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EXHIBIT 4(d)
HARTMANN EMPLOYEE
SAVINGS AND INVESTMENT PLAN
PLAN NO.: 018
EIN: 61-0143150
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HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
By action of the Board of Directors, Brown-Forman Corporation, a
Delaware corporation (Employer), adopted the following plan effective October 1,
1997 (Effective Date), which shall hereafter be known as Hartmann Employee
Savings and Investment Plan (Plan), for the benefit of employees of Hartmann
Luggage Company. Assets consisting of account balances under the Lenox,
Incorporated Savings and Investment Plan and/or the Lenox Retail Savings and
Investment Plan (Predecessor Plans) attributable to participants who are
employees of Hartmann Luggage Company will be spun-off and transferred to the
Trust created for this Plan. The Plan is established to recognize and reward
employees for their contribution to the Employer's successful operation, and is
for the exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
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HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS.........................................................................................1
1.01 Accounts......................................................................................1
1.02 Accounting Date...............................................................................1
1.03 Affiliated Employer...........................................................................2
1.04 Beneficiary...................................................................................2
1.05 Break in Service..............................................................................2
1.06 Code..........................................................................................3
1.07 Compensation..................................................................................3
1.08 Elapsed Time..................................................................................4
1.09 Employee......................................................................................5
1.10 Employer......................................................................................5
1.11 Fiscal Year...................................................................................5
1.12 Highly Compensated Employee...................................................................5
1.13 Hour of Service...............................................................................5
1.14 Leased Employee...............................................................................7
1.15 Month of Service..............................................................................7
1.16 Normal Retirement Age.........................................................................7
1.17 Period of Severance...........................................................................8
1.18 Plan Year.....................................................................................8
1.19 Spouse (Surviving Spouse).....................................................................8
1.20 Total and Permanent Disability................................................................8
1.21 Year of Service...............................................................................9
ARTICLE II - PARTICIPATION.....................................................................................10
2.01 Eligibility..................................................................................10
2.02 Reemployment of Participant..................................................................10
2.03 Reemployment of Non-Participant..............................................................10
2.04 Transferred Employees........................................................................10
2.05 Employment Status Change.....................................................................10
2.06 Participation Following Normal Retirement Age................................................11
ARTICLE III - VESTING .........................................................................................12
3.01 Fully Vested and Nonforfeitable Accounts.....................................................12
3.02 Vesting of Other Accounts....................................................................12
3.03 Period of Service for Vesting Purposes.......................................................12
3.04 Vesting Schedule/Employer Matching Contribution Account......................................12
3.05 Vesting Schedule/CORE Account................................................................12
3.06 Effect of Break in Service on Vesting........................................................13
3.07 Date of Termination of Employment............................................................14
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination...............................14
3.09 Amendment of Vesting Schedule................................................................14
ARTICLE IV - TIME AND MANNER OF PAYMENT........................................................................15
4.01 Time of Initial Payment of Retirement Benefits...............................................15
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4.02 Consent To Payment Of Benefits...............................................................15
4.03 Manner of Payment of Retirement Benefits.....................................................16
4.04 Payment Upon Death of Participant............................................................16
4.05 Calculation of Distributions.................................................................16
4.06 Forfeiture of Non-vested Benefits............................................................18
4.07 Fully Vested Account.........................................................................19
4.08 Suspension of Benefits.......................................................................19
4.09 Pre-1984 Election............................................................................20
4.10 Pre-Retirement Distribution..................................................................20
4.11 Hardship Distribution........................................................................20
4.12 Loans to Participant.........................................................................21
4.13 Limitation for Qualified Domestic Relations Order............................................22
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER......................................................................24
5.01 Nonelective Contribution by Employer.........................................................24
5.02 Elective Contribution by Employer............................................................24
5.03 Matching Contribution by Employer............................................................24
5.04 Deduction of Employer Contributions..........................................................24
5.05 Limits on Elective and Matching Contributions................................................25
5.06 Special Employer Contributions...............................................................26
5.07 Correction of Excess Elective Contributions..................................................27
5.08 Correction of Excess Employer Matching Contributions.........................................27
5.09 Return of Contribution.......................................................................28
5.10 Plan and Trust Conditioned on Approval and Qualification.....................................28
5.11 Funding Policy...............................................................................28
ARTICLE VI - PARTICIPANT CONTRIBUTIONS.........................................................................29
6.01 Amount of Elective Contribution..............................................................29
6.02 Election Request.............................................................................29
6.03 Change of Rate...............................................................................29
6.04 Distributions from Elective Account..........................................................30
6.05 Withdrawal from Voluntary Contribution Account...............................................30
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS............................................................31
7.01 Allocation of Nonelective Employer Contribution..............................................31
7.02 Allocation of Elective Contributions.........................................................31
7.03 Allocation of Matching Contribution..........................................................31
7.04 Allocation of Forfeitures....................................................................31
7.05 Amendment of Allocation Eligibility..........................................................31
7.06 Maximum Additions to Participant's Account...................................................31
7.07 Overall Limit................................................................................33
7.08 Date of Allocation to Accounts...............................................................35
7.09 Expenses of Plan.............................................................................35
7.10 Participant Direction of Investment..........................................................35
7.11 Periodic Adjustments to Account..............................................................35
ARTICLE VIII - TOP HEAVY PROVISIONS............................................................................37
8.01 When Provisions Effective....................................................................37
8.02 Determination of Top Heavy...................................................................37
8.03 Top Heavy Vesting Schedule...................................................................38
8.04 Minimum Benefits.............................................................................38
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8.05 Impact on Maximum Benefits...................................................................38
8.06 Determination of Super Top Heavy.............................................................39
ARTICLE IX - PORTABILITY OF ACCOUNT............................................................................40
9.01 Transfers to Another Qualified Plan..........................................................40
9.02 Eligible Rollover Distributions..............................................................40
9.03 Transfers to this Plan.......................................................................41
9.04 Manner of Payment of Retirement Benefits Transferred From Lenox Retail Savings and
Investment Plan..............................................................................41
9.05 Election to Waive Joint and Survivor Annuity and Single Life Annuity.........................42
9.06 Payment of Benefits Transferred from Lenox Retail Savings and Investment Plan Upon Death
of Participant...............................................................................43
9.07 Election to Waive Pre-Retirement Survivor Annuity............................................44
ARTICLE X - PARTICIPATING EMPLOYERS............................................................................46
10.01 Adoption by Other Employers..................................................................46
10.02 Withdrawal from the Plan.....................................................................46
10.03 Action of a Single Employer..................................................................46
ARTICLE XI - PLAN ADMINISTRATOR................................................................................47
11.01 Appointment of Plan Administrator............................................................47
11.02 Duties of Plan Administrator.................................................................47
11.03 Decisions of Plan Administrator and Indemnification..........................................48
11.04 Instructions to Trustee......................................................................48
11.05 Claims Procedure.............................................................................48
11.06 Delegating Responsibility....................................................................49
ARTICLE XII - MISCELLANEOUS....................................................................................50
12.01 Right to Terminate...........................................................................50
12.02 Plan Voluntary on Part of Employer...........................................................50
12.03 Benefits Not Subject to Creditors' Claim.....................................................50
12.04 Trust Agreement..............................................................................50
12.05 Assets for Exclusive Benefits to Participants................................................50
12.06 Nonguarantee of Employment...................................................................51
12.07 Amendment....................................................................................51
12.08 Acts by Trustee..............................................................................51
12.09 Laws of Kentucky.............................................................................51
12.10 Distribution to Minor or Incompetent Beneficiary.............................................51
12.11 Construction.................................................................................51
12.12 Merger or Consolidation......................................................................51
12.13 Discretionary Action.........................................................................52
12.14 Lost Beneficiaries; Escheat..................................................................52
12.15 Action by the Employer.......................................................................52
ARTICLE XIII - SIGNATURES......................................................................................53
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ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate
Account established and maintained on behalf of a Participant to which shall be
credited the Participant's share of Employer Matching Contributions and the
share of the net gains or losses of the Trust attributable to such
contributions. The Employer Matching Contribution Account shall be subject to
the vesting provisions of Article III.
(c) Voluntary Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the nondeductible Voluntary Contributions a Participant may have as a result of
the transfer of said Participant's accounts from the Lenox, Incorporated Savings
and Investment Plan and/or the Lenox Retail Savings and Investment Plan
(Predecessor Plans), and the share of the net gains or losses of the Trust
attributable to said Voluntary Contributions. The Voluntary Contribution Account
shall be fully vested and nonforfeitable at all times.
(d) ESOP Contribution Account. The separate Account maintained
on behalf of a Participant to which were credited contributions based on
Compensation paid or accrued on or before December 31, 1986, and the share of
net gains or losses of the Trust attributable to such contributions. The ESOP
Contribution Account shall be fully vested and nonforfeitable at all times.
(e) Company Retirement ("CORE") Account. The separate Account
established and maintained on behalf of a Participant who is an employee at an
"offsite" Hartmann retail store which does not share a common site with the
Hartmann plant facility to which shall be credited any Nonelective Contributions
provided under Section 5.01, and the share of the net gains or losses of the
Trust Fund attributable to such contributions. The CORE Account shall be subject
to the vesting provisions of Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Account valuations shall be performed on a daily
basis.
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1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements below, then the Beneficiary shall be the person(s)
in the first of the following classes surviving at the death of the Participant:
(i) widow or widower, or (ii) the Participant's estate.
Any election by a Participant of a designated Beneficiary other than
Participant's Spouse is effective only if the Participant's Spouse consents to
the election in writing, it is witnessed by a Plan representative or a notary
public, and the consent is irrevocable and acknowledges the effect of the
election and the specific alternate Beneficiary. Any consent by a Spouse (or
establishment that such consent may not be obtained) is effective only with
respect to that Spouse.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Plan representative that such consent may
not be obtained because there is no Spouse, or the Spouse cannot be located. The
Secretary of the Treasury may prescribe regulations specifying other
circumstances under which the Spouse's consent may be waived.
A revocation of a prior Beneficiary designation may be made by a
Participant without spousal consent at any time prior to commencement of
benefits. The number of revocations shall not be limited. Any new Beneficiary
designation will require spousal consent to such change in the manner set forth
above unless the prior consent acknowledged that the Spouse had the right to
limit consent to a specific Beneficiary and the Spouse voluntarily chose to
relinquish that right. A Beneficiary designation may be changed by submitting a
new notice to the Plan Administrator. Such a notice is not effective until the
Plan Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
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Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance, and
similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) payments made in lieu of Hartmann Supplemental Executive
Retirement Plan and/or Lenox, Incorporated Supplemental Executive
Retirement Plan and/or Lenox, Incorporated Supplemental Retirement
Income Plan and/or Brown-Forman Corporation Supplemental Excess
Retirement Plan benefits; and
(d) any payments under a nonqualified deferred compensation
plan.
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In the Employee's first year of participation, Compensation is
recognized as of the Employee's entry date into the Plan.
Compensation in excess of $150,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d).
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provisions of the plan to the contrary, the annual
compensation of each employee taken into account under the plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of living
in accordance with Section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
Any reference in this plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.08 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.06) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
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For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
1.09 Employee. Any person employed by Hartmann Luggage Company, a
subsidiary of Brown-Forman Corporation. Employee shall include any Leased
Employee. However, the term Employee excludes the following:
(a) any employee required to be and included in a unit of
employees covered by a collective bargaining agreement between employee
representatives and the Employer, provided that (i) retirement benefits
were the subject of good faith bargaining between the employee
representatives and the Employer; and (ii) the collective bargaining
agreement does not expressly provide that the employee is eligible for
initial or continued participation in the Plan; and
(b) any person employed as an independent contractor.
1.10 Employer. Brown-Forman Corporation or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Hartmann Luggage Company, an Affiliated Employer, has adopted the Plan.
1.11 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.12 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year received Compensation from the Employer in excess of $80,000 (as
adjusted pursuant to section 415(d) of the Code) and, if the Employer so
elected, was a member of the top-paid group for such year. The term highly
compensated employee also includes employees who are 5 percent owners at any
time during the look-back year or determination year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
1.13 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time
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during which no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave of absence
authorized in writing by the Employer; (iii) for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The same
Hour of Service is credited no more than once to a single Employee, even though
it may fall within more than one of categories (i), (ii) and (iii) of the
preceding sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such payment is made or due under a plan maintained solely to
comply with applicable worker's compensation, or unemployment compensation or
disability insurance laws; (iii) Hours of Service are not credited for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee; and (iv) Hours of Service are not credited to an
Employee for payments made by this Plan or any other pension or profit sharing
plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with
(i) ten (10) Hours of Service for each day for which the
Employee is required to be credited with at least one
(1) Hour of Service under this Section;
(ii) forty-five (45) Hours of Service for each week for
which the Employee is required to be credited with at
least one (1) Hour of Service under this Section; or
(iii) hours Worked, as defined in Labor Regulation Section
2530.200b-3(d)(3)(i) in which 870 Hours Worked are
equivalent to 1,000 Hours of Service, and 435 Hours
Worked are equivalent to 500 Hours of Service; or
(iv) hours of Service determined on the basis of periods
of employment which are the payroll periods
applicable to the Employee. An Employee is credited
with Hours of Service, determined in accordance with
the following table, for
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each payroll period in which the Employee actually
has at least one (1) Hour of Service:
HOURS OF
PAYROLL PERIOD SERVICE CREDITED
-------------- ----------------
weekly 45
semi-monthly 95
monthly 190
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.14 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.15 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.16 Normal Retirement Age. A Participant's 65th birthday.
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1.17 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance begins on the second
(2nd) twelve (12) month anniversary of the first day the individual was absent
from work. The period between the first and second (2nd) anniversaries of the
first (1st) day of absence from work is neither a period of service nor a Period
of Severance. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of a child by the individual, or (4) for purposes of caring for a child
for a period beginning immediately following the child's birth or placement.
1.18 Plan Year. January 1 to December 31, the accounting year of the
Plan; provided, however, there shall be a short plan year for the period October
1, 1997 to December 31, 1997.
1.19 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.20 Total and Permanent Disability. The inability of a Participant to
continue to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or be of long continued or indefinite duration. The permanence and
degree of the impairment shall be supported by medical evidence satisfactory to
the Plan Administrator.
Total and Permanent Disability excludes any disability which:
(a) is contracted, suffered, or incurred while the Participant
is engaged in a criminal enterprise;
(b) results from an intentional self-inflicted injury; or
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(c) occurs while in service in the Armed Forces and which
prevents the Participant from returning to employment with the
Employer, and for which the Participant receives a military pension.
1.21 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that twelve (12) Months of Service (thirty days are
deemed to be a month in the case of the aggregation of fractional months) or
three hundred sixty-five (365) days of service equal a whole Year of Service.
For purposes of vesting, after calculating the Participant's period of service
as provided in this section, the Plan may disregard any remaining less than
whole year, twelve (12) month, or three hundred sixty-five (365) day period of
service. An Employee will receive credit for the aggregate of all Years of
Service commencing with the Employee's first day of employment and ending on the
date a Break in Service begins.
Years of Service include Years of Service credited under the
Predecessor Plan(s).
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ARTICLE II - PARTICIPATION
2.01 Eligibility. An Employee becomes a Participant as of the first day
of the month coinciding with or next following the date the Employee completes a
Year of Service with the Employer. Those Employees who were Participants in the
Lenox, Incorporated Savings and Investment Plan or the Lenox Retail Savings and
Investment Plan on September 30, 1997, will become participants in this Plan on
October 1, 1997.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.10 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
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2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
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ARTICLE III - VESTING
3.01 Fully Vested and Nonforfeitable Accounts. A Participant's Elective
Contribution Account, Voluntary Contribution Account, and ESOP Contribution
Account are fully vested at all times.
3.02 Vesting of Other Accounts. A Participant's Employer Matching
Contribution Account and CORE Account are fully vested upon the first of the
following events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Service for vesting
purposes is taken into account on the basis of Elapsed Time. For purposes of
this Section, whether service with a business entity (including but not limited
to new entrepreneurial ventures, new divisions, or Affiliated Employers) created
or acquired by the Employer or its Affiliated Employers that was not a
participant in the Plan on October 1, 1997, shall be deemed to be service with
the Employer will be determined by the Executive Committee of the Board of
Directors of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account. The
vested portion of a Participant's Employer Matching Contribution Account prior
to the occurrence of an event stated in Section 3.02 is a percentage of such
Account determined on the basis of Years of Service according to the following
schedule:
Vested Percentage
Years of Service of Account
---------------- ----------
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
3.05 Vesting Schedule/CORE Account. The vested portion of a
Participant's CORE Account prior to the occurrence of an event stated in Section
3.02 is a percentage of such Account determined on the basis of Years of Service
according to the following schedule:
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Vested Percentage
Years of Service of Account
---------------- ----------
Less than 5 years 0%
5 years or more 100%
3.06 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service. If
a terminated Participant is reemployed by the Employer before incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service (only a single Break in Service applies, if completed
prior to the first day of the first Plan Year in 1985), all post-break
service will be disregarded in determining the vested percentage of
such Participant's Account which accrued prior to the break. However,
all Years of Service (both pre-break and post-break) will count for
purposes of vesting the Participant's Account which accrues after the
break.
(c) Reemployment of Non-Vested Participant After Five
Consecutive Breaks in Service. If a Participant terminates employment
with no vested benefit whatsoever and is reemployed after incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), all service after the break is disregarded in determining the
vested percentage of the Participant's Account that accrued prior to
the break. Further, such Participant's pre-break service counts for
purposes of determining the vested percentage of the Participant's
Account which accrues after the break only if upon reemployment the
number of consecutive Breaks in Service is less than the aggregate
number of pre-break Years of Service.
For purposes of this subsection (c), in computing a
Participant's aggregate Years of Service completed prior to any Break
in Service, Years of Service which were disregarded by reason of any
prior Break in Service shall likewise be disregarded.
Service earned prior to the first day of the first Plan Year
in 1985 is disregarded if the minimum participation and minimum vesting
rules then in effect did not require service to be taken into account.
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
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3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or the adoption date of such amendment, it has
the effect of reducing such Participant's vested accrued benefit as calculated
without regard to the amendment. If the Plan's vesting schedule is amended or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, or if the Plan is deemed
amended by an automatic change to or from a Top Heavy vesting schedule, each
Participant with at least 3 Years of Service as of the end of the election
period may elect to have such Participant's vested percentage computed under the
Plan without regard to such amendment or change. However, for Plan Years
beginning before January 1, 1989, or with respect to Employees who do not
complete one Hour of Service in a Plan Year beginning after December 31, 1988,
"5 years" shall be substituted for "3 years" in the preceding sentence.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan
Administrator.
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ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the payment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which the
Participant who is a 5% owner or a Participant who has terminated
employment attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the first
day on which the Participant is entitled to such benefits.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411-(a)-11(c) of the Income Tax Code Regulations
is given, provided that:
(1) The Plan Administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The participant, after receiving the notice, affirmatively
elects a distribution.
No consent shall be required if a distribution is required to satisfy
Code section 401(a)(9) or 415. In addition, upon termination of the Plan if the
Plan does not offer the option of a commercial annuity, the Participant's
account balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan under Code section 4975(e)(7)) within the same
controlled group.
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An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of Normal Retirement Age or age 62.
Absent such Participant's consent to receive benefits in excess of $3,500,
distribution of benefits shall begin no sooner than the later of age 62 or
Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for consent of the Participant.
For purposes of this Section, if the value of a Participant's vested account
balance is zero, the Participant shall be deemed to have received a distribution
of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods as elected by the Participant:
(a) Single Payment. Payment may be in one lump-sum payment in
cash in the year in which distribution is to be made.
(b) Lifetime Payments. Payments may be made over a period not
extending beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's Beneficiary.
Notwithstanding the foregoing, distribution of a Participant's benefits
attributable to the Participant's account balance transferred from the Lenox
Retail Savings and Investment Plan will be made pursuant to Section 9.04 hereof.
4.04 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in cash.
Notwithstanding the foregoing, distribution of a Participant's benefits
attributable to the Participant's account balance transferred from the Lenox
Retail Savings and Investment Plan will be made pursuant to Section 9.06 hereof.
4.05 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
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(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy
of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required
to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(ii) The amount to be distributed each year shall not
be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's Spouse is not the
designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations. Distributions after the death of the
Participant shall be distributed using the applicable life
expectancy in subsection (i) above as the relevant divisor
without regard to proposed regulations section 1.401(a)(9)-2.
(iii) The minimum distribution required for the
Participant's first distribution calendar year must be made on
or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(iv) If the participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life
expectancy and joint and last survivor life expectancy will be made by
use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the Participant
or Spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election shall be
irrevocable. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
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4.06 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred to
an account holding potential forfeitures. This account shall continue
to be adjusted by earnings and losses of the Trust; provided, however,
in the case of any Participant who has incurred five (5) or more
consecutive Breaks in Service (Five Year Break in Service) prior to the
resumption of employment with the Employer, the non-vested portion of
such terminated Participant's benefits, and all regular periodic
adjustments thereto, shall be deemed forfeited and shall be used to
reduce the Employer's contribution for the Plan Year within which the
fifth Break in Service occurs. Upon such forfeiture, such terminated
Participant's Account shall be closed and if the vested Account
balance has not been paid to the Participant, the vested portion of
such Account shall be transferred to a separate Fully Vested Account
for such terminated Participant's benefit; provided, however, at such
time as the terminated Participant resumes employment with the
Employer, an additional separate Account shall be established for the
Participant's benefit as if the Participant were a new Participant,
which Account shall be maintained separate and distinct from the
Participant's Fully Vested Account, until such Account becomes fully
vested at which time the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's benefits shall be deemed forfeited and shall be allocated
as of the Accounting Date of the Plan Year of termination of a
non-vested Participant, or the Plan Year in which distribution to a
vested Participant is made, in accordance with subsection (a) as though
a Five Year Break in Service had occurred. If less than the entire
vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator
of which is the total value of the vested Employer derived account
balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated
Participant, who has received a distribution of the entire
vested portion of such Participant's benefits is reemployed by
the Employer prior to a Five Year Break in Service, and repays
to the Plan (in cash and/or kind, as initially distributed) an
amount equal to the full amount of such distribution
(repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of
distribution shall be reinstated by the Employer (in cash
and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's
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reemployment; provided, however, reinstatement of such
Participant's forfeiture shall occur only where repayment by
the Participant is completed by the earlier of: (1) the
last day of the Plan Year within which the Participant has
five consecutive Breaks in Service or (2) five years after the
Participant is reemployed by the Employer. If a terminated
Participant incurs five consecutive Breaks in Service,
repayment will not be permitted.
(ii) Non-Vested Participant. If a terminated
Participant who had no vested interest in his benefits is
reemployed by the Employer before the Participant's
consecutive Breaks in Service equal or exceed the greater of
(1) five, or (2) the aggregate number of pre-break Years of
Service, that terminated Participant's benefits, if previously
forfeited shall be reinstated (in cash or in kind as initially
forfeited) to constitute the opening balance of such
Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection
(c) of this Section shall be made from the following sources in the
order described:
(1) From the forfeiture of such terminated
Participant's Account which has not yet been applied pursuant
to subsection (a) above (the account of potential
forfeitures); or if insufficient,
(2) From forfeitures applicable as of the Accounting
Date of the Plan Year within which repayment is completed; or
if insufficient,
(3) From the Employer contributions for the Plan Year
within which such repayment is completed; and if necessary,
for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration. Restoration
of a forfeiture pursuant to this subsection (e) shall in all events be
completed by the Accounting Date of the Plan Year next following the
Plan Year within which the repayment is completed.
4.07 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.08 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
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4.09 Pre-1984 Election. The preceding Sections of this Article IV
notwithstanding, if the Participant has, before January 1, 1984, made an
election to receive benefits in a form acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982, and if the Participant filed such election in a timely manner with the
Plan Administrator, said election shall be effective unless and until revoked by
the Participant. If an election is revoked any subsequent distributions must
meet the requirements of this Article IV.
4.10 Pre-Retirement Distribution. A Participant who has been a
Participant for at least two years and who attains age 59 1/2 may elect to
receive a distribution of the entire vested amount credited to such
Participant's Accounts, or a portion thereof, excluding amounts from the CORE
Account and the ESOP Contribution Account. Any Participant who withdraws
Elective Contributions shall not be permitted to make Elective Contributions
until six (6) months have elapsed from the date on which such withdrawal occurs.
A Participant who receives such a distribution shall continue to participate in
the Plan. Any such distribution shall be made in a manner consistent with the
requirements of this Article IV, including all notice and consent requirements.
4.11 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for the CORE Account, the ESOP Contribution
Account, and any Special Employer Contributions, and earnings credited
to the Participant's Elective Account after December 31, 1988) of an
amount necessary to satisfy the Participant's immediate and heavy
financial need where the Participant lacks other available resources on
account of:
(i) accident or illness involving the Participant or
a member of the Participant's immediate family or household or
other dependant,
(ii) tuition and related educational fees for the
next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan
Administrator determines constitutes an immediate and heavy
financial need.
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No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
(i) The Participant shall apply for the distribution
under procedures fixed by the Plan Administrator.
(ii) The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Plan Administrator.
(iii) The distribution shall not exceed the amount of
the financial need.
(iv) The Participant shall obtain all distributions
and nontaxable loans available under all plans of the
Employer.
(v) The Participant's Elective Contributions under
all plans of the Employer for the year immediately following
the year of the hardship distribution shall not exceed $7,979
(adjusted pursuant to the method provided in Code section
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.12 Loans to Participant.
(a) The Trustee may, if the Plan Administrator directs, lend amounts in
accordance with this Section and the Trust Agreement, provided, however, that
Participant loans are not permitted from the Participant's CORE Account or the
Participant's ESOP Contribution Account.
Loans may be made to Participants and Beneficiaries under the following
circumstances: (1) loans are made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans are not made available
to Highly Compensated Employees in an amount greater than the amount made
available to other employees; (3) loans bear a reasonable rate of interest; (4)
loans are adequately secured; and (5) loans provide for repayment over a
reasonable period of time.
(b) Any loan granted or renewed on or after the last day of the first
Plan Year beginning after December 31, 1988, shall be made pursuant to a written
Loan Program which shall be contained in a separate document incorporated herein
by reference, and shall include the following:
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(1) the identity of the person(s) or position(s)
authorized to administer the loan program;
(2) the procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on types and amounts of loans;
(5) the procedure for determining a reasonable interest
rate;
(6) the types of collateral which may secure a loan; and
(7) the events constituting default and the steps that
will be taken to preserve plan assets.
(c) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by any plan maintained by the Employer) shall be
limited to the lesser of:
(1) $50,000, reduced by the amount of principal repaid on any
prior loan within the 12-month period ending on the date a loan is
made, or
(2) the greater of (a) 1/2 the Participant's vested Account
balance, or (b) $10,000.
(d) Loans shall provide for level amortization with payments to be made
at least quarterly over a period not to exceed five (5) years.
(e) No distribution shall be made to any Participant or to a
Beneficiary of any Participant unless and until all unpaid loans, including
accrued interest thereon have been liquidated.
(f) Any loan made pursuant to this Section is earmarked as a Directed
Investment in the borrowing Participant's Account, pursuant to Section 7.10.
4.13 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and
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administration of such Qualified Domestic Relations Order may be charged against
and paid from the Accounts of the Participant named in the order.
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ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Nonelective Contribution by Employer. The Employer shall
contribute to the Trust a Nonelective Contribution on behalf of each Participant
who is a salaried Employee of the retail division and who is employed on the
last day of the Plan Year, except those Employees at the plant location in
Lebanon, Tennessee. The amount of the Nonelective Contribution is equal to three
percent (3%) of the Compensation earned by the Participant during the portion of
the Plan Year the Participant is employed at the retail stores. The nonelective
contributions made pursuant to this Section are credited to the Participant's
Company Retirement (CORE) Account in accordance with Section 7.01.
5.02 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.02.
5.03 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. The amount of
the Matching Contribution shall be
(i) For non-retail Employees, an amount equal to 75% of a
Participant's Compensation deferred. However, in
applying the foregoing matching percentages, only
Participant Elective Contributions up to 5% of
Compensation shall be considered.
(ii) For retail Employees, an amount equal to fifty (50%)
percent of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the
remainder of the Participant's Compensation deferred.
However, in applying the foregoing matching
percentages, only Participant Elective Deferrals up
to 10% of Compensation shall be considered.
(iii) Notwithstanding the foregoing, retail store Employees
at the plant location in Lebanon, Tennessee, shall
receive a matching contribution as set out in
subparagraph (i) above.
The Matching Contribution shall be credited to the Employer Matching
Contribution Account of eligible Participants in accordance with Section 7.03.
5.04 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the
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Employer provided the return is accomplished within one (1) year after the
disallowance of the deduction.
5.05 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and proposed
Regulation 1.401(m)-1 and -2. The Code and Regulation sections are incorporated
by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees,
or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
To prevent the multiple use of the tests in this subsection (b), if a
Highly Compensated Participant is eligible to make elective deferrals pursuant
to any cash or deferred arrangement maintained by the Employer or an Affiliated
Employer, or to make Employee contributions or receive matching contributions
under this or any other plan maintained by the Employer or an Affiliated
Employer, such Participant's Actual Contribution Percentage shall be reduced
pursuant to Treasury regulation 1.401(m)-2. The provisions of regulations
1.401(m)-1(b) and 1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for the Plan Year used in
performing the calculations by the Participant's Compensation for such Plan
Year. The ADP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ADPs of each eligible
Participant in the group, calculated to the nearest one-hundredth of one
percent. Elective Contributions allocated to non-Highly Compensated Participants
shall not include Excess Deferrals (determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions for the Plan Year used in
performing the calculations by the Participant's Compensation for such Plan
Year. The ACP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ACPs of each eligible
Participant in the group calculated to the nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section
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4975(e)(7)) to which Elective Contributions, Matching Contributions or Voluntary
Contributions are made, such contributions on behalf of such Highly Compensated
Participant shall be aggregated in determining the ADP and ACP of such
Participant. If the plans have different plan years, all plans ending within the
same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. Plans may be aggregated to satisfy Code section 401(k)
and 401(m) only if they have the same Plan Year.
5.06 Special Employer Contributions. Within 12 months after the end of
the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.05.
The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears to
the Compensation of all such eligible Participants.
(b) As a level dollar amount to each eligible Participant or
group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.03. If Special Employer Contributions are made for purposes of
satisfying one of the nondiscrimination tests outlined in Section 5.05, a
separate accounting shall be maintained within the applicable Elective
Contribution Accounts to prevent such Special Employer Contributions from being
taken into consideration for purposes of determining whether any other
contributions satisfy the remaining
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nondiscrimination tests. Further, the contributions shall satisfy the
nondiscrimination requirements in accordance with Regulation 1.401(k)-1(b)(5)
and Regulation 1-401(m)-1(b)(5), incorporated herein by reference.
5.07 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.05, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest dollar amount of elective deferrals such Participant's excess amounts
("Excess Contributions") and income allocable thereto (determined under
applicable regulations) until the excess amounts have been distributed, or until
such Participant's dollar amount of elective deferrals equals the dollar amount
of elective deferrals of the Highly Compensated Participant having the second
highest dollar amount of elective deferrals . This process shall continue until
the excess amounts have been distributed. The amount of Excess Contributions for
a Highly Compensated Participant is then equal to the total of elective and
other contributions taken into account for the ADP test, minus the product of
the employee's ADP (as determined after application of this Section) and the
employee's compensation used in determining that ratio. The amount of Excess
Contributions to be distributed shall be reduced by any previous distribution of
Excess Deferrals (pursuant to Section 6.01) for the employee's taxable year
ending in the same Plan Year.
Excess Contributions shall within two and one-half months after the
Plan Year end be distributed to the Participant. Distribution may be postponed
but not later than the close of the Plan Year following the Plan Year in which
the Excess Contribution was allocable; however, if the Excess Contributions are
not corrected within two and one-half months after the Plan Year end, a 10%
excise tax will be imposed on the Employer on such amounts. The Employer shall
designate the distribution as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution shall be made first from unmatched Elective Contributions,
and then simultaneously from matched Elective Contributions and Matching
Contributions which relate to such Elective Contributions. However, any such
Matching Contributions which are not vested shall be forfeited in lieu of
distribution.
5.08 Correction of Excess Employer Matching Contributions. If the
amount of Matching Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section 5.05, the
Plan Administrator shall distribute to the Highly Compensated Participant having
the highest dollar amount of matching contributions such Participant's excess
amounts ("Excess Aggregate Contributions") and income allocable thereto
(determined under applicable regulations) until the excess amounts are
distributed/forfeited, or until such Participant's dollar amount of matching
contributions equals the dollar amount of matching contributions of the Highly
Compensated Participant having the second highest dollar amount of matching
contributions. This process shall continue until the excess amounts are
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distributed/forfeited. The amount of Excess Aggregate Contributions for a Highly
Compensated Employee is then equal to the total of matching and other
contributions taken into account for the ACP test, minus the product of the
Employee's ACP (as determined after application of this Section) and the
Employee's Compensation used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
(b) Voluntary Contributions, if any, including recharacterized
amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
5.09 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.10 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service rules that such Plan is not
qualified, the Employer reserves the right to recover contributions which were
made prior to a final ruling from the Internal Revenue Service with respect to
the initial determination as to qualification of the Plan and Trust. Any
contribution of the Employer shall be returned to the Employer within one (1)
year after the date of the final ruling with respect to the denial of initial
qualification of the Plan and Trust.
5.11 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect to
defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between two percent (2%) and fifteen percent (15%) (in
increments of 1%) of the Participant's Compensation for the Plan Year in
question, but shall not exceed a dollar amount as adjusted pursuant to the
method provided in Code section 415(d) for the Participant's taxable year. The
Plan Administrator may fix lower maximums for Highly Compensated Employees to
satisfy the nondiscrimination tests of Section 5.05.
A Participant's elective contributions for his or her taxable year
under the Plan and all other plans, contracts and arrangements of an employer
will not exceed the amount of the Section 402(g) limitation in effect for the
calendar year with or within which such taxable year begins. The Section 402(g)
limitation is the greater of $7,000.00 or the adjusted amount determined by the
Secretary of the Treasury.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution of
Excess Contributions pursuant to Section 5.07 for the Plan Year beginning within
the Participant's taxable year.
If the amount allocated to the Participant's Elective Contribution
Account for the Plan Year is less than the maximum amount specified in this
Section, the Participant may elect to have the Employer make a lump-sum Elective
Contribution to the Trust on behalf of the Participant, of an amount not less
than two percent (2%) or more than fifteen percent (15%) (in increments of 1%)
of the Participant's Compensation for the Plan Year in question, subject to the
limitation in this Section. The lump-sum Elective Contribution may be made in
January or December of the Plan Year. Such contribution shall be made as soon as
administratively feasible following the date on which such amount would
otherwise have been paid to the Participant.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) by notifying the
Employer and the Plan Administrator at least fifteen (15) days prior to the date
such changes in contribution are to take effect, or at any
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other time mutually agreeable between the Employer and the Participant, provided
that all Participants under similar circumstances are treated alike.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
(i) the Participant's retirement, death, Total and Permanent
Disability, separation from service, or attainment of age 59 1/2;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such corporation if the
Participant continues employment with the corporation acquiring such
assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to Section
4.13; or
(vi) pursuant to Sections 6.01 and 5.07.
6.05 Withdrawal from Voluntary Contribution Account. Any withdrawal
from the Participant's Voluntary Contribution Account is subject to the
distribution rules provided in Section 6.04.
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ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Nonelective Employer Contribution. Each Plan Year
the Nonelective Employer Contribution shall be allocated to the CORE Accounts of
all eligible Participants employed on the last day of the Plan Year in the same
manner as the contribution is determined pursuant to Section 5.01.
7.02 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Contribution Account of
such Participant in the same manner as the contribution is determined pursuant
to Section 6.01.
7.03 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.03.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to which
the contribution relates.
7.04 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be used to reduce the Employer's matching contribution for the
current Plan Year.
7.05 Amendment of Allocation Eligibility. [Reserved.]
7.06 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
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from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any elective contributions and/or any voluntary
contributions credited for the Limitation Year to the extent the return
would reduce the excess amount in the Participant's Accounts;
(b) Hold any remaining excess after the return of elective
and/or voluntary contributions in the Participant's Account to be used
to reduce Employer contributions in the next Limitation Year and
succeeding years if necessary;
(c) If an excess amount still exists and the Participant is
not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and applied to reduce
Employer contributions for all remaining Participant's in the next
Limitation Year (and succeeding years if necessary) before any Employer
or Employee contributions may be made to the Plan for that Limitation
Year; or
(d) Reduce Employer Matching Contributions to the Plan for
such Limitation Year by the amount of the suspense account allocated
and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
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(a) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income in the year
in which contributed;
(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
Compensation shall be limited to $150,000 as adjusted in the same
manner as permitted under Code section 415(d).
7.07 Overall Limit. In addition to the foregoing if any Participant is
(or has been) a Participant under any defined benefit plan of the Employer, the
sum of the Defined Benefit and Defined Contribution Fractions (defined below)
for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit Fraction for
any Limitation Year is a fraction, the numerator of which is the
Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount which
may be taken into account under Code section 415(b)(1)(B) for such
Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined
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benefit plans individually and in the aggregate satisfied the
requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
(b) Defined Contribution Fraction. The Defined Contribution
Fraction is a fraction, the numerator of which is the sum of Annual
Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for the
current and all prior Limitation Years (including the annual additions
attributable to the participant's nondeductible employee contributions
to the participant's plans, whether or not terminated, maintained by
the employer, and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(1)(2) of the Code
maintained by the employer); and the denominator of which is the sum of
the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer): (a) 1.25 multiplied by the dollar limitation determined
under Code section 415(b) and (d) in effect under Code section
415(c)(1)(A), or (b) 35 percent of the Participant's compensation for
such year.
If the employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the employer which
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the annual
benefit under any other defined benefit plans or defined contribution plans
shall be reduced in order to achieve compliance with the limitations of Internal
Revenue Code Section 415 shall be determined by the Plan Administrator in such a
manner so as to maximize the aggregate benefits payable to such Participant. If
such reduction is under this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual contribution or
benefits required by this paragraph.
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7.08 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
7.09 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.10 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the Plan
Administrator, may establish written procedures, incorporated specifically as
part of this Plan, relating to Participant direction of investment under this
Section 7.10.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant self-direction.
Each such segregated investment Account shall be adjusted with the earnings,
losses and expenses attributable to said Account.
(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are relieved of
fiduciary responsibility or liability for any losses resulting from a
Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.11 Periodic Adjustments to Account. The Account(s) held in trust for
the benefit of a Participant shall be adjusted in an equitable and reasonable
manner, generally to be determined as follows unless circumstances require
otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
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(i) The fair market value of the Trust on the
current Accounting Date as of which the calculation is made,
excluding the Employer's contribution and all voluntary
contributions of Participants for the current Accounting Date,
less
(ii) The fair market value of the Trust on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including any
amount falling due and paid from the Trust during such Plan
Year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's Voluntary
Contribution Account shall also include the amount of any voluntary
contributions made by the Participant after such Accounting Date):
provided, however, if the Plan Administrator directs payment of a
Participant's Accounts in any manner other than a single payment to be
made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such distribution in
order to account for any substantial changes in the value of the Trust
assets since such Account's most recent regular periodic adjustment. In
such event, the Plan Administrator shall restate the value of the Trust
assets in order to determine the percentage of increase or decrease in
the fair market value of all net Trust assets (deducting any advance
contributions and any voluntary contributions of Participants for the
Plan Year in question) as of the end of the month (hereinafter referred
to as the Interim Valuation Date) next preceding the date of
distribution of the Account. The Participant's Account, as of the
Accounting Date immediately preceding such Interim Valuation Date,
shall, for the purpose of distribution only, be adjusted to reflect
such increase or decrease, as the case may be, by multiplying such
Account by the percentage determined as aforesaid. Such interim
valuation percentage once determined shall be applied to the Accounts
of any other Participants who are to receive a distribution of their
Account in a single payment following such Interim Valuation Date but
prior to the next regular periodic adjustment of Accounts, or the next
Interim Valuation Date, whichever is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in 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 Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Top Heavy Vesting Schedule. If the Plan becomes Top Heavy, a
Participant's vested interest in such Participant's CORE Account shall be
determined in accordance with the following schedule:
Vested Percentage
Years of Service of Account
---------------- ----------
Less than 3 years 0%
3 years or more 100%
8.04 Minimum Benefits. The provisions of Article VII notwithstanding, a
minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) if the Employer has no defined benefit plan which
designates this Plan to satisfy Code section 401(a)(4) or 410, the largest
percentage of Employer contribution and/or forfeitures allocated to the Account
of a Key Employee. Such minimum contribution must be allocated to the account of
all non-Key Participants who are employed by the Employer on the Accounting
Date, regardless of the number of Hours of Service credited during the Plan Year
to which the contribution relates, regardless of whether or not the Participant
makes mandatory contributions for the Plan Year to which the contribution
relates, and regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.05 Impact on Maximum Benefits. For any Plan Year in which the Plan is
a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be read by
substituting the number 1.00 for the number 1.25 wherever it appears therein,
unless the Plan meets the following additional minimum benefit requirements:
(i) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant only in this Plan by substituting four
percent (4%) for three percent (3%) in Section 8.05;
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(ii) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant in both this Plan and such a defined
benefit plan by substituting seven and one-half percent (7 1/2%) for
three percent (3%) in Section 8.05.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.06 Determination of Super Top Heavy. The Plan is Super Top Heavy if
as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group exceeds 90% of the sum of the account balances and/or present
value of accrued benefits of all Participants under this Plan and all Plans of
an Aggregation Group.
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ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic
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relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover. A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee is specifically authorized to accept a plan-to-plan
transfer on behalf of participants in this Plan of their accounts in the Lenox,
Incorporated Savings and Investment Plan and/or the Lenox Retail Savings and
Investment Plan.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans shall be
segregated in a fully vested and nonforfeitable Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
9.04 Manner of Payment of Retirement Benefits Transferred From Lenox
Retail Savings and Investment Plan. Distribution of a Participant's benefits
will be made to the Participant or Beneficiary by one of the following methods:
(a) Automatic Form of Payment of Retirement Benefits. Unless
the Participant elects otherwise as provided below, distribution of a
Participant's benefits will be made to the Participant by one of the
following methods, as applicable:
(i) Joint and Survivor Annuity. A Participant who is
married on the Annuity Starting Date shall receive the value
of the benefits in the form of a Joint and Survivor Annuity.
The Joint and Survivor Annuity shall be the actuarial
equivalent of a single life annuity. Such Joint and Survivor
benefits following the Participant's
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death shall continue to the Spouse during the Spouse's
lifetime at a rate equal to fifty percent (50%) of the rate at
which such benefits were payable to the Participant.
Notwithstanding the foregoing, a Joint and
Survivor Annuity will not be provided unless the Participant
and Spouse have been married the entire 1-year period ending
on the earlier of (1) the Annuity Starting Date, or (2) the
Participant's death. However, if a Participant marries within
one year before the Annuity Starting Date and such marriage
continues for at least a one year period ending on or before
the Participant's death, then the Participant and such Spouse
must be treated as having been married for one year prior to
the Annuity Starting Date, provided that the said Participant
notifies the Plan Administrator when the said Participant has
been married for one year.
(ii) Single Life Annuity. A Participant who is not
married on the Annuity Starting Date shall receive benefits in
the form of a Single Life Annuity.
(b) Optional Form of Payment of Retirement Benefits. If a
Participant duly elects pursuant to Section 4.04 to waive the Joint and
Survivor Annuity or Single Life Annuity, as applicable, distribution of
a Participant's benefits will be made to the Participant or Beneficiary
by one of the following methods, as elected by the Participant:
(i) By lump-sum payment in cash.
(ii) Payments may be made over a period not extending
beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's
Beneficiary.
9.05 Election to Waive Joint and Survivor Annuity and Single Life
Annuity.
(a) Election and Spousal Consent. An election to waive the
Joint and Survivor Annuity must be made by the Participant in writing
during the Election Period and be consented to by the Participant's
Spouse. Such election shall designate a Beneficiary or a form of
benefits that may not be changed without spousal consent (unless the
original consent acknowledged the Spouse's right to limit consent to a
specific Beneficiary or form of benefits and the Spouse voluntarily
chose to relinquish one or both of such rights). Such Spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Plan Administrator that the required consent cannot be obtained
because there is no Spouse, or the Spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election made
by the Participant and consented to by the Spouse may be revoked by the
Participant in writing without the consent of the Spouse at any time
during the Election Period. The number of revocations
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shall not be limited. Any new election must comply with the
requirements of this Section. A former Spouse's waiver shall not be
binding on a new Spouse.
(b) Election Period. For purposes of this Section, the
Election Period to waive the Joint and Survivor Annuity shall be the
ninety (90) day period ending on the Annuity Starting Date.
(c) Notice Period. With regard to the election, the Plan
Administrator shall provide the Participant a written explanation no
less than 30 and no more than 90 days before the Annuity Starting Date
containing:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the effect
of an election to waive the Joint and Survivor Annuity, and
(iii) the rights of the Participant's Spouse, and
(iv) the right of the Participant to revoke such
election and the effect of such revocation.
(v) the relative values of the various optional
forms of benefits under the Plan.
(d) Election to Waive Single Life Annuity. An unmarried
Participant may elect to waive the Single Life Annuity form of payment
by complying with the provisions of this Section as if electing to
waive the Joint and Survivor Annuity, but without the spousal consent
requirements.
9.06 Payment of Benefits Transferred from Lenox Retail Savings and
Investment Plan Upon Death of Participant. Other than an annuity payable
pursuant to Section 9.04, if a Participant dies before having received the
entire vested balance of that Participant's benefits and has a Surviving Spouse,
such remaining vested balance, plus the proceeds of any insurance on the life of
the Participant held in the Participant's Accounts shall be paid to or for the
benefit of the Participant's Spouse in the form of a Pre-Retirement Survivor
Annuity, unless the Participant has elected to waive the annuity pursuant to
Section 9.07. Payment of such annuity shall commence within a reasonable time
after the Participant's death unless the Spouse elects a later commencement
date. However, payment must commence on or before the later of (i) the last day
of the calendar year following the year of the Participant's death, or (ii) the
last day of the year in which the Participant would have attained age 70-1/2.
If a Participant's death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, the Participant's death benefits shall be paid
to the Beneficiary in a lump sum payment in cash.
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Notwithstanding the foregoing, a Pre-Retirement Survivor Annuity will
not be provided unless the Participant and Spouse have been married the entire
one-year period ending on the earlier of (1) the Annuity Starting Date, or (2)
the Participant's Death.
9.07 Election to Waive Pre-Retirement Survivor Annuity. Any
election to waive the Pre-Retirement Survivor Annuity before the Participant's
death must be made by the Participant in writing during the Election Period and
shall require the Spouse's irrevocable consent in the same manner provided for
in Section 9.05. Further, the Spouse's consent must acknowledge the specific
nonspouse Beneficiary or the alternative form of death benefit to be paid in
lieu of the Pre-Retirement Survivor Annuity (unless the consent of the Spouse
acknowledges that the Spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit and that the Spouse voluntarily elects
to relinquish one or both of such rights.)
(a) The Election Period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age thirty-five (35) and end on the date of the
Participant's death. In the event a vested Participant separates from
service prior to the beginning of the Election Period, the Election
Period shall begin on the date of such separation from service.
Pre-age 35 waiver: A Participant who will not yet attain age 35 as of
the end of any current Plan Year may make a special qualified election
to waive the Pre-Retirement Survivor Annuity for the period beginning
on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall
not be valid unless the Participant receives a written explanation of
the Pre-Retirement Survivor Annuity in such terms as are described
below. Pre-Retirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
participant attains age 35. Any new waiver on or after such date shall
be subject to the full requirements of this Section.
(b) With regard to the election, the Plan Administrator shall
provide each Participant within the "applicable period", with respect
to such Participant (and consistent with regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 4.04. The
term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(i) The period beginning with the first day of the
Plan Year in which the Participant attains age thirty-two (32)
and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age thirty-five (35);
(ii) A reasonable period ending after the individual
becomes a Participant. For this purpose, in the case of an
individual who becomes a Participant after age thirty-two
(32), the explanation must be provided by the end of the
three-year period
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beginning with the first day of the first Plan Year for which
the individual is a Participant;
(iii) A reasonable period ending after the Plan no
longer fully subsidizes the Pre-Retirement Survivor Annuity
with respect to the Participant;
(iv) A reasonable period ending after Code section
401(a)(11) applies to the Participant; or
(v) A reasonable period after separation from
service in the case of a Participant who separates before
attaining age thirty-five (35). For this purpose, the Plan
Administrator must provide the explanation at the time of
separation or within one year after separation.
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ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown-Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the participation
of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by action
of its governing authority, may withdraw from the Plan after giving 90 days
advance notice to the Board of Directors of Brown-Forman Corporation, provided
the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to all
Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
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ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service with
the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports
to the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the
Plan, including supplying any omissions in accordance with the intent
of the Plan, decide all questions of eligibility, determine the amount,
manner and time of payment of any benefits hereunder, authorize the
payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such manner
as the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
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(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as set
forth in the Plan; and
(k) Generally. Exercise other powers and duties the Employer
may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
11.04 Instructions to Trustee. The Trustee may request instructions in
writing from the Plan Administrator on other matters and may rely and act upon
them.
11.05 Claims Procedure. The Plan Administrator shall establish a claims
procedure for the benefit of Participants and their Beneficiaries which shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
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11.06 Delegating Responsibility. The Plan Administrator may delegate in
writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any such delegation of responsibility.
Any action of the Trustee in the exercise of such delegated responsibilities
shall have the same force and effect for all purposes as if such action had been
taken by the Plan Administrator. The Trustee shall have the right, in its sole
discretion, by written instrument delivered to the Plan Administrator, to
reject and to refuse to exercise any such delegated authority.
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ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest extent
permitted by law, none of the benefits under the Plan are subject to the claims
of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust Agreement
and said Trust Agreement is made a part hereof. The Trust and any income
therefrom received by the Trustee shall be received, held in trust, and
disbursed by the Trustee in accordance with written instructions from the Plan
Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as provided
in Article V, it shall not be possible (within the taxable year or thereafter)
for any part of the corpus or income to be used for purposes other than for the
exclusive benefit of the Participants or their Beneficiaries at any time prior
to the satisfaction of all liabilities with respect to Participants and their
Beneficiaries under the Trust.
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12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
If this Plan replaces a defined contribution plan which provided for
Early Retirement Benefits, the provisions of the prior plan relating to Early
Retirement shall govern for any Participant who was a Participant of the prior
plan and who satisfied the requirements for Early Retirement in the prior plan
as of the date of adoption of this Plan.
12.08 Acts by Trustee. The Employer shall not be responsible for any of
the acts of the Trustee.
12.09 Laws of Kentucky. The provisions of this Plan shall be construed,
administered, and enforced in accordance with the laws of Kentucky, to the
extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall include
the feminine. Whenever words are used herein in the singular, they shall be
construed as though they were used in the plural, in any case where they would
so apply.
12.12 Merger or Consolidation. In the event of a merger, consolidation
or transfer of assets and/or liabilities to any other Plan, each Participant
shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
such transaction if the Plan had then terminated.
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12.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary power includes, but is not limited to, construing and interpreting
this Plan, construing disputed or doubtful terms, supplying omissions in
accordance with the intent of the Plan, deciding questions of eligibility for
participation, determining the amount, timing and payment of benefits under the
terms of the Plan, reviewing benefit eligibility determinations, and authorizing
the payment of benefits. Whenever the Administrator acts pursuant to the terms
of this Plan, such action will be taken in a uniform and nondiscriminatory
manner. Any construction of the Plan or Trust adopted by the Administrator in
good faith, and any discretionary action exercised by the Administrator in good
faith, shall be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
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ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 8th day of September, 1997, effective October 1,
1997.
BROWN-FORMAN CORPORATION
By : /s/ Milton B. Gillis
-------------------------------
MILTON B. GILLIS, Vice-President
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FIRST AMENDMENT
HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
The Hartmann Employee Savings and Investment Plan was adopted by
Brown-Forman Corporation for the benefit of employees of Hartmann Luggage
Company effective October 1, 1997.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1, 1999,
Article IV, Time and Manner of Payment, is amended to increase the involuntary
cashout limit from $3,500 to $5,000. The $3,500 dollar limit is amended to read
$5,000 wherever that $3,500 dollar limit appears in Article IV of this Plan.
2. Sections 4.03 and 4.04 are correctively amended effective October 1,
1997, to reflect the options for distribution of the transferred ESOP Accounts
as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in
one lump-sum payment in cash in the year in which distribution
is to be made; provided, however, that payment from a
Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind.
(b) Lifetime Payments. Payments may be made
in cash over a period not extending beyond the life expectancy
of the Participant or the joint life expectancies of the
Participant and the Participant's Beneficiary.
Notwithstanding the foregoing, distribution of a
Participant's benefits attributable to the Participant's
balance transferred from the Lenox Retail Savings and
Investment Plan will be made pursuant to Section 9.04 hereof.
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4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment from
a Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind.
3. Effective April 1, 1999, Sections 4.03 and 4.04 are amended in their
entirety as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in
one lump-sum payment in cash in the year in which distribution
is to be made; provided, however, that payment from a
Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind. Effective April 1, 1999,
payment of all or any portion of a Participant's account
balance invested in the Brown-Forman Stock Fund may be made in
one lump-sum payment in cash or kind, with in kind
distribution in the form of Brown-Forman Corporation Class B
shares.
(b) Lifetime Payments. Payments may be made
in cash over a period not extending beyond the life expectancy
of the Participant or the joint life expectancies of the
Participant and the Participant's Beneficiary.
Notwithstanding the foregoing, distribution of a
Participant's benefits attributable to the Participant's
balance transferred from the Lenox Retail Savings and
Investment Plan will be made pursuant to Section 9.04 hereof.
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment from
a Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind. Effective
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April 1, 1999, payment of all or any portion of a
Participant's account balance invested in the Brown-Forman
Stock Fund may be made in one lump-sum payment in cash or
kind, with in kind distribution in the form of Brown-Forman
Corporation Class B shares.
4. Effective April 1, 1999, Section 7.10, Participant Direction of
Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have
established the Brown-Forman Stock Fund, composed of employer
securities in the form of Brown-Forman Corporation Class B
shares, as an additional investment option under the Plan. A
Participant may direct the investment of his/her account
balance into said Stock Fund under the terms and conditions as
agreed upon between the Trustee and the Plan Administrator.
In all other respects, the Hartmann Employee Savings and Investment
Plan as initially adopted and subsequently amended shall remain in full force
and effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Hartmann Employee Savings and Investment Plan to be executed by its duly
authorized officer this 25th day of March, 1999, effective as set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
----------------------------------
MILTON B. GILLIS,
Vice President
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