EXHIBIT 10.13
FIRST AMENDMENT AND RESTATEMENT OF
THE WILLIAMS-SONOMA, INC.
ASSOCIATE STOCK INCENTIVE PLAN
(Effective January 1, 1997)
TABLE OF CONTENTS
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ARTICLE I GENERAL DEFINITIONS........................................................... 1
ARTICLE II COMMITTEE AND OTHER FIDUCIARIES............................................... 9
2.1 Appointment of Committee............................................................... 9
2.2 Powers and Duties of Committee......................................................... 9
2.3 Direction of Trustee................................................................... 9
2.4 Funding Policy......................................................................... 11
2.5 Investment Manager..................................................................... 11
2.6 Organization of Committee Allocation and Delegation of Duties.......................... 12
2.7 Duties and Relationship of Fiduciaries................................................. 12
2.8 Compensation and Expenses of Committee................................................. 14
2.9 Records of the Committee............................................................... 14
2.10 Resignation and Removal of Members..................................................... 14
2.11 Appointment of Successors.............................................................. 14
2.12 Loans to Participants.................................................................. 15
2.13 Indemnification........................................................................ 15
2.14 Administrative Mistake................................................................. 16
2.15 Voting of Company Stock................................................................ 16
ARTICLE III PARTICIPATION OF EMPLOYEES.................................................... 16
3.1 Who May Participate.................................................................... 16
3.2 Breaks in Service...................................................................... 17
3.3 Termination of Participation........................................................... 18
3.4 Leaves of Absence; Military Service.................................................... 18
3.5 Committee to Determine Participants.................................................... 18
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ARTICLE IV CONTRIBUTIONS................................................................. 18
4.1 Employer Contributions................................................................. 18
4.2 Time for Payment....................................................................... 21
4.3 Dollar Limit on Salary Deferral Contributions.......................................... 21
4.4 Actual Deferral Percentage Test........................................................ 22
4.5 Actual Contribution Percentage Test.................................................... 24
4.6 No Multiple Use........................................................................ 26
4.7 Corrective Forfeiture of Matching Contributions........................................ 26
4.8 Rollover Contributions................................................................. 26
4.9 No Voluntary Contributions............................................................. 26
4.10 Transfers From Other Qualified Plans................................................... 27
4.11 Participant Accounts................................................................... 27
ARTICLE V DETERMINATION AND VESTING OF EMPLOYEES' INTERESTS............................. 27
5.1 Allocation to Participant Accounts..................................................... 27
5.2 Forfeitures............................................................................ 28
5.3 Overall Contribution Limitation........................................................ 29
5.4 Certain Compensation................................................................... 31
5.5 Vesting of Participants' Interests..................................................... 31
5.6 Election of Former Vesting Schedule.................................................... 32
5.7 Changes in Vesting Schedule............................................................ 33
ARTICLE VI TOP-HEAVY STATUS.............................................................. 33
6.1 Definitions Relating to Top-Heavy Status............................................... 33
6.2 Determination of Top-Heavy Status...................................................... 36
6.3 Consequences of Top-Heavy Status....................................................... 37
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ARTICLE VII DISTRIBUTIONS AND WITHDRAWALS FROM THE TRUST FUND............................. 38
7.1 Events Causing Distribution or Permitting Withdrawal................................... 38
7.2 Transfers to Other Qualified Plans..................................................... 39
7.3 Information to Be Furnished to Committee............................................... 39
7.4 Withdrawals from Rollover Contribution Accounts........................................ 39
7.5 Form of Distribution................................................................... 39
7.6 Disposition of Non-Vested Interests After Termination.................................. 41
7.7 Restoration of Forfeited Amounts on Reemployment....................................... 42
7.8 Spendthrift Trust Provisions........................................................... 42
7.9 Limitation on Time of Distribution..................................................... 43
7.10 Withdrawals After Age 59 1/2........................................................... 43
7.11 Required Distributions................................................................. 43
7.12 Claims Procedure....................................................................... 46
7.13 Missing Persons........................................................................ 49
7.14 Direct Rollovers....................................................................... 50
7.15 Withdrawal of Salary Deferral Contributions on Account of Hardship..................... 50
ARTICLE VIII CONTINUANCE AND AMENDMENT OF PLAN............................................. 52
8.1 Continuance of the Plan Not a Contractual Obligation of the Company.................... 52
8.2 Continuance of Plan by Successor Business.............................................. 52
8.3 Distribution of Trust Fund on Discontinuance of Plan................................... 53
8.4 Amendments............................................................................. 53
ARTICLE IX ADMINISTRATION OF THE TRUST FUND.............................................. 53
9.1 The Trust Agreement.................................................................... 53
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ARTICLE X MISCELLANEOUS................................................................. 54
10.1 Right of Employer to Dismiss Employees................................................. 54
10.2 Benefits Provided Solely from the Trust Fund........................................... 54
10.3 Plan Intended to Conform to Provisions of Federal Internal
Revenue Code Relative to Employees' Trusts ............................................ 54
10.4 Amended and Successor Code or Act or Sections Thereof.................................. 55
10.5 Context to Control..................................................................... 55
10.6 Gender and Number...................................................................... 55
10.7 Service of Process..................................................................... 55
10.8 Governing Law.......................................................................... 55
10.9 Adoption by Other Employers............................................................ 55
10.10 No Reversion to Employer............................................................... 55
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FIRST AMENDMENT AND RESTATEMENT OF
THE WILLIAMS-SONOMA, INC. ASSOCIATE STOCK INCENTIVE PLAN
(effective January 1, 1997)
Effective as of February 1, 1989, Williams-Sonoma, Inc., a California
corporation (the "Company"), adopted the Williams-Sonoma, Inc. Employee Profit
Sharing and Stock Incentive Plan (the "Plan"), a profit sharing plan intended to
qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), which includes a cash or deferred arrangement intended to satisfy
the requirements of Section 401(k) of the Code. Thereafter, the Plan was amended
10 times and the name of the Plan was changed to the Williams-Sonoma, Inc.
Associate Stock Incentive Plan. The Plan is being amended and restated in its
entirety (a) to incorporate the 10 amendments to the Plan adopted since February
1, 1989, and (b) to comply with the Internal Revenue Service Restructuring and
Reform Act of 1998, the Taxpayer Relief Act of 1997, the Uniformed Services
Employment and Reemployment Rights Act of 1994, the Uruguay Round Agreements
Act, the Internal Revenue Restructuring and Reform Act of 1998, the Small
Business Job Protection Act of 1996, and the Community Renewal Tax Relief Act of
2000 (collectively referred to as ("GUST"), and with certain rules and
regulations promulgated under GUST and otherwise. The Plan is hereby amended and
restated in its entirety effective as of January 1, 1997, except as otherwise
provided herein, as follows:
ARTICLE I
GENERAL DEFINITIONS
When used herein, the following words shall have the following meanings:
1.1 "Act" shall mean the Employee Retirement Income Security Act of 1974
(Public Law 93-406), all amendments thereto, and all regulations issued
thereunder.
1.2 "Affiliate" shall mean the Company and (a) any corporation that is a
member of a controlled group of corporations (as defined in Section 414(b) of
the Code), which includes the Company; (b) any trade or business (whether or not
incorporated), that is under common control (as defined in Section 414(c) of the
Code) with the Company; (c) any organization (whether or not incorporated) that
is a member of an affiliated service group (as defined in Section 414(m) of the
Code), which includes the Company; or (d) any other entity required to be
aggregated with the Company pursuant to regulations promulgated under Section
414(o) of the Code. The term Affiliate shall be modified by Section 415(h) of
the Code whenever applicable.
1.3 "Anniversary Date" shall mean December 31.
1.4 "Beneficiary" means a person designated to receive a Participant's
interest upon his death under Section 7.17.5 of Article VII.
1.5 "Board of Directors" shall mean the Board of Directors of
Williams-Sonoma, Inc.
1.6 "Code" shall mean the Internal Revenue Code of 1986, all amendments
thereto, and all regulations issued thereunder.
1.7 "Committee" means the Administration Committee provided for in Article
II.
1.8 "Company" shall mean Williams-Sonoma, Inc. or any successor
corporation.
1.9 "Company Stock" means common stock that is readily tradable on an
established securities market issued by the Company or by a corporation that is
a member of the same controlled group (within the meaning of Sections 409(l)(4)
and 1563(a) of the Code) as the Company.
1.10 "Company Stock Fund" means a fund invested primarily in shares of
Company Stock, but that also holds cash to provide enough liquidity to permit
disbursements before the settlement of trades of shares of Company Stock. For
purposes of recordkeeping, the Company Stock Fund shall be divided into units,
and each unit shall have a specific unit value at any given time.
1.11 "Compensation" means as follows:
(a) For purposes of Article IV and Section 5.1 of Article V,
"Compensation" means only base salary, overtime pay, and commissions.
(b) For all other purposes of this Plan, "Compensation" means wages
within the meaning of Section 3401(a) of the Code and all other payments of
compensation to an Employee by an Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the Employee a
written statement (Form W-2) under Sections 6041(d), 6051(a)(3), and 6052 of the
Code. Compensation must be determined without regard to any rules under Section
3401(a) of the Code that limit the renumeration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2) of the Code), except that
(effective January 1, 1998 for purposes of Section 5.3 of Article V and
effective January 1, 1997 for other purposes of this Plan) such Compensation
shall include any compensation that is not currently includable in a
Participant's income by reason of the application of Sections 402(g)(3), 125, or
457 of the Code. Effective January 1, 2001, Compensation also shall include any
compensation that is not currently includable in a Participant's income by
reason of the application of Section 132(f)(4) of the Code.
(c) Compensation for any Plan Year or Limitation Year (as defined in
Section 5.3 of Article V) shall mean the Compensation actually paid or made
available during such Plan Year or Limitation Year, as the case may be, except
that, for purposes of Article IV and Section 5.1 of Article V, (i) in the case
of an Employee who becomes a Participant during the Plan Year, Compensation paid
or made available to such Participant during the portion of the Plan Year before
he became a Participant shall be disregarded, and (ii) Compensation paid or made
available to a Participant after the date of termination of the Employment of
such Participant by reason of death, Total Disability, retirement, or otherwise,
shall be disregarded.
(d) The annual Compensation of each Participant taken into account
in determining all benefits provided under this Plan for any Plan Year shall not
exceed One
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Hundred Sixty Thousand Dollars ($160,000.00), as adjusted for changes in the
cost of living after 1997 in accordance with Section 401(a)(17)(B) of the Code.
The cost-of-living adjustment in effect for a calendar year applies to any
Determination Period, as defined below, beginning in such calendar year. If a
Determination Period consists of fewer than twelve (12) months, the annual
compensation limit is an amount equal to the otherwise-applicable annual
Compensation limit multiplied by a fraction, the numerator of which is the
number of months in the short Determination Period, and the denominator of which
is the number twelve (12). The "Determination Period" shall be the Plan Year.
(e) For Plan Years beginning on or after January 1, 1989, and before
January 1, 1994, the annual Compensation taken into account in determining a
Participant's benefits for any Plan Year shall not exceed Two Hundred Thousand
Dollars ($200,000.00). This limitation shall be adjusted by the Secretary at the
same time and in the same manner as under Section 415(d) of the Code, except
that the dollar increase in effect on January 1 of any calendar year shall be
effective for Plan Years beginning in such calendar year and the first
adjustment to the Two Hundred Thousand Dollar ($200,000.00) limitation shall be
effective January 1, 1990.
(f) If Compensation for any prior Determination Period is taken into
account in determining a Participant's benefits for the current Plan Year, the
Compensation for such prior Determination Period is subject to the applicable
annual Compensation limit in effect for that prior period. For this purpose, in
determining benefits in Plan Years beginning on or after January 1, 1989, the
annual Compensation limit in effect for Determination Periods beginning before
January 1, 1989 is Two Hundred Thousand Dollars ($200,000.00). In addition, in
determining benefits in Plan Years beginning on or after January 1, 1994, the
annual Compensation limit in effect for Determination Periods beginning before
January 1, 1994 is One Hundred Fifty Thousand Dollars ($150,000.00).
(g) For Plan Years beginning prior to January 1, 1997, in
determining the annual Compensation limit, the rules of Section 414(q)(6) of the
Code shall apply, except that, in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendents of the
Participant who have not attained the age of nineteen (19) years before the
close of the Plan Year. If, as a result of the application of such rules, the
adjusted annual Compensation limit is exceeded, such limitation shall be
prorated among the affected individuals in proportion to each such individual's
Compensation as determined under this Section 1.11 before the application of
such limitation.
1.12 "Effective Date" of this Plan is February 1, 1989. The Effective Date
of this Amendment and Restatement is January 1, 1997, except as otherwise stated
herein.
1.13 "Employee" means any person now or hereafter in the employ of an
entity constituting the Employer. The term "Employee" shall also include any
leased employee within the meaning of Section 414(n)(2) of the Code, as amended.
Notwithstanding the foregoing, if such leased employees constitute less than
twenty percent (20%) of the Employer's Non-Highly Compensated Employees within
the meaning of Section 414(n)(1)(C)(ii) of the Code, the term "Employee" shall
not include those leased employees covered by a plan described in Section
414(n)(5) of the Code. No self-employed individual shall be an Employee under
this Plan by virtue of his self-employment.
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1.14 "Employer" means Williams-Sonoma, Inc., any Affiliate (unless such
Affiliate, with the written consent of the Board of Directors, declines to
permit its Employees to participate in the Plan), and any other person, firm, or
corporation that adopts this Plan with the approval of Williams-Sonoma, Inc.,
and any successor in interest to Williams-Sonoma, Inc. resulting from merger,
consolidation, or transfer of substantially all of the assets of
Williams-Sonoma, Inc. that expressly agrees in writing to continue this Plan.
1.15 "Entry Date" shall mean (a) before May 1, 1997, January 1 and July 1
of each year, and (b) effective May 1, 1997, the day after the day on which an
Employee satisfies the requirements for participation under Section 3.1.
1.16 "Fiduciary" shall include all of the following, to the extent they
are deemed to be such under the Act:
(a) Any administrator, officer, trustee, or custodian of the Plan;
(b) Any person exercising any discretionary authority or
discretionary control respecting management of the Plan;
(c) Any person exercising authority or control respecting management
or disposition of Plan assets;
(d) Any person rendering investment advice for a fee or other
compensation with respect to Plan assets, or with the authority or
responsibility to do so, except as provided otherwise in the Act;
(e) Any person who possesses any discretionary authority or
responsibility in the administration of the Plan; and
(f) Any person designated under or to whom fiduciary duties are
delegated pursuant to Section 405(c)(1)(B) of the Act or Section 2.7 of Article
II.
1.17 "Highly Compensated Employee" means any Employee who is a Highly
Compensated Employee under Section 414(q) of the Code and the regulations
promulgated thereunder. Under Section 414(q) of the Code and the regulations
thereunder, a "Highly Compensated Employee" includes an Employee who:
(a) Was a Five Percent Owner, as defined in Section 6.1.4(c), during
the Plan Year or the preceding Plan Year, or
(b) During the preceding Plan Year, received Compensation from the
Employer in excess of Eighty Thousand Dollars ($80,000.00)
Dollar amounts set forth in this Section 1.17 shall be increased to reflect the
most recent adjustment for increases in the cost of living after 1997 published
by the Secretary of the Treasury pursuant to Section 415(d) of the Code, except
that the base period shall be the calendar quarter ending September 30, 1996. In
determining whether an Employee is a Highly Compensated Employee for Plan Years
beginning in 1997, this Section 1.17 shall apply as having been in effect for
the Plan Year beginning in 1996.
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1.18 "Hour of Service" shall include:
(a) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of duties during the
applicable computation period. Such hours shall be credited to the Employee for
the computation period or periods in which the duties were performed.
(b) Each hour for which back pay is awarded to the Employee or
agreed to by the Employer. Such hours shall be credited to the Employee for the
computation period or periods to which the award or agreement pertains and shall
be calculated irrespective of mitigation of damages, but no Hour of Service
shall be counted both under this paragraph and under the first paragraph of this
Section 1.18.
(c) Any hour of service required to be credited to the Employee
under any law of the United States or any rule or regulation issued thereunder;
provided, however, that no hour shall be credited to the Employee both under
this paragraph (c) and under any of the other paragraphs of this Section 1.18.
(d) Each hour (i) for which the Employee is directly or indirectly
paid, or entitled to payment, by reasons (such as vacation, sickness, or
disability) other than the performance of duties during the applicable
computation period as required by paragraphs (b) and (c) of Labor Reg. Section
2530. 200b-2, such hours being credited in the computation period in which such
hours were accrued irrespective of whether payments are made or become due with
respect to such hours in other computation periods, and (ii) during a temporary
layoff (even if of indefinite duration) or an Employer-approved leave of
absence. Notwithstanding the preceding provisions of this paragraph (d), the
following rules shall apply with respect to such hours:
(1) An Employee shall not be credited with more than five
hundred one (501) Hours of Service under this paragraph (d) on account of any
single continuous period during which the Employee does not perform any duties
(whether or not such period occurs during a single Plan Year);
(2) An Employee shall not be credited with an Hour of Service
on account of a period during which the Employee does not perform any duties if
the payment the Employer makes (or the payment due) is under a plan maintained
solely for the purpose of complying with the applicable worker's compensation
law, unemployment compensation law or disability insurance law; and
(3) An Employee shall not be credited with an Hour of Service
for a payment to the Employee that merely reimburses the Employee for medical or
medically related expenses incurred by the Employee.
(e) If a Participant has a Maternity or Paternity Leave of Absence,
such Participant shall be credited with the Hours of Service with which such
Participant would otherwise normally have been credited but for such absence,
or, if the Committee is unable to determine the number of Hours of Service that
would normally otherwise have been credited but for such absence, such
Participant shall be credited with eight (8) Hours of Service for each day of
such absence. Hours shall be credited by reason of a Maternity or Paternity
Leave of Absence, however, only as necessary to prevent the Participant from
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incurring a One-Year Break in Service for purposes of the participation rules of
Article III and the vesting rules of Sections 5.5 and 6.3.4, and in no event
shall a Participant be credited with more than Five Hundred One (501) Hours of
Service by reason of any Maternity or Paternity Leave of Absence. The Hours of
Service with which a Participant is credited by reason of a Maternity or
Paternity Leave of Absence shall be credited in the Plan Year in which such
absence begins if such crediting is necessary to prevent the Participant from
incurring a One-Year Break in Service in such Plan Year. In any other case, the
Hours of Service with which a Participant is credited by reason of a Maternity
or Paternity Leave of Absence shall be credited in the Plan Year immediately
following the Plan Year in which such absence begins.
(f) For periods before May 1, 1997, a salaried Employee shall be
credited with forty-five (45) Hours of Service for each calendar week during
which he performed at least one (1) Hour of Service.
(g) Effective December 12, 1994, Hours of Service shall be credited
to an Employee to comply with the provisions of the Uniformed Services
Employment and Reemployment Rights Act of 1994 (P.L. 101-353, 38 U.S.C. Section
4318) and any regulations promulgated thereunder.
(h) In the case of any ambiguity arising under this Section 1.18,
such ambiguity shall be resolved in favor of crediting the Employee with the
Hours of Service in question.
1.19 "Investment Manager" means any Fiduciary (other than the (i) Trustee,
Committee or Claims Coordinator designated under Section 7.12 of Article VII, or
(ii) a person who is identified as a Fiduciary pursuant to the procedure set
forth in this Plan) who (a) has the power to manage, acquire, or dispose of any
asset of the Plan, (b) has acknowledged in writing that he is a Fiduciary with
respect to the Plan, and (c) is (i) registered as an investment adviser under
the Investment Advisers Act of 1940; (ii) is a bank, as defined in that Act; or
(iii) is an insurance company qualified to manage, acquire, or dispose of the
assets of retirement plans under the laws of more than one State.
1.20 "Limited Associate" means any Employee whose terms of Employment
provide that he will not be working a full schedule or will not be entitled to
receive all of the benefits normally provided by the Employer to its Employees.
1.21 "Matching Contribution" means a contribution made under Section 4.1.2
of Article IV, and "Matching Contribution Account" shall have the meaning set
forth in Section 4.11 of Article IV.
1.22 A "Maternity or Paternity Leave of Absence" means an Employee's
absence from work for any period of time (a) by reason of the Employee's
pregnancy, (b) by reason of the birth of the Employee's child, (c) by reason of
the placement of a child with the Employee in connection with the Employee's
adoption of such child, or (d) for the purpose of caring for the Employee's
child immediately following the birth of such child or the placement of such
child with the Employee in connection with the Employee's adoption of such
child.
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1.23 "Non-Highly Compensated Employee" means any Employee who is not a
Highly Compensated Employee for the Plan Year.
1.24 "Normal Retirement Date" shall mean the date on which a Participant
attains the age of sixty-five (65) years.
1.25 "One-Year Break in Service" means a Plan Year in which the Employee
has not completed more than five hundred (500) Hours of Service. An Employee
shall be deemed to have incurred a One-Year Break in Service on the last day of
said Plan Year. For purposes of Sections 5.5, 5.6, 5.7, 6.3.4, 7.6 and 7.7,
however, the term "One-Year Break in Service" means a Period of Severance of
twelve (12) months in length.
1.26 "Participant" means any Employee who becomes a participant in this
Plan under Section 3.1 and who has acquired the right to either a forfeitable or
a nonforfeitable interest in the Trust Fund that has not been distributed.
1.27 "Participant Account" shall mean the account maintained for each
Participant pursuant to Section 4.11 of Article IV.
1.28 "Period of Severance" means a period beginning on the Severance Date
of an Employee, and, if applicable, ending on his Reemployment Date; provided,
however, that, in the case of an Employee who was absent from work due to a
Maternity or Paternity Leave of Absence, the period of twelve (12) consecutive
months beginning on the first anniversary of the first day of such Maternity or
Paternity Leave of Absence shall not constitute a "Period of Severance."
1.29 "Plan" shall mean the Williams-Sonoma, Inc. Associate Stock Incentive
Plan set forth in and by this document and the related Trust and all subsequent
amendments thereto.
1.30 "Plan Year" shall mean a fiscal year of the Plan that ends on the
Anniversary Date.
1.31 "Profit Sharing Contribution Account" shall have the meaning set
forth in Section 4.11 of Article IV.
1.32 "Qualified Matching Contribution" means a contribution made under
Section 4.1.4 of Article IV, and "Qualified Matching Contribution Account" shall
have the meaning set forth in Section 4.11 of Article IV.
1.33 "Qualified Nonelective Contribution" means a contribution made under
Section 4.1.5 of Article IV, and "Qualified Nonelective Contribution Account"
shall have the meaning set forth in Section 4.11 of Article IV.
1.34 "Reemployment Date" means a date on which a reemployed Employee first
completes one (1) Hour of Service after a Period of Severance (other than a
Period of Severance which is required to be taken into account in determining
whether the Employee has completed a Year of Service).
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1.35 "Salary Deferral Contribution" means a contribution made under
Section 4.1.1 of Article IV, and "Salary Deferral Contribution Account" shall
have the meaning set forth in Section 4.11 of Article IV.
1.36 "Service" or "Employment" means service of each Employee as an
Employee of an Employer or Affiliate. Service with any Employer or Affiliate
shall constitute "Service" and "Employment" for all purposes under this Plan,
and all such service for any Employer or Affiliate shall be aggregated in
determining whether an Employee has completed a "Year of Service" or has
incurred a "One-Year Break in Service." "Service" and "Employment" shall
commence on the day the Employee first completes one (1) Hour of Service with an
Employer or Affiliate. In addition, the Committee is authorized, in its
discretion, to determine from time to time that pre-acquisition service of any
persons who were employees of any corporation, organization, or entity before
such corporation, organization, or entity became an Affiliate, or who become
Employees in connection with the acquisition by the Employer of some or all of
the business or product lines of another person or entity that previously
employed such Employees, shall constitute "Service" or "Employment" for all
purposes under this Plan, and all such service for any such corporation,
organization, or entity that becomes an Affiliate or for any such predecessor
employer shall be aggregated in determining whether an Employee has completed a
"Year of Service" or has incurred a "One-Year Break in Service." The Committee
shall exercise its discretion hereunder only in a uniform and nondiscriminatory
manner.
1.37 "Severance Date" means the earlier of (i) the date on which an
Employee quits, retires, is discharged, or dies, or (ii) the first anniversary
of the first day of a period during which such Employee is absent (with or
without Compensation) from performing duties for the Employer for any reason
other than quitting, retirement, discharge, or death, such as vacation, holiday,
sickness, leave of absence or layoff.
1.38 "Total Disability" means total and permanent incapacity of a
Participant, due to physical impairment or legally established mental
incompetence, to perform the usual duties of Employment, which disability shall
be determined on evidence that the Participant has become entitled to receive
primary benefits as a disabled employee under the Social Security Act in effect
on the date of disability; provided, however, that if such disability is due to
alcohol, drugs, or other substance abuse, the Employee must be enrolled or have
completed a rehabilitation program approved by the Company for such disability
to constitute a Total Disability.
1.39 "Trust Agreement" means the Agreement between the Employer and the
Trustee or Trustees covering the administration of the Trust Fund and includes
the succession of the Trustee or Trustees.
1.40 "Trust Fund" means the assets of the Trust established pursuant to
this Plan and the Trust Agreement hereinafter referred to, out of which the
benefits under this Plan shall be paid.
1.41 "Trustee" means the Trustee or Trustees of the Trust Fund established
pursuant to this Plan and any successor Trustee or Trustees.
1.42 "Valuation Date" shall mean each business day that the New York Stock
Exchange is open for business.
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1.43 "Year of Service" shall mean a Plan Year of Service in which the
Employee has completed not less than one thousand (1,000) Hours of Service. For
purposes of Sections 5.5, 5.6, 5.7, 6.3.4, 7.6 and 7.7, however, the term "Year
of Service" means three hundred sixty five (365) days of Service completed by an
Employee, including: (i) any period of Service, whether or not continuous, and
(ii) for a reemployed Employee, any Period of Severance, provided that his
Reemployment Date occurs within one (1) year after his Severance Date.
ARTICLE II
COMMITTEE AND OTHER FIDUCIARIES
2.1 Appointment of Committee
The Committee shall be appointed by the Board of Directors and shall
consist of not less than three (3) nor more than five (5) members, the exact
number of which shall be established by the Board of Directors from time to
time. Under this authority, the Board of Directors has established that the
Committee shall consist of three (3) members. Such members of the Committee
shall hold office until resignation, death, or removal by the Board of
Directors.
2.2 Powers and Duties of Committee
The Committee shall be the "administrator" provided for in Section
3(16)(A) of the Act, and each member of the Committee shall be a "named
fiduciary" as defined in Section 402(a) of the Act. The Committee shall be
charged with the administration of this Plan and shall decide, in its
discretion, by majority vote, subject to the terms of this Plan and the Trust
Agreement, all questions arising in the administration, interpretation, and
application of the Plan, including all questions of eligibility and entitlement
to and amount of benefits, except such as may be expressly reserved hereunder to
the Employer or its Board of Directors. The Committee shall also have the
discretion and authority to make, amend, interpret, and enforce all appropriate
rules and regulations for the administration of this Plan, and to engage and
discharge all advisors, counsel, recordkeepers and service providers as may be
necessary or appropriate for the administration of this Plan. The decisions of
the Committee shall be conclusive and binding on all parties; provided that such
decisions shall be made on a uniform basis and shall not discriminate in favor
of its employees who are officers, stockholders, or Highly Compensated
Employees.
2.3 Direction of Trustee
The Committee, from time to time, shall direct the Trustee
concerning the payments to be made out of the Trust Fund pursuant to this Plan
and shall have such other powers respecting the administration of the Trust Fund
as may be conferred upon it hereunder or under the Trust Agreement. The Trustee
shall invest and reinvest the Trust Fund, or any part thereof, in any manner
that it deems advisable subject to the right hereby reserved to the Committee to
direct the Trustee with respect to the investment and reinvestment of the Trust
Fund. The Committee shall have the power to direct the Trustee to invest and
reinvest any and all money or property of any description at any time held by it
and constituting part of the Trust Fund in accordance with the following powers:
- 9 -
2.3.1 The Committee, without previous application to or subsequent
ratification of any court, tribunal or commission, or any federal or state
governmental agency, except as hereinafter provided, may direct the Trustee to
invest in bonds, notes, debentures, mortgages, commercial paper, preferred
stock, or common stocks sell covered call options; or invest in other
securities, rights, obligations, or property, real or personal, including shares
and certificates of participation issued by investment companies or investment
trusts, trust funds of the Trustee created for qualified employee benefit plans,
annuity contracts, and life insurance contracts.
2.3.2 At all times, this Plan shall be an "eligible individual
account plan," as defined in Section 407(d)(3) of the Act. Accordingly, the
Trustee is authorized to invest and hold up to one hundred percent (100%) of the
assets in the Trust Fund in Company Stock, in the Company Stock Fund, or in any
other "qualifying employer securities," as that term is defined in the Act. The
Trustee may purchase Company Stock or qualifying employer securities from the
Employer or from any other source, and such Company Stock or qualifying employer
securities purchased by the Trustee may be outstanding, newly issued, or
treasury shares; provided, however, that (a) the Trustee shall not purchase any
shares of Company Stock or qualifying employer securities at a price exceeding
the fair market value of such shares or securities as of the time of purchase,
as determined in good faith by the Committee, and (b) no commissions shall be
paid on the acquisition by the Trustee of Company Stock or qualifying employer
securities from any "party in interest," as defined in Section 3(14) of the Act,
or any "disqualified person," as defined in Section 4975(e)(2) of the Code. The
Trustee is expressly excused from the requirements of diversification and of a
fair return as to the investment of the Trust Fund in Company Stock or in the
Company Stock Fund.
2.3.3 The Committee may, in its discretion, direct the Trustee to
invest the assets of the Trust Fund in two (2) or more investment funds, pools
or vehicles, and permit each Participant to direct how the assets allocated to
his Participant Account will be invested among such investment funds, pools or
vehicles. In the event the Committee permits each Participant to direct how the
assets in his or her Participant Account are invested, Participants shall have a
reasonable opportunity to give investment instructions to the Trustee in
accordance with the procedures established by the Committee. The Trustee shall
invest a Participant's Participant Account in accordance with such Participant's
investment directions as soon as practicable after the contribution is
transferred to the Trust. At its discretion exercisable at any time, or from
time to time, the Committee may add to, delete from, change, or substitute the
investment funds, pools, or vehicles among which each Participant will have the
option to invest the assets in his Participant Account. The Committee may, in
its discretion exercisable at any time or from time to time, promulgate, amend,
or repeal rules or regulations governing: (i) the manner in which, and times at
which, each Participant may elect to have the assets in his Participant Account
invested among the various investment funds, pools, or vehicles selected by the
Committee, or change his election regarding the investment of the assets in his
Participant Account, and (ii) any maximum, minimum, or incremental dollar amount
or percentage of each Participant's Participant Account which may be invested in
a particular investment fund, pool, or vehicle selected by the Committee.
- 10 -
2.3.4 Notwithstanding the foregoing:
(a) All amounts allocated to Participants' Matching
Contribution Accounts, Profit Sharing Contribution Accounts, Qualified
Nonelective Contribution Accounts, and Qualified Matching Contribution Accounts
will always be invested in the Company Stock Fund;
(b) Any portion of a Participant's Salary Deferral
Contribution Account which is invested in the Company Stock Fund shall not
thereafter be reinvested in any of the other investment funds, pools, or
vehicles selected by the Committee;
(c) A Participant's option to invest the assets in his
Participant Account in shares of Company Stock or units of the Company Stock
Fund shall be subject to the power of the Committee to suspend, delay, override,
or disregard any investment direction of a Participant regarding shares of
Company Stock or units of the Company Stock Fund if the Committee determines, in
its discretion, that such suspension, delay, overriding, or disregarding is
necessary or appropriate to facilitate or ensure compliance with any federal or
state securities laws, including, but not limited to, securities laws regarding
insider trading; and
(d) The Plan shall not invest in ordinary life or term
insurance contracts on the life of a Participant for the benefit of the
Participant whose life is insured or his Beneficiary.
2.3.5 The Committee shall have no right or authority to authorize
the Trustee to make loans or advances to a Participant except as provided in
Section 2.12 or to make any distribution except as provided in Article VII.
2.4 Funding Policy
The Committee from time to time shall establish a funding policy and
method consistent with the objectives of the Plan, in accordance with the status
of the Plan as a defined contribution plan and in conformity with the
requirements of the Act. In formulating such policy and method, the Committee
shall consider the short- and long-term liquidity and other financial needs of
the Plan. Such policy and method shall be communicated in writing to the Trustee
and any then acting Investment Manager, and thereafter none of the powers of the
Committee, the trustee, or any Investment Manager set forth herein shall be
exercised in any manner inconsistent with such objectives. Such policy and
method shall be communicated in writing to the Trustee and any then-acting
Investment Manager, and thereafter none of the powers of the Committee, the
Trustee, or any Investment Manager shall be exercised in a manner inconsistent
with such policy and method.
2.5 Investment Manager
The Committee may, from time to time, and in writing, authorize or
direct the Trustee to delegate the management of the Plan assets or any part
thereof, including the right to acquire and dispose of such assets, to an
Investment Manager. Such authority or direction
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of the Trustee to so delegate may be revoked by the Committee at any time, and
the Committee may authorize or direct the Trustee at any time to revoke any such
delegation.
2.6 Organization of Committee Allocation and Delegation of Duties
2.6.1 The Committee may appoint one of its own members as Chairman
and may adopt such bylaws and regulations as it deems desirable for the conduct
of its affairs and appoint a secretary and one or more assistant secretary or
secretaries. The Committee may, at any duly constituted meeting thereof,
allocate specific fiduciary responsibilities, other than trustee
responsibilities, among the members of the Committee. Any member of such
Committee may also, at such a meeting, designate other persons to carry out any
fiduciary duties that are the responsibility of such member, other than trustee
responsibilities. Either of such actions shall be recorded in the minutes of
said meeting and may be revoked at any time by action taken at another such
meeting recorded in the minutes thereof and communicated to the person to whom
such duties were delegated.
2.6.2 Any determination of the Committee may be made by a majority
of the Committee at a meeting thereof or without a meeting by a resolution or
memorandum signed by all members and, except as provided otherwise herein, shall
be final and conclusive on the Employer, the Trustee, and all Participants and
Beneficiaries claiming any rights hereunder, and as to all third parties dealing
with the Committee or with the Trustee. All notices, directions, information,
and other communications from the Committee to the Trustee shall be in writing.
2.6.3 In any matter affecting any member of the Committee in his
individual capacity as a Participant hereunder, separate and apart from his
status as a member of the group of Participants, such interested member shall
have no authority or vote in the determination of such matter as a member of the
Committee, but said Committee shall determine such matter as if said interested
member were not a member of the Committee; provided, however, that this shall
not be deemed to take from said interested member any of his rights hereunder as
a Participant. In the event that the remaining members of the Committee should
be unable to agree on any matter so affecting an interested member because of an
equal division of voting, the Board of Directors shall appoint a temporary
member of the Committee to create an odd number of voting members. In the event
a majority of the members of the Committee shall be so interested in the same
matter, then the Board of Directors shall appoint temporary members to take
their place on said Committee for the purpose of determining such matter.
2.7 Duties and Relationship of Fiduciaries
2.7.1 Every Fiduciary, except as otherwise provided in the Act,
shall discharge his duties with respect to the Plan:
(a) Solely in the interest of the Participants and
Beneficiaries;
(b) For the exclusive purposes of providing benefits to
Participants and Beneficiaries and defraying reasonable expenses of
administration;
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(c) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of like
character and with like aims;
(d) By diversifying investments of the Plan unless under the
circumstances it is clearly prudent not to do so;
(e) In accordance with the documents and instruments governing
the Plan; and
(f) By maintaining the indicia of ownership of the Plan assets
within the jurisdiction of the United States District Courts, except as
otherwise authorized by regulations under the Act.
Notwithstanding all of the foregoing, however, each Fiduciary shall at all
times discharge his duties in conformance with the provisions of the Act and as
required for the administration of a qualified plan under the Code.
2.7.2 It shall be the responsibility of every Fiduciary and of every
person handling funds or other property of the Plan to be bonded to the extent
required by the Act. The Committee may direct the Trustee to pay the cost of all
such bonds from the Trust assets, if and to the extent that the Company does not
pay such costs in a timely fashion, and the Trustee shall be protected in
relying on such directions.
2.7.3 Each Fiduciary, including the Board of Directors, the
Committee, the Claims Coordinator designated under Section 7.12 of Article VII,
and the Trustee, shall be responsible only for acts and omissions in connection
with the exercise of the powers, duties, and functions specifically allocated to
such Fiduciary under the terms of this Plan and the Trust Agreement. No
Fiduciary shall be responsible for any acts or omissions in connection with the
powers, functions, and duties allocated to any other Fiduciary under the terms
of this Plan and the Trust Agreement. Except to the extent provided in the Act
or the Code, no Fiduciary shall have any duty to question whether any other
Fiduciary is fulfilling the responsibilities imposed on such other Fiduciary by
this Plan, the Trust Agreement, or the Act. No Fiduciary shall have any
liability for a breach of fiduciary responsibility of any other Fiduciary with
respect to the Plan or the Trust unless such Fiduciary participates knowingly in
such breach, knowingly undertakes to conceal such breach, has actual knowledge
of such breach and fails to take reasonable remedial action to remedy such
breach, or, through such Fiduciary's negligence in performing his own specific
fiduciary responsibilities, has enabled such other Fiduciary to commit a breach
of such other Fiduciary's fiduciary responsibilities. Wherever this Plan or the
Trust Agreement provides that a Fiduciary has the power to appoint another
person or entity with discretionary authority or control respecting the
operation or administration of the Plan or the Trust Fund, the responsibility of
the appointing Fiduciary with respect to such appointment shall be limited to
the selection of the appointee and periodic review of the performance of the
appointee in accordance with the standards of the Act. Any violation of
fiduciary responsibilities by the appointee that is not a proximate result of
the failure of the appointing Fiduciary properly to select or supervise the
appointee, and in which breach the appointing Fiduciary did not otherwise
participate, will not be considered to be a breach by the appointing Fiduciary.
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2.7.4 Any person may serve in more than one fiduciary capacity with
respect to this Plan or the Trust, including, but not limited to, service both
as a Trustee and as a member of the Committee.
2.8 Compensation and Expenses of Committee
The members of the Committee shall serve without compensation but
shall be reimbursed for any necessary expenditures incurred in the discharge of
their duties as members of said Committee. The compensation of all agents,
counsel, or other persons (who may be officers or members of the Employer)
retained or employed by the Committee shall be fixed by the Committee, subject
to the approval of the Board of Directors. Any such reimbursement or payment
shall be made by the Trustee out of the Trust Fund if it is legally permissible
to do so; provided, however, that all or any part of any such reimbursement or
payment may be made by the Employer if it shall so determine.
2.9 Records of the Committee
The Committee shall keep a record of all of its proceedings and
shall keep or cause to be kept all such books of account, records, and other
data as may be necessary or advisable in its judgment for the administration of
this Plan and to reflect properly the affairs thereof, and to determine the
amount of vested and forfeitable interests of the respective Participants in the
Trust Fund and the amount of all retirement benefits or other benefits
hereunder. As a part thereof, it shall maintain or cause to be maintained a
separate Participant Account for each Participant, which account in each year
shall reflect the interest of the Participant in this Plan, together with such
additional information required by the Act or the Code. Any person dealing with
the Committee may rely on and shall incur no liability in relying on a
certificate or memorandum in writing signed by the secretary of the Committee or
by a majority of the members of the Committee as evidence of any action taken or
resolution adopted by the Committee, except that the Trustee may accept as
evidence of any action or resolution adopted by the Committee only a written
notice thereof signed by a majority of the members of the Committee if such
action was taken or resolution adopted at a meeting of the Committee or signed
by all members if such action or resolution was adopted without a meeting.
2.10 Resignation and Removal of Members
Any member of the Committee may resign at any time by giving thirty
(30) days' prior written notice of such resignation to the other members and to
the secretary of the Company; provided, however, that the other members of the
Committee may waive such thirty (30) days' prior notice. Any member who leaves
the employment of the Employer shall be deemed to have resigned as a member of
the Committee on the date of his termination of employment. Any member of the
Committee may at any time be removed by the Board of Directors.
2.11 Appointment of Successors
Upon the death, resignation, or removal of any member, the Board of
Directors shall at its next regular meeting, or at a special meeting if so
desired, appoint, by resolution, a successor. Notice of appointment of a
successor member shall be made by the Secretary of the Company in writing to the
Trustee and to the Committee. Until receipt by
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the Trustee of such written notice of any change in membership of the Committee,
the Trustee shall not be charged with knowledge of notice of such change.
2.12 Loans to Participants
(a) Upon the application of a Participant to the Committee, the
Committee may direct the Trustee to make a loan or loans to such Participant
upon such terms as the Committee deems appropriate. Nothing herein contained
shall require the Committee to grant any such loan, such action being purely
discretionary on the part of the Committee, provided, however, that the
Committee shall exercise its discretion in a uniform and nondiscriminatory
manner. The Committee may, in its discretion, determine that no loans shall be
made to any Participants. Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Employees.
(b) Unless the Committee determines, in its discretion, that no
loans shall be made to any Participants, the Committee shall, from time to time,
promulgate a Participant Loan Program in compliance with Department of Labor
Regulation Section 2550.408b-1(d)(2), which shall state the manner in which the
Committee will determine the amount of loans, terms of loans, and interest rate
of loans, and such other rules and regulations that the Committee may adopt.
(c) No loans shall be made to any Participant who is a sole
proprietor of an Employer, a partner of an Employer who owns more than ten
percent (10%) of the capital or profits interest in the Employer, or a
shareholder who owns (or is considered as owning within the meaning of Section
318(a)(1) of the Code) more than five percent (5%) of the outstanding stock of
an Employer that is an S corporation under the Code on any day during the
taxable year of such Employer. All loans shall be taken out in the form of cash;
no loan shall be taken out in the form of Company Stock.
(d) Loan repayments will be suspended under this Plan as permitted
under Section 414(u)(4) of the Code and regulations promulgated thereunder.
2.13 Indemnification
The Employer hereby agrees to indemnify the Committee and any other
Employee of the Employer, and the estates and heirs of such Committee member and
Employee, to the full extent of any expenses, penalties, damages, or other
pecuniary loss that such Employee or Committee member, his estate, or heirs may
suffer as a result of his responsibilities, obligations, or duties in connection
with the Plan or fiduciary activities actually performed in connection with the
Plan. Such indemnification shall be paid by the Employer to the Employee,
Committee member, his estate, or heirs to the extent that fiduciary liability
insurance, if any, does not cover the payment of such items, but in no event
shall such items be paid out of Plan assets. Notwithstanding the foregoing, this
indemnification agreement shall not relieve any Employee serving in a fiduciary
capacity of his fiduciary responsibilities and liabilities to the Plan for
breaches of fiduciary obligations, nor shall this agreement violate any
provision of Part 4 of Title I of the Act as it may be interpreted from time to
time by the U.S. Department of Labor and any courts of competent jurisdiction.
- 15 -
2.14 Administrative Mistake
Notwithstanding anything to the contrary herein contained, if the
Committee discovers that a mistake has been made in crediting Employer
Contributions or earnings to the Participant Account of any Participant, the
Committee may request the Employer to make a special contribution to the
Participant Account of said Participant and may take any other administrative
action that it deems necessary or appropriate to remedy such mistake.
2.15 Voting of Company Stock
The Committee shall be direct the Trustee as to the manner in which
shares of Company Stock allocated to such Participant's Participant Account or
shares of Company Stock represented by units of the Company Stock Fund allocated
to such Participant's Participant Account ("Allocated Shares") are to be voted.
In the event a tender or exchange offer is made with respect to Company Stock,
the Committee shall direct the Trustee whether or not to tender Allocated
Shares.
ARTICLE III
PARTICIPATION OF EMPLOYEES
3.1 Who May Participate
3.1.1 Effective as of May 1, 1997, each Employee who is not a
Limited Associate shall be eligible to participate in the Plan on the later of
(a) the thirtieth (30th) day after such Employee's date of hire, or (b) such
Employee's twenty-first (21st) birthday. Effective as of May 1, 1997, each
Employee who is a Limited Associate shall be eligible to participate in the Plan
on the later of (i) the thirtieth (30th) day after the date on which he has
completed one thousand (1,000) Hours of Service, provided that he completes such
one thousand (1,000) Hours of Service within one (1) "Eligibility Computation
Period" (as defined in Section 3.1.2), or (ii) such Employee's twenty-first
(21st) birthday. Before May 1, 1997, each Employee shall be eligible to
participate in the Plan on later of (A) the date on which he has completed one
thousand (1,000) Hours of Service, provided that he completes such one thousand
(1,000) Hours of Service within one (1) "Eligibility Computation Period" (as
defined in Section 3.1.2), or (ii) such Employee's twenty-first (21st) birthday.
Each Employee who is eligible to participate in the Plan shall become a
Participant as of the Entry Date next following the date on which he becomes
eligible to participate.
3.1.2 For purposes of this Section 3.1, the term "Eligibility
Computation Period" shall mean the twelve-consecutive-month period commencing on
the date a person first completes one (1) Hour of Service and during which he is
credited with not less than one thousand (1,000) Hours of Service and, in the
event an Employee fails to complete one thousand (1,000) Hours of Service in
said period, shall also mean the Plan Year including the first anniversary of
the Employment commencement date for such Employee and succeeding Plan Years.
Notwithstanding any other provision of this Section 3.1, however, no person who
is eligible to become a Participant shall become a Participant if he has quit or
been permanently discharged and as a result thereof is not employed by the
Employer on the Entry Date on which he would otherwise become a Participant;
provided, however, that if he is reemployed by the Employer prior to incurring a
One-Year Break in Service, he shall become a Participant on the date he is
rehired. For purposes of continuing participation, once an Employee has become
eligible to participate in the Plan, an Eligibility Computation
- 16 -
Period shall mean a Plan Year in which the Employee has completed at least one
thousand (1,000) Hours of Service with the Employer and such Plan Years shall be
measured beginning with the Plan Year commencing before or on the date upon
which the Employee becomes eligible to participate.
3.1.3 For purposes of determining the number and identity of Highly
Compensated Employees or for purposes of the pension requirements of Section
414(n)(3) of the Code, the Employees of the Employer shall include individuals
defined as Employees in Article I. Notwithstanding any other provision of this
Plan, however, a leased employee within the meaning of Section 414(n)(2) of the
Code shall not become a Participant in, and shall not accrue benefits under,
this Plan based on service as a leased employee.
3.1.4 Notwithstanding the provisions of Sections 3.1.1 and 3.1.2, no
Employee shall be a Participant hereunder (a) if such Employee is neither a
citizen nor a resident of the United States and derives no earned income from
the Employer that would constitute income from sources within the United States,
(b) while a member of a collective bargaining unit and while covered by a
collective bargaining agreement with respect to which retirement benefits were
the subject of good-faith bargaining between the employee representatives and
the Employer and that does not specifically provide for coverage of such
Employee under this Plan, or (c) if such Employee is an individual whom the
Employer previously classified as an independent contractor but whom the
Internal Revenue Service later determines is an Employee whose compensation
should be shown on Form W-2, or whom any other governmental agency later
determines is a common-law employee.
3.2 Breaks in Service
In the event that an Employee's Employment is terminated and the
Employee later returns to Employment with an Employer, the following rules shall
apply for purposes of determining eligibility:
3.2.1 In the case of an Employee who has or had a vested interest in
the Trust Fund, such Employee shall become a Participant immediately upon his
resumption of Employment.
3.2.2 In the case of an Employee, all of whose interest in the Trust
Fund is a forfeitable interest, Years of Service before a One-Year Break in
Service shall not be taken into account at any time if the number of consecutive
One-Year Breaks in Service equals or exceeds the greater of five (5) or the
aggregate number of Years of Service prior to such One-Year Break in Service.
Such aggregate number of Years of Service before such One-Year Break in Service
shall not include any Years of Service not required to be taken into account by
reason of any prior One-Year Break in Service but shall include the Year of
Service beginning on or before the date upon which the Employee becomes eligible
to participate in the Plan. If an Employee's aggregate number of Years of
Service exceeds the number of such One-Year Breaks in Service, or if the
Employee does not incur five (5) or more consecutive One-Year Breaks in Service,
such Employee shall become a Participant immediately upon his resumption of
Employment.
- 17 -
3.3 Termination of Participation
Participation of a Participant shall continue until such
Participant's Employment is terminated for any reason.
3.4 Leaves of Absence; Military Service
An Employee's Service shall not be considered terminated for
purposes of this Plan if the Employee has been on Leave of Absence with the
consent of the Employer, provided that he returns to the employ of the Employer
at the expiration of such Leave of Absence. A Leave of Absence shall mean a
leave granted by the Employer, in accordance with rules uniformly applied to all
Employees, for reasons of health or public service or for reasons determined by
the Employer to be in its best interests. An Employee's Employment shall
likewise not be deemed to have been terminated while the Employee is a member of
the Armed Forces of the United States, provided that he returns to the service
of the Employer within ninety (90) days (or such longer period as may be
prescribed by law) from the date he first became entitled to his discharge. An
Employee who does not return to the employ of the Employer within ninety (90)
days following the end of the Leave of Absence, or within the required time in
case of service with the Armed Forces, shall be deemed to have terminated his
Employment as of the date when his Leave of Absence or military service ended
(unless such failure to return was the result of his death, Total Disability, or
retirement after the attainment of his Normal Retirement Date). An Employee's
Employment shall not be deemed to be terminated by reason of a Maternity or
Paternity Leave of Absence. Effective as of December 12, 1994, this Section 3.4
shall be applied in a manner that is consistent with the provisions of the
Uniformed Services Employment and Reemployment Rights Act of 1994 (P.L. 101-353,
38 U.S.C. Section 4318), Section 414(u) of the Code, and any regulations
promulgated thereunder, including any such provisions related to required
Employer Contributions, benefits, and service credit for periods of military
service.
3.5 Committee to Determine Participants
Within ninety (90) days after each Entry Date, the Employer shall
certify to the Committee in writing such information from the Employer's records
with respect to Employees as the Committee may require to determine the identity
and interests of the Participants and otherwise to perform its duties hereunder.
Any such certification of information to the Committee pursuant to this Plan
shall, for all purposes of the Plan, be binding on all interested parties;
provided that whenever any Employee proves to the satisfaction of the Employer
that his period of Employment or his Compensation as so certified is incorrect,
the Employer shall correct such certification. The determination of the
Committee as to the identity of the respective Participants and as to their
respective interests shall be binding upon the Employer, the Trustee, the
Employees, the Participants, and all Beneficiaries.
ARTICLE IV
CONTRIBUTIONS
4.1 Employer Contributions
4.1.1 The Employer shall reduce the cash compensation of each
Participant who so elects by an amount equal to any whole percentage of such
Participant's
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Compensation between and including one percent (1%) and fifteen percent (15%)
(ten percent (10%) for periods before January 1, 1999), as directed by such
Participant, and shall contribute such amount to the Plan. Such contributions
shall constitute the "Salary Deferral Contributions" for such Participant. Each
Participant who desires to have Salary Deferral Contributions made on his behalf
may do so by following procedures established by the Committee from time to time
(provided that such procedures shall be uniform for all Participants at any
given time) regarding notice, the effective date of commencement of Salary
Deferral Contributions, and other pertinent matters. Each Participant may cause
the Employer to cease making Salary Deferral Contributions on his behalf, or may
resume or change the level of the Salary Deferral Contributions made on his
behalf, by following procedures established by the Committee from time to time
(provided that such procedures shall be uniform for all Participants at any
given time) regarding notice, the effective date of the resumption or change in
the level of Salary Deferral Contributions, and other pertinent matters. The
Committee shall determine whether the amount that a Participant desires to have
contributed on his behalf is at one of the levels set forth above, and whether
the Participant has followed the applicable procedures. If such amount is at one
of the levels set forth above and the Participant has followed the applicable
procedures, the Committee shall direct the Trustee to accept such Salary
Deferral Contribution and to hold it in trust for such Participant. If such
amount is not at one of the levels set forth above, or if the Participant has
not followed the applicable procedures, the Committee shall direct the Employer
not to reduce such Participant's cash contribution and shall direct the Trustee
to reject any such Salary Deferral Contribution.
4.1.2 In addition to the Salary Deferral Contributions, the Employer
shall make contributions, in cash or in Company Stock valued as of the date of
contribution at the election of the Employer, to the Plan as "Matching
Contributions":
4.1.2.1 for each Participant whose Employment with the
Employer was terminated, who later returned to Employment with the Employer, and
who is entitled to have the amount of his forfeiture restored under the
provisions of Section 7.7, in an amount necessary to restore any such
forfeiture; and
4.1.2.2 for each Participant who makes Salary Deferral
Contributions, equal to one hundred percent (100%) (fifty percent (50%) for
periods before May 1, 1997) of the Salary Deferral Contributions made by such
Participant, to the extent that such Salary Deferral Contributions do not exceed
six percent (6%) of such Participant's Compensation; provided, however, that the
percentage level of the Matching Contributions may be altered for any Plan Year
by a resolution of the Board of Directors adopted before the first day of such
Plan Year, and provided, further, that Salary Deferral Contributions shall not
be matched to the extent that such Participant does not elect to have such
Salary Deferral Contributions invested in Company Stock Fund. The Company shall
make such Matching Contributions at such times as may be determined by the
Committee in its discretion (provided that such times shall be substantially
uniform among all Participants), but not less frequently than quarterly based on
the Participants' Compensation earned and Salary Deferral Contributions made in
the portion of the Plan Year ending on the last day of each calendar quarter.
4.1.3 For certain periods before 1997, the Company made Profit
Sharing Contributions to the Plan. Effective January 1, 1997, the Company will
not make any further Profit Sharing Contributions.
- 19 -
4.1.4 In addition to the Salary Deferral Contributions and the
Matching Contributions, the Employer, in its sole and absolute discretion, may
elect for any Plan Year to contribute in cash "Qualified Matching Contributions"
in an amount to be determined by the Employer in its discretion, which shall be
allocated among the Participants who are Non-Highly Compensated Employees in the
manner provided in Section 5.1.3, and which shall be fully vested and
nonforfeitable at all times.
4.1.5 In addition to the Salary Deferral Contributions, the Matching
Contributions, and the Qualified Matching Contributions, the Employer may also
elect, in its sole and absolute discretion, to contribute in cash for a Plan
Year "Qualified Nonelective Contributions," which shall be in an amount to be
determined by the Employer in its discretion, allocated among Participants who
are Non-Highly Compensated Employees in the manner set forth in Section 5.1.4,
and fully vested and nonforfeitable at all times.
4.1.6 The total amount of Contributions under this Section 4.1 made
on behalf of all Participants for a Plan Year shall not exceed fifteen percent
(15%) of the total Compensation paid to all Participants during such Plan Year,
plus the amount of any credit for contribution carryovers to which the Employer
is entitled under Section 404(a)(3) of the Code.
4.1.7 The contribution attributable to each Participant shall be
made by his Employer. If a Participant has been employed by more than one
Employer during any year, each Employer shall be responsible for the portion of
the contributions attributable to the Compensation earned by the Participant
from such Employer.
4.1.8 Notwithstanding anything to the contrary herein contained,
Employer Contributions shall be, and hereby are, made subject to the conditions
that (a) the Plan and Trust qualify as a tax-exempt plan under Section 401 of
the Code, (b) such contributions are deductible under Section 404 of the Code,
and (c) such contributions are not made as a result of a mistake of fact. In the
event that the Commissioner of Internal Revenue determines that the Plan and
Trust do not so qualify, any Employer Contributions made while the Plan and
Trust have not qualified shall be repaid to the Employer, in whole or in part,
by the Trustee, within one (1) year after the date of the denial of
qualification of the Plan and Trust. In the event that the Commissioner of
Internal Revenue determines that a deduction for the Employer Contributions
shall be disallowed, the excess of such contributions over the amount that would
have been contributed had there not occurred a mistake in determining the
deductibility of the contributions shall be repaid to the Employer, in whole or
in part, by the Trustee, within one (1) year after the disallowance of the
deduction. In the case of Employer Contributions that are made by reason of
mistake of fact, the excess of such contributions over the amount that would
have been contributed had there not occurred a mistake of fact shall be repaid
to the Employer, in whole or in part, by the Trustee, within one (1) year after
the payment of the contributions. With respect to contributions for which a
deduction is disallowed or made by reason of mistake of fact, (1) earnings
attributable to the excess contributions shall not be returned to the Employer,
(2) losses attributable thereto shall reduce the amount to be repaid, and (3) if
the repayment of the excess would cause the balance of a Participant's
Participant Account to be reduced to less than the amount of the Participant's
Participant Account had the excess contributions not been made, the amount of
the repayment shall be limited to the excess of the excess contributions over
the amount of the Participant's Participant Account had the excess contributions
not been made. Any amounts repaid to the Employer by the Trustee pursuant to
this Section 4.1.8 shall be repaid
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without liability therefor on the part of the Trustee to any Participant,
Beneficiary, or any other person.
4.2 Time for Payment
The Employer may make payment of its contributions for any Plan Year
on any date or dates it elects; provided, however, that (a) the total amount of
its Matching Contributions and Qualified Matching Contributions for each taxable
year shall be paid in full not later than the date prescribed by federal income
tax law to entitle the Company to a deduction for the Plan Year with respect to
which such contributions are made, and (b) the Salary Deferral Contributions
shall be paid in full not later than such time as may be required by regulations
promulgated by the Department of Labor under the Act.
4.3 Dollar Limit on Salary Deferral Contributions
4.3.1 Salary Deferral Contributions made to this Plan on behalf of
any Participant during any calendar year shall not exceed Nine Thousand Five
Hundred Dollars ($9,500.00), reduced by all contributions made by or on behalf
of such Participant for such calendar year to: (a) any qualified cash or
deferred arrangement as defined in Section 401(k) of the Code maintained by the
Employer or any other employer to the extent such contribution is not includable
in such Participant's gross income for such calendar year under Section
402(e)(3), (b) a simplified employee pension as defined in Section 408(k) of the
Code maintained by the Employer or any other employer to the extent such
contribution is not includable in the Participant's gross income for such
calendar year under Section 402(h)(1)(B) of the Code, (c) an annuity contract
under Section 403(b) under a salary reduction agreement within the meaning of
Section 3121(a)(5)(D) to the extent such contribution is not includable in the
Participant's gross income for such calendar year under Section 403(b) of the
Code, (d) any eligible deferred compensation plan under Section 457 of the Code,
(e) under a trust described in Section 501(c)(18) of the Code to the extent that
such contribution is deductible from such Participant's income for such calendar
year under Section 501(c)(18) of the Code, or (f) any Simple Individual
Retirement Account Plan described under Section 408(p). Salary Deferral
Contributions for any calendar year made on behalf of a Participant to this Plan
in excess of the limitations set forth in the preceding sentence are hereinafter
referred to as "Excess Deferrals." Excess Deferrals shall not include any
deferrals properly distributed as excess Annual Additions (as defined in Section
5.3.1). The amount of Nine Thousand Five Hundred Dollars ($9,500.00) set forth
in this Section 4.3.1 shall be increased to reflect the most recent adjustment
for increases in the cost of living after 1997 published by the Secretary of the
Treasury pursuant to Section 415(d) of the Code. Any such adjustment shall be
effective as of January 1 of the calendar year.
4.3.2 If Excess Deferrals are made on behalf of a Participant for a
calendar year, the Plan shall make a corrective distribution to such Participant
of such Excess Deferrals (and earnings thereon) during any calendar year if the
following conditions are satisfied: (a) the Participant designates the
distribution as an Excess Deferral, (b) the correcting distribution is made
after the date on which the Plan received the Excess Deferral, and (c) the
Committee designates the distribution as a distribution of Excess Deferrals. The
earnings attributable to Excess Deferrals to be distributed under this Section
4.3.2 shall be computed by multiplying the net amount of earnings, income,
gains, or losses (whether or not realized) on Salary Deferral Contributions made
by such Participant during such calendar year through the date of distribution
by a fraction, the numerator of which is the
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amount of Excess Deferrals made by such Participant during such calendar year
through the date of distribution, and the denominator of which is the total
Salary Deferral Contributions made by such Participant during such calendar year
through the date of distribution.
4.3.3 Not later than March 1 following the close of a calendar year,
a Participant may notify the Committee that Excess Deferrals were made on his
behalf to this Plan during such calendar year. A Participant is deemed to notify
the Committee of any Excess Deferrals that arise by taking into account only the
Deferrals made to this Plan and other plans of the Employer. Not later than
April 15 following the close of a calendar year in which Excess Deferrals were
made on behalf of a Participant to this Plan, this Plan shall make a corrective
distribution to such Participant of such Excess Deferrals and any income
allocable thereto. Income allocable to Excess Deferrals to be distributed under
this Section 4.3.3 shall include income allocable to the calendar year in which
such Excess Deferrals were made and income allocable to the period between the
end of such calendar year and the date of distribution. Income allocable to the
calendar year in which Excess Deferrals were made, and between the end of such
calendar year and the date of distribution, may be calculated using any method
that (a) does not discriminate in favor of officers, shareholders, or Highly
Compensated Employees, (b) is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year, and (c) is used by
the Plan for allocating income to Participants' Participant Accounts.
4.3.4 The amount of Excess Deferrals that may be distributed under
this Section 4.3 to a Participant for any calendar year shall be reduced by the
Excess Contributions previously distributed to such Participant for the Plan
Year beginning with or within such calendar year.
4.4 Actual Deferral Percentage Test
4.4.1 For each Plan Year, the Actual Deferral Percentage of the
Highly Compensated Employees shall bear a relationship to the Actual Deferral
Percentage of the Non-Highly Compensated Employees for the current Plan Year
(or, if the Committee elects in the manner prescribed by the Secretary of the
Treasury, the Plan Year) that meets either of the following two tests:
4.4.1.1 The Actual Deferral Percentage of the Highly
Compensated Employees is not more than the Actual Deferral Percentage of the
Non-Highly Compensated Employees multiplied by 1.25, or
4.4.1.2 The Actual Deferral Percentage of the Highly
Compensated Employees is not more than the Actual Deferral Percentage of the
Non-Highly Compensated Employees multiplied by two (2), and is not more than two
(2) percentage points higher than the Actual Deferral Percentage of the
Non-Highly Compensated Employees, or such smaller number of percentage points as
the Secretary of the Treasury may prescribe.
4.4.2 For purposes of this Section 4.4, the terms "Actual Deferral
Percentage," "Deferral Percentage" and "Excess Contributions" shall have the
following meanings:
4.4.2.1 For each Plan Year, the "Actual Deferral Percentage"
of the Highly Compensated Employees shall be the average of the Deferral
Percentages of all of
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the Highly Compensated Employees who are eligible to participate in this Plan,
and the "Actual Deferral Percentage" of Non-Highly Compensated Employees shall
be the average of the Deferral Percentages of all of the Non-Highly Compensated
Employees who are eligible to participate in this Plan.
4.4.2.2 The "Deferral Percentage" for any Plan Year of an
Employee who is eligible to participate in this Plan shall be (i) the sum of the
Salary Deferral Contributions, Qualified Matching Contributions, and Qualified
Nonelective Contributions (other than Qualified Nonelective Contributions
applied, in the discretion of the Committee, in determining the Contribution
Percentages of Employees under Section 4.5.2.2) made by or on behalf of such
Employee for such Plan Year (including Excess Deferrals of any Highly
Compensated Employee but excluding Excess Deferrals of any Non-Highly
Compensated Employee that arise solely under this Plan or any other plan of the
Employer), divided by (ii) such Employee's Compensation for such Plan Year.
4.4.2.3 "Excess Contributions" for any Plan Year means the
Salary Deferral Contributions made to the Plan on behalf of Participants who are
Highly Compensated Employees in excess of the limitations set forth in Section
4.4.1.
4.4.3 If there are any Excess Contributions for any Plan Year, such
Excess Contributions and the income allocable thereto shall be distributed to
the Participants who are Highly Compensated Employees on or before the
Anniversary Date of the following Plan Year; provided, however, that the
Committee shall use its best efforts to cause such distribution to be made
within two and one-half (2 1/2) months after the Anniversary Date of such Plan
Year. The amount of Excess Contributions to be distributed to each Participant
who is a Highly Compensated Employee shall be determined by (a) distributing
amounts to the Highly Compensated Employee on whose behalf the largest dollar
amount of Salary Deferral Contributions was made for such Plan Year to the
extent required to (i) enable the Plan to satisfy the limitations of Section
4.4.1, or (ii) cause such Highly Compensated Employee's dollar amount of Salary
Deferral Contributions to equal the dollar amount of Salary Deferral
Contributions for the Highly Compensated Employee having the next highest dollar
amount of Salary Deferral Contributions for such Plan Year, and (b) such process
shall be repeated until this Plan satisfies the limitation of Section 4.4.1.
Income allocable to Excess Contributions to be distributed to a Participant
under this Section 4.4.3 shall include income allocable to the Plan Year in
which such Excess Contributions were made and income allocable to the period
between the end of such Plan Year and the date of distribution. Income allocable
to the Plan Year in which Excess Contributions were made, and between the end of
such Plan Year and the date of distribution, may be calculated using any method
that (a) does not discriminate in favor of officers, shareholders, or Highly
Compensated Employees, (b) is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year, and (c) is used by
the Plan for allocating income to Participants' Participant Accounts.
4.4.4 For purposes of this Section 4.4, the Deferral Percentage of
any Highly Compensated Employee who is eligible to participate in this Plan
during the Plan Year and who is eligible to make Salary Deferral Contributions,
or to receive qualified matching contributions or qualified nonelective
contributions allocated to his account under two or more plans described in
Section 401(a) of the Code or arrangements described in Section 401(k) of the
Code, which are maintained by the Employer or an Affiliate, shall be determined
as if all such contributions and elective deferrals were made under a single
plan.
- 23 -
In the event that this Plan satisfies the requirements of Sections 401(k),
401(a)(4), or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Sections
401(k), 401(a)(4), or 410(b) of the Code only if aggregated with this Plan, this
Section 4.4 shall be applied by determining the Deferral Percentages of all
Employees eligible to participate in this Plan as if all such plans were a
single plan. Plans may be aggregated to satisfy Section 401(k) of the Code only
if they have the same plan year. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under regulations
under Section 401(k) of the Code.
4.4.5 The amount of Excess Contributions to be distributed under
this Section 4.4 to a Highly Compensated Employee for a Plan Year shall be
reduced by any Excess Deferrals previously distributed to such Highly
Compensated Employee for the calendar year ending with or within such Plan Year.
4.5 Actual Contribution Percentage Test
4.5.1 For each Plan Year, the Actual Contribution Percentage of the
Highly Compensated Employees shall bear a relationship to the Actual
Contribution Percentage of the Non-Highly Compensated Employees for the current
Plan Year (or, if the Committee elects in the manner prescribed by the Secretary
of the Treasury, the Plan Year) that meets either of the following two tests:
4.5.1.1 The Actual Contribution Percentage of the Highly
Compensated Employees is not more than the Actual Contribution Percentage of the
Non-Highly Compensated Employees multiplied by 1.25, or
4.5.1.2 The Actual Contribution Percentage of the Highly
Compensated Employees is not more than the Actual Contribution Percentage of the
Non-Highly Compensated Employees multiplied by two (2), and is not more than two
(2) percentage points higher than the Actual Contribution Percentage of the
Non-Highly Compensated Employees, or such smaller number of percentage points as
the Secretary of the Treasury may prescribe.
4.5.2 For purposes of this Section 4.5, the terms "Actual
Contribution Percentage," "Contribution Percentage," and "Excess Matching
Contributions" shall have the following meanings:
4.5.2.1 For each Plan Year, the "Actual Contribution
Percentage" of the Highly Compensated Employees shall be the average of the
Contribution Percentages of all of the Highly Compensated Employees who are
eligible to participate in this Plan, and the "Actual Contribution Percentage"
of Non-Highly Compensated Employees shall be the average of the Contribution
Percentages of all of the Non-Highly Compensated Employees who are eligible to
participate in this Plan.
4.5.2.2 The "Contribution Percentage" for any Plan Year of an
Employee who is eligible to participate in this Plan shall be (i) the sum of the
Matching Contributions and Qualified Nonelective Contributions (other than
Qualified Nonelective Contributions applied, in the discretion of the Committee,
in determining the Deferral Percentages of Employees under Section 4.4.2.2) made
by or on behalf of such Employee for such Plan Year (excluding Excess Matching
Contributions of any Highly Compensated
- 24 -
Employee that arise solely under this Plan or any other plan of the Employer),
divided by (ii) such Employee's Compensation for such Plan Year.
4.5.2.3 "Excess Matching Contributions" for any Plan Year
means the Matching Contributions made to the Plan on behalf of Participants who
are Highly Compensated Employees in excess of the limitations set forth in
Section 4.5.1 and Section 4.6; provided, however, that Matching Contributions,
which are forfeited pursuant to Section 4.7, shall not be considered to be
Excess Matching Contributions.
4.5.3 If there are any Excess Matching Contributions for any Plan
Year, such Excess Matching Contributions and the income allocable thereto shall
be (a) forfeited to the extent not vested under Section 5.5 (provided, however,
that no Matching Contributions that are so forfeited shall be allocated to the
Matching Contribution Accounts of Highly Compensated Employees for whom Excess
Matching Contributions are forfeited or distributed under this Section 4.5.3),
or (b) distributed to the Participants who are Highly Compensated Employees on
or before the Anniversary Date of the following Plan Year; provided, however,
that the Committee shall use its best efforts to cause such distribution to be
made within two and one-half (2 1/2) months after the Anniversary Date of such
Plan Year. The amount of Excess Matching Contributions to be forfeited by or
distributed to each Participant who is a Highly Compensated Employee shall be
determined by (a) forfeiting amounts by or distributing amounts to the Highly
Compensated Employee on whose behalf the largest dollar amount of Matching
Contributions were made for such Plan Year to the extent required to (i) enable
the Plan to satisfy the limitations of Sections 4.5.1 and 4.6, or (ii) cause
such Highly Compensated Employee's dollar amount of Matching Contributions to
equal the dollar amount of Matching Contributions for the Highly Compensated
Employee having the next highest dollar amount of Matching Contributions for
such Plan Year, and (b) such process shall be repeated until this Plan satisfies
the limitations of Sections 4.5.1 and 4.6. Income allocable to Excess Matching
Contributions to be distributed to a Participant under this Section 4.5.3 shall
include income allocable to the Plan Year in which such Excess Matching
Contributions were made and income allocable to the period between the end of
such Plan Year and the date of distribution. Income allocable to the Plan Year
in which Excess Matching Contributions were made, and between the end of such
Plan Year and the date of distribution, may be calculated using any method that
(a) does not discriminate in favor of officers, shareholders, or Highly
Compensated Employees, (b) is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year, and (c) is used by
the Plan for allocating income to Participants' Participant Accounts.
4.5.4 For purposes of this Section 4.5, the Contribution Percentage
of any Highly Compensated Employee who is eligible to participate in this Plan
during the Plan Year and who is eligible to receive matching contributions to
his account under two or more plans described in Section 401(a) of the Code or
arrangements described in Section 401(m) of the Code, which are maintained by
the Employer or an Affiliate, shall be determined as if all such matching
contributions were made under a single plan. In the event that this Plan
satisfies the requirements of Sections 401(m), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of Sections 401(m), 401(a)(4), or 410(b) of the Code
only if aggregated with this Plan, this Section 4.5 shall be applied by
determining the Contribution Percentages of all Employees eligible to
participate in this Plan as if all such plans were a single plan. Plans may be
aggregated to satisfy Section 401(m) of the Code only if they have the same
- 25 -
plan year. Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under regulations under Section 401(m) of
the Code.
4.6 No Multiple Use
Matching Contributions made on behalf of Participants who are Highly
Compensated Employees shall be deemed to constitute Excess Matching
Contributions for any Plan Year in which the sum of the Actual Deferral
Percentage and the Actual Contribution Percentage of Participants who are Highly
Compensated Employees exceeds the greater of (a) the sum of (i) one hundred
twenty-five percent (125%) of the greater of Actual Deferral Percentage of the
Non-Highly Compensated Employees for the current Plan Year or the Actual
Contribution Percentage of the Non-Highly Compensated Employees for the current
Plan Year, and (ii) the lesser of two hundred percent (200%) or two (2) plus the
lesser of such Actual Deferral Percentage of such Non-Highly Compensated
Employees or such Actual Contribution Percentage of such Non-Highly Compensated
Employees, or (b) the sum of (i) one hundred twenty-five percent (125%) of the
lesser of such Actual Deferral Percentage of such Non-Highly Compensated
Employees or such Actual Contribution Percentage of such Non-Highly Compensated
Employees, and (ii) the lesser of two hundred percent (200%) or two (2) plus the
greater of such Actual Deferral Percentage of such Non-Highly Compensated
Employees or such Actual Contribution Percentage of such Non-Highly Compensated
Employees.
4.7 Corrective Forfeiture of Matching Contributions
If any Excess Contributions are distributed under Section 4.4.3 for
any Plan Year to Highly Compensated Employees, Matching Contributions made on
account of such Excess Contributions, plus income allocable to such Matching
Contributions (determined as though such Matching Contributions were Excess
Matching Contributions under Section 4.5.3), shall be forfeited by such Highly
Compensated Employees. Such forfeiture shall occur even if such Matching
Contributions would otherwise be vested under Section 5.5. Any Matching
Contributions that are forfeited under this Section 4.7 shall be treated as a
forfeiture under Sections 5.2 and 7.6 as of the last day of the month in which
the distribution of the related Excess Contributions occurs.
4.8 Rollover Contributions
Subject to the approval of the Committee and of the Trustee, any
Participant may contribute from time to time any amount in cash that constitutes
an eligible rollover contribution within the meaning of Sections 402(c),
403(a)(4), and 408(d)(3) of the Code. The Committee may, in its discretion,
decide that the Plan will not accept any Rollover Contributions. Effective
January 1, 1999, hardship distributions described in Section 401(k)(2)(B)(i)(IV)
of the Code are not eligible rollover contributions.
4.9 No Voluntary Contributions
No Participant may make any voluntary contributions to the Trust
Fund.
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4.10 Transfers From Other Qualified Plans
There may be transferred to the Trustee, subject to the approval of
the Committee and of the Trustee, all or any of the assets held (whether by a
trustee, custodian, or otherwise) on behalf of any other plan that satisfies the
applicable requirements of Section 401(a) of the Code and that is maintained for
the benefit of any persons who are or are about to become Participants in this
Plan. The Committee is not required to approve such a transfer of assets to this
Plan. In no event, however, shall any assets be transferred into this Plan from
a plan that is required to satisfy the requirements of Section 417 of the Code.
4.11 Participant Accounts
The Committee shall maintain a Participant Account for each
Participant that shall show the dollar value of his current interest in the
Trust Fund as of each Valuation Date. Such dollar value shall be his interest in
the Trust Fund until the next Valuation Date. Within the Participant Account of
each Participant, the Committee shall maintain separate subaccounts for Rollover
Contributions made by such Participant and amounts transferred to this Plan
under Section 4.10 for the benefit of such Participant and the earnings, losses,
and gains thereon (the "Rollover Contribution Account"); the Salary Deferral
Contributions made on behalf of such Participant and the earnings, losses, and
gains thereon (the "Salary Deferral Contribution Account"); the Matching
Contributions made on behalf of such Participant and the earnings, losses and
gains thereon (the "Matching Contribution Account"); the Profit Sharing
Contributions made on behalf of such Participant before 1997 and the earnings,
losses, and gains thereon (the "Profit Sharing Contribution Account"); the
Qualified Matching Contributions made on behalf of such Participant and the
earnings, losses, and gains thereon (the "Qualified Matching Contribution
Account"); and the Qualified Nonelective Contributions made on behalf of such
Participant and the earnings, losses, and gains thereon (the "Qualified
Nonelective Contribution Account"). Except for the maintaining of such
subaccounts, Rollover Contributions and amounts transferred to this Plan under
Section 4.10 shall be held and administered in the same manner as the Employer
Contributions, and the Trustee is authorized to hold Rollover Contributions and
amounts transferred to this Plan under Section 4.10 and all other contributions
to the Plan in the common Trust Fund, without segregation of assets.
ARTICLE V
DETERMINATION AND VESTING OF EMPLOYEES' INTERESTS
5.1 Allocation to Participant Accounts
The Participant Account of each Participant shall be credited with
the following amounts:
5.1.1 Allocation of Salary Deferral Contributions. Salary Deferral
Contributions for each Plan Year to the Trust Fund shall be allocated among the
Salary Deferral Contribution Accounts of the Participants in the actual amounts
contributed by or for such Participants.
- 27 -
5.1.2 Allocation of Matching Contributions. Matching Contributions
for each Plan Year to the Trust Fund shall be allocated among the Matching
Contribution Accounts of the Participants in the actual amounts contributed for
such Participants.
5.1.3 Allocation of Qualified Matching Contributions. Qualified
Matching Contributions for each Plan Year to the Trust Fund shall be allocated
on the Anniversary Date among the Qualified Matching Contribution Accounts of
the Participants who are Non-Highly Compensated Employees in the actual amounts
contributed for such Participants.
5.1.4 Allocation of Qualified Nonelective Contributions. Qualified
Nonelective Contributions for each Plan Year to the Trust Fund shall be
allocated on the Anniversary Date to the Qualified Nonelective Contribution
Accounts of the Participants who are Non-Highly Compensated Employees in the
amounts that the Committee determines are necessary for the Plan to pass the
actual deferral percentage test of Section 4.4 for the Plan Year, or, in the
discretion of the Committee, in the amounts that the Committee determines are
necessary for the Plan to pass the actual contribution percentage test of
Section 4.5 for the Plan Year; provided, however, that the Qualified Nonelective
Contributions need not be allocated to all Participants who are Non-Highly
Compensated Employees, or among such Participants in the ratio that their
respective Compensation for such Plan Year bears to the total Compensation of
all Participants for such Plan Year who were Non-Highly Compensated Employees.
5.1.5 Allocation of Earnings of Trust Fund. Earnings, losses,
expenses, gains and changes in value of the Trust Fund shall be allocated to the
Participant Accounts of all Participants as of each Valuation Date. The amounts
of such earnings, losses, expenses, gains, and changes in value to be allocated
to the Participant Account of a Participant shall bear the same ratio to the
total amounts of such earnings, losses, gains and changes in value as the dollar
value of such Participant's Participant Account prior to the allocation under
this Section 5.1.5 and prior to the allocation of Contributions under Sections
5.1.1, 5.1.2, 5.1.3 and 5.1.4 bears to the total dollar value of all Participant
Accounts prior to such allocations. Earnings, losses, gains, and changes in
value allocated to the Participant Account of a particular Participant pursuant
to this Section 5.1.5 shall be further allocated to such Participant's Salary
Deferral Contribution Account, Matching Contribution Account, Profit Sharing
Contributions Account, Qualified Matching Contribution Account, Rollover
Contribution Account, and Qualified Nonelective Contribution Account in the
ratio that the dollar value of each of such accounts prior to the allocations
under Sections 5.1.1, 5.1.2, 5.1.3 and 5.1.4 and prior to the allocation under
this Section 5.1.5 bears to the dollar value of such Participant's entire
Participant Account prior to such allocations. Notwithstanding the foregoing, if
the assets in a Participant's Participant Account are invested in one or more
investment funds, pools, or vehicles at the direction of the Participant as
described in Section 2.3.5, such Participant's Participant Account shall be
increased by the amount of any earnings, gains, and increases in value, and
decreased by the amount of any losses, expenses, and decreases in value, that
actually resulted from the investment of the assets in his Participant Account
in such investment funds, pools, or vehicles during the Plan Year.
5.2 Forfeitures
All amounts representing forfeitures, as described in Section 7.6,
shall be applied to reduce the Matching Contributions to be made by the Employer
and, as such,
- 28 -
shall be allocated to the Matching Contribution Accounts of the Participants in
the manner set forth in Section 5.1.2; provided, however, that no such
forfeitures shall be allocated for a Plan Year to any Participants who are
Highly Compensated Employees and who have Excess Matching Contributions for such
Plan Year.
5.3 Overall Contribution Limitation
Notwithstanding the foregoing provisions of this Article V:
5.3.1 Effective for Limitation Years beginning after January 1,
1994, the Annual Additions allocated to the Participant Accounts of any
Participant, together with the Annual Additions allocated to a Participant's
account in any other defined contribution plan, as defined in Section 414(i) of
the Code, maintained by the Employer shall not exceed the lesser of (1)
twenty-five percent (25%) of such Participant's Compensation, or (2) $30,000.00,
as adjusted under Section 415(d) of the Code. Any adjustment pursuant to Section
415(d) of the Code shall be effective as of January 1 of the calendar year and
shall apply with respect to the Limitation Year ending with or within such
calendar year. For purposes of this Section 5.3, "Annual Additions" shall mean
the sum for any Limitation Year of (1) the Employer Contributions allocated to a
Participant's Participant Account, (2) the amount of such Participant's employee
contributions and voluntary employee contributions to all defined contribution
plans maintained by the Employer, (3) forfeitures allocated to the Participant,
(4) amounts allocated, after March 31, 1984, to an individual medical account,
as defined in Section 415(l)(2) of the Code, which is part of a pension or
annuity plan maintained by the Employer, (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 separate account of a key employee, as defined in Section 419A(d)(3) of the
Code, under a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, and (6) allocations under a simplified employee
pension. The percentage-of-Compensation limitation set forth in clause (1) of
the first sentence of this Section 5.3.1 shall not apply to any contribution for
medical benefits (within the meaning of Section 401(h) or Section 419A(f)(2) of
the Code) that an Employer allocates to an account maintained for the
Participant that is otherwise treated as an Annual Addition under Section
415(l)(1) or Section 419A(d)(2) of the Code. The Annual Addition for any
Limitation Year beginning before January 1, 1987, shall not be recomputed to
treat all employee contributions as part of such Annual Addition, but only the
lesser of the amount of a Participant's employee contributions in excess of six
percent (6%) of his eligible Compensation or one-half (1/2) of his employee
contributions to all defined contribution plans maintained by the Employer shall
be included in any such Annual Addition. The term "Annual Additions" shall not
include the amount of any rollover contributions as that term is used in Section
415(c)(2) of the Code. The Plan Year shall be the "Limitation Year" under
Section 415 of the Code. If a short Limitation Year is created because of an
amendment to the Plan changing the Limitation Year to a different twelve (12)
consecutive month period, the limitation set forth in clause (2) of the first
sentence of this Section 5.3.1 will not exceed the limitation set forth in
clause (2) of the first sentence of this Section 5.3.1, multiplied by a
fraction, the numerator of which is the number of months in the short Limitation
Year, and the denominator of which is twelve (12).
5.3.2 For purposes of determining the Annual Addition limit under
this Section 5, Employer shall have the meaning provided herein; except that the
term Affiliate as defined in Section 1.3 of Article I shall be modified by
Section 415(h) of the Code.
- 29 -
5.3.3 Neither the Employer nor any Affiliate has ever maintained,
for any Limitation Year beginning on or before December 31, 1999, a defined
benefit plan in addition to this Plan.
5.3.4 In the event that corrective adjustments in any Participant's
Participant Account are required pursuant to Sections 5.3.1 or 5.3.2, the Annual
Addition to such accounts shall be reduced by corrective adjustments made in the
following order of precedence:
(1) Return to such Participant all or a portion of such
Participant's employee contributions or voluntary contributions (plus
attributable earnings) made to any defined contribution plan of the Employer;
(2) Return to such Participant all or a portion of his
elective Salary Deferral Contributions (within the meaning of Section 402(g)(3)
of the Code) plus attributable earnings pursuant to any salary deferral plan
under Section 401(k) of the Code;
(3) If such Participant is a Participant under this Plan at
the end of a Limitation Year, such excess amount shall be used to reduce
Employer Contributions and forfeitures allocated to such Participant in the next
Limitation Year and, if necessary, in each succeeding Limitation Year if the
Participant remains a Participant in the Plan at the end of such Limitation
Year;
(4) If such Participant is not a Participant of the Plan at
the end of a Limitation Year, such excess amount shall be held unallocated in a
suspense account, which such suspense account shall be applied to reduce
Employer Contributions allocated to all remaining Participants in the next
Limitation Year, and, if necessary, each succeeding Limitation Year. If a
suspense account is in existence at any time during a Limitation Year pursuant
to this Section 5.3.4, (a) such suspense account shall not participate in the
allocation of investment gains and losses, and (b) all amounts in such suspense
account must be allocated and reallocated to Participants' Participant Accounts
before any Employer Contribution or any employee contributions may be made to
the Plan for such Limitation Year. Excess amounts may not be distributed to
Participants or former Participants;
(5) If a Participant's Annual Additions under this Plan and
all other defined contribution plans, welfare benefit funds, or individual
medical accounts maintained by the Employer would result in an excess amount for
a Limitation Year, such excess amount shall be deemed to consist of the Annual
Additions last allocated, except that Annual Additions attributable to a
simplified employee pension will be deemed to have been allocated first,
followed by Annual Additions to a welfare benefit fund or individual medical
account, regardless of the actual allocation date;
(6) If the allocation date of this Plan coincides with the
allocation date of any other defined contribution plan, welfare benefit fund, or
individual medical account maintained by an Employer, the excess amount
attributable to this Plan shall be the product of: (a) the total excess amount
allocated as of such date, multiplied by (b) the ratio of (i) the Annual
Addition allocated to the Participant for such Limitation Year as of such
allocation date under this Plan, to (ii) the total Annual Additions allocated to
the Participant for such Limitation Year as of such allocation date under this
Plan and all other defined
- 30 -
contribution plans, welfare benefit funds, and individual medical accounts
maintained by an Employer; and
(7) Corrective adjustments made pursuant to the provisions of
each defined benefit plan maintained by the employer.
5.4 Certain Compensation
In the event that in any year any Participant's total Compensation,
including the amount of the Employer Contribution and forfeitures allocated to
the Participant Account of such a Participant pursuant to this Plan (hereinafter
referred to as "Total Compensation"), is found to be unreasonable in amount and
results in the disallowance of a deduction to the Employer in the Plan Year in
which a final determination is made with respect to the deductibility of such
Total Compensation, the Employer Contribution allocated to the Participant
Account of such Participant with respect to the year in question shall be
reduced by an amount that is proportionate to the amount of Total Compensation
for which a deduction is disallowed divided by the amount of Total Compensation
for which the Employer has taken a deduction. Such excess contribution, and any
earnings thereon, shall be reallocated to the remaining Participants in the same
proportions provided in Sections 5.1.2 in the year of such final determination.
To the extent that the excess contribution, together with amounts already
contributed to the Plan, exceeds the limitation with respect to the
deductibility of Employer Contributions contained in Section 404(a)(3) of the
Code, such amount shall constitute a contribution carryover.
5.5 Vesting of Participants' Interests
5.5.1 A Participant's interest shall become vested to the extent of
the sum of (1) the total of such Participant's Rollover Contribution Account,
Salary Deferral Contribution Account, Qualified Matching Contribution Account,
and Qualified Nonelective Contribution Account, and (2) the following scheduled
percentages of such Participant's Matching Contribution Account and Profit
Sharing Contribution Account:
Years of Service Percentage Vested
---------------- -----------------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
provided, however, that in the case of a Participant whose Employment terminated
before August 18, 1997, such Participant shall become vested in the following
scheduled percentages of the such Participant's Matching Contribution Account
and Profit Sharing Contribution Account:
- 31 -
Years of Service Percentage Vested
---------------- -----------------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Notwithstanding the foregoing, when any Participant reaches his Normal
Retirement Date, dies, or suffers Total Disability while an Employee of the
Employer, his entire interest in his Matching Contributions Account and Profit
Sharing Contributions Account shall become fully vested without regard to his
Years of Service; and provided, further, that, notwithstanding the schedule set
forth above, the Matching Contributions (and earnings allocable thereto) of a
Participant who is a Highly Compensated Employee may be forfeited as set forth
in Section 4.7. Any portion of the interest of a Participant that has not become
vested, as herein provided, shall be a forfeitable interest. Any interest in the
Trust Fund shall be and become payable to such Participant or his Beneficiaries
only as and to the extent provided in this Plan; and a Participant or former
Participant who dies having designated a Beneficiary shall cease to have any
interest hereunder in the Trust Fund or in his Participant Account, and his
Beneficiary shall become entitled to payment thereof as herein provided by
virtue of the terms of this Plan and not as a result of any transfer of said
interest or Participant Account.
5.5.2 For purposes of computing Years of Service for use in the
application of Section 5.5.1, the following rules shall apply and, except as
otherwise provided by said rules, all Years of Service shall be taken into
account:
(a) In the case of a Participant all of whose interest in the
Trust Fund derived from Employer Contributions is a forfeitable interest, Years
of Service before a One-Year Break in Service shall not be taken into account at
any time if the number of consecutive One-Year Breaks in Service equals or
exceeds the greater of five (5) or the aggregate number of Years of Service
prior to such One-Year Breaks in Service. Such aggregate number of Years of
Service before such One-Year Breaks in Service shall not include any Years of
Service not required to be taken into account by reason of any prior One-Year
Break in Service.
(b) Years of Service subsequent to any Participant's incurring
five (5) consecutive One-Year Breaks in Service shall not be taken into account
for purposes of calculating the percentage of vesting of that portion of such
Participant's Participant Account that is attributable to Employer Contributions
made prior to such One-Year Breaks in Service.
5.6 Election of Former Vesting Schedule
In the event the vesting schedule of this Plan is amended, any
Participant who has completed at least three (3) Years of Service (five (5)
Years of Service for Plan Years beginning before January 1, 1989) may elect to
have his vested interest in Employer Contributions and earnings thereon
determined without regard to such amendment by
- 32 -
notifying the Committee in writing during the election period as hereafter
defined. The election period shall begin on the date such amendment is adopted
and shall end no earlier than the latest of the following dates:
(a) The date that is sixty (60) days after the date the
amendment is adopted;
(b) The date that is sixty (60) days after the day the
amendment becomes effective; or
(c) The date that is sixty (60) days after the day the
Participant is issued written notice of the amendment by the Employer or the
Committee. Such election shall be available only to an individual who is a
Participant at the time such election is made and such election shall be
irrevocable.
5.7 Changes in Vesting Schedule
In the event that the vesting schedule of this Plan is amended, the
vested interest of any person who is a Participant on the date such amendment is
adopted, or on the effective date of such amendment, if later, shall not be less
than the vested interest computed under the Plan without regard to such
amendment.
ARTICLE VI
TOP-HEAVY STATUS
6.1 Definitions Relating to Top-Heavy Status
For purposes of this Article VI, the following terms are defined as
follows:
6.1.1 "Aggregate Account" means, with respect to a participant in a
defined contribution plan, such participant's account balance as of the most
recent Valuation Date occurring within the twelve (12)-month period ending on
the Determination Date, adjusted as provided in Sections 6.1.1(a) and 6.1.1(b).
(a) In the case of a defined contribution plan that is not
subject to the minimum funding requirements of Section 412 of the Code, the
Aggregate Account shall include the amount of any contribution allocated to such
participant's account that is actually made after the valuation date but on or
before the Determination Date; provided, however, that in the first plan year of
such defined contribution plan, such Aggregate Account shall also include the
amount of any contribution made after the Determination Date that is allocated
to the account of such participant as of any date in such first plan year. In
the case of a defined contribution plan that is subject to the minimum funding
requirements of Section 412 of the Code, the Aggregate Account of a participant
shall include contributions that would be allocated to such participant as of
any date that is not later than the Determination Date, even though such amounts
are not required to be contributed to the plan as of such date.
(b) The Aggregate Account of a participant in a defined
contribution plan shall include the following:
- 33 -
(1) Any distributions made from such defined
contribution plan to such participant within the Determination Period; provided,
however, that the Aggregate Account of a participant shall not include
distributions made after the Valuation Date but before the Determination Date,
to the extent that such distributions are already included in such participant's
Aggregate Account as of the Valuation Date. Notwithstanding anything herein to
the contrary, all distributions, including distributions made prior to January
1, 1984, and distributions under a terminated plan which, if it had not been
terminated, would have been required to be included in the Required Aggregation
Group, will be counted. Further, distributions from the Plan (including the cash
value of life insurance policies) of a Participant's Participant account balance
because of death shall be treated as a distribution for the purposes of this
Section 6.1.1. However, amounts attributable to tax deductible qualified
deductible employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(2) All employee contributions, whether voluntary or
mandatory, and all Employer contributions attributable to a salary reduction or
similar arrangement.
(3) All Unrelated Rollovers (as defined in Section
6.1.1(c)) accepted by such defined contribution plan on behalf of such
participant before January 1, 1984, and all Related Rollovers (as defined in
Section 6.1.1(c)) accepted by such defined contribution plan on behalf of such
participant, irrespective of the date on which such Related Rollover is
accepted.
(c) For purposes of this Section 6.1.1, a "Related Rollover"
means a rollover or plan-to-plan transfer not initiated by the participant or
made to a plan maintained by the same employer from which such rollover or
transfer is made. For purposes of this Section 6.1.1, an "Unrelated Rollover"
means a rollover or a plan-to-plan transfer initiated by the participant and
made from a plan maintained by one employer to a plan maintained by another
employer. For purposes of Section 6.1.1(b), all Unrelated Rollovers shall be
deemed to be distributions, but no Related Rollover shall be deemed to be a
distribution. In determining whether a rollover or plan-to-plan transfer is made
between plans maintained by different employers, all employers aggregated under
Section 414(b), (c) or (m) of the Code shall be treated as being the same
employer.
6.1.2 "Determination Date" means (a) the last day of the preceding
plan year, or (b) in the case of the first plan year, the last day of such plan
year.
6.1.3 "Determination Period" means a plan year containing a
Determination Date for the plan year in question and the four (4) preceding plan
years.
6.1.4 "Key Employee" means any Employee or former Employee
(including any deceased Employee and Beneficiaries) who is a Key Employee under
Section 416(i)(1) of the Code and the regulations promulgated thereunder. Under
Section 416(i)(1) of the Code and the regulations thereunder, a "Key Employee"
includes an Employee who, at any time during the Determination Period, is one or
more of the following:
(a) An officer of an Employer having annual Compensation from
the Employer or Affiliate greater than fifty percent (50%) of the dollar
limitation in effect under Section 415(c)(1)(A) of the Code; provided, however,
that not
- 34 -
more than fifty (50) Employees (or, if less, the greater of three (3) or ten
percent (10%) of the Employees) shall be treated as officers.
(b) One of the ten (10) Employees who has Compensation from an
Employer or Affiliate for a Plan Year that exceeds the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for the calendar year in which
such Plan Year ends and who owns, or is considered as owning, within the meaning
of Section 318 of the Code as modified by Section 416(i)(1)(B)(iii)(I) of the
Code, the largest interests (but not less than one-half of one percent (1/2%))
in an Employer; provided, however, that if two (2) Employees have the same
interest in an Employer, the Employee having greater annual Compensation from an
Employer shall be treated as having a larger interest in such Employer.
(c) A "Five Percent Owner" of an Employer. The term "Five
Percent Owner" means any person who owns (or is considered as owning within the
meaning of Section 318 of the Code) more than five percent (5%) of the
outstanding stock of an employer, or stock possessing more than five percent
(5%) of the total combined voting power of all stock in an employer, or, in the
case of an unincorporated business, any person who owns more than five percent
(5%) of the capital or profits interest in such employer.
(d) Any Employee who (a) receives Compensation from an
Employer or Affiliate for a Plan Year of more than One Hundred Fifty Thousand
Dollars ($150,000.00), and (b) owns (or is considered as owning within the
meaning of Section 318 of the Code) more than one percent (1%) of the
outstanding stock of an Employer, or stock possessing more than one percent (1%)
of the total combined voting power of all stock of an Employer, or, in the case
of an unincorporated Employer, any person who owns more than one percent (1%) of
the capital or profits interest in such Employer.
An Employee may be considered a Key Employee in a Plan Year under
more than one subsection of this Section 6.1.4; provided that for purposes of
determining whether the Plan is Top-Heavy, a Key Employee's accrued benefit
shall be counted only once.
For purposes of determining the number of officers taken into
account under Section 6.1.4(a), the following Employees are excluded:
(a) Employees who have not completed six (6) months of
Service,
(b) Employees who normally work less than seventeen and a half
(17 1/2) hours per week,
(c) Employees who normally do not work more than six (6)
months during each Plan Year,
(d) Employees who have not attained the age of twenty-one (21)
years, and
(e) Except to the extent provided in regulations, Employees
who are included in a unit of Employees covered by an agreement which the
- 35 -
Secretary of Labor finds to be a collective bargaining agreement between
Employee representatives and the Employer.
6.1.5 "Non-Key Employee" means any employee who is not a Key
Employee.
6.1.6 "Permissive Aggregation Group" means all plans included in a
Required Aggregation Group (as defined in Section 6.1.7), and any other plan of
an Employer that is not required to be included in the Required Aggregation
Group, provided that the resulting group of plans, taken as a whole, satisfies
the nondiscrimination provisions of Section 401(a)(4) of the Code and the
coverage provisions of Section 410 of the Code.
6.1.7 "Required Aggregation Group" means each plan (including any
terminated plan) of the Employer in which a Key Employee is a participant during
the Determination Period, and each other plan of the Employer that enables any
plan in which a Key Employee participates to satisfy the nondiscrimination
requirements of Section 401(a)(4) of the Code and the coverage requirements of
Section 410 of the Code.
6.1.8 "Top-Heavy Year" means any Plan Year commencing after December
31, 1983, in which this Plan is a Top-Heavy Plan.
6.2 Determination of Top-Heavy Status
In determining whether this Plan is a Top-Heavy Plan, the following
provisions shall apply:
6.2.1 This Plan shall be a "Top-Heavy Plan" for any Plan Year
commencing after December 31, 1983, in which, as of the Determination Date,
either (a) the Aggregate Accounts of Key Employees exceed sixty percent (60%) of
the Aggregate Accounts of all Employees under this Plan, or (b) this Plan is
part of a Required Aggregation Group that is a Top-Heavy Group, unless this Plan
is also part of a Permissive Aggregation Group that is not a Top-Heavy Group.
6.2.2 This Plan shall be a "Super Top-Heavy Plan" for any Plan Year
commencing after December 31, 1983, in which, as of the Determination Date,
either (a) the Aggregate Accounts of Key Employees exceed ninety percent (90%)
of the Aggregate Accounts of all Employees under this Plan, or (b) this Plan is
part of a Required Aggregation Group that is a Super Top-Heavy Group, unless
this Plan is also part of a Permissive Aggregation Group that is not a Super
Top-Heavy Group.
6.2.3 A Permissive Aggregation Group or a Required Aggregation Group
constitutes a "Top-Heavy Group" if the Aggregate Accounts of Key Employees under
all defined contribution plans included in such Permissive Aggregation Group or
Required Aggregation Group exceed sixty percent (60%) of similar sums of all
employees.
6.2.4 A Permissive Aggregation Group or a Required Aggregation Group
is a "Super Top-Heavy Group" if the Aggregate Accounts of Key Employees under
all defined contribution plans included in such Permissive Aggregation Group or
Required Aggregation Group exceed ninety percent (90%) of similar sums of all
employees.
- 36 -
6.2.5 In determining the status of this Plan as a Top-Heavy Plan or
Super Top-Heavy Plan, the Aggregate Account (under this Plan or any other plan
that is part of a Required Aggregation Group or Permissive Aggregation Group of
which this Plan is part) of an employee shall be disregarded if either (a) such
employee is a Non-Key Employee in any plan year but was a Key Employee in any
prior plan year, or (b) such employee has not received any compensation from the
Employer (other than benefits under a plan) at any time during the Determination
Period.
6.3 Consequences of Top-Heavy Status
Notwithstanding any other provision of this Plan, the following
provisions shall apply in any Top-Heavy Year:
6.3.1 In any Top-Heavy Year, the annual Compensation of each
Participant that shall be taken into account under this Plan shall be limited to
Two Hundred Thousand Dollars ($200,000.00) for any Plan Year after 1986 and
before 1994, and One Hundred Fifty Thousand Dollars ($150,000.00) for any Plan
Year after 1993, subject to any cost of living adjustment made by the Secretary
of the Treasury. Any such adjustment shall be effective as of January 1 of the
calendar year and shall apply with respect to Plan Years ending with or within
such calendar year.
6.3.2 For each Top-Heavy Year, each Participant who is a Non-Key
Employee and whose Employment has not been terminated as of the Anniversary Date
shall receive a minimum allocation of Employer Contributions and forfeitures to
his Participant Account equal to three percent (3%) of his Compensation for such
Plan Year, subject to the following provisions:
(a) Notwithstanding the foregoing, the ratio of the Employer
Contributions and forfeitures allocated to the Participant Account of a Non-Key
Employee in a Top-Heavy Year to the Compensation of such Non-Key Employee for
such Top-Heavy Year shall not exceed the highest ratio of Employer Contributions
and forfeitures allocated to the Participant Account of any Key Employee for
such Top-Heavy Year to the Compensation of such Key Employee in such Top-Heavy
Year. This Section 6.3.2(a) shall not apply if this Plan is required to be
included in a Required Aggregation Group or a Permissive Aggregation Group and
enables any defined benefit plan required to be included in such Required
Aggregation Group or Permissive Aggregation Group to meet the requirements of
Section 401(a)(4) or 410 of the Code.
(b) If, in a Top-Heavy Year, a Non-Key Employee participates
both in this Plan and in a defined benefit plan, and this Plan and such defined
benefit plan are part of a Required Aggregation Group that is a Top-Heavy Group,
the Committee shall adjust the minimum allocation provided for such Non-Key
Employee under this Section 6.3.2 to prevent inappropriate omissions or required
duplications of minimum benefits or allocations. Such adjustment shall be made
under the comparability analysis method of Treasury Regulation Section 1.416-1
M-12.
(c) In each Top-Heavy Year, the minimum allocation provided in
this Section 6.3.2 shall be allocated to the Participant Account of each
Participant who is a Non-Key Employee and whose Employment has not been
terminated as of the Anniversary Date of such Top-Heavy Year, including Non-Key
Employees who (1)
- 37 -
do not participate because they failed to complete one thousand (1,000) Hours of
Service, (2) do not participate because they declined or failed to make, or
withdraw, mandatory employee contributions under this Plan or (3) do not
participate in this Plan because their compensation is less than a stated amount
but are counted to satisfy the coverage requirements of Section 410 of the Code.
6.3.3 In computing the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction under Section 5.3.3, "1.0" shall be substituted for
"1.25" in any Top-Heavy Year in which either:
(a) This Plan is a Super Top-Heavy Plan, or
(b) This Plan is not a Super Top-Heavy Plan, unless the
minimum allocation allocated to the Participant Account of each Non-Key Employee
for such Top-Heavy Year under Section 6.3.2 is computed by substituting "four
percent (4%)" for "three percent (3%)".
6.3.4 In each Top-Heavy Year, the vested percentage of a Participant
in the Employer Contributions and gains and earnings thereon allocated to him
shall be at least equal to the applicable percentage set forth on the following
schedule:
Years of Service Vested Percentage
---------------- -----------------
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
For purposes of this Section 6.3.4, each Participant's Years of Service
shall be determined as set forth in Section 5.3.2. Notwithstanding the
foregoing, if a Participant does not complete one (1) or more Hours of Service
in any Top-Heavy Year, the vested portion of such Participant's interest in
Employer Contributions and the earnings and gains thereon shall be determined
under Section 5.5. If this Plan ceases to be a Top-Heavy Plan, vesting under the
Plan shall thereafter be determined under the vesting schedule set forth in
Section 5.5. Any such reversion shall be treated as an amendment to this Plan,
which is subject to the provisions of Section 5.7.
ARTICLE VII
DISTRIBUTIONS AND WITHDRAWALS FROM THE TRUST FUND
7.1 Events Causing Distribution or Permitting Withdrawal
A Participant's vested interest in the Trust Fund shall be
distributed upon his death, Total Disability, retirement, or termination of
Employment to such Participant, such Participant's surviving spouse, or such
Participant's Beneficiary as set forth in Section 7.5. A Participant may take
withdrawals from the Trust Fund before his death, Total Disability, retirement,
or termination of Employment under the circumstances set forth in Sections 7.4,
- 38 -
7.10 and 7.16. For purposes of this Article VII, a Participant shall be deemed
to have terminated his Employment upon the disposition by the Employer of
substantially all of the assets used by the Employer in a trade or business
within the meaning of Section 401(k)(10)(A)(ii) of the Code, if such Participant
continues employment with the corporation acquiring such assets, or upon the
disposition by the Employer of the Employer's interest in a subsidiary within
the meaning of Section 401(k)(10)(A)(iii) of the Code, if the Participant
continues employment with such subsidiary, but only if such Participant
satisfies the requirements for receiving a distribution under Section 401(k)(10)
of the Code or other applicable ruling or regulation.
7.2 Transfers to Other Qualified Plans
In the event that any Participant becomes, or is about to become, a
participant in any other plan that satisfies the requirements of Section 401(a)
of the Code, the Committee may, in its discretion, direct the Trustee to
transfer all or part of the assets in such Participant's Participant Account to
the trustee, custodian, or other person who holds the assets of such other plan.
A Participant shall cease to be a participant in this Plan, and neither such
Participant nor such Participant's Beneficiaries shall be entitled to receive
any distribution from this Plan, from and after the date on which the vested
portion of such Participant's Participant Account has been reduced to zero
because of distributions, transfers to other plans as provided in this Section
7.2 or both.
7.3 Information to Be Furnished to Committee
For the purpose of enabling the Committee to determine the portion
of the Participant's interest in the Trust Fund that is vested and
distributable, the Employer shall certify to the Committee in writing the
following information as soon as possible following his retirement, death, Total
Disability, or termination of Employment:
(1) Name and address;
(2) Date on which Participant retired, died, or became Totally
Disabled or otherwise left the employ of the Employer;
(3) Number of Years of Service; and
(4) Age upon death or termination of Employment.
7.4 Withdrawals from Rollover Contribution Accounts
A Participant may take a withdrawal from his Rollover Contribution
Account at any time and for any reason, provided that no such withdrawal shall
be in the form of an annuity.
7.5 Form of Distribution
The following provisions shall apply to any distribution from the
Trust Fund with respect to any Participant to the extent that the Trustee has
not received for the benefit of such Participant any direct or indirect transfer
of assets under Section 4.10 from any other plan that is required to comply with
the requirements of Section 417 of the Code:
- 39 -
7.5.1 Form of Distribution: The Committee shall distribute such
Participant's interest in the Trust Fund, in one of the following forms, as
elected by the Participant or his Beneficiary:
(a) One lump sum payable as soon as administratively
practicable after such Participant's death, Total Disability, retirement, or
termination of Employment.
(b) A direct rollover in accordance with Section 7.15.
(c) In the event that the Participant elects benefits to be
paid in the form of one lump sum or in a direct rollover in accordance with
Section 7.15, the Participant may elect that the portion of the Participant's
Participant Account that is invested in shares of Company Stock or in units of
the Company Stock Fund shall be distributed in the form of shares of Company
Stock, valued as of the date of distribution, with fractional shares being paid
in cash. Unless the Participant makes the election described in the preceding
sentence, the entire amount of his or her Participant Account shall be
distributed in the form of cash. The portion of the Participant's Participant
Account that is not invested in shares of Company Stock or in units of the
Company Stock Fund shall be distributed in cash.
7.5.2 Beneficiary. Each Participant's Beneficiary shall be his
surviving spouse, unless either (a) there is no surviving spouse, or (b) such
Participant's spouse consents in writing to the designation of another
Beneficiary, and such consent acknowledges the effect of such designation and is
witnessed by a representative of the Plan or a notary public. If there is no
surviving spouse, or if such Participant's spouse consents in writing to the
designation of another Beneficiary and such consent acknowledges the effect of
such designation and is witnessed by a notary public, such Participant's
Beneficiary shall be designated in the form prescribed by the Committee. If such
Participant fails to designate a Beneficiary before his death, or if no
designated Beneficiary survives the Participant, the Participant shall be deemed
to have designated Beneficiaries in the following order of priority, and the
Committee shall direct the Trustee to pay benefits under this Plan to such
Beneficiaries: (1) The Participant's surviving spouse, (2) if the Participant
has no surviving spouse, then the Trustees of any then existing inter vivos
(living) trust (including any amendments thereto up to the time of the
Participant's death) established by the Participant for the benefit of the
Participant's surviving spouse, children, or issue, (3) if there is no such
surviving spouse or such inter vivos trust, then any testamentary trust
established by court order in the Participant's estate, (4) if there is no such
surviving spouse, inter vivos trust, or testamentary trust, then the
Participant's lawful living issue (including adopted issue) who survive such
Participant, with each such issue's beneficial interest to be determined by
right of representation, and (5) otherwise, to the Participant's executor or
administrator. If no executor or administrator has been appointed or if actual
notice of such appointment has not been given to the Trustee within one hundred
twenty (120) days after such Participant's death, and if such Participant's
interest in the Trust Fund does not exceed Sixty Thousand Dollars ($60,000.00),
the Committee may direct the Trustee to pay such Participant's interest in the
Trust Fund to the person entitled thereto and the Committee may require such
proof of right and identity from such person as the Committee deems necessary,
all in accordance with the provisions of Section 630 of the California Probate
Code.
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7.5.3 Cash Out of Benefits. Notwithstanding the foregoing provisions
of this Section 7.5, the vested balance in a Participant's Participant Account
shall be distributed immediately upon the retirement, Total Disability,
termination of employment, or death of the Participant if such distribution can
be made without the consent of the Participant or the Participant's spouse under
the following provisions of this Section 7.5.3. If the value of a Participant's
vested Participant Account exceeds $3,500, and such vested Participant Account
is not "Immediately Distributable" (as defined below), the Participant and the
Participant's spouse (or the survivor, if either has died) must consent to any
distribution of such Participant Account. Such consent of the Participant and
the Participant's spouse shall be obtained in writing within the 90-day period
ending on the first date on which a distribution is made. The Committee shall
notify the Participant and the Participant's spouse of the right to defer any
distribution until the Participant's Participant Account is no longer
immediately distributable. Such notification shall include a general description
of the material features and an explanation of the relative values of the
optional forms of benefit available under the Plan, and shall be provided no
less than 30 days and no more than 90 days before the first date on which a
distribution is made. However, distribution may commence less than 30 days after
such notice is given, if the Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving such
notice to consider whether or not to elect a distribution (and, if applicable, a
particular distribution option), and the Participant, after receiving such
notice, affirmatively elects a distribution. Neither the consent of the
Participant nor the Participant's spouse shall be required to the extent that a
distribution is required to satisfy the provisions of Sections 5.3 or 7.11 of
the Plan. If, upon the termination of the Plan, neither the Company nor any
Affiliate maintains another defined contribution plan (other than an employee
stock ownership plan as defined in Section 4975(e)(7) of the Code), the
Participant's Participant Account will, without the Participant's consent, be
distributed to the Participant. However, if the Company or any Affiliate
maintains another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code), the Participant's
Participant Account will be transferred, without the Participant's consent, to
the other plan if the Participant does not consent to an immediate distribution.
For purposes of this Section 7.5.3, a Participant's Participant Account is
"Immediately Distributable" if any part of the Participant Account could be
distributed to the Participant (or surviving spouse) before the Participant
attains, or would have attained if not deceased, the later of age 62 or his
Normal Retirement Date.
7.6 Disposition of Non-Vested Interests After Termination
A Participant whose Employment terminates for any reason other than
retirement, death, or Total Disability while any part of his interest in the
Trust Fund remains forfeitable shall have no right to receive payment of or on
account of his forfeitable interest, which instead shall be forfeited upon such
the earlier of (a) the date on which the Participant receives a distribution of
his entire vested interest in the Trust Fund, or (b) the date on which the
Participant incurs five (5) consecutive One-Year Breaks in Service. For purposes
of the preceding sentence, if a Participant's vested interest in the Trust Fund
is zero, the Participant will be deemed to have received a distribution of his
entire vested interest in the Trust Fund on his termination of Employment.
Forfeited amounts shall remain in the Trust Fund as part thereof and be applied
in reduction of Matching Contributions to be made by the Employer in the manner
set forth in Section 5.2. If a Participant receives a distribution of benefits
before becoming one hundred percent (100%) vested and before incurring five (5)
consecutive One-Year Breaks in Service, the vested portion of such Participant's
Matching
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Contribution Account and Profit Sharing Contribution Account at any relevant
time shall be equal to an amount ("X") determined by the formula:
X=P[AB+(RxD)]-(RxD). For purposes of applying the formula: P is the
Participant's vested percentage in his Matching Contribution Account and Profit
Sharing Contribution Account at the relevant time; AB is the balance in the
Participant's Matching Contribution Account and Profit Sharing Account at the
relevant time; D is the amount of the benefit distributed to the Participant
from the Participant's Matching Contribution Account and Profit Sharing
Contribution Account; and R is the ratio of the Participant's balance in the
Participant's Matching Contribution Account and Profit Sharing Contribution
Account at the relevant time to his balance the Participant's Matching
Contribution Account and Profit Sharing Contribution Account immediately after
the distribution of his benefit.
7.7 Restoration of Forfeited Amounts on Reemployment
Any amounts which a Participant forfeits under Sections 5.2 and 7.6
shall be restored to such Participant's Participant Account (without regard to
any gains or losses of the Trust Fund after such Participant's termination of
Employment and before the date of such restoration) if such Participant:
(a) Received a distribution from the Plan upon the termination of
his Employment that was less than the total balance in his Participant Account
at the time of his termination of Employment; and
(b) Resumes participation under this Plan before he incurs five (5)
consecutive One-Year Breaks in Service after the date of such distribution.
7.8 Spendthrift Trust Provisions
Except as otherwise provided under this Plan, all distributions by
the Trustee shall be paid only to the person entitled thereto, and all such
payments shall be made directly into the hands of such person and not into the
hands of any other person or corporation whatsoever, to the end that said
payments shall not be liable or the debts, contracts, or engagements of any such
designated person, or taken in execution by attachment or garnishment, or by any
other legal or equitable proceedings; nor shall any such designated person have
any right to alienate, anticipate, commute, pledge, encumber, or assign any such
payments or the benefits, proceeds, or any interest arising out of this Plan and
Trust. The preceding sentence shall not apply to rights to payment under any
"qualified domestic relations order," as defined in Section 414(p) of the Code,
or to rights to payment under any domestic relations order entered before
January 1, 1985. The Committee shall establish a written procedure to determine
the qualified status of domestic relations orders and to administer
distributions under such orders. To the extent provided under a "qualified
domestic relations order," a former spouse of a Participant (a) shall be treated
as the Participant's spouse or surviving spouse for all purposes of this Plan,
and (b) pursuant to Section 414(p)(10) of the Code, may receive a distribution
from this Plan before the retirement, death, disability, or termination of
Employment of the Participant, or the date on which the Participant reaches the
age of fifty-nine and one-half (59 1/2) years or suffers a hardship as described
in Section 7.16.
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7.9 Limitation on Time of Distribution
Notwithstanding any other provision of this Plan, no distribution of
benefits to a Participant shall commence later than the sixtieth day after the
close of the Plan Year in which occurs the latest of (i) the Normal Retirement
Date of the Participant, (ii) the tenth anniversary of the commencement of
participation by such Participant, (iii) termination of the Participant's
Employment, or (iv) the date to which the Participant elects to have the
commencement of distribution of benefits to him deferred. Any such election by
the Participant shall be submitted to the Committee in writing, shall be signed
by the Participant, and shall describe the benefit and the date upon which it is
to commence.
7.10 Withdrawals After Age 59 1/2
A Participant may take a withdrawal from his vested interest in the
Trust Fund at any time and for any reason after reaching the age of fifty-nine
and one-half (59 1/2) years.
7.11 Required Distributions
Notwithstanding any other provision of this Plan, distributions
shall be made in accordance with Section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of Regulation Section
1.401(a)(9)-2. Accordingly, the following provisions, which are intended to
comply with such requirements, shall apply notwithstanding any other provision
of this Plan:
7.11.1 For purposes of this Section 7.11:
(a) Effective January 1, 1998, in the case of a Participant
who is not a Five Percent Owner (as defined in Section 6.1.3(c)) for the Plan
Year ending with or within the calendar year in which such Participant attained
the age of seventy and one-half (70 1/2) years, the term "Beginning Date" shall
mean the first day of April of the calendar year following the later of (a) the
calendar year in which the Participant attains the age of seventy and one-half
(70 1/2) years, or (b) the calendar year in which the Participant retires. In
the case of a Participant who is a Five Percent Owner (as defined in Section
6.1.3(c)) for the Plan Year ending with or within the calendar year in which
such Participant attained the age of seventy and one-half (70 1/2) years, the
term "Beginning Date" shall mean the first day of April of the calendar year
following the calendar year in which the Participant attains the age of seventy
and one-half (70 1/2) years.
(b) The term "Distribution Calendar Year" shall mean a
calendar year for which a minimum distribution is required pursuant to this
Section 7.11. For distributions beginning before the Participant's death, the
first Distribution Calendar Year is the calendar year immediately preceding the
calendar year that contains the Participant's Beginning Date. For distributions
beginning after the Participant's death, the first Distribution Calendar Year is
the calendar year in which the distributions are required to begin pursuant to
this Section 7.11.
(c) Life expectancy and joint and last survivor expectancy
shall be computed by the use of the expected return multiples of Tables V and VI
of Regulation Section 1.72-9. Unless otherwise elected by the Participant (or by
the
- 43 -
Participant's surviving spouse in the case of distributions described in Section
7.11.4) by the time distributions are required to begin, life expectancy shall
be recalculated annually. Such election shall be irrevocable as to the
Participant (or surviving spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse Beneficiary may not be recalculated.
(d) The term "Applicable Life Expectancy" shall mean the life
expectancy (or joint and last survivor expectancy) calculated using the attained
age of the Participant (or the Designated Beneficiary) as of the Participant's
(or the Designated Beneficiary's) birthday in the "Applicable Calendar Year"
reduced by one for each calendar year that has elapsed since the date life
expectancy was first calculated. If life expectancy is being recalculated, the
Applicable Life Expectancy shall be the life expectancy as so recalculated. The
"Applicable Calendar Year" shall be the first Distribution Calendar Year, and if
life expectancy is being recalculated, each succeeding calendar year. If annuity
payments commence in accordance with the provisions of this Section 7.11 before
the Beginning Date, the "Applicable Calendar Year" shall be the year such
payments commence. If a distribution is in the form of an immediate annuity
purchased after the Participant's death with the Participant's remaining
interest, the "Applicable Calendar Year" is the year of purchase.
(e) The term "Participant's Benefit" means the balance in the
Participant's interest in the Trust Fund as of the last Valuation Date in the
calendar year (the "Valuation Calendar Year") immediately preceding the
Distribution Calendar Year increased by the amount of any contributions or
forfeitures allocated to the Participant during the Valuation Calendar Year
after such Valuation Date and decreased by distributions made in the such
Valuation Calendar Year after such Valuation Date; provided, however, that if
any portion of the minimum distribution for the first Distribution Calendar Year
is made in the second Distribution Calendar Year on or before the Beginning
Date, the amount of the minimum distribution made in the second Distribution
Calendar Year shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
7.11.2 Each Participant's entire interest in the Trust Fund shall be
distributed, as of the first Distribution Calendar Year, to such Participant
either (a) in full, not later than such Participant's Beginning Date, or (b) in
installments, beginning not later than such Participant's Beginning Date, and
extending over one of the following periods: (1) the life of such Participant,
(2) the lives of such Participant and his Designated Beneficiary, (3) a period
not extending beyond the life expectancy of such Participant, or (4) a period
not extending beyond the life expectancy of the Participant and his Designated
Beneficiary. Once distributions have begun to a Five Percent Owner under this
Section 7.11, they must continue to be distributed, even if a Participant ceases
to be a Five Percent Owner in a subsequent year.
7.11.3 If a Participant dies after distribution of his interest in
the Trust Fund has begun but before his entire interest in the Trust Fund has
been distributed pursuant to Section 7.11.2, the portion of his interest in the
Trust Fund that remains undistributed at his death shall be distributed at least
as rapidly as it would have been distributed under the method of distribution
that was in use pursuant to Section 7.11.2 on the date of his death.
7.11.4 If a Participant dies before distribution of his interest in
the Trust Fund begins pursuant to Section 7.11.2, distribution of such
Participant's entire interest shall be completed by December 31 of the calendar
year containing the fifth (5th) anniversary of
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the Participant's death, except to the extent that an election is made to
receive distributions in accordance with paragraph (a) or paragraph (b) as
follows:
(a) If any portion of the Participant's interest is payable to
a Designated Beneficiary, distributions may be made over the life or over a
period certain not greater than the life expectancy of such Designated
Beneficiary commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died, or
(b) If the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to begin in accordance
with paragraph (a) above shall not be earlier than the later of (i) December 31
of the calendar year immediately following the calendar year in which the
Participant died or (ii) December 31 of the calendar year in which the
Participant would have attained the age of seventy and one-half (70 1/2) years.
If such surviving spouse dies before such distributions begin, the provisions of
this Section 7.11.4 shall be applied as if such surviving spouse were the
Participant.
If the Participant has not made an election pursuant to this Section 7.11.4 by
the time of his death, the Participant's Designated Beneficiary must elect the
method of distribution no later than the earlier of (i) December 31 of the
calendar year in which the distributions would be required to begin under this
Section 7.11.4, or (ii) December 31 of the calendar year that contains the fifth
(5th) anniversary of the date of the death of the Participant. If the
Participant has no Designated Beneficiary, or if the Designated Beneficiary does
not elect a method of distribution, distribution of the Participant's entire
interest in the Trust Fund must be completed by December 31 of the calendar year
containing the fifth (5th) anniversary of the Participant's death.
7.11.5 If a Participant's interest is to be distributed in other
than a single sum, the following minimum distribution rules shall apply on or
after the Beginning Date:
(a) If the Participant's Benefit is to be distributed over (i)
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 (ii) 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.
(b) For calendar years beginning before January 1, 1989, if
the Participant's spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the first
Distribution Calendar Year, shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of (i) the Applicable Life
Expectancy or (ii) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the table set forth in
Regulation Section 1.401(a)(9)-2 Q&A-4. Distributions after the death of the
Participant
- 45 -
shall be distributed using the Applicable Life Expectancy set forth in paragraph
(a) above as the relevant divisor without regard to Regulation Section
1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before the Participant's
Beginning Date. The minimum distribution for other calendar years, including the
minimum distribution for the Distribution Calendar Year in which the
Participant's Beginning Date occurs, must be made on or before December 31 of
such Distribution Calendar Year.
7.11.6 For purposes of this Section 7.11, any amount paid to a child
of a Participant shall be treated as if such amount had been paid to such
Participant's surviving spouse if such amount will become payable to such
surviving spouse when such child reaches maturity. For purposes of this Section
7.11, the life expectancy of a Participant and of his surviving spouse may not
be redetermined more frequently than annually.
7.11.7 For purposes of this Section 7.11, "Designated Beneficiary"
means any individual designated as a Beneficiary by a Participant.
7.11.8 Notwithstanding the foregoing provisions of this Section 7,
any designation properly made by a Participant before January 1, 1984, under
Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 shall
remain in effect.
7.11.9 With respect to distributions under the Plan made in calendar
years beginning on or after January 1, 2001, the Plan will apply the minimum
distribution requirements of Section 401(a)(9) of the Code in accordance with
the regulations under Section 401(a)(9) that were proposed in January 2001,
notwithstanding any provision of the Plan to the contrary. This Section 7.11.9
shall continue in effect until the end of the last calendar year beginning
before the effective date of final regulations under section 401(a)(9) of the
Code or such other date specified in guidance published by the Internal Revenue
Service.
7.12 Claims Procedure
If a Participant or Beneficiary does not receive payment of the
benefits to which such person believes he is entitled under the Plan or has any
other grievance with respect to his benefits under the Plan, such person or his
authorized representative (such person or his authorized representative, if any,
is hereinafter referred to as the "Claimant") may make a claim in the manner
herein provided. All claims under the Plan shall be administered and processed
in accordance with the rules and procedures specified in this Section 7.12,
which, where appropriate, shall be applied consistently with respect to
similarly situated Claimants. For purposes of this Section 7.12, the pension
benefit election form completed by a Participant or a Beneficiary shall not be
deemed a claim, and such requesting party shall not be deemed a Claimant. A
Claimant shall not be charged a fee or be liable for any costs associated with
making a claim or appealing an adverse benefit determination pursuant to this
Section 7.12.
7.12.1 Filing a Claim. All claims under the Plan shall be made in
writing, signed by the Claimant, and submitted to the Claims Coordinator, who
may be, but need not be, an Employee or a member of the Committee. The Claims
Coordinator shall be designated by the Committee from time to time; provided,
that, the Committee provides
- 46 -
reasonable notice to Participants and to Beneficiaries as to the identity and
the contact information of the Claims Coordinator. The Claims Coordinator must,
upon request and within a reasonable period of time, provide a Participant or a
Beneficiary with a benefits claim form (the "Claim Form"). The Claim Form shall
(i) specify the claim, (ii) specify the date the claim is filed, (iii) specify
the date by which a decision must be rendered by the Claims Coordinator, (iv)
summarize the rules regarding extensions of benefit determinations as described
herein, and (v) list the records, documents, and other information (other than
information available to the Committee and the Claims Coordinator from their own
records) required to be submitted by the Claimant. The date the Claims
Coordinator receives the Claim Form from the Claimant shall be the date the
claim is filed and shall be the date specified as such on the Claim Form,
without regard to whether all the information necessary to make a determination
accompanies the filing (the "Filing Date"). Once a claim is filed, the Claims
Coordinator shall provide written notice to the Claimant of its determination
within a reasonable time but not later than 90 days from the Filing Date. The
determination notice shall comply with Section 7.12.3 of the Plan. The Claims
Coordinator may determine that special circumstances require an extension of
time for making a determination on a claim. If the Claims Coordinator determines
that an extension of time is required, the Claims Coordinator shall provide
written notice, in accordance with Section 7.12.2 of the Plan, to the Claimant
prior to the termination of the initial 90-day period. In no event shall an
extension exceed a period of 180 days from the Filing Date. In the event the
Claims Coordinator extends the determination period due to a Claimant's failure
to submit information necessary to decide a claim, the period for making the
determination shall be tolled from the date the notification of the extension is
sent to the Claimant until the date the Claims Coordinator receives the
information.
7.12.2 Notice of Extension. In a notice of extension, the Claims
Coordinator shall indicate (i) the date the notice is sent to the Claimant, (ii)
the special circumstances requiring an extension of time, and (iii) the date by
which the Claims Coordinator expects to render the determination. If the
extension notice is in connection with a Claimant's failure to submit
information necessary to decide the claim, the notice shall also state that the
determination period is tolled from the date the notice is sent until the date
the Claims Coordinator receives the information.
7.12.3 Notice of Benefit Determination. If a claim is granted, the
Claims Administrator shall provide the Claimant written notice of such
determination and the appropriate distribution, adjustment, or other action
shall be made or taken within a reasonable period of time. If the Claims
Coordinator denies the claim in whole or in part, he shall furnish a copy of his
written determination to the Claimant upon the issuance thereof, and such
written determination shall set forth, in a manner calculated to be understood
by the Claimant, the following information:
(a) The date the Claims Coordinator made the determination and
the date the notice is sent to the Claimant;
(b) The specific reasons for the denial;
(c) Specific references to the pertinent Plan provisions upon
which the denial is based;
- 47 -
(d) A description of any additional information or material
necessary to perfect the claim and why such material or information is
necessary;
(e) An explanation of the appeals procedure set forth in
Section 7.12.4 and Section 7.12.5 of the Plan and the time limits applicable to
such procedures;
(f) A statement of the Claimant's right to bring a civil
action under Section 502 of the Act following an adverse benefit determination
on review; and
(g) An Appeals Form addressed to the Committee that clearly
specifies the date by which an appeal must be filed with respect to the adverse
determination.
7.12.4 Committee Review of an Adverse Benefit Determination. If the
Claims Coordinator denies a claim in whole or in part, the Claimant may appeal
from such denial to the entire Committee. The Committee shall provide the
Claimant an opportunity to submit written comments, documents, records, and
other information relating to the claim for benefits. The Committee shall review
and take into account all comments, documents, records, and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.
The Claimant shall be provided upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
to the Claimant's claim for benefits. A document, record, or other information
shall be considered relevant for purposes of the preceding sentence if such
document, record, or information was (i) relied upon by the Claims Coordinator
in making the benefit determination, (ii) was submitted, considered, or
generated in the course of making the benefit determination, without regard to
whether such document, record, or other information was relied upon by the
Claims Coordinator in making the benefit determination, or (iii) demonstrates
compliance with the administrative processes and safeguards required under Labor
Regulation 2560.501-1.
7.12.5 Filing an Appeal of an Adverse Benefit Determination. A
Claimant shall appeal an adverse benefit determination by filing a signed
benefit determination appeals form (the "Appeals Form") with the Committee no
later than 60 days from the date the notice provided under Section 7.12.3 of the
Plan is sent to the Claimant. The date an appeal is filed shall be the date the
Committee receives the Appeals Form from the Claimant, without regard to whether
all the information necessary to make a benefit determination is filed with the
Appeals Form. The Committee, or such other individual designated by the
Committee from time to time, shall specify on each Appeals Form received by the
Committee the date such Appeals Form was received by the Committee. The
Committee shall issue its written decision on each appeal no later than the date
of the regularly scheduled meeting of the Committee that immediately follows the
Claimant's request for a review, unless the request for review is filed within
30 days preceding the date of such meeting, in which event the Committee shall
make a determination no later than the date of the second regularly scheduled
meeting following the Committee's receipt of request for review. If special
circumstances (such as the need to hold a hearing or obtain additional
information) require an extension of the time for processing the appeal, the
Committee shall issue its decision as soon as possible but not later than the
Committee's third regularly
- 48 -
scheduled meeting after the date on which the appeal is filed. The Committee
shall provide a Claimant with written notice, in accordance with Section 7.12.2
of the Plan, of an extension prior to the commencement of the extension. In the
event the Committee requires an extension of time to make its determination due
to a Claimant's failure to submit information necessary to decide a claim, the
period for making a benefit determination shall be tolled from the date the
notification of the extension is sent to the Claimant until the date the
Committee receives the information.
7.12.6 Adverse Benefit Determination on Appeal-Information Access.
In the event of an adverse benefit determination by the Committee, the Plan
Administrator shall provide the Claimant access to, and copies of, documents,
records, and other information relating to the adverse benefit determination on
appeal, whether or not such information was relied on by the Committee in
reaching a determination on the claim.
7.12.7 Notice of an Adverse Benefit Determination on Appeal. If the
claim is granted on review, the Committee shall provide the Claimant written
notice of such determination and the appropriate distribution, adjustment, or
other action shall be made or taken within a reasonable period of time. If the
Committee denies the claim in whole or in part, the Committee shall provide the
Claimant with written notification of its determination as soon as possible, but
no later than 5 days after the adverse benefit determination is made. The
written notice issued by the Committee shall set forth, in a manner calculated
to be understood by the Claimant, the following:
(a) The date the Committee made the adverse determination and
the date the notice is sent to the Claimant;
(b) The specific reasons for the adverse determination;
(c) The specific references to the pertinent Plan provisions
on which the decision is based;
(d) A statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the Claimant's claim for benefits;
and
(e) A statement of the Claimant's right to bring action under
Section 502(a) of the Act.
7.13 Missing Persons
If the Trustee is unable to effect delivery of any amount payable
hereunder to the person entitled thereto, it shall so advise the Committee and
the Committee shall give written notice to such person at his last known address
as shown in the Employer's records, or take other reasonable steps to locate
such person. If such person or such person's personal representative shall not
have presented himself to the Employer within a reasonable time after the date
of mailing of such notice or the completion of such steps, then the Committee
shall direct the Trustee to (i) distribute such amount, including any amount
thereafter becoming due to such person or such person's personal representative
in the manner provided in Section 7.17.5(a) with respect to the death of the
Participant where there is no valid designation of Beneficiary on file, (ii)
petition for administration of such person's
- 49 -
estate pursuant to the requirements of local law, (iii) treat the same as a
forfeiture in accordance with the provisions hereof, or (iv) take such other
steps as may be authorized in guidance published by the Internal Revenue Service
or the Department of Labor. In the event that a Participant, his Beneficiary,
surviving spouse, executor, or administrator presents a valid claim for any
amount payable hereunder after it has been forfeited pursuant to the preceding
sentence, the Employer shall make a contribution to the Plan sufficient to
reinstate the Participant in the value of such amount as of the date of its
forfeiture.
7.14 Direct Rollovers
This Section 7.14 applies to distributions made on or after January
1, 1993. Notwithstanding any provision of this Plan to the contrary that would
otherwise limit a "Distributee's" election under this Section 7.14, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an "Eligible Rollover Distribution" paid
directly to an "Eligible Retirement Plan" specified by the Distributee in a
"Direct Rollover."
7.14.1 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 (10) years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; a portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities); and, effective January 1, 2000, any distribution described in
Section 401(k)(2)(B)(1)(IV).
7.14.2 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.
7.14.3 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 relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
7.14.4 Direct Rollover. A "Direct Rollover" is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
7.15 Withdrawal of Salary Deferral Contributions on Account of Hardship
Upon written application to the Committee, and satisfaction of the
conditions set forth in Section 7.15.2 hereof, a Participant may withdraw the
amount of his Salary
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Deferral Contributions (but not the earnings thereon) for the purposes set forth
in Section 7.15.1. No Participant make take more than one (1) hardship
withdrawal in any Plan Year, or any hardship withdrawal in an amount less than
five hundred dollars ($500.00).
7.15.1 The purposes for which a Participant may withdraw his Salary
Deferral Contributions are:
7.15.1.1 Payment of medical expenses described in Section
213(d) of the Code incurred by the Participant, the Participant's spouse, or any
dependent of the Participant (as defined in Section 152 of the Code) or expenses
necessary for such persons to obtain medical care;
7.15.1.2 Effective September 16, 1997, costs directly related
to the purchase (excluding mortgage payments) of a principal residence for the
Participant;
7.15.1.3 Effective September 16, 1997, the payment of tuition
for the next twelve (12) months of post-secondary education for the Participant,
or the Participant's spouse, children, or dependents;
7.15.1.4 To prevent the eviction of Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or
7.15.1.5 Effective September 16, 1997, any other purpose set
forth in a revenue ruling, notice, or other document of general applicability
published by the Commissioner of Internal Revenue.
7.15.2 The conditions that must be satisfied for a Participant to
withdraw his Salary Deferral Contributions are as follows:
7.15.2.1 The Participant must certify in writing to the
Committee that the amount of the withdrawal is not in excess of the amount
necessary to accomplish the applicable purpose set forth in Section 7.15.1,
including amounts necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the withdrawal;
7.15.2.2 The Participant has obtained all distributions (other
than distributions on account of hardship) and all nontaxable loans currently
available under all plans maintained by the Employer;
7.15.2.3 The Participant's Salary Deferral Contributions shall
be suspended for twelve (12) months after receipt of the withdrawal under this
Section 7.15 or under any comparable provision of any other plan maintained by
the Employer; and
7.15.2.4 The Participant may not make Salary Deferral
Contributions for the calendar year following the calendar year of the
withdrawal in excess of the dollar limitation set forth in Section 4.3 for such
next calendar year less the amount of such Participant's Salary Deferral
Contributions for the calendar year in which the withdrawal was taken.
7.15.3 All distributions on account of hardship shall be made in
cash; no distribution on account of hardship shall be made in the form of
Company Stock.
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ARTICLE VIII
CONTINUANCE AND AMENDMENT OF PLAN
8.1 Continuance of the Plan Not a Contractual Obligation of the Company
It is the expectation of the Company that it will continue this Plan
indefinitely, but the continuance of this Plan is not a contractual obligation
of the Company, and is not in consideration of, an inducement to, or condition
of the employment of any person. The right is reserved to the Company by action
of its Board of Directors at any time to discontinue this Plan, which action
shall be binding on all Affiliates. The discontinuance of this Plan by the
Company shall not have the effect of revesting in the Company or any Affiliate
any part of the Trust Fund. Upon the termination or partial termination of this
Plan or complete discontinuance of contributions by resolution of the Board of
Directors or otherwise, the interests of affected Participants at such times
shall thereupon be nonforfeitable and the Trustee shall continue to administer
the Trust in accordance with the provisions hereof.
8.2 Continuance of Plan by Successor Business
8.2.1 In the event of the dissolution, consolidation, or merger of
any entity which is an Employer or the sale by an Employer of its assets, the
resulting successor person or persons, firm, or corporation may continue this
Plan by direction from such person or persons or firm, if not a corporation, and
if a corporation, by adoption of this Plan by resolution by its board of
directors, and (if such predecessor was Williams-Sonoma, Inc.) by appointing a
new Committee as though all members thereof had resigned, and by executing a
proper Supplemental Agreement to the Trust Agreement with the Trustee. If such
successor person or persons, firm, or corporation continues this Plan in the
manner set forth above, then, unless otherwise specified at the time of such
continuance either by the predecessor Employer or by such successor person or
persons, firm, or corporation, (a) such successor person or persons, firm or
corporation shall be deemed to be an Employer, (b) the Employees of the
predecessor Employer shall not be deemed to have terminated their Employment or
separated from Service by reason of such continuance, and (c) this Plan shall
not be deemed to have terminated by reason of such continuance.
8.2.2 In the event the successor Employer has in effect or
establishes a pension or profit sharing trust for the benefit of its employees,
the assets of the Trust Fund required to satisfy the liabilities of the Trust
with respect to Participants who continue in the employ of the successor
Employer may be transferred to the trustee of the trust of such pension or
profit sharing plan.
8.2.3 Notwithstanding the foregoing provisions of this Section 8.2,
no merger or consolidation of this Plan with any other plan, nor transfer of the
assets or liabilities of this Plan to any other plan, shall be permitted or be
effective unless the provisions of such merged, consolidated, or transferee plan
are such that each Participant of this Plan would, if said new plan were
terminated immediately following said merger, consolidation, or transfer,
receive a benefit equal to or greater than each said Participant would have
received had this Plan been terminated immediately prior to such merger,
consolidation, or transfer.
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8.3 Distribution of Trust Fund on Discontinuance of Plan
If this Plan is terminated at any time under the terms of Sections
8.1 or 8.2, the Committee shall determine or cause to be determined the value of
the Trust Fund and of the respective interests of the Participants and
Beneficiaries therein, as follows:
The value of the Trust Fund shall be determined by evaluating the
entire Trust Fund as of the business day next following the date of such
termination according to the fair market value of the assets on that date or on
the date of actual sale of assets required to be sold to make any distribution,
including in such value all assets of the Trust Fund. The value of the interest
of each respective Participant or Beneficiary in the Trust Fund then held by the
Trustee shall be his proportionate share of the Trust Fund as so evaluated and
shall be vested in its entirety as of the date of the termination of the Plan.
The Committee shall then direct the Trustee either to (i) transfer the
Participants' interests in the Plan to the trustee of a trust under another
qualified plan in which the Participants are or will be participants, (ii)
distribute the Participants' interests as the Committee shall determine, or
(iii) continue to hold the Participants' interests until they otherwise would be
distributable under this Plan. In any event, the Trust shall continue until all
Participants' interests shall have been so transferred or distributed.
8.4 Amendments
The Company by action of its Board of Directors may at any time and
from time to time amend this Plan; provided, however, that (a) no amendment
shall be made at any time pursuant to which the Trust Fund may be diverted to
purposes other than for the exclusive benefit of the Participants and their
Beneficiaries, (b) no amendment shall decrease the percentage of the interest of
any Participant that theretofore has become vested, (c) no amendment shall
discriminate in favor of Employees who are officers, shareholders, or highly
compensated Employees, (d) no amendment shall reduce or eliminate any optional
form of benefit offered under this Plan with respect to the Participant Account
balance of any Participant as of the effective date of such amendment, and (e)
no amendment shall eliminate or reduce any early retirement benefit or
retirement-type subsidy with respect to benefits attributable to Service
performed before the effective date of such amendment. Any amendment of the Plan
by the Company shall be binding on each Affiliate, without any further action by
any such Affiliate. Notwithstanding anything herein to the contrary, however,
the Plan may be amended at any time if necessary to conform to the provisions
and requirements of the Act and the Code, or any amendments thereto, or
regulations issued pursuant thereto, or any similar act or any amendments
thereto, and no such amendment shall be considered prejudicial to any interest
of any Participant hereunder or his Beneficiaries.
ARTICLE IX
ADMINISTRATION OF THE TRUST FUND
9.1 The Trust Agreement
Concurrently with or before the adoption of this Plan, the Company
has executed a Trust Agreement providing for the administration of the Trust
Fund by the trustees designated by the Board of Directors, herein called
"Trustee," containing such provisions as the Company has deemed appropriate with
respect to the powers and authority
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of the Trustee as to the investment and reinvestment of the Trust Fund, the
income therefrom, and the general administration thereof, subject to the right
of the Committee to direct the Trustee with respect to investment of the Trust
Fund and to remove therefrom any such investment as hereinbefore provided, the
limitations on the liability of the Trustee, on authority of the Committee to
settle the accounts of the Trustee on behalf of all persons having any interest
in the Trust Fund, and from time to time to appoint a new Trustee in place of
any then acting Trustee of the Trust Fund. All taxes upon or in respect of the
Trust Fund or its assets and all expenses of administration (including
reasonable compensation of the Trustee, its agents, and counsel) of the Trust
Fund and special trust accounts established pursuant to this Plan shall be
withdrawn by the Trustee from the Trust Fund (or from such special trust
accounts) if it is legally permissible to do so, unless the Company elects to
bear such expenses. The Trust Agreement shall be deemed to form a part of this
Plan, and any and all rights or benefits that accrue to any person under this
Plan shall be subject to all the terms and provisions of said Trust Agreement
insofar as they are not in direct conflict with this Plan.
ARTICLE X
MISCELLANEOUS
10.1 Right of Employer to Dismiss Employees
The adoption and maintenance of the Plan shall not be deemed to
constitute a contract between the Employer and any Employee, or to be a
consideration for or an inducement or condition of the Employment of any person.
Neither the action of the Company in establishing this Plan nor any action taken
by it or by the Committee under the provisions hereof, nor any provisions of
this Plan shall be construed as giving to any Employee of the Employer the right
to be retained in its employ or any right to any payment whatsoever except to
the extent of the benefits provided for by this Plan to be paid from the Trust
Fund. The Employer expressly reserves its right to dismiss any employee at any
time without any liability for any claim either against the Company or against
the Trust Fund for any payment whatsoever except to the extent provided for in
this Plan.
10.2 Benefits Provided Solely from the Trust Fund
All benefits payable under this Plan shall be paid or provided for
solely from the Trust Fund and the Employer assumes no liability or
responsibility therefor.
10.3 Plan Intended to Conform to Provisions of Federal Internal Revenue
Code Relative to Employees' Trusts
It is the intention of the Company that it shall be impossible for
any part of the Trust Fund to be used for or diverted to purposes other than for
the exclusive benefit of the Employees of the Employer. This Section 10.3 shall
be construed to follow the spirit and intent of the present Act, Code, and
regulations thereunder or any future federal law and regulations governing
trusts for the exclusive benefit of employees, to the end that the Trust Fund
shall be incapable of such diversion, whether by operation or natural
termination of the Trust by power of revocation, by amendment, or by any other
means, except as expressly allowed by any such law or regulations.
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10.4 Amended and Successor Code or Act or Sections Thereof
Wherever a reference is made in this Plan to the Code or Act or to a
section of the Code or Act, such reference shall be deemed to refer to such Code
or Act or section as the same may be amended from time to time, and to any
successor Code or Act or section thereto.
10.5 Context to Control
The headings of articles and sections are included solely for
convenience or reference, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
10.6 Gender and Number
Any gender, including neuter, shall include the other and the
singular shall include the plural, and vice versa.
10.7 Service of Process
Any member of the Committee who is then acting as such shall be
authorized to receive service of process on behalf of the Plan.
10.8 Governing Law
This plan shall be administered in the United States of America, and
its validity, construction, and all rights hereunder shall be governed by the
laws of the United States under the Act. To the extent that the Act shall not be
held to have preempted local law, the Plan shall be administered under the laws
of the state under which the Company is organized. If any provision of the Plan
is held invalid or unenforceable, the remaining provisions hereof shall continue
to be fully effective.
10.9 Adoption by Other Employers
In the event that any Employer other than the Company and its
Affiliates adopts this Plan, completely independent records, allocations, and
contributions shall be maintained for each entity, that constitutes an Employer,
and, for purposes of this Section 10.9, the Company and its Affiliates shall be
deemed to constitute a single Employer. The Trustee may invest all funds without
segregating assets between or among signatory Employers. A separate Participant
Account shall be established by each Employer for each Participant employed by
any such Employer. Forfeitures arising with respect to one Employer's former
Participants shall be allocated only among the Participant Accounts of that
Employer's Participants and shall not be allocated to the Participant Accounts
of other Employers.
10.10 No Reversion to Employer
Except as provided in Section 4.1.8, no contribution to or other
asset of this Plan and Trust shall revert to the Employer, the Plan being for
the exclusive benefit of the Employees of the Employer.
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IN WITNESS WHEREOF, this document has been executed this 25th day of
February, 2002, to be effective as of January 1, 1997, except as otherwise
stated herein.
WILLIAMS-SONOMA, INC.
By /s/ John S. Bronson
----------------------------
Title: Sr. Vice President
-------------------------
By
----------------------------
Title:
-------------------------
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