1
EXHIBIT 10.2(x)
UNIVERSAL FOODS TRANSITION RETIREMENT PLAN
2
UNIVERSAL FOODS TRANSITION RETIREMENT PLAN
Table of Contents
Page
----
ARTICLE I. DEFINITION OF TERMS ............................................ 2
Section 1.01. Definitions ..................................... 2
Section 1.02. Construction .................................... 4
ARTICLE II. PARTICIPATION AND VESTING SERVICE ............................. 6
Section 2.01. Participation ................................... 6
Section 2.02. Vesting Service ................................. 6
Section 2.03. Period of Severance ............................. 6
Section 2.04. Eligibility for Allocations ..................... 6
ARTICLE III. CONTRIBUTIONS ................................................ 8
Section 3.01. Employer Contributions .......................... 8
Section 3.02. No Liability for Future Contributions ........... 8
Section 3.03. Funding Policy .................................. 8
ARTICLE IV. PARTICIPANTS' ACCOUNTS ........................................ 9
Section 4.01. Establishment of Accounts ....................... 9
Section 4.02. Allocation to Accounts .......................... 9
Section 4.03. Determination and Allocation of
Changes in Value ................................ 9
Section 4.04. Maximum Annual Additions ........................ 9
ARTICLE V. BENEFITS .......................................................11
Section 5.01. Retirement ......................................11
Section 5.02. Death ...........................................11
Section 5.03. Disability ......................................11
Section 5.04. Other Severance from Service ....................11
Section 5.05. Distributions ...................................12
Section 5.06. Payment for Minor or Incompetent Person .........13
Section 5.07. Voting Rights and Tender Offers .................14
Section 5.08. Change of Control ...............................14
Section 5.09. Annual Statement ................................15
Section 5.10. Diversification .................................15
Section 5.11. Withholding/Rollover Rules ......................16
ARTICLE VI. ADMINISTRATION ................................................18
i
3
Page
----
Section 6.01. Allocation of Responsibility Among Fiduciaries
for Plan and Trust Administration ...............18
Section 6.02. Appointment and Authority of Benefits
Administrative Committee ........................18
Section 6.03. Use of Professional Services ....................20
Section 6.04. Fees and Expenses ...............................20
Section 6.05. Claims Procedure ................................20
Section 6.06. Trustee's Responsibilities ......................21
Section 6.07. Fiduciary Insurance and Indemnification .........21
Section 6.08. Agent for Service of Process ....................22
Section 6.09. Allocation of Fiduciary Responsibility ..........22
Section 6.10. Liability for Breach of Co-Fiduciary ............22
Section 6.11. Communications ..................................22
ARTICLE VII. TRUSTEE AND TRUST FUND .......................................23
Section 7.02. Investment of Trust Fund ........................23
Section 7.03. Acquisition of UFC Stock ........................23
ARTICLE VIII. AMENDMENT AND TERMINATION ...................................24
Section 8.01. Amendment .......................................24
Section 8.02. Termination .....................................24
Section 8.03. Non-Reversion of Assets .........................24
ARTICLE IX. GENERAL PROVISIONS ............................................25
Section 9.01. Participants to Furnish Information .............25
Section 9.02. Non-Guarantee of Employment or Other Benefits ...25
Section 9.03. Mergers, Consolidations and Transfers of
Plan Assets .....................................25
Section 9.04. Spendthrift Clause ..............................25
Section 9.05. Exclusive Benefit ...............................26
Section 9.06. Successors and Assigns ..........................26
Section 9.07. Top-Heavy Restrictions ..........................26
Appendix A .................................................................29
ii
4
UNIVERSAL FOODS TRANSITION RETIREMENT PLAN
Effective as of September 8, 1988, Universal Foods Corporation
(the "Company") establishes this target benefit pension plan known as the
Universal Foods Transition Retirement Plan (the "Plan") for the purpose of
providing eligible employees and their beneficiaries with certain retirement and
other benefits for their financial security.
5
ARTICLE I. DEFINITION OF TERMS
Section 1.01. Definitions. The following words and phrases
when used herein shall have the following respective meanings, unless the
context clearly indicates otherwise:
(a) "Affiliate" means any Employer and any other corporation
which is a member of a controlled group of corporations (within the meaning of
Section 1563(a) of the Code determined without regard to subsections (a)(4) or
(e)(3)(C) thereof) which includes an Employer.
(b) "Beneficiary" means the person, trust and/or other entity
entitled to receive benefits in the event of the Participant's death. A
Participant shall designate his Beneficiary on the form and in the manner
prescribed by the Benefits Administrative Committee and such designation may be
changed or withdrawn by the Participant at any time. The most recent valid
designation on file with the Benefits Administrative Committee at the time of
the Participant's death shall be the Beneficiary. Notwithstanding the foregoing,
in the event the Participant is married at the time of his death, the
Beneficiary shall be the Participant's spouse at such time unless such spouse
consented in writing to the designation of an alternative Beneficiary after
notice of the spouse's rights and such consent was witnessed (i) by a Plan
representative appointed by the Benefits Administrative Committee or (ii) by a
notary public. In the event no valid designation of a Beneficiary is on file
with the Benefits Administrative Committee at the date of death or no designated
Beneficiary survives him, the Participant's spouse shall be deemed the
Beneficiary; in the further event the Participant is unmarried or his spouse
does not survive him, the Participant's estate shall be deemed to be his
Beneficiary. No spouse consent prior to the Participant's attainment of age
thirty-five (35) shall be effective.
(c) "Benefits Administrative Committee" means the Benefits
Administrative Committee of the Company appointed by the Finance Committee.
(d) "Benefits Investment Committee" means the Benefits
Investment Committee of the Company appointed by the Finance Committee.
(e) "Code" means the Internal Revenue Code of 1986, as
interpreted and applied by regulations and rulings issued pursuant thereto, all
as amended and in effect from time to time.
(f) "Company" means Universal Foods Corporation, a Wisconsin
corporation, or any successor thereto.
2
6
(g) "Employee" means any person actively employed on or after
January 1, 1989 by an Employer on its United States payroll who is specifically
designated in Appendix A attached hereto. An individual who is a "leased
employee" as defined in Code Section 414(n) shall not be eligible to participate
in the Plan.
(h) "Employer" means the Company, Universal Flavor Corporation
and each subsidiary or affiliate corporation with a United States payroll
designated by the Benefits Administrative Committee as an Employer hereunder.
(i) "Employment Commencement Date" means the first date on
which a person completes an hour of service, which is an hour for which an
Employee is directly or indirectly paid or entitled to payment by an Employer or
any Affiliate, and shall include hours for which back pay has been awarded or
paid.
(j) "ERISA" means the Employee Retirement Income Security Act
of 1974, as interpreted and applied by regulations and rulings issued pursuant
thereto, all as amended and in effect from time to time.
(k) "Finance Committee" means the Finance Committee of the
Board of Directors of the Company.
(1) "Participant" means any Employee who has satisfied the
conditions of Section 2.01 hereof
(m) "Plan" means the target benefit pension plan herein
contained, as amended and in effect from time to time, which plan shall be known
as the "Universal Foods Transition Retirement Plan". The governing documents for
the Plan shall include this plan document, any amendments hereto, any agreement
with any Trustee and any amendments thereto, resolutions of the Finance
Committee relating hereto and such uniformly applicable rules, regulations and
standards promulgated by the Benefits Administrative Committee consistent and in
accordance with the terms hereof and ERISA requirements.
(n) "Plan Year" means the twelve (12) month period ending on
any September 30.
(o) "Severance from Service" means the earliest to occur of
the following:
(i) the date that a Participant quits, retires,
is terminated or dies, whichever occurs
first;
(ii) subject to Section 2.03 hereof, the first
anniversary of the date a Participant
commences a continuous absence
3
7
from service with the Affiliates for any
other reason, such as illness, disability,
layoff, vacation, or authorized leave of
absence; provided, however, that for
purposes of the Plan, "an authorized leave
of absence" means an absence from active
service with the Affiliates which an
Affiliate authorizes pursuant to uniform
rules consistently applied in like
circumstances for its personnel who are
similarly situated in respect to such
Participant; or
(iii) the date as of which the Participant is
suffering from a disability as evidenced by
receipt of either long-term disability
benefits from a plan sponsored by the
Employers or Social Security disability
benefits.
(p) "Trust" means the Trust adopted effective as of September
8, 1988 and as may be amended and in effect from time to time, between the
Company and the Trustee for the purpose of funding, in whole or in part, the
benefits provided hereunder.
(q) "Trust Fund" means the assets of the Trust as in effect
from time to time.
(r) "Trustee" means Marshall & Ilsley Trust Company or any
successor or successors thereto appointed to hold and administer the Trust.
(s) "UFC Stock" means common stock of the Company.
(t) "Valuation Date" means September 30, 1989 and each January
31, April 30, July 31 and October 31 thereafter.
(u) "Vesting Service" means a Participant's years of
employment which are credited under Section 2.02 hereof.
Section 1.02. Construction. (a) Words used herein in the
masculine gender shall include the feminine and words used herein in the
singular shall include the plural in all cases where such would apply. The words
"hereof", "herein", "hereunder" and other similar compounds of the word "here"
shall refer to the entire Plan, not to a particular article or section hereof.
Headings of articles, sections and subsections are for convenience of reference
only; they constitute no part of the Plan and are not to be considered in the
construction hereof. All references to statutory sections shall include the
section so identified as amended from time to time or any other statute of
similar import.
4
8
(b) The Plan is intended to be a target benefit plan meeting
the requirements of Section 401(a) of the Code and shall be interpreted so as to
comply with the applicable requirements thereof, where such requirements are not
clearly contrary to the express terms hereof. In all other respects, the Plan
shall be construed and its validity determined according to the laws of the
State of Wisconsin to the extent such laws are not preempted by applicable
requirements of federal law. In case any provision of the Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be construed and
enforced as if said illegal or invalid provisions had never been included
herein.
5
9
ARTICLE II. PARTICIPATION AND VESTING SERVICE
Section 2.01. Participation. An Employee shall become a
Participant hereunder as of October 1, 1988, except with respect to an Employee
who is eligible to participate in the Universal Foods Corporation Pension
Plan-Idaho Frozen Foods Participating Group for whom the entry date is July 1,
1989.
Section 2.02. Vesting Service. Each Employee's eligibility for
benefits hereunder shall be based in part upon such Employee's years of Vesting
Service. Subject to Section 2.03 hereof, each Employee shall be credited with
Vesting Service for the period beginning on his Employment Commencement Date and
ending on the date of his Severance from Service, less any period(s) of
severance during such period which exceed(s) twelve (12) months in duration.
Service shall be calculated based on years, months and days. An Employee of an
acquired business shall be given Vesting Service for employment prior to the
acquisition date only to the extent determined by the Benefits Administrative
Committee.
Section 2.03. Period of Severance. (a) For purposes of this
Article, a "period of severance" shall commence on an Employee's Severance from
Service and shall end on the date the Employee first performs paid services as
an employee of an Affiliate following such date, and said period shall be
calculated in years, months and days.
(b) If an Employee who is not entitled to a vested benefit
pursuant to Article V hereof incurs a period of severance of at least twelve
(12) months which equals or exceeds the period of Vesting Service, the
Employee's Vesting Service earned prior to the period of severance shall be
cancelled and disregarded under Section 2.02 for all purposes of the Plan;
provided, however, that service shall be reinstated if individual is reemployed
within a period of time not longer than seventy-two (72) months.
(c) Any Employee shall cease to be a Participant upon
incurring a Severance from Service. If rehired by an Affiliate within the
requisite time provided in subsection (b) above, any forfeited amount shall be
reinstated to an account in the individual's name and shall continue to vest
pursuant to the provisions thereof. Except as otherwise expressly provided in
Sections 3.01 and 4.02, no further Employer contributions shall be made to any
Participant after his Severance from Service.
Section 2.04. Eligibility for Allocations. Participants who
are eligible for allocations of Employer contributions pursuant to Section 4.02
for any Plan Year shall be those identified below but shall not include any
other Participant whose employment with the Employers was severed during the
Plan Year due to any other reason:
6
10
(i) each Participant who is employed by an
Employer on the last day of such Plan Year,
treating a permanent layoff as a termination
of employment but not a temporary layoff;
(ii) each Participant whose service with an
Employer was severed during such year on
account of death, disability, or retirement
on or after attainment of age fifty-five
(55) with at least ten (10) years of Vesting
Service, and
(iii) with respect to any sale or closing of an
Employer's location, to the extent
specifically authorized by the Benefits
Administrative Committee, any Participant
whose Severance from Service was due to such
sale or closing.
Notwithstanding the foregoing, eligible Participants shall not include any
former Participant who was rehired after a Severance from Service.
7
11
ARTICLE III. CONTRIBUTIONS
Section 3.01. Employer Contributions. (a) Commencing with the
Plan Year ending September 30, 1989 and for each Plan Year thereafter, the
Employers shall contribute an aggregate amount which, when added to forfeitures
allocable for such year pursuant to Section 5.04(b) hereof, equals the sum of
the amounts for each Participant eligible for a contribution pursuant to Section
4.02 hereof, determined in accordance with Appendix A hereof.
(b) The Employers' contribution for any Plan Year shall be
paid to the Trust Fund not later than the time prescribed by law, including any
extensions thereof, for filing the Employers' federal income tax returns with
respect to such Plan Year.
(c) If any Employer contributes an amount in excess of the
amount it would otherwise have contributed but for a mistake of fact, such
excess, less any losses thereon since its contribution, may, upon the request of
the Employer, be returned to the Employer within one (1) year from the date of
the mistaken contribution, but no such return shall cause any Participant's
account to be reduced to an amount below the amount such account would contain
if the mistaken contribution had not been made.
(d) Notwithstanding subsection (a), the Employer contributions
made to achieve the level of allocations required hereunder which are to be
invested in UFC Stock (as compared to those which will be diversified pursuant
to Section 5. 10) shall be determined by using an average of the closing prices
of UFC Stock on the New York Stock Exchange for the last five (5) days of the
Plan Year on which UFC Stock is actually traded, and contributing sufficient
cash or UFC Stock so that as of the last day of the Plan Year the portion of an
eligible Participant's account which is to be invested in UFC Stock shall be
credited with the number of whole and fractional shares of UFC Stock which, when
multiplied by the five (5) day average price, will equal the required
allocation.
Section 3.02. No Liability for Future Contributions. Benefits
and distributions under the Plan shall be only such as can be provided by the
Trust Fund assets, and there shall be no liability or obligation on the part of
any Employer to make any further contributions except as otherwise provided
herein.
Section 3.03. Funding Policy. The funding policy for the Plan
is that Employer contributions shall be made and the Trust Fund managed in a
manner consistent with the Code, ERISA, and other applicable law for the
purposes of providing the benefits described herein and, to the extent permitted
by such law, defraying the reasonable expenses of administering the Plan and
Trust Fund.
8
12
ARTICLE IV. PARTICIPANTS' ACCOUNTS
Section 4.01. Establishment of Accounts. The Benefits
Administrative Committee shall establish a separate account for each
Participant; provided, however, that the establishment of separate Participant
accounts shall not require a segregation of Trust Fund assets, and neither the
Employers, Participants, former Participants, nor Beneficiaries shall acquire
any right to or interest in any specific asset of the Trust Fund as a result of
any allocation provided for herein.
Section 4.02. Allocation to Accounts. The Benefits
Administrative Committee, as of the end of the Plan Year, shall credit the
Employers' contribution for that Plan Year and any forfeitures pursuant to
Section 5.04(b) to the appropriate accounts of eligible Participants, as
determined pursuant to Section 2.04, based on each Participant's applicable
dollar amount for such year specified in Appendix A hereof, subject to a maximum
contribution for any Participant determined pursuant to Section 4.04. For any
Participant eligible for an allocation pursuant to Section 2.04(ii) or (iii),
the applicable dollar amount shall be reduced so that the amount of the
contribution for such year is equal to the applicable dollar amount multiplied
by a fraction, the numerator of which is the number of nearest completed months
(employment on the fifteenth (15th) day of the month being treated as a full
month) and the denominator of which is twelve (12).
Section 4.03. Determination and Allocation of Changes in
Value. At the end of each Valuation Date and as of each September 30, the
Benefits Administrative Committee shall increase or decrease each account with
its proportionate share of any change in the fair market value of the Trust Fund
assets since the preceding Valuation Date.
Section 4.04. Maximum Annual Additions. (a) Notwithstanding
the other provisions of this Plan, annual additions to the account of any
Participant for a Plan Year shall not exceed the lesser of:
(i) thirty thousand dollars ($30,000) as
adjusted pursuant to Section 415(c)(1)(A)
and (d)(1) of the Code; or
(ii) twenty-five percent (25%) of the
Participant's total compensation (as defined
in subsection (c) of Section 415 of the Code
using accrued, not paid, bonuses) from the
Affiliates for such Plan Year.
The term "annual additions" as used in this subsection shall mean the amount of
the Employer's contributions and forfeitures for the Plan Year allocated to the
account of the Participant. If a Participant also participates in another
qualified defined contribution plan
9
13
maintained by an Employer, then the sum of his annual additions under this Plan
and under such other plan shall not exceed the limitations described in (i) or
(ii) above subject to any special limitations applicable to such other plan. In
the event that at any September 30 such limitations would be exceeded, then the
Participant's annual additions to his account shall be reduced as may be
necessary to satisfy such limitations.
(b) In addition, if a Participant is also participating in a
qualified defined benefit plan which an Affiliate maintains on his behalf, the
sum of the defined benefit fraction and the defined contribution fraction as
defined in Section 415(e) will not exceed one (1) and the limitations of Code
Section 415(e) are hereby incorporated by reference. If as of any September 30
such rules are violated, the benefit of any active defined benefit plan shall be
reduced accordingly; otherwise, the annual additions for the Plan Year hereunder
shall be reduced to satisfy such limitations.
(c) In the event that either of the rules set forth in this
Section would otherwise be violated, there shall be deducted from such
Participant's account such amount as may be necessary to satisfy both of such
rules; any such amount shall be treated as a forfeiture for purposes of Sections
3.01 and 4.02; provided that if such reallocation to the accounts of other
Participants is not possible as the result of the application of this Section,
then the reallocable amounts shall be credited to a suspense account subject to
the following conditions:
(i) amounts in the suspense account shall be
allocated at such time, including
termination of the Plan or complete
discontinuance of Employer contributions, as
the foregoing limitations permit,
(ii) any income produced by such suspense account
shall be held in the suspense account,
(iii) no further Employer contributions shall be
permitted until the foregoing limitations
Permit their allocation to Participants'
accounts, and
(iv) upon termination of the Plan any unallocable
amounts in the suspense account shall revert
to the Company.
10
14
ARTICLE V. BENEFITS
Section 5.01. Retirement. For any Participant hired by an
Affiliate prior to attainment of age sixty (60), the account of such Participant
shall be fully vested and nonforfeitable upon attainment of age sixty-five (65)
if then employed with an Affiliate. For any Participant first hired by an
Affiliate after attainment of age sixty (60), the account of such Participant
shall be fully vested and nonforfeitable as of the fifth (5th) anniversary of
such date of hire if then employed with an Affiliate. Payments shall commence as
soon as practicable after the Participant's Severance from Service and be
payable in accordance with Section 5.05.
Section 5.02. Death. Upon a Participant's death before his
Severance from Service for any other reason, the entire amount credited to his
account shall be fully vested and nonforfeitable. Upon a Participant's death,
whether before or after commencement of payment of benefits, the vested amount
credited to his account shall be payable in accordance with Section 5.05 to the
Participant's Beneficiary.
Section 5.03. Disability. If a Participant's Severance from
Service occurs on account of a disability as described in Section 1.01(o)(iii),
the entire amount credited to his account shall be fully vested and
nonforfeitable and shall be payable to him in accordance with Section 5.05.
Section 5.04. Other Severance from Service. (a) Any
Participant whose Severance from Service occurs by reason other than retirement,
death or disability and who has completed five (5) or more years of Vesting
Service, shall be fully vested and nonforfeitable with respect to the amount
credited to his account, which amount shall be payable to him in accordance with
Section 5.05. A Participant whose Severance from Service is due to a sale or
closing of an Employer's location shall be fully vested in his entire account
balance to the extent specifically authorized by the Benefits Administration
Committee.
(b) Any amounts in a Participant's account which are not
vested under subsection (a) above upon his Severance from Service shall be
maintained in such account and shall continue to share in investment earnings
and losses under Article IV hereof until a forfeiture occurs. A conditional
forfeiture shall occur on the September 30 immediately following the
Participant's one year period of severance under Section 2.03 hereof. Except as
otherwise provided in this subsection (b), forfeitures shall be added to
Employer contributions and allocated under Section 4.02 hereof. In the event a
former Participant is reemployed prior to such September 30, he shall not
receive any further distribution until he again severs his service with the
Employers, and any forfeitable amount shall remain in his account and continue
to vest in accordance with subsection (a) above. In the event the
11
15
Participant is reemployed after such September 30 and within a period of time
not longer than seventy-two (72) months (a "six year break in service"), his
conditionally forfeited account shall be reestablished from forfeitures of other
Participants or from a special Employer contribution as determined by the
Benefits Administrative Committee, and such reconstituted account shall continue
to vest in accordance with subsection (a). Upon a six year break in service, the
conditional forfeiture shall become final regardless of the future employment of
the Participant. Separate subaccounts shall be maintained for Employer
contributions accrued with respect to a Participant before a six year break in
service and after such a break.
Section 5.05. Distributions. (a) Time. In the event of a
Participant's Severance from Service with the Employers, the entire amount to
which the Participant is entitled under the Plan shall be distributed to him or
his Beneficiary, as the case may be, within sixty (60) days after the Valuation
Date after the event giving rise to such distribution occurs. Notwithstanding
any other provision in this Section, the account balance of a Participant shall
be distributed no later than April 1 of the calendar year following the calendar
year in which he attains age seventy and one-half (70 1/2). If a Participant who
has severed his service or has incurred a disability subsequently dies prior to
receiving his total distribution hereunder, the remainder of such distribution
shall then be made to his Beneficiary. Except with respect to death benefits, no
lump sum cash distribution in excess of Three Thousand Five Hundred Dollars
($3,500) shall be made prior to the Participant's attainment of age seventy and
one-half (70 1/2) without the consent of the Participant to the extent required
by law.
(b) Form. The amount to which a Participant or his
Beneficiary, as the case may be, is entitled hereunder shall be rendered, at the
election of the recipient, in the form of
(i) a lump sum distribution consisting entirely
of cash or UFC Stock as determined by the
Participant, except that cash shall be
distributed in lieu of any fractional share
of UFC Stock; or
(ii) as an annuity, if such amount exceeds Three
Thousand Five Hundred Dollars ($3,500).
If a Participant is married at the time he is entitled to commencement of the
distribution, the following rules apply:
(iii) Except as elected to the contrary pursuant
to (iv) below, the benefit shall be paid by
purchasing a joint and survivor annuity
contract from a licensed insurance
12
16
company using unisex actuarial factors and
providing a monthly benefit for the life of
the Participant commencing immediately and,
if the Participant predeceases the
Participant's spouse as of the commencement
date, a survivor's benefit to the spouse for
the spouse's remaining life equal to
one-half of the monthly amount received by
the Participant.
(iv) A Participant may elect, in writing on a
form provided by and filed with the Benefits
Administrative Committee, against receiving
payments in the form of such a joint and
survivor annuity, but such election shall
only be effective if the spouse consents to
such election and acknowledges the effect of
such waiver, such consent being witnessed by
a Plan representative appointed by the
Benefits Administrative Committee or a
notary public.
In the event (i) a Participant dies prior to commencement of annuity benefits
hereunder, (ii) a Beneficiary is the applicable Participant's spouse, and (iii)
the benefit payable to such spouse is in excess of Three Thousand Five Hundred
Dollars ($3,500), unless such spouse elects in writing to receive the lump sum
payment otherwise payable pursuant to subsection (i) above, the benefit payable
to such spouse shall be paid by purchasing a life only annuity contract from a
licensed insurance company using unisex actuarial factors and providing a
monthly benefit for the life of the spouse commencing immediately. Any elections
hereunder may be made or revoked at any time prior to the benefit commencement
date, and the Benefits Administrative Committee shall provide the Participant
and the spouse, as applicable, notice of their rights under this subsection in
accordance with the requirements of applicable regulations at least ninety (90)
days prior to such benefit commencement. Any spouse consent shall only be valid
for benefits commencing within ninety (90) days of such consent. In addition, an
unmarried Participant shall be provided a life only annuity contract unless the
Participant elects to the contrary, to the extent and in the manner required by
law. The provisions of the Plan are intended to comply with Code Section
401(a)(9) which prescribes certain rules regarding minimum distributions and
requires that death benefits be incidental to retirement benefits. All
distributions under the Plan shall be made in conformance with Section 401(a)(9)
and the regulations thereunder which are incorporated herein by reference. The
provisions of the Plan governing distributions are intended to apply in lieu of
any default provisions prescribed in regulations; provided, however, that Code
Section 401(a)(9) and the regulations thereunder override any Plan provisions
inconsistent with such Code Section and regulations.
Section 5.06. Payment for Minor or Incompetent Person. In the
event that any amount is payable under the Plan to a minor or to any person
deemed by the Benefits
13
17
Administrative Committee to be incompetent, either mentally or physically, such
payment shall be made for the benefit of such minor or incompetent person in any
of the following ways, as determined in the Benefits Administrative Committee's
sole discretion: (a) to the legal representative of such minor or incompetent
person; (b) directly to such minor or incompetent person; or (c) to some near
relative of such minor or incompetent person to be used for the latter's
benefit. The Benefits Administrative Committee shall not be required to see to
the proper application of any such payment made to any person pursuant to the
provisions of this Section 5.06.
Section 5.07. Voting Rights and Tender Offers. (a) The voting
rights of any UFC Stock held in the Trust Fund shall be exercised by the Trustee
as directed by the Benefits Investment Committee in a manner it determines to be
in the best interests of Participants.
(b) In the event of any tender offer for shares of UFC Stock
held in the Trust Fund, the Trustee shall respond to the tender offer with
respect to any such shares as directed by the Benefits Investment Committee in a
manner the Benefits Investment Committee determines to be in the best interests
of Participants.
Section 5.08. Change of Control. (a) For purposes of this
Section, the term "change of control of Company" means:
(i) the acquisition of more than eighty-five
percent (85%) of the outstanding shares of
voting stock directly or indirectly by any
person or group of persons acting in
concert, excluding affiliates of the
Company, by means of an offer made publicly
to the holders of all or substantially all
of the outstanding shares of any one or more
classes of the voting stock of the Company
to acquire such shares for cash, securities,
other property or any combination thereof;
or
(ii) the sale, assignment or transfer by the
Company of all or substantially all of its
business and assets to any person, excluding
affiliates of the Company; or
(iii) a merger, consolidation or other business
combination by the Company into or with any
person in which neither the Company nor any
subsidiary thereof is the continuing or
successor corporation.
14
18
(iv) As a result of, or in connection with, any
cash tender or exchange offer, merger or
other business combination, sale of assets
or contested election or any combination of
the foregoing transactions, the persons who
are directors of the Company before any of
the foregoing transactions shall cease to
constitute a majority of the Board of
Directors of the Company or any successor to
the Company.
(b) In the event of a change of control of the Company, all
account balances of all Participants employed on such date shall be fully vested
and nonforfeitable.
Section 5.09. Annual Statement. As soon as practicable
following each October 31, and at such other times as it determines, the
Benefits Administrative Committee shall provide each Participant with an annual
statement reflecting the status of the Participant's account as of such date.
Section 5.10. Diversification. (a) Subject to the rights of
Participants under this Section and the maximum ten percent (10%) limitation on
purchases of UFC Stock pursuant to Section 7.02, Participants' accounts shall be
invested in UFC Stock. A qualified Participant may elect to invest the eligible
diversification amount in accordance with the rules of this Section in a fixed
income investment fund designated by the Benefits Administrative Committee. The
right to invest hereunder is intended to enable a qualified Participant to
diversify a portion of the amount allocated to his account among investments
other than UFC Stock.
(b) A Participant becomes a qualified Participant on the day
following the Valuation Date coincidental with or immediately following his
attainment of age thirty-five (35). A Participant remains a qualified
Participant following his Severance from Service until his account has been
completely distributed.
(c) The eligible diversification amount shall be the result
obtained by subtracting the diversified account (as defined below) from the
product of (i) the Participant's elected diversification percentage times (ii)
the sum of the Participant's vested account balances in the Plan and the
Universal Foods Retirement Employee Stock Ownership Plan as of the Valuation
Date preceding the effective date of the diversification election. A
Participant's diversified amount is the sum of the Participant's account
balances in the Plan and the Universal Foods Retirement Employee Stock Ownership
Plan as of the applicable Valuation Date which are invested in the fixed income
fund established under such plans. The Participant may elect any of the
following percentages for diversification based on age:
Participant's Age Diversification Percentage
15
19
Under 35 None
35-49 None or 25%
50-59 None, 25% or 50%
60 and over None, 25%, 50% or 75%
In the event an election results in a negative number, that amount shall be
transferred out of the fixed income fund and invested in UFC Stock. For all
purposes of this Section, diversification into the fixed income fund shall first
apply to the account balance under the Plan.
(d) An election under this Section may be made as of the day
following any Valuation Date by filing the form prescribed for such purpose by
the Benefits Administrative Committee by the date required by such Committee. To
the extent determined by the Benefits Administrative Committee, a separate
diversification election shall be provided with respect to the allocation under
Section 4.02 for any Plan Year with such effective date as may be determined by
said Committee.
(e) Effective September 8, 1998, the Plan shall be amended to
satisfy the requirements for diversification under Code Section 401(a)(28).
Section 5.11. Withholding/Rollover Rules. (a) This section
applies to distributions made on or after January 1, 1993. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a distributee's
election under this section, a distributee may elect, at the time and in the
manner prescribed by the Administrative Committee, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover as such terms are defined
herein.
(b) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the distributee, except that
an eligible rollover distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent that such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(c) An eligible retirement plan is an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible rollover
16
20
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(d) A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(e) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
17
21
ARTICLE VI. ADMINISTRATION
Section 6.01. Allocation of Responsibility Among Fiduciaries
for Plan and Trust Administration. The Finance Committee, Benefits
Administrative Committee and Trustee shall be "Named Fiduciaries" within the
meaning of Section 402(a)(2) of ERISA. The Named Fiduciaries shall have only
those specific powers, duties, responsibilities and obligations as are
specifically given them under this Plan or the trust agreement. In general, the
Finance Committee shall have the sole authority to appoint and remove the
members of the Benefits Administrative Committee and to amend or terminate the
Plan in whole or in part. The Benefits Administrative Committee shall have the
responsibility for the administration of this Plan, which responsibility is
specifically described in this Plan. The Trustee shall have the sole
responsibility for the administration of the Trust and the management of the
assets held thereunder, except to the extent such responsibility is delegated to
any investment managers in accordance with such trust agreement. Each Named
Fiduciary may rely upon any direction, information or action of any other Named
Fiduciary as being proper, and is not required to inquire into the propriety of
any such direction, information or action. It is intended under this Plan that
each Named Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under this Plan and shall not
be responsible for any act or failure to act of another Named Fiduciary. An
individual may serve in more than one fiduciary capacity hereunder.
Section 6.02. Appointment and Authority of Benefits
Administrative Committee. (a) The general responsibility for carrying out the
provisions of the Plan shall be placed in the Benefits Administrative Committee
which shall be comprised of not less than three (3) employees of the Employers
or any Affiliate thereof appointed from time to time by the Finance Committee.
The Benefits Administrative Committee may appoint from its number such officers
and/or subcommittees with such powers as it shall determine and may authorize
one or more of its number or any agent to execute or deliver any instrument or
make any payment on its behalf. The Benefits Administrative Committee may
designate and allocate any fiduciary responsibility to one or more of its
members or to any other person or persons. It may retain counsel, employ agents
and provide for such clerical, accounting and actuarial services as it may
require. The foregoing sentence shall in no way affect the duty and obligation
of the Benefits Administrative Committee to retain such services in connection
with the carrying out of its duties and to designate an independent, qualified
public accountant as provided in Section 6.03(b) hereof.
(b) The Benefits Administrative Committee shall hold meetings
upon such notice, at such place and at such times as it may from time to time
determine. A meeting may be held in any manner as may be determined by the
Benefits Administrative Committee, but in any event, where all members are not
physically present, the actions of the Benefits
18
22
Administrative Committee shall be reduced to writing and sent to all members
within ten (10) days of the date of such meeting.
(c) A majority of the Benefits Administrative Committee shall
constitute a quorum, and any action which the Plan authorizes or requires the
Benefits Administrative Committee to take shall require the written approval or
the affirmative vote of a majority of its members.
(d) Members of the Benefits Administrative Committee shall not
be paid any compensation from the assets of the Plan.
(e) Subject to the provisions of the Plan, the Benefits
Administrative Committee may from time to time establish rules for the
transaction of its business. The determination of the Benefits Administrative
Committee as to any disputed question pertaining to the Plan shall be
conclusive.
(f) Any member of the Benefits Administrative Committee may
resign by delivering his written resignation to the Finance Committee. Any
member of the Benefits Administrative Committee may be removed by the Finance
Committee, and such removal shall be effective at such time as is provided for
by the Finance Committee. Notice of such removal shall be conveyed to the member
so removed in the manner provided by the Finance Committee.
(g) In addition, the Benefits Administrative Committee shall
have the following specific duties and authority under the Plan:
(i) To determine a funding policy in accordance
with Section 3.03 herein;
(ii) To exercise the discretionary authority to
determine eligibility for benefits and to
construe the terms of the Plan; any such
determination or construction shall be final
and binding on all parties unless arbitrary
and capricious;
(iii) To prescribe and require the use of
appropriate forms;
(iv) To formulate, issue and apply rules and
regulations;
(v) To make appropriate determinations and
calculations;
(vi) To authorize and direct benefit payments;
and
19
23
(vii) To prepare and file reports, notices, and
any other documents relating to the Plan
which may be required by law.
The Benefits Administrative Committee shall exercise any authority allocated
hereunder in any manner consistent with ERISA and the applicable provisions of
the Plan.
Section 6.03. Use of Professional Services. (a) The Benefits
Administrative Committee may allocate fiduciary duties to any other person or
persons. The Benefits Administrative Committee may employ agents, provide for
clerical services as required and, subject to the approval of the Finance
Committee, retain counsel.
(b) The Benefits Administrative Committee shall, subject to
the approval of the Finance Committee, engage an independent, qualified public
accountant who shall audit the Plan and its assets in compliance with ERISA (and
if the Benefits Administrative Committee so elects, subject to the approval of
the Finance Committee, remove and appoint another such accountant).
Section 6.04. Fees and Expenses. Where the Benefits
Administrative Committee utilizes services as provided in Section 6.03 hereof,
the Benefits Administrative Committee shall review the fees and other costs for
these services and shall authorize the payment of such fees and costs. Such fees
and costs and other expenses incurred or authorized by the Benefits
Administrative Committee shall be paid by the Employers or from the Plan assets
as determined by the Benefits Administrative Committee.
Section 6.05. Claims Procedure. A Participant or Beneficiary
may file with the Benefits Administrative Committee a claim with respect to the
Plan. Any such claim shall be filed in writing stating the nature of the claim,
the facts supporting the claim, the amount claimed and the name and address of
the claimant. The Benefits Administrative Committee, within ninety (90) days (or
one hundred eighty (180) days if special circumstances require an extension of
time for processing the claim and the Benefits Administrative Committee notifies
the claimant of such extension prior to ninety (90 days from the date of the
initial filing of the claim) after receipt of the notice, shall render a written
decision on the claim. If the claim shall be denied, either in whole or in part,
the decision shall include the specific reason or reasons for the denial;
specific reference to the pertinent Plan provision or provisions which is the
basis for the denial; a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation why the
information or material is necessary; and appropriate information as to the
steps to be taken if the Participant or Beneficiary wishes to appeal the
Benefits Administrative Committee's decision. The claimant may file with the
Benefits Administrative Committee, within sixty (60) days after receiving such
notification, a written notice of request for review of the Benefits
Administrative Committee's decision. The
20
24
review shall be made by the Benefits Administrative Committee. The written
notice of appeal should contain (i) a statement of the ground(s) for the appeal,
(ii) a specific reference to the pertinent Plan provision or provisions on which
the appeal is based, (iii) a statement of the argument(s) and authority (if any)
supporting each ground for the appeal, and (iv) any other pertinent documents or
comments which the claimant desires to submit in support of the appeal. The
Benefits Administrative Committee shall render a written decision on the claim
which shall include the specific reasons for the decision and a reference to the
pertinent Plan provisions on which the decision was based within sixty (60) days
(or one hundred twenty (120) days if special circumstances require an extension
of time for processing the claim and the Benefits Administrative Committee
notifies the claimant of such extension prior to sixty (60) days from the date
of the initial filing of the claim) after receipt of the documents requested for
review. A copy of the Benefits Administrative Committee's decision shall be
mailed promptly to the claimant. If a Participant or Beneficiary shall not file
written notice with the Benefits Administrative Committee at the times set forth
above, the Participant or Beneficiary shall have waived all benefits other than
as set forth in the notice from the Benefits Administrative Committee.
The foregoing claims procedure shall be the only method by
which claims of Participants, former Participants or Beneficiaries shall be
decided under this Plan. Oral communications by potential claimants to the
Benefits Administrative Committee shall have no force and effect hereunder.
Section 6.06. Trustee's Responsibilities. The duties,
authority and responsibility of any Trustee or other person handling all or any
part of the Plan assets shall include and be limited to the duties, authority
and responsibility expressly set forth in a written agreement between the
Company and any such Trustee or other person.
Section 6.07. Fiduciary Insurance and Indemnification. The
Company or any Affiliate shall maintain and keep in force such insurance as the
Benefits Administrative Committee shall determine to insure and protect the
directors, officers, employees of the Company or any Affiliate thereof and any
appropriately authorized delegates or appointees of them against any and all
claims, damages, liability, loss, cost or expense (including attorneys' fees)
arising out of or resulting from (including failure to act with respect to) any
responsibility, duty, function or activity of any such person in relation to the
Plan, including without limitation, the members of the Benefits Administrative
Committee and directors, officers and employees of the Employers or any
subsidiary or Affiliate thereof performing responsibilities, duties, functions,
and/or actions at the direction or under the authority of any of the foregoing.
In lieu of and/or as a supplement and in addition to the
insurance referred to in the foregoing sentence, the Affiliates shall indemnify
and hold harmless their directors, officers and employees against any and all
claims, damages, liability, loss, cost or expense
21
25
(including attorneys' fees) arising out of or resulting from (including failure
to act with respect to) any responsibility, duty, function or activity of any
such person in relation to the Plan (or trust agreement, if applicable)
including without limitation the members of the Benefits Administrative
Committee and directors, officers and employees of the Affiliates performing
responsibilities, duties, functions and/or actions at the direction or under the
authority of any of the foregoing; provided, however, that no such
indemnification shall extend to any matter as to which it shall have been
adjudged by any court of competent jurisdiction that such person or persons have
acted in bad faith or were guilty of gross negligence in the performance of any
duties hereunder unless such Court shall, in view of all the circumstances of
the case, determine that such person or persons are fairly and reasonably
entitled to indemnification.
Section 6.08. Agent for Service of Process. The Chairman of
the Benefits Administrative Committee is hereby designated as the agent for
service of legal process with respect to all matters pertaining to the Plan.
Section 6.09. Allocation of Fiduciary Responsibility. This
Article VI provides for "Named Fiduciaries" as required by Section 402(a)(1) of
ERISA and a procedure for the allocation of responsibilities as required by
Section 402(b)(2) of ERISA. If the Finance Committee or Benefits Administrative
Committee allocates responsibility as herein provided, such Named Fiduciaries
shall not be responsible for the actions of the person(s) to whom the
responsibility is allocated except as provided in Section 405(c)(2) of ERISA.
Section 6.10. Liability for Breach of Co-Fiduciary. The
members of the Finance Committee and the Benefits Administrative Committee shall
not be liable for the acts of commission or omission of another fiduciary unless
(i) such member knowingly participated or knowingly attempted to conceal the act
or omission of another fiduciary and he knew the act or omission was a breach of
fiduciary responsibility by the other fiduciary; or (ii) such member has
knowledge of a breach by the other fiduciary and shall not make reasonable
efforts to remedy the breach; or (iii) such member's breach of the member's own
fiduciary responsibility permitted the other fiduciary to commit a breach.
Section 6.11. Communications. All requests, appeals, elections
and other communications to the Benefits Administrative Committee shall be in
writing and shall be by transmitting the same via the U.S. Mail, certified,
return receipt requested, addressed as follows:
Universal Foods Corporation
433 East Michigan Street
Milwaukee, Wisconsin 53202
Attention: Chairman, Benefits Administrative Committee
Universal Foods Transition Retirement Plan
22
26
ARTICLE VII. TRUSTEE AND TRUST FUND
Section 7.01. Trustee and Trust Fund. The powers and duties of
the Trustee with respect to the Plan and Trust Fund are set forth in the Trust.
Section 7.02. Investment of Trust Fund. All Employer
contributions made to the Trust Fund pursuant to this Plan shall be paid to the
Trustee and, except as may otherwise be provided in the Trust, shall be held,
invested and reinvested by the Trustee without distinction between principal and
income, in such securities or in such other property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not limited to,
shares of stock, common or preferred, whether or not listed on any exchange
(including, without limitation, shares of UFC Stock), participations in mutual
investment funds, bonds and mortgages, and other evidences of indebtedness or
ownership, and participations in any common trust fund established or maintained
by the Trustee for the collective investment of fiduciary funds and shall not be
limited by any state statute or judicial decision prescribing or limiting
investments appropriate for trustees; provided, however, that the Trustee shall
not purchase Stock if, as a result of such purchase, the aggregate fair market
value of all shares of UFC Stock held in the Trust Fund would exceed ten percent
(10%) of the fair market value of all Trust Fund assets.
Section 7.03. Acquisition of UFC Stock. It is intended that
the Trustee qualify as an "agent independent of the issuer" within the meaning
of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and
accordingly neither the Company nor any Affiliate of the Company may exercise
any direct or indirect control or influence over the times when, or the prices
at which, the Trustee purchases shares of UFC Stock in the market, the amounts
to be purchased, the manner in which the shares are to be purchased, or the
selection of a broker or dealer through which purchases are executed. Purchases
will not be made for the purpose of creating actual or apparent active trading
in, or raising the price of, UFC Stock. Any such investment and reinvestment
shall meet the applicable provisions of ERISA and the Code.
23
27
ARTICLE VIII. AMENDMENT AND TERMINATION
Section 8.01. Amendment. The Company shall have the right, by
action of the Finance Committee, to modify, alter or amend the Plan at any time
and in any manner which does not cause any part of the Plan to be used for, or
diverted to, any purpose other than the exclusive benefit of the Participants or
Beneficiaries. Notwithstanding the foregoing, no amendment to the Plan shall
decrease a Participant's accrued benefit or vested percentage or eliminate an
optional form of distribution for a previously accrued benefit.
Section 8.02. Termination. The Company shall have the right to
terminate the Plan, in whole or in part, by action of the Finance Committee. An
Employer may terminate its participation in the Plan by action of its board of
directors. In the event of any termination, partial termination or permanent
discontinuance of Employer contributions, the account balances of Participants
affected by such action shall be fully vested and nonforfeitable.
Section 8.03. Non-Reversion of Assets. In no event shall the
Employers receive any amount from the Plan, except that, (i) to the extent that
any contributions hereunder are made by a mistake of fact, such amount may, at
the request of the Benefits Administrative Committee, be returned within one (1)
year after it is made, (ii) all contributions hereto being hereby expressly
conditioned on the deductibility of the contribution under Code Section 404, and
to the extent such deduction is disallowed it may, at the request of the
Benefits Administrative Committee, be returned within one (1) year after the
disallowance of such deduction, and (iii) amounts may be returned pursuant to
Section 4.04(c)(iv) hereof.
24
28
ARTICLE IX. GENERAL PROVISIONS
Section 9.01. Participants to Furnish Information. Each
Participant entitled to benefits under the Plan shall furnish to the Benefits
Administrative Committee such evidence, data or information as the Benefits
Administrative Committee considers necessary or desirable in order to administer
the Plan properly.
Section 9.02. Non-Guarantee of Employment or Other Benefits.
Neither the establishment of the Plan, nor any modification or amendment hereof,
nor the payment of benefits hereunder shall be construed as giving any
Participant or other person whomsoever any legal or equitable right against the
Employers, the Finance Committee, the Benefits Administrative Committee, the
Benefits Investment Committee, or their respective members or the Trustee, or
the right to payment of any benefits hereunder (unless the same shall be
specifically provided herein) or as giving any Employee the right to be retained
in the service of the Employers or the Affiliates.
Section 9.03. Mergers, Consolidations and Transfers of Plan
Assets. In the case of any merger, consolidation with, or transfer of assets or
liabilities to any other plan, each Participant must be entitled (if the Plan
then terminated) to receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit the
Participant would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan then terminated) pursuant to the
requirements of ERISA and the Code.
Section 9.04. Spendthrift Clause. No Participant, former
Participant or Beneficiary entitled to benefits hereunder shall have the right
to transfer, assign, alienate, anticipate, pledge or encumber any part of such
benefits, nor shall such benefits, or any part of the Plan assets or any
contract from which such benefits are payable, be subject to seizure by legal
process by any creditor of such Participant, former Participant or Beneficiary.
In the event that such Participant or other person entitled to such benefits, or
such creditor thereof, shall attempt to effect a division as hereinabove
described, of any such benefit, the Plan may pay over to or apply on the behalf
of such Participant, former Participant or Beneficiary, all or any part of such
benefits to which such person would otherwise have been entitled hereunder.
Notwithstanding the foregoing, the Trustee may recognize a qualified domestic
relations order with respect to child support, alimony payments or marital
property rights if such order contains sufficient information for the Benefits
Administrative Committee to determine that it meets the applicable requirements
of Section 414(p) of the Code. Such an order may permit distribution to an
alternate payee prior to the time a Participant would be eligible for benefits
hereunder. The Benefits Administrative Committee shall establish written
procedures concerning the notification of interested parties and the
determination of the validity of such orders.
25
29
Section 9.05. Exclusive Benefit. All contributions made under
the Plan shall be paid to the Trust, and all property and funds of the Trust
allocable to the Plan, including income from investments and from all other
sources, shall be managed solely in the interest of Participants and
Beneficiaries and for the exclusive purpose of:
(i) providing benefits to Participants and
Beneficiaries; and
(ii) defraying reasonable expenses of administering
the Plan.
Section 9.06. Successors and Assigns. The Plan shall be
binding upon the successors and assigns of the Employers.
Section 9.07. Top-Heavy Restrictions. (a) Notwithstanding any
provision to the contrary herein, in accordance with Code Section 416, if the
Plan is a top-heavy plan for any Plan Year, then the provisions of this Section
shall be applicable. The Plan is "top-heavy" for a Plan Year if as of its
"determination date" (i.e., the last day of the preceding Plan Year or the last
day of the Plan's first Plan Year, whichever is applicable), the total present
value of the accrued benefits of key employees (as defined in Code Section
416(i)(1) and applicable regulations) exceeds sixty percent (60%) of the total
present value of the accrued benefits of all employees under the Plan (excluding
those of former key employees) (as such amounts are computed pursuant to Section
416(g) and applicable regulations using a five percent (5%) interest assumption
and a 1971 GAM mortality assumption) unless such plan can be aggregated with
other plans maintained by the applicable controlled group in either a permissive
or required aggregation group and such group as a whole is not top-heavy. In
addition, a plan is top-heavy if it is part of a required aggregation group
which is top-heavy. Any plan of a controlled group may be included in a
permissive aggregation group as long as together they satisfy the Code Section
401(a)(4) and 410 discrimination requirements. Plans of a controlled group which
must be included in a required aggregation group (including any terminated
plans) include any plan in which a key employee participates and any plan which
enables such a plan to meet the Section 401(a)(4) or 410 discrimination
requirements. The present values of aggregated plans are determined separately
as of each plan's determination date and the results aggregated for the
determination dates which fall in the same calendar year. A "controlled group"
for purposes of this Section includes any group employers aggregated pursuant to
Code Section 414(b), (c) or (m). The calculation of the present value shall be
done as of a valuation date which for a defined contribution plan is the
determination date and for a defined benefit plan is the date as of which
funding calculations are generally made within the twelve month period ending on
the determination date. 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 an employee other than a key employee (within the meaning of
Section 416(i)(1) of the Code) shall be determined under (i) the method, if any,
that uniformly applies for accrual purposes under
26
30
all plans maintained by 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.
(b) If the Plan is top-heavy in a Plan Year, nonkey employee
participants who have not separated from service at the end of such Plan Year
will receive allocations of Employer contributions and forfeitures under this
Plan and/or the Universal Foods Retirement Employee Stock Ownership Plan at
least equal to five percent (5%) of compensation (as defined in Code Section
415) for such year.
(c) If the controlled group maintains a defined benefit plan
and a defined contribution plan which both cover one or more of the same key
employees, and if such plans are top-heavy, then the limitation of this Plan
with respect to the Code Section 415(e) maximum benefit limitations shall be
amended to refer to a 1.0 adjustment on the dollar limitation rather than a 1.25
adjustment. This provision shall not apply if the Plan is not "super top-heavy"
and if the minimum benefit requirements of this Section are met when five
percent (5%) is changed to seven and one-half percent (7.5%) for each year
such plan is top-heavy. A plan is "super top-heavy" if the ratio referred to in
subsection (a) above results in a percentage in excess of ninety percent (90%)
rather than a percentage in excess of sixty percent (60%).
(d) If the Plan is top-heavy in a Plan Year, the vesting
schedule shall automatically be amended for any employee employed on the first
day of such year or thereafter so that the vested percentage for
employer-derived benefits is equal to the greater of the vesting provided under
other provisions of the Plan or the following schedule:
Years of Service Nonforfeitable Percentage
1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
where "years of service" means the years credited for vesting purposes under the
Plan or, if greater, the years required to be counted under Code Section 411 and
applicable regulations thereto. If the Plan thereafter ceases to be top-heavy
for a Plan Year, the vesting schedule above shall be disregarded and the
original schedule applied, except with respect to any Participant with five (5)
or more years of service and except that no Participant's vested percentage as
of the end of the prior year shall be decreased. Any non-vested Participant who
acquires a vested interest in the employer-derived benefit by operation of the
27
31
amended vesting schedule shall not be subject thereafter to a cancellation of
service. Notwithstanding anything in this Section to the contrary, the amendment
of the vesting schedule pursuant to this subsection shall not affect the
calculation of benefit amounts or the determination of benefit commencement
dates hereunder.
28
32
AMENDMENT NO. 1 TO THE
UNIVERSAL FOODS CORPORATION
TRANSITION RETIREMENT PLAN
The Universal Foods Corporation Transition Retirement Plan ("the Plan")
is hereby amended, effective as of September 10, 1998, as set forth below:
1. Section 5.08(a) of the Plan is amended to read in its entirety
as follows:
Section 5.08. Change of Control. (a) For purposes of this
Section, the term change of control of the Company means:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act") (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either
(A) the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (B) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (i),
the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from the Company, (2)
any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or (4) any acquisition pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) of
this Section; or
(ii) individuals who, as of September 10, 1998, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
September 10, 1998 whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
33
(iii) consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company or the
acquisition of assets of another entity (a "Business
Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such business
combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any employee benefit plan (or related
trust) of the Company or of such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination and (C) at least a majority of the members of
board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or the
action of the Board, providing for such Business Combination;
or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.