EXHIBIT 10.20
MARQUETTE MEDICAL SYSTEMS, INC.
PROFIT SHARING AND 401(K) PLAN
EFFECTIVE AS OF JANUARY 1, 1998
MARQUETTE MEDICAL SYSTEMS, INC.
PROFIT SHARING AND 401(K) PLAN
TABLE OF CONTENTS
-----------------
Page
ARTICLE I. DEFINITIONS AND CONSTRUCTION.................................... 1
Section 1.01. Definitions............................................ 1
Section 1.02. Constructions.......................................... 5
ARTICLE II. ELIGIBILITY AND PARTICIPATION.................................. 6
Section 2.01. Eligibility............................................ 6
Section 2.02. Status of Leased Employees............................. 6
ARTICLE III. CONTRIBUTIONS................................................. 7
Section 3.01. 401(k) Contributions................................... 7
Section 3.02. Employer Matching Contributions........................ 8
Section 3.03. Profit Sharing Contributions........................... 9
Section 3.04. Maximum Annual Additions...............................10
Section 3.05. Rollovers..............................................12
ARTICLE IV. PARTICIPANT ACCOUNTS; INVESTMENT OF ACCOUNTS...................13
Section 4.01. Establishment of Accounts..............................13
Section 4.02. Investment of Accounts.................................13
Section 4.03. Allocations to Matching Contributions
and Profit Sharing Accounts..........................14
Section 4.04. Valuation of Accounts..................................14
ARTICLE V. VESTING AND FORFEITURES.........................................15
Section 5.01. Calculation of Vesting Service.........................15
Section 5.02. Effect of Breaks in Service............................15
Section 5.03. Vesting in 401(k) Contributions, Matching
Contributions and Rollover Accounts..................15
ARTICLE VI. DISTRIBUTION OF BENEFITS.......................................17
Section 6.01. Distribution Upon Termination of Employment............17
i
Section 6.02. Death.................................................17
Section 6.03. Time of Distributions.................................17
Section 6.04. Form of Distributions.................................18
Section 6.05. Eligible Rollover Distributions.......................18
ii
ARTICLE VII. WITHDRAWALS AND LOANS.......................................20
Section 7.01. In-Service Withdrawals................................20
Section 7.02. Age 60 Withdrawal and Diversification Alternatives....20
Section 7.03 Loans to Participants.................................20
Section 7.04. Time and Manner of Distribution.......................22
ARTICLE VIII. PLAN ADMINISTRATION.........................................23
Section 8.01. Company Authority and Responsibility..................23
Section 8.02. Administration........................................23
Section 8.03. Agent for Service of Process..........................25
Section 8.04. Marquette Stock Fund..................................25
ARTICLE IX. TRUSTEE AND TRUST FUND......................................26
Section 9.01. Trustee Removal and/or Resignation and Successors.....26
Section 9.02. Investment Funds......................................26
Section 9.03. Investment of the Trust Fund..........................26
Section 9.04. Trustees Power and Duties.............................27
Section 9.05. Payments from the Trust Fund..........................27
ARTICLE X AMENDMENT AND TERMINATION...................................28
Section 10.01. Amendment and Termination.............................28
ARTICLE XI. MISCELLANEOUS...............................................29
Section 11.01. Plan is Voluntary.....................................29
Section 11.02. Non-Guarantee of Employment...........................29
Section 11.03. Rights to Trust Assets................................29
Section 11.04. Non-Alienation........................................29
Section 11.05. Indemnification.......................................30
Section 11.06. Facility of Payment...................................30
Section 11.07 Board Action..........................................30
Section 11.08. Mergers, Consolidations and Transfer of Plan Assets...30
Section 11.09. Fiduciaries...........................................30
ARTICLE XII. TOP-HEAVY PLAN PROVISIONS...................................31
Section 12.01. Effect of Top-Heavy Status............................31
Section 12.02. Additional Definitions................................32
Section 12.03. Vesting...............................................32
iii
Section 12.04 Minimum Benefits......................................33
Section 12.05. Maximum Benefit Limits................................33
APPENDIX A.................................................................34
RESOLUTION AMENDMENT I.....................................................36
iv
MARQUETTE MEDICAL SYSTEMS, INC.
PROFIT SHARING AND 401(k) PLAN
STATEMENT OF PURPOSE
The purpose of this Plan document is to continue and update the provisions of
the Plan as in effect prior to January 1, 1998. This Plan is the continuation of
the Marquette Electronics, Inc. Profit Sharing and 401(k) Plan, which was
originally effective May 1, 1987 and the Marquette Electronics, Inc. Employee
Stock Ownership Plan, which was merged into the Profit Sharing Plan effective
April 30, 1993.
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.01. Definitions.
------------
For purposes of the Plan, unless the context clearly or necessarily indicates
the contrary, the following words and phrases shall have the meanings set forth
in the definitions below:
(a) Accounts shall mean the separate accounts to be maintained under the
Plan for each Participant as provided in Section 4.01.(a) Accounts shall mean
the separate accounts to be maintained under the Plan for each Participant as
provided in Section 4.01.
(b) Affiliate or Affiliates shall mean each Employer and each other
corporation or unincorporated business in a controlled group of corporations, a
group of trades or businesses under common control or an affiliated service
group (within the meaning of Section 414(b), (c) or (m) of the Code) which
includes the Employer.(b) Affiliate or Affiliates shall mean each Employer and
each other corporation or unincorporated business in a controlled group of
corporations, a group of trades or businesses under common control or an
affiliated service group (within the meaning of Section 414(b), (c) or (m) of
the Code) which includes the Employer.
(c) Beneficiary shall mean the person, trust and/or other entity entitled
to receive benefits hereunder in the event of the Participant's death as
provided in Section 6.02.(c)
Beneficiary shall mean the person, trust and/or other entity entitled to
receive benefits hereunder in the event of the Participant's death as provided
in Section 6.02.
(d) Board shall mean the Board of Directors of the Company.(d) Board
shall mean the Board of Directors of the Company.
(e) Break in Service shall mean at least five consecutive Years of Break
in Service.(e) Break in Service shall mean at least five consecutive Years of
Break in Service.
(f) Code shall mean the Internal Revenue Code of 1986, as amended.(f) Code
shall mean the Internal Revenue Code of 1986, as amended.
(g) Company shall mean Marquette Medical Systems, Inc., and any successor
thereto which adopts this Plan.(g) Company shall mean Marquette Medical
Systems, Inc., and any successor thereto which adopts this Plan.
(h) Compensation shall mean salary or wages, reported as taxable on Form
W-2, plus any Participant 401(k) contributions and any salary reduction pursuant
to Code Section 125, but
1
excluding overtime premiums, reimbursements or other expense allowances,
including fringe benefits, moving expenses and welfare benefits paid with
respect to a Plan Year by the Employer to an Employee for services performed
during such Plan Year; provided, however, that with respect to a Plan Year
during which an Employee first becomes eligible (or, in the event of
reemployment and/or one or more Years of Break in Service, regains his
eligibility) to participate hereunder, Compensation shall be determined from and
after the date as of which such Employee's participation hereunder commences.
The maximum annual compensation taken into account hereunder for purposes of
calculating any Participant's accrued benefit (including the right to any
optional benefit) and for all other purposes under the Plan shall be the amount
permitted pursuant to Code Section 401(a)(17) as adjusted annually for cost-of-
living increases at such time and in such amount as may be determined by the
Secretary of the Treasury. Notwithstanding the foregoing, for purposes of
determining who is a Highly Compensated Employee under Section 1.01(s) and
calculating a Participant's average deferral and contribution ratios under
Article III, Compensation has the meaning set forth in Code Section 415(c)(3),
but prior to reduction on account of a Participant's Deposits to this Plan or
any other contributions not treated as taxable income by reason of Code Section
125 or 402(a)(8).(h) Compensation shall mean salary or wages, reported as
taxable on Form W-2, plus any Participant 401(k) contributions and any salary
reduction pursuant to Code Section 125, but excluding overtime premiums,
reimbursements or other expense allowances, including fringe benefits, moving
expenses and welfare benefits paid with respect to a Plan Year by the Employer
to an Employee for services performed during such Plan Year; provided, however,
that with respect to a Plan Year during which an Employee first becomes eligible
(or, in the event of reemployment and/or one or more Years of Break in Service,
regains his eligibility) to participate hereunder, Compensation shall be
determined from and after the date as of which such Employee's participation
hereunder commences. The maximum annual compensation taken into account
hereunder for purposes of calculating any Participant's accrued benefit
(including the right to any optional benefit) and for all other purposes under
the Plan shall be the amount permitted pursuant to Code Section 401(a)(17) as
adjusted annually for cost-of-living increases at such time and in such amount
as may be determined by the Secretary of the Treasury. Notwithstanding the
foregoing, for purposes of determining who is a Highly Compensated Employee
under Section 1.01(s) and calculating a Participant's average deferral and
contribution ratios under Article III, Compensation has the meaning set forth in
Code Section 415(c)(3), but prior to reduction on account of a Participant's
Deposits to this Plan or any other contributions not treated as taxable income
by reason of Code Section 125 or 402(a)(8).
(i) 401(k) Contributions shall mean amounts contributed under the Plan by
or at the direction of Participants pursuant to Section 3.01.(i) 401(k)
Contributions shall mean amounts contributed under the Plan by or at the
direction of Participants pursuant to Section 3.01.
2
(j) Disability shall mean permanent and total disability, as a result of
which a Participant is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or to be of long-continued and indefinite
duration.(j) Disability shall mean permanent and total disability, as a result
of which a Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or to be of long-continued and indefinite
duration.
(k) Effective Date shall mean January 1, 1998.(k) Effective Date shall
mean January 1, 1998.
(l) Employee shall mean any person who is both a common law employee of
an Employer and who is treated by the Employer as such, except that the term
shall not include any nonresident alien who receives no earned income from the
Employer which constitutes income from sources within the United States. (l)
Employee shall mean any person who is both a common law employee of an Employer
and who is treated by the Employer as such, except that the term shall not
include any nonresident alien who receives no earned income from the Employer
which constitutes income from sources within the United States.
(m) Employer shall mean the Company and any Affiliate of the Company.
which, with Board approval, adopts this Plan.(m) Employer shall mean the
Company and any Affiliate of the Company. which, with Board approval, adopts
this Plan.
(n) Employer Contributions shall mean both Employer Matching Contributions
and Profit Sharing Contributions hereunder.(n) Employer Contributions shall
mean both Employer Matching Contributions and Profit Sharing Contributions
hereunder.
(o) Employer Matching Contributions shall mean amounts contributed by the
Employer pursuant to Section 3.02.(o) Employer Matching Contributions shall
mean amounts contributed by the Employer pursuant to Section 3.02.
(p) Marquette Stock shall mean common stock of the Company, or any
Affiliate of the Company.(p) Marquette Stock shall mean common stock of the
Company, or any Affiliate of the Company.
(q) Marquette Stock Fund shall mean an unsegregated fund to be primarily
invested in Marquette Stock.(q) Marquette Stock Fund shall mean an unsegregated
fund to be primarily invested in Marquette Stock.
3
(r) ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.(r) ERISA shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to time.
(s) Highly Compensated Employee shall mean any highly compensated active
employee and any highly compensated former employee. A highly compensated
active employee includes any individual employed by an Affiliate who during the
immediately preceding Plan Year:(s) Highly Compensated Employee shall mean any
highly compensated active employee and any highly compensated former employee.
A highly compensated active employee includes any individual employed by an
Affiliate who during the immediately preceding Plan Year:
(i) was a 5% owner of an Affiliate; or(i) was a 5% owner of an
Affiliate; or
(ii) received compensation from the Affiliates in excess of $85,000
(or such higher amount permitted pursuant to Code Section 414(q)) and was
among the 20% most Highly Compensated Employees of the Affiliates for the
Plan Year.(ii) received compensation from the Affiliates in excess of
$85,000 (or such higher amount permitted pursuant to Code Section 414(q))
and was among the 20% most Highly Compensated Employees of the Affiliates
for the Plan Year.
A highly compensated former employee includes any individual who
separated from service (or was deemed to have separated) prior to the current
Plan Year, performs no service for the Affiliates during the current Plan Year
and was a highly compensated active employee for either his separation year or
any Plan Year ending on or after the employee's 55th birthday.
(t) Hour of Service shall mean each hour for which an Employee is paid,
or entitled to payment, by the Affiliates for the performance of duties; each
hour for which an Employee is paid, or entitled to payment, by the Affiliates
for periods of time during which no duties are performed, except that no more
than 501 hours shall be credited for any single continuous period during which
no duties are performed; and each hour (if any) for which back pay is awarded or
agreed to by the Affiliates. Hours of Service shall be computed and credited,
and shall not be less than the number of hours required to be credited, pursuant
to U.S. Department of Labor Regulations ' 2530.200b-2(b) and (c).(t) Hour of
Service shall mean each hour for which an Employee is paid, or entitled to
payment, by the Affiliates for the performance of duties; each hour for which an
Employee is paid, or entitled to payment, by the Affiliates for periods of time
during which no duties are performed, except that no more than 501 hours shall
be credited for any single continuous period during which no duties are
performed; and each hour (if any) for
4
which back pay is awarded or agreed to by the Affiliates. Hours of Service shall
be computed and credited, and shall not be less than the number of hours
required to be credited, pursuant to U.S. Department of Labor Regulations '
2530.200b-2(b) and (c).
In addition to the foregoing provisions, an Employee shall receive Hour of
Service credit for the hours described in paragraphs (i) and (ii) below, if not
credited pursuant to the preceding paragraph of this subsection.
(i) Uncompensated hours, up to a maximum of 40 hours per week (but
not more than the number of hours necessary to avoid a Year of Break in
Service), for applicable holidays, vacations and periods of Approved Leaves
of Absence, including:(i) Uncompensated hours, up to a maximum of 40 hours
per week (but not more than the number of hours necessary to avoid a Year
of Break in Service), for applicable holidays, vacations and periods of
Approved Leaves of Absence, including:
(A) absence for temporary illness or accident,(A) absence for
temporary illness or accident,
(B) during receipt of benefits under the Affiliate's disability
income plan, if any, and(B) during receipt of benefits under the
Affiliate's disability income plan, if any, and
(C) absence for military service, but only to the extent, if
any, required under applicable federal and state statutes and only if
the Employee applies for reemployment within such time as he has
reemployment rights under such statutes.(C) absence for military
service, but only to the extent, if any, required under applicable
federal and state statutes and only if the Employee applies for
reemployment within such time as he has reemployment rights under such
statutes.
5
(ii) Solely for purposes of determining whether a Year of Break in
Service has occurred for participation and vesting purposes, hours while
the Employee is absent from work for maternity or paternity reasons. For
purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence:(ii) Solely for purposes of determining whether a
Year of Break in Service has occurred for participation and vesting
purposes, hours while the Employee is absent from work for maternity or
paternity reasons. For purposes of this paragraph, an absence from work
for maternity or paternity reasons means an absence:
(A) by reason of the pregnancy of the Employee,(A) by reason of
the pregnancy of the Employee,
(B) by reason of a birth of a child of the Employee,(B) by
reason of a birth of a child of the Employee,
(C) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or(C) by
reason of the placement of a child with the Employee in connection
with the adoption of such child by such Employee, or
(D) for purposes of caring for such child for a period beginning
immediately following such birth or placement.(D) for purposes of
caring for such child for a period beginning immediately following
such birth or placement.
An Employee shall receive credit under this paragraph for the hours which would
otherwise have been credited to the Employee but for the absence, or in any case
in which these hours cannot be determined, eight Hours of Service per day of the
absence. The Hours of Service credited under this paragraph shall be credited
in the twelve consecutive calendar month computation period in which the absence
begins, if this crediting is necessary to prevent a Year of Break in Service in
that period or, in all other cases, in the following 12 consecutive calendar
month computation period.
In computing an Employee's Hours of Service when a record of the Employee's
actual Hours of Service is not available, an Employee shall be credited with 10
Hours of Service for each day of employment for which the Employee would have
been required to be credited with one Hour of Service.
(u) Investment Funds shall mean one or more unsegregated funds established
pursuant to Section 9.02 and invested in securities, insurance contracts or
other property of such type and general characteristics as the Employer shall
determine. The Marquette Stock Fund is
6
an Investment Fund. (u) Investment Funds shall mean one or more unsegregated
funds established pursuant to Section 9.02 and invested in securities, insurance
contracts or other property of such type and general characteristics as the
Employer shall determine. The Marquette Stock Fund is an Investment Fund.
(v) Investment Manager shall mean any person, insurance company or
corporation appointed by the Employer to direct the investment and reinvestment
of all or any portion of the assets held by the Trustee under the Trust. (v)
Investment Manager shall mean any person, insurance company or corporation
appointed by the Employer to direct the investment and reinvestment of all or
any portion of the assets held by the Trustee under the Trust.
(w) Normal Retirement Date shall mean the date on which the
Participant attains age 65. (w) Normal Retirement Date shall mean the date on
which the Participant attains age 65.
(x) Participant shall mean an Employee who is eligible to make 401(k)
Contributions hereunder as provided in Sections 2.01 and 3.01. The term shall
include any individual who was a Participant in the Plan immediately prior to
the Effective Date. In no event, however, will an Employee who is a member of a
collective bargaining unit be a Participant unless the collective bargaining
agreement so provides. (x) Participant shall mean an Employee who is eligible to
make 401(k) Contributions hereunder as provided in Sections 2.01 and 3.01. The
term shall include any individual who was a Participant in the Plan immediately
prior to the Effective Date. In no event, however, will an Employee who is a
member of a collective bargaining unit be a Participant unless the collective
bargaining agreement so provides.
(y) Plan shall mean the Marquette Medical Systems, Inc. Profit Sharing and
401(k) Plan as set forth herein and as the same may be amended from time to
time. (y) Plan shall mean the Marquette Medical Systems, Inc. Profit Sharing and
401(k) Plan as set forth herein and as the same may be amended from time to
time.
(z) Plan Year shall mean each 12 month period ending April 30. (z) Plan
Year shall mean each 12 month period ending April 30.
(aa) Profit Sharing Contributions shall mean amounts contributed by
the Employer pursuant to Section 3.03. (aa) Profit Sharing Contributions shall
mean amounts contributed by the Employer pursuant to Section 3.03.
(bb) Severance from Service shall mean the date of an Employee's death
or other termination of employment with the Employers and Affiliates. (bb)
Severance from Service shall mean the date of an Employee's death or other
termination of employment with the Employers and Affiliates.
7
(cc) Trust Fund shall mean the property which shall be held from time to
time by the Trustee in trust under the terms of this Agreement.(cc) Trust Fund
shall mean the property which shall be held from time to time by the Trustee in
trust under the terms of this Agreement.
(dd) Trustee shall mean Norwest Bank, N.A., or any successor or
successors thereto designated pursuant to Section 9.01.(dd) Trustee shall mean
Norwest Bank, N.A., or any successor or successors thereto designated pursuant
to Section 9.01.
(ee) Valuation Date shall mean each day of the year, or such other
periods, not less frequent than annual, which the Company designates.(ee)
Valuation Date shall mean each day of the year, or such other periods, not less
frequent than annual, which the Company designates.
(ff) Vesting Service shall mean service with an Affiliate that is counted
in determining the Participant's vested and nonforfeitable interest under the
Plan, as determined under Section 5.01.(ff) Vesting Service shall mean service
with an Affiliate that is counted in determining the Participant's vested and
nonforfeitable interest under the Plan, as determined under Section 5.01.
(gg) Year of Break in Service shall mean a Plan Year, during which the
Employee is not employed with the Employer or an Affiliate for at least 501
Hours of Service.(gg) Year of Break in Service shall mean a Plan Year, during
which the Employee is not employed with the Employer or an Affiliate for at
least 501 Hours of Service.
(hh) Years of Service shall mean the total Plan Years during which an
individual completed at least 1,000 Hours of Service for an Employer or
Affiliate.(hh) Years of Service shall mean the total Plan Years during which an
individual completed at least 1,000 Hours of Service for an Employer or
Affiliate.
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.
(b) The Plan is intended to be a qualified profit-sharing plan with a
qualified cash or deferred arrangement meeting the requirements of Code Sections
401(a) and (k). The Plan shall
8
be interpreted so as to comply with the applicable requirements of ERISA and the
Code, 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 this Agreement and/or the Plan shall be held illegal or invalid for
any reason, such illegality or invalidity shall not affect the remaining
provisions of this Agreement and/or the Plan, and this Agreement and/or the Plan
shall be construed and enforced as if said illegal or invalid provisions had
never been included herein. As provided in Section 8.02, the Company shall have
the ultimate discretionary authority to interpret the terms of the Plan.(b) The
Plan is requirements of ERISA and the Code, 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 this Agreement and/or the
Plan shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of this Agreement and/or
the Plan, and this Agreement and/or the Plan shall be construed and enforced as
if said illegal or invalid provisions had never been included herein. As
provided in Section 8.02, the Company shall have the ultimate discretionary
authority to interpret the terms of the Plan.
9
ARTICLE II.ARTICLE II.
ELIGIBILITY AND PARTICIPATION
Section 2.01.Eligibility.
------------
An Employee shall be eligible to participate in the Plan on the May 1, August
1, November 1 or February 1 next following the date he becomes an Employee and
is regularly scheduled to work 20 or more hours per week. Employees who are not
regularly scheduled to work 20 or more hours per week will be eligible to
participate as of the May 1, August 1, November 1 or February 1 following an
eligibility period in which the Employee completes 1,000 or more Hours of
Service. The first eligibility period begins with an individuals date of hire by
an Affiliate. If 1,000 Hours of Service are not completed during that period,
subsequent periods are each Plan Year starting with the Plan Year after hire.
Section 2.02. Status of Leased Employees. A person who is a leased
------------
employee within the meaning of Code Section 414(n) or (o) shall not be eligible
to participate in the Plan, but in the event such a person was participating or
subsequently becomes eligible to participate herein, credit shall be given for
the person's service as a leased employee of any Affiliate toward completion of
the Plan's eligibility and vesting requirements.
10
ARTICLE III.
CONTRIBUTIONS
Section 3.01. 401(k) Contributions.
------------
(a) Subject to the limitations described in Section 3.05, any Employee
who is eligible to participate in the Plan may elect to have the Employer
contribute any whole percentage of his Compensation, to a maximum of 12%, as
401(k) Contributions, in lieu of paying such amounts as current cash
compensation. Such elections shall be effective as of the first day of the
payroll period following the day such elections are received, subject to any
uniform cut-off date established by the Administrator to permit processing of
the election. The maximum 401(k) Contribution hereunder for any Participant in
any calendar year shall be $10,000 (adjusted for cost-of-living increases
pursuant to Code Section 402(g)(5)). From time to time, but not less frequently
than monthly, the Employer shall remit Participants' 401(k) Contributions to the
Trustee. The Account of each Participant shall be credited with the amounts of
his contributions as such amounts are received by the Trustee.
11
(b) A Participant may elect to change the rate of his 401(k)
Contributions, including a complete suspension, effective as of the payroll
period following receipt of the election on or before any cut-off date
established by the Company to permit processing of elections.(b) A Participant
may elect to change the rate of his 401(k) Contributions, including a complete
suspension, effective as of the payroll period following receipt of the election
on or before any cut-off date established by the Company to permit processing of
elections.
(c) The Company shall, from time to time, establish a maximum deferred
amount respecting Participant 401(k) Contributions. Such maximum deferred amount
may vary during each payroll period and for each Participant. If a Participant
shall designate any amount or rate of 401(k) Contributions in excess of the
applicable maximum deferred amount established for his 401(k) Contributions,
such designation shall not be invalid, but shall be effective to designate a
rate of 401(k) Contributions equal to the applicable maximum deferred amount.
Without limiting the generality of the foregoing, the average rate, expressed as
a percentage of compensation as defined in Code Section 414(s), by Participants
who are Highly Compensated Employees shall not exceed a rate equal to the
average rate of 401(k) contributions for the preceding Plan Year by all
Participants who were not Highly Compensated Employees in that Plan Year,
multiplied by the greater of:(c) The Company shall, from time to time, establish
a maximum deferred amount respecting Participant 401(k) Contributions. Such
maximum deferred amount may vary during each payroll period and for each
Participant. If a Participant shall designate any amount or rate of 401(k)
Contributions in excess of the applicable maximum deferred amount established
for his 401(k) Contributions, such designation shall not be invalid, but shall
be effective to designate a rate of 401(k) Contributions equal to the applicable
maximum deferred amount. Without limiting the generality of the foregoing, the
average rate, expressed as a percentage of compensation as defined in Code
Section 414(s), by Participants who are Highly Compensated Employees shall not
exceed a rate equal to the average rate of 401(k) contributions for the
preceding Plan Year by all Participants who were not Highly Compensated
Employees in that Plan Year, multiplied by the greater of:
(i) 1.25 times such average rate; or(i) 1.25 times such average rate;
or
(ii) the lesser of (A) 2.0 times such average rate or (B) such average
rate plus 2%, subject to such other applicable limit as may be prescribed by the
Secretary of the Treasury to prevent the multiple use of this alternative
limitation.(ii) the lesser of (A) 2.0 times such average rate or (B) such
average rate plus 2%, subject to such other applicable limit as may be
prescribed by the Secretary of the Treasury to prevent the multiple use of this
alternative limitation.
12
(d) In order to ensure the favorable tax treatment of 401(k)
Contributions hereunder pursuant to Code Section 401(k) or to ensure compliance
with Code Section 402(g) or 415, the Company in its discretion may prospectively
decrease the rate of 401(k) Contributions of any Participant at any time and may
direct the Trustee to refund 401(k) Contributions to any Participant. Any excess
contributions, determined (i) after use of qualified nonelective contributions
as helpful in the actual deferral percentage test, and (ii) by leveling the
highest contribution amounts until the test is satisfied, shall be distributed
with applicable income. In addition, the Employer Matching Contributions shall
be forfeited with applicable income, to the extent such Employer Matching
Contributions are attributable to excess contributions and excess deferrals. For
purposes of this subsection, applicable income means income for the Plan Year to
which the excess contributions and deferrals relate. The amount of a required
distribution of excess contributions shall be reduced in whole or in part by a
prior distribution of excess deferrals for the applicable period and vice versa.
Such distributions shall be no later than the Plan Year following the year the
excess contributions and excess deferrals were made, and the amount of excess
contributions shall be determined based on the respective portions attributable
to each Highly Compensated Employee. Notwithstanding the above, nonelective
contributions may be used in the actual deferral percentage test as qualified
nonelective contributions only if such contributions are fully vested when made
and subject to the distribution restrictions applicable to 401(k) Contributions
under this Plan.(d) In order to ensure the favorable tax treatment of 401(k)
Contributions hereunder pursuant to Code Section 401(k) or to ensure compliance
with Code Section 402(g) or 415, the Company in its discretion may prospectively
decrease the rate of 401(k) Contributions of any Participant at any time and may
direct the Trustee to refund 401(k) Contributions to any Participant. Any excess
contributions, determined (i) after use of qualified nonelective contributions
as helpful in the actual deferral percentage test, and (ii) by leveling the
highest contribution amounts until the test is satisfied, shall be distributed
with applicable income. In addition, the Employer Matching Contributions shall
be forfeited with applicable income, to the extent such Employer Matching
Contributions are attributable to excess contributions and excess deferrals. For
purposes of this subsection, applicable income means income for the Plan Year to
which the excess contributions and deferrals relate. The amount of a required
distribution of excess contributions shall be reduced in whole or in part by a
prior distribution of excess deferrals for the applicable period and vice versa.
Such distributions shall be no later than the Plan Year following the year the
excess contributions and excess deferrals were made, and the amount of excess
contributions shall be determined based on the respective portions attributable
to each Highly Compensated Employee. Notwithstanding the above, nonelective
contributions may be used in the actual deferral percentage test as qualified
nonelective contributions only if such contributions are fully vested when made
and subject to the distribution restrictions applicable to 401(k) Contributions
under this Plan.
13
(e) If a Participant gives timely notice to the Company that the total
of his elective deferrals (within the meaning of Code Section 402(g)(3)) for his
taxable year exceeded the limit described in such Code Section for his taxable
year and of the amount of such excess attributable to the Plan, the Company may
direct that such excess, together with applicable income, shall be distributed
to the Participant on or before the first April 15 following the end of the
Participant's taxable year. In the event that a Participant has excess deferrals
for his taxable year calculated by taking into account only elective deferrals
under this Plan and other plans of the Employer, such Participant will be deemed
to have notified the Company of such excess deferrals and the Company shall
direct that such excess, together with applicable income, shall be distributed
to the Participant on or before the first April 15 following the end of the
Participant's taxable year. In either event, the Employer Matching Contributions
shall be forfeited with applicable income, to the extent such Employer Matching
Contributions are attributable to excess deferrals. For purposes of this
subsection, applicable income shall mean any income for the Plan Year to which
the excess deferrals relate.(e) If a Participant gives timely notice to the
Company that the total of his elective deferrals (within the meaning of Code
Section 402(g)(3)) for his taxable year exceeded the limit described in such
Code Section for his taxable year and of the amount of such excess attributable
to the Plan, the Company may direct that such excess, together with applicable
income, shall be distributed to the Participant on or before the first April 15
following the end of the Participant's taxable year. In the event that a
Participant has excess deferrals for his taxable year calculated by taking into
account only elective deferrals under this Plan and other plans of the Employer,
such Participant will be deemed to have notified the Company of such excess
deferrals and the Company shall direct that such excess, together with
applicable income, shall be distributed to the Participant on or before the
first April 15 following the end of the Participant's taxable year. In either
event, the Employer Matching Contributions shall be forfeited with applicable
income, to the extent such Employer Matching Contributions are attributable to
excess deferrals. For purposes of this subsection, applicable income shall mean
any income for the Plan Year to which the excess deferrals relate.
Section 3.02. Employer Matching Contributions.
------------
(a) For each Plan Year, the Account of each Participant who is eligible
to receive an Employer Matching Contribution shall be credited with Employer
Matching Contributions. The Board may, in its sole discretion, change the rate
of Employer Matching Contributions for any Plan Year. Employer Matching
Contributions shall be made on or before the due date (including extensions) of
the Employer's federal income tax return for the Plan Year.
In the absence of Board action to the contrary, Employer Matching
Contributions will be the percentage of Employee 401(k) Contributions shown
below, but not more than the greater of the dollar amount or percentage of
Compensation indicated:
14
Plan Year Ending Percentage of Percentage of
401(k) Contributions Compensation Dollar Amount
April 30, 1998 35% 2.1% $500
April 30, 1999 40% 2.4% $500
April 30, 2000 45% 2.7% $500
April 30, 2001 50% 3.0% $500
and thereafter
(b) All Participants who elect to make 401(k) Contributions for a Plan
Year shall be eligible to share in Employer Matching Contributions for such Plan
Year.(b) All Participants who elect to make 401(k) Contributions for a Plan
Year shall be eligible to share in Employer Matching Contributions for such Plan
Year.
(c) Notwithstanding subsection 3.02(a) above, the average rate,
expressed as a percentage of Compensation, of the sum of Employer Matching
Contributions and 401(k) Contributions for any Plan Year for Participants who
are Highly Compensated Employees for such Plan Year shall not exceed a rate
equal to the average rate of Employer Matching Contributions for the preceding
Plan Year by all Participants who were not Highly Compensated Employees in that
Plan Year multiplied by the greater of:(c) Notwithstanding subsection 3.02(a)
above, the average rate, expressed as a percentage of Compensation, of the sum
of Employer Matching Contributions and 401(k) Contributions for any Plan Year
for Participants who are Highly Compensated Employees for such Plan Year shall
not exceed a rate equal to the average rate of Employer Matching Contributions
for the preceding Plan Year by all Participants who were not Highly Compensated
Employees in that Plan Year multiplied by the greater of:
(i) 1.25 times such average rate; or(i) 1.25 times such average
rate; or
(ii) the lesser of (A) 2.0 times such average rate or (B) such
average rate plus 2%, subject to such other applicable limit as may be
prescribed by the Secretary of the Treasury to prevent the multiple use of
this alternative limitation.(ii) the lesser of (A) 2.0 times such average
rate or (B) such average rate plus 2%, subject to such other applicable
limit as may be prescribed by the Secretary of the Treasury to prevent the
multiple use of this alternative limitation.
In order to ensure compliance with Code Section 401(m) or 415, any excess
aggregate contributions, determined (i) after use of qualified nonelective
contributions as helpful in the
15
actual contribution percentage test, and (ii) by leveling the highest
contribution amounts until the test is satisfied, shall be distributed, to the
extent vested, and forfeited, to the extent forfeitable, with applicable income.
For purposes of this subsection, applicable income means income for the Plan
Year to which the excess aggregate contributions relate. Such distributions
shall be made during the Plan Year following the year the excess aggregate
contributions were made, and the amount shall be determined based on the
respective portions attributable to each Highly Compensated Employee.
Notwithstanding the above, nonelective contributions may be used in the actual
contribution percentage test as qualified nonelective contributions only if such
contributions are fully vested when made and subject to the distribution
restrictions applicable to 401(k) Contributions under this Plan.
Section 3.03. Profit Sharing Contributions.
------------
(a) The Employer may also make such Profit Sharing Contributions for
each Plan Year as may be determined by the Board, in its sole discretion,
provided that Profit Sharing Contributions for any Plan Year shall not exceed
(i) the amount that can be allocated to Participants' Accounts hereunder (after
giving effect to the limitations described in Section 3.04), or (ii) the maximum
amount deductible for federal income tax purposes for such Plan Year. The
Employer may contribute in cash or in kind and may designate all or any portion
of the Profit Sharing Contribution for investment in the Marquette Stock
Account. Subject to the limitations described in Section 3.04, Profit Sharing
Contributions and forfeitures for any Plan Year shall be allocated to the Profit
Sharing Accounts of those Participants who, pursuant to subsection 3.03(b), are
eligible to share in such Contributions, in the same proportion that the
Certified Earnings paid by the Employer to such Participant for the Plan Year
bears to the total Certified Earnings paid by the Employer to all such
Participants for such Plan Year.
(b) The Participants eligible to share in Profit Sharing Contributions
for any Plan Year shall be those Participants who (b) The Participants
eligible to share in Profit Sharing Contributions for any Plan Year shall be
those Participants who
(i) were first employed by an Employer or Affiliate at some time
before the February 1 preceding the Plan Year and who are employed by an
Employer on the last day of the Plan Year; and (i) were first employed by
an Employer or Affiliate at some time before the February 1 preceding the
Plan Year and who are employed by an Employer on the last day of the Plan
Year; and
(ii) have completed at least 1,000 Hours of Service during the Plan
Year.(ii)have completed at least 1,000 Hours of Service during the Plan
Year.
16
Section 3.04. Maximum Annual Additions.
------------
(a) Notwithstanding the other provisions of this Plan, annual additions
to the account of any Participant for a Plan Year (also the limitation year)
shall not exceed the lesser of:
(i) $30,000 as adjusted pursuant to Section 415(c)(1)(A) and
(d)(1); or(i)$30,000 as adjusted pursuant to Section 415(c)(1)(A) and
(d)(1); or
(ii) 25% of the Participant's total compensation (as defined in
subsection (c) of Section 415 of the Code) from the Employer for such Plan
Year.(ii) 25% of the Participant's total compensation (as defined in
subsection (c) of Section 415 of the Code) from the Employer for such Plan
Year.
(b) The term annual additions as used in this Section shall mean the sum
for the Plan Year of (i) Employer Contributions, (ii) forfeitures, (iii) 401(k)
Contributions and (iv) amounts described in Sections 415(c)(2) and 419A(d)(2) of
the Code, credited to the Participant's Account.(b) The term annual additions
as used in this Section shall mean the sum for the Plan Year of (i) Employer
Contributions, (ii) forfeitures, (iii) 401(k) Contributions and (iv) amounts
described in Sections 415(c)(2) and 419A(d)(2) of the Code, credited to the
Participant's Account.
17
(c) If a Participant also participates in another qualified defined
contribution plan maintained by the Employer, then the sum of his annual
additions under this Plan and under such other plan shall not exceed the
limitations described in subsection (a) of this Section. Further, if a
Participant also participates in a defined benefit pension plan maintained by
the Employer, the sum of (1) and (2) below may not exceed 1.0:(c) If a
Participant also participates in another qualified defined contribution plan
maintained by the Employer, then the sum of his annual additions under this Plan
and under such other plan shall not exceed the limitations described in
subsection (a) of this Section. Further, if a Participant also participates in
a defined benefit pension plan maintained by the Employer, the sum of (1) and
(2) below may not exceed 1.0:
(i) the sum of the projected annual benefit of the Participant
under all defined benefit pension plans of the Employer determined as of
the close of the Plan Year, divided by the lesser of (i) the product of
1.25 multiplied by the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such year, or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Section
415(b)(1)(B) of the Internal Revenue Code with respect to such Participant
for such year; and(i) the sum of the projected annual benefit of the
Participant under all defined benefit pension plans of the Employer
determined as of the close of the Plan Year, divided by the lesser of (i)
the product of 1.25 multiplied by the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for such year, or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Section
415(b)(1)(B) of the Internal Revenue Code with respect to such Participant
for such year; and
(ii) the sum of the annual additions to the Participant's account
under all defined contribution plans of the Employer as of the close of the
Plan Year and for all prior Plan Years, divided by the sum of the lesser of
(i) or (ii) for such year and for each prior year of service with the
Employer (regardless of whether any such defined contribution plan was in
existence during those years), where (i) is the product of 1.25 multiplied
by the dollar limitation in effect under Section 415(c)(1)(A) of the code
for such year, and (ii) is the product of 1.4 multiplied by the amount
which may be taken into account under Section 415(c)(1)(B) of the Code (or
Section 415(c)(7) or (8) of such Code, if applicable) with respect to such
individual under such plan for such year; provided, however, that the
Company may elect that the amount taken into account for each Participant
for all years ending before January 1, 1983, under (i) and (ii) above shall
be determined pursuant to the special transition rule provided in such
Section 415(e)(6) of the Code.(ii) the sum of the annual additions to the
Participant's account under all defined contribution plans of the Employer
as of the close of the Plan Year and for all prior Plan Years, divided by
the sum of the lesser of (i) or (ii) for such year and for each prior year
of service with the Employer (regardless of whether any such defined
18
contribution plan was in existence during those years), where (i) is the
product of 1.25 multiplied by the dollar limitation in effect under Section
415(c)(1)(A) of the code for such year, and (ii) is the product of 1.4
multiplied by the amount which may be taken into account under Section
415(c)(1)(B) of the Code (or Section 415(c)(7) or (8) of such Code, if
applicable) with respect to such individual under such plan for such year;
provided, however, that the Company may elect that the amount taken into
account for each Participant for all years ending before January 1, 1983,
under (i) and (ii) above shall be determined pursuant to the special
transition rule provided in such Section 415(e)(6) of the Code.
(d) In the event that, after the application of all limitations and
reductions in the Participant's benefits under any defined benefit pension plan
and any limitations imposed by the Company pursuant to Sections 3.01(d), 3.01(e)
and 3.02(c), the rules set forth in subsection (a) or (b) of this Section would
otherwise be violated with respect to any Participant, then such Participant's
annual additions under this Plan for the Plan Year shall be automatically
reduced as follows:(d) In the event that, after the application of all
limitations and reductions in the Participant's benefits under any defined
benefit pension plan and any limitations imposed by the Company pursuant to
Sections 3.01(d), 3.01(e) and 3.02(c), the rules set forth in subsection (a) or
(b) of this Section would otherwise be violated with respect to any Participant,
then such Participant's annual additions under this Plan for the Plan Year shall
be automatically reduced as follows:
(i) The amount of Profit Sharing Contributions allocated to his
Profit Sharing Account pursuant to Section 3.03 shall be reduced and
allocated pursuant to Section 3.03 to the Profit Sharing Accounts of other
Participants eligible to share in Profit Sharing Contributions for the Plan
Year to the extent such additional allocations do not result in violation
of this Section.(i) The amount of Profit Sharing Contributions allocated
to his Profit Sharing Account pursuant to Section 3.03 shall be reduced and
allocated pursuant to Section 3.03 to the Profit Sharing Accounts of other
Participants eligible to share in Profit Sharing Contributions for the Plan
Year to the extent such additional allocations do not result in violation
of this Section.
(ii) In the event that the application of (i) above is not
sufficient to eliminate the violation, there shall be deducted from the
Participant's Accounts such portion of Employer Matching Contributions for
the Plan Year as shall be necessary to eliminate the violation. Employer
Matching Contributions deducted from a Participant's Accounts shall be
forfeited and shall be applied as provided in Section 5.05.(ii) In the
event that the application of (i) above is not sufficient to eliminate the
violation, there shall be deducted from the Participant's Accounts such
portion of Employer Matching
19
Contributions for the Plan Year as shall be necessary to eliminate the
violation. Employer Matching Contributions deducted from a Participant's
Accounts shall be forfeited and shall be applied as provided in Section
5.05.
Notwithstanding the foregoing, if as a result of the allocation of forfeitures,
an error in estimating a Participant's Compensation for the Plan Year, an error
in determining the amount of 401(k) Contributions that may be made with respect
to any Participant under the limits of Code Section 415, or such other facts and
circumstances as may be prescribed by the Commissioner of Internal Revenue, the
Before-Tax Deposits or After-Tax Deposits or Employer Contributions, or both,
actually allocated to a Participant exceed the limits described in this Section,
such excess 401(k) Contributions shall be returned to the Participant and/or
such excess Employer Contributions shall be used to reduce Employer
Contributions under the Plan for the next Plan Year and succeeding Plan Years,
as necessary, for such Participant. To the extent such excess Employer
Contributions are not so reduced, the Participant shall not be entitled to
receive such excess. If a Participant has such an excess annual addition
consisting of Employer Contributions but is not covered by the Plan as of the
end of the Plan Year for which the excess arose or as of any succeeding Plan
Year prior to the Plan Year in which such excess is fully eliminated, then such
excess shall be held in a suspense account for that Plan Year and allocated or
reallocated in the next and succeeding Plan Years to all Participants then
entitled to share in Employer Matching Contributions or Profit Sharing
Contributions, subject, however, to the limitations of this Section. Amounts
allocated to this suspense account shall not be credited with income or loss.
If an amount remains in this suspense account at the time the Plan terminates
and all Plan assets have been distributed to Participants, then such amount
shall be returned to the Employer.
(e) The Company shall have broad authority to coordinate with the plan
administrator of other plans maintained by the Employer in relation to the
limits imposed by this Section, and to implement reductions of allocations and
reallocations necessary to maintain all of such plans in accordance with the
requirements of applicable law.(e) The Company shall have broad authority to
coordinate with the plan administrator of other plans maintained by the Employer
in relation to the limits imposed by this Section, and to implement reductions
of allocations and reallocations necessary to maintain all of such plans in
accordance with the requirements of applicable law.
Section 3.05. Rollovers.
------------
An Employee shall be entitled to rollover to the Plan amounts derived from a
qualifying distribution from another tax-qualified pension, profit sharing or
stock bonus plan. No such rollover shall be accepted unless it is paid over in
cash or check to the Trustee directly from the other plan or within 60 days
after it is received by the Employee. No amount shall be accepted
20
for rollover unless the Employee certifies in writing that (i) the plan was a
tax-qualified retirement plan at the time of the distribution, and (ii) the
distribution constituted an eligible rollover distribution from such other plan
within the meaning of Code Section 402(c)(4).
21
ARTICLE IV.
PARTICIPANT ACCOUNTS;PARTICIPANT ACCOUNTS;
INVESTMENT OF ACCOUNTS
Section 4.01. Establishment of Accounts. Each Participant shall have one
-------------
or more Accounts established for him. Such Accounts shall consist of:Section
-------
4.01. Establishment of Accounts. Each Participant shall have one or more
- -----
Accounts established for him. Such Accounts shall consist of:
(a) a 401(k) Contributions Account; (a) a 401(k) Contributions Account;
(b) a Matching Contributions Account; (b) a Matching Contributions Account;
(c) a Profit Sharing Account; (c) a Profit Sharing Account;
(d) an Old ESOT Account; and(d) an Old ESOT Account; and
(e) a Rollover Account.(e) a Rollover Account.
To the extent necessary or appropriate to provide for the proper
administration of the Plan, the Accounts of Participants shall include separate
balances for interests invested in each Investment Fund, for interests derived
from different sources of contributions, and for such other purposes as the
Company shall determine. As soon as practicable after each Valuation Date, each
Participant shall be provided with a statement reflecting the status of his
Accounts.
Section 4.02. Investment of Accounts. Section 4.02. Investment of
------------ ------------
Accounts.
(a) The Company shall permit each Participant to invest his Accounts in
one or more of the Investment Funds available for such purpose. A Participant
who makes an election under this Section 4.02 shall elect to have all or any
portion (expressed as a whole percentage) of his Accounts invested in any one or
more of the Investment Funds then available. Further, any such election may be
changed as of any Valuation Date, but shall remain in effect for successive
periods unless changed by the Participant.(a) The Company shall permit each
Participant to invest his Accounts in one or more of the Investment Funds
available for such purpose. A Participant who makes an election under this
Section 4.02 shall elect to have all or any portion (expressed as a whole
percentage) of his Accounts invested in any one or more of the Investment Funds
then available. Further, any such election may be changed as of any Valuation
Date, but shall remain in effect for successive periods unless changed by the
Participant.
22
(b) A Participant may elect to reallocate his Accounts among the
Investment Funds as of any Valuation Date, except as limited by paragraph (d).
A Participant who elects to make such a reallocation shall elect to have all or
any portion (expressed as a whole percentage) of his Accounts invested in any
one or more Investment Funds transferred to one or more other Investment Funds
(in any whole percentage of the amounts being transferred).(b) A Participant
may elect to reallocate his Accounts among the Investment Funds as of any
Valuation Date, except as limited by paragraph (d). A Participant who elects to
make such a reallocation shall elect to have all or any portion (expressed as a
whole percentage) of his Accounts invested in any one or more Investment Funds
transferred to one or more other Investment Funds (in any whole percentage of
the amounts being transferred).
(c) In the event that a Participant shall fail to direct the investment of
his Accounts subject to his direction or fail to replace any directions which
may have been suspended or revoked, then such Accounts shall be invested on the
Participant's behalf in an Investment Fund designated by the Company on a
uniform and nondiscriminatory basis for all similarly situated Participants.
(c) In the event that a Participant shall fail to direct the investment of his
Accounts subject to his direction or fail to replace any directions which may
have been suspended or revoked, then such Accounts shall be invested on the
Participant's behalf in an Investment Fund designated by the Company on a
uniform and nondiscriminatory basis for all similarly situated Participants.
(d) A Participant may direct investment out of the Marquette Stock Fund
into other Investment Funds to the extent of up to 7% of the Participants
Account in the Fund (or stock valuing up to $2,500, if greater) within any 90
day period. In addition, the total of Marquette Stock liquidated by the Trust
in any fiscal quarter may not exceed 1% of the total of such stock outstanding
at the time. In the event liquidation requests exceed this limit at any time,
requests then outstanding will be honored, pro rata, until the next fiscal
quarter and will be the first such requests honored in that quarter.(d) A
Participant may direct investment out of the Marquette Stock Fund into other
Investment Funds to the extent of up to 7% of the Participants Account in the
Fund (or stock valuing up to $2,500, if greater) within any 90 day period. In
addition, the total of Marquette Stock liquidated by the Trust in any fiscal
quarter may not exceed 1% of the total of such stock outstanding at the time.
In the event liquidation requests exceed this limit at any time, requests then
outstanding will be honored, pro rata, until the next fiscal quarter and will be
the first such requests honored in that quarter.
23
Section 4.03. Allocations to Matching Contributions and Profit Sharing
-------------
Accounts.
A Participant's Matching Contributions Account shall be credited with his
allocable share of Matching Contributions promptly after receipt by the Trustee.
The Profit Sharing Accounts maintained for each eligible Participant shall be
credited annually, as of the last day of each Plan Year, with his allocable
share of Employer Contributions and forfeitures for such Plan Year.
Section 4.04. Valuation of Accounts.
------------
As of each Valuation Date, the Accounts of each Participant shall be adjusted to
reflect the effect of income, collected and accrued, realized and unrealized
gains and losses, expenses and all other transactions during the period
preceding the Valuation Date with respect to the applicable Investment Funds.
24
ARTICLE V.
VESTING AND FORFEITURES
Section 5.01. Calculation of Vesting Service.
-------------
A Participant's eligibility for benefits from his Profit Sharing Accounts shall
be determined by his Vesting Service. Subject to the Break in Service
provisions of Section 5.02, an Employee shall be credited with one year of
Vesting Service for each Plan Year in which he completes 1,000 or more Hours of
Service.
Section 5.02. Effect of Breaks in Service.
-------------
(a) The Vesting Service of a Participant who at the time he incurs a Break
in Service has a vested right to any benefits in his Profit Sharing Accounts
hereunder shall not be subject to cancellation. In any other case, the Vesting
Service of a Participant who incurs a Break in Service shall be canceled and
disregarded for all purposes of the Plan.
(b) In the event that a former Participant is re-employed by the Employer,
such former Participant shall be eligible for reparticipation in the Plan
immediately upon his rehire.(b) In the event that a former Participant is re-
employed by the Employer, such former Participant shall be eligible for
reparticipation in the Plan immediately upon his rehire.
Section 5.03. Vesting in 401(k) Contributions, Matching Contributions and
------------
Rollover Accounts.
A Participant's interests in his old ESOT, 401(k) Contributions, Matching
Contributions and Rollover Accounts shall be fully vested and nonforfeitable at
all times.
Section 5.04. Vesting in Profit Sharing Accounts.
------------
(a) A Participant's interest in his Profit Sharing Accounts shall be fully
vested and nonforfeitable upon the occurrence of any of the following events
prior to his termination of employment:
(i) the Participant's attainment of age 65;(i) the Participant's
attainment of age 65;
(ii) death; or(ii) death; or
25
(iii) Disability (iii) Disability
26
(b) Except as provided in subsection (a), a Participant's interest in Profit
Sharing Accounts shall be vested and nonforfeitable to the extent determined
from the following table:
Years of
Vesting Service Vested Percentage
0 0%
1 0%
2 25%
3 50%
4 75%
5 or more 100%
Section 5.05. Forfeitures.
- ------------
(a) Following a Participant's termination of employment, the balances in
the Participant's Accounts which are not vested shall be maintained in the
Participant's Accounts until the earlier of the date on which the Participant
(i) incurs a Break in Service or (ii) receives a distribution of the vested
portion of all of his Accounts. If either of the events described above occurs,
such amounts shall be forfeited and shall be allocated to the Profit Sharing
Accounts of those Participants eligible to share in Profit Sharing Contributions
for the Plan Year in which the forfeiture occurred, as provided in Section 3.03.
A Participant whose entire vested interest in his Accounts has been distributed
or who has no vested interest shall be deemed cashed out of the Plan.
(b) If a Participant whose Accounts have been forfeited in whole or in
part returns to employment before incurring a Break in Service, and pays to the
Plan all amounts previously distributed within the earlier of five years from
the date of rehire or the date a Break in Service occurs then the amounts
forfeited pursuant to this Section shall be reinstated to the Participant's
Accounts, out of forfeitures for the Plan Year in which such reemployment
occurs, or, if such forfeitures are not sufficient, out of additional Employer
Contributions. The reinstated amount shall be the amount forfeited, unadjusted
for any earnings, gains and losses. (b) If a Participant whose Accounts have
been forfeited in whole or in part returns to employment before incurring a
Break in Service, and pays to the Plan all amounts previously distributed within
the earlier of five years from the date of rehire or the date a Break in Service
occurs then the amounts forfeited pursuant to this Section shall be reinstated
to the Participant's Accounts, out of forfeitures for the Plan Year in which
such reemployment occurs, or, if such forfeitures are not sufficient, out of
27
additional Employer Contributions. The reinstated amount shall be the amount
forfeited, unadjusted for any earnings, gains and losses.
(c) If a Participant whose Accounts have been forfeited in whole or in
part returns to employment after incurring a Break in Service, the forfeited
amounts shall not be reinstated. Such a Participant's Vesting Service shall be
determined pursuant to Section 5.02.(c) If a Participant whose Accounts have
been forfeited in whole or in part returns to employment after incurring a Break
in Service, the forfeited amounts shall not be reinstated. Such a Participant's
Vesting Service shall be determined pursuant to Section 5.02.
28
ARTICLE VI.ARTICLE VI.
DISTRIBUTION OF BENEFITS
Section 6.01. Distribution Upon Termination of Employment.
-------------
A Participant's vested and nonforfeitable interests in all of his Accounts shall
be distributable to the Participant upon his termination of employment from the
Employer and Affiliates for any reason. Distribution shall be made at the time
and in the manner specified in Sections 6.04 and 6.05.
Section 6.02. Death.
-------------
(a) Upon a Participant's death, whether before or after his termination of
employment and whether before or after commencement of payment of benefits, the
vested portion of the remaining amounts in all of his Accounts shall be payable
to the Participant's Beneficiary at the time and in the manner specified in
Sections 6.04 and 6.05.
(b) A Participant may designate any person, trust and/or other entity as
his Beneficiary. Any such designation shall be in writing and filed with the
Company on the form and in the manner prescribed by the Company, and may be
revoked or changed by the Participant at any time by a written instrument filed
with the Company prior to his death. Notwithstanding the foregoing, in the
event that the Participant has a spouse at the time of his death, such spouse
shall be the Participant's Beneficiary unless (i) such spouse has consented in
writing to the Participant's designation of a different Beneficiary, (ii) such
consent acknowledges the effect of such election and is witnessed by a plan
representative appointed by the Company or by a notary public, and (iii) the
Participant is survived by a Beneficiary designated as such as described above.
In the event the Participant is not married at the time of his death and is not
survived by a properly designated Beneficiary, the Participant's estate shall be
the Beneficiary.(b) A Participant may designate any person, trust and/or other
entity as his Beneficiary. Any such designation shall be in writing and filed
with the Company on the form and in the manner prescribed by the Company, and
may be revoked or changed by the Participant at any time by a written instrument
filed with the Company prior to his death. Notwithstanding the foregoing, in
the event that the Participant has a spouse at the time of his death, such
spouse shall be the Participant's Beneficiary unless (i) such spouse has
consented in writing to the Participant's designation of a different
Beneficiary, (ii) such consent acknowledges the effect of such election and is
witnessed by a plan representative appointed by the Company or by a notary
public, and (iii) the Participant is survived by a Beneficiary designated as
such as described above. In the
29
event the Participant is not married at the time of his death and is not
survived by a properly designated Beneficiary, the Participant's estate shall be
the Beneficiary.
Section 6.03. Time of Distributions. General.
------------
(a) A Participant's vested interest in his Account shall be distributed to
him after he has terminated employment. If the account is $5,000 or less,
distribution will occur within an administratively reasonable period following
termination of employment. If the value of the Participant's Account exceeds
$5,000, distribution shall be made as soon as practicable following any date
elected by the Participant.
(b) Required Distributions. Distribution of a Participant's Account shall
commence no later than 60 days after the latest of: (i) the close of the Plan
Year in which the Participant attains age 65 or (ii) the date the Participant
actually terminates employment with the Employer and Affiliates. Distribution
shall be completed not later than five years after the date of the Participant's
death, except as provided in Section 6.04. A 5% shareholder of an Employer must
begin to receive distribution no later than the April 1 following attainment of
age 70, even if still employed. (b) Required Distributions. Distribution of a
Participant's Account shall commence no later than 60 days after the latest of:
(i) the close of the Plan Year in which the Participant attains age 65 or (ii)
the date the Participant actually terminates employment with the Employer and
Affiliates. Distribution shall be completed not later than five years after the
date of the Participant's death, except as provided in Section 6.04. A 5%
shareholder of an Employer must begin to receive distribution no later than the
April 1 following attainment of age 70, even if still employed.
30
Section 6.04. Form of Distributions.
------------
(a) A Participant or Beneficiary will receive distribution of his Accounts
in the form of: (i) a lump sum, (ii) in a series of annual or more frequent
installments over a fixed period not exceeding the joint life expectancy of the
Participant and the Participants Beneficiary, (iii) a nonrefundable period
certain annuity, subject to the period limits of paragraph (ii) above.
In the event that any Participant whose benefits are immediately
distributable without his consent cannot be located upon reasonable attempts
made by the Company, the Company shall direct the Trustee to distribute such
benefits to a federally insured savings account opened in the name of such
Participant. A Participant or beneficiary may elect to take the portion of his
account that is attributable to whole shares of Employer Stock in the form of
Employer Stock.
(b) 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 Code 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.(b) 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 Code 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.
31
Section 6.05. Eligible Rollover Distributions.
-------------
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Company, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(a) Eligible rollover distribution means any distribution of all or any
portion of the balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).(a) Eligible rollover
distribution means any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
(b) Eligible retirement plan means an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.(b) Eligible retirement plan means an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account or
individual retirement annuity.
32
(c) 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.(c)
Distributee includes an employee or former employee. In addition, the
employee's or former employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former spouse.
(d) Direct rollover means a payment by the Plan to the eligible
retirement plan specified by the distributee. (d) Direct rollover means a
payment by the Plan to the eligible retirement plan specified by the
distributee.
33
ARTICLE VII.ARTICLE VII.
WITHDRAWALS AND LOANS WITHDRAWALS AND LOANS
Section 7.01. In-Service Withdrawals.
------------
A Participant shall be permitted to withdraw all or a portion of his vested
balances in his Accounts once in each Plan Year, provided the participant has
been a Participant for three or more years under this Plan or either Prior Plan.
Withdrawals will be subject to all of the following limits:
(a) The withdrawal is limited to 25% of the value of the vested portion of
the Old ESOT and Profit Sharing Accounts. Further, any Employer Contributions
or earnings allocated during the preceding two year period cannot be
withdrawn.(a) The withdrawal is limited to 25% of the value of the vested
portion of the Old ESOT and Profit Sharing Accounts. Further, any Employer
Contributions or earnings allocated during the preceding two year period cannot
be withdrawn.
(b) Any Participant loan balance must be fully satisfied out of the
withdrawal.(b) Any Participant loan balance must be fully satisfied out of the
withdrawal.
(c) Withdrawals will be distributed within an administratively reasonable
period following the request.(c) Withdrawals will be distributed within an
administratively reasonable period following the request.
(d) If aggregate withdrawals, distributions and investment changes for a
month would cause net sales by the Trust of more than 1% of the outstanding
common stock of the Company for the Plan Year quarter, withdrawals will be
prorated to meet the 1% limit. In ensuing months, requests will be honored on a
pro rata basis, consistent with the limit, on a month by month basis, honoring
the oldest months requests first.(d) If aggregate withdrawals, distributions
and investment changes for a month would cause net sales by the Trust of more
than 1% of the outstanding common stock of the Company for the Plan Year
quarter, withdrawals will be prorated to meet the 1% limit. In ensuing months,
requests will be honored on a pro rata basis, consistent with the limit, on a
month by month basis, honoring the oldest months requests first.
Section 7.02. Age 60 Withdrawal and Diversification Alternatives.
------------
A Participant who is both age 60 and has completed 5 or more Years of Service
may withdraw all or any portion of his Account and/or may direct the liquidation
of all or any portion of his Marquette Stock Account and may direct reinvestment
of such amounts in any other investment accounts available under the Plan.
34
Withdrawals from the Employer Stock Fund may, at the Participants election, be
made in cash or in kind.
Liquidation elections shall be subject to the rules in section 4.02 without
regarding to the 7% Account limitation.
Withdrawals will be distributed once per month. If the withdrawal request is
made by the 20/th/ of the month, distribution will occur shortly after the end
of the month. Withdrawals are, however, expressly subject to the rules of
section 7.01(b) and (d).
Section 7.03. Loans to Participants.Section 7.03. Loans to Participants.
------------- -------------
(a) Upon application, any Participant may elect to borrow from his Account.
The amount of any loan hereunder shall not be less than $2,000, nor more than
$50,000. A Participant may not have more than two loans outstanding at a time.
The aggregate principal amount of a loan, when added to the highest loan balance
in existence during the prior 12 month period, shall not exceed the amount or
portion of the Participant's total vested Account balances determined from the
following table:
Amount of Total Vested
Account Balances Maximum Loan
At least $4,000 but 50% of such balance
Less than $100,000
$100,000 or more $50,000
(b) A loan shall be considered an investment of the borrowing Participant's
Account, and, in accordance with Department of Labor Regulation '2550.408b-1,
interest shall be charged thereon at a rate that is commensurate with interest
rates charged on similar commercial loans, as determined by the Administrator
from time to time. Every loan applicant shall receive a clear statement of the
charges involved in each loan transaction. This statement shall include the
dollar amount and annual interest rate of the finance charge. Any such loan
shall be repaid by the Participant by means of payroll deduction. No loan shall
be for a period of more than five years. Except in the case of a Participant who
is a party in interest with respect to the Plan (within the meaning of ERISA
'3(14)), a Participant must be actively employed on the date a loan is made.(b)
A loan shall be considered an investment of the borrowing Participant's Account,
and, in accordance with Department of Labor Regulation '2550.408b-1, interest
shall be charged thereon at a rate that is commensurate with interest rates
charged on similar
35
commercial loans, as determined by the Administrator from time to time. Every
loan applicant shall receive a clear statement of the charges involved in each
loan transaction. This statement shall include the dollar amount and annual
interest rate of the finance charge. Any such loan shall be repaid by the
Participant by means of payroll deduction. No loan shall be for a period of more
than five years. Except in the case of a Participant who is a party in interest
with respect to the Plan (within the meaning of ERISA '3(14)), a Participant
must be actively employed on A loan shall be considered an investment of the
borrowing Participant's Account, the date a loan is made.
(c) Amounts loaned to a Participant pursuant to this Section shall not
share in allocations of investment fund earnings under Section 4.04, but shall
be treated as a segregated account for the sole benefit of the Participant,
which account shall serve as security for the loan repayment. In the event that
the Participant does not repay the loan in accordance with the terms and
conditions thereof, or fails to cure any default within a reasonable time after
receiving notice thereof, the Administrator may direct that the Participant's
segregated loan account shall be charged for the total amount of the loan or any
part thereof (including accrued interest) with such amount being treated as a
distribution of that portion of the Participant's Accounts; provided that such
direction shall not occur at a time or in a manner when such a distribution
would violate applicable provisions of the Code or ERISA. Loans shall be due in
full upon a Participants Severance from Service.(c) Amounts loaned to a
Participant pursuant to this Section shall not share in allocations of
investment fund earnings under Section 4.04, but shall be treated as a
segregated account for the sole benefit of the Participant, which account shall
serve as security for the loan repayment. In the event that the Participant
does not repay the loan in accordance with the terms and conditions thereof, or
fails to cure any default within a reasonable time after receiving notice
thereof, the Administrator may direct that the Participant's segregated loan
account shall be charged for the total amount of the loan or any part thereof
(including accrued interest) with such amount being treated as a distribution of
that portion of the Participant's Accounts; provided that such direction shall
not occur at a time or in a manner when such a distribution would violate
applicable provisions of the Code or ERISA. Loans shall be due in full upon a
Participants Severance from Service.
(d) Amounts borrowed pursuant to this Section shall be drawn from the
Participant's vested Account balances in the following order of priority:
Rollover Account, 401(k) Contributions Account, Employer Matching Contributions
Account and Profit Sharing Contributions Account. Principal payments shall be
restored to the various Accounts from which the loan was drawn in reverse order.
A Participant shall not be entitled to make any withdrawal hereunder without
first full withdrawal of Account balances then outstanding in the form of loans.
(d) Amounts borrowed pursuant to this Section shall be drawn from the
Participant's vested Account balances in the following order of priority:
Rollover Account, 401(k) Contributions Account, Employer Matching Contributions
Account and Profit Sharing
36
Contributions Account. Principal payments shall be restored to the various
Accounts from which the loan was drawn in reverse order. A Participant shall not
be entitled to make any withdrawal hereunder without first full withdrawal of
Account balances then outstanding in the form of loans.
(e) The Administrator may impose such rules, requirements or restrictions
relating to loans under this Section as it shall determine to be necessary or
appropriate, including, without limitation, requirements as to the execution of
loan documents and/or payroll deduction authorizations, and the assessment of
application and processing fees against the borrower's Accounts. The loan
program provided for in this Section shall be administered by the Administrator
in accordance with Section 408(b)(1) of ERISA.(e) The Administrator may impose
such rules, requirements or restrictions relating to loans under this Section as
it shall determine to be necessary or appropriate, including, without
limitation, requirements as to the execution of loan documents and/or payroll
deduction authorizations, and the assessment of application and processing fees
against the borrower's Accounts. The loan program provided for in this Section
shall be administered by the Administrator in accordance with Section 408(b)(1)
of ERISA.
Section 7.04. Time and Manner of Distribution.
------------
Distributions pursuant to this Article VII shall be made in a lump sum as soon
as administratively feasible, subject to Section 6.05, after the Company
approves the withdrawal or loan. If less than all of the balance in a
Participant's Account is to be withdrawn, the Trustee shall make all
distributions from the Investment Funds in which such Accounts are then
invested, in the order specified by the Company. The Marquette Stock Fund will
be the last subject to withdrawal.
37
ARTICLE VIII.
PLAN ADMINISTRATION
Section 8.01. Company Authority and Responsibility.
------------
The Company shall be the Administrator and Named Fiduciary of the Plan. The
Company shall be empowered and authorized to:
(i) appoint and contract with the Trustee (or successor Trustee),
insurance company, Investment Manager (as defined in ERISA) or other
investment advisor for the retention, investment, administration and
management of part or all of the Trust Fund;(i) appoint and contract with
the Trustee (or successor Trustee), insurance company, Investment Manager
(as defined in ERISA) or other investment advisor for the retention,
investment, administration and management of part or all of the Trust Fund;
(ii) establish a procedure for establishing and carrying out a
funding policy and method consistent with the objectives of the Plan and
the requirements of ERISA;(ii) establish a procedure for establishing and
carrying out a funding policy and method consistent with the objectives of
the Plan and the requirements of ERISA;
(iii) amend and terminate the Plan.(iii) amend and terminate the
Plan.
These powers may be exercised by the Board, the Executive Committee of the Board
or any individual so authorized by either the Board or the Executive Committee.
These actions must be evidenced by a written instrument.
Section 8.02. Administration.
------------
(a) The Company shall have full authority to control and manage and to
perform, delegate and/or allocate the responsibilities for the operation and
administration of the Plan as well as to perform or allocate the responsibility
for any act necessary to comply with the objectives and requirements of ERISA
and the Code, as the same from time to time may be interpreted and implemented
through regulations or otherwise, excluding the power and authority expressly
reserved to the Board and Executive Committee as set forth in Section 8.01. Any
administrative duty may be carried out by the Board, its Executive Committee,
the Chief
38
Executive Officer of Marquette Medical Systems, Inc. (or its successor) and any
individual or individuals designated by any of those in writing. Without
limiting the generality of the foregoing, the Company shall have the following
powers and duties:
(i) to require any person to furnish such information as it may
request for the purpose of the proper administration of the Plan as a
condition to receiving any benefit under the Plan;(i) to require any
person to furnish such information as it may request for the purpose of the
proper administration of the Plan as a condition to receiving any benefit
under the Plan;
(ii) to make and enforce such rules and regulations and prescribe
the use of such forms as it shall deem necessary for the efficient
administration of the Plan;(ii)to make and enforce such rules and
regulations and prescribe the use of such forms as it shall deem necessary
for the efficient administration of the Plan;
(iii) to have discretion to interpret the Plan and to resolve
ambiguities, inconsistencies and omissions in its interpretation, such
resolutions to be final, conclusive and binding on all parties affected
thereby;(iii) to have discretion to interpret the Plan and to resolve
ambiguities, inconsistencies and omissions in its interpretation, such
resolutions to be final, conclusive and binding on all parties affected
thereby;
(iv) to compute the amount and determine the manner of payment of
benefits which shall be payable to any person in accordance with the
provisions of the Plan;(iv)to compute the amount and determine the manner
of payment of benefits which shall be payable to any person in accordance
with the provisions of the Plan;
(v) to determine a person's status as an Employee, his eligibility
for participation, his Vesting Service and the amount and rate of his
Compensation for any Plan Year and, subject to the appeal procedures
provided for in subsection (c) hereof, any such determination shall, for
all purposes under this Plan, be final, conclusive and binding upon all
Employees, Participants, former Participants, Beneficiaries, the Trustee
and the Employer, as well as upon all other persons;(v) to determine a
person's status as an Employee, his eligibility for participation, his
Vesting Service and the amount and rate of his Compensation for any Plan
Year and, subject to the appeal procedures provided for in subsection (c)
hereof, any such determination shall, for all purposes under this Plan, be
final, conclusive and binding upon all Employees, Participants, former
Participants, Beneficiaries, the Trustee and the Employer, as well as upon
all other persons;
39
(vi) to employ actuaries, attorneys, accountants and such other
persons as it shall deem necessary or desirable for the administration of
this Plan;(vi) to employ actuaries, attorneys, accountants and such other
persons as it shall deem necessary or desirable for the administration of
this Plan;
(vii) to incur reasonable expenses necessary to the administration
of the Plan, which expenses shall be paid from the Trust Fund unless paid
by the Employer;(vii)to incur reasonable expenses necessary to the
administration of the Plan, which expenses shall be paid from the Trust
Fund unless paid by the Employer;
(viii) 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; and(viii) 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; and
(ix) to authorize and direct benefit payments. (ix) to authorize
and direct benefit payments.
40
(b) Claims Procedures.(b) Claims Procedures.
(i) Any Participant or Beneficiary under this Plan who believes he
is entitled to benefits under the Plan in an amount greater than he is
receiving may file, or have his duly authorized representative file, a
claim with the Company under this Section. 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 Company
shall designate one or more persons (who may or may not be members of the
Company) to consider the claim and answer it in writing stating whether the
claim is granted or denied. If the claim is denied in whole or in part, the
claimant shall be furnished with a written notice of such denial containing
(A) the specific reasons for the denial, (B) a specific reference to the
Plan provisions on which the denial is based, (C) a description of any
additional material or information which it is necessary for the claimant
to submit and an explanation of why such material or information is
necessary, and (D) an explanation of the Plan's appeal procedure.(i) Any
Participant or Beneficiary under this Plan who believes he is entitled to
benefits under the Plan in an amount greater than he is receiving may file,
or have his duly authorized representative file, a claim with the Company
under this Section. 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 Company shall designate one or
more persons (who may or may not be members of the Company) to consider the
claim and answer it in writing stating whether the claim is granted or
denied. If the claim is denied in whole or in part, the claimant shall be
furnished with a written notice of such denial containing (A) the specific
reasons for the denial, (B) a specific reference to the Plan provisions on
which the denial is based, (C) a description of any additional material or
information which it is necessary for the claimant to submit and an
explanation of why such material or information is necessary, and (D) an
explanation of the Plan's appeal procedure.
(ii) If a claimant wishes to appeal the denial of his claim, the
claimant or his duly authorized representative shall file a written notice
of appeal with the Company. In order that the Company may expeditiously
decide such appeal, the written notice of appeal should contain (A) a
statement of the ground(s) for the appeal, (B) a specific reference to the
Plan provisions on which the appeal is based, (C) a statement of the
arguments and authority (if any) supporting each ground for appeal, and (D)
any other pertinent documents or comments which the appellant desires to
submit in support of his appeal. The Company shall decide the appellant's
appeal within 60 days of its receipt of the appeal. The Company's written
decision shall contain the reasons for the decision and reference to the
Plan provisions on which the decision is based. A copy of the Company's
decision shall be mailed promptly to the claimant. In addition, the
Company shall afford
41
any person whose claim for benefits has been denied a reasonable
opportunity for a review of the Company's decision denying the claim by the
Employer officer or officers designated by the Board pursuant to Section
8.01(v).(ii) If a claimant wishes to appeal the denial of his claim, the
claimant or his duly authorized representative shall file a written notice
of appeal with the Company. In order that the Company may expeditiously
decide such appeal, the written notice of appeal should contain (A) a
statement of the ground(s) for the appeal, (B) a specific reference to the
Plan provisions on which the appeal is based, (C) a statement of the
arguments and authority (if any) supporting each ground for appeal, and (D)
any other pertinent documents or comments which the appellant desires to
submit in support of his appeal. The Company shall decide the appellant's
appeal within 60 days of its receipt of the appeal. The Company's written
decision shall contain the reasons for the decision and reference to the
Plan provisions on which the decision is based. A copy of the Company's
decision shall be mailed promptly to the claimant. In addition, the Company
shall afford any person whose claim for benefits has been denied a
reasonable opportunity for a review of the Company's decision denying the
claim by the Employer officer or officers designated by the Board pursuant
to Section 8.01(v).
(c) Records and Reports. The Company shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and the
Code and any governmental regulations thereunder relating to any records
maintained in connection with the administration of the Plan and to the
reporting and disclosure of information to any governmental agency and to
Participants and their Beneficiaries.(c) Records and Reports. The Company
shall exercise such authority and responsibility as it deems appropriate in
order to comply with ERISA and the Code and any governmental regulations
thereunder relating to any records maintained in connection with the
administration of the Plan and to the reporting and disclosure of information to
any governmental agency and to Participants and their Beneficiaries.
(d) Rules and Decisions. All rules and decisions of the Company shall be
uniformly and consistently applied to all Participants and other persons
claiming or entitled to benefits hereunder in similar circumstances. When
making a determination or calculation, the Company shall be entitled to rely
upon information furnished by a Participant, Beneficiary, or legal counsel, who
may also be legal counsel to the Company or any Affiliate or the Trustee.(d)
Rules and Decisions. All rules and decisions of the Company shall be uniformly
and consistently applied to all Participants and other persons claiming or
entitled to benefits hereunder in similar circumstances. When making a
determination or calculation, the Company shall be entitled to rely upon
information furnished by a Participant, Beneficiary, or legal counsel, who may
also be legal counsel to the Company or any Affiliate or the Trustee.
Section 8.03. Agent for Service of Process.
------------
42
The agent for service of legal process in Wisconsin for the Company is hereby
designated as the agent for service of process with respect to all matters
pertaining to the Plan.
Section 8.04. Marquette Stock Fund.
------------
To the extent the Board or its Executive Committee so indicates, Employer
Matching Contributions and Profit Sharing Contributions shall be initially
maintained in the Marquette Stock Fund, which is intended to be primarily
invested in Marquette Stock.
Marquette Stock credited to Participant's Accounts shall be subject to direction
by Participants as to voting rights and as to the disposition of such Marquette
Stock in the event of a tender offer for such Marquette Stock. The Company
shall establish procedures for soliciting instructions for Participants
directions and for collecting their instructions on a basis intended to assure
confidentiality of their instructions. The Company procedures shall provide for
Participant to receive all information made available to other shareholders in
connection with such voting or tender offer instructions. Each Participant
shall be entitled to provide instructions with respect to that number of whole
and fractional shares of Marquette Stock credited to the Participants Account.
To the extent that a Participant fails to provide instructions to the Company,
the shares allocated to such Participant will be voted or tendered by the
Company in accordance with the Company's own independent judgment. In such
circumstances, the Company may, but is not required to, delegate such
responsibility in writing to an independent fiduciary of the Company's choice.
43
ARTICLE IX.
TRUSTEE AND TRUST FUND
Section 9.01. Trustee Removal and/or Resignation and Successors.
------------
The Trustee may be removed by the Board at any time, with or without cause, upon
30 days' written notice. The Trustee may resign at any time upon 30 days'
written notice to the Employer and to the Company. Upon such removal or
resignation of the Trustee, the Board shall appoint or designate a successor
trustee or trustees, and the Trustee shall assign and transfer and pay over to
such successor trustee or trustees, all property then constituting the Trust
Fund. The successor trustee or trustees shall be such person or persons, trust
company, bank, or other appropriate financial institution appointed as such from
time to time by the Board and serving at the pleasure of the Board.
Section 9.02. Investment Funds.
-------------
The Trust Fund shall consist of such Investment Funds as shall be established
and maintained hereunder at the direction of the Company. The Company shall
establish one or more Investment Funds and shall advise the Trustee in writing
of the types of investments to be made by such Investment Fund. The Company may
direct that any such Investment Fund will be invested in one or more insurance
contracts or regulated investment companies selected by the Company or may
appoint one or more Investment Managers to direct the investment of any
Investment Fund.
Section 9.03. Investment of the Trust Fund.
------------
(a) Subject to Participants' elections under Section 4.02, the Trust Fund,
including all of the Investment Funds shall be invested and reinvested without
distinction between principal and income in any property, real, personal or
mixed or share or part thereof, or part interest therein, including but not
limited to common stocks, preferred stocks, bonds, notes, debentures, mortgages,
equipment trust certificates, investment trust certificates, mutual funds,
common trust funds, and any form of insurance contract. To the extent and for
the time that any assets of the Trust Fund are invested in a common, pooled or
collective fund maintained by a bank or other financial institution (which may
include any such fund established or maintained by the Trustee or an Investment
Manager), any instrument governing such fund shall be deemed to be incorporated
in and made a part of this Agreement as fully and to all intents and purposes as
if set forth herein at length. Except as required by ERISA, such investments
and reinvestments shall not be restricted to those of the character authorized
for fiduciaries under any present or
44
future laws or administrative regulations or pursuant to any rule of court, nor
shall any investments be limited in amount or type in relation to the amount or
type of investments of the Trust Fund as a whole.
(b) Subject to the directions of the Company as provided in Section 9.02,
any investments or reinvestments shall be made by the Trustee in its sole
discretion. For the time, in the manner, and to the extent that control has
been asserted by the Company as so provided, the Trustee shall be charged with
responsibility only to execute with reasonable diligence and care the directions
of the Company or Investment Manager appointed by such Company. In the event
that an Investment Manager shall have been appointed to direct the investments
of any portion of the Trust Fund, custody of all or a part of such portion may,
at such Investment Manager's direction, be transferred to a bank, trust company
or insurance company (which may be the Investment Manager or an affiliate
thereof) in its capacity as trustee of a common or collective trust fund, in
which case such bank or trust company shall have the sole responsibility for the
custody and safekeeping of such portion of the Trust Fund.(b) Subject to the
directions of the Company as provided in Section 9.02, any investments or
reinvestments shall be made by the Trustee in its sole discretion. For the
time, in the manner, and to the extent that control has been asserted by the
Company as so provided, the Trustee shall be charged with responsibility only to
execute with reasonable diligence and care the directions of the Company or
Investment Manager appointed by such Company. In the event that an Investment
Manager shall have been appointed to direct the investments of any portion of
the Trust Fund, custody of all or a part of such portion may, at such Investment
Manager's direction, be transferred to a bank, trust company or insurance
company (which may be the Investment Manager or an affiliate thereof) in its
capacity as trustee of a common or collective trust fund, in which case such
bank or trust company shall have the sole responsibility for the custody and
safekeeping of such portion of the Trust Fund.
Section 9.04. Trustee's Powers and Duties.
------------
The powers and duties of the Trustee shall be set forth in a separate Trust
agreement between the Trustee and the Employer.
Section 9.05. Payments from the Trust Fund.
------------
The Trustee shall make payments from the Trust Fund to such persons, and in such
manner and amounts as may be specified in written directions to the Trustee from
the Company. Should any such payment be unclaimed, the Trustee shall notify the
Company thereof, and shall dispose of same in accordance with the Company's
further directions.
45
ARTICLE X.
AMENDMENT AND TERMINATION
Section 10.01. Amendment and Termination.
-------------
While it is intended that the Plan shall continue in effect indefinitely, the
Board, by appropriate corporate resolution, may from time to time modify, alter
or amend the Plan or the Trust; provided, however, that any amendment that
affects the duties and responsibilities of the Trustee may only be made with the
Trustee's written consent. The Board may at any time order the temporary
suspension or complete discontinuance of Employer Contributions or may terminate
the Plan, provided, however, that
(i) no such action shall make it possible for any part of the Trust
assets (except such part as is used for the payment of expenses) to be used
for or diverted to any purpose other than for the exclusive benefit of
Participants or their Beneficiaries and the defraying of the reasonable
expenses of administering and winding up the Plan,(i) no such action shall
make it possible for any part of the Trust assets (except such part as is
used for the payment of expenses) to be used for or diverted to any purpose
other than for the exclusive benefit of Participants or their Beneficiaries
and the defraying of the reasonable expenses of administering and winding
up the Plan,
(ii) no such action shall adversely affect the rights or interests
of Participants theretofore vested under the Plan, and(ii) no such action
shall adversely affect the rights or interests of Participants theretofore
vested under the Plan, and
(iii) in the event of termination of the Plan or complete
discontinuance of Employer Contributions hereunder, all rights and
interests of Participants not theretofore vested shall become vested as of
the date of such termination or complete discontinuance. In the event of a
partial termination of the Plan, the rights and interests of the
Participants affected thereby shall become vested as of the date of such
partial termination.(iii)in the event of termination of the Plan or
complete discontinuance of Employer Contributions hereunder, all rights and
interests of Participants not theretofore vested shall become vested as of
the date of such termination or complete discontinuance. In the event of a
partial termination of the Plan, the rights and interests of the
Participants affected thereby shall become vested as of the date of such
partial termination.
However, nothing herein shall be construed to prevent any modification,
alteration or amendment of the Plan or of the Trust which is required in order
to comply with the provision of any law or
46
regulation relating to the establishment or maintenance of this Plan and Trust,
including but not limited to the establishment and maintenance of the Plan or
Trust as a qualified employee plan or trust under the Code, even though such
modification, alteration, or amendment if made retroactively, adversely affects
the rights or interests of a Participant under the Plan.
47
ARTICLE XI.
MISCELLANEOUS
Section 11.01. Plan is Voluntary.
-------------
Although it is intended that the Plan and contributions hereunder shall be
continued, the Plan is entirely voluntary on the part of the Employer and its
continuance and payment of contributions hereunder are not assumed as
contractual obligations of the Employer, and the Employer does not guarantee or
promise to pay or to cause to be paid any of the benefits provided by the Plan.
The Employer specifically reserves the right, in its sole discretion, to modify,
reduce, suspend, in whole or in part, at any time or from time to time and for
any period or periods of time, or to discontinue at any time, contributions
under the Plan.
Section 11.02. Non-Guarantee of Employment.
-------------
Nothing contained in this Plan shall be construed as a contract of employment
between the Employer and a Participant, to be consideration or inducement for
the employment of any Participant or Employee, to create a right of any
Participant to be continued in the employment of his Employer, or as a
limitation of the right of the Employer to discharge any Participant with or
without cause.
Section 11.03. Rights to Trust Assets.
-------------
(a) No Participant or any other person shall have any right to, or interest
in, any part of the Trust Fund upon termination of his employment or otherwise,
except as provided from time to time under this Plan, and then only to the
extent of the amounts due and payable to such person out of the assets of the
Trust Fund. All payments as provided for in this Plan shall be made solely out
of the assets of the Trust Fund and neither the Employer, the Trustee, nor any
member of the Company shall be liable therefor in any manner.
(b) Employer Contributions hereunder are conditioned upon their
deductibility under Code Section 404. In the event that the Internal Revenue
Service denies a deduction for the Employer Contribution hereto, or if the
Company determines that a contribution has been made as the result of a good
faith mistake of fact, then the Company may direct that any nondeductible
Employer Contribution or any other contribution made as the result of a mistake
of fact shall be refunded to the Employer or Participant in accordance with
applicable provisions of ERISA.(b) Employer Contributions hereunder are
conditioned upon their deductibility under Code Section 404. In the event that
the Internal Revenue Service denies a deduction for the Employer Contribution
hereto, or if the Company determines that a contribution has been made as the
result of a good faith mistake of fact, then the Company may direct that any
nondeductible Employer Contribution or any other contribution
48
made as the result of a mistake of fact shall be refunded to the Employer or
Participant in accordance with applicable provisions of ERISA.
Section 11.04. Non-Alienation.
-------------
Except as may be otherwise provided herein, no right or interest of any
Participant or Beneficiary in the Plan and the Trust Fund shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, attachment, garnishment, execution, levy, bankruptcy, or
any other disposition of any kind, either voluntary or involuntary, prior to
actual receipt of payment by the person entitled to such right or interest under
the provisions hereof, and any such disposition or attempted disposition shall
be void. Notwithstanding the foregoing, the Trustee shall recognize a qualified
domestic relations order with respect to child support, alimony payments or
marital property rights if the Company determines that such order meets the
applicable requirements of Code Section 414(p). If any such order so directs, a
lump sum distribution of benefits to an alternate payee may be made at a time
when such distribution could not be made to the Participant hereunder. The
Company shall establish written procedures concerning notification of interested
parties and the determination of the validity of such orders.
Section 11.05. Indemnification.
-------------
The Employer shall indemnify each member of the Company and the Board and hold
each of them harmless from the consequences of his acts or conduct in his
official capacity, if he acted in good faith and in a manner he reasonably
believed to be solely in the best interests of the Participants and their
beneficiaries, and with respect to any criminal action or proceeding had no
reasonable cause to believe his conduct was unlawful. Such indemnification
shall cover any and all attorneys' fees and expenses, judgments, fines and
amounts paid in settlement, but only to the extent that such amounts are not
paid to such person(s) under the Employer's fiduciary insurance policy, if any,
and to the extent that such amounts are actually and reasonably incurred by such
person(s).
Section 11.06. Facility of Payment.
-------------
If the Company shall determine that a Participant entitled to a distribution
hereunder, or his Beneficiary, is incapable of caring for his own affairs,
because of illness or otherwise, it may direct that any distribution from such
Participant's Accounts may be made, in such shares as it shall determine, to the
spouse, child, parent or other blood relative of such Participant, or his
Beneficiary, or any of them, or to such other person or persons as the Company
may determine, until such date as it shall determine that such incapacity no
longer exists. The Company shall be under no obligation to see to the proper
application of the distributions so made to such person or
49
persons and any such distribution shall be a complete discharge of any liability
under the Plan to such Participant, or his Beneficiary, to the extent of such
distribution.
Section 11.07. Board Action.
-------------
Any action which is required or permitted to be taken by the Board under the
Plan may be taken by the Executive Committee of the Board or any other
authorized Committee of the Board.
Section 11.08. Mergers, Consolidations and Transfer of Plan Assets.
-------------
In the case of any merger or consolidation with, or transfer of assets or
liabilities to or from any other plan, each Participant in the Plan must be
entitled (if the Plan then terminates) to receive a benefit immediately after
the merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated).
Section 11.09. Fiduciaries.
-------------
Any person may serve in more than one fiduciary capacity with respect to the
Plan. Any fiduciary hereunder, as an individual, may employ such legal,
actuarial, accounting or other assistant, he may deem necessary to fulfill his
obligations hereunder, which assistants may be those consulted by the Employer,
the Trustee, the Plan or other fiduciaries.
50
ARTICLE XII.
TOP-HEAVY PLAN PROVISIONS
Section 12.01. Effect of Top-Heavy Status.
-------------
The Plan shall be a Top-Heavy Plan for any Plan Year if either of the following
conditions applies:
(i) The Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not
part of any Required Aggregation Group or Permissive Aggregation Group
having a Top-Heavy Ratio of less than 60%.(i) The Top-Heavy Ratio for the
Plan exceeds 60% and the Plan is not part of any Required Aggregation Group
or Permissive Aggregation Group having a Top-Heavy Ratio of less than 60%.
(ii) The Plan is part of a Required Aggregation Group having a Top-
Heavy Ratio which exceeds 60% and is not part of a Permissive Aggregation
Group having a Top-Heavy Ratio of less than 60%.(ii) The Plan is part of a
Required Aggregation Group having a Top-Heavy Ratio which exceeds 60% and
is not part of a Permissive Aggregation Group having a Top-Heavy Ratio of
less than 60%.
If the Plan is a Top-Heavy Plan in any Plan Year, the provisions of Sections
12.03 through 12.05 shall supersede any conflicting provisions of the Plan.
Section 12.02. Additional Definitions.
-------------
Solely for purposes of this Article, the following terms shall have the meanings
set forth below:
(a) Key Employee means any employee or former employee (and the
beneficiary of such employee) whose status as an officer or owner of the Plan
sponsor makes him a key employee as determined in accordance with Code Section
416(i)(1)22 and the regulations thereunder.(a) Key Employee means any employee
or former employee (and the beneficiary of such employee) whose status as an
officer or owner of the Plan sponsor makes him a key employee as determined in
accordance with Code Section 416(i)(1)22 and the regulations thereunder.
(b) Determination Date means the last day of the preceding Plan Year.(b)
Determination Date means the last day of the preceding Plan Year.
51
(c) Top-Heavy Ratio means a fraction, the numerator of which is the sum of
account balances under any defined contribution plans for all Key Employees and
the present value of accrued benefits under any defined benefit plans for all
Key Employees, and the denominator of which is the sum of the account balances
under any defined contribution plans for all Participants and the present value
of accrued benefits under any defined benefit plans for all Participants,
excluding the account balances and accrued benefits of all Participants who have
not performed services for the Employer during the preceding 5-year period. Both
the numerator and denominator of the Top-Heavy Ratio shall be adjusted for any
distribution of an account balance or an accrued benefit made in the 5-year
period ending on the Determination Date and any contribution due but unpaid as
of the Determination Date. For purposes of the preceding sentence, (i) the value
of account balances and the present value of accrued benefits shall be
determined as of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, and (ii) the account
balances and accrued benefits of a Participant who is not a Key Employee but who
was a Key Employee in a prior year shall be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions, rollovers and transfers
are taken into account will be made in accordance with Code Section 416 and the
regulations thereunder. Deductible employee contributions will not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar year.
The present value of accrued benefits shall be determined pursuant to Code
Section 416(g) using a 5% interest assumption and the UP-1984 Mortality
Table.(c) Top-Heavy Ratio means a fraction, the numerator of which is the sum of
account balances under any defined contribution plans for all Key Employees and
the present value of accrued benefits under any defined benefit plans for all
Key Employees, and the denominator of which is the sum of the account balances
under any defined contribution plans for all Participants and the present value
of accrued benefits under any defined benefit plans for all Participants,
excluding the account balances and accrued benefits of all Participants who have
not performed services for the Employer during the preceding 5-year period. Both
the numerator and denominator of the Top-Heavy Ratio shall be adjusted for any
distribution of an account balance or an accrued benefit made in the 5-year
period ending on the Determination Date and any contribution due but unpaid as
of the Determination Date. For purposes of the preceding sentence, (i) the value
of account balances and the present value of accrued benefits shall be
determined as of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, and (ii) the account
balances and accrued benefits of a Participant who is not a Key Employee but who
was a Key Employee in a prior year shall be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions, rollovers and transfers
are taken into account will be made in accordance with Code Section 416 and the
regulations thereunder. Deductible employee contributions will not be taken into
account
52
for purposes of computing the Top-Heavy Ratio. When aggregating plans, the value
of account balances and accrued benefits will be calculated with reference to
the Determination Dates that fall within the same calendar year. The present
value of accrued benefits shall be determined pursuant to Code Section 416(g)
using a 5% interest assumption and the UP-1984 Mortality Table.
(d) Permissive Aggregation Group means the Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.(d) Permissive Aggregation Group
means the Required Aggregation Group of plans plus any other plan or plans of
the Employer which, when considered as a group with the Required Aggregation
Group, would continue to satisfy the requirements of Code Sections 401(a)(4) and
410.
(e) Required Aggregation Group means (i) each qualified plan of the
Employer in which at least one Key Employee participates, and (ii) any other
qualified plan of the Employer which enables a plan described in (i) to meet the
requirements of Code Sections 401(a)(4) and 410.(e) Required Aggregation Group
means (i) each qualified plan of the Employer in which at least one Key Employee
participates, and (ii) any other qualified plan of the Employer which enables a
plan described in (i) to meet the requirements of Code Sections 401(a)(4) and
410.
(f) Valuation Date means (i) in the case of a defined contribution plan,
the Determination Date, and (ii) in the case of a defined benefit plan, the date
as of which funding calculations are generally made within the 12-month period
ending on the Determination Date.(f) Valuation Date means (i) in the case of a
defined contribution plan, the Determination Date, and (ii) in the case of a
defined benefit plan, the date as of which funding calculations are generally
made within the 12-month period ending on the Determination Date.
(g) Employer means the employer or employers whose employees are covered
by this Plan and any other employer which must be aggregated with any such
employer under Code Section 414(b), (c) and (m).(g) Employer means the employer
or employers whose employees are covered by this Plan and any other employer
which must be aggregated with any such employer under Code Section 414(b), (c)
and (m).
53
Section 12.03. Vesting.
-------------
If the Plan is a Top-Heavy Plan in any Plan Year, the vesting schedule shall
automatically be amended for any Participant 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 Vested 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 a Top-Heavy
Plan for any Plan Year, the vesting schedule above shall be disregarded and the
original schedule applied, except with respect to any Participant with three or
more Years of Service and except that no Participant's vested percentage as of
the end of a prior year shall be decreased. Any non-vested Participant who
acquires a vested interest in the employer-derived benefit by operation of the
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.
Section 12.04. Minimum Benefits.
-------------
For any year in which the Plan is a Top-Heavy Plan, each Participant who is not
a Key Employee shall receive allocations of Employer contributions and
forfeitures under this Plan and any other defined contribution plan maintained
by the Employer at least equal to 5% of compensation (as defined in Code Section
415) for such year, or, if less, the percentage of compensation allocated on
behalf of the Key Employee for whom such percentage was the highest for the Plan
Year; provided, however, that if the Participant is also covered by a defined
benefit plan, such Employee will only be entitled to the defined benefit plan
minimum.
Section 12.05. Maximum Benefit Limits.
-------------
54
If the Employer 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 stated in a separate provision 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 Top-Heavy Ratio is less than
90% and if the minimum benefit requirements referred to in Section 12.04 are met
when the defined benefit minimum is changed from 2% to 3% and 20% is changed to
an amount not greater than 30% which equals 20% plus 1% for each year this is a
Top-Heavy Plan.
55
APPENDIX A
I. E for M
Effective May 1, 1996, the E for M Corporation Employees Profit Sharing
Plan was merged into this Plan, and E for M Corporation and Optical Devices,
Inc. became included subsidiaries. The following provisions apply on and after
May 1, 1996:
1. Employment with E for M Corporation, Optical Devices, Inc. and their
predecessors prior to May 1, 1996 will be treated as employment with an
Affiliate.
2. Accounts transferred from the E for M Plan will be paid to married
Participants in the form of a joint and survivor annuity providing benefits to
the Participant for life and 50% of that amount to the Participants surviving
spouse for life, unless, after at least 30 days prior notice, the Participant
elects a different form of distribution, with notarized written consent of the
Participants spouse. In addition to the forms of distribution otherwise
available under the plan, such Participants will have the following additional
options with respect to such transferred amounts:
Single life annuity, as well as single life with 5, 10, or 15 years
guaranteed.
Joint and survivor annuity with 50%, 66-1/3% or 100% continued to the
survivor.
Minimum distribution beginning at age 70-1/2, determined under rules
permitted by Code Section 401(a)(9).
3. Account balances transferred from E for M will be subject to hardship
withdrawal to the extent of employee deferrals, according to the following
rules:
A withdrawal shall be deemed to be on account of a financial hardship
if the distribution is for:
(i) unreimbursed medical expenses described in Code Section
213(d) previously incurred by the Participant, the
Participants spouse or any dependents of the Participant
(as defined in Code Section 152) or necessary for such
individuals to obtain medical care described in Code
Section 213(d)
56
(ii) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
(iii) payment of tuition and related educational fees for the
next twelve (12) months or quarter of post-secondary
education for the Participant or the Participants spouse or
dependents; or
(iv) payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on
the mortgage of the Participants principal residence.
The hardship withdrawal (i) shall be limited to the amount of the financial
hardship, including any amounts necessary to pay any income taxes or penalties
reasonably anticipated to result from the withdrawal and (ii) shall be made only
after the Participant takes all permitted loans and distributions hereunder and
pursuant to any other plan maintained by the Employers. Any Participant who
makes a withdrawal under this Section shall have his 401K contributions and any
other elective contributions or employee contributions under this Plan or any
other plan of deferred compensation maintained by the Employer (both qualified
and nonqualified) automatically suspended for a period of twelve (12) months
following such withdrawal. The amount which such a Participant may contribute as
401K contributions for the calendar year following such withdrawal shall not
exceed the amount described in Section 402(g) for such year, reduced by the
amount of such Participants actual Deposits for the calendar year in which the
withdrawal occurred.
II. Corometrics Medical Systems, Inc.II. Corometrics Medical Systems, Inc.
Effective August 1, 1994, Corometrics Medical Systems, Inc. became an
Employer under this Plan, after having participated in the American Home
Products Corporation Savings Plan (AHPC Plan). With respect to accounts
transferred to this Plan from the AHPC Plan:
Participants are fully vested in all account balances so transferred.
A separate account will be set up to record qualified voluntary employee
contributions made prior to January 1, 1987 and earnings thereon.
AHPC common stock transferred from the AHPC Plan will be segregated for
investment purposes. Participants may direct investments out of this Account,
but not into it.
Loans transferred in kind from the AHPC Plan will continue amortization
according to their schedules.
57