PREIT-RUBIN, INC.
STOCK BONUS PLAN
(Effective as of September 30, 1997)
TABLE OF CONTENTS
Page
Article I
DEFINITIONS........................................... 1
1.1 "Accrued Benefit".......................................... 1
1.2 "Affiliate"................................................ 1
1.3 "Board of Directors"....................................... 1
1.4 "Code" .................................................... 2
1.5 "Committee"................................................ 2
1.6 "Company".................................................. 2
1.7 "Company Stock"............................................ 2
1.8 "Company Stock Account".................................... 2
1.9 "Compensation"............................................. 2
1.10 "Effective Date".......................................... 2
1.11 "Eligible Employee"....................................... 2
1.12 "Employee"................................................ 2
1.13 "ERISA"................................................... 2
1.14 "Leased Employee"......................................... 2
1.15 "Normal Retirement Age"................................... 3
1.16 "Normal Retirement Date".................................. 3
1.17 "Other Investments Account"............................... 3
1.18 "Participant"............................................. 3
1.19 "Plan".................................................... 3
1.20 "Plan Year"............................................... 3
1.21 "Qualified Election Period"............................... 3
1.22 "Qualified Participant"................................... 3
1.23 "Trust"................................................... 3
1.24 "Trust Agreement"......................................... 3
1.25 "Trust Fund".............................................. 3
1.26 "Trustee"................................................. 4
1.27 "Valuation Date".......................................... 4
Article II
SERVICE................................................ 4
2.1 Hour of Service............................................ 4
2.2 Year of Service............................................ 6
2.3 One-Year Break in Service.................................. 6
2.4 Break in Service Rules..................................... 7
2.5 Military Service........................................... 7
Article III
PARTICIPATION.......................................... 7
3.1 Eligibility Requirements................................... 7
3.2 Commencement of Participation.............................. 7
3.3 Participation After Separation from Service................ 7
Article IV
COMPANY CONTRIBUTIONS................................... 8
4.1 Company Contributions...................................... 8
4.2 Time of Payment............................................ 8
4.3 Contributions Irrevocable.................................. 8
Article V
PARTICIPANTS' ACCOUNTS AND INVESTMENT THEREOF........... 9
5.1 Accounts................................................... 9
5.2 Investment of Trust Fund................................... 9
5.3 Legal Limitation........................................... 9
Article VI
ALLOCATION OF CONTRIBUTIONS............................. 9
6.1 Participants Entitled to Allocation........................ 9
6.2 Allocation of Company Stock Contributions.................. 10
6.3 Allocation of Other Contributions.......................... 10
6.4 Allocation of Forfeitures.................................. 10
Article VII
VALUATION............................................... 10
7.1 Valuation.................................................. 10
7.2 Allocation of Gains and Losses............................. 11
7.3 Dividends on Company Stock................................. 11
Article VIII
BENEFITS AND DISTRIBUTIONS.............................. 11
8.1 Vesting.................................................... 11
8.2 Amount, Method of Benefit Payments......................... 12
8.3 Normal and Late Retirement................................. 12
8.4 Vested Deferred Benefits................................... 12
8.5 Disability Retirement...................................... 13
8.6 Death .................................................... 14
8.7 Designation of Beneficiary and Form of Payment of Death
Benefit; Spouse's Consent to Non-Spouse Beneficiary. 14
8.8 Requirements Concerning Distributions...................... 15
8.9 Participant's Consent to Payment of Benefits............... 17
8.10 Direct Rollovers........................................... 17
Article IX
LIMITATIONS ON CONTRIBUTIONS............................ 18
9.1 Definitions for Limitations on Contributions............... 18
9.2 Basic Limitation........................................... 20
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9.3 Combined Limit with Defined Benefit Plans.................. 20
9.4 Combining and Aggregating Plans............................ 20
Article X
TOP-HEAVY PROVISIONS.................................... 20
10.1 Top-Heavy Preemption...................................... 20
10.2 Top-Heavy Definitions..................................... 21
10.3 Top-Heavy Rules........................................... 23
10.4 Impact on Maximum Benefits................................ 24
10.5 Change in Top-Heavy Status................................ 24
10.6 Duplication of Minimum Contributions Not Required......... 24
10.7 Repeal of Limitation...................................... 25
Article XI
NONALIENATION OF BENEFITS............................... 25
11.1 Nonalienation Rule........................................ 25
Article XII
ALLOCATION OF FIDUCIARY RESPONSIBILITY.................. 25
12.1 Allocation................................................ 25
12.2 Exclusive Responsibility.................................. 25
12.3 Co-Fiduciary Liability.................................... 26
12.4 Interest of Participants.................................. 26
12.5 Employment of Advisers.................................... 26
Article XIII
THE COMMITTEE........................................... 26
13.1 Appointment of Committee.................................. 26
13.2 Committee Officers, Procedures, Rules..................... 27
13.3 Investment Responsibilities............................... 27
13.4 Administrative Responsibilities, Powers................... 27
13.5 Standards of Committee Conduct............................ 28
13.6 Plan Records.............................................. 28
13.7 Claims Procedure.......................................... 29
13.8 Determination of Liquidity Needs.......................... 30
13.9 Voting Rights and Tender Offers........................... 30
13.10 Contracting for Services.................................. 31
13.11 Discretionary Authority................................... 31
Article XIV
THE TRUSTEE............................................. 32
14.1 The Trust................................................. 32
14.2 Standards of Trustee Conduct.............................. 32
14.3 Investment Responsibilities............................... 32
14.4 Payment of Benefits....................................... 32
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14.5 Removal, Resignation of Trustee........................... 33
Article XV
PLAN AMENDMENT, MERGER OR CONSOLIDATION................. 33
15.1 Amendment................................................. 33
15.2 Merger or Consolidation................................... 33
Article XVI
PLAN TERMINATION........................................ 34
16.1 Discontinuance of Contributions or Termination............ 34
Article XVII
MISCELLANEOUS........................................... 34
17.1 Application of Plan....................................... 34
17.2 No Employment Rights Created.............................. 34
17.3 Incapacitated Participant or Beneficiary.................. 34
17.4 Payment of Plan Expenses.................................. 35
17.5 Unclaimed Benefits........................................ 35
17.6 Treatment of Leased Employees............................. 35
17.7 Construction.............................................. 35
17.8 Gender and Number......................................... 36
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PREIT-RUBIN, INC.
STOCK BONUS PLAN
(Effective as of September 30, 1997)
WHEREAS, PREIT-RUBIN, Inc., a Pennsylvania corporation (the
"Company"), desires to establish the PREIT-RUBIN, Inc. Stock Bonus Plan (the
"Plan") to hold all of the voting common stock of the Company; and
WHEREAS, the Plan will be maintained for the exclusive
benefit of eligible employees of the Company and their beneficiaries (within
the meaning of section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code")), and is intended to qualify as a stock bonus plan under section
401(a) of the Code;
NOW, THEREFORE, effective as of September 30, 1997, except
as otherwise specifically provided herein, and subject to the approval of the
District Director of Internal Revenue, the Plan is hereby established under
the following terms:
Article I
DEFINITIONS
The following words and phrases, as used herein, shall have
the following meanings, unless the context clearly indicates otherwise:
1.1 "Accrued Benefit" shall mean the sum of the amounts
credited to a Participant's Company Stock Account and Other Investments
Account in the Trust Fund.
1.2 "Affiliate" shall mean any corporation which is a member
of a controlled group of corporations, as defined in section 414(b) of the
Code, of which the Company is a member; any other trade or business which is
under common control, as defined in section 414(c) of the Code, with the
Company; any trade or business which is a member of an affiliated service
group, as defined in section 414(m) of the Code, of which the Company is a
member; and any entity required to be aggregated with the Company pursuant to
section 414(o) of the Code. For purposes of applying section 414(b) and
section 414(c) of the Code to the limitations on contributions set forth in
Article IX, the phrase "more than 50 percent" shall be substituted for the
phrase "at least 80 percent" each place it appears in section 1563(a)(1) of
the Code.
1.3 "Board of Directors" shall mean the Board of Directors
of the Company, as such Board may be constituted from time to time.
1.4 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.5 "Committee" shall mean the Stock Bonus Plan Committee
established under the provisions of Article XIII.
1.6 "Company" shall mean PREIT-RUBIN, Inc. or its successor.
1.7 "Company Stock" shall mean the voting common stock
issued by the Company.
1.8 "Company Stock Account" shall mean the account
established by the Committee for each Participant to which Company Stock
allocated to the Participant is credited.
1.9 "Compensation" shall mean an Eligible Employee's Form
W-2 wages for a Plan Year, as defined in section 3401(a) of the Code for
purposes of income tax withholding at the source, but determined without
regard to any rules that limit the remuneration included in wages based on the
nature or location of the employment or the services provided. The annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan shall not exceed $150,000, as adjusted by the
Commissioner of Internal Revenue for increases in the cost of living in
accordance with section 401(a)(17) of the Code. The cost-of-living adjustment
in effect for a calendar year shall apply to any period, not exceeding 12
months, beginning in such calendar year over which Compensation is determined
(the "determination period"). If a determination period consists of fewer than
12 months, the applicable limit (as adjusted) shall be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
1.10 "Effective Date" shall mean, except as otherwise
specifically provided, September 30, 1997.
1.11 "Eligible Employee" shall mean any Employee of the
Company. "Eligible Employee" shall not include any Leased Employee.
1.12 "Employee" shall mean any individual employed by the
Company or an Affiliate.
1.13 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.14 "Leased Employee" shall mean a leased employee of the
Company or an Affiliate within the meaning of section 414(n)(2) of the Code.
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Notwithstanding the foregoing, if all such leased employees constitute less
than 20 percent of the nonhighly compensated work force (within the meaning of
section 414(n)(5)(C)(ii) of the Code) of the Company and the Affiliates, the
term "Leased Employee" shall not include any leased employee covered by a plan
described in section 414(n)(5) of the Code.
1.15 "Normal Retirement Age" shall mean age 65.
1.16 "Normal Retirement Date" shall mean the first day of
the month coinciding with or next following the date a Participant attains
Normal Retirement Age.
1.17 "Other Investments Account" shall mean the account
established by the Committee for each Participant to which assets allocated to
the Participant other than Company Stock are credited.
1.18 "Participant" shall mean any Eligible Employee who
meets or who has met the eligibility requirements of Article III and who has
commenced to participate in the Plan pursuant to Section 3.3.
1.19 "Plan" shall mean the PREIT-RUBIN, Inc. Stock Bonus
Plan as set forth in this document and as it may be amended from time to time.
1.20 "Plan Year" shall mean a period of 12 consecutive
calendar months beginning on January 1 of each year.
1.21 "Qualified Election Period" shall mean the
six-Plan-Year period beginning with the first Plan Year in which the
Participant becomes a Qualified Participant.
1.22 "Qualified Participant" shall mean a Participant who
has attained age 55 and who has completed at least 10 years of participation
in the Plan.
1.23 "Trust" shall mean the PREIT-RUBIN, Inc. Stock Bonus
Plan Trust, created by the Trust Agreement.
1.24 "Trust Agreement" shall mean the agreement by and
between the Company and the Trustee, as it may be amended from time to time.
1.25 "Trust Fund" shall mean all cash and securities and all
other assets deposited with or acquired by the Trustee in its capacity as such
hereunder, together with accumulated income.
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1.26 "Trustee" shall mean CoreStates Bank, N.A., or its duly
appointed successor.
1.27 "Valuation Date" shall mean December 31 of each Plan
Year and any other date or dates during the Plan Year, as specified by the
Committee, upon which the assets of the Trust Fund are valued, as prescribed
by Section 7.1.
Article II
SERVICE
2.1 Hour of Service.
(a) (1) An "Hour of Service" is each hour for which
an Employee is paid, or entitled to payment, for the
performance of duties for the Company or an Affiliate.
(2) An "Hour of Service" is also each hour
for which an Employee is paid, or entitled to payment, by
the Company or an Affiliate on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence. Notwithstanding the preceding sentence,
(A) No more than 501 Hours of Service
shall be credited under this subsection (a)(2) to an Employee
an account of any single continuous period during which the
Employee performs no duties;
(B) Hours of Service shall not be
credited under this subsection (a)(2) to an Employee for
payments made or due under a plan maintained solely for the
purpose of complying with any applicable workers'
compensation, unemployment compensation or disability
insurance laws;
(C) Hours of Service shall not be
credited under this subsection (a)(2) to an Employee for any
payment which solely reimburses him for medical or medically
related expenses he has incurred; and
(D) Hours of Service shall not be
credited under this subsection (a)(2) to an Employee for any
payments made or due
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him under this Plan or any other plan of deferred
compensation qualified under section 401 of the Code which
is maintained by the Company or an Affiliate.
(3) An "Hour of Service" is also each hour
for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Company or an
Affiliate.
(4) Solely for the purpose of determining
whether a Participant has incurred a One-Year Break in
Service, an "Hour of Service" is also --
(A) Each hour which is part of an
Employee's customary workweek during which he is on an unpaid
leave of absence authorized by the Company or an Affiliate
under its standard personnel practices, provided the Employee
resumes employment with the Company or an Affiliate upon the
expiration of such leave.
(B) With respect to any Employee who
is absent from work for maternity or paternity reasons, each
hour which would otherwise have been credited to such Employee
but for such absence, or, in any case in which such hours
cannot be determined, eight hours per day of such absence. An
absence from work for maternity or paternity reasons means a
continuous absence --
(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 such Employee; or
(IV) for purposes of caring for such
child for a period beginning immediately following such birth
or placement.
The Hours of Service credited under this subsection (a)(4)(B) shall be credited
in the Plan Year in which the absence begins if the crediting is necessary to
prevent a One-Year Break in Service in that Plan Year, or, in all other cases,
in the following Plan Year.
(b) In the case of a payment which is made or due on
account of a period during which an Employee performs no duties, and which
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results in the crediting of Hours of Service under subsection (a)(2), or in
the case of an award or agreement for back pay, to the extent that such award
or agreement is made with respect to a period described in subsection (a)(2),
the number of Hours of Service to be credited shall be determined in
accordance with the applicable regulations prescribed by the Secretary of
Labor and set forth in 29 CFR ss. 2530.200b-2(b).
(c) Hours of Service described in subsection (a)(1),
subsection (a)(2) and subsection (a)(3) shall be credited to Plan Years in
accordance with the applicable regulations prescribed by the Secretary of Labor
and set forth in 29 CFR ss. 2530.200b-2(c).
(d) Hours of Service with an Affiliate shall be
credited to an Employee only to the extent that such Hours are completed during
the period that the Employee's employer is an Affiliate.
2.2 Year of Service
(a) Eligibility. An Employee shall complete a "Year
of Service" for purposes of eligibility in any successive 12-month period from
his date of hire during which he completes at least 1,000 Hours of Service. In
addition to Years of Service completed pursuant to the preceding sentence, an
Employee shall be credited with the number of Years of Service for purposes of
eligibility back to his date of hire by the Company, by an Affiliate, or by
Equities Properties Development LP, Strauss Greenberg, Inc., Richard I. Rubin,
Inc., or The Rubin Organization, Inc. (collectively, the "Predecessor
Companies"), equal to the number he would have been credited with had the Plan
been in existence throughout his pre-Effective Date service with the Company,
the Affiliate, or the Predecessor Company.
(b) Vesting. An Employee shall complete a "Year of
Service" for purposes of vesting in any Plan Year in which he completes 1,000 or
more Hours of Service, whether or not he is in the employ of the Company or an
Affiliate at the end of such Plan Year. In addition to Years of Service
completed pursuant to the preceding sentence, an Employee shall be credited with
the number of Years of Service for purposes of vesting back to his date of hire
by the Company, an Affiliate, or a Predecessor Company equal to the number he
would have been credited with had the Plan been in existence throughout his
pre-Effective Date service with the Company, the Affiliate, or the Predecessor
Company.
2.3 One-Year Break in Service. An Employee shall be
considered to have incurred a "One-Year Break in Service" in any Plan Year
beginning on or after January 1, 1998 in which he does not complete more than
500 Hours of Service.
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2.4 Break in Service Rules. For purposes of vesting, all of a
Participant's Years of Service shall be taken into account, except under the
following circumstances --
(a) In the case of a Participant who does not have
any vested Accrued Benefit, Years of Service before any One-Year Break in
Service shall not be taken into account if the number of consecutive One-Year
Breaks in Service equals or exceeds the greater of (i) the total number of Years
of Service preceding such Breaks or (ii) five. The total number of Years of
Service preceding such Breaks shall not include any Years of Service not taken
into account because of a prior application of this Section.
(b) In the case of Participant who has five
consecutive One-Year Breaks in Service, Years of Service after such Breaks
shall not be taken into account in determining the nonforfeitable (vested)
percentage of the Participant's Accrued Benefit which he accrued prior to such
Breaks and the nonvested portion of such Accrued Benefit shall be forfeited in
accordance with Section 8.4(d). If, as a result, the Participant has different
vesting percentages in his pre-Break and post-Break Accrued Benefit, the
Committee shall maintain within the Participant's Company Stock and Other
Investments Accounts separate sub-accounts for such pre-Break and post-Break
Accrued Benefit.
2.5 Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits, and service credit with respect
to qualified military service shall be provided in accordance with section
414(u) of the Code.
Article III
PARTICIPATION
3.1 Eligibility Requirements. Any Eligible Employee shall be
eligible to participate in the Plan when he completes one Year of Service for
eligibility with the Company or an Affiliate.
3.2 Commencement of Participation. An Employee who meets the
requirements of Section 3.1 as of the Effective Date shall become a
Participant in the Plan on the Effective Date. An Employee who meets such
requirements after the Effective Date shall become a Participant in the Plan
on the first January 1 or July 1 following his attainment of eligibility,
provided he is an Eligible Employee on such date.
3.3 Participation After Separation from Service. If a
Participant separates from service and is thereafter reemployed by the Company
(whether or
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not he incurs a One-Year Break in Service), he shall resume participation in
the Plan immediately upon his return to the service of the Company.
Article IV
COMPANY CONTRIBUTIONS
4.1 Company Contributions. For each Plan Year, the Company
may make a contribution, in cash or in kind (including Company Stock), to the
Trust. The amount of such contribution for any year shall be determined by
appropriate action by the Board of Directors.
4.2 Time of Payment. The Company shall make payment of its
contribution to the Trust for each fiscal year for which it makes a
contribution within the time prescribed by law, including extensions of time,
for the filing of its Federal income tax return for such year.
4.3 Contributions Irrevocable
(a) General Rule. Except as provided in subsection
(b), all Company contributions to the Trust shall be irrevocable. Neither such
contributions nor any income therefrom shall be used for any purpose other than
the exclusive benefit of Participants or their beneficiaries under the Plan.
(b) Circumstances of Return of Company Contributions
(1) If the Internal Revenue Service
initially determines that the Plan does not meet the
requirements of a "qualified plan" under section 401(a) of
the Code, the assets of the Trust Fund attributable to
contributions made by the Company under the Plan shall be
returned to the Company within one year of the date of
denial of qualification of the Plan.
(2) In the case of a Company contribution
made by a mistake of fact, such contribution may be returned
to the Company within one year after the payment of the
contribution.
(3) Company contributions are conditioned
on their deductibility under section 404 of the Code, and,
to the extent a deduction is disallowed, the affected
contribution (to the extent disallowed) may be returned to
the Company within one year after the disallowance of the
deduction.
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Article V
PARTICIPANTS' ACCOUNTS AND INVESTMENT THEREOF
5.1 Accounts. A Participant's interest in the Trust Fund
shall be reflected in his Company Stock and Other Investments Accounts. The
Committee shall establish such record Accounts for each Participant.
Notwithstanding the foregoing, the Trust Fund shall be treated as a single
trust for purposes of investment and administration, and nothing contained
herein shall require a physical segregation of assets for any such Account.
5.2 Investment of Trust Fund. Up to 100 percent of the Trust
Fund may be invested in Company Stock. Among other investments, cash or cash
equivalents may be held in the Trust Fund for the purposes of, inter alia,
making distributions to Participants or acquiring shares of Company Stock from
shareholders of the Company or directly from the Company. Neither the Company
nor the Committee nor the Trustee shall have any responsibility or duty to
time any transaction involving Company Stock in order to anticipate market
conditions or changes in stock value, nor shall any such person have any
responsibility or duty to sell Company Stock held in the Trust Fund (or
otherwise to provide investment management for Company Stock held in the Trust
Fund) in order to maximize return or minimize loss.
5.3 Legal Limitation. The Committee shall not be required to
engage in any transaction, including, without limitation, directing the
purchase or sale of Company Stock, which it determines in its sole discretion
might tend to subject itself, its members, the Plan, the Company or any
Affiliate or any Participant to liability under Federal or state laws.
Article VI
ALLOCATION OF CONTRIBUTIONS
6.1 Participants Entitled to Allocation. Each contribution
to the Trust Fund for a Plan Year shall be allocated by the Committee to and
among each Participant (i) who in such Plan Year completed at least 1,000
Hours of Service for the Company, and (ii) who was an Eligible Employee on the
last day of such Plan Year. Notwithstanding the preceding clause (ii), a
Participant or his beneficiary, as the case may be, shall be entitled to an
allocation for the Plan Year in which the Participant's employment terminates
on or after his Normal Retirement Date, or because of death, or by reason of
total and permanent disability (as defined in Section 8.5(b)), regardless of
whether the Participant was an Eligible Employee on the last day of the Plan
Year.
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6.2 Allocation of Company Stock Contributions. The Committee
shall, as of December 31 of each Plan Year for which the Company makes a
Company Stock contribution, allocate such contribution (including fractional
shares to 1/1000th of a share) to the Company Stock Account of each
Participant entitled to an allocation for the Plan Year in the same proportion
that such Participant's Compensation for the calendar year ending with the
last day of the Plan Year bears to the total Compensation of all Participants
entitled to an allocation for the Plan Year.
6.3 Allocation of Other Contributions. The Committee shall,
as of December 31 of each Plan Year for which the Company makes a contribution
in a form other than Company Stock, allocate such contribution to the Other
Investments Account of each Participant entitled to an allocation for the Plan
Year in the same proportion that such Participant's Compensation for the
calendar year ending with the last day of the Plan Year bears to the total
Compensation of all Participants entitled to an allocation for the Plan Year.
6.4 Allocation of Forfeitures. All forfeitures occurring
pursuant to Section 8.4 shall be allocated in the manner described in Section
6.2 or Section 6.3 (as applicable) as of December 31 of the Plan Year in which
the last of the five consecutive One-Year Breaks in Service causing the
forfeiture occurs.
Article VII
VALUATION
7.1 Valuation. There shall be established within the Trust
Fund a "Company Stock Subfund" consisting of all of the Company Stock Accounts
of Participants and an "Other Investments Subfund" consisting of all of the
Other Investments Accounts of Participants. As of each Valuation Date, each
such Subfund shall be valued separately by the Trustee, and any net increase
or decrease in the fair market value of the applicable Subfund, including
earnings or losses realized or sustained during the Plan Year or part of the
Plan Year then ending, shall be computed. For the purpose of determining such
net increase or decrease, the value of the applicable Subfund on the
immediately preceding Valuation Date shall be reduced by amounts paid out or
due as benefits from such Subfund during the Plan Year or part of the Plan
Year then ending.
For purposes of the valuation described above, the fair
market value of shares of Company Stock which are not readily tradeable on an
established market and are held by the Trustee shall be determined as of the
Valuation Date coincident with the last day of the Plan Year, and as of such
other Valuation Dates as the Committee so directs, by a recognized independent
firm of security analysts
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or appraisers meeting requirements similar to those contained in regulations
(if any) issued under section 170(a)(1) of the Code.
7.2 Allocation of Gains and Losses. As of each Valuation
Date, the net increase or decrease in the market value of the Company Stock
Subfund and of the Other Investments Subfund, as calculated under Section 7.1,
shall be separately allocated (i) with respect to the Company Stock Subfund,
among the Company Stock Accounts of the Participants in the proportion that
each such Account bears to the total of all such Accounts immediately prior to
the valuation and before the allocations for the current Plan Year pursuant to
Article VI and (ii) with respect to the Other Investments Subfund, among the
Other Investments Accounts of the Participants in the proportion that each
such Account bears to the total of all such Accounts prior to the valuation
and before the allocations for the current Plan Year pursuant to Article VI.
7.3 Dividends on Company Stock
(a) Cash Dividends. With respect to any shares of
Company Stock allocated to the Company Stock Accounts of Participants, cash
dividends payable with respect to such shares shall be paid into the applicable
Participants' Other Investments Accounts.
(b) Stock Dividends. Stock dividends paid (and stock
received by the Trustee as a result of a stock split, stock conversion, or
reorganization or recapitalization of the Company) with respect to shares of
Company Stock held in the Trust Fund shall be credited to the Company Stock
Accounts to which such Company Stock was previously allocated.
Article VIII
BENEFITS AND DISTRIBUTIONS
8.1 Vesting. A Participant shall have a nonforfeitable
(vested) right to his Accrued Benefit when he attains age 55. Before age 55, a
Participant shall have a nonforfeitable (vested) right to the percentage of
his Accrued Benefit determined under the following table --
Completed Years Nonforfeitable
of Service Percentage
---------- ----------
fewer than 3................................ 0
3 or more ............................. 100
There shall be no divestment of a Participant's Accrued Benefit for cause.
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8.2 Amount, Method of Benefit Payments
(a) Amount and Form. The amount of any benefits
payable under this Article shall be determined from the amount of the
Participant's vested Accrued Benefit after the allocations pursuant to Article
VI for the Plan Year last ending before such benefits are paid, and based on the
Valuation Date last preceding such payment. Provided the corporate charter of
the Company restricts ownership of all or substantially all outstanding Company
Stock to Employees or to a plan or trust described in section 401(a) of the
Code, benefits held in a Participant's Company Stock Account shall be paid in
cash. Benefits held in a Participant's Other Investments Account shall be paid
in cash.
(b) Method. Except as otherwise required by Section
8.8, benefits shall be paid in the following methods --
(1) with respect to any Participant who
separates from service with the Company, and whose vested Accrued Benefit does
not exceed (and did not at the time of any prior distribution exceed) $3,500,
one single-sum payment paid as soon as practicable after the end of the Plan
Year in which the Participant separated from service (and in any event, not
later than one year after the end of such Plan Year);
(2) provided any consent required by Section
8.4(b) is given, with respect to any Participant whose vested Accrued Benefit
exceeds (or at the time of any prior distribution exceeded) $3,500, one
single-sum payment paid as soon as practicable after the end of the Plan Year in
which the Participant separated from service (and, in any event, not later than
one year after the end of such Plan Year).
8.3 Normal and Late Retirement
(a) A Participant may retire at any time on or after
his Normal Retirement Date.
(b) If a Participant continues in the service of the
Company after his Normal Retirement Date, he shall continue to participate in
the Plan until he actually retires. The benefits of a Participant who retires on
or after his Normal Retirement Date shall be paid in accordance with Section
8.2.
8.4 Vested Deferred Benefits
(a) If a Participant with a vested Accrued Benefit
separates from service before attaining Normal Retirement Age for any reason
other than
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death, benefits shall be paid in accordance with Section 8.2 but not later
than the time specified in Section 8.8.
(b) In the case of any Participant whose vested
Accrued Benefit exceeds (or at the time of any prior distribution exceeded)
$3,500, the Committee shall not direct that all or any part of such vested
Accrued Benefit be distributed, or commence to be distributed, before the
Participant attains Normal Retirement Age, unless the Participant consents in
writing to such distribution as provided in Section 8.9, or unless the benefit
becomes distributable under Section 8.6 upon the death of the Participant.
(c) If a Participant with a vested right to less than
100 percent of his Accrued Benefit separates from service, the nonvested portion
of his Accrued Benefit shall be transferred to a subaccount of the Company Stock
or Other Investments Account in which it is held, for disposition in accordance
with the provisions of subsection (d) or subsection (e).
(d) If the terminated Participant incurs five
consecutive One-Year Breaks in Service or dies before he returns to service,
any amount set aside in a subaccount pursuant to subsection (c) shall be
forfeited upon the fifth such consecutive One-Year Break in Service, or upon the
first payment to his designated beneficiary or beneficiaries in the event of his
death, if earlier.
(e) If the terminated Participant returns to service
with the Company prior to incurring five consecutive One-Year Breaks in Service,
any amount set aside in a subaccount pursuant to subsection (c) shall be
reallocated to the Participant's Company Stock and Other Investments Accounts as
of the last day of the month in which the terminated Participant returns to
service.
8.5 Disability Retirement
(a) If, before attaining Normal Retirement Age, a
Participant in the service of the Company suffers a total and permanent
disability (as defined in subsection (b)), such Participant shall then retire,
he shall become 100 percent vested in his Accrued Benefit, and his Accrued
Benefit shall be paid to him pursuant to Section 8.4(a).
(b) "Total and permanent disability" shall mean a
medically determinable physical or mental impairment which prevents the
Participant from engaging in any substantial gainful activity and which can be
expected to last at least 12 months, the existence of which disability shall be
established to the satisfaction of the Committee by the opinion of a physician
acceptable to the Committee.
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8.6 Death. If a Participant dies while in the service of the
Company, his Accrued Benefit shall be paid to his designated beneficiary or
beneficiaries in accordance with Section 8.7. If a Participant with a vested
Accrued Benefit dies after separating from service and before receiving all of
the benefit payments to which he was entitled, the remainder of his vested
Accrued Benefit shall be paid to his designated beneficiary(ies) in accordance
with Section 8.7.
8.7 Designation of Beneficiary and Form of Payment of Death
Benefit; Spouse's Consent to Non-Spouse Beneficiary
(a) Designation of Beneficiary and Form of Payment.
In the event a Participant has a surviving spouse at his death, such surviving
spouse shall be the Participant's beneficiary, unless the spouse has consented
in the manner described in subsection (b) to the payment of the Participant's
Accrued Benefit to a beneficiary other than the spouse. In the event the
Participant has no surviving spouse at his death, the beneficiary shall be the
beneficiary designated by the Participant. Any designation by the Participant
and/or consent by the Participant's spouse shall be made by a written form
delivered to the Committee. Except as otherwise provided with respect to a
surviving spouse, a Participant may, at any time prior to his death, change his
beneficiary designation by completing a new written form, but a beneficiary
designation shall remain in effect until such new form is received by the
Committee.
The death benefit shall be paid in one single-sum payment
paid as soon as practicable after the first Valuation Date after the
Participant's death. If a Participant dies without effectively designating a
surviving beneficiary and without a surviving spouse, the Committee shall
designate a beneficiary, but only from among the following and only in the
order set forth: the Participant's estate, surviving children, and surviving
parents.
(b) Requirements for Spouse's Consent. To be
effective, a consent by a spouse to a Participant's designation of a non-spouse
beneficiary must be filed in writing with the Committee, must be specific with
respect to the particular non-spouse beneficiary consented to, must be
irrevocable and must be witnessed by a Plan representative designated by the
Committee or by a notary public. In addition, any such spousal consent shall be
limited to the non-spouse beneficiary or beneficiaries specifically designated
by the Participant, which designation may not be changed without a further
spousal consent (unless the initial spousal consent expressly permits
designations by the Participant without any further consent by the spouse).
Notwithstanding the foregoing, if the Participant
establishes to the satisfaction of the Committee that such written consent may
not be obtained because there is no spouse or the spouse cannot be located,
the Participant's
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designation of a nonspouse beneficiary will be effective without the
requirement of the spouse's consent. Any consent required under this Section
shall be valid only with respect to the spouse who signs the consent, and any
establishment that the consent of a spouse may not be obtained shall be
effective only with respect to such spouse. Additionally, a revocation of a
prior beneficiary designation may be made by a Participant without the consent
of the spouse at any time. The number of revocations or consents shall not be
limited.
8.8 Requirements Concerning Distributions. All benefit
distributions under this Article shall be subject to the following requirements
(a) Before Death
(1) Last Date for Commencement of
Payments. The payment of benefits to a Participant under
this Plan shall commence not later than the 60th day after
the close of the Plan Year in which the latest of the
following events occurs --
(i) the Participant attains Normal
Retirement Age;
(ii) the tenth anniversary of the year
the Participant commenced participation in the
Plan; or
(iii) the termination of the Participant's
service with the Company.
Notwithstanding the above, if the amount of payment required
otherwise to commence on a date determined under this
Section or under any other Section of the Plan cannot be
ascertained by such date, or if the Committee is unable to
locate the Participant or beneficiary after making
reasonable efforts to do so, a payment retroactive to such
date may be made no later than 60 days after the later of
(i) the earliest date on which the amount of such payment
can be ascertained under the Plan or (ii) the earliest date
on which the Participant or beneficiary is located.
(2) Additional Rule for Commencement of
Benefit Payments. The distribution of benefits to a
Participant shall commence not later than April 1 of the
calendar year following the later of (i) the calendar year
in which the Participant attains age 70-1/2, or (ii) the
calendar year in which the Participant retires. However,
clause (ii) shall not apply if the Participant is a
"5-percent owner," as defined in section 416 of the Code,
with respect to the
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Plan Year ending in the calendar year in which the
Participant attains age 70-1/2.
(3) Duration of Benefit Payments. As of
the calendar year ending before the April 1 described in
paragraph (2), the distribution of benefit payments to each
Participant shall be made, in accordance with regulations
prescribed by the Secretary of the Treasury, over a period
not extending beyond the life expectancy of the Participant
or the joint life and last survivor expectancy of the
Participant and his designated beneficiary.
(4) Incidental Death Benefit Rule. If the
Participant's beneficiary is a person other than the
Participant's spouse, the value of the payments to be made
to the Participant shall be more than 50 percent of the
value of the total payments to be made to the Participant
and his beneficiary. This paragraph (4) shall be
administered so as to comply with the minimum distribution
incidental benefit requirements set forth in Prop. Treas.
Reg. ss. 1.401(a)(9)-2 or any successor thereto.
(b) After Death
(1) Distribution Already Begun. If a
Participant dies on or after the date described in
subsection (a)(2) and after distribution of his benefit has
commenced under a method of distribution in accordance with
subsection (a)(3), the remaining portion of such benefit
shall be distributed at least as rapidly as such benefit
would have been distributed under such method as of the date
of the Participant's death.
(2) Five-Year Rule for Other Cases. If a
Participant dies before the date described in subsection
(a)(2), the entire benefit of such Participant shall be
distributed by December 31 of the year containing the fifth
anniversary of the date of the Participant's death.
(c) Regulations Control. Distributions under this
Section shall be made in accordance with section 401(a)(9) of the Code and
regulations issued thereunder. This Section and section 401(a)(9) of the Code
shall take precedence over any distribution options in the Plan inconsistent
with this Section or section 401(a)(9) of the Code.
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8.9 Participant's Consent to Payment of Benefits
(a) Except as provided in subsection (b), the
Committee shall provide each Participant, not more than 90 days and (except as
provided in subsection (c)) not fewer than 30 days prior to the date the vested
portion of his Accrued Benefit is paid to him, written notice of his right to
defer receipt of the payment until on or after his Normal Retirement Date.
Payment shall not be made prior to the Participant's Normal Retirement Date
unless the Participant affirmatively elects the payment in writing, on a form
filed with the Committee.
(b) The written notice described in subsection (a)
shall not apply to the payment if (i) the Participant's vested Accrued Benefit
does not exceed (and did not at the time of any prior distribution exceed)
$3,500, or (ii) the payment is made on or after the Participant's Normal
Retirement Date.
(c) A payment may be made or may commence fewer than
30 days after the notice described in subsection (a) is given to the
Participant, provided --
(1) the Committee clearly informs the
Participant that he has a right to a period of at least 30 days after receiving
the notice to consider whether or not to elect the payment (and, if applicable,
a particular payment option); and
(2) the Participant, after receiving the
notice, affirmatively elects the payment.
8.10 Direct Rollovers
(a) General Rule. Notwithstanding any other provision
of the Plan to the contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in the manner
prescribed by the Committee, to have a portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) Definitions. The following definitions shall
apply for purposes of this Section --
(i) "Eligible rollover distribution"
shall mean any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover
distribution shall not include (i) any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
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the distributee and the distributee's designated beneficiary, or for
a specified period of 10 years or more, (ii) any distribution to the
extent such distribution is required under section 401(a)(9) of the
Code, and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
(ii) "Eligible Retirement Plan" shall
mean an individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in section 408(b)
of the Code, an annuity plan described in section 403(a) of the Code,
or a qualified trust described in section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse,
an eligible retirement plan shall be an individual retirement account
or individual retirement annuity.
(iii) "Distributee" shall include an
Employee or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the Code
shall be Distributees with regard to the interest of the spouse or
former spouse.
(iv) "Direct rollover" shall mean a
payment by the Plan to the eligible retirement plan specified by the
distributee.
Article IX
LIMITATIONS ON CONTRIBUTIONS
9.1 Definitions for Limitations on Contributions
(a) "Annual additions" shall mean the sum of the
following amounts credited to a Participant's Company Stock and Other
Investments Accounts for the limitation year:
(1) Company contributions; and
(2) forfeitures.
(b) "Defined benefit fraction" shall mean a fraction,
the numerator of which is the Participant's projected annual benefit under any
defined benefit plans qualified under section 401(a) of the Code maintained by
the Company and its Affiliates, and the denominator of which is the lesser of
125
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percent of the dollar limitation in effect for the limitation year under
section 415(b)(1)(A) of the Code or 140 percent of the Participant's highest
average limitation compensation.
(c) "Defined contribution fraction" shall mean a
fraction, the numerator of which is the sum of the annual additions to the
Participant's Company Stock and Other Investments Accounts under the Plan and
all annual additions to any other defined contribution plans qualified under
section 401(a) of the Code maintained by the Company and its Affiliates for the
current and all prior limitation years, and the denominator of which is the sum
of the maximum amounts for the current and all prior years of employment with
the Company. The maximum amount in any limitation year is the lesser of 125
percent of the dollar limitation in effect under section 415(c)(1)(A) of the
Code or 35 percent of the Participant's limitation compensation for such year.
(d) "Highest average limitation compensation" shall
mean the Participant's average limitation compensation for the three consecutive
Years of Service that produce the highest average.
(e) "Limitation compensation" shall mean a
Participant's wages, salaries and fees for professional services and other
amounts received (without regard to whether or not the amount is paid in cash)
for personal services actually rendered in the service of the Company or any
Affiliate, to the extent that the amounts are includible in gross income, and
excluding contributions by the Company or any Affiliate to a plan of deferred
compensation which are not includible in the Participant's gross income for the
taxable year in which contributed, or any distributions from a plan of deferred
compensation (except any amounts received by a Participant pursuant to an
unfunded, nonqualified plan in the year such amounts are includible in his gross
income).
(f) "Limitation year" shall mean the calendar year.
(g) "Maximum permissible amount" shall mean the
lesser of --
(1) $30,000 (or, if greater, 1/4 of the
defined benefit dollar limitation set forth in section
415(b)(1)(A) of the Code as in effect for the limitation
year); or
(2) 25 percent of the Participant's
limitation compensation for the limitation year.
(h) "Projected annual benefit" shall mean the annual
retirement benefit (adjusted to an actuarially equivalent straight life annuity
if such
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benefit is expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which the Participant is entitled under the
terms of any defined benefit plan qualified under section 401(a) of the Code
maintained by the Company and its Affiliates.
9.2 Basic Limitation. The amount of annual additions which
may be credited to the Participant's Company Stock and Other Investments
Accounts for any limitation year shall not exceed the lesser of the maximum
permissible amount or any other limitation contained in this Plan. If the
Company's contributions that would otherwise be contributed and allocated to
the Participant's Company Stock and Other Investments Accounts would cause the
annual additions for the limitation year to exceed the maximum permissible
amount, the amount contributed shall be reduced so that the annual additions
for the limitation year equal the maximum permissible amount.
9.3 Combined Limit with Defined Benefit Plans. For any
Participant who also has an accrued benefit under any defined benefit plan
qualified under section 401(a) of the Code maintained by the Company and its
Affiliates, the sum of the Participant's defined benefit fraction and defined
contribution fraction shall not exceed 1.0 in any limitation year. If the sum
of such fractions with respect to any Participant for any limitation year
would otherwise exceed 1.0, the amount contributed under this Plan shall be
reduced to the extent necessary to comply with such 1.0 limit.
9.4 Combining and Aggregating Plans. For purposes of
applying the limitations set forth in this Article --
(a) all qualified defined benefit plans ever
maintained by the Company or any Affiliate shall be treated as one defined
benefit plan; and
(b) all qualified defined contribution plans ever
maintained by the Company or any Affiliate shall be treated as one defined
contribution plan.
Article X
TOP-HEAVY PROVISIONS
10.1 Top-Heavy Preemption. Notwithstanding any other
provision of this Plan to the contrary, during any Plan Year in which this
Plan is top-heavy, as defined in Section 10.2 below, the Plan shall be
governed in accordance with this Article, which shall control over other
provisions hereof.
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10.2 Top-Heavy Definitions
(a) "Determination date" shall mean, with respect to
any Plan Year after the first Plan Year, the last day of the preceding Plan Year
and, with respect to the first Plan Year, the last day of such first Plan Year.
(b) "Determination period" shall mean, with respect
to any Plan Year, the Plan Year containing the determination date and the four
preceding Plan Years.
(c) "Key Employee" shall mean any Employee or former
Employee (and the beneficiaries of such Employee) who at any time during a Plan
Year included in the determination period was--
(1) an officer of the Company or any
Affiliate having an annual top-heavy compensation greater
than 50 percent of the dollar limitation applicable to
defined benefit plans under section 415(b)(1)(A) of the Code
for such Plan Year;
(2) one of the 10 Employees having an
annual top-heavy compensation from the Company and the
Affiliates greater than the amount in effect under section
415(c)(1)(A) of the Code and owning (or considered as owning
within the meaning of section 318 of the Code) both more
than a 1/2 percent interest and the largest interests in the
Company or any Affiliate;
(3) a five percent owner of the Company or
any Affiliate (within the meaning of section 416(i)(1)(B)(i)
of the Code); or
(4) a one percent owner of the Company or
any Affiliate (within the meaning of section
416(i)(1)(B)(ii) of the Code) having an annual top-heavy
compensation from the Company and the Affiliates of more
than $150,000.
For purposes of paragraph (1), no more than 50 employees (or if fewer, the
greater of three or 10 percent of the employees) shall be treated as officers.
The determination of who is a key Employee shall be made in accordance with
section 416(i) of the Code and regulations thereunder.
(d) "Limitation compensation" shall mean limitation
compensation as defined in Section 9.1(e).
(e) "Non-key Employee" shall mean any Employee who is
not a key Employee.
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(f) "Permissive aggregation group" shall mean, with
respect to any Plan Year, the required aggregation group plus any other defined
contribution plan or defined benefit plan which the Committee elects to include,
provided such permissive aggregation group meets the requirements of section
401(a)(4) and section 410 of the Code with such defined contribution plan or
defined benefit plan being taken into account.
(g) "Required aggregation group" shall mean, with
respect to any Plan Year:
(1) each defined contribution plan and
each defined benefit plan of the Company or any Affiliate in
which a key Employee is a participant or was a participant
at any time during the determination period (regardless of
whether the plan has been terminated); and
(2) each other defined contribution plan
and each other defined benefit plan of the Company or any
Affiliate which, during the determination period, enables
any defined benefit plan or defined contribution plan
described in paragraph (g)(1) to meet the requirements of
section 401(a)(4) or section 410 of the Code.
(h) "Top-heavy compensation" shall mean limitation
compensation plus elective or salary deferral contributions to a plan described
in section 125 or section 401(k) of the Code.
(i) "Top-heavy plan" shall mean this Plan if --
(1) this Plan is not part of a required or
permissive aggregation group, and the top-heavy ratio for
the Plan exceeds 60 percent;
(2) this Plan is part of a required
aggregation group and not part of a permissive aggregation
group, and the top-heavy ratio for the required aggregation
group exceeds 60 percent; or
(3) this Plan is part of a required
aggregation group and part of a permissive aggregation
group, and the top-heavy ratio for the permissive
aggregation group exceeds 60 percent.
(j) "Top-heavy ratio" shall mean a fraction. The
numerator of the fraction is the sum of the account balances of all key
Employees under the Plan, or, if the Plan is a member of a required or
permissive aggregation group, under all defined contribution plans in such
required or permissive aggregation
-22-
group (hereinafter the "aggregation group"), plus the sum of the present
values of accrued benefits of all key Employees under all defined benefit
plans in the aggregation group, as of the determination date. The denominator
of the fraction is a similar sum determined for all Employees. For purposes of
determining the fraction, the numerator and denominator shall include any part
of any account balance or accrued benefit distributed in the determination
period. If any individual has not been credited with at least one Hour of
Service with the Company or any Affiliate at any time during the determination
period, any account balance or accrued benefit of, or distribution to, such
individual shall not be taken into account.
For purposes of the preceding paragraph, the sum of account
balances and the present values of accrued benefits shall be determined as of
the most recent valuation date that falls within the 12-month period ending on
the determination date. The calculation of the top-heavy ratio shall be made
in accordance with section 416 of the Code and the regulations thereunder.
Solely for the purpose of determining if the Plan, or any
other plan included in a required aggregation group of which this Plan is a
part, is top-heavy (within the meaning of section 416(g) of the Code) the
accrued benefit of a non-key Employee shall be determined under (i) the
method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Company and the Affiliates, or (ii) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional accrual rate of section 411(b)(1)(C) of
the Code.
(k) "Valuation date" shall mean, with respect to this
Plan, the first day of the Plan Year.
10.3 Top-Heavy Rules. Notwithstanding any other provision of
the Plan, the following rules shall apply for any Plan Year in which the Plan is
determined to be a top-heavy plan --
(a) Minimum Benefit. The Company contributions and
forfeitures allocated on behalf of any Participant in this Plan who is a non-key
Employee for the Plan Year shall not be less than the lesser of (i) three
percent of such Participant's limitation compensation or (ii) the largest
percentage of the Company contributions and forfeitures allocated on behalf of
any key Employee under this Plan for such Plan Year as a percentage of the first
$150,000 (as adjusted by the Commissioner of Internal Revenue for increases in
the cost of living in accordance with section 401(a)(17)(B) of the Code) of the
key Employee's limitation compensation. This provision shall not apply to any
Participant who was not employed by the Company on the last day of the Plan
Year.
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The minimum benefit shall be provided without regard to any
Social Security contribution. The minimum benefit shall be provided even
though, under other Plan provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser allocation,
in the Plan Year because (i) of the Participant's failure to complete 1,000
Hours of Service, (ii) of the Participant's failure to make mandatory employee
contributions to the Plan or (iii) the Participant's limitation compensation
is less than a stated amount.
(b) Minimum Vesting. Notwithstanding the provisions
of Section 8.1, for any Plan Year in which this Plan is a top-heavy plan, the
following minimum vesting schedule shall apply to the Participant's Accrued
Benefit
ompleted Years Nonforfeitable
of Service Percentage
---------- ----------
fewer than 3 ...................................... 0
3 or more ......................................100
This subsection (b) does not apply to the Accrued Benefit of any Participant
who does not have an Hour of Service after the Plan has initially become a
top-heavy plan; such Participant's vested Accrued Benefit shall be determined
without regard to this subsection (b).
10.4 Impact on Maximum Benefits. For any Plan Year in which
the Plan is a top-heavy plan,Section 9.1 shall be read by substituting "100
percent" for "125 percent" wherever it appears therein, except that such
substitution shall not have the effect of reducing any benefit accrued under a
defined benefit plan prior to the first day of the Plan Year in which this
provision becomes applicable.
10.5 Change in Top-Heavy Status. If the Plan becomes a
top-heavy plan and subsequently ceases to be such, the vesting schedule in
Section 10.3(b) shall continue to apply in determining the nonforfeitable
percentage of any Participant who had at least three Years of Service as of
December 31 of the last Plan Year of top-heaviness. For other Participants,
such schedule shall apply only to the Participant's Accrued Benefit as of such
December 31.
10.6 Duplication of Minimum Contributions Not Required. The
Committee shall, to the maximum extent permitted by the Code and regulations
thereunder, apply the provisions of this Article by taking into account the
benefits payable and the contributions made under all other defined
contribution and defined benefit plans maintained by the Company or any
Affiliate which are qualified under section 401(a) of the Code to prevent
inappropriate omissions or duplication of minimum benefits or contributions.
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10.7 Repeal of Limitation. In the event that Congress should
provide by statute, or the Treasury Department should provide by regulation or
ruling, that the limitations provided in this Article are no longer necessary
for the Plan to meet the requirements of section 401 of the Code or other
applicable law then in effect, such limitations shall become void and shall no
longer apply, without the necessity of further amendment to the Plan.
Article XI
NONALIENATION OF BENEFITS
11.1 Nonalienation Rule. The right of any Participant or
beneficiary to any benefit payment shall not be subject to any voluntary or
involuntary alienation or assignment. The preceding sentence shall also apply
to the creation, assignment or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations order, unless
such order is determined to be a qualified domestic relations order (as
defined in section 414(p) of the Code) or a domestic relations order entered
before January 1, 1985.
Article XII
ALLOCATION OF FIDUCIARY RESPONSIBILITY
12.1 Allocation. Authority and responsibility for management
of the Plan and Trust shall be allocated among the following persons --
(a) The Board of Directors shall have sole
responsibility for the appointment, removal and replacement of the members of
the Committee described in Article XIII and the Trustee described in Article
XIV. To the extent that they are carrying out these responsibilities, the
members of the Board of Directors shall be "named fiduciaries" of the Plan for
purposes of section 402(a)(1) of ERISA.
(b) The Committee shall have sole responsibility for
the administration of the Plan, and shall have exclusive authority to direct the
Trustee with regard to the investment of the Trust Fund, as set forth in Article
V and Article XIII. The members of the Committee shall be "named fiduciaries"
with respect to the administration of the Plan.
(c) Subject to the direction of the Committee, the
Trustee shall have sole responsibility for the management and control of the
Trust Fund.
12.2 Exclusive Responsibility. It is the purpose of this Plan
and the Trust Agreement to allocate to each of the fiduciaries identified in
Section 12.1
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exclusive responsibility for prudent execution of the functions assigned to
him and no responsibility for execution of functions assigned to others.
Whenever one such fiduciary is required by the Plan and the Trust Agreement to
follow the directions of another such fiduciary, the two fiduciaries shall not
be deemed to have been assigned a shared responsibility, but the fiduciary
giving the directions shall have sole responsibility for the functions
assigned to him, including issuing such directions, and the fiduciary
receiving the directions shall have sole responsibility for the functions
assigned to him, including following such directions insofar as they are on
their face proper under this Plan and the Trust Agreement and under applicable
law.
12.3 Co-Fiduciary Liability. A fiduciary shall not be liable
for a breach of fiduciary responsibility by another fiduciary to whom other
fiduciary responsibilities have been assigned under the Plan except under the
following circumstances --
(a) if he participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other fiduciary, knowing such
act or omission is a breach;
(b) if, by his failure properly to discharge his own
fiduciary responsibilities, he has enabled such other fiduciary to commit a
breach; or
(c) if he has knowledge of a breach by such other
fiduciary, unless he makes reasonable efforts under the circumstances to remedy
the breach.
12.4 Interest of Participants. In carrying out the
responsibilities allocated to him under this Plan and the Trust Agreement,
each fiduciary shall act solely in the interest of the Participants and their
beneficiaries.
12.5 Employment of Advisers. A fiduciary identified in
Section 12.1 may employ one or more persons to render advice with regard to
such fiduciary's responsibilities under the Plan.
Article XIII
THE COMMITTEE
13.1 Appointment of Committee. The Board of Directors shall
appoint a Stock Bonus Committee consisting of at least three persons to
administer the Plan. Members of the Committee shall serve without compensation
at the pleasure of the Board of Directors. Vacancies on the Committee shall be
filled by the Board of Directors.
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The Board of Directors shall notify the Trustee of the
appointment of the Committee and of subsequent changes in its membership.
13.2 Committee Officers, Procedures, Rules. The Committee
shall elect a chairman and a secretary, who shall be members of the Committee.
The secretary shall keep a record of all meetings and actions taken by the
Committee.
A majority of the members of the Committee shall constitute
a quorum for the transaction of business. All resolutions or other actions
taken by the Committee at any meeting shall be by vote of the majority of the
Committee members present at such meeting. Resolutions may be adopted or other
action taken without a meeting upon written consent signed by all of the
members of the Committee. No member of the Committee shall act on any matter
which involves his personal interest or benefit under the Plan as
distinguished from the general interest of all Participants.
The Committee shall enact such rules and regulations
consistent with the Plan as it may consider desirable for the conduct of its
business.
13.3 Investment Responsibilities. The Committee shall have
sole responsibility for directing the Trustee with regard to the investment of
Trust assets in Company Stock. The Committee shall fulfill its responsibility
by issuing written instructions to the Trustee concerning the management,
acquisition, and disposition of Trust assets invested in Company Stock. No
investment of Trust assets in Company Stock shall be made without the written
approval of the Committee.
13.4 Administrative Responsibilities, Powers. The Committee
shall have sole responsibility for administration of the Plan, and shall
supervise and control the operation of the Plan in accordance with its terms.
The Committee shall have the responsibility, the power and the authority to do
all things necessary to accomplish that purpose, including, but not limited
to, the responsibility, power and authority to do the following --
(a) to construe and interpret the terms and
provisions of the Plan as provided in Section 13.11;
(b) to adopt such rules and regulations under the
Plan as it may consider desirable for the administration of the Plan;
(c) to determine all questions of eligibility for
participation under the Plan;
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(d) to determine all questions concerning the amount,
time and manner of payment of benefits under the Plan;
(e) to make or cause to be made valuations and
appraisals of Plan assets and to engage appropriate experts for such purpose;
(f) to prescribe procedures to be followed by
Employees, Participants and beneficiaries under the Plan;
(g) to prepare and distribute appropriate information
concerning the Plan;
(h) to issue directions to the Trustee concerning all
benefits which are to be paid from the Trust Fund pursuant to the Plan; and
(i) to keep such records, make such reports and do
such other acts as it deems appropriate in order to comply with ERISA and
government regulations thereunder.
13.5 Standards of Committee Conduct. The Committee shall act
solely in the interest of the Participants and beneficiaries and --
(a) for the exclusive purpose of providing benefits
to Participants and their beneficiaries and defraying reasonable expenses of
administering the Plan;
(b) with the care, skill, prudence and diligence that
a prudent man acting in a like capacity and familiar with such matters would use
under the circumstances;
(c) by diversifying the investments of the Trust so
as to minimize the risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
(d) in accordance with the terms of the Plan and
Trust Agreement and the provisions of ERISA.
For purposes of subsection (b) and subsection (c), the prudence requirement
(to the extent that it requires diversification) and the diversification
requirement shall not be violated by the acquisition or holding of "qualifying
employer securities" (as defined in section 407(d)(5) of ERISA).
13.6 Plan Records. The Committee shall maintain records
containing all relevant data pertaining to Participants and their rights under
the Plan. Records
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pertaining solely to a particular Participant shall be made available to him
for examination during business hours upon request.
13.7 Claims Procedure. The Committee shall make all
determinations as to the right of any person to a benefit under the Plan. If
the Committee denies in whole or part any claim for a benefit under the Plan
by a Participant or a beneficiary, the Committee shall furnish the claimant
with notice of the decision not later than 90 days after receipt of the claim,
unless special circumstances require extension of time for processing the
claim. If such an extension of time for processing is required, written notice
of the extension shall be furnished to the claimant prior to the termination
of the initial 90-day period. In no event shall such extension exceed the
period of 90 days from the end of such initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and
the date by which the Committee expects to render the final decision.
The written notice which the Committee shall provide to
every claimant who is denied a claim for benefits shall set forth in a manner
calculated to be understood by the claimant --
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions
on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary; and
(d) appropriate information as to the steps to be
taken if the claimant wishes to submit his claim for review.
A claimant or his authorized representative may request a
review of the denied claim by the Committee. Such request shall be made in
writing and shall be presented to the Committee not more than 60 days after
receipt by the claimant of written notification of the denial of a claim. The
claimant shall have the right to review pertinent documents and to submit
issues and comments in writing. The Committee shall make its decision on
review not later than 60 days after receipt of the claimant's request for
review, unless special circumstances require an extension of time, in which
case a decision shall be rendered as soon as possible but not later than 120
days after receipt of the request for review. The decision on review shall be
in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based.
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It is intended that the claims procedure of this Plan be
administered in accordance with the claims procedure regulations of the
Department of Labor set forth in 29 CFR ss. 2560.503-1.
13.8 Determination of Liquidity Needs. The Committee shall,
at least annually, estimate the amount of the benefit payments which the Plan
will be required to make, taking into account anticipated Participant
retirements and terminations and all other relevant factors, and, on the basis
of such estimate, determine the Plan's need for liquidity. The Committee shall
consider each such determination in its formulation of investment policy for
the Trust.
13.9 Voting Rights and Tender Offers. All voting rights of
Company Stock held by the Trust Fund shall be exercised by the Trustee as
directed by the Committee, except for any vote regarding the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets
of a trade or business, or such similar transaction as may be prescribed in
Treasury regulations. With respect to any such matter, the Trustee shall vote
the Company Stock allocated to the Company Stock Account of each Participant
as directed by the Participant and shall vote all Company Stock held in the
Trust Fund but not yet allocated to the Company Stock Accounts of Participants
as directed by the Committee. Such directions shall be given in accordance
with the following provisions --
(a) At least 30 days before each annual or special
shareholders' meeting of the Company at which a corporate matter requiring the
votes of Participants is to be voted on, the Committee through the Trustee shall
furnish to each Participant a copy of any proxy solicitation material, together
with a form requesting confidential instructions on how the Company Stock
allocated to the Participant's Company Stock Account (including fractional
shares to 1/1000th of a share) is to be voted. Upon timely receipt of such
instructions, the Trustee shall vote the Company Stock as directed. The
instructions received by the Trustee from Participants shall be held by the
Trustee in strict confidence and shall not be divulged or released to any
person, including officers of the Company or Employees or employees of any other
company. The Trustee and the Committee shall not make recommendations to
Participants on whether to vote or how to vote. If voting instructions for
Company Stock allocated to any Participant's Company Stock Account are not
timely received for a particular shareholders' meeting, the Trustee shall vote
such Company Stock as the Committee, in its sole discretion, directs, after the
Committee determines such action to be in the best interests of Participants and
their beneficiaries.
(b) The Trustee shall utilize its best efforts to
distribute or cause to be distributed to each Participant in a timely manner all
information distributed to shareholders of the Company in connection with any
tender or
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exchange offer. Each Participant shall have the right from time to time with
respect to the shares of Company Stock allocated to his Company Stock Account
to instruct the Trustee in writing as to the manner in which to respond to any
such tender or exchange offer which shall be pending or which may be made in
the future for all shares of Company Stock or any portion thereof. A
Participant's instructions shall remain in force until superseded in writing
by the Participant. The Trustee shall tender or exchange such shares of
Company Stock as and to the extent so instructed. If the Trustee does not
receive instructions from a Participant regarding any such tender or exchange
offer, the Trustee shall have no discretion in such matter and shall take no
action in response thereto. Unless and until shares of Company Stock are
tendered or exchanged, the individual instructions received by the Trustee
from Participants shall be held by the Trustee in strict confidence and shall
not be divulged or released to any person, including officers of the Company
or Employees, or employees of any other company; provided, however, that the
Trustee shall advise the Board of Directors, at any time upon request, of the
total number of shares for which the Trustee has not received instructions to
tender or exchange.
(c) Except as otherwise provided in subsection (b),
neither the Committee nor the Trustee shall have the discretion or power to
sell, convey, or transfer any allocated or unallocated shares of Company Stock
held in the Trust Fund in response to a tender or exchange offer unless the
Board of Directors or a court of competent jurisdiction determines that the
Committee shall have the discretion or power to instruct the Trustee to sell,
convey, or transfer any such shares of Company Stock in response to a tender or
exchange offer.
13.10 Contracting for Services. The Committee may contract
for actuarial, legal, accounting, clerical and other services necessary to
carry out its responsibilities under the Plan. The costs of such services and
expenses of the Committee shall be paid pursuant to Section 17.4.
13.11 Discretionary Authority. The Committee shall have sole
discretion to carry out its responsibilities under this Article to construe
and interpret the provisions of the Plan and to determine all questions
concerning benefit entitlements, including the power to construe and determine
disputed or doubtful terms. To the maximum extent permissible under law, the
Committee's determinations on all such matters shall be final and binding upon
all persons involved.
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Article XIV
THE TRUSTEE
14.1 The Trust. The Trust which is a part of this Plan shall
consist of all amounts contributed under the Plan, and the earnings and
appreciation thereon, less payments made by the Trustee under the Plan and the
Trust Agreement entered into pursuant to the Plan.
14.2 Standards of Trustee Conduct. In holding the Trust
assets, following the directions of the Committee, and otherwise managing the
Trust assets, the Trustee shall act solely in the interest of the Participants
and beneficiaries and --
(a) for the exclusive purpose of providing benefits
to Participants and their beneficiaries and defraying reasonable expenses of
administering the Plan;
(b) with the care, skill, prudence and diligence that
a prudent man acting in a like capacity and familiar with such matters would use
under the circumstances;
(c) by diversifying the investments of the Trust so
as to minimize the risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
(d) in accordance with the terms of the Plan and
Trust Agreement and the provisions of ERISA.
For purposes of subsection (b) and subsection (c), the prudence requirement
(to the extent that it requires diversification) and the diversification
requirement shall not be violated by the acquisition or holding of "qualifying
employer securities" (as defined in section 407(d)(5) of ERISA).
14.3 Investment Responsibilities. Subject to the directions
of the Committee pursuant to Section 13.3, and to Section 5.2, the Trustee
shall have the exclusive responsibility and authority to hold, invest,
reinvest and administer the Trust assets in accordance with the terms of the
Plan and the Trust Agreement. Except as provided in Section 12.3, the Trustee
shall not be liable for following proper directions of the Committee which are
in accordance with the terms of the Plan and Trust Agreement and not contrary
to law.
14.4 Payment of Benefits. The Trustee shall make all benefit
payments under the Plan from the Trust Fund upon the written instructions of
the Committee.
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14.5 Removal, Resignation of Trustee. The Board of Directors
may remove the Trustee at any time upon 60 days' notice in writing to the
Trustee (or upon any shorter notice consented to by the Trustee); and the
Trustee may resign at any time upon delivery of such notice to the Board of
Directors. Upon such removal or resignation of the Trustee, the Board of
Directors shall appoint a successor trustee and enter into a successor trust
agreement.
Article XV
PLAN AMENDMENT, MERGER OR CONSOLIDATION
15.1 Amendment. The Board of Directors shall have the right
to amend this Plan in writing at any time, subject to the following
limitations --
(a) No such amendment shall cause any part of the
Trust Fund to be used for or diverted to any purpose other than the exclusive
benefit of the Participants or their beneficiaries.
(b) No such amendment shall cause any reduction in
the amount of any Participant's Accrued Benefit. For purposes of this subsection
(b), an amendment which has the effect of (i) eliminating or reducing an early
retirement benefit or a retirement-type subsidy or (ii) eliminating an optional
form of benefit, with respect to benefits attributable to service before the
amendment, shall be treated as reducing accrued benefits as provided in section
411(d)(6) of the Code and the regulations thereunder.
(c) No such amendment shall change any vesting
schedule unless, in the case of an individual who is a Participant on (i) the
date the amendment is adopted, or (ii) the date the amendment is effective, if
later, the nonforfeitable percentage of such Participant's right to his Accrued
Benefit is not less than his percentage computed under the Plan without regard
to such amendment. Furthermore, no such amendment shall otherwise change any
vesting schedule unless each Participant having three or more Years of Service
is permitted to elect, in accordance with regulations under the Code, to have
the nonforfeitable percentage of his Accrued Benefit determined under the Plan
without regard to such amendment; provided that no election shall be given to
any Participant whose nonforfeitable percentage under the Plan as amended cannot
at any time be less than such percentage determined without regard to such
amendment.
15.2 Merger or Consolidation. This Plan and Trust shall not
be merged or consolidated with, nor shall any assets or liabilities be
transferred to, any other plan and trust, unless the benefits payable to each
Participant if the Plan were terminated immediately after such action would be
equal to or greater than
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the benefits which would have been payable to each Participant if the Plan had
been terminated immediately before such action.
Article XVI
PLAN TERMINATION
16.1 Discontinuance of Contributions or Termination. The
Board of Directors shall have the right to discontinue the Company's
contributions hereunder and to terminate or partially terminate this Plan by
delivery of written notice to the Trustee of such action.
Upon complete discontinuance of the Company's contributions,
or termination or partial termination of the Plan, the rights of all affected
Participants to benefits accrued to the date of such discontinuance or
termination shall become nonforfeitable except to the extent that law or
regulations may preclude such vesting in order to prevent discrimination in
favor of highly compensated Employees.
Upon final termination of the Plan, the Committee shall
direct the Trustee to distribute all assets remaining in the Trust, after
payment of any proper expenses, to the Participants in accordance with the
vested Accrued Benefits of such Participants as of the date of such
termination. Such payments shall be made in cash and at such time and in such
manner as the Committee shall in its discretion determine, subject to Section
8.8.
Article XVII
MISCELLANEOUS
17.1 Application of Plan. This Plan shall not apply to any
person who retired or otherwise separated from the service of the Company
before the Effective Date. The right of any such person to any retirement
benefit or otherwise shall be governed solely by the provisions of the Plan in
effect on the date of such retirement or other separation from service.
17.2 No Employment Rights Created. The Plan and Trust do not
confer upon any Participant or other Employee any right to be continued in the
employ of the Company or an Affiliate, and the Company expressly reserves the
right to terminate the employment of any Employee whether or not a
Participant, whenever the interest of the Company, in its sole judgment, may
so require.
17.3 Incapacitated Participant or Beneficiary. If the
Committee deems any person incapable of receiving any benefit to which he is
entitled by
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reason of minority, illness, infirmity or other incapacity, the Committee may
direct the Trustee to make payment to such person's legally appointed
guardian, or, if none has been appointed, to the holder of a legally valid
power of attorney from such person. Such payments shall, to the extent
thereof, discharge the liability of the Company, the Committee, the Trustee
and the Trust.
17.4 Payment of Plan Expenses. Except as otherwise provided
in the Trust Agreement, the Plan shall pay the expenses of administering the
Trust which is part of this Plan (to the extent such expenses are not paid by
the Company), including the compensation of the Trustee, which shall be as
mutually agreed by the Company and the Trustee.
17.5 Unclaimed Benefits. Any benefits payable to a
Participant or beneficiary not claimed for a period of five years from the
date of entitlement as determined by the Committee following a diligent effort
to locate such Participant or beneficiary and with the approval of the
Committee, shall be forfeited and applied in accordance with the terms of
Section 6.4; provided, however, that such forfeited benefits shall be
reinstated if a claim for them is made by the Participant or beneficiary.
17.6 Treatment of Leased Employees. Notwithstanding any
other provisions of the Plan, for purposes of the pension requirements of
section 414(n)(3) of the Code, Employees shall include Leased Employees.
17.7 Construction. Construction and administration of this
Plan and of the Trust Agreement shall be governed by ERISA and other
applicable Federal law and, to the extent not governed by Federal law, by
Pennsylvania law.
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17.8 Gender and Number. The masculine pronoun wherever used
shall include the feminine and the singular may include the plural, and vice
versa, as the context may require.
IN WITNESS WHEREOF, PREIT-RUBIN, INC. has caused these
presents to be duly executed as of this 30th day of September, 1997.
Attest: PREIT-RUBIN, INC.
/s/ Cynthia Wong By:/s/ Ronald Rubin
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