whom
the expense relates.
- 25 -
(ii) In making such adjustments, expenses allocable to each Fund
division as a whole shall be borne by such Fund division as a whole, and
expenses allocable to the Fund as a whole shall be borne by each Fund
division on a pro rata basis (determined on the basis of account balances to
which such adjustments are made). Such allocation of expenses shall be made
in the manner determined by the Administrator.
(iii) At each Valuation Date, the Administrator in its discretion
shall cause any negative balance in each Participant's account in the Fund
to be eliminated by means of a transfer thereto of amounts held in the same
classification of account of the Participant in another Fund division, and a
corresponding pro rata transfer from the accounts of other Participants
between Fund divisions.
(iv) Promissory notes of Participants or Beneficiaries held by the
Trustee in the Loan Fund shall be valued at the face amount of their unpaid
principal balances and, in the event the accrual method of accounting is
used for such purpose, any interest accrued but unpaid thereon; and other
assets of the Fund shall be valued at their fair market value as of each
Valuation Date or other valuation thereof.
4.6(e) The Administrator shall select the method of accounting (either the
cash method or the accrual method or some permissible combination thereof) to be
used for purposes hereof.
4.6(f) The value of the assets shall be at their fair market value as of the
Valuation Date and such other valuation thereof; provided, however, that the
value of some or all Policies and Contracts may be their cash surrender value as
of their respective last anniversary or other valuation date coinciding with or
immediately preceding the Valuation Date if so directed by the Administrator.
4.6(g) Whenever the Plan accounting is based on daily Valuation Dates,
contributions creditable to Participants' accounts shall be accounted for on as
received basis by the Trustee and the valuation adjustments to Participants'
accounts shall be effected on such basis and subject to such rules and
procedures as the Administrator may determine to reflect daily accounting
(without regard to the proration or partial allocation rules or other
inconsistent rules of the foregoing provisions of this paragraph).
4.7 Determination of Account Balances.
---------------------------------
4.7(a) The value of any account on the books of the Fund at any time shall
be that amount determined by adding the amount of all contributions which have
been allocated to such account and all adjustments and transfers (including all
acquisitions of Company Stock made by cash purchase) by which such account has
been increased, and further by subtracting all amounts forfeited from such
account, all adjustments by which such account has been decreased and all
distributions, other payments and transfers (including all cash payments from it
to purchase Company Stock) made from such account, all as provided in the Plan.
4.7(b) In determining account balances in the Company Stock Fund:
(i) As of each Valuation Date, the Administrator shall allocate to
each such account the number of full shares and the fractional interest
(calculated to the second, third or fourth decimal place, as determined by
the Administrator) of Company Stock transferred to or acquired by the
account and shall decrease the number thereof at the last preceding
Valuation Date by the shares or interest sold by, distributed from or
otherwise removed from such account.
(ii) In the event of a Company Stock dividend or Company Stock
split or a change in the number of shares of Company Stock held by the Plan
as a result of a reorganization or other recapitalization of the Plan
Sponsor, there shall be credited to each affected account a proportionate
number of full and fractional shares of Company Stock
- 26 -
received by the Plan as a result of such dividend, split or other change
based on the number of shares and fraction thereof in such account as of the
Valuation Date (or such date as the Administrator may direct) coinciding
with or next following the ex-dividend or record date as applicable.
4.7(c) A record of the basis of the shares of Company Stock and fractions
thereof shall be maintained as follows unless another method permitted by
Section 402 of the Code is directed to be used by the Administrator:
(i) The basis of Company Stock purchased by the Trustee shall be
the actual cost of the Company Stock to the Trustee. The basis of all other
Company Stock acquired by the Trustee (including Company Stock contributed
by the Employer to the Fund) shall be the fair market value of the Company
Stock on the date of the acquisition.
(ii) All shares of Company Stock that are held unallocated in the
special account maintained pursuant to paragraph 4.5 shall retain their
original basis, without regard to when the shares are allocated to the
accounts of the Participants.
(iii) As of each Valuation Date, the basis of all Company Stock that
is made available for allocation to the accounts of the Participants shall
be calculated by averaging the basis of all Company Stock to be allocated as
of that date, as determined pursuant to clauses (i) and (ii) above.
(iv) The basis of all Company Stock allocated to an account of a
Participant shall be calculated by averaging the basis of all Company Stock
allocated to such account as of that date, determined as hereinabove
provided.
4.7(d) Unless otherwise directed by the Administrator for Plan
administrative purposes such as making benefit payments or causing substantially
the same proportions of each account balance in the Company Stock Fund to be
held in cash and in Company Stock, acquisitions and dispositions of Company
Stock by Participants' accounts shall generally be effected pro rata based on
account balances held in the Company Stock Fund and available for the period
used.
4.8 Suspense Accounts.
-----------------
4.8(a) If any in-service withdrawal or other distribution of an Accrued
Benefit is made to a Participant from his Matching or Profit Sharing Active
Account before such Participant has a non-forfeitable right to his entire
Accrued Benefit and before such Participant has permanently forfeited and lost
his restoration rights under the Plan pursuant to subparagraph 6.6(b) (referred
to herein as the "requisite break in service"), the balance of such Matching or
Profit Sharing Active Account after each such distribution shall be maintained
as a suspended portion of his Matching or Profit Sharing Active Account until
either:
(i) Such Participant has incurred the requisite break in service,
in which event his non-forfeitable interest in each such suspended portion
shall be designated as or added to his Matching or Profit Sharing Non-
forfeitable Account pursuant to subparagraph 6.3(c), or
(ii) Such Participant has become entitled to a non-forfeitable
interest in his entire Accrued Benefit, in which event such portion shall no
longer be suspended.
In no event shall any contributions or forfeitures be allocated to that part of
a Participant's Matching or Profit Sharing Active Account which has been so
suspended, but such suspended portion shall nevertheless be adjusted to reflect
the increases or decreases in the value of the Fund pursuant to paragraph 4.6.
4.8(b) A Participant's non-forfeitable interest at any relevant time in any
suspended portion of his Matching or Profit Sharing Active Account shall be
determined by first determining:
- 27 -
(i) A "factor", which is the ratio of the value of such suspended
portion at such relevant time to the value of the balance in such suspended
portion immediately after such distribution, and
(ii) The "adjusted distribution", which is the product obtained by
multiplying such factor by the sum of the last adjusted distribution, if
any, plus the amount of the distribution which brought about the suspension
of such portion of such account.
The Participant's non-forfeitable interest in any suspended portion of his
Matching or Profit Sharing Active Account at any relevant time shall equal the
excess of:
(iii) The product obtained by multiplying such Participant's non-
forfeitable percentage, determined under subparagraph 6.3 at such relevant time,
by the sum obtained by adding the adjusted distribution to the value of the
suspended portion at such relevant time, over
(iv) The adjusted distribution.
4.9 Equitable Adjustment in Case of Error or Omission.
-------------------------------------------------
4.9(a) When an error or omission is discovered in the account of a
Participant, the Administrator shall be authorized to make such equitable
adjustments as are practical and as are determined by it as of the Plan Year in
which the error or omission is discovered or corrected, including but not
limited to actual retroactive reallocations, reallocations based on reasonable
estimates, and other corrections described in this paragraph.
4.9(b) In the event that the error or omission is the erroneous forfeiture
from a Participant's account or the failure to permit contributions to be made
or to properly allocate contributions, forfeitures or valuation adjustments to a
Participant's account, the Plan Sponsor in its sole discretion may contribute or
cause there to be contributed by any Employer funds or assets to the Plan or may
permit a make-up contribution by the Participant to be made to correct such
error or omission and such funds, assets or contributions shall be allocated to
the account or accounts of any such affected Participant as the Administrator
may direct the Trustee in writing. Any such contributed amounts (other than the
portion thereof intended to compensate for previously unallocated investment
gain which shall not be considered an allocation subject to the Dollar/25%
Limitations of paragraph 4.3) shall be considered allocated to the Participant's
account for the Plan Year or Limitation Year to which they relate, rather than
the Plan Year or Limitation Year in which actually made, for purposes of such
limitations.
4.9(c) In the event that the error or omission is the understatement or
overstatement of Fund earnings and losses, the Administrator is expressly
authorized to determine the appropriate equitable adjustment on the basis of a
standard of materiality therefor. If the understatement or overstatement does
not exceed the standard, the Administrator may direct that no correction in the
allocation for the valuation period of the understatement or overstatement be
made and that such error or omission be corrected solely by treating the amount
of the understatement or overstatement as additional earnings or loss for a
subsequent valuation period (which generally shall be the valuation period
immediately following the valuation period as of which both the error or
omission is discovered and a determination is made of the equitable adjustment
to correct the error or omission). Unless otherwise determined in writing by
the Administrator, the standard of materiality for purposes hereof for a monthly
valuation period shall be an aggregate amount (determined on a monthly basis)
equal to the greater of Three Dollars ($3.00) per Participant in the affected
Fund division or one tenth of one percent (.1%) of the fair market value of the
affected Fund division at the Valuation Date of the understatement or
overstatement. This subparagraph shall apply to all such errors or omissions
not yet corrected as of the Effective Date of this Restatement of the Plan.
4.10 Special Rules for Reemployed Veterans.
-------------------------------------
- 28 -
4.10(a) Effective December 12, 1994, notwithstanding any other provision of
the Plan, the following special rules shall apply in order to provide Make-up
Contributions to the Plan on behalf of Reemployed Veterans:
(i) Make-up Contributions shall be made to the Plan by the
Employer on behalf of a Reemployed Veteran, and allocated to the appropriate
account of the affected Participant's Accrued Benefit, in such amount and at
such time or times as is required by the USERRA.
(ii) Make-up Contributions with respect to a Reemployed Veteran
shall not be subject to any otherwise applicable contribution limits under
Sections 402(g), 402(h), 403(b), 408, 415, or 457 of the Code or any
otherwise limit on deductible contributions under Sections 404(a) or 404(h)
of the Code as applied with respect to the Plan Year or taxable year, as
applicable to the relevant section of the Code, in which the contribution is
made. A Make-up Contribution shall not be taken into account in applying the
contribution or deductible contribution limits to any other contribution
made during the Plan Year or taxable year, as applicable to the relevant
section of the Code. Make-up Contributions shall not exceed the aggregate
amount of contributions that would have been permitted under the Plan
contribution and deductible contribution limits for the Plan Year or taxable
year, as applicable to the relevant section of the Code, to which the
contribution relates had the Reemployed Veteran continued to be employed by
the Employer during the period of his Qualified Military Service.
(iii) Make-up Contributions shall not be treated as contributions
for purposes of determining Top Heavy Contributions required to be made by
the Employer for either the Plan Year in which they are made or for the Plan
Year to which they relate.
(iv) Compensation to be used for purposes of determining Make-up
Contributions with respect to a period of Qualified Military Service shall
mean the Compensation (as otherwise defined in the Plan but based on rate of
pay) which the Reemployed Veteran would have received but for his Qualified
Military Service. If a Reemployed Veteran's pay is not readily
determinable, the Reemployed Veteran's Compensation shall then be his
average Compensation for the 12-month period (or actual shorter period of
employment) immediately preceding his Qualified Military Service.
(v) The following service counting rules shall apply:
(A) A Reemployed Veteran shall not be considered to have incurred a
Year of Broken Service by reason of his Qualified Military Service.
(B) Qualified Military Service of a Reemployed Veteran shall be
counted as service for vesting and benefit accrual under the Plan.
(vi) A Reemployed Veteran shall be entitled to Matching
Contributions that are contingent on elective deferrals or employee
contributions for the period of his Qualified Military Service only if he
timely makes those contributions following his return to the Employer's
service as provided in this paragraph.
4.10(b) Notwithstanding any other provision of the Plan, a Reemployed
Veteran shall be entitled to make After-Tax and Pre-Tax Contributions for the
period of his Qualified Military Service following his return to the Employer's
service as follows:
(i) Such contributions must be made during the period which begins
on the date of reemployment with the Employer following such Qualified
Military Service and is equal to the lesser of (A) three times the
Reemployed Veteran's period of Qualified Military Service or (B) five (5)
years.
- 29 -
(ii) The amount of such contributions shall be determined by the
Reemployed Veteran but shall not exceed the maximum amount which the
Reemployed Veteran could have made during the period of his Qualified
Military Service in accordance with the applicable limitations and rules of
the Plan as though the Reemployed Veteran had continued to be employed by
the Employer and received the Compensation during such period in the amount
determined pursuant to this paragraph.
(iii) The maximum amount of such contributions determined in clause
(ii) above shall be reduced by the amount of any such contributions actually
made for during the Reemployed Veteran's period of Qualified Military
Service.
4.10(c) For purposes of this paragraph, the following terms have the
following meanings:
(i) "Make-up Contributions" means the contributions which are
required to be made to the Plan for a Reemployed Veteran pursuant to the
USERRA and Section 414(u) of the Code. These contributions generally are
the contributions by the Employer that would have accrued to the Reemployed
Veteran under the Plan, but for his absence due to his Qualified Military
Service. Neither the Make-up Contribution obligation nor this paragraph
requires that (A) any earnings be credited to the account of a Reemployed
Veteran with respect to any Make-up Contribution before such contribution is
actually made or (B) the Plan provide for any make-up allocation of any
forfeitures that occurred during the period of a Reemployed Veteran's
Qualified Military Service.
(ii) "Qualified Military Service" means any service in the
uniformed services (as defined in chapter 43 of title 38, United States
Code) by any individual if such individual is entitled to reemployment
rights under such chapter with respect to such service and to the Employer.
(iii) "Reemployed Veteran" means a person who is or, but for his
Qualified Military Service, would have been a Participant at some time
during his Qualified Military Service and who is entitled to the restoration
benefits and protections of the USERRA with respect to his Qualified
Military Service and the Plan.
(iv) "USERRA" means the Uniformed Services Employment and
Reemployment Rights Act of 1994.
4.11 Limitation on and Distribution of After-Tax, Pre-Tax and Matching
-----------------------------------------------------------------
Contributions Made by or on behalf of Highly Compensated Employees. After-Tax,
- ------------------------------------------------------------------
Pre-Tax and Matching Contributions made by or on behalf of Highly Compensated
Employees shall be subject to the non-discrimination rules of Sections 401(k)
and (m) of the Code and shall be limited, refunded or forfeited as provided in
Appendix D to the Plan.
ARTICLE V
Retirement Dates
----------------
5.1 Normal Retirement Date. The Normal Retirement Date of a Participant
----------------------
shall be the first day of the calendar month coinciding with or next following
the date on which the Participant attains his Normal Retirement Age.
5.2 Delayed Retirement Date. A Participant who continues in the active
-----------------------
employment of the Employer beyond his Normal Retirement Date shall continue to
participate in the Plan, and his Delayed Retirement Date shall be the first day
of the calendar month coinciding with or next following the date of termination
of his employment with the Employer.
5.3 Early Retirement Date. A Participant who has attained the age of
---------------------
fifty-five (55) years or more while an Eligible Employee and has completed at
least ten (10) Years of Vesting Service as determined for vesting purposes under
paragraph 6.5 may retire from the employment of the Employer prior to his Normal
Retirement Date and his Early Retirement Date shall be the first day of the
calendar month coinciding with or next following the date of such retirement.
- 30 -
5.4 Disability Retirement Date. A Participant who becomes Disabled while
--------------------------
employed by the Employer and ceases to be employed by the Employer as a result
of his Disability shall be considered to retire on Disability Retirement for
purposes of this Plan and his Disability Retirement Date shall be the first day
of the calendar month coinciding with or next following the date of such
retirement.
5.4(b) For purposes hereof:
(i) With respect to a Participant, the existence of a "Disability"
or the status of being "Disabled" means the occurrence of either (A) the
Participant's inability, because of a physical or mental impairment, either
to perform the duties of his customary employment or to engage in any
gainful activity for an indefinite period or (B) the Participant's permanent
loss or loss of use of a member of function of the body or permanent
disfigurement.
(ii) The Administrator shall have the right to require proof of
Disability.
(iii) Failure by the Participant to provide such evidence as may be
required by the Administrator shall result in the determination that the
Participant is not Disabled under the Plan.
(iv) The determination of Disability shall be made by the
Administrator in accordance with standards uniformly applied to all
Participants, on the advice of one or more physicians appointed or approved
by the Plan Sponsor if deemed necessary or advisable by the Administrator,
and the Administrator shall have the right to require further medical
examinations from time to time to determine whether there has been any
change in the Participant's physical condition.
ARTICLE VI
Vesting
-------
6.1 Vesting at Retirement or Attainment of Normal Retirement Age.
------------------------------------------------------------
6.1(a) Upon either:
(i) A Participant's having attained his Normal Retirement Age
while employed by the Employer,
(ii) His satisfaction of the age and service requirements for Early
Retirement while an Eligible Employee, or
(iii) His retirement from the employment of the Employer on his
Disability Retirement Date,
the Accrued Benefit of such Participant shall be fully vested and non-
forfeitable.
6.2 Vesting at Death. If a Participant dies while employed by the
----------------
Employer, the Accrued Benefit of such Participant shall be fully vested and non-
forfeitable.
6.3 Vesting in Matching and Profit Sharing Active Accounts at Other
---------------------------------------------------------------
Times. At any time when a Participant is not fully vested in his Matching and
Profit Sharing Active Accounts under paragraphs 6.1 or 6.2, he shall have a non-
forfeitable interest in a percentage of his Matching and Profit Sharing Active
Accounts depending upon the number of his Years of Vesting Service with which he
is credited at such time in accordance with the applicable schedule below:
Years of Vesting Service Non-Forfeitable Percentage
------------------------ --------------------------
- 31 -
Less than 3 0%
3 or more 100%
Notwithstanding the foregoing, a Participant who is an Employee at the time of a
"change in control" of the Plan Sponsor shall have a non-forfeitable interest in
a percentage of his Matching and Profit Sharing Active Accounts. For purposes
hereof, the term "change in control" means "Change in Control" as defined in the
Plan Sponsor's 1996 Incentive Stock Plan.
6.4 Vesting in Accrued Benefit Other Than Matching and Profit Sharing
-----------------------------------------------------------------
Active Accounts. A Participant shall at all times have a fully vested and non-
- ---------------
forfeitable interest in his Accrued Benefit other than his Matching and Profit
Sharing Active Accounts.
6.5 Vesting Service Rules. For purposes of computing a Participant's
---------------------
non-forfeitable right to his Matching and Profit Sharing Active Accounts, all
Years of Vesting Service, whether or not consecutive, shall be included.
6.6 Forfeiture and Restoration of Matching and Profit Sharing Active
----------------------------------------------------------------
Accounts.
- --------
6.6(a) The balance of a Participant's Matching and Profit Sharing Active
Accounts in excess of his non-forfeitable interest therein shall be forfeited as
of the earlier (his "Forfeiture Date") of:
(i) The last day of the Plan Year in which he incurs five (5)
consecutive Years of Broken Service (a "Forfeiture Break in Service), or
(ii) The date he dies, or
(iii) The date he receives payment of his entire non-forfeitable
Accrued Benefit under the Plan (a "cash-out").
After a Participant's Forfeiture Date (and the loss of his right of restoration
described in subparagraph 6.6(b), if applicable), his non-forfeitable interest
in his Matching or Profit Sharing Active Account, if any, shall then be
designated as or added to his Matching or Profit Sharing Non-forfeitable Account
and no further allocations of any part of the Matching, Profit Sharing or Top
Heavy Contributions by the Employer or of any forfeitures shall be made to such
account thereafter.
6.6(b) If a Participant incurs a Forfeiture Date because of a cash-out and
again becomes an Employee prior to the termination of the Plan (the date of
which is referred to herein as the "Re-employment Date"), an amount equal to
such forfeited account balance (without increase or decrease for valuation
adjustments in the Fund after the forfeiture) shall be restored to his Matching
and Profit Sharing Active Accounts through a Supplemental Contribution made by
the Employer for such Plan Year in which both:
(i) While an Employee, he repays to the Fund the amount of the
distributions from his Matching and Profit Sharing Accounts, and
(ii) Such repayment is made before the earlier of (A) the date he
incurs five (5) consecutive Years of Broken Service after the date of his
cash-out or (B) the date which is five (5) years after his Re-employment
Date (at which earlier date his restoration right expires).
6.6(c) For purposes of this paragraph, a Participant who has no non-
forfeitable interest in his Accrued Benefit shall be deemed to have been cashed-
out pursuant to the provisions of this paragraph upon his ceasing to be an
Employee and shall be deemed to have repaid such cashed-out benefit upon his Re-
employment Date provided that such Re-employment Date occurs before his
restoration right expires.
- 32 -
6.6(d) If a Participant incurs a Forfeiture Date, and if he later is
entitled to an allocation of Matching, Profit Sharing or Top Heavy Contributions
or forfeitures, new Matching and Profit Sharing Active Accounts shall be
established for such Participant.
6.6(e) If a Participant incurs a forfeiture because of a Forfeiture Break in
Service or he incurs a forfeiture because of a cash-out and his restoration
rights with respect to a separately established Matching or Profit Sharing
Account expire, Years of Vesting Service after the occurrence of his Forfeiture
Break in Service or the expiration of his restoration rights, respectively,
shall not be taken into consideration in determining the amount of such
Participant's vested interest in such separately established Matching and Profit
Sharing Active or Non-forfeitable Accounts.
ARTICLE VII
Death Benefits
--------------
7.1 Death after Benefit Commencement Date. If a Participant dies after
-------------------------------------
his Accrued Benefit has begun to be paid to him, the only benefits payable under
the Plan after his death shall be those, if any, provided under the form of
payment being made to him at his death.
7.2 Death before Benefit Commencement Date. If a Participant dies before
--------------------------------------
his Accrued Benefit has begun to be paid to him, his non-forfeitable Accrued
Benefit under the Plan shall be paid to his Beneficiary at the time and in the
manner described in ARTICLE VIII.
7.3 Beneficiary Designation.
-----------------------
7.3(a) Subject to the rights of his Spouse as hereinafter provided, each
Participant shall have the right to notify the Administrator in writing of any
designation of a Beneficiary to receive, if alive, benefits under the Plan in
the event of his death. Such designation may be changed from time to time by
notice in writing to the Administrator. Notwithstanding anything to the
contrary in the foregoing, the Beneficiary of any Participant shall be the
Participant's surviving Spouse, if any, and no contrary Beneficiary designation
shall be given effect unless the Beneficiary designation is consented to by the
Participant's Spouse.
7.3(b) If a Participant dies without having designated a Beneficiary, or if
the Beneficiary so designated has predeceased the Participant or, except when
his Beneficiary is his Spouse, cannot be located by the Administrator within one
year after the date when the Administrator commenced making a reasonable effort
to locate such Beneficiary, then his surviving spouse, or if none, then his
surviving children, including adopted children, in equal shares, or if none,
then his surviving parents in equal shares, or if none, then his estate shall be
deemed to be his Beneficiary.
7.3(c) Unless otherwise provided by the Administrator, any Beneficiary
designation may include multiple, contingent or successive Beneficiaries and may
specify the proportionate distribution to each Beneficiary. If a Beneficiary
shall survive the Participant, but shall die before the entire benefit payable
to such Beneficiary has been distributed, then absent any other provision by the
Participant, the unpaid amount of such benefit shall be distributed to the
estate of the deceased Beneficiary. If multiple Beneficiaries are designated,
absent provisions by the Participant, those named or the survivors of them shall
share equally any benefits payable under the Plan. Any Beneficiary, including
the Participant's spouse, shall be entitled to disclaim any benefit otherwise
payable to him under the Plan.
7.4 Consent to Beneficiary Designation. Any Beneficiary designation by
----------------------------------
the Participant for purposes of paragraph 7.3 and shall be subject to the
following rules:
7.4(a) Such Beneficiary designation shall not be given effect unless either:
- 33 -
(i) The Participant's Spouse consents in writing to the
designation and the Spouse's consent acknowledges the effect of the
designation and is witnessed by a representative of the Plan or a notary
public (or the equivalent) or both if required by the Administrator, or
(ii) It is established to the satisfaction of the Administrator
that such consent may not be attained because there is no Spouse, because
the Spouse cannot be located, because the Participant has been abandoned by
the Spouse (which fact shall be determined under applicable law and
evidenced by a court order so specifying), or because of such other
circumstances as may be provided under Section 417(a)(2)(B) of the Code.
For purposes hereof, a representative of the Plan is any officer of the
Employer, the Administrator or any other person designated as such in writing by
any of the foregoing.
7.4(b) If a Spouse consents to a Participant's Beneficiary designation, such
consent shall either be in the form of:
(i) A limited consent which acknowledges any specific non-Spouse
Beneficiary or class of non-Spouse Beneficiaries (including any multiple,
contingent or successive Beneficiary or class of Beneficiaries), if any, or
(ii) If permitted by the Administrator on a uniform non-
discriminatory basis, a general consent which acknowledges the Spouse's
right (and awareness thereof) to limit consent only to a specific
Beneficiary or class of Beneficiaries and in which the Spouse voluntarily
elects to relinquish such right.
7.4(c) If a Spouse consents to a Participant's Beneficiary designation, any
change of the Beneficiary thereunder (other than a revocation altogether of the
designation) by the Participant shall require the further consent of his Spouse
in accordance with the applicable provisions of this subparagraph (unless the
consent of the Spouse expressly permits such change by the Participant without
any requirement of further consent by the Spouse). However, reaffirmation of
the Spouse's consent to the designation shall not be required.
7.4(d) Any such consent by a Spouse, or the establishment that the consent
of a Spouse may not be obtained, shall be effective only with respect to such
Spouse.
7.4(e) Any such consent by a Spouse shall continue to be effective for so
long as the Participant's designation remains in force and may not be revoked by
the Spouse.
ARTICLE VIII
Payment of Benefits
-------------------
8.1 Time of Payment.
---------------
8.1(a) The non-forfeitable Accrued Benefit of a Participant shall become
payable to the Participant, if then alive, or otherwise to his Beneficiary, no
earlier than his cessation of employment with the Employer and at a time
determined by the Administrator in accordance with the following rules:
(i) The non-forfeitable Accrued Benefit of the Participant shall
normally commence to be paid as soon as practicable after:
(A) The Participant separates from the service of the Employer
for any reason; or
- 34 -
(B) If later, and the Participant's non-forfeitable Accrued Benefit
exceeds, or at the time of any prior distribution exceeded, $3,500 (or
$5,000 for Plan Years beginning after December 31, 1998), the earlier
of (I) the date on which the Participant delivers to the Administrator
a written consent to payment or (II) the date on which the Participant
attains age sixty-five (65).
(ii) Notwithstanding the foregoing, the non-forfeitable Accrued
Benefit of a Participant shall not commence to be paid later than the
sixtieth (60th) day after the end of the Plan Year in which occurs the later
of the:
(A) The date on which the Participant attains the age of sixty-five
(65), or
(B) The date he ceases to be employed by the Employer.
(iii) Notwithstanding the foregoing, the non-forfeitable Accrued
Benefit of a Participant shall commence to be paid by the April 1 (sometimes
referred to as the "Required Beginning Date") following the calendar year in
which occurs the later of the following applicable event (the "Required
Beginning Event"):
(A) The date the Participant attains the age seventy and one-half
(70-1/2), or
(B) Effective January 1, 1997 if the Participant's non-forfeitable
Accrued Benefit is not in pay status on December 31, 1996 and the
Participant is not a 5% Owner, the date the Participant retires from
the service of the Employer or otherwise ceases to be employed by the
Employer. For purposes hereof a "5% Owner" means a Participant who is
a more than five percent (5%) owner of the Employer (as defined for
purposes of determining Key Employees) with respect to the Plan Year
ending in the calendar year in which the Participant attains the age
seventy and one-half (70-1/2) (a "5% Owner").
As an alternative to the foregoing, a Participant who is not a 5% Owner and
who reaches age seventy and one-half (70-1/2) while employed by the Employer
and on or before December 31, 1999 may elect to begin to receive his non-
forfeitable Accrued Benefit at any time after he attains the age of seventy
and one-half (70-1/2) and at or before the April 1 of the calendar year
following the calendar year in which he attains the age of seventy and one-
half (70-1/2). The non-forfeitable Accrued Benefit of a Participant for
each Plan Year after his Accrued Benefit commences pursuant to this clause
shall commence to be paid as soon as possible after each such Plan Year.
(iv) Notwithstanding the foregoing other than clause (iii), except as
provided in ARTICLE IX, the non-forfeitable Accrued Benefit of a Participant
shall not commence to be paid before the earlier of:
(A) The date such Participant ceases to be employed by the Employer
by reason of death, disability, retirement or other separation from
service,
(B) The date of transfer of such Participant to the employment of a
corporate employer which is not an Affiliate acquiring by sale or
other disposition of substantially all the assets used in a trade or
business conducted by a selling corporate Affiliate which employed the
Participant,
(C) The date of sale or other disposition of a corporate
Affiliate's interest in a subsidiary to an entity or person which is
not an Affiliate when such Participant continues employment with such
subsidiary, or
(D) The date of termination of the Plan without the establishment
of a successor plan as determined for purposes of Section 401(k) of
the Code. A "successor plan" generally means any other defined
contribution plan (other than an employee stock ownership plan as
defined in Section 409 or 4975(e)(7) of the Code, other than a
simplified employee pension plan described in Section 408(k) of the
Code, and other than a plan under which fewer than two percent (2%) of
the Employees eligible to participate in the Plan at the date
- 35 -
of its termination are or were eligible to participate at any time
during the twenty-four (24) month period beginning twelve (12) months
before its termination) maintained by the Employer which is in
existence at the date of termination of the Plan or established within
the 12-month period after all benefits under the Plan are distributed.
Clauses (iv)(B), (C) and (D) of this subparagraph shall not apply unless the
distribution occurring by reason of an event described therein is a Lump Sum
Payment. Clauses (iv)(B) and (C) of this subparagraph shall not apply
unless the Plan continues to be maintained by the selling Affiliate or any
other Affiliate after the sale or other disposition referred to therein,
unless the purchaser does not after the sale or other disposition adopt or
maintain the Plan or another plan with the Plan is merged or consolidated or
to which Plan assets are transferred (other than by means of a rollover
contribution), and unless the distribution occurs in connection with the
sale or other disposition (which means that the distribution normally is
made no later than the end of the second calendar year after the calendar
year in which the sale or other disposition occurred).
8.1(b) The non-forfeitable Accrued Benefit of a Participant who dies before
such Accrued Benefit commences to be paid to him shall become payable to his
Beneficiary as soon as practicable after the Participant's death.
8.1(c) Notwithstanding the foregoing provisions of this paragraph, a
Participant whose non-forfeitable Accrued Benefit exceeds, or at the time of any
prior distribution exceeded, $3,500 (or $5,000 for Plan Years beginning after
December 31, 1998), or the Beneficiary of a Participant who dies before his non-
forfeitable Accrued Benefit becomes payable and whose non-forfeitable Accrued
Benefit entitlement exceeds $3,500 (or $5,000 for Plan Years beginning after
December 31, 1998), may elect a later date on which such Accrued Benefit shall
become payable if such Accrued Benefit exceeds, at the time of the distribution
or any prior distribution, $3,500 (or $5,000 for Plan Years beginning after
December 31, 1998). Such later date shall not be later than:
(i) In the case of an election by a Participant, the latest time
for payment under clause (iii) of subparagraph 8.1(a);
(ii) In the case of an election by a Beneficiary who is the
Participant's spouse, the later of:
(A) The end of the fifth (5th) calendar year following the calendar
year in which the Participant's death occurs, or
(B) The end of the calendar year in which the Participant would
have attained the age of seventy and one-half (70-1/2); and
(iii) In the case of an election by a Beneficiary who is not the
Participant's spouse, the end of the fifth (5th) calendar year following the
calendar year in which the Participant's death occurs.
Such election shall be in writing, executed and filed with the Administrator at
least thirty (30) days (or such shorter period as the Administrator may permit
on a uniform and non-discriminatory basis) before the date such Accrued Benefit
otherwise becomes payable, and it shall set forth and shall be conditioned upon
the payment of such Accrued Benefit in a form provided herein. Any such
election may be revoked or modified at any time.
8.1(d) The non-forfeitable Accrued Benefit of a Participant which is payable
to an "alternate payee" (as defined in Section 414(p) of the Code) who is the
Participant's spouse (including a former spouse) pursuant to a QDRO may be paid
in a Lump Sum Payment (as defined in paragraph 8.4), as soon as practicable
after the QDRO is delivered to the Administrator and determined to be a QDRO or
at such later time as may be provided in such QDRO, where the Participant has
neither attained the earliest retirement age under Section 414(p) of the Code or
separated from the service of the Employer.
- 36 -
8.1(e) Notwithstanding the foregoing provisions of this paragraph, payment
may be delayed for a reasonable period in the event the recipient cannot be
located or is not competent to receive the benefit payment, there is a dispute
as to the proper recipient of such benefit payment, additional time is needed to
complete the Plan valuation adjustments and allocations, or additional time is
necessary to properly explain the recipient's options.
8.2 Form of Payment When Participant Is the Initial Recipient. The non-
---------------------------------------------------------
forfeitable Accrued Benefit of a Participant payable to him pursuant to
paragraph 8.1 shall be paid to him in the form of a Lump Sum Payment (as defined
in paragraph 8.4). Payments due after a Participant's death shall be made to
his Beneficiary.
8.3 Form of Payment When Beneficiary Is the Initial Recipient. In the
---------------------------------------------------------
event of a Participant's death before his Accrued Benefit is entirely paid to
him, the Participant's remaining non-forfeitable Accrued Benefit payable
pursuant to paragraph 8.1 shall be paid to his Beneficiary in the form of a Lump
Sum Payment (as defined in paragraph 8.4). Payments due after a Beneficiary's
death shall be made to the successor Beneficiary.
8.4 Payment Definitions and Rules.
-----------------------------
8.4(a) The term "Lump Sum Payment" generally means a single payment of the
entire or, as applicable, the designated portion of the entire, non-forfeitable
Accrued Benefit. A non-forfeitable Accrued Benefit of a Participant payable in
the form of a Lump Sum Payment shall be determined as of the Valuation Date (or
other time of valuation hereunder) immediately preceding the date of payment to
which shall be added any contributions or other adjustments allocated after such
Valuation Date (or other time of valuation hereunder) and from which shall be
subtracted any distributions or other adjustments since such Valuation Date (or
other time of valuation hereunder). In the event an Accrued Benefit is to be
paid in a Lump Sum Payment and the amount thereof has not been determined, the
Administrator is authorized to make one or more interim payments prior to the
time the amount of such Lump Sum Payment is finally determined.
8.4(b) All payments of a Participant's non-forfeitable Accrued Benefit held
in Fund divisions other than the Loan Fund or the Company Stock Fund shall be
made in cash.
8.4(c) All payments of a Participant's non-forfeitable Accrued Benefit held
in the Company Stock Fund shall be made by the transfer of either cash or whole
shares of Company Stock and cash in lieu of a fractional share, as follows:
(i) If the number of shares which would otherwise be distributed
is less than twenty-five (25) (as adjusted automatically from time to time
to reflect Company Stock dividends or splits or other capitalization changes
occurring after March 31, 1997), payment shall normally be made entirely in
cash.
(ii) If the number of shares to be distributed is twenty-five (25)
(as adjusted automatically from time to time to reflect Company Stock
dividends or splits or other capitalization changes occurring after March
31, 1997) or more, payment shall normally be made in whole shares and cash
in lieu of a fractional share.
(iii) Notwithstanding the normal form of payment, the recipient
shall be entitled to elect either method of payment. Such election shall be
filed with the Administrator at least thirty (30) days (or such shorter
period as the Administrator may permit on a uniform and non-discriminatory
basis) before the benefit payment date. Any election may be revoked and
another election made any number of times.
(iv) Any whole shares of Company Stock which are converted to cash
for payment purposes shall be disposed of at current fair market value at or
about the time of payment by sale to the Plan Sponsor or on the open market
or transfer to other Participants' accounts. Any whole or fractional shares
which are acquired with the portion of the account which normally would be
paid in cash shall be acquired at current fair market value at or about the
time of payment by purchase from the Plan Sponsor or on the open market or
transfer from other Participants' account. Notwithstanding the provisions
of paragraphs 4.6 and 4.7, the basis attributable to the Stock acquired with
the cash
- 37 -
portion from a stockholder other than the Plan or from the Plan Sponsor
shall not be determined pursuant to paragraphs 4.6 and 4.7, but shall equal
its cost, if so directed by the Administrator.
8.4(d) All payments of a Participant's non-forfeitable Accrued Benefit held
in the Loan Fund shall be made by offset against the Participant's non-
forfeitable Accrued Benefit by distribution of the Participant's promissory
note(s) marked paid and satisfied.
8.4(e) To the extent the payment provisions of the Plan are inconsistent
with and violative of the requirements of Section 401(a)(9) of the Code, the
provisions of Section 401(a)(9) of the Code are hereby incorporated by reference
and shall control.
8.5 Plan to Plan Direct Rollover as a Distribution Option.
-----------------------------------------------------
8.5(a) Notwithstanding any contrary provision of the Plan, but subject to
any de minimis or other exceptions or limitations provided for under Section
401(a)(31) of the Code, any prospective recipient (whether a Participant, a
surviving spouse, a current or former spouse who is an alternate payee under a
QDRO or any other person eligible to make a rollover) of a distribution from the
Plan which constitutes an "eligible rollover distribution" (to the extent
otherwise includible in the recipient's gross income) may direct the Trustee to
pay the distribution directly to an "eligible retirement plan".
8.5(b) For purposes hereof, the following terms have the meanings assigned
to them in Section 401(a)(31) of the Code and, to the extent not inconsistent
therewith, shall have the following meanings:
(i) The term "eligible retirement plan" means a defined
contribution plan which is either an individual retirement account described
in Section 408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code (other than an endowment contract), 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 prospective recipient's
eligible rollover distribution; provided, however, that in the case of an
eligible rollover distribution payable to a Participant's surviving spouse,
an "eligible retirement plan" means only an individual retirement account or
individual retirement annuity.
(ii) The term "eligible rollover distribution" means any
distribution other than:
(A) A distribution which is one of a series of substantially equal
periodic payments (not less frequently than annually) made either for
the life (or life expectancy) of the recipient or the joint lives (or
joint life expectancies) of the recipient and his beneficiary who is
an individual or for a specified period of ten (10) or more years, or
(B) A distribution to the extent it is required under the minimum
distribution requirement of Section 401(a)(9) of the Code.
Effective January 1, 2000 pursuant to an administrative delay in
application of this sentence permitted by the Internal Revenue Service and
utilized by the Administrator, that portion of any hardship withdrawal
attributable to Pre-Tax Contributions (and any other contributions which the
Internal Revenue Service treats as subject to the rule of this sentence)
shall not constitute an eligible rollover distribution.
8.5(c) Any such direction shall be filed with the Administrator in such form
and at such time as the Administrator may require and shall adequately specify
the eligible retirement plan to which the payment shall be made.
8.5(d) The Trustee shall make payment as directed only if the proposed
transferee plan will accept the payment.
- 38 -
8.5(e) Any such plan to plan transfer shall be considered a distribution
option under this Plan and shall be subject to all the usual distribution rules
of this Plan (including but not limited to the requirement of spousal consent,
where applicable, and an advance explanation of the option).
8.5(f) The Administrator is authorized in its discretion, applied on a
uniform and non-discriminatory basis, to apply any discretionary de minimis or
other discretionary exceptions or limitations provided for under Section
401(a)(31) of the Code in effecting or declining to effect plan to plan
transfers hereunder.
8.5(g) Within a reasonable time (generally not more than ninety (90) nor
less than thirty (30) days) before the benefit payment date of a prospective
recipient of an eligible rollover distribution from the Plan, the Administrator
shall provide the prospective recipient with a written explanation of the
rollover and tax rules required by Section 402(f) of the Code.
8.6 Notice, Election and Consent Procedures Regarding Accrued Benefit
-----------------------------------------------------------------
Payment.
- -------
8.6(a) Any election and any designation regarding, and any consent to,
payment given by a Participant or Beneficiary shall be in writing, shall clearly
indicate the election or designation being made or the consent being given, and
shall be filed with the Administrator and in accordance with the procedures
provided in the following subparagraphs to this paragraph.
8.6(b) Within a reasonable time (generally not more than ninety (90) nor
less than thirty (30) days, or any shorter period permitted under the Code)
before a Participant's non-forfeitable Accrued Benefit is to be paid to him, the
Administrator shall by mail or personal delivery provide the Participant with a
written explanation of:
(i) The terms and conditions of the applicable form of payment,
including the financial effects of the form of payment.
(ii) The Participant's right to delay receipt of his non-
forfeitable Accrued Benefit until such later date, if any, allowed under
paragraph 8.1, including the right to modify or revoke any election
thereunder.
8.6(c) Within a reasonable time before the non-forfeitable Accrued Benefit
of a Participant who died prior to commencement of payment of his Accrued
Benefit is to be paid, the Administrator shall by mail or personal delivery
provide the Participant's Beneficiary with a written explanation of:
(i) The terms and conditions of the applicable form of payment.
(ii) The Beneficiary's right to delay receipt of the Participant's
non-forfeitable Accrued Benefit until such later date, if any, allowed under
paragraph 8.1, including the right to modify or revoke any election
thereunder.
8.6(d) If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply (and it is intended that those sections do not apply to
distributions from this Plan), such distribution may commence to be made less
than thirty (30) days (or any shorter period permitted under the Code) after any
required notice pursuant to this paragraph or paragraph 8.5 is given so long as:
(i) The Administrator clearly informs the recipient that, where
applicable, the recipient has a right to a period of at least thirty (30)
days (or any shorter period permitted under the Code) after receiving the
notice to consider the decision of whether or not to elect or consent to a
distribution (and, if applicable, a particular distribution option), and
(ii) The recipient, after receiving the notice, affirmatively
elects a distribution.
- 39 -
8.7 Benefit Determination and Payment Procedure.
-------------------------------------------
8.7(a) The Administrator shall make all determinations concerning
eligibility for benefits under the Plan, the time or terms of payment, and the
forms or manner of payment to the Participant or the Participant's Beneficiary,
in the event of the death of a Participant. The Administrator shall promptly
notify the Trustee of each such determination that benefit payments are due or
should cease to be made and provide to the Trustee all other information
necessary to allow the Trustee to carry out said determination, whereupon the
Trustee shall pay or cease to pay such benefits from the Fund in accordance with
the Administrator's determination.
8.7(b) In making the determinations described in subparagraph 8.7(a), the
Administrator shall take into account the terms of any QDRO received with
respect to the non-forfeitable Accrued Benefit of the Participant. The time and
form of payment with respect to the QDRO and the time and form of payment chosen
by the Participant or his Beneficiary or required by the Plan shall not be
altered by the terms of the QDRO (except as required under Section 414(p)(4) of
the Code or, if payment is made in the form of a Lump Sum Payment (as defined in
paragraph 8.4), as permitted under subparagraph 8.1(d)). The Administrator
shall make all determinations regarding benefit payments to be made pursuant to
a QDRO. Any benefit payment which may be subject to the terms of a domestic
relations order received by the Administrator shall be suspended during the
period the Administrator is considering whether the order is a QDRO. In the
event that benefits are in pay status at the time that a domestic relations
order is received, the Administrator shall promptly notify the Trustee of the
amount, if any, of the benefit payments that must be suspended for the period
required by the Administrator to determine the status of the order. Upon the
completion of the Administrator's review or other determination of the status of
the order, the Administrator shall promptly notify the Trustee of the time
benefit payments are to commence or resume, and of the identity of, and the
amount and form of benefits to be paid to the person or persons to whom payment
is to be made.
8.8 Claims Procedure.
----------------
8.8(a) A Participant or Beneficiary (the "claimant") shall have the right to
request any benefit under the Plan by filing a written claim for any such
benefit with the Administrator on a form provided by the Administrator for such
purpose. The Administrator shall give such claim due consideration and shall
either approve or deny it in whole or in part. Within ninety (90) days
following receipt of such claim by the Administrator, notice of any approval or
denial thereof, in whole or in part, shall be delivered to the claimant or his
duly authorized representative or such notice of denial shall be sent by mail to
the claimant or his duly authorized representative at the address shown on the
claim form or such individual's last known address. The aforesaid ninety (90)
day response period may be extended to one hundred eighty (180) days after
receipt of the claimant's claim if special circumstances exist and if written
notice of the extension to one hundred eighty (180) days indicating the special
circumstances involved and the date by which a decision is expected to be made
is furnished to the claimant within ninety (90) days after receipt of the
claimant's claim. Any notice of denial shall be written in a manner calculated
to be understood by the claimant and shall:
(i) Set forth a specific reason or reasons for the denial,
(ii) Make specific reference to the pertinent provisions of the
Plan on which any denial of benefits is based,
(iii) Describe any additional material or information necessary for
the claimant to perfect the claim and explain why such material or
information is necessary, and
(iv) Explain the claim review procedure of subparagraph 8.8(b).
If a notice of approval or denial is not provided to the claimant within the
applicable ninety (90) day or one hundred eighty (180) day period, the
claimant's claim shall be considered denied for purposes of the claim review
procedure of subparagraph 8.8(b).
- 40 -
8.8(b) A Participant or Beneficiary whose claim filed pursuant to
subparagraph 8.8(a) has been denied, in whole or in part, may, within sixty (60)
days following receipt of notice of such denial, or following the expiration of
the applicable period provided for in subparagraph 8.8(a) for notifying the
claimant of the decision on the claim if no notice of denial is provided, make
written application to the Administrator for a review of such claim, which
application shall be filed with the Administrator. For purposes of such review,
the claimant or his duly authorized representative may review Plan documents
pertinent to such claim and may submit to the Administrator written issues and
comments respecting such claim. The Administrator may schedule and hold a
hearing. The Administrator shall make a full and fair review of any denial of a
claim for benefits and issue its decision thereon promptly, but no later than
sixty (60) days after receipt by the Administrator of the claimant's request for
review, or one hundred twenty (120) days after such receipt if a hearing is to
be held or if other special circumstances exist and if written notice of the
extension to one hundred twenty (120) days is furnished to the claimant within
sixty (60) days after the receipt of the claimant's request for a review. Such
decision shall be in writing, shall be delivered or mailed by the Administrator
to the claimant or his duly authorized representative in the manner prescribed
in subparagraph 8.8(a) for notices of approval or denial of claims, and shall:
(i) Include specific reasons for the decision,
(ii) Be written in a manner calculated to be understood by the
claimant, and
(iii) Contain specific references to the pertinent Plan provisions
on which the decision is based.
The Administrator's decision made in good faith shall be final.
8.9 Payments to Minors and Incompetents. If a Participant or Beneficiary
-----------------------------------
entitled to receive any benefits hereunder is a minor or is adjudged to be
legally incapable of giving valid receipt and discharge for such benefits, or is
deemed so by the Administrator, benefits will be paid to such person as the
Administrator may designate for the benefit of such Participant or Beneficiary.
Such payments shall be considered a payment to such Participant or Beneficiary
and shall, to the extent made, be deemed a complete discharge of any liability
for such payments under the Plan.
8.10 Distribution of Benefit When Distributee Cannot Be Located. The
----------------------------------------------------------
Administrator shall make all reasonable attempts to determine the identity
and/or whereabouts of a Participant or Participant's Spouse or a Participant's
Beneficiary entitled to any other benefit under the Plan, including the mailing
by certified mail of a notice to the last known address shown on the Employer's,
the Administrator's or the Trustee's records. If the Administrator is unable to
locate such a person entitled to benefits hereunder, or if there has been no
claim made for such benefits, the Trustee shall continue to hold the benefit due
such person, subject to any applicable statute of escheats.
ARTICLE IX
Withdrawals and Loans
---------------------
9.1 In-Service Non-Hardship Withdrawals from After-Tax Optional Account
-------------------------------------------------------------------
and/or Rollover Account. A Participant who is employed by the Employer may make
- -----------------------
non-hardship withdrawals in whole or in part from his After-Tax Optional Account
and/or Rollover Account.
9.2 In-Service Non-Hardship Withdrawals from Unrestricted Matching
--------------------------------------------------------------
Account and/or Unrestricted Profit Sharing Account. A Participant who is
- --------------------------------------------------
employed by the Employer and who has attained the age of twenty-one (21) years
and is 100% vested in his Accrued Benefit may make non-hardship withdrawals in
whole or in part from his Unrestricted Matching Account and/or Unrestricted
Profit Sharing Account.
- 41 -
9.3 In-Service Non-Hardship Withdrawals from After-Tax Basic Account,
-----------------------------------------------------------------
Pre-Tax Account and/or Unrestricted QNEC Account. A Participant who is employed
- ------------------------------------------------
by the Employer and who has attained the age of fifty-nine and one-half (59-1/2)
years may make non-hardship withdrawals in whole or in part from his After-Tax
Basic Account, Pre-Tax Account and/or Unrestricted QNEC Account.
9.4 In-Service Hardship Withdrawals from After-Tax Basic Account, Pre-Tax
---------------------------------------------------------------------
Account, Unrestricted Matching Account and/or Unrestricted Profit Sharing
- -------------------------------------------------------------------------
Account.
- -------
9.4(a) A Participant who is employed by the Employer and who suffers a
Severe Hardship may, upon written request approved by the Administrator, make a
hardship withdrawal from his After-Tax Basic Account, Unrestricted Matching
Account (to the extent vested), Unrestricted Profit Sharing Account (to the
extent vested), and all or that portion of the balance of his Pre-Tax
Contributions then considered held in his Pre-Tax Account, which the
Administrator deems appropriate to relieve such hardship. Unless the
Administrator provides for a different ordering, Severe Hardship withdrawals
shall be made first from the Participant's After-Tax Basic Account, then from
his Pre-Tax Account, then from his Unrestricted Matching Account, and lastly
from his Unrestricted Profit Sharing Account.
9.4(b) "Severe Hardship" of a Participant for purposes of this paragraph
shall be determined by the Administrator upon review of each situation and in
accordance with the following objective standard and means an immediate and
heavy need for financial assistance in meeting obligations incurred or to be
incurred by the Participant, taking into account the Participant's other
reasonably available resources, as provided below. A Severe Hardship shall be
considered to exist only where the conditions of both of the following clauses
(i) and (ii) are satisfied:
(i) The immediate and heavy need requirement shall be considered
satisfied only where the need is on account of any of the following:
(A) Medical expenses (to the extent not reimbursable or compensable
by any plan, program, insurance or otherwise) described in Section
213(d) of the Code of the Participant, the Participant's spouse or any
of the Participant's dependents (as defined in Section 152 of the
Code).
(B) Acquisition (excluding mortgage payments) of a dwelling unit
which within a reasonable time is to be used (determined at the time
the withdrawal is made) as the principal residence of the Participant.
(C) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Participant,
the Participant's spouse, the Participant's children or any of the
Participant's dependents (as defined in Section 152 of the Code).
(D) Prevention of eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's
principal residence.
The amount of the immediate and heavy financial need may include any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the Severe Hardship distribution.
(ii) The other reasonably available resources requirement shall be
considered satisfied only when all of the following occur:
(A) The distribution from the Plan does not exceed the amount of
the immediate and heavy need plus the projected income tax liability
on the amount to be withdrawn (taking into account the following
described currently available funds).
- 42 -
(B) The Participant has obtained all currently available
distributions, other than Severe Hardship under this Plan and
comparable hardship distributions under other qualified plans, under
this Plan and all other qualified plans maintained by the Employer.
(C) The Participant has obtained all currently available non-
taxable loans under this Plan and all other qualified plans maintained
by the Employer.
(D) The Participant agrees to a suspension of his Elective
Deferrals (as defined in Appendix D to the Plan) to this Plan and all
his employee contributions (other than mandatory employee
contributions to a defined benefit plan and rollover contributions to
any plan) to all other qualified plans and non-qualified plans of
deferred compensation (other than health or welfare benefit plans)
maintained by the Employer, including, but not limited to stock
option, stock purchase and similar plans, for a period of one year
after receipt of the Severe Hardship distribution and all applicable
plans so provide.
(E) The Participant agrees that his Elective Deferrals (as defined
in Appendix D to the Plan) to this Plan and all other qualified plans
maintained by the Employer for the calendar year immediately following
the calendar year in which the Severe Hardship distribution is made
shall be limited to the excess of (I) the Elective Deferral Dollar
Limit (as defined in Appendix D to the Plan) for such next calendar
year over (II) the amount of such Participant's Elective Deferrals to
this Plan and such other qualified plans maintained by the Employer
for the calendar year in which the Severe Hardship distribution is
made.
The Participant contribution suspension and limitation requirements of
clauses (ii)(D) and (E) are hereby imposed on any Severe Hardship withdrawal
or similar hardship authorized in any other qualified plan maintained by the
Employer and shall be deemed agreed to by any Participant requesting a
Severe Hardship withdrawal or such other similar hardship withdrawal.
9.4(c) The one year Participant contribution suspension referred to in
clause (ii)(D) of subparagraph 9.3(b) shall be imposed for twelve (12) months
beginning on the first day of the payroll period next following the date of
withdrawal. For purposes hereof, separate periods of suspension under this
paragraph shall run concurrently.
9.4(d) A Participant who is an Eligible Employee may recommence his
contributions to the Plan after his applicable period of suspension has expired
on the first day of any calendar month thereafter by his delivering a new
payroll deposit election form to the Administrator no later than the fifteenth
(15th) day (or such shorter period as the Administrator on a uniform and non-
discriminatory basis may determine) of the month immediately preceding the
calendar month it is to become effective, designating the date, rate and type or
types of such recommencement of contributions.
9.4(e) For purposes hereof, unless otherwise provided in the applicable
asset transfer, plan merger or consolidation or adoption agreement, the
remaining period of any suspension from participation under any plan which is
merged into this Plan at the time of such merger shall be considered a period of
suspension under this paragraph during which Participants may not contribute to
the Plan.
9.5 Withdrawal Restrictions and Procedure.
-------------------------------------
9.5(a) A Participant shall not make more than two (2) non-hardship
withdrawals in any Plan Year. Withdrawals from more than one account made at
the same time shall only count as one withdrawal.
9.5(b) The amount of any withdrawal from any such account shall not be less
than $100, unless the Participant's account balance is less than $100 in which
case the then balance in the account may only be withdrawn or unless such
withdrawal would require a suspension from active participation in which case
the amount which would not cause a suspension may be withdrawn.
- 43 -
9.5(c) All withdrawals shall be made only by filing a written withdrawal
request form with the Administrator in which the amount of withdrawal and the
account(s) and the Fund division(s) from which the withdrawal is to be made and,
if applicable, the Severe Hardship and such other information (including but not
limited to certifications regarding no other cash resources and/or no other
resources for purposes of determining the existence of a Severe Hardship)
pertaining thereto as the Administrator may deem appropriate are stated.
9.5(d) Notwithstanding any of the other provisions of this ARTICLE IX, the
Administrator may on a uniform and non-discriminatory basis at any time and from
time to time suspend or limit the withdrawal rights under this ARTICLE IX
(except to the extent prohibited by Section 411(d)(6) of the Code).
9.6 Payment of Withdrawals.
----------------------
9.6(a) All non-hardship withdrawals shall be made within a reasonable time
and at such time or times as are determined by the Administrator after the
Participant's non-hardship withdrawal request is delivered to the Administrator
or his hardship withdrawal request is approved by the Administrator, as the case
may be, and shall be made in cash.
9.6(b) The amount of any withdrawal shall be determined on the basis of the
value of the Participant's accounts from which the withdrawal is made as of the
most recent Valuation Date for which the valuation adjustments under paragraph
4.5 have been completed prior to the date of payment of the withdrawal,
decreased by any withdrawals or other distributions since such Valuation Date.
9.6(c) Unless otherwise determined by the Administrator from time to time on
a uniform and non-discriminatory basis applied prospectively or, to the extent
otherwise permitted by the Administrator, as specifically designated by the
Participant in his withdrawal request, each withdrawal by a Participant shall be
made in the following order, with availability being determined on the basis of
the circumstances (such as hardship, severe hardship, non-hardship, the age of
the Participant, the time contributions have been in the Plan, the length of the
Participant's active participation in the Plan as provided herein) surrounding
the withdrawal:
(i) First from his accounts in the following order:
(A) First his After-Tax Account, with withdrawals being made first
from his After-Tax Optional and then from his After-Tax Basic Account,
(B) Then his Rollover Account,
(C) Then his Pre-Tax Account,
(D) Then his Unrestricted QNEC Account, and
(E) Then his Unrestricted Matching Account (to the extent vested),
with withdrawals being made first from his Matching Non-forfeitable
Account and then from his Matching Active Account,
(F) Lastly his Unrestricted Profit Sharing Account (to the extent
vested), with withdrawals being made first from his Profit Sharing
Non-forfeitable Account and then from his Profit Sharing Active
Account.
Withdrawals are not available from a Participant's Company Stock QNEC
Account, Company Stock Matching Account or Company Stock Profit Sharing
Account.
(ii) Then with the withdrawals being made first from the Fund
division(s) in each account in the following:
- 44 -
(A) First the First Union Stable Portfolio Group Trust
(B) Then the Evergreen Short-Intermediate Bond Fund: Class Y,
(C) Then the Fidelity Puritan Fund,
(D) Then the First Union Enhanced Stock Market Fund,
(E) Then the Fidelity Advisor Growth Opportunities Fund: Class A,
(F) Lastly the Company Stock Fund.
9.6(d) Whenever withdrawals are permitted from the Company Stock Fund (if at
all), they shall be made in cash and not in the form of Company Stock.
9.6(e) All withdrawals shall be subject to the plan to plan rollover
transfer distribution option provided in paragraph 8.5.
9.7 No Withdrawal Restoration. No restoration of amounts withdrawn shall
-------------------------
be permitted.
9.8 Loans.
-----
9.8(a) Loans from the Fund may be made to Participants (such term for
purposes of this paragraph is intended to include deceased Participants'
Beneficiaries who are entitled to the Participant's non-forfeitable Accrued
Benefit for purposes of making loans from the Plan) who are employed by the
Employer or who otherwise are "parties in interest" (as defined in Section 3(14)
of the Act) on written application therefor delivered to the Administrator,
subject to the following rules:
(i) Loans must be adequately secured, which may include or consist
of use of a Participant's non-forfeitable Accrued Benefit as security,
provided however that:
(A) Not more than fifty percent (50%) of a Participant's non-
forfeitable Accrued Benefit may be considered adequate security for
such purpose, and
(B) Any pledge and assignment of a Participant's non-forfeitable
Accrued Benefit shall be ineffective and void for any period of time
during which the loan fails to comply with the provisions of Section
4975(d)(1) of the Code and Section 408(b)(1) of the Act.
(ii) Loans must be approved by the Administrator in accordance with a
uniform, non-discriminatory policy established, and which thereafter may be
modified or suspended from time to time, by the Administrator. The
Administrator's loan policy shall be considered a part of the Plan and shall
at a minimum contain:
(A) A procedure for applying for loans,
(B) The basis on which loans will be approved or denied,
(C) Limitations, if any, on the types and amounts of loans
available,
(D) The procedure for determining a reasonable interest rate,
- 45 -
(E) The types of collateral which may secure a loan,
(F) The events constituting a default and the steps that will be
taken to preserve the Plan assets in the event of a default.
(iii) Loans must be available to all Participants on a reasonably
equivalent basis.
(iv) Loans must not be made available to Highly Compensated
Employees in an amount of and/or percentage of their non-forfeitable Accrued
Benefits or some combination thereof greater than that made available to
other Participants.
(v) Loans must not exceed with respect to any Participant (when
added to the outstanding balance of all loans to the Participant from the
Plan and all other qualified employer plans of the Employer and of each
Affiliate) the lesser of:
(A) $50,000, reduced by the excess of (I) the Participant's highest
aggregate outstanding balance in the preceding twelve (12) months
under this Plan and such other plans over (II) his aggregate
outstanding balance under this Plan and such other plans on the date
on which the loan in question is made,
(B) One-half of the sum of the Participant's non-forfeitable
Accrued Benefit under this Plan and non-forfeitable accrued benefits
(exclusive of his accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code) under such other
plans, or
(C) With respect to loans from this Plan only, his vested Accrued
Benefit (exclusive of amounts held in his Company Stock Matching
Account, Company Stock Profit Sharing Account and Company Stock QNEC
Account) which is not held in the Loan Fund.
(vi) Loans must bear a reasonable rate of interest (which means a
commercially reasonable rate of interest), which may be fixed or variable
and which may vary between Participants based on the term of the loan, the
security provided and such other considerations deemed desirable by the
Administrator.
(vii) Notwithstanding the foregoing, unless the Secretary of Labor
or his delegate grants an administrative exemption from the prohibited
transaction rules with respect to such loan, no loan shall be made to any
Participant who is a shareholder-employee (as defined in Section 1379 of the
Code, as in effect on the day before the date of enactment of the Subchapter
S Revision Act of 1982) of the Employer or who is a member of the family (as
defined in Section 267(c)(4) of the Code) of such a shareholder-employee.
9.8(b) The loan policy of the Administrator shall include considerations
such as creditworthiness and may include financial need and any other
considerations deemed desirable by the Administrator.
9.8(c) All loans shall require repayment by substantially level amortization
with payments not less frequently than quarterly and shall otherwise be repaid
in the manner and within a specified period of time as determined by the
Administrator, but in no event to exceed ten (10) years for "home loans" or five
(5) years for all other loans. For purposes hereof a "home loan" is any loan
used to acquire any dwelling unit which within a reasonable time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant.
9.8(d) The Employer shall cooperate with the Administrator and the Trustee
in enforcing prompt repayment of all such loans and installments thereon. The
entire balance of principal and interest then due on all such loans upon which a
Participant is then liable shall be deducted by offset from any distributions or
benefits paid to or with respect to such Participant from the Loan fund and
shall be applied to the payment of such balance.
- 46 -
9.8(e) Every loan applicant shall receive a clear statement of the charges
involved in each loan transaction. This statement shall include the dollar
amount and annual interest rate of the finance charge.
9.8(f) Notwithstanding the foregoing, the Administrator may on a non-
discriminatory basis, among other things, set minimum loan amounts (not to
exceed $1,000), minimum repayment amounts, more restrictive loan limits, and/or
a maximum number of outstanding loans for any Participant at any one time, may
impose a loan processing and/or administrative charge, may restrict accounts
from which loans are made, may require repayment by payroll deduction, and may
suspend loan rights from time to time.
9.8(g) Upon the making of a loan to a Participant pursuant to this
paragraph, the Trustee shall transfer to a segregated account for the
Participant in the Loan Fund an amount equal to the principal amount of such
loan (unless otherwise determined by the Administrator from time to time on a
uniform and non-discriminatory basis applied prospectively and stated in the
Plan's loan policy):
(i) First from his accounts in the following order:
(A) First his After-Tax Account, with transfers being made first
from his After-Tax Optional and then from his After-Tax Basic Account,
(B) Then his Rollover Account,
(C) Then his Pre-Tax Account,
(D) Then his Unrestricted QNEC Account, and
(E) Then his Unrestricted Matching Account (to the extent vested),
with transfers being made first from his Matching Non-forfeitable
Account and then from his Matching Active Account,
(F) Lastly his Unrestricted Profit Sharing Account (to the extent
vested), with transfers being made first from his Profit Sharing Non-
forfeitable Account and then from his Profit Sharing Active Account,
and
Loans are not available from a Participant's Company Stock QNEC Account,
Company Stock Matching Account or Company Stock Profit Sharing Account.
(ii) Then with the transfers being made first from the Fund
division(s) other than the Company Stock Fund and the Loan Fund in each such
tier of accounts on a pro rata basis and then from the Company Stock Fund.
9.8(h) Notwithstanding any other provision of the Plan, if a loan repayment
obligation is suspended for any part of a Participant's service in the uniformed
services of the United States (as defined in chapter 43 of title 38, United
States Code), whether or not Qualified Military Service (as defined in paragraph
4.10), such suspension shall not be taken into account for purposes of Sections
72(p), 401(a) or 4975(d)(1) of the Code and, if the Administrator permits, for
purposes of the loan term and similar rules of the Plan.
9.8(i) In the event of a Participant's default where the default continues
after any applicable grace or catch-up period, if any, permitted by the
Administrator on a uniform and non-discriminatory basis, the Administrator shall
treat the loan as an offset against the Participant's non-forfeitable Accrued
Benefit by distribution of the Participant's promissory note(s) marked paid and
satisfied.
- 47 -
9.9 Instructions to Trustee. The Administrator, upon determination
-----------------------
that a requested withdrawal or loan is permissible under the Plan, shall
immediately notify the Trustee, who shall pay from the Fund the amount of the
withdrawal or loan in accordance with the Administrator's instructions and, in
the case of a withdrawal, shall deduct the amount thereof from the Participants'
account in the Fund or transfer the amount to a segregated account in the Fund
as designated by the Administrator.
ARTICLE X
The Fund
--------
10.1 Trust Fund and Exclusive Benefit. The Trustee shall receive all
--------------------------------
contributions under and all assets transferred to the Plan and shall invest and
administer them as a trust fund (the "Fund") for the exclusive benefit of the
Participants and Beneficiaries hereunder in accordance with the Plan. Except as
otherwise expressly provided herein, no part of the corpus or income of the Fund
shall revert to or be used or enjoyed by the Employer or be used for, or
diverted to, purposes other than the exclusive benefit of the Participants or
their Beneficiaries and the defrayal of reasonable expenses of the Plan and
Fund. The rights of all persons hereunder are subject to the terms of the Plan.
10.2 Plan and Fund Expenses. Unless or to the extent not paid by the
----------------------
Employer without being advanced subject to reimbursement (which shall make such
payments as directed by the Plan Sponsor) or unless prohibited by the Act or the
Code, all expenses of the Plan and the Fund, including reasonable legal,
accounting, custodial, brokerage, consulting and other fees and expenses
incurred in the establishment, amendment, administration and termination of the
Plan or the Fund and/or the compensation of the Trustee and other fiduciaries of
the Plan to the extent provided under the Plan, and all taxes of any nature
whatsoever, including interest and penalties, assessed against or imposed upon
the Fund or the income thereof shall be paid out of the Fund and shall
constitute a charge upon the Fund. The Plan Sponsor may cause the Employer to
advance any or all such expenses and/or taxes on behalf of the Fund, subject to
the Employer's right of reimbursement from the Fund if so directed by the Plan
Sponsor and to the applicable prohibited transaction provisions of the Act and
the Code.
10.3 Reversions to the Employer.
--------------------------
10.3(a) If a contribution by the Employer is made under a mistake of fact,
upon written direction by the Plan Sponsor, the Trustee shall return to the
Employer an amount equal to such mistaken contribution, less any losses
attributable to such mistaken contribution, within one year after payment of
such contribution. If a contribution by the Employer is made conditioned upon
its deductibility for federal income tax purposes and there is a final
determination of the disallowance of a deduction under Section 404 of the Code
for such contribution or portion thereof, upon written direction by the Plan
Sponsor, the Trustee shall return to the Employer an amount equal to the amount
of such contribution or portion thereof so disallowed, less any losses
attributable to such contribution, within one year after such final
determination. Notwithstanding anything to the contrary in the foregoing, any
such return shall be limited to an amount which would not cause the balance of
any Participant's account to be reduced to less than the balance such
Participant's account would have been had such amount not been contributed.
10.3(b) If the Internal Revenue Service determines that the Plan does not
initially qualify under Section 401 of the Code with respect to any Employer
which has adopted the Plan provided it has submitted an application for a
determination within one year after its adoption of the Plan, the Trustee shall
return to such Employer (unless otherwise directed to be distributed to
Participants or, if deceased, their Beneficiaries) and to its Participants (or
if deceased, their Beneficiaries) within one year after the date of notice of
such disqualification, all assets attributable to contributions which the
Trustee has received from such Employer and its Participants, respectively, and
shall return to the predecessor funding agent or distribute to Participants or,
if deceased, their Beneficiaries, all assets attributable to funds of any
predecessor plan received by the Trustee, all as directed by the Plan Sponsor.
Upon such return, the Plan shall terminate with respect to such Employer.
- 48 -
10.3(c) After the termination of the Plan as a whole and after all fixed
and contingent liabilities of the Fund to Participants and their Beneficiaries
have been satisfied, any remaining assets of the Fund held pursuant to paragraph
4.5 shall be distributed to the Employer as the Plan Sponsor may direct.
10.4 No Interest Other Than Plan Benefit. Nothing contained herein
-----------------------------------
shall be deemed to give any Participant or Beneficiary any interest in any
specific part of the Fund or any interest other than his right to receive
benefits in accordance with the provisions of the Plan.
10.5 Payments from the Fund. The Trustee shall make all payments from
----------------------
the Fund which become due hereunder in accordance with the written instructions
or directions of the Administrator. In directing the Trustee to make any
payments or deliveries out of the Fund, the Administrator shall follow the
provisions of the Plan. The Trustee acting in accordance with such instructions
or directions shall be fully protected and indemnified by the Employer in
relying upon any such written instruction or direction which the Trustee
reasonably and in good faith believes to be proper.
10.6 Fund Divisions.
--------------
10.6(a) The Fund shall be held in divisions (sometimes referred to as
"divisions of the Fund", "Fund divisions" or "investments funds" herein) as
hereinafter provided, and each account under the Plan shall be subdivided to
reflect its interest in each Fund division.
10.6(b) The Fund divisions which shall be maintained in the Fund are as
follows:
(i) Company Stock Fund - The Company Stock Fund shall be
------------------
established effective March 31, 1997 and shall be a pooled investment fund
consisting of and invested primarily in Company Stock and such short-term
temporary investments and such cash balances as the Trustee deems
appropriate. It is generally expected that after accumulating a reasonable
reserve for day to day administration, Company Stock will represent
approximately at least 95% of the total assets of the Company Stock Fund,
and cash reserves and temporary investments represent the remaining assets.
(ii) Loan Fund - The Loan Fund shall consist of loans made to
---------
Participants pursuant to paragraph 9.8, which shall be considered directed
investments of each such Participant, of principal and interest payments
thereon.
(A) As provided in paragraph 9.8, an amount equal to the principal
amount of a loan to a Participant shall be segregated from such
Participant's account or accounts within the other Fund divisions.
(B) Payments of the principal of and payments of interest on a loan
to a Participant shall be transferred upon payment pro rata:
(I) To the Participant's unsegregated accounts in the Fund in
the reverse order from which funds were transferred from such
accounts to the Participant's segregated account in the Loan Fund
for purposes of making such loan, and
(II) To the Fund divisions determined on the basis of the
Participant's contribution investment direction then in effect
under paragraph 10.7.
(iii) Named Fund Divisions in Appendix E - The regulated investment
----------------------------------
companies, collective trust funds and/or mutual funds authorized for
investment as provided in Appendix E to the Plan, which appendix may be
modified from time to time by the Plan Sponsor.
10.7 Participant Investment Directions.
---------------------------------
- 49 -
10.7(a) Except as otherwise provided in the applicable plan asset transfer
or merger agreement, in the case of the direct transfer of assets to the Plan on
behalf of a Participant, such transferred assets (or the proceeds from the sale
thereof) which are allocated to his Directable Accounts shall initially be
invested in the Available Fund Divisions, in whole multiples of the Permitted
Direction Percentage (but not exceeding one hundred percent (100%) in the
aggregate), as directed by the Participant (or, if deceased, his Beneficiary)
for whom transferred in accordance with the direction filing requirements
therefor established by the Administrator.
10.7(b) Upon becoming a Participant without a contribution investment
direction in force, or upon a Participant's making a Rollover Contribution or
repayment pursuant to paragraph 6.6 without a contribution investment direction
in force, he may direct that such contribution or repayment and his allocable
share of future Directable Contributions be invested, in whole multiples of the
Permitted Direction Percentage (but not exceeding one hundred percent (100%) in
the aggregate), in the Available Investment Funds by filing a "contribution
investment direction" with the Administrator at such time.
10.7(c) In accordance with procedures established by the Administrator from
time to time:
(i) Contribution Investment Direction - A Participant may make a
---------------------------------
"contribution investment direction" by directing that whole multiples of the
Permitted Direction Percentage (but not exceeding one hundred percent (100%)
in the aggregate) of his allocable share of future Directable Contributions
be invested in the Available Fund Divisions. Any such contribution
investment direction shall be effected for contributions made after each
subsequent Contribution Investment Direction Change Date for which such
direction is timely delivered to the Administrator (or its designee); and/or
(ii) Account Balance Investment Direction - A Participant (or, if
------------------------------------
deceased, his Beneficiary) may make an "account balance investment
direction" by directing that whole multiples of the Permitted Direction
Percentage (but not exceeding one hundred percent (100%) in the aggregate)
of his Directable Accounts be invested in the Available Fund Divisions. Any
such account balance investment direction shall be effective as of and for
the Account Balance Investment Direction Change Date for which such
direction is timely delivered to the Administrator (or its designee).
10.7(d) If or to the extent a Participant (or if deceased, his Beneficiary)
has no investment direction in effect, his Directable Contributions and
Directable Accounts shall be invested in the Fund division designated as the
Default Fund in Appendix E to the Plan.
10.7(e) For purposes of this paragraph and subject to the provisions of
subparagraph 10.7(e):
(i) The term "Account Balance Investment Direction Change Date"
means each Valuation Date.
(ii) The term "Available Fund Divisions" means the Company Stock
Fund and the named investment funds listed in Appendix E.
(iii) The term "Directable Accounts" means all accounts, or parts of
accounts, of the Participant other than those parts held in the Company
Stock Matching Account, the Company Stock Profit Sharing Account, the
Company Stock QNEC Account, or the Loan Fund.
(iv) The term "Directable Contributions" means (A) all
contributions made by the Participant and (B) all contributions made by the
Employer (other than contributions by the Employer required to be invested
in the Company Stock Fund pursuant to subparagraph 3.2(c) - that is,
contributions allocated to the Company Stock Matching Account, the Company
Stock Profit Sharing Account, or the Company Stock QNEC Account,).
(v) The term "Contribution Investment Direction Change Date" means
each Valuation Date.
- 50 -
(vi) The term "Permitted Direction Percentage" means five percent
(5%) or any lesser percentage or any dollar amount permitted by the
Administrator from time to time.
10.7(f) The Plan is intended to constitute a plan described in Section
404(c) of the Act and Title 29 of the Code of Federal Regulations Section 2550-
404c-1 under which Participants may direct investments. It is intended that
fiduciaries of the Plan shall act accordingly and may thereby be relieved of
liability for investment losses which are the result of Participant and
Beneficiary investment directions regarding allocation of accounts and
contributions among the available divisions of the Fund to the maximum extent
permitted under Section 404(c) of the Act.
10.8 Investment Authority of the Administrator.
-----------------------------------------
10.8(a) The Administrator may on a uniform and non-discriminatory basis
require the entire Accrued Benefit (other than that held in the Company Stock
Matching Account) of one or more Participants and/or Beneficiaries be invested
in the Default Fund designated in Appendix E to the Plan in the event that the
person cannot be located or is not competent to make an investment direction or
that there is a dispute as to the proper recipient of the Participant's Accrued
Benefit.
10.8(b) The Administrator may on a uniform and non-discriminatory basis
from time to time may set or change the advance notice requirement for effecting
investment directions, may limit the number of investment direction changes made
in a Plan Year, may limit investment directions which be can made by telephone,
and generally may change any of the investment direction procedures.
10.8(c) The Administrator in its discretion may suspend from time to time
and at any time the maintenance and/or offering of any Fund division as a
Participant directed investment alternative hereunder, whereupon, and
notwithstanding anything to the contrary herein, no investment directions
pursuant hereto shall be permitted in such Fund division for the period of any
such suspension.
10.9 Provisions Relating to Insurer.
------------------------------
10.9(a) No Insurer shall be deemed a party to the Plan or responsible for
the validity thereof.
10.9(b) No Insurer shall be required to determine either:
(i) That a person for whom the Trustee applies for a Policy is, in
fact, eligible for participation or entitled to benefits under the Plan,
(ii) Any fact necessary for the proper issuance of any Policy or
Contract, or
(iii) The proper distributions or further application of any moneys
paid by it to the Trustee in accordance with the written direction of the
Trustee;
and with respect to each of the foregoing, the Insurer shall be fully
indemnified and protected in relying upon the advice and direction of the
Trustee.
10.9(c) Any notice, direction, application or other communication
whatsoever shall be accepted by the Insurer as duly authorized and executed if
signed by the Trustee. The Insurer shall be fully protected in assuming that
the Trustee is as shown in the latest notification received by it at its home
office.
ARTICLE XI
- 51 -
Fiduciaries
-----------
11.1 Named Fiduciaries and Duties and Responsibilities. Authority to
-------------------------------------------------
control and manage the operation and administration of the Plan shall be vested
in the following, who, together with their membership, if any, shall be the
Named Fiduciaries under the Plan with those powers, duties, and responsibilities
specifically allocated to them by the Plan:
11.1(a) Trustee - The Trustee in connection with its fiduciary obligations
-------
relating to the Plan and the Fund.
11.1(b) Plan Sponsor - The Plan Sponsor in connection with its fiduciary
------------
obligations and rights relating to the Plan and the Fund.
11.1(c) Plan Administrator - The Plan Administrator in connection with its
------------------
fiduciary obligations and rights relating to the Plan and the Fund.
11.1(d) Board - The Board in connection with its fiduciary obligations and
-----
rights relating to the Plan and the Fund.
11.2 Limitation of Duties and Responsibilities of Named Fiduciaries. The
--------------------------------------------------------------
duties and responsibilities, and any liability therefor, of the Named
Fiduciaries provided for in paragraph 11.1 shall be severally limited to the
duties and responsibilities specifically allocated to each such Named Fiduciary
in accordance with the terms of the Plan, and there shall be no joint duty,
responsibility, or liability among any such groups of Named Fiduciaries in the
control and management of the operation and administration of the Plan.
11.3 Service by Named Fiduciaries in More Than One Capacity. Any person
------------------------------------------------------
or group of persons may serve in more than one Named Fiduciary capacity with
respect to the Plan (including both service as Trustee and Plan Administrator).
11.4 Allocation or Delegation of Duties and Responsibilities by Named
----------------------------------------------------------------
Fiduciaries. By written agreement filed with the Plan Administrator and the
- -----------
Plan Sponsor, the duties and responsibilities of the Trustee with respect to the
management and control of the assets of the Fund may, with the written consent
of the Plan Sponsor, be allocated among the Trustees (if there are two or more
persons so serving) and any other duties and responsibilities of any Named
Fiduciary may be allocated among Named Fiduciaries or may, with the consent of
the Plan Sponsor, be delegated to persons other than Named Fiduciaries. The
delegation permitted under this paragraph includes the Trustee's right to select
a custodian (other than a Custodian for any separate trust established pursuant
to paragraph 12.8) to hold the assets of the Fund. Any written agreement shall
specifically set forth the duties and responsibilities so allocated or
delegated, shall contain reasonable provisions for termination, and shall be
executed by the parties thereto.
11.5 Investment Manager.
------------------
11.5(a) The Board may appoint one or more Investment Managers to manage all
or any portion of the Fund. The appointment of any such Investment Manager
shall be by written agreement, which shall specify the scope of the powers and
duties of such Investment Manager, shall contain reasonable provisions for the
termination of such appointment, may require or allow any Investment Manager to
perform or to select the person performing asset custodial services for all or
part of the Fund, and shall be executed by the parties thereto and acknowledged
by the Trustee. An Investment Manager appointed pursuant to any such agreement
shall acknowledge therein its status as a fiduciary with respect to the Plan.
11.5(b) In the event an Investment Manager is appointed for all or part of
the assets of the Fund, the Trustee shall follow the directions of the
Investment Manager in managing and controlling the assets of the Fund subject to
the direction and control of the Investment Manager. The Investment Manager
shall be governed by the powers and restrictions imposed on the Trustee in its
management and control of the Fund.
- 52 -
11.6 Assistance and Consultation. A Named Fiduciary, and any delegate
---------------------------
named pursuant to paragraph 11.4, may engage agents to assist in its duties and
may consult with counsel, who may be counsel for the Employer, with respect to
any matter affecting the Plan or its obligations and responsibilities hereunder,
or with respect to any action or proceeding affecting the Plan. All
compensation and expenses of such agents and counsel shall be paid or reimbursed
from the Fund, except to the extent prohibited by the Act or the Code and except
to the extent paid or reimbursed by the Employer.
11.7 Indemnification. The Employer shall indemnify and hold harmless
---------------
any individual who is a Named Fiduciary or a member of a Named Fiduciary under
the Plan and any other individual to whom duties of a Named Fiduciary are
delegated pursuant to paragraph 11.4, to the extent permitted by law, from and
against any liability, loss, cost or expense arising from their good faith
action or inaction in connection with their responsibilities under the Plan.
11.8 Funding Policy. The Board shall establish and communicate to the
--------------
Trustee a funding policy consistent with the current and long-term financial
needs of the Plan with respect to the ages of the Participants in the Plan and
other such relevant information; provided, however, that nothing in this
subparagraph shall be construed as granting to the Board any power or authority
with respect to the control and management of the Fund.
11.9 Standard of Conduct.
-------------------
11.9(a) The Named Fiduciaries and all other fiduciaries under the Plan
shall each discharge their duties with respect to the Plan and the Fund solely
in the interest of the Participants and Beneficiaries, in accordance with the
applicable provisions of the Act and the Code and:
(i) For the exclusive purpose of providing benefits to
Participants and Beneficiaries, and defraying reasonable expenses of
administering the Plan and the Fund to the extent permitted by the Plan and
any separate trust or custodial agreement;
(ii) 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;
(iii) By diversifying investments of the Fund in accordance with the
requirements of the Act so as to minimize the risk of large losses, unless
under the circumstances it is clearly prudent not to do so; and
(iv) In accordance with the terms of the Plan and any other plan
documents insofar as they are consistent with the Act.
11.9(b) In the exercise of their authority under the Plan, the Named
Fiduciaries and all other fiduciaries under the Plan shall take cognizance of
and be inhibited by those limitations and prohibitions contained in Section 406
of the Act and the prohibited transaction provisions of Section 4975 of the
Code, for which no exemption is applicable.
ARTICLE XII
The Trust Fund
--------------
12.1 Trustee Powers and Duties. Subject to the following provisions of
-------------------------
this ARTICLE XII, the Trustee shall commingle and jointly invest, or where
specifically provided herein shall segregate and separately invest, the assets
of the Fund, without distinction between corpus and income.
- 53 -
12.1(a) The Trustee shall hold the Fund in trust, shall have the following
general powers granted in this paragraph, subject to the directions,
limitations, restrictions or prohibitions imposed hereunder, and, except as
otherwise specifically provided herein, shall have exclusive authority and
discretion in its management and control of the Fund.
(i) The Trustee shall invest and reinvest the Fund in such stocks,
stock options (whether or not covered), warrants and rights, puts, calls,
stock-index futures, bonds, securities, commodities, commodity futures and
options, loans to Participants if and subject to conditions expressly
authorized in the Plan, real estate mortgages, real estate investment trusts
or funds, real estate, partnership interests, mutual funds, closed-end
investment companies, regulated investment companies or trusts, common,
collective or group trust funds (except as otherwise limited hereunder) and
other investments, and in such proportion, as may be deemed suitable for the
purposes and the funding policy hereof.
(ii) Such investments shall not be restricted to property and
securities of the character authorized for investment by trustees under any
present or future laws, with the exception of the Act.
(iii) To the extent permitted by law, the Trustee is expressly
authorized to invest and reinvest the Fund and to execute any joinder or
similar agreement therefor on behalf of the Plan:
(A) In any general common trust fund qualifying under Section 584
of the Code and maintained by any person, including but not limited to
the Trustee or any affiliate of the Trustee in the same bank holding
system affiliated group, as defined in Section 1504 of the Code, as
the Trustee (if the Trustee and any such affiliate are banks or trust
companies supervised by a state or federal agency) and/or the
Investment Manager or any affiliate of the Investment Manager;
(B) In any other collective or group trust fund maintained by any
person, including but not limited to any such bank or trust company
and/or the Investment Manager or any affiliate of the Investment
Manager, and consisting solely of assets of qualified retirement
trusts and/or individual retirement accounts exempt from federal
income taxation under the Code, as the Trustee or, where applicable,
the Investment Manager in its discretion may determine (whether or not
the Trustee or, where applicable, the Investment Manager is such a
bank or trust company), provided such collective or group trust is so
qualified and exempt under the Code;
(C) In whole or in part in qualifying employer securities (subject
however to any applicable securities registration requirements),
qualifying employer real property, or both, as defined by Section
407(d)(4) and (5) of the Act;
(D) In Contracts or Policies (not containing or providing life
insurance) issued to provide or fund benefits under the Plan, and in
Policies of life insurance on the lives of Participants if the Plan
expressly provides for the purchase of such Policies and the
Administrator so directs, (whether or not the Insurer is the Plan
Sponsor or any affiliate of the Plan Sponsor, or the Investment
Manager or any affiliate of the Investment Manager, if an insurance
company);
(E) In whole or in part in deposits with any bank or similar
financial institution supervised by the United States or a State,
regardless of whether such bank or other institution is a Trustee or
other fiduciary hereunder, provided such deposits shall bear a
reasonable rate of interest, except that funds may be deposited in
non-interest bearing accounts to such extent and for such time as may
be reasonably required for the orderly administration of the Plan; or
(F) In any mutual fund, closed-end investment company, regulated
investment company or trust, or similar pooled investment medium,
whether on not maintained by or advised by the Trustee or any
affiliate of the Trustee or the Investment Manager or any affiliate of
the Investment Manager.
- 54 -
(iv) If an investment is made in a common, collective or group
trust, the Trustee is expressly authorized to incorporate the terms thereof
as an investment medium under and as a part of the Plan, and the terms of
such trust shall govern the investment, disposition and distribution of the
assets of such trust.
12.1(b) Subject to the requirements imposed by law, and in furtherance and
not in limitation of the Trustee's investment authority, the Trustee shall have
all powers and authority necessary or advisable to carry out the provisions of
the Plan, and all inherent, implied and statutory powers now or subsequently
provided by law, including specifically the power to do any of the following:
(i) To deal with all or any part of the Fund, including, without
limitation, to invest, reinvest and change investment;
(ii) To acquire any property by purchase, subscription, lease or
other means;
(iii) To sell for cash or on credit, convey, lease for long or short
terms, or convert, redeem or exchange all or any part of the Fund;
(iv) To borrow money for the purpose of the Fund, and for any sum
so borrowed to issue its promissory note as Trustee and to secure the
repayment thereof by pledging all or any part of the Fund;
(v) To enforce by suit or otherwise, or to waive its rights on
behalf of the Fund, and to defend claims asserted against him or the Fund;
(vi) To compromise, adjust and settle any and all claims against or
in favor of it or the Fund;
(vii) To renew, extend or foreclose any mortgage or other security;
(viii) To bid in property on foreclosure;
(ix) To take deeds in lieu of foreclosure, with or without paying a
consideration therefor;
(x) To vote, or give proxies to vote, any stock or other security,
and to oppose, participate in and consent to the reorganization, merger,
consolidation or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith, and to deposit securities
under deposit agreements;
(xi) To hold Plan assets unregistered (including in bearer form),
or to register them in its own name, in street name or in the names of
nominees who are within the jurisdiction of the district courts of the
United States and are either banks or trust companies that are subject to
supervision by the United States or a state thereof, brokers or dealers
registered under the Securities Exchange Act of 1934, clearing agencies as
defined in Section 3(a)(23) of the Securities Exchange Act of 1934,
permissible nominees of any of the foregoing, or any other persons or
entities permitted to act as nominee for the Trustee under Section 403 of
the Act, provided the books and records of the Fund shall at all times
reflect that the Fund is the beneficial owner of such securities;
(xii) To make, execute, acknowledge and deliver any and all
instruments that it shall deem necessary or appropriate to carry out the
powers herein granted; and
(xiii) Generally to exercise any of the powers of an owner with
respect to all or any portion of the Fund.
Except as provided in the Act, no person dealing with the Trustee shall be bound
to see to the application of any money or property paid or delivered to the
Trustee or to inquire into the validity or propriety of any transaction.
- 55 -
12.1(c) The Trustee shall not have the power or duty to inquire into the
correctness of the amount tendered to it as required by the Plan nor to enforce
the payment of contributions thereunder by the Employer. The Trustee shall be
responsible only for such sums and assets that it actually receives as Trustee.
12.2 Accounts. The Trustee shall keep true and accurate accounts of all
--------
investments, receipts, and disbursements and other transactions hereunder, and
all accounts, books and records relating thereto shall be open to inspection and
audit at all reasonable times by any person or persons designated by the Plan
Sponsor. Within sixty (60) days after the removal or resignation of the Trustee
and at least quarterly (unless the Plan Sponsor requires less frequent reports),
the Trustee shall file with the Plan Sponsor a valuation of the assets of the
Trust, and an accounting of its transactions since the last previous such
accounting. In addition, the Plan Sponsor may require an accounting from the
Trustee at any other reasonable time. No employee and no person other than
those designated by the Plan Sponsor shall have the right to demand or be
entitled to any accounting by the Trustee except as otherwise provided by law.
12.3 Two or More Trustees. Except in the case of the appointment of a
--------------------
Separate Trustee pursuant to paragraph 12.8, in the event two or more persons
are at any time serving as Trustee hereunder, such Trustees shall jointly manage
and control the Fund; provided, however, that pursuant to paragraph 11.4 such
Trustees may enter into an agreement in writing with respect to the allocation
of specific responsibilities, obligations or duties among themselves. Any
written agreement entered into pursuant to this paragraph shall be attached to
and made a part of the Plan.
12.4 Management of Fund by Investment Manager. In the event an
----------------------------------------
Investment Manager is appointed for all or part of the assets of the Fund, the
Trustee shall follow the directions of the Investment Manager in managing and
controlling the assets of the Fund subject to the direction and control of the
Investment Manager. The Investment Manager shall be governed by the powers and
restrictions imposed on the Trustee in its management and control of the Fund.
12.5 Trustee Compensation and Expenses. Subject to applicable
---------------------------------
limitations and prohibitions under the Act, the Trustee shall be paid such
reasonable compensation and shall be reimbursed for its reasonable expenses as
shall from time to time be agreed upon by the Plan Sponsor and the Trustee.
12.6 Bond. Except as may be provided under Section 412 of the Act, the
----
Trustee shall not otherwise be required to give any bond or other security for
the faithful performance of its duties hereunder.
12.7 Trustee Resignation, Removal or Death and Appointment of Successor
------------------------------------------------------------------
or Additional Trustee.
- ---------------------
12.7(a) In the event the Trustee or Trustees serving hereunder have been
named Trustee by virtue of any office they may hold in connection with their
employment by the Plan Sponsor or any other Employer, upon leaving any such
office, such Trustee shall at once cease to be a Trustee and shall be discharged
from all further duties and responsibilities as Trustee. Upon acceptance in
writing of its status as Trustee hereunder by the successor in office of any
such Trustee, he shall become a Trustee hereunder.
12.7(b) The Trustee may resign at any time upon delivering to the Plan
Sponsor a written notice of such resignation to take effect not less than sixty
(60) days after the delivery thereof to the Plan Sponsor unless the Plan Sponsor
shall accept as adequate a shorter notice. The Trustee may be removed by the
Plan Sponsor by mailing notice by registered mail addressed to the Trustee at
his last known address, or by delivery of same to the Trustee to take effect not
less than sixty (60) days after mailing or delivery of such notification unless
notice of a shorter duration shall be accepted as adequate. The Administrator
shall be notified by the Plan Sponsor of any such resignation or removal.
12.7(c) In case of the resignation or removal of a Trustee, such Trustee
shall transfer, assign, convey and deliver to the successor or other Trustee the
trust estate as it may then be constituted and shall execute all documents
necessary for transferring the trust estate.
- 56 -
12.7(d) The Plan Sponsor shall forthwith appoint a successor Trustee in
case of resignation, removal or death of all Trustees appointed and then
serving. Any successor Trustee shall qualify as such by executing,
acknowledging, and delivering to the Plan Sponsor an instrument accepting such
appointment hereunder in such form as may be satisfactory to the Plan Sponsor,
which form shall become a part of this Trust document, and thereupon such
successor Trustee shall become vested with the rights, powers, discretion,
duties and obligation of its predecessor Trustee. The Administrator shall be
notified by the Plan Sponsor of any such successor Trustee.
12.7(e) In the event of the resignation, removal or death of a Trustee, the
surviving Trustee shall continue to be a Trustee hereunder.
12.7(f) The Plan Sponsor may at any time and from time to time appoint one
or more additional Trustees. The Administrator shall be notified by the Plan
Sponsor of any such additional Trustee.
12.7(g) The Trustee may, with the written consent of the Plan Sponsor, or
shall, at the written direction of the Plan Sponsor, or the Plan Sponsor may by
written direction, appoint a bank with trust powers or a trust company
(including any Trustee) as a Co-Trustee for the custody and/or investment of all
or a portion of the assets of the Fund and enter into a trust agreement with
such bank, and thereafter the Trustee shall deliver assets of the Fund to such
bank or trust company for such custody and/or investment in accordance with such
written consent or direction of the Plan Sponsor. Any such trust agreement
shall be attached to the Plan. For purposes hereof and except as otherwise
required by Section 405(b)(2) of the Act with respect to co-fiduciary
responsibility and liability:
(i) The duties and responsibilities with respect to the assets of
the Fund held by any Co-Trustee appointed pursuant to this subparagraph
shall be allocated solely to such Co-Trustee, and such Co-Trustee shall have
no duties or responsibilities with respect to the other assets of the Fund
by reason of its appointment pursuant to this subparagraph; and
(ii) Conversely, any Trustee which is not appointed as such Co-
Trustee for such assets of the Fund shall have no duties and
responsibilities with respect to the assets of the Fund held by such Co-
Trustee pursuant to this subparagraph.
Any appointment of a Co-Trustee pursuant to this subparagraph shall
automatically be considered an allocation of duties and responsibilities under
paragraph 11.4 without further action being required and it is intended to be an
allocation described in Section 405(b)(1) of the Act. The Administrator shall
be notified by the Plan Sponsor of any such appointment of a Co-Trustee pursuant
to this subparagraph.
12.8 Establishment of Separate Trusts.
--------------------------------
12.8(a) The Board may establish one or more separate trusts and appoint a
bank with trust powers, a trust company or any other person (including any
Trustee) as a Separate Trustee and if so provided a separate Custodian for the
custody and/or investment of all or a portion of the assets of the Fund and
enter into a separate trust agreement with such bank, trust company or other
person and the Trustee shall thereafter deliver assets of the Fund to such bank,
trust company or other person for such custody and/or investment in accordance
with such separate trust agreement and any written directions of the Board.
12.8(b) For purposes hereof:
(i) The duties and responsibilities of the Separate Trustee with
respect to the assets of the Fund held pursuant to the Plan shall be
allocated solely to such Separate Trustee, and such Separate Trustee shall
have no duties or responsibilities with respect to the other assets of the
Fund by reason of its appointment pursuant to this subparagraph; and
-57-
(ii) Conversely, any Trustee or Separate Trustee which is not
appointed as such Separate Trustee for such assets of the Fund shall have no
duties and responsibilities with respect to the assets of the Fund held by
such Separate Trustee pursuant to this subparagraph.
(iii) The provisions of subparagraphs 12.7(a) through (d) apply to
the appointment, resignation or removal of Separate Trustees and Custodians
as though references to Trustee were references to Separate Trustee and
Custodian, respectively.
12.8(c) Any appointment of a Separate Trustee pursuant to this subparagraph
is intended to be an establishment of a separate trust as described in Section
405(b)(3) of the Act. Upon the establishment of such a separate trust, any
Trustee currently serving shall automatically become a Separate Trustee in
accordance with the provisions of this paragraph.
12.8(d) Prior to March 31, 1997, there are no Separate Trustees, and First
Union National Bank of North Carolina is the sole Trustee. Effective as of
March 31, 1997, this Agreement shall be considered a separate trust agreement
for the purpose of establishing two separate trusts pursuant to this paragraph,
one separate trust to consist of all Fund divisions other than the Company Stock
Fund (for which no Custodian is appointed as of March 31, 1997) and the other
separate trust to consist of the Company Stock Fund (for which a Custodian is
appointed as of March 31, 1997 pursuant to a separate custodial agreement). As
of March 31, 1997, First Union National Bank of North Carolina is the Separate
Trustee for all Fund divisions other than the Company Stock Fund, Thomas M.
Mishoe, Jr. is the Separate Trustee for the Company Stock Fund, and First Union
National Bank of North Carolina is the Custodian for the Company Stock Fund.
12.8(e) The Administrator shall be notified by the Board of any appointment
of a Separate Trustee pursuant to this paragraph (other than the Separate
Trustees provided for in subparagraph 12.2(d)).
12.9 Automatic Successor Trustee by Corporate Transaction. If any
----------------------------------------------------
corporate Trustee at any time shall be merged, or consolidated with, or shall
sell or transfer substantially all of its assets and business to another
employer, domestic or foreign, or shall be in any manner reorganized or
reincorporated, then the resulting or acquiring employer shall be substituted
ipso facto for such corporate Trustee without the execution of any instrument
- ---- -----
and without any action upon the part of the Plan Sponsor, any Participant or
Beneficiary, or any other person having or claiming to have an interest in the
Fund.
ARTICLE XIII
Plan Administration
-------------------
13.1 Appointment of Plan Administrator. The Board may appoint one or
---------------------------------
more persons to serve as the Plan Administrator (the "Administrator") for the
purpose of carrying out the duties specifically imposed on the Administrator by
the Plan, the Act and the Code. In the event more than one person is appointed,
the persons shall form an administrative committee for the Plan. The person or
committeemen serving as Administrator shall serve for indefinite terms at the
pleasure of the Board, and may, by thirty (30) days prior written notice to the
Board, terminate such appointment. The Board shall inform the Trustee of any
such appointment or termination and the Trustee may assume that any person
appointed continues in office until notified of any change.
13.2 Plan Sponsor as Plan Administrator. In the event that no
----------------------------------
Administrator is appointed or in office pursuant to paragraph 13.1, the Plan
Sponsor shall be the Administrator.
13.3 Compensation and Expenses. Unless otherwise determined and paid by
-------------------------
the Employer (as directed by the Plan Sponsor), the person or committeemen
serving as the Administrator shall serve without compensation for service as
such. All expenses of the Administrator shall be paid as provided in paragraph
10.2, provided no compensation shall be paid the Administrator from the Fund to
the extent prohibited by the Act or the Code.
-58-
13.4 Procedure if a Committee. If the Administrator is a committee, it
------------------------
shall appoint from its members a Chairman and a Secretary. The Secretary shall
keep records as may be necessary of the acts and resolutions of such committee
and be prepared to furnish reports thereof to the Trustee. Except as otherwise
provided, all instruments executed on behalf of such committee may be executed
by its Chairman or Secretary and the Trustee may assume that such committee, its
Chairman or Secretary are the persons who were last designated as such to the
Trustee in writing by the Plan Sponsor.
13.5 Action by Majority Vote if a Committee. If the Administrator is a
--------------------------------------
committee, its action in all matters, questions and decisions shall be
determined by a majority vote of its members qualified to act thereon. They may
meet informally or take any action without the necessity of meeting as a group.
13.6 Appointment of Successors. Upon the death, resignation or removal
-------------------------
of a person serving as, or on a committee which is, the Administrator, the Board
may, but need not, appoint a successor.
13.7 Additional Duties and Responsibilities. The Administrator shall
--------------------------------------
have the following duties and responsibilities in addition to those expressly
provided elsewhere in the Plan:
13.7(a) The Administrator shall be responsible for the fulfillment of all
relevant reporting and disclosure requirements set forth in the Act and the
Code, including but not limited to the preparation of necessary plan
descriptions, summary plan descriptions, annual reports, summary annual reports,
employee benefit statements, notice of forfeitability of benefits, notice of
special tax treatment (rollover, five-year or ten-year averaging and capital
gains) for distributions, and other statements or reports, the distribution
thereof to Participants and their Beneficiaries and the filing thereof with the
appropriate governmental officials and agencies.
13.7(b) The Administrator shall maintain and retain necessary records
respecting administration of the Plan and matters upon which disclosure is
required under the Act and the Code.
13.7(c) The Administrator shall make any elections for the Plan under the
Act or the Code.
13.7(d) The Administrator shall provide to Participants and Beneficiaries
such notices, including but not limited to the notice to interested parties, and
information as are required by the Plan, the Act and the Code.
13.7(e) The Administrator shall make all determinations regarding
eligibility for participation in and benefits under the Plan.
13.7(f) The Administrator shall have the right to settle claims against the
Plan and to make such equitable adjustments in a Participant's or Beneficiary's
rights or entitlements under the Plan as it deems appropriate in the event an
error or omission is discovered or claimed in the operation or administration of
the Plan.
13.8 Power and Authority.
-------------------
13.8(a) The Administrator is hereby vested with all the power and authority
necessary in order to carry out its duties and responsibilities in connection
with the administration of the Plan, including the power to interpret the
provisions of the Plan. For such purpose, the Administrator shall have the power
to adopt rules and regulations consistent with the terms of the Plan.
13.8(b) The Administrator shall exercise its power and authority in its
discretion. It is intended that a court review of the Administrator's exercise
of its power and authority with respect to matters relating to claims for
benefits by, and to eligibility for participation in and benefits of,
Participants and Beneficiaries shall be made only on an arbitrary and capricious
standard.
-59-
13.9 Availability of Records. The Employer and the Trustee shall, at
-----------------------
the request of the Administrator, make available necessary records or other
information they possess which may be required by the Administrator in order to
carry out its duties hereunder.
13.10 No Action with Respect to Own Benefit. No Administrator who is a
-------------------------------------
Participant shall take any part as the Administrator in any discretionary action
in connection with his participation as an individual. Such action shall be
taken by the remaining Administrator, if any, or otherwise by the Plan Sponsor.
13.11 Limitation on Powers and Authority. The Administrator shall have
----------------------------------
no power in any way to modify, alter, add to or subtract from any provisions of
the Plan.
ARTICLE XIV
Amendment and Termination of Plan
---------------------------------
14.1 Amendment. The Plan may be amended in whole or in part at any time
---------
by action of the Board; provided, however, that:
(i) Except to the extent permitted or required by the Act or the
Code, neither the Accrued Benefit (nor any subsidy, early retirement
benefit, optional form of payment or any other benefit considered to be an
accrued benefit for purposes of Section 411(d)(6)(B) of the Code) of a
Participant, nor the percentage thereof which is non-forfeitable, at the
time of any such amendment shall be adversely affected thereby.
(ii) Except to the extent permitted or required by the Act or the
Code, no such amendment shall have the effect of revesting in the Employers
any part of the Fund prior to the termination of the Plan and the
satisfaction of all fixed and contingent liabilities thereunder with respect
to Participants and their Beneficiaries.
(iii) The duties and obligations of the Trustee hereunder shall not
be increased nor its compensation decreased without its written consent.
Any such amendment to the Plan shall be in writing and shall be adopted pursuant
to action by the Board (including pursuant to any standing authorization for any
officer, director or committee to adopt amendments) in accordance with its
applicable procedures, including where applicable by majority vote or consent in
writing.
14.2 Merger, Consolidation or Transfer of Assets.
-------------------------------------------
14.2(a) The merger or consolidation of or transfer of assets or liabilities
between this Plan and any other plan shall be permitted upon action by the Board
or as expressly provided elsewhere in the Plan so long as, immediately after
such merger, consolidation or transfer of assets or liabilities, each
Participant who is or may become eligible to receive an accrued benefit of any
type from this Plan (or whose Beneficiaries may be eligible to receive any such
benefit) would, if such surviving or transferee plan was then terminated, be
entitled to receive an accrued benefit at least equal to the accrued benefit to
which such Participant (and each such Beneficiary) would have been entitled had
this Plan terminated immediately prior to such merger, consolidation or transfer
of assets or liabilities.
14.2(b) With the consent of the Plan Sponsor, the Trustee may accept a
direct transfer of cash or other property to the Fund on behalf of a Participant
from a plan qualified under Section 401 or 403(a) of the Code.
-60-
14.2(c) In the event property is received by the Trustee pursuant to this
paragraph, such property shall be valued at its fair market value on the date of
receipt by the Trustee in accordance with the method of valuation used for
purposes of paragraph 4.6 or as otherwise provided in the merger, consolidation
or asset transfer agreement.
14.2(d) Assets becoming part of the Fund by reason of any such merger,
consolidation or transfer of assets or liabilities shall be allocated to the
accounts in the Plan as provided in the merger, consolidation or asset transfer
agreement or as otherwise provided in the Plan.
14.3 Plan Permanence and Termination. The Employers have established
-------------------------------
the Plan with the intention and expectation that they will be able to make their
contributions indefinitely, but none of the Employers are or shall be under any
obligation or liability to any Participant or Employee to continue their
contributions or to maintain the Plan for any given length of time, and each may
in its sole and absolute discretion discontinue its contributions or otherwise
terminate its participation in the Plan at any time without any such liability
for such discontinuance or termination.
14.4 Lapse in Contributions. Failure by any Employer to make
----------------------
contributions to the Fund in any year or years, unless the same shall constitute
a complete discontinuance of contributions, or shall be coupled with any other
event causing a termination of its participation in the Plan, shall not
terminate the Plan or operate to vest the rights of any Participants or to
accelerate any payments or distributions to or for the benefit of any
Participants or their Beneficiaries.
14.5 Termination Events.
------------------
14.5(a) The Plan shall terminate in whole or in part as the case may be
upon the happening of any of the following events:
(i) With respect to any Employer, action by its Board terminating
the Plan as to it and specifying the date of such termination. Notice of
such termination shall be delivered to the Plan Sponsor, Trustee and the
Administrator.
(ii) With respect to any Employer, its adjudication as a bankrupt
or its general assignment to or for the benefit of its creditors or its
dissolution, unless within sixty (60) days after such event a successor
employer shall assume the terms and conditions hereof in writing.
(iii) With respect to any Employer, its complete discontinuance of
contributions.
(iv) Termination or partial termination of the Plan within the
meaning of Section 411(d)(3) of the Code, provided, however, that in the
case of a partial termination, paragraphs 14.5 through 14.8 shall only apply
to that part of the Plan which is partially terminated.
(v) With respect to any Employer other than the Plan Sponsor,
upon its ceasing to be an Affiliate with respect to the Plan Sponsor.
(vi) Action by the Board of the Plan Sponsor terminating the Plan
as a whole and specifying the date of such termination. Notice of such
termination shall be delivered to the Trustee, the Administrator and all
Employers.
14.5(b) For purposes of paragraphs 14.6 through 14.8 hereof, any action by
the Board terminating the Plan shall also specify whether the Plan is thereafter
to be operated as a "terminated plan" or a "frozen plan". Such terms are
defined as follows:
(i) A "terminated plan" is one that has been formally terminated,
has ceased crediting service for benefit accrual purposes and vesting, and
has been or is distributing Plan assets to Participants and Beneficiaries
entitled thereto
-61-
as soon as administratively possible. For purposes hereof, a Plan will be
considered a terminated plan when Plan assets are required to be distributed
pursuant to paragraph 14.8 hereof.
(ii) A "frozen plan" is one to which contributions to the Plan
have ceased but all Plan assets are not being distributed to Participants or
Beneficiaries entitled thereto as soon as administratively possible. For
purposes hereof, a Plan will be considered a frozen plan when Plan assets
are not required to be distributed pursuant to paragraph 14.8 hereof.
14.5(c) Termination of the Plan shall mean that:
(i) Contributions shall cease to be made to the Plan for periods
after the effective date of the termination, and
(ii) Unless otherwise determined by the Board or prohibited by the
Act or the Code, any withdrawal, investment direction, or other rights shall
cease in the case of a "terminated plan" or shall continue in the case of a
"frozen plan", and
(iii) In the case of a "frozen plan", benefit payments shall be
made as provided in ARTICLE VIII and withdrawals and loans shall be
permitted as provided in ARTICLE IX prior to its becoming a "terminated
plan".
14.6 Termination Allocations and Separate Accounts.
---------------------------------------------
14.6(a) Upon the effective date of the termination or partial termination
of the Plan within the meaning of Section 411(d)(3) of the Code, or upon the
effective date of the complete discontinuance of contributions to the Plan, the
accounts of each affected Participant shall be fully vested.
14.6(b) Upon the effective date of the termination of the Plan with respect
to any Employer, or upon the discontinuance of contributions by it, all or that
portion of each Participant's account which is attributable to such Employer's
(or its predecessor's) contributions shall be fully vested to the extent, if
any, as the Board or the Plan Sponsor shall provide. In addition:
(i) If so directed by the Plan Sponsor, and as of the effective
date of the termination of the Plan with respect to such Employer or the
complete discontinuance of contributions by it, or as of any subsequent
Valuation Date, the Trustee shall pay out of the Fund or provide for all
accrued expenses not otherwise paid, shall value the assets held by the
Fund, and shall adjust such accounts, both in the same manner as at the end
of the Plan Year.
(ii) If so directed by the Plan Sponsor, the Trustee shall then
hold as separate accounts the portions of each account which have been fully
vested under the provisions of this subparagraph.
14.6(c) Upon the effective date of the termination of the Plan as a whole
or the complete discontinuance of all contributions to the Plan, or if so
directed by the Plan Sponsor, the partial termination of the Plan, the Trustee
shall, subject to the Dollar/25% Limitation of paragraph 4.3, allocate the then
unallocated contributions and forfeitures to the accounts of Participants and
adjust such accounts in the same manner as at the end of the Plan Year and shall
thereafter hold such accounts of all Participants as separate accounts
hereunder. Thereafter, and after all fixed and contingent liabilities of the
Fund to Participants and their Beneficiaries have been satisfied, any remaining
assets of the Fund held in such account pursuant to paragraph 4.5 hereof shall
be distributed to the Employer in such manner and in such proportions as the
Plan Sponsor may determine.
14.6(d) To the extent a Participant's Matching and Profit Sharing Active
Accounts becomes fully vested pursuant to this paragraph, it shall be
transferred to his Matching and Profit Sharing Non-forfeitable Accounts.
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14.7 Holding of Separate Accounts.
----------------------------
14.7(a) Upon termination of the Plan with respect to any Employer caused
solely by a complete discontinuance of its contributions, by a partial
termination of the Plan and/or by action of its Board or the Board, the Trustee
shall continue to administer any separate accounts established in accordance
with paragraph 14.6 as a part of the Fund in accordance with the provisions of
the Plan for the sole benefit of the then Participants and Beneficiaries then
receiving benefits, and any future Beneficiaries entitled to receive benefits
hereunder with respect to such separate accounts.
14.7(b) In administering such separate accounts the Trustee shall have the
powers and duties imposed upon it under the Plan provided that under no
circumstances shall all or any portion of the separate accounts of any
Participant held under this paragraph, as from time to time adjusted to reflect
the profits, losses and expenses of the Fund, be subject to any forfeiture or
inure to the benefit of any person other than such Participant or his
Beneficiary.
14.8 Distribution of Separate Accounts after Termination.
---------------------------------------------------
Notwithstanding the other provisions of this ARTICLE XIV, but subject to the
applicable provisions of clause (i)(B) of subparagraph 8.1(a) in the event that
the Employer maintains another defined contribution plan other than an employee
stock ownership plan (as defined in Section 4975(e)(7) of the Code), the Trustee
shall forthwith distribute or pay the respective separate accounts in the Fund
to the Participants who are not Transferor Plan Participants or their
Beneficiaries entitled thereto, in cash or in assets valued as hereinbefore
provided, in a Lump Sum Payment and to Transferor Plan Participants and their
Beneficiaries entitled thereto either in the form of a Lump Sum Payment, in cash
or in assets valued as hereinbefore provided, or in the form of an annuity
contract or policy upon the happening of any of the following events which occur
on or after or result in the termination of the Plan:
(i) Delivery to the Trustee of a notice executed on behalf of the
Plan Sponsor by authority of the Board directing that such distribution or
payment be made.
(ii) Adjudication of the Plan Sponsor as a bankrupt or general
assignment by the Plan Sponsor to or for the benefit of creditors or
dissolution of the Plan Sponsor, unless, within sixty (60) days after such
event, either a successor or other employer shall assume the terms and
conditions hereof in writing, or the Trustee (or a successor Trustee
appointed within such sixty (60) day period) shall agree to continue to hold
and administer the Fund as provided herein and additionally, unless
otherwise agreed with or directed by the Plan Sponsor, to assume all the
powers and duties imposed upon the Named Fiduciaries under the Plan. In
assuming such powers and duties, the Trustee (or any successor Trustee)
shall be vested with all authority granted by the Plan without any
limitation imposed upon such authority by the Plan except the requirement
that its actions shall be governed by the other provisions of the Plan and
by the Act and the Code. If the Trustee (or any successor Trustee) shall so
agree to continue the trust, all expenses of the Plan and the Fund and
reasonable compensation to the Trustee (or any successor Trustee) and any
successor shall be paid from the Fund. In the event of the death,
resignation or removal of the Trustee (or any successor Trustee) who shall
have so agreed to continue the trust, a court of competent jurisdiction over
the Fund shall appoint a successor or the respective account balances in the
Fund shall forthwith be distributed as hereinabove provided at the direction
of such court.
14.9 Effect of Employer Merger, Consolidation or Liquidation.
-------------------------------------------------------
Notwithstanding the foregoing provisions of the ARTICLE XIV, the merger or
liquidation of any Employer into any other Employer or the consolidation of two
(2) or more of the Employers shall not cause the Plan to terminate with respect
to the merging, liquidating or consolidating Employers, provided that the Plan
has been adopted or is continued by and has not terminated with respect to the
surviving or continuing Employer.
ARTICLE XV
Matters Relating to Company Stock
---------------------------------
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15.1 Voting Directions.
-----------------
15.1(a) Voting rights with respect to Company Stock (and any other
securities of the Employer) held in any Fund division and allocated to
Participants' accounts as of the applicable record date shall be passed through
to Participants (or if deceased, to their Beneficiaries). When so required to
be passed through, such rights which are not so exercised shall not be exercised
by the Trustee.
15.1(b) In addition to the required pass-through of voting rights under
subparagraph 15.1(a), when and then to the extent and in the manner directed by
the Board:
(i) Any voting rights with respect to Company Stock (or other
securities of the Employer) which are not required to be passed through may
be passed through to Participants (or if deceased, to their Beneficiaries),
(ii) Any decision by a holder of Company Stock (or such other
securities) to accept or reject a tender offer for Company Stock (or such
other securities) may be treated as voting rights with respect to Company
Stock (or such other securities) and passed through to Participants (or if
deceased, to their Beneficiaries), and/or
(iii) Voting rights with respect to unallocated Company Stock (and
such other securities) may be passed through to Participants (or if
deceased, to their Beneficiaries).
For purposes hereof, a "tender offer" is intended to include any acquisition
proposal which does not require voting rights with respect to Company Stock (or
such other securities) to be exercised.
15.1(c) Whenever voting rights of Company Stock (or any other securities of
the Employer) are passed through to Participants under subparagraph 15.1(a) or
(b), each Participant (or if deceased, his Beneficiary) shall have the right to
direct the manner in which such Company Stock (or other securities) is to be
voted pursuant to clause (i) hereof or to actually or by attorney vote such
Company Stock (or other securities) pursuant to clause (ii) hereof as determined
by the Administrator. Within a reasonable time before such voting rights are to
be exercised, the Administrator shall notify each Participant (or if deceased,
his Beneficiary) of the occasion for the exercise of such rights and shall cause
to be sent to each such Participant (or if deceased, his Beneficiary entitled to
benefits hereunder) all information that the Employer or tender offeror, as the
case may be, distributes to shareholders (or security holders) regarding the
exercise of such rights.
(i) Unless otherwise determined pursuant to clause (ii) of this
subparagraph, any direction made pursuant to this paragraph shall be made in
writing on a form provided by the Administrator, executed by the Participant
(or if deceased, his Beneficiary), and delivered to the Administrator by
5:00 p.m. of the second day preceding (or such other period as the
Administrator may establish) the date such voting rights are to be
exercised. The Administrator shall then forthwith deliver such direction to
the Trustee. To the extent permitted by law, the Trustee shall exercise
such rights as directed and, except in the case of voting rights or a tender
offer described in subparagraph 15.1(b) unless also directed by the
Administrator, shall not exercise such rights which are not so directed.
(ii) Notwithstanding the foregoing, the Administrator may
alternatively direct the Trustee to execute and give each Participant (or if
deceased, his Beneficiary) a power of attorney with respect to such Company
Stock (or other securities), and the Participant (or if deceased, his
Beneficiary) may then vote such Company Stock (or other securities) directly
or through his attorney. If the Administrator determines to pass through
voting rights pursuant to this clause (ii), such Company Stock (or other
securities) which is not voted by Participants (or if deceased, their
Beneficiaries) shall not be voted.
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15.1(d) To the extent that the voting rights of Company Stock (or other
securities of the Employer) or the decision to accept or reject a tender offer
for Company Stock (or other securities of the Employer) held in the Fund are not
passed through to Participants and are not prohibited from being voted under
subparagraph 15.1(a), either:
(i) The Administrator shall direct the Trustee in writing as to
the manner, if any, in which such voting rights shall be exercised and as to
the acceptance or rejection of such tender offer in whole or in part,
provided such direction is delivered to the Trustee prior to the time such
voting rights are to be exercised or such tender offer is to be accepted or
rejected, and the Trustee shall exercise such rights as directed, or
(ii) The Administrator's duly authorized representative may
exercise such rights in person or by proxy, or
(iii) The Administrator shall inform the Trustee that neither the
Administrator nor its authorized representative will exercise its rights
hereunder and that the Trustee should exercise such rights in its
discretion.
Such direction may include, but shall not be limited to, an instruction to vote
such Company Stock (or such other securities) or to accept or reject such tender
offer based on the manner in which such rights with respect to a majority (or
some other specified percentage or fraction) of shares of Company Stock (or
shares or interests in such other securities) with respect to which such voting
or tender acceptance or rejection rights are passed through to Participants are
exercised.
15.1(e) If the Trustee or Administrator is prevented by law from, or does
or may have a conflict of interest in, exercising any voting rights of Company
Stock (or other securities of the Employer) in accordance with the applicable
provisions of the Plan or making directions or other determinations pursuant to
this paragraph, or if the Plan Sponsor deems it appropriate for any reason, the
Plan Sponsor shall appoint a Co-Trustee (sometimes referred to as the "Voting
Co-Trustee") in lieu of the Trustee or Administrator for the purpose of
exercising such voting rights in accordance herewith or making directions or
other determinations pursuant to this paragraph and such appointment shall be
terminable at will by the Plan Sponsor.
15.2 Acquisitions and Dispositions of Company Stock.
----------------------------------------------
15.2(a) Purchases of Company Stock for the Company Stock Fund may be made
on the open market or from the Plan Sponsor (if the Plan Sponsor consents) as
determined by the Trustee from time to time or as directed by the Plan Sponsor.
15.2(b) The Named Fiduciaries under the Plan are hereby specifically
authorized, pursuant to and in accordance with Section 408(e) of the Act to
acquire from or sell to any "party in interest" as defined in Section 3(14) of
the Act any stock or securities of the Employer which constitutes "qualifying
employer securities" as defined in Section 407(d)(5) of the Act if such
acquisition or sale is for adequate consideration (or in the case of the
acquisition by the Plan, at a price not less favorable to the Plan than the fair
market value of such securities at the time of acquisition) and if no commission
is charged the Plan with respect thereto. The Board and the Plan Sponsor are
each authorized to determine on behalf of the Plan and the Fund what is adequate
consideration. Unless otherwise determined, the closing sale price per share of
Company Stock as reported in The Wall Street Journal or other authoritative
-----------------------
sources for the day on which a purchase or sale is to take place shall be
adequate consideration with respect to Company Stock if Company Stock is
considered readily tradable on an established market. If such price is not
supplied by The Wall Street Journal or other authoritative sources, then the
-----------------------
price per share will be determined pursuant to the valuation method or procedure
determined by the Board or the Plan Sponsor in good faith.
15.3 Sales Prohibited if Registration or Qualification Required. In no
----------------------------------------------------------
event shall any acquisition or sale of Company Stock pursuant to the Plan be
consummated if in the opinion of counsel for the Plan Sponsor such acquisition
or sale could result in the loss by the Employer or the Plan of its exemption
from applicable registration and/or qualification requirements of federal or
state securities laws. The foregoing sentence shall, however, be inapplicable
if and to the extent such acquisition or sale is required to preserve the
qualification of the Plan under Section 401 or, to the extent applicable, 409
-65-
of the Code or to the extent such acquisition or sale is directed in writing by
the Administrator. In the event an acquisition or disposition of Company Stock
is made as provided in this paragraph under circumstances which require the
registration and/or qualification of the Company Stock under applicable federal
or state securities laws, then the Plan Sponsor, at the expense of the Employer,
shall take or cause to be taken any and all actions as may be necessary or
appropriate to effect such registration or qualification.
15.4 Limitation on Insiders' Interests in Company Stock.
--------------------------------------------------
Notwithstanding anything in the Plan to the contrary, but subject to any
applicable qualification requirements under Section 401 and, to the extent
applicable, 409 of the Code, the Board shall have authority to adopt and
implement administrative rules and regulations relating to the investment of the
assets held in the accounts of Participants who are insiders (within the meaning
of Section 16 of the Securities Exchange Act of 1934 (the "1934 Act") and the
rules thereunder), including, without limitation, such rules and regulations as
may the Administrator or Plan Sponsor deems necessary or appropriate in order
for insiders' participation in the Plan to satisfy the conditions of Rule 16b-3,
as amended (or any successor or similar rule), under the 1934 Act.
15.5 No Guarantee of Values. Neither the Employer nor the Named
----------------------
Fiduciaries guarantee that the fair market value of the Company Stock when it is
distributed will be equal to its purchase price or that the total amount
distributable under the Plan will be equal to or greater than the amount of
contributions and direct transfers allocated to any Participant. Each
Participant assumes all risk of any decrease in the market value of the Company
Stock and other assets allocated to his accounts in accordance with the
provisions of the Plan.
15.6 Legend Regarding Securities Laws Restriction on Sale or Transfer.
----------------------------------------------------------------
Each certificate for shares of Company Stock distributed from the Plan which is
subject to a restriction on sale or transfer by reason of any applicable federal
or state securities laws shall bear an appropriate legend giving notice of such
restrictions.
15.7 Confidentiality of Participant Directions regarding and Holdings of
-------------------------------------------------------------------
Company Stock.
- -------------
15.7(a) The Administrator shall maintain confidentially with respect to
Participant directions to invest or cease investment in the Company Stock Fund,
Participants' interests in the Company Stock Fund and Participant directions
regarding the exercise of voting, tender and similar rights for Company Stock as
is intended under Section 404(c) of the Act. The Administrator's procedures for
confidentiality shall include the collection of investment direction information
by the Administrator (or its delegate) and the collection of voting instructions
by the Plan Administrator (or its delegate), followed by delivery of voting
instructions to the Trustee. Information regarding investment directions and
voting instructions shall be retained by the Administrator, as required by the
Act and other applicable laws, but will not be disclosed to management of the
Plan Sponsor or any other Employer or Affiliate except to the extent required by
securities or other applicable laws which are not pre-empted by the Act.
15.7(b) The Plan fiduciary responsible for monitoring compliance with the
confidentiality procedures of this paragraph is the Director of Human Resources
of the Plan Sponsor.
15.7(c) The Plan fiduciary responsible for monitoring compliance with the
confidentiality procedures of this paragraph shall appoint an independent
fiduciary for the Plan to carry out certain activities with respect to Company
Stock for any matters (such as tender offers, exchange offers and contested
Board elections) for which he believes appropriate in order to ensure
confidentially.
ARTICLE XVI
Miscellaneous
-------------
16.1 Headings. The headings in the Plan have been inserted for
--------
convenience of reference only and are to be ignored in any construction of the
provisions hereof.
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16.2 Gender and Number. In the construction of the Plan, the masculine
-----------------
shall include the feminine or neuter and the singular shall include the plural
and vice-versa in all cases where such meanings would be appropriate.
16.3 Governing Law. The Plan and the Fund created hereunder shall be
-------------
construed, enforced and administered in accordance with the laws of the
Commonwealth of Virginia, and any federal law pre-empting the same. Unless
federal law specifically addresses the issue, federal law shall not pre-empt
applicable state law preventing an individual or person claiming through him
from acquiring property or receiving benefits as a result of the death of a
decedent where such individual caused the death.
16.4 Employment Rights. Participation in the Plan shall not give any
-----------------
employee the right to be retained in the Employer's employ nor, upon dismissal
or upon his voluntary termination of employment, to have any right or interest
in the Fund other than as herein provided.
16.5 Conclusiveness of Employer Records. The records of the Employer
----------------------------------
with respect to age, service, employment history, compensation, absences,
illnesses and all other relevant matters shall be conclusive for purposes of the
administration of the Plan.
16.6 Right to Require Information and Reliance Thereon. The Employer,
-------------------------------------------------
Administrator and Trustee shall have the right to require any Participant,
Beneficiary or other person receiving benefit payments to provide it with such
information, in writing, and in such form as it may deem necessary to the
administration of the Plan and may rely thereon in carrying out its duties
hereunder. Any payment to or on behalf of a Participant or Beneficiary in
accordance with the provisions of the Plan in good faith reliance upon any such
written information provided by a Participant or any other person to whom such
payment is made shall be in full satisfaction of all claims by such Participant
and his Beneficiary; and any payment to or on behalf of a Beneficiary in
accordance with the provisions of the Plan in good faith reliance upon any such
written information provided by such Beneficiary or any other person to whom
such payment is made shall be in full satisfaction of all claims by such
Beneficiary.
16.7 Alienation and Assignment.
-------------------------
16.7(a) Except as otherwise permitted by the Act and the Code and as
expressly permitted by the Plan or the Administrator, no benefit hereunder shall
be subject in any manner to alienation, sale, anticipation, transfer,
assignment, pledge, encumbrance, garnishment, attachment, execution or levy of
any kind.
16.7(b) As provided in the Act and the Code, this prohibition shall not
apply to any QDRO entered on or after January 1, 1985, and the Administrator
shall have all rights granted thereunder in determining the existence of such an
order, in establishing and following procedures therefor and in complying with
any such order. The Administrator shall treat any domestic relations order
entered before January 1, 1985 as a QDRO entered on January 1, 1985 if the Plan
is paying benefits pursuant to such order on January 1, 1985 or if the
Administrator in its discretion deems such treatment warranted. On a uniform
and non-discriminatory basis, the Administrator may determine that any special
charge, fee or expense in reviewing the status of a domestic relations order and
in otherwise administering the Plan in connection therewith be charged directly
to the account of the Participant with respect to whom the order is issued.
16.7(c) As provided in the Act and the Code, this prohibition shall not
apply to any Participant loan which meets the requirements of subparagraph
9.8(a).
16.8 Notices and Elections.
---------------------
16.8(a) Except as provided in subparagraph 16.8(b), all notices required to
be given in writing and all elections, consents, applications and the like
required to be made in writing, under any provision of the Plan, shall be
invalid unless made
-67-
on such forms as may be provided or approved by the Administrator and, in the
case of a notice, election, consent or application by a Participant or
Beneficiary, unless executed by the Participant or Beneficiary giving such
notice or making such election, consent or application.
16.8(b) Subject to limitations under applicable provisions of the Code or
the Act (such as the requirement that spousal consent be in writing), the
Administrator is authorized in its discretion to accept other means for receipt
of effective notices, elections, consent and/or application by Participants
and/or Beneficiaries, including but not limited to interactive voice systems, on
such basis and for such purposes as it determines from time to time.
16.9 Delegation of Authority. Whenever the Plan Sponsor or any
-----------------------
Employer is permitted or required to perform any act, such act may be performed
by its Chief Executive Officer, its President, its Vice President and Treasurer,
or its Board of Directors or by any person duly authorized by any of the
foregoing.
16.10 Service of Process. The Administrator, as well as the Trustee,
------------------
shall be the agent for service of process on the Plan.
16.11 Construction. This Plan is created for the exclusive benefit of
------------
Employees of the Employer and their Beneficiaries and shall be interpreted and
administered in a non-discriminatory manner consistent with its being an
employees' profit sharing plan and trust and a defined contribution plan as
defined in Sections 401(a) and 414(i), of the Code, respectively, with a cash or
deferred arrangement described in 401(k) of the Code.
ARTICLE XVII
Adoption of the Plan
--------------------
17.1 Restated Adoption and Failure to Obtain Qualification. If the
-----------------------------------------------------
Internal Revenue Service determines that this Restatement of the Plan does not
qualify initially under Section 401 of the Code, the Plan as restated herein
shall have no force and effect, unless the same shall be further amended in
order to so qualify.
17.2 Adoption by Additional Employers. Any employer which is an
--------------------------------
Affiliate and which, with the consent of the Board, desires to adopt the Plan,
may do so by executing the Plan or an adoption agreement in a form authorized
and approved by such employer's Board of Directors and the Board. In the event
that such Affiliate has established and has been maintaining a profit sharing or
money purchase pension plan for the benefit of its employees which qualifies
under Section 401 or 404(a)(2) of the Code, an adoption or other agreement may
provide, subject to the requirements of paragraph 14.2, that such plan is
amended and restated by the provisions of this Plan (such prior plan being
deemed a predecessor plan to this Plan) or that such plan is to be merged or
consolidated with this Plan; and, in such event, the assets of such plan shall
be paid over to the Trustee to be administered as a part of the Fund pursuant to
the provisions of this Plan.
-68-
IN WITNESS WHEREOF, the Plan Sponsor, for itself and for each Employer,
pursuant to the resolution duly adopted by its Board of Directors, has caused
its name to be signed to this Plan and Trust Agreement by its duly authorized
officer with its corporate seal hereunto affixed and attested by its Secretary
or Assistant Secretary, and each Trustee and the Custodian have caused their
names to be signed to this Plan and Trust Agreement, as of the ______ day of
April, 1997.
ESKIMO PIE CORPORATION,
Plan Sponsor and participating Employer
By:________________________________(SEAL)
Its_______________________________
Attest:
___________________________________
Its_______________________________
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Separate Trustee for all Fund divisions other
than the
Company Stock Fund and Custodian for the
Company Stock Fund
By:________________________________(SEAL)
Its_______________________________
Attest:
___________________________________
Its_______________________________
___________________________________(SEAL)
THOMAS M. MISHOE, JR.,
Separate Trustee for the Company Stock
Fund
-69-
ESKIMO PIE CORPORATION SAVINGS PLAN AND TRUST
Appendix A
Determination of Hours of Service
---------------------------------
A-1.1 Introduction. Hours of Service shall be credited to Employees for
------------
purposes of the Plan as provided in this Appendix.
A-1.2 Paid Hours for the Performance of Duties. An Employee shall be
----------------------------------------
credited with one Hour of Service for each hour for which he is paid by the
Employer, or entitled to payment, for the performance of duties for the
Employer, including each hour for which credit has not theretofore been given
and for which back pay, irrespective of mitigation of damages, has either been
awarded or agreed to by the Employer. Such Hours of Service shall be credited
to the individual for the period in which the duties are actually performed.
A-1.3 Paid Hours Where No Performance of Duties Required. An Employee
--------------------------------------------------
shall also be credited with up to and including five hundred and one (501) Hours
of Service for any single continuous period during which no duties are performed
due to vacation, holiday, sickness, incapacity, disability, layoff, jury duty,
military duty or leave of absence and on account of which he is directly or
indirectly paid, or entitled to payment, by the Employer (other than under a
plan maintained solely for the purpose of complying with applicable workmen's
compensation or unemployment compensation or disability insurance laws or other
than solely as reimbursement for medical or medically related expenses incurred
by the individual), including hours for any such period for which credit has not
theretofore been given and for which back pay, irrespective of mitigation of
damages, has either been awarded or agreed to by the Employer, all determined as
provided below. Such Hours of Service shall be credited in accordance with the
following rules.
(i) The number of Hours of Service to be credited for a payment
calculated on the basis of units of time (such as hours, days, weeks or
months) shall be the number of regularly scheduled working hours included in
the unit of time on the basis of which the payment is calculated; provided,
however, that if an Employee has no regular working schedule, the number of
Hours of Service to be credited to the Employee shall be calculated, as
determined by the Administrator, on the basis of a forty (40) hour workweek,
an eight (8) hour workday, or on any reasonable basis which reflects the
average hours worked by the Employee, or by other Employees in the same job
classification, over a representative period of time, provided that the
basis so used is consistently applied. Such Hours of Service shall be
credited to the year or years in which the period during which no duties are
performed occurred.
(ii) The number of Hours of Service to be credited for a payment
which is not calculated on the basis of units of time shall be the number
determined by dividing the amount of the payment by the Employee's most
recent "hourly rate of compensation" before the period for which the payment
is made. An Employee's "hourly rate of compensation" is:
(A) In the case of an Employee whose compensation is
determined on the basis of an hourly rate, his hourly rate of
compensation;
(B) In the case of an Employee whose compensation is
determined on the basis of a fixed rate for specified periods of time
(other than hours), his rate of compensation for the specified period
of time divided by the number of hours regularly scheduled during such
specified period of time; provided, however, that the Employee has no
regular work schedule, the "hourly rate of compensation" of the
Employee shall be calculated, as determined by the Administrator, on
the basis of a forty (40) hour workweek, an eight (8) hour workday, or
on any reasonable basis which reflects the average hours worked by the
Employee, or by other Employees in the same job classification, over a
representative period of time, provided that the basis so used is
consistently applied; or
-A-1-
(C) In the case of all other Employees, the lowest hourly rate
of compensation paid to Employees in the same job classification or,
if none have an hourly rate, the minimum wage as established from time
to time under Section 6(a)(1) of the Fair Labor Standards Act of 1938,
as amended.
Such Hours of Service shall be credited to the year in which the period
during which no duties are performed occurs, or, if more than one year is
involved, such Hours of Service shall be allocated between the first two
such years on any reasonable and consistently applied basis determined by
the Administrator.
(iii) Notwithstanding the provisions of clauses (i) and (ii) of this
paragraph, such Hours of Service shall not be credited in a number greater
than the number of hours regularly scheduled for performance of duties
during the period for which the payment is made; provided, however, that if
the Employee has no regular work schedule, the number of regularly scheduled
hours for the Employee for purposes of the provisions of this clause (iii)
shall be deemed to be, as determined by the Administrator, forty (40) hours
per workweek, eight (8) hours per workday, or such number as reflects the
average hours worked by the Employee, or by other Employees in the same job
classification, over a representative period of time, provided such number
used is consistently applied.
A-1.4 Periods Overlapping A Year. Notwithstanding the year to which Hours
--------------------------
of Service are required to be credited under the foregoing, in the case of Hours
of Service to be credited in connection with a period of no more than thirty-one
(31) days which overlaps two years, all such Hours of Service may be credited to
the first or second such year, if done consistently and as directed by the
Administrator.
A-1.5 Absences Due to Pregnancy, Childbirth, Adoption and Related Child
-----------------------------------------------------------------
Care. Solely for purposes of determining whether an Employee is credited with a
- ----
Year of Broken Service for purposes of determining his eligibility to
participate in the Plan or his vested interest in his Accrued Benefit, if the
Employee is absent from work with the Employer for any period beginning on or
after the first day of the first Plan Year commencing after December 31, 1984:
(i) By reason of the pregnancy of the Employee,
(ii) By reason of the birth of a child of the Employee,
(iii) By reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee, or
(iv) For purposes of caring for such child for a period beginning
immediately after such birth or placement,
then the Employee shall be credited with that number of Hours of Service which
would normally have been credited to the Employee during such absence but for
such absence or, if the Employee's otherwise credited Hours of Service cannot be
readily determined, with eight (8) Hours of Service per day of such absence,
except that the total number of Hours of Service so credited shall not exceed
that number needed to avoid incurring a Year of Broken Service. Such Hours of
Service shall be credited either for the applicable year in which the absence
from work begins, if the Employee would be prevented from receiving a Year of
Broken Service for such year solely because such periods of absence are treated
as Hours of Service as provided in this subparagraph, or in the immediately
following year, in any other case. Notwithstanding the foregoing, no credit for
Hours of Service shall be given under this subparagraph unless the Employee
furnishes to the Administrator such timely information as the Administrator may
reasonably require to establish that the absence from work is for one of the
foregoing reasons or purpose and the number of days for which there was such an
absence.
A-1.6 Absences for Leave under the Family and Medical Leave Act. Solely
---------------------------------------------------------
for purposes of determining whether an Employee is credited with a Year of
Broken Service (but only when Years of Broken Service are determined on the
-A-2-
basis of Hours of Service) for purposes of determining his eligibility to
participate in the Plan or his vested interest in his Accrued Benefit, if the
Employee is absent from work with the Employer for any period after August 4,
1993 for family or medical leave required to be granted under the Family and
Medical Leave Act, then the Employee shall be credited with that number of Hours
of Service which would normally have been credited to the Employee during such
absence but for such absence or, if the Employee's otherwise credited Hours of
Service cannot be readily determined, with eight (8) Hours of Service per day of
such absence, except that the total number of Hours of Service so credited shall
not exceed that number needed to avoid incurring a Year of Broken Service. Such
Hours of Service shall be credited for the applicable year(s) in which the
absence from work occurs. Notwithstanding the foregoing, no credit for Hours of
Service shall be given under this subparagraph unless the Employee complies with
the leave procedures required under the Employer's leave policies and the Family
and Medical Leave Act.
A-1.7 Qualified Military Service. Effective December 12, 1994, service
--------------------------
shall be granted for periods of Qualified Military Service as provided in
paragraph 4.10 of the Plan. Unless otherwise required under Section 414(u) of
the Code or USERRA, the affected Employee shall be credited with that number of
Hours of Service which would normally have been credited to the Employee during
such absence but for such absence or, if the Employee's otherwise credited Hours
of Service cannot be readily determined, with eight (8) Hours of Service per day
of such absence. Such Hours of Service shall be credited for the applicable
year(s) in which the Qualified Military Service occurs. Notwithstanding the
foregoing, no credit for Hours of Service shall be given under this subparagraph
unless the Employee complies with the any notice and restoration right
procedures required, or permitted to be required and adopted by the Employer,
under Section 414(u) of the Code or USERRA.
A-1.8 No Duplication of Hours Credited or Conflict with Federal Law.
-------------------------------------------------------------
Nothing contained in this Appendix shall be construed to require or permit any
duplication in the crediting of Hours of Service or to alter, amend, modify,
invalidate, impair or supersede any law of the United States or any valid rule
or regulation issued under any such law so as to deny an Employee credit for an
Hour of Service where such credit is required by federal law other than the Act,
including but not limited to credit required to be given for periods of time in
which no duties are performed due to military duty or service in the United
States Armed Forces, provided that the Employee enters such service directly
from the employ of the Employer and returns to active employment with the
Employer within the period prescribed by applicable law. Hours of Service
before any year commencing after September 2, 1974 may be determined or
reasonably estimated with such records as are available to the Employer.
-A-3-
ESKIMO PIE CORPORATION SAVINGS PLAN AND TRUST
Appendix B
Determination of Top Heavy Plan Status
--------------------------------------
B-1.1 Introduction. The Plan will be a Top Heavy Plan for any Plan Year
------------
beginning after December 31, 1983 if the sum of the present values of the
cumulative accrued benefits of Key Employees under the Plan, and the present
values of the cumulative accrued benefits of Key Employees under all plans
aggregated with it, exceeds sixty percent (60%) of the aggregate of the present
value of the cumulative Accrued Benefits under the Plan and accrued benefits
under such plan(s) at the applicable determination date. For purposes hereof,
aggregation, accrued benefits (including Accrued Benefits) taken into account,
the determination date and all other standards and criteria for determining top-
heaviness under this Plan and such other plan(s) shall be determined under
Section 416 of the Code. Subject to the foregoing, the determination of Top
Heavy Plan status shall be made each Plan Year in accordance with the rules and
definitions contained in this Appendix.
B-1.2 Determination Date. The determination date with respect to a plan
------------------
means the last day of its preceding plan year or, in the case of the first plan
year of a plan, the last day of such first plan year.
B-1.3 Value of Accrued Benefits.
-------------------------
B-1.3(a) The value of an accrued benefit at a determination date is the
value thereof at the most recent valuation date occurring within the twelve (12)
month period ending on the determination date, plus, in the case of a defined
contribution plan, an appropriate adjustment for contributions made or due
thereafter and on or before the determination date.
B-1.3(b) If the plan is a defined benefit plan, the present value of
accrued benefits thereunder shall be determined on the basis of the actuarial
assumptions stated in such plan for such purpose or, if none are stated, on the
basis of the applicable actuarial equivalent benefit payment factors of such
plan, in any case taking into account post-retirement mortality, interest, non-
proportional subsidies (the benefits of which are assumed to commence at the age
when the benefit is most valuable), pre-retirement mortality and future
increases in cost of living, but not taking into account proportional subsidies,
future withdrawals or salary increases, future increases in the maximum dollar
limitation of Section 415 of the Code, and benefits not relating to retirement.
B-1.3(c) If the plan is a defined contribution plan, the value of an
accrued benefit shall be determined as follows:
(i) An individual's account balance in a plan not subject to
Section 412 of the Code is the sum of his actual account balance on the
applicable valuation date and all contributions actually made after the
applicable valuation date but on or before the determination date; provided,
however, for such a plan's first plan year, the amount determined in the
preceding sentence shall be added to the amount of any contributions made
after the determination date that are allocated as of a date in that first
plan year.
(ii) An individual's account balance in a defined contribution
plan that is subject to Section 412 of the Code is the sum of his account
balance on the applicable valuation date, all contributions due as of the
determination date (that is, contributions that would be allocated as of a
date not later than the determination date, even though those amount are not
yet required to be contributed), and, for the plan year that contains the
determination date, all amounts actually contributed (or due to be
contributed) after the extended payment period in Section 412(c)(10) of the
Code.
B-1.3(d) The accrued benefit of a Non-Key Employee shall be determined (i)
under the method which is uniformly used for accrual purposes for all plans of
the Employer or (ii) if there is no method described in clause (i), as if such
benefit accrued not more rapidly than the slowest applicable accrual rate
permitted under the fractional rule of Section 411(b)(1)(C) of the Code.
-B-1-
B-1.4 Accrued Benefits Excluded from Determination. In determining the
--------------------------------------------
value of accrued benefits, there shall be excluded:
(i) Any rollover contribution or plan-to-plan transfer initiated
by the participant and made after December 31, 1983 so long as the rollover
contribution or transfer was not derived from a plan maintained by the
Employer,
(ii) Any accumulated deductible employee contributions,
(iii) The accrued benefit of any individual who was a Key Employee
for a prior plan year but who is no longer a Key Employee, and
(iv) For plan years beginning after December 31, 1984, the accrued
benefit of any individual who has not performed service for any Employer
maintaining the plan at any time during the five (5) plan year period ending
on the determination date.
B-1.5 Distributions and Transfers Taken into Account in Determination.
---------------------------------------------------------------
In determining the value of accrued benefits, there shall be included any
distributions made under the plan at any time during the five (5) plan year
period ending on the determination date:
(i) Including distributions from any terminated plan which if it
had not been terminated would have been required to be aggregated with this
Plan under clause (i) or (ii) of subparagraph 1.6(b) of this Appendix, but
(ii) Excluding:
(A) Distributions made on account of death, to the extent the
benefits do not exceed the present value of accrued benefits existing
immediately prior to death (in the case of a defined contribution
plan, a distribution made on account of death is the participant's
accrued account balance (including the cash value of life insurance
policies)), and
(B) Distributions and plan-to-plan transfers which are rolled
over into a plan maintained by the Employer or initiated by the
participant.
B-1.6 Aggregation of Plans.
--------------------
B-1.6(a) When aggregating plans, the value of accrued benefits shall be
calculated with reference to the determination dates of such aggregated plans
that fall within the same calendar year. When aggregating defined benefit plans
the same actuarial assumptions shall be used with respect to all such plans and,
if the stated assumptions of such plans are not the same, the plan sponsor(s) of
such plans shall select and agree on one plan's assumptions.
B-1.6(b) The plans to be aggregated with this Plan for purposes hereof for
a plan year are:
(i) Each other plan (whether or not terminated) intended to meet
the applicable requirements of Section 401(a)(10)(B) of the Code and
maintained by the Employer and each simplified employee pension plan
(whether or not terminated) maintained by the Employer in which a Key
Employee participates for the plan year containing the determination date
with respect to such plan year or for any of the preceding four (4) plan
years,
(ii) Each other qualified or simplified employee pension plan
(whether or not terminated) maintained by the Employer which, during the
applicable five (5) plan year period described in clause (i) of this
subparagraph, enables
-B-2-
any such plan described in clause (i) of this subparagraph to meet the
requirements of Section 401(a)(4) or 410 of the Code, and
(iii) Solely in the discretion of the Plan Sponsor, any additional
qualified or simplified employee pension plan(s) (whether or not terminated)
maintained by the Employer if the plans described in clauses (i) and (ii) of
this subparagraph would continue to meet the requirements of Sections
401(a)(4) and 410 of the Code with such plan(s) being included in the
aggregation group.
-B-3-
ESKIMO PIE CORPORATION SAVINGS PLAN AND TRUST
Appendix C
List of Participating Employers
(As of January 1, 1997)
-----------------------
Type and Effective Date Effective Date
Place of of Commencement of Termination
Name of Employer Organization of Participation of Participation
- ---------------- ------------ ---------------- ----------------
Eskimo Pie Corporation Virginia corporation April 6, 1992 ----
Eskimo, Inc. Virginia corporation February 1, 1997 ----
Sugar Creek Foods, Inc. Virginia corporation February 1, 1997 ----
-C-1-
ESKIMO PIE CORPORATION SAVINGS PLAN AND TRUST
Appendix D
Rules Pertaining to Limitations on After-Tax, Pre-Tax and Matching Contributions
- --------------------------------------------------------------------------------
D-1.1 Limitation on Pre-Tax Contributions.
-----------------------------------
D-1.1(a) The aggregate amount of a Participant's Pre-Tax Contributions made
to the Plan for a Plan Year shall not exceed the applicable limits thereon
specified in this paragraph and elsewhere in the Plan.
D-1.1(b) Notwithstanding anything in the Plan to the contrary, the
aggregate Pre-Tax Contributions and other Elective Deferrals made by a
Participant for any calendar year may not exceed the Elective Deferral Dollar
Limitation.
(i) In no event shall the aggregate Elective Deferrals made by
any Employee for any calendar year to this Plan and any other plan
maintained by the Employer exceed the Elective Deferral Dollar Limitation,
and the Administrator shall, whenever necessary to comply with this
limitation, cause such Employee's Elective Deferrals to this Plan to cease
being made for such calendar year and take such other action as it may deem
appropriate in connection therewith.
(ii) For purposes hereof:
(A) The term "Elective Deferral Dollar Limitation" means
$7,000, as adjusted by the Adjustment Factor and as otherwise adjusted
pursuant to Section 402(g) of the Code.
(B) The term "Elective Deferrals" means a Participant's Pre-
Tax Contributions to the Plan and his other elective or salary
reduction contributions to a cash or deferred arrangement, tax
sheltered annuity or simplified employee pension plan or "Section
501(c)(18)" trust to the extent not includable in or to the extent
deductible from the Participant's gross income for his taxable year of
contribution on account of or as described in Section 401(k), 403(b),
408(k) or 501(c)(18) of the Code and required to be taken into account
and aggregated for purposes of applying the limitations of Section
402(g) of the Code to the Plan.
(C) The term "Excess Elective Deferrals" means a
Participant's Elective Deferrals for a calendar year in excess of the
Elective Deferral Dollar Limitation for such calendar year.
(iii) The following procedure applies to the notice of the
existence of Excess Elective Deferrals and to the distribution of Excess
Elective Deferrals during the calendar year for which made:
(A) By written notice filed with the Administrator the
Participant may notify the Administrator of the existence of Excess
Elective Deferrals with respect to the Participant and may allocate
the amount of his Excess Elective Deferrals for such calendar year
among the plans to which contributed and notify the Administrator of
the portion, if any, allocated to the Plan. In addition, the Employer
may notify the Administrator of Excess Elective Deferrals made to the
Plan and other plans maintained by the Employer.
(B) The Administrator, in its discretion, may then
distribute the designated Excess Elective Deferrals (without income
thereon unless otherwise determined by the Administrator on a uniform
and non-discriminatory basis) in a "corrective distribution" during
the calendar year for which made so long as the distribution is made
after the Plan has received the Excess Elective Deferrals or, if
permitted under Section 402(g) of the Code, may direct that the Excess
Elective Deferrals be retained in the Plan permanently or for later
distribution pursuant to the Plan.
-D-1-
(iv) The following procedure applies to the notice of the existence
of Excess Elective Deferrals and to the distribution of Excess Elective
Deferrals after the calendar year for which made:
(A) Not later than the January 31 following each calendar year
the Administrator shall inform each Participant of his aggregate Pre-
Tax Contributions for such calendar year.
(B) Not later than the March 1 following each calendar year, by
written notice filed with the Administrator the Participant may notify
the Administrator of the existence of Excess Elective Deferrals with
respect to the Participant and may allocate the amount of his Excess
Elective Deferrals for such calendar year among the plans to which
contributed and notify the Administrator of the portion, if any,
allocated to the Plan. In addition, the Employer may notify the
Administrator of Excess Elective Deferrals made to the Plan and other
plans maintained by the Employer.
(C) The Administrator may then, in its discretion, direct that
any Excess Elective Deferrals allocated to the Plan be distributed to
the Participant (together with income thereon as determined pursuant
to Section 402(g) of the Code) in a "corrective distribution" or, if
permitted under Section 402(g) of the Code, be retained in the Plan.
(v) For purposes hereof and except to the extent otherwise provided
under Section 401(k) or 402(g) of the Code:
(A) The amount of any Excess Elective Deferrals that may be
distributed with respect to any Participant for a calendar year shall
be reduced by any Excess Deferral Contributions (as defined in
paragraph 1.2 of this Appendix) previously distributed or
recharacterized with respect to the Participant for the Plan Year
beginning with or within the calendar year.
(B) Excess Elective Deferrals allocated to the Plan shall be
considered first to be Pre-Tax Optional Contributions for such Plan
Year and then to be the remainder of the Participant's Pre-Tax Basic
Contributions.
(vi) For purposes hereof and except to the extent otherwise provided
under Section 401(k) or 402(g) of the Code, the income allocated to any
Excess Elective Deferrals allocated to the Plan shall be determined by the
Administrator under the following rules and calculated under any reasonable
method selected by the Administrator so long as the method does not violate
the requirements of Section 401(a)(4) of the Code, is used consistently for
all Participants and for all corrective distributions under the Plan for a
calendar year, and is used by the Plan for allocating income to
Participants' accounts under the Plan:
(A) Unless another method is determined by the Administrator,
where the corrective distribution is made after the end of the
calendar year for which the Excess Elective Deferrals were made, the
amount of income to be distributed shall be determined by multiplying
(I) the income for the calendar year or other period in question
allocable to the account to which such Excess Elective Deferrals are
allocated by (II) a fraction, the numerator of which is the amount of
the Participant's Excess Elective Deferrals allocated to such account
for the calendar year or other period in question and entitled to a
share of the valuation adjustment therefor under paragraph 4.6 of the
Plan and the denominator of which is the balance in such account on
the last day of the calendar year or other period in question, reduced
by the earnings allocable thereto and increased by the losses
allocable thereto in the calendar year or other period in question.
-D-2-
(B) Where the corrective distribution is made after the end of
the calendar year for which the Excess Elective Deferrals were made,
unless otherwise determined by the Administrator on a uniform and non-
discriminatory basis, no income shall be distributed for the period
between the end of the calendar year and the date of distribution.
(C) Where the corrective distribution is made during the
calendar year for which the Excess Elective Deferrals were made,
unless otherwise determined by the Administrator on a uniform and non-
discriminatory basis, no income shall be distributed.
(vii) For purposes of the Code, including Sections 401(a)(4),
401(k)(3), 404, 409, 411, 412 and 416 thereof, Excess Elective Deferrals are
treated as Employer contributions even if they are distributed. However,
Excess Elective Deferrals which are timely distributed to a Participant are
not treated as Annual Additions for purposes of Section 415 of the Code and
paragraphs 4.3 and 4.4 of the Plan. In addition, Excess Elective Deferrals
of Non-Highly Compensated Employees are not taken into account in
determining Deferral Percentages under paragraph 1.2 of this Appendix to the
extent they exceed the Elective Deferral Dollar Limitation based only on
Elective Deferrals made to this Plan and other plans maintained by the
Employer.
D-1.1(c) If a Participant's Pre-Tax Contributions are returned in a
corrective distribution made because of the existence of Elective Deferrals made
to plans not maintained by the Employer or any Affiliate, such contributions
shall nevertheless still be considered made for any benefit accrual requirements
contingent thereon, and any Matching Contributions attributable thereto shall be
also be distributed (to the extent vested) or forfeited (to the extent not
vested).
D-1.2 Limitation on and Distribution of Pre-Tax Contributions Made by
---------------------------------------------------------------
Highly Compensated Employees.
- ----------------------------
D-1.2(a) Except where the alternative method under Section 401(k)(12) of
the Code of meeting the nondiscrimination requirements of Section 401(k) of the
Code is satisfied with respect to the Plan for a Plan Year beginning on or after
January 1, 1999, the Pre-Tax Contributions otherwise permitted to be made
pursuant to the Plan shall be limited as hereafter provided so that the Average
Deferral Percentage for Eligible Participants who are Highly Compensated
Employees for a Plan Year (that is, the Tested Plan Year) does not exceed the
greater of (i) or (ii) as follows :
(i) The "regular limitation" percentage which is equal to one
hundred twenty-five percent (125%) of the Average Deferral Percentage for
the Eligible Participants who are Non-Highly Compensated Employees for the
Applicable Plan Year, or
(ii) The "alternative limitation" percentage which is equal to
the lesser of:
(A) Two hundred percent (200%) of the Average Deferral
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year, or
(B) Two (2) percentage points over the Average Deferral
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year.
Notwithstanding the foregoing, for Plan Years beginning on or after January 1,
1997, if the Tested Plan Year is the first Plan Year of the Plan, then the
Average Deferral Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year shall be deemed to be three
percent (3%) unless the Plan Sponsor or the Administrator elects in accordance
with Section 401(k)(3)(E) of the Code, to use the actual Average Deferral
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the first Plan Year.
D-1.2(b) For purposes hereof:
-D-3-
(i) The term "Applicable Plan Year" means:
(A) For Plan Years beginning before January 1, 1997, the Tested
Plan Year.
(B) For Plan Years beginning on or after January 1, 1997, the Plan
Year immediately preceding the Tested Plan Year, unless the Plan Sponsor or
the Administrator elects in accordance with Section 401(k)(3)(A) of the
Code, to use the Tested Plan Year.
(ii) The term "Average Deferral Percentage" means the average (expressed
as a percentage) of the Deferral Percentages of the Eligible Participants in a
group.
(iii) The term "Deferral Contributions" means:
(A) Pre-Tax Contributions, and
(B) To the extent provided or elected pursuant to the special
operating rules of subparagraph 1.2(c) of this Appendix:
(I) Qualified non-elective contributions, including without
limitation QNEC Contributions, within the meaning of Section
401(m)(4)(C) of the Code (that is, any employer contributions (other
than matching contributions within the meaning of Section
401(m)(4)(A) of the Code) which the Employee may not elect to have
paid to him instead of being contributed to the plan, which are
subject to the restrictions on distributions contained in Section
401(k)(2)(B) of the Code (generally prohibiting distribution before
separation from service, death, or disability unless the Employee has
a hardship or has reached age fifty-nine and one-half (59-1/2) or
after plan termination), and which are immediately fully vested and
non-forfeitable),
(II) Qualified matching contributions within the meaning of
Section 401(k)(3)(C)(I) of the Code (that is, matching contributions
as defined in Section 401(m)(4)(A) of the Code, which are subject to
the restrictions on distributions contained in Section 401(k)(2)(B)
of the Code (generally prohibiting distribution before separation
from service, death, or disability unless the Employee has a hardship
or has reached the age fifty-nine and one-half (59-1/2) or after plan
termination) and which are immediately fully vested and non-
forfeitable), and/or
(III) Any other elective deferrals under a cash or deferred
arrangement described in Section 401(k) of the Code.
(C) Notwithstanding the foregoing, a Pre-Tax Contribution and any
other elective deferral shall not be considered a Deferral Contribution for
a Plan Year unless both:
(I) It is allocated as of a date within the Plan Year (which
generally means that it is not contingent upon the Employee's
participation in the plan or arrangement or performance of services
on any date subsequent to that date and that is actually paid to the
funding vehicle of the plan or arrangement no later than the end of
the 12-month period immediately following such Plan Year), and
(II) It either relates to compensation that either would have
been received by the Employee in such Plan Year but for his election
to contribute to the plan or arrangement or is attributable to
services performed by the Employee in the Plan Year, and but for the
Employee's election to contribute to the
-D-4-
plan or arrangement, would have been received by the Employee within
two and one-half (2-1/2) months after the end of such Plan Year.
(iv) The term "Deferral Percentage" means the ratio (expressed as a
percentage and calculated to the nearest one-hundredth of one percent (.01%)) of
(A) the Pre-Tax Contributions under the Plan (and, where provided or elected in
accordance with the special operating rules of subparagraph 1.2(c) of this
Appendix, any other Deferral Contributions) made by or on behalf of an Eligible
Participant for the Plan Year to (B) the Eligible Participant's Eligible
Compensation for the Plan Year.
(v) The term "Eligible Compensation" means an Eligible Participant's
Statutory Compensation while he is an Eligible Participant determined without
regard to suspensions from participation.
(vi) The term "Eligible Participant" means any Employee who is authorized
under the terms of the Plan to make Pre-Tax Contributions for the Plan Year,
determined without regard to suspensions from participation for any reason other
than not being an Eligible Employee (or, where provided or elected in accordance
with the special operating rules of subparagraph 1.2(c) of this Appendix, who is
authorized under the terms of the applicable plan to make or receive an
allocation of Deferral Contributions for the Plan Year).
(vii) The term "Excess Deferral Contributions" means the amount of
Deferral Contributions for a Plan Year which must be eliminated in order for the
restrictions of subparagraph 1.2(a) of this Appendix to be satisfied for the
Plan Year.
(viii) The term "Tested Plan Year" means the Plan Year for which the
limitation is being applied to the contributions of Eligible Participants who
are Highly Compensated Employees.
D-1.2(c) The following special rules shall apply for purposes of this
paragraph:
(i) The following plans or portions of plans are mandatorily
disaggregated and must be tested separately under subparagraph 1.2(a) of this
Appendix and Section 401(k)(3) of the Code:
(A) Contributions under an employee stock ownership plan described
in Section 409 or 4975(e)(7) of the Code (an "ESOP") (or the portion of a
plan which is an ESOP) may not be aggregated with contributions under a
non-ESOP (or the portion of a plan which is not an ESOP) except as
permitted under Section 401(k), 409 or 4975 of the Code.
(B) Except where permitted to be aggregated for purposes of Section
410 of the Code, contributions by or for employees who are included in a
unit of employees covered by a collective bargaining agreement may not be
aggregated with contributions by or for employees who are included in a
unit of employees not covered by the same collective bargaining agreement.
(C) Except where permitted to be aggregated for purposes of Section
410 of the Code, contributions by or for employees assigned to qualified
separate lines of business within the meaning of Section 414(r) of the
Code, unless the plan in question qualifies for the employer-wide exception
to mandatory disaggregation for this purpose under Section 414(r) of the
Code.
(D) Contributions under plans that could but actually are not
aggregated for the plan year for purposes of satisfying the minimum coverage
requirements of Section 410(b) of the Code (other than the average benefits
percentage test).
-D-5-
(E) Contributions under a plan maintained by more than one employer
as described in Section 413(c) of the Code shall be treated as if each such
employer maintained a separate plan.
(F) Except as provided in clause (ii) of this subparagraph,
contributions under plans which do not have the same plan year.
(ii) Subject to the limitations of clause (i) of this subparagraph, the
following plans or portions of plans are mandatorily aggregated and must be
tested as one plan under subparagraph 1.2(a) of this Appendix and Section
401(k)(3) of the Code:
(A) The Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to make
Pre-Tax Contributions or have other elective deferrals allocated to his
account under two or more cash or deferred arrangements described in
Section 401(k) of the Code that are maintained by the Employer shall be
determined as if all such Pre-Tax Contributions and elective deferrals were
made under a single plan. Such aggregation shall be effected on the basis
of plan years beginning in the same calendar year.
(B) In the event that this Plan satisfies the requirements of Section
401(a)(4) or 410(b) (other than Section 410(b)(2)(A)(ii)) of the Code only
if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of Section 401(a)(4) or 410(b) (other than Section
410(b)(2)(A)(ii)) of the Code only if aggregated with this Plan, then this
paragraph shall be applied by determining the Deferral Percentages of
Eligible Participants as if all such plans were a single plan.
(iii) Subject to the limitations of clause (i) of this subparagraph, two or
more cash or deferred arrangements may be permissively aggregated by the
Administrator for purposes of satisfying the requirements of Section 401(a)(4),
401(k) and 410(b) of the Code if such arrangements each have the same plan year.
(iv) At the option of the Administrator, each Eligible Participant's
Deferral Contributions for a Plan Year consisting of qualified non-elective
contributions and/or qualified matching contributions under any plan or
arrangement may be included in determining the Deferral Percentages for the Plan
Year provided, however, that:
(A) The non-elective contributions (both including and excluding the
qualified non-elective contributions which are treated as Deferral
Contributions) satisfy the requirements of Section 401(a)(4) of the Code.
(B) The matching contributions satisfy the requirements of Section
401(m) of the Code, provided that the qualified non-elective contributions
and qualified matching contributions treated as Deferral Contributions are
disregarded in making this determination.
(C) Except as provided in clauses (v)(A) and (B) of this
subparagraph, the qualified non-elective contributions and qualified
matching contributions treated as Deferral Contributions are not taken into
account in determining whether any other contributions or benefits satisfy
the requirements of Section 401(a)(4) of the Code or whether employee
contributions and matching contributions meet the requirements of Section
401(m) of the Code.
(D) The qualified non-elective contributions may not be treated as
Deferral Contributions if the effect is to increase the difference between
the Average Deferral Percentages for Highly Compensated Employees and for
Non-Highly Compensated Employees.
-D-6-
(E) The qualified non-elective contributions and qualified
matching contributions satisfy the contingent benefit limitations of
Section 401(k)(4)(A) (which generally prohibit benefits other than
matching contributions from being contingent on making or not making
elective deferrals).
(F) The plan years of the plans or arrangements under which the
qualified non-elective contributions and qualified matching
contributions treated as Deferral Contributions are made is the same
as the Plan Year.
(v) The determination of Excess Deferral Contributions for a Plan
Year for purposes of this paragraph shall be made:
(A) After first determining the Excess Elective Deferrals under
subparagraph 1.1(b) of this Appendix for the Plan Year; provided that
the Excess Elective Deferrals of Non-Highly Compensated Employees
shall not be taken into account in determining the Deferral Percentage
of such Eligible Participants to the extent that such Excess Elective
Deferrals are made under this Plan or other cash or deferred
arrangement maintained by the Employer and that Excess Elective
Deferrals of Highly Compensated Employees shall be taken into account
in determining the Deferral Percentage of such Eligible Participants,
and
(B) Before determining the Excess Aggregate Contributions for
purposes of paragraph 1.3 of this Appendix and Section 401(m) of the
Code for the Plan Year.
(vi) The employee groups tested hereunder may be divided into
separate testing groups on such basis, if any, as the Administrator may
determine and as is permitted under Sections 410, 401(k) and 401(m) of the
Code, including, but not limited to, separate testing for excludible
employees (that is, where the plan's age and/or service requirements are
lower than the greatest minimum age and service conditions permissible
under Section 410(a) of the Code).
(vii) If the Plan Sponsor or the Administrator elects to apply
Section 410(b)(4)(B) of the Code in determining whether the Plan meets the
requirements of Section 410(b) of the Code for a Plan Year, the Plan may
exclude altogether the participation of Non-Highly Compensated Employees
(but not the participation of Highly Compensated Employees) who have not
met the minimum age and service requirements of Section 410(a)(1)(A) of the
Code in determining the satisfaction of requirements of subparagraph D-
1.2(a) and subparagraph D-1.4(a) of this Appendix.
(viii) The determination and treatment of the Deferral Contributions
and Deferral Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury or his
delegate.
D-1.2(d) If the Average Deferral Percentage for the Eligible
Participants who are Highly Compensated Employees for a Plan Year is more than
the amount permitted under the above restrictions, then:
(i) If the Administrator directs that Excess Deferral Contributions
shall be recharacterized, the Excess Deferral Contributions for the Highly
Compensated Employees for the Plan Year shall be reduced by
recharacterization as After-Tax Contributions as required by Section 401(k)
of the Code or by distributing such contributions (together with income
thereon) as provided below after the end of the Plan Year for which made
and, to the extent not inconsistent therewith. Notwithstanding the
foregoing, in no case shall the amount of Excess Deferral Contributions
recharacterized with respect to any Highly Compensated Employee exceed the
amount of his Pre-Tax Contributions and other elective deferrals. When
Excess Deferral Contributions cannot be recharacterized, they shall be
returned in a "corrective distribution" to the Highly Compensated Employee
at such time as the Administrator shall determine but in no event later than
twelve (12) months after the end of the Plan Year for which made, together
with income thereon (as
-D-7-
determined pursuant to the provisions of clause (iv) of subparagraph 1.3(d)
of this Appendix substituting the phrase "Excess Deferral Contributions to
be returned" for "Excess Aggregate Contributions").
(ii) If the Administrator does not direct that Excess Deferral
Contributions shall be recharacterized, the Excess Deferral Contributions
for the Highly Compensated Employees for the Plan Year shall be reduced by
distributing them (together with income thereon) in a "corrective
distribution" to Highly Compensated Employees as required by Section 401(k)
of the Code (or, where so provided in another plan for Excess Deferral
Contributions made to that plan, by recharacterizing them as after-tax
employee contributions pursuant to that other plan) at such time as the
Administrator may determine after the end of the Plan Year for which made
but in no event later than twelve (12) months after the end of the Plan
Year for which made. To the extent not inconsistent with the requirements
of Section 401(k) of the Code, the reduction shall be effected in the
following manner:
(A) First, the excess amount shall be considered to consist
of the Participant's Pre-Tax Basic Contributions in excess of the
percentage of his Compensation with respect to which Matching
Contributions are made for such Plan Year to the extent thereof,
and
(B) Then, any remaining portion of the excess amount shall
be considered to consist of the remainder of the Participant's
Pre-Tax Contributions for such Plan Year to the extent thereof,
and
(C) Finally, any remaining portion of the excess amount
shall be considered to consist of the Participant's other
Deferral Contributions for such Plan Year.
Notwithstanding the time period described above for the return of Excess
Deferral Contributions, such amounts and any income thereon returned more
than two and one-half (2-1/2) months after the end of the Plan Year may be
subject to the ten percent (10%) excise tax imposed on the Employer by
Section 4979 of the Code.
(iii) Among such Participants, the reduction shall be effected by
reducing contributions in the order of the highest dollar amounts of
Deferral Contributions by or on behalf of each of the Highly Compensated
Employees, such that the applicable restrictions of subparagraph 1.2(a) of
this Appendix are satisfied; provided, however, that any required reduction
for any Eligible Participant will be reduced by his Excess Elective
Deferrals returned or recharacterized pursuant to subparagraph 1.1(b) of
this Appendix.
(iv) When two or more plans are involved, contributions shall be
reduced in the following order: First, those under money purchase pension
plans, then those under stock bonus plans, then those under profit sharing
plans, and lastly, those under all other plans; and reductions under plans
of the same type shall be on a pro rata basis.
(v) Whenever Excess Deferral Contributions are recharacterized
as After-Tax Contributions, the following rules shall apply with respect to
such recharacterization.
(A) Excess Deferral Contributions recharacterized are
includable in the Participant's income on the earliest date any
elective deferrals would have been received by the Participant but
for his election to contribute to the plan or arrangement.
(B) Such recharacterized Excess Deferral Contributions are
to be treated as After-Tax Contributions for purposes of Sections 72,
401(a), 401(m) and 6047 of the Code, but shall be considered elective
deferrals for all other purposes of the Code including but not
limited to Sections 401(k)(2), 404, 409, 411, 412, 415, 416 and 417
of the Code.
-D-8-
(C) Such recharacterized Excess Deferral Contributions shall
remain allocated to the applicable account of the Participant, except
to the extent required to be distributed to the Participant.
(D) Such Excess Deferral Contributions shall be recharacterized no
later than two and one-half (2-1/2) months after the end of the Plan
Year in question. For this purpose, recharacterization is deemed to
occur on the date on which the last of those Highly Compensated
Employees with Excess Deferral Contributions to be recharacterized is
notified of the recharacterization in any manner prescribed by the
Secretary of the Treasury or his delegate.
(E) The payor or Administrator shall report such recharacterized
Excess Deferral Contributions as employee contributions to the
Internal Revenue Service and the affected Participant by timely
providing such forms as the Secretary of the Treasury or his delegate
shall designate to the Internal Revenue Service and to the affected
Participant, by timely taking such other actions as the Secretary of
the Treasury or his delegate shall require, and by the Administrator's
accounting for such amounts as employee contributions for purposes of
Sections 72 and 6047 of the Code.
(vi) For purposes hereof and except to the extent otherwise provided
under Section 401(k) of the Code, the income allocated to any Excess
Deferral Contributions allocated to the Plan shall be determined by the
Administrator under the following rules and calculated under any reasonable
method selected by the Administrator so long as the method does not violate
the requirements of Section 401(a)(4) of the Code, is used consistently for
all Participants and for all corrective distributions under the Plan for a
Plan Year, and is used by the Plan for allocating income to Participants'
accounts under the Plan:
(A) Unless another method is determined by the Administrator, the
amount of income to be distributed shall be determined by multiplying
(I) the income for the Plan Year or other period in question allocable
to the account to which such Excess Deferral Contributions are
allocated by (II) a fraction, the numerator of which is the amount of
the Participant's Excess Deferral Contributions allocated to such
account for the Plan Year or other period in question and entitled to
a share of the valuation adjustment therefor under paragraph 4.6 and
the denominator of which is the balance in such account on the last
day of the Plan Year or other period in question, reduced by the
earnings allocable thereto and increased by the losses allocable
thereto in the Plan Year or other period in question.
(B) Unless otherwise determined by the Administrator on a uniform
and non-discriminatory basis, no income shall be distributed for the
period between the end of the Plan Year and the date of distribution.
(vii) Any distribution of Excess Deferral Contributions (and income)
shall clearly be designated by the Administrator as such.
D-1.2(e) If a Participant's Pre-Tax Contributions are recharacterized as
After-Tax Contributions for purposes of paragraph 1.3 of this Appendix, such
contributions shall nevertheless still be considered made for any benefit
accrual requirements contingent thereon.
D-1.2(f) If a Participant's Pre-Tax Contributions are returned pursuant to
this paragraph, such contributions shall nevertheless still be considered made
for any benefit accrual requirements contingent thereon and any Matching
Contributions attributable thereto shall be also be distributed (to the extent
vested) or forfeited (to the extent not vested).
D-1.3 Limitation on and Distribution of After-Tax and Matching
--------------------------------------------------------
Contributions Made by or on behalf of Highly Compensated Employees.
- ------------------------------------------------------------------
-D-9-
D-1.3(a) Except where the alternative method under Section 401(m)(11) of
the Code of meeting the nondiscrimination requirements of Section 401(m) of the
Code is satisfied with respect to the Plan for a Plan Year beginning on or after
January 1, 1999, the After-Tax Contributions made by Participants and the
Matching Contributions otherwise allocated to the account of a Participant under
the Plan shall be limited as hereafter provided so that the Average Contribution
Percentage for Eligible Participants who are Highly Compensated Employees for a
Plan Year (that is, the Tested Plan Year) does not exceed the greater of (i) or
(ii) as follows:
(i) The "regular limitation" percentage which is equal to one
hundred twenty-five percent (125%) of the Average Contribution Percentage
for the Eligible Participants who are Non-Highly Compensated Employees for
the Applicable Plan Year, or
(ii) The "alternative limitation" percentage which is equal to the
lesser of:
(A) Two hundred percent (200%) of the Average Contribution
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year, or
(B) Two (2) percentage points over the Average Contribution
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year.
Notwithstanding the foregoing, for Plan Years beginning on or after January 1,
1997, if the Tested Plan Year is the first Plan Year of the Plan, then the
Average Contribution Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year shall be deemed to be three
percent (3%) unless the Plan Sponsor or the Administrator elects in accordance
with Section 401(m)(2)(E) of the Code, to use the actual Average Contribution
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the first Plan Year.
D-1.3(b) For purposes hereof:
(i) The term "Aggregate Contributions" means:
(A) After-Tax Contributions and Matching Contributions,
(B) To the extent provided or elected pursuant to the special
operating rules of subparagraph 1.3(c) of this Appendix, any after-tax
employee contributions which are allocated to a separate account to
which attributable earnings or loss are allocated and consisting of
either:
(I) Employee contributions to the defined contribution
portion of a plan described in Section 414(k) of the Code.
(II) Employee contributions to a qualified cost-of-living
arrangement described in Section 415(2)(B) of the Code.
(III) Employee contributions applied to the purchase of
whole life insurance protection or survivor benefit protection
under a defined contribution plan.
(IV) Amounts attributable to Excess Deferral Contributions
as defined in paragraph 1.2 of this Appendix which are
recharacterized as after-tax employee contributions.
(V) Employee contributions to a contract described in
Section 403(b) of the Code.
-D-10-
Notwithstanding the foregoing, after-tax employee contributions do not
include loan repayments, cash-out buy-backs, qualifying rollover
contributions, employee contributions which are transferred to a plan
or any other amounts which are excluded from such term under Section
401(m) of the Code,
(C) To the extent provided or elected pursuant to the special
operating rules of subparagraph 1.3(c) of this Appendix, any other
matching contributions within the meaning of Section 404(m)(4)(A) of
the Code (that is, employer contributions made on account of after-tax
employee contributions under any plan or elective deferrals under a
cash or deferred arrangement described in Section 401(k) of the Code),
and/or
(D) To the extent provided or elected pursuant to the special
operating rules of subparagraph 1.3(c) of this Appendix:
(I) Pre-Tax Contributions,
(II) Qualified non-elective contributions, including
without limitation QNEC Contributions, within the meaning of
Section 401(m)(4)(C) of the Code (that is, any employer
contributions (other than matching contributions) which the
Employee may not elect to have paid to him instead of being
contributed to the plan, which are subject to the restrictions on
distributions contained in Section 401(k)(2)(B) of the Code
(generally prohibiting distribution before separation from service,
death, or disability unless the Employee has a hardship or has
reached age fifty-nine and one-half (59-1/2) or after plan
termination), and which are immediately fully vested and non-
forfeitable), and/or
(III) Any other elective deferrals under a cash or deferred
arrangement described in Section 401(k) of the Code.
(E) Notwithstanding the foregoing, a contribution shall not be
considered an Aggregate Contribution for a Plan Year unless:
(I) In the case of an after-tax employee contribution it
is actually paid to the funding vehicle of the plan or an agent of
the plan who remits the contribution to the funding vehicle within
a reasonable time.
(II) In the case of a matching contribution, it is
allocated as of a date within the Plan Year, it is actually paid to
the funding vehicle of the plan no later than the end of the 12-
month period immediately following such plan year, and it is made
on behalf of the Employee's elective deferrals or employee
contributions for the plan year.
(ii) The term "Applicable Plan Year" means:
(A) For Plan Years beginning before January 1, 1997, the Tested
Plan Year.
(B) For Plan Years beginning on or after January 1, 1997, the Plan
Year immediately preceding the Tested Plan Year, unless the Plan
Sponsor or the Administrator elects in accordance with Section
401(m)(2)(A) of the Code, to use the Tested Plan Year.
(iii) The term "Average Contribution Percentage" means the average
(expressed as a percentage) of the Contribution Percentages of the Eligible
Participants in a group.
-D-11-
(iv) The term "Contribution Percentage" means the ratio (expressed as
a percentage and calculated to the nearest one-hundredth of one percent (.01%))
of (A) the Matching Contributions under the Plan (and, where provided or elected
in accordance with the special operating rules of subparagraph 1.3(c) of this
Appendix, any other Aggregate Contributions) made by or on behalf of an Eligible
Participant for the Plan Year to (B) the Eligible Participant's Eligible
Compensation for the Plan Year.
(v) The term "Eligible Compensation" means an Eligible Participant's
Statutory Compensation while he is an Eligible Participant determined without
regard to suspensions from participation.
(vi) The term "Eligible Participant" means any Employee who is authorized
under the terms of the Plan to make After-Tax Contributions or Pre-Tax
Contributions for the Plan Year or receive an allocation of the Matching
Contribution for the Plan Year, determined without regard to suspensions from
participation for any reason other than not being an Eligible Employee (or,
where provided or elected in accordance with the special operating rules of
subparagraph 1.3(c) of this Appendix, who is authorized under the terms of the
applicable plan to make or receive an allocation of other Aggregate
Contributions for the Plan Year).
(vii) The term "Excess Aggregate Contributions" means the amount of
Aggregate Contributions for a Plan Year which must be eliminated in order for
the restrictions of subparagraph 1.3(a) of this Appendix to be satisfied for the
Plan Year.
(viii) The term "Tested Plan Year" means the Plan Year for which the
limitation is being applied to the contributions by or for Eligible Participants
who are Highly Compensated Employees.
D-1.3(c) The following special rules shall apply for purposes of this
paragraph:
(i) The following plans or portions of plans are mandatorily
disaggregated and must be tested separately under subparagraph 1.3(a) of this
Appendix and Section 401(m)(2) of the Code:
(A) Contributions under an employee stock ownership plan described
in Section 409 or 4975(e)(7) of the Code (an "ESOP") (or the portion of
a plan which is an ESOP) may not be aggregated with contributions under
a non-ESOP (or the portion of a plan which is not an ESOP) except as
permitted under Section 401(m), 409 or 4975 of the Code.
(B) Except where permitted to be aggregated for purposes of Section
410 of the Code, contributions by or for employees who are included in a
unit of employees covered by a collective bargaining agreement may not
be aggregated with contributions by or for employees who are included in
a unit of employees not covered by the same collective bargaining
agreement.
(C) Except where permitted to be aggregated for purposes of Section
410 of the Code, contributions by or for employees assigned to qualified
separate lines of business within the meaning of Section 414(r) of the
Code, unless the plan in question qualifies for the employer-wide
exception to mandatory disaggregation for this purpose under Section
414(r) of the Code.
(D) Contributions under plans that could but actually are not
aggregated for the plan year for purposes of satisfying the minimum
coverage requirements of Section 410(b) of the Code (other than the
average benefits percentage test).
(E) Contributions under a plan maintained by more than one employer
as described in Section 413(c) of the Code shall be treated as if each
such employer maintained a separate plan.
-D-12-
(F) Except as provided in clause (ii) of this subparagraph,
contributions under plans which do not have the same plan year.
(ii) Subject to the limitations of clause (i) of this subparagraph, the
following plans or portions of plans are mandatorily aggregated and must be
tested as one plan under subparagraph 1.3(a) of this Appendix and Section
401(m)(2) of the Code:
(A) The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to make
after-tax employee contributions, or to have matching contributions,
qualified non-elective contributions or elective deferrals allocated to his
account, under two or more plans described in Section 401(a) or cash or
deferred arrangements described in Section 401(k) of the Code that are
maintained by the Employer shall be determined as if all such after-tax
employee contributions, matching contributions, qualified non-elective
contributions and elective deferrals were made under a single plan. Such
aggregation shall be effected on the basis of plan years beginning in the
same calendar year.
(B) In the event that this Plan satisfies the requirements of Section
401(a)(4) or 410(b) (other than Section 410(b)(2)(A)(ii)) of the Code only
if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of Section 401(a)(4) or 410(b) (other than Section
410(b)(2)(A)(ii)) of the Code only if aggregated with this Plan, then this
paragraph shall be applied by determining the Contribution Percentages of
Eligible Participants as if all such plans were a single plan.
(iii) Subject to the limitations of clause (i) of this subparagraph, two
or more plans to which after-tax employee contributions or matching
contributions or both may be made may be permissively aggregated by the
Administrator for purposes of satisfying the requirements of Section 401(a)(4),
401(m) and 410(b) of the Code if such plans each have the same plan year.
(iv) At the option of the Administrator, each Eligible Participant's
Aggregate Contributions for a Plan Year consisting of qualified non-elective
contributions and elective deferrals under any plan or arrangement may be
treated as matching contributions and included in determining the Contribution
Percentages for the Plan Year provided, however, that:
(A) The non-elective contributions (both including and excluding the
qualified non-elective contributions which are treated as Aggregate
Contributions and in the latter case also excluding the qualified non-
elective contributions treated as elective deferrals under Section 401(k)
of the Code) satisfy the requirements of Section 401(a)(4) of the Code.
(B) The elective deferrals (both including and excluding elective
deferrals treated as Aggregate Contributions) satisfy the requirements of
Section 401(k) of the Code.
(C) Except as provided in clauses (v)(A) and (B) of this
subparagraph, the qualified non-elective contributions and elective
deferrals treated as Aggregate Contributions are not taken into account in
determining whether any other contributions or benefits satisfy the
requirements of Section 401(a)(4) of the Code or whether elective deferrals
meet the requirements of Section 401(k) of the Code.
(D) The qualified non-elective contributions may not be treated as
Aggregate Contributions if the effect is to increase the difference between
the Average Contribution Percentages for Highly Compensated Employees and
for Non-Highly Compensated Employees.
-D-13-
(E) The plan years of the plans or arrangements under which the
qualified non-elective contributions and elective deferrals treated as
Aggregate Contributions are made is the same as the Plan Year.
(v) Contributions by or for employees who are included in a unit of
employees covered by a collective bargaining agreement shall automatically
be considered to pass the non-discrimination test of subparagraph 1.3(a) of
this Appendix and Section 401(m) of the Code and need not be tested
thereunder.
(vi) The determination of Excess Aggregate Contributions for a Plan
Year for purposes of this paragraph shall be made after:
(A) First determining the Excess Elective Deferrals under
subparagraph 1.1(b) of this Appendix for the Plan Year, and
(B) Then determining the Excess Deferral Contributions under
paragraph 1.2 of this Appendix for the Plan Year.
(vii) The employee groups tested hereunder may be divided into
separate testing groups on such basis, if any, as the Administrator may
determine and as is permitted under Sections 410, 401(k) and 401(m) of the
Code, including, but not limited to, separate testing for excludible
employees (that is, where the plan's age and/or service requirements are
lower than the greatest minimum age and service conditions permissible under
Section 410(a) of the Code).
(viii) If the Plan Sponsor or the Administrator elects to apply
Section 410(b)(4)(B) of the Code in determining whether the Plan meets the
requirements of Section 410(b) of the Code for a Plan Year, the Plan may
exclude altogether the participation of Non-Highly Compensated Employees
(but not the participation of Highly Compensated Employees) who have not met
the minimum age and service requirements of Section 410(a)(1)(A) of the Code
in determining the satisfaction of requirements of subparagraph D-1.3(a) and
subparagraph D-1.4(a) of this Appendix.
(ix) The determination and treatment of the Aggregate Contributions
and Contribution Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury or his
delegate.
D-1.3(d) If the Average Contribution Percentage for the Eligible
Participants who are Highly Compensated Employees for a Plan Year is more than
the amount permitted under the above restrictions, then:
(i) The Excess Aggregate Contributions for the Highly Compensated
Employees for the Plan Year shall be reduced by distributing them (to the
extent vested) to Highly Compensated Employees or by forfeiting them (to the
extent not vested), together with income thereon in either case, as required
by Section 401(m) of the Code at such time as the Administrator may
determine after the end of the Plan Year for which made but in no event
later than twelve (12) months after the end of the Plan Year for which made.
To the extent not inconsistent with the requirements of Section 401(m) of
the Code, the reduction shall be effected in the following manner:
(A) First, the excess amount shall be considered to consist of
the Participant's After-Tax Optional Contributions for such Plan Year
and similar contributions under other plans taken into account for
such Plan Year on a pro rata basis to the extent thereof, which
contributions shall be distributed to the Participant, and
(B) Then, any remaining portion of the excess amount shall be
considered to consist of the Participant's After-Tax Basic
Contributions, Matching Contributions, and other Aggregate
Contributions treated as matching contributions and similar
contributions under other plans taken into account for such Plan Year
on a pro rata basis to the extent thereof, which contributions shall
be distributed to the Participant (or forfeited, to the extent not
vested).
-D-14-
Notwithstanding the time period described above for the return of Excess
Aggregate Contributions, such amounts and any income thereon returned more
than two and one-half (2-1/2) months after the end of the Plan Year may be
subject to the ten percent (10%) excise tax imposed on the Employer by
Section 4979 of the Code.
(ii) Among such Participants, the reduction shall be effected by
reducing contributions in the order of the highest dollar amounts of
Aggregate Contributions by or on behalf of each of the Highly Compensated
Employees, such that the applicable restrictions of subparagraph 1.3(a) of
this Appendix are satisfied.
(iii) When two or more plans are involved, contributions shall be
reduced in the following order: First, those under defined benefit plans
shall be reduced, then those under target benefit pension plans, then those
under money purchase pension plans, then those under stock bonus plans, then
those under profit sharing plans, and lastly, those under all other plans;
and reductions under plans of the same type shall be on a pro rata basis.
(iv) For purposes hereof and except to the extent otherwise
provided under Section 401(m) of the Code, the income allocated to any
Excess Aggregate Contributions allocated to the Plan shall be determined by
the Administrator under the following rules and calculated under any
reasonable method selected by the Administrator so long as the method does
not violate the requirements of Section 401(a)(4) of the Code, is used
consistently for all Participants and for all corrective distributions under
the Plan for a Plan Year, and is used by the Plan for allocating income to
Participants' accounts under the Plan:
(A) Unless another method is determined by the Administrator,
the amount of income to be distributed shall be determined by
multiplying (I) the income for the Plan Year or other period in
question allocable to the account to which such Excess Aggregate
Contributions are allocated by (II) a fraction, the numerator of
which is the amount of the Participant's Excess Aggregate
Contributions allocated to such account for the Plan Year or other
period in question and entitled to a share of the valuation
adjustment therefor under paragraph 4.6 of the Plan and the
denominator of which is the balance in such account on the last day
of the Plan Year or other period in question normally taken into
account in determining such valuation adjustment.
(B) Unless otherwise determined by the Administrator on a
uniform and non-discriminatory basis, no income shall be
distributed for the period between the end of the Plan Year and the
date of distribution.
(v) Any distribution of Excess Aggregate Contributions (and
income) shall clearly be designated by the Administrator as such.
D-1.4 Limitation on Multiple Use of Alternative Limitations in Paragraphs
-------------------------------------------------------------------
1.2 and 1.3 of this Appendix.
- ----------------------------
D-1.4(a) Multiple use of the alternative limitations under clause (ii) of
subparagraphs 1.2(a) and 1.3(a) of this Appendix is prohibited as provided in
section 401(m)(9)(A) of the Code and, to the extent not inconsistent therewith,
is considered to occur if both of the following occur for a Plan Year:
(i) One or more Highly Compensated Employees are Eligible
Participants for purposes of both paragraphs 1.2 and 1.3 of this Appendix,
and
(ii) The sum of the Average Deferral Percentages and the Average
Contribution Percentages of the Highly Compensated Employees who are
Eligible Participants exceeds the Multiple Use Limitation Percentage, and
(ii) Both:
-D-15-
(A) The Average Deferral Percentage of the Highly Compensated
Employees who are Eligible Participants for the Tested Plan Year
exceeds one hundred twenty-five percent (125%) of the Average Deferral
Percentage of the Non-Highly Compensated Employees who are Eligible
Participants for the Applicable Plan Year, and
(B) The Average Contribution Percentage of the Highly Compensated
Employees who are Eligible Participants for the Tested Plan Year
exceeds one hundred twenty-five percent (125%) of the Average
Contribution Percentage of the Non-Highly Compensated Employees who
are Eligible Participants for the Applicable Plan Year.
Notwithstanding anything to the contrary herein, the prohibition on multiple
use of the alternative limitations under clause (ii) of subparagraphs 1.2
and 1.3 of this Appendix shall apply separately to contributions under an
employee stock ownership plan described in Section 409 or 4975(e)(7) of the
Code (an "ESOP") (or the portion of a plan which is an ESOP) and
contributions under a non-ESOP (or the portion of a plan which is not an
ESOP) except as permitted under Section 401(k), 401(m), 409 or 4975 of the
Code.
D-1.4(b) If the multiple use requirement of subparagraph 1.4(a) of this
Appendix is not satisfied for a Plan Year, then the Excess Multiple Use
Contributions shall be eliminated as provided in Sections 401(k) and 401(m) of
the Code and, to the extent not inconsistent therewith, as follows:
(i) The elimination shall be effected in the manner of reduction
described in paragraphs 1.2 and 1.3 of this Appendix, depending on whether
the contribution eliminated is a Deferral Contribution or an Aggregate
Contribution.
(ii) Such reduction shall be effected first for Aggregate
Contributions and then for Deferral Contributions.
(iii) Such reduction shall be effected for all Highly Compensated
Employees who are Eligible Participants for purposes of either paragraph 1.2
or 1.3 of this Appendix.
D-1.4(c) For purposes hereof:
(i) The term "Excess Multiple Use Contributions" means the amount
of Deferral Contributions and/or Aggregate Contributions for a Plan Year
which must be eliminated so that the Multiple Use Limitation Percentage will
not be exceeded for the Plan Year.
(ii) The term "Multiple Use Limitation Percentage" means a
percentage equal to the greater of:
(A) The sum of:
(I) One hundred twenty-five percent (125%) of the
greater of (a) the Average Deferral Percentage of the Non-
Highly Compensated Employees who are Eligible Participants or
(b) the Average Contribution Percentage of the Non-Highly
Compensated Employees who are Eligible Participants, and
(II) Two (2) plus the lesser of (a) the Average Deferral
Percentage referred to in clause (ii)(A)(I) of this
subparagraph or (b) the Average Contribution Percentage
referred to in clause (ii)(A)(I) of this subparagraph, provided
that the amount determined under this clause (ii)(A)(II)(b)
shall in no event exceed two hundred percent (200%) of such
lesser Average Deferral Percentage or Average Contribution
Percentage.
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(B) The sum of:
(I) One hundred twenty-five percent (125%) of the lesser of
(a) the Average Deferral Percentage of the Non-Highly Compensated
Employees who are Eligible Participants or (b) the Average
Contribution Percentage of the Non-Highly Compensated Employees who
are Eligible Participants, and
(II) Two (2) plus the greater of (a) the Average Deferral
Percentage referred to in clause (ii)(B)(I) of this subparagraph or
(b) the Average Contribution Percentage referred to in clause
(ii)(B)(I) of this subparagraph, provided that the amount
determined under this clause (ii)(B)(II)(b) shall in no event
exceed two hundred percent (200%) of such greater Average Deferral
Percentage or Average Contribution Percentage.
(iii) Notwithstanding the foregoing:
(A) The employee groups tested hereunder may be divided into
separate testing groups on such basis, if any, as the Administrator may
determine and as is permitted under Sections 410, 401(k) and 401(m) of
the Code, including, but not limited to, separate testing for excludible
employees (that is, where the plan's age and/or service requirements are
lower than the greatest minimum age and service conditions permissible
under Section 410(a) of the Code).
(B) The Multiple Use Limitation Percentage may otherwise be
appropriately adjusted by the Administrator as permitted in Sections
401(k) and (m) of the Code in accordance with regulations under
Sections 401(m)(9) of the Code.
D-1.5 Distribution of Transferred Contributions to Meet Requirements
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Similar to Those of Paragraphs 1.2, 1.3 and 1.4 of this Appendix. In the event
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that Deferral Contributions or Aggregate Contributions are transferred from
another plan to this Plan and corrective distributions are required under
Section 401(k), 401(m) or 402(g) of the Code with respect to the transferred
contributions (including income thereon), the Administrator is authorized to
distribute to the affected Participant or return to the transferor plan the
transferred Deferral Contributions and Aggregate Contributions (including income
thereon) as may be necessary or appropriate to effect the corrective
distribution.
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