EXHIBIT 4.10
PREMIER FARNELL CORPORATION
401(K) RETIREMENT SAVINGS PLAN
JANUARY 1, 2002 RESTATEMENT
TABLE OF CONTENTS
PREAMBLE
ARTICLE I
DEFINITIONS
1.1 PLAN DEFINITIONS ...................................................................................... 2
1.2 INTERPRETATION ........................................................................................ 7
ARTICLE II
SERVICE
2.1 SPECIAL DEFINITIONS ................................................................................... 8
2.2 CREDITING OF HOURS OF SERVICE ......................................................................... 8
2.3 CREDITING OF CONTINUOUS SERVICE ....................................................................... 9
2.4 ELIGIBILITY SERVICE ................................................................................... 9
2.5 VESTING SERVICE ....................................................................................... 9
2.6 CREDITING OF SERVICE ON TRANSFER OR AMENDMENT ......................................................... 9
2.7 CREDITING OF SERVICE TO LEASED EMPLOYEES .............................................................. 9
ARTICLE III
ELIGIBILITY
3.1 ELIGIBILITY .......................................................................................... 11
3.2 TRANSFERS OF EMPLOYMENT .............................................................................. 11
3.3 REEMPLOYMENT ......................................................................................... 11
3.4 EFFECT AND DURATION .................................................................................. 11
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 TAX-DEFERRED CONTRIBUTIONS ........................................................................... 13
4.2 AMOUNT OF TAX-DEFERRED CONTRIBUTIONS ................................................................. 13
4.3 AUTOMATIC DEFERRAL ELECTIONS ......................................................................... 13
4.4 NOTICE OF AUTOMATIC DEFERRAL ELECTION ................................................................ 14
4.5 AMENDMENTS TO REDUCTION AUTHORIZATION ................................................................ 14
4.6 SUSPENSION OF TAX-DEFERRED CONTRIBUTIONS ............................................................. 15
4.7 RESUMPTION OF TAX-DEFERRED CONTRIBUTIONS ............................................................. 15
4.8 DELIVERY OF TAX-DEFERRED CONTRIBUTIONS ............................................................... 15
4.9 VESTING OF TAX-DEFERRED CONTRIBUTIONS ................................................................ 15
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ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 NO AFTER-TAX CONTRIBUTIONS ........................................................................... 16
5.2 ROLLOVER CONTRIBUTIONS ............................................................................... 16
5.3 VESTING OF ROLLOVER CONTRIBUTIONS .................................................................... 16
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 CONTRIBUTION PERIOD .................................................................................. 17
6.2 QUALIFIED NONELECTIVE CONTRIBUTIONS .................................................................. 17
6.3 ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS .................................................... 17
6.4 VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE SPONSOR ...................................... 17
6.5 PAYMENT OF EMPLOYER CONTRIBUTIONS .................................................................... 17
6.6 ALLOCATION REQUIREMENTS FOR EMPLOYER CONTRIBUTIONS ................................................... 18
6.7 VESTING OF EMPLOYER CONTRIBUTIONS .................................................................... 18
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 DEFINITIONS .......................................................................................... 19
7.2 CODE SECTION 402(g) LIMIT ............................................................................ 21
7.3 DISTRIBUTION OF EXCESS DEFERRALS ..................................................................... 22
7.4 LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES ............................. 22
7.5 DETERMINATION AND ALLOCATION OF EXCESS TAX-DEFERRED CONTRIBUTIONS AMONG HIGHLY COMPENSATED EMPLOYEES . 23
7.6 DISTRIBUTION OF EXCESS TAX-DEFERRED CONTRIBUTIONS .................................................... 24
7.7 DETERMINATION OF INCOME OR LOSS ...................................................................... 25
7.8 CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS AND FORFEITURES ........................... 25
7.9 APPLICATION OF CODE SECTION 415 LIMITATIONS WHERE PARTICIPANT IS COVERED UNDER OTHER QUALIFIED DEFINED
CONTRIBUTION PLAN .................................................................................... 26
7.10 SCOPE OF LIMITATIONS ................................................................................. 26
ARTICLE VIII
TRUST FUNDS AND ACCOUNTS
8.1 GENERAL FUND ......................................................................................... 27
8.2 INVESTMENT FUNDS ..................................................................................... 27
8.3 LOAN INVESTMENT FUND ................................................................................. 27
8.4 INCOME ON TRUST ...................................................................................... 28
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8.5 ACCOUNTS ............................................................................................. 28
8.6 SUB-ACCOUNTS ......................................................................................... 28
ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 NO LIFE INSURANCE CONTRACTS .......................................................................... 29
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 FUTURE CONTRIBUTION INVESTMENT ELECTIONS ............................................................. 30
10.2 DEPOSIT OF CONTRIBUTIONS ............................................................................. 30
10.3 ELECTION TO TRANSFER BETWEEN FUNDS ................................................................... 30
10.4 404(c) PROTECTION .................................................................................... 31
ARTICLE XI
CREDITING AND VALUING ACCOUNTS
11.1 CREDITING ACCOUNTS ................................................................................... 32
11.2 VALUING ACCOUNTS ..................................................................................... 32
11.3 PLAN VALUATION PROCEDURES ............................................................................ 32
11.4 FINALITY OF DETERMINATIONS ........................................................................... 33
ARTICLE XII
LOANS
12.1 APPLICATION FOR LOAN ................................................................................. 34
12.2 REDUCTION OF ACCOUNT UPON DISTRIBUTION ............................................................... 34
12.3 REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION ....................................................... 35
12.4 ADMINISTRATION OF LOAN INVESTMENT FUND ............................................................... 36
12.5 DEFAULT .............................................................................................. 37
12.6 DEEMED DISTRIBUTION UNDER CODE SECTION 72(p) ......................................................... 37
12.7 TREATMENT OF OUTSTANDING BALANCE OF LOAN DEEMED DISTRIBUTED UNDER CODE SECTION 72(p) ................. 37
12.8 SPECIAL RULES APPLICABLE TO LOANS .................................................................... 38
12.9 LOANS GRANTED PRIOR TO AMENDMENT ..................................................................... 38
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 NON-HARDSHIP WITHDRAWALS OF ROLLOVER CONTRIBUTIONS ................................................... 39
13.2 AGE 59 1/2 WITHDRAWALS ............................................................................... 39
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13.3 OVERALL LIMITATIONS ON NON-HARDSHIP WITHDRAWALS ...................................................... 39
13.4 HARDSHIP WITHDRAWALS ................................................................................. 39
13.5 HARDSHIP DETERMINATION ............................................................................... 40
13.6 SATISFACTION OF NECESSITY REQUIREMENT FOR HARDSHIP WITHDRAWALS ....................................... 40
13.7 CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS ................................................... 41
13.8 ORDER OF WITHDRAWAL FROM A PARTICIPANT'S SUB-ACCOUNTS ................................................ 41
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE ........................................................ 42
ARTICLE XV
DISTRIBUTIONS
15.1 DISTRIBUTIONS TO PARTICIPANTS ........................................................................ 43
15.2 DISTRIBUTIONS TO BENEFICIARIES ....................................................................... 43
15.3 CASH OUTS AND PARTICIPANT CONSENT .................................................................... 44
15.4 REQUIRED COMMENCEMENT OF DISTRIBUTION ................................................................ 44
15.5 REEMPLOYMENT OF A PARTICIPANT ........................................................................ 44
15.6 RESTRICTIONS ON ALIENATION ........................................................................... 44
15.7 FACILITY OF PAYMENT .................................................................................. 45
15.8 INABILITY TO LOCATE PAYEE ............................................................................ 45
15.9 DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS ......................................... 45
15.10 SPECIAL PROVISIONS RELATING TO FORMER PROFIT SHARING PLAN PARTICIPANTS ............................... 46
ARTICLE XVI
FORM OF PAYMENT
16.1 NORMAL FORM OF PAYMENT ............................................................................... 48
16.2 OPTIONAL FORM OF PAYMENT ............................................................................. 48
16.3 CHANGE OF ELECTION ................................................................................... 48
16.4 DIRECT ROLLOVER ...................................................................................... 48
16.5 NOTICE REGARDING FORMS OF PAYMENT .................................................................... 49
16.6 REEMPLOYMENT ......................................................................................... 50
16.7 DISTRIBUTION IN THE FORM OF EMPLOYER STOCK ........................................................... 50
ARTICLE XVII
BENEFICIARIES
17.1 DESIGNATION OF BENEFICIARY ........................................................................... 51
17.2 SPOUSAL CONSENT REQUIREMENTS ......................................................................... 51
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ARTICLE XVIII
ADMINISTRATION
18.1 AUTHORITY OF THE SPONSOR ............................................................................. 52
18.2 DISCRETIONARY AUTHORITY .............................................................................. 53
18.3 ACTION OF THE SPONSOR ................................................................................ 53
18.4 CLAIMS REVIEW PROCEDURE .............................................................................. 53
18.5 QUALIFIED DOMESTIC RELATIONS ORDERS .................................................................. 55
18.6 INDEMNIFICATION ...................................................................................... 55
18.7 ACTIONS BINDING ...................................................................................... 55
18.8 PLAN INTERPRETATIONS AND FINDINGS OF FACT ............................................................ 56
18.9 FILING OF DOCUMENTS/USE OF ELECTRONIC MEDIA .......................................................... 56
18.10 PLAN CONVERSIONS ..................................................................................... 56
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 AMENDMENT ............................................................................................ 57
19.2 LIMITATION ON AMENDMENT .............................................................................. 57
19.3 TERMINATION .......................................................................................... 57
19.4 REORGANIZATION ....................................................................................... 58
19.5 WITHDRAWAL OF AN EMPLOYER ............................................................................ 59
ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 ADOPTION BY RELATED COMPANIES ........................................................................ 60
20.2 EFFECTIVE PLAN PROVISIONS ............................................................................ 60
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 NO COMMITMENT AS TO EMPLOYMENT ....................................................................... 61
21.2 BENEFITS ............................................................................................. 61
21.3 NO GUARANTEES ........................................................................................ 61
21.4 EXPENSES ............................................................................................. 61
21.5 PRECEDENT ............................................................................................ 61
21.6 DUTY TO FURNISH INFORMATION .......................................................................... 62
21.7 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS .................................................... 62
21.8 BACK PAY AWARDS ...................................................................................... 62
21.9 CONDITION ON EMPLOYER CONTRIBUTIONS .................................................................. 63
21.10 RETURN OF CONTRIBUTIONS TO AN EMPLOYER ............................................................... 63
21.11 VALIDITY OF PLAN ..................................................................................... 63
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21.12 TRUST AGREEMENT ...................................................................................... 63
21.13 PARTIES BOUND ........................................................................................ 64
21.14 APPLICATION OF CERTAIN PLAN PROVISIONS ............................................................... 64
21.15 MERGED PLANS ......................................................................................... 64
21.16 TRANSFERRED FUNDS .................................................................................... 64
21.17 VETERANS REEMPLOYMENT RIGHTS ......................................................................... 65
21.18 DELIVERY OF CASH AMOUNTS ............................................................................. 65
21.19 WRITTEN COMMUNICATIONS ............................................................................... 65
21.20 EMPLOYER STOCK PROVISIONS ............................................................................ 65
ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 DEFINITIONS .......................................................................................... 67
22.2 APPLICABILITY ........................................................................................ 69
22.3 MINIMUM EMPLOYER CONTRIBUTION ........................................................................ 69
22.5 ACCELERATED VESTING .................................................................................. 70
ARTICLE XXIII
EFFECTIVE DATE
23.1 GUST EFFECTIVE DATES ................................................................................. 71
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PREAMBLE
The Premier Farnell Corporation 401(k) Retirement Savings Plan, originally
effective as of April 1, 1999, is hereby amended and restated in its entirety.
Except as otherwise specifically provided in Article XXIII, this amendment and
restatement shall be effective as of January 1, 2002. The Plan, as amended and
restated hereby, is intended to qualify as a profit-sharing plan under Code
Section 401(a), and includes a cash or deferred arrangement that is intended to
qualify under Code Section 401(k). The Plan is maintained for the exclusive
benefit of eligible employees and their beneficiaries.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Account under the Plan on and after the effective date of
this amendment and restatement shall be not less than his vested interest in his
account on the day immediately preceding the effective date. Any provision of
the Plan that restricted or limited withdrawals, loans, or other distributions,
or otherwise required separate accounting with respect to any portion of a
Participant's Account immediately prior to the later of the effective date of
this amendment and restatement or the date this amendment and restatement is
adopted and the elimination of which would adversely affect the qualification of
the Plan under Code Section 401(a) shall continue in effect with respect to such
portion of the Participant's Account as if fully set forth in this amendment and
restatement.
Any sample amendment adopted by the Sponsor prior to this amendment and
restatement for purposes of complying with EGTRRA shall continue in effect after
this amendment and restatement.
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ARTICLE I
DEFINITIONS
1.1 PLAN DEFINITIONS
As used herein, the following words and phrases have the meanings hereinafter
set forth, unless a different meaning is plainly required by the context:
An "ACCOUNT" means the account maintained by the Trustee in the name of a
Participant that reflects his interest in the Trust and any Sub-Accounts
maintained thereunder, as provided in Article VIII.
The "ADMINISTRATOR" means the Administrative Committee.
An "AFTER-TAX CONTRIBUTION" means any after-tax employee contribution made by a
Participant to the Plan as may be permitted under Article V or as may have been
permitted under the terms of the Plan prior to this amendment and restatement.
The "BENEFICIARY" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under the
Plan.
A Participant's "BENEFIT PAYMENT DATE" means the first day on which all events
have occurred which entitle the Participant to receive payment of his benefit.
The "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a Code section includes such section and any comparable
section or sections of any future legislation that amends, supplements, or
supersedes such section.
The "Compensation" of a Participant for any period means compensation which is
paid to a Participant from an Employer which is required to be reported for
Federal income tax purposes, including base pay, commissions, bonuses and
overtime pay amounts which are deferred by the Participant pursuant to a salary
reduction agreement meeting the requirements of Sections 125, 132(f)(4) or
401(k) of the Code, and 'deemed Section 125 compensation' as defined in Rev.
Rul. 2002-27, but excluding medical reimbursement payments, and expense
reimbursements, car allowances, tuition refunds, imputed income for life
insurance premiums, amounts which arise under stock options and severance pay
and accrued vacation pay which is paid following a Participant's termination of
employment.
In no event, however, shall the Compensation of a Participant taken into account
under the Plan for any Plan Year exceed $150,000 (subject to adjustment annually
as provided in Code Sections
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401(a)(17)(B) and 415(d); provided, however, that the dollar increase in effect
on January 1 of any calendar year, if any, is effective for Plan Years beginning
in such calendar year). If the Compensation of a Participant is determined over
a period of time that contains fewer than 12 calendar months, then the annual
compensation limitation described above shall be adjusted with respect to that
Participant by multiplying the annual compensation limitation in effect for the
Plan Year by a fraction the numerator of which is the number of full months in
the period and the denominator of which is 12; provided, however, that no
proration is required for a Participant who is covered under the Plan for less
than one full Plan Year if the formula for allocations is based on Compensation
for a period of at least 12 months.
A "CONTRIBUTION PERIOD" means the period specified in Article VI for which
Employer Contributions shall be made.
An "ELIGIBLE EMPLOYEE" means any person who is classified by an Employer as an
Employee and who has met the eligibility requirements of Article III to
participate in the Plan. In furtherance of, but without limiting the foregoing,
any individual who is not treated by an Employer as a common-law employee shall
not be considered an Eligible Employee hereunder even if a court or
administrative agency determines that such individual is a common-law employee.
The "ELIGIBILITY SERVICE" of an Employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his eligibility to participate in the Plan as may be required under Article III
or Article VI.
An "EMPLOYEE" means any common-law employee of an Employer or Related Company,
including a "leased employee" as defined in Section 2.7.
An "EMPLOYER" means the Sponsor and any entity which has adopted the Plan as may
be provided under Article XX.
An "EMPLOYER CONTRIBUTION" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "ENROLLMENT DATE" means each day of the Plan Year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "GENERAL FUND" means a Trust Fund maintained by the Trustee as required to
hold and administer any assets of the Trust that are not allocated among any
separate Investment Funds as
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may be provided in the Plan or the Trust Agreement. No General Fund shall be
maintained if all assets of the Trust are allocated among separate Investment
Funds.
A "HIGHLY COMPENSATED EMPLOYEE" means any Eligible Employee or former Eligible
Employee who is a "highly compensated active employee" or a "highly compensated
former employee" as defined hereunder.
A "highly compensated active employee" includes any Eligible Employee who
performs services for an Employer during the Plan Year and who (i) was a five
percent owner at any time during the Plan Year or the "look back year" or (ii)
received "compensation" from an Employer during the "look back year" in excess
of $80,000 (subject to adjustment annually at the same time and in the same
manner as under Code Section 415(d)) and was in the top paid group of Employees
for the "look back year". An Eligible Employee is in the top paid group of
Employees if he is in the top 20 percent of the Employees of his Employer and
all Related Companies when ranked on the basis of "compensation" paid during the
"look back year".
A "highly compensated former employee" includes any Eligible Employee who (1)
separated from service from an Employer and all Related Companies (or is deemed
to have separated from service from an Employer and all Related Companies) prior
to the Plan Year, (2) performed no services for an Employer during the Plan
Year, and (3) was a "highly compensated active employee" for either the
separation year or any Plan Year ending on or after the date the Eligible
Employee attains age 55, as determined under the rules in effect under Code
Section 414(q) for such year.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of Employees in the top paid group,
shall be made in accordance with the provisions of Code Section 414(q) and
regulations issued thereunder.
For purposes of this definition, the following terms have the following
meanings:
(a) An Eligible Employee's "compensation" means compensation as defined in
Code Section 415(c)(3) and regulations issued thereunder.
(b) The "look back year" means the 12-month period immediately preceding
the Plan Year.
An "HOUR OF SERVICE" with respect to a person means each hour, if any, that may
be credited to him in accordance with the provisions of Article II.
An "INVESTMENT FUND" means any separate investment Trust Fund maintained by the
Trustee as may be provided in the Plan or the Trust Agreement or any separate
investment fund maintained by the Trustee, to the extent that there are
Participant Sub-Accounts under such funds, to which assets of the Trust may be
allocated and separately invested.
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The "NORMAL RETIREMENT DATE" of an Employee means the date he attains age 65.
A "PARTICIPANT" means any person who has an Account in the Trust.
The "PLAN" means the Premier Farnell Corporation 401(k) Retirement Savings Plan,
as from time to time in effect.
A "PLAN YEAR" means the period beginning April 1, 1999 and ending December 31,
1999 and each 12-consecutive-month period ending December 31 thereafter.
A "PREDECESSOR EMPLOYER" means any company that is a predecessor organization to
an Employer under the Code, provided that the Employer maintains a plan of such
predecessor organization.
A "QUALIFIED NONELECTIVE CONTRIBUTION" means any Employer Contribution made to
the Plan as provided in Article VI that is 100 percent vested when made and may
be taken into account to satisfy the limitations on Tax-Deferred Contributions
made by Highly Compensated Employees under Article VII.
A "RELATED COMPANY" means any corporation or business, other than an Employer,
which would be aggregated with an Employer for a relevant purpose under Code
Section 414.
A Participant's "REQUIRED BEGINNING DATE" means the following:
(a) for a Participant who is not a "five percent owner", April 1 of the
calendar year following the calendar year in which occurs the later of
the Participant's (i) attainment of age 70 1/2 or (ii) Settlement Date.
(b) for a Participant who is a "five percent owner", April 1 of the
calendar year following the calendar year in which the Participant
attains age 70 1/2.
A Participant is a "five percent owner" if he is a five percent owner, as
defined in Code Section 416(i) and determined in accordance with Code Section
416, but without regard to whether the Plan is top-heavy, for the Plan Year
ending with or within the calendar year in which the Participant attains age 70
1/2. The Required Beginning Date of a Participant who is a "five percent owner"
hereunder shall not be redetermined if the Participant ceases to be a five
percent owner as defined in Code Section 416(i) with respect to any subsequent
Plan Year.
A "ROLLOVER CONTRIBUTION" means any rollover contribution to the Plan made by a
Participant as may be permitted under Article V.
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The "SETTLEMENT DATE" of a Participant means the date on which a Participant's
interest under the Plan becomes distributable in accordance with Article XV.
The "SPONSOR" means Premier Farnell Corp., and any successor thereto.
A "SUB-ACCOUNT" means any of the individual sub-accounts of a Participant's
Account that is maintained as provided in Article VIII.
A "TAX-DEFERRED CONTRIBUTION" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with Article IV.
The "TRUST" means the trust, custodial accounts, annuity contracts, or insurance
contracts maintained by the Trustee under the Trust Agreement.
The "TRUST AGREEMENT" means any agreement or agreements entered into between the
Sponsor and the Trustee relating to the holding, investment, and reinvestment of
the assets of the Plan, together with all amendments thereto and shall include
any agreement establishing a custodial account, an annuity contract, or an
insurance contract (other than a life, health or accident, property, casualty,
or liability insurance contract) for the investment of assets if the custodial
account or contract would, except for the fact that it is not a trust,
constitute a qualified trust under Code Section 401.
The "TRUSTEE" means the trustee or any successor trustee which at the time shall
be designated, qualified, and acting under the Trust Agreement and shall include
any insurance company that issues an annuity or insurance contract pursuant to
the Trust Agreement or any person holding assets in a custodial account pursuant
to the Trust Agreement. The Sponsor may designate a person or persons other than
the Trustee to perform any responsibility of the Trustee under the Plan, other
than trustee responsibilities as defined in ERISA Section 405(c)(3), and the
Trustee shall not be liable for the performance of such person in carrying out
such responsibility except as otherwise provided by ERISA. The term Trustee
shall include any delegate of the Trustee as may be provided in the Trust
Agreement.
A "TRUST FUND" means any fund maintained under the Trust by the Trustee.
A "VALUATION DATE" means each day on which the New York Stock Exchange is open
for trading.
The "VESTING SERVICE" of an Employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
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1.2 INTERPRETATION
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
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ARTICLE II
SERVICE
2.1 SPECIAL DEFINITIONS
For purposes of this Article, the following terms have the following meanings.
The "CONTINUOUS SERVICE" of an Employee means the continuous service credited to
him in accordance with the provisions of Section 2.3 of the Plan.
The "EMPLOYMENT COMMENCEMENT DATE" of an Employee means the date he first
completes an Hour of Service.
The "REEMPLOYMENT COMMENCEMENT DATE" of an Employee means the first date
following a "severance date" on which he again completes an Hour of Service.
The "SEVERANCE DATE" of an Employee means the earlier of (i) the date on which
he retires, dies, or his employment with all Employers and Related Companies is
otherwise terminated, or (ii) the first anniversary of the first date of a
period during which he is absent from work with all Employers and Related
Companies for any other reason; provided, however, that if he terminates
employment with or is absent from work with all Employers and Related Companies
on account of service with the armed forces of the United States, he shall not
incur a "severance date" if he is eligible for reemployment rights under the
Uniformed Services Employment and Reemployment Rights Act of 1994 and he returns
to work with an Employer or a Related Company within the period during which he
retains such reemployment rights, but, if he does not return to work within such
period, his "severance date" shall be the earlier of the date which is one year
after his absence commenced or the last day of the period during which he
retains such reemployment rights; and provided, further, that if an employee is
on a paid leave of absence beyond the first anniversary of the first day of such
absence, he shall not incur a "severance date" if he returns to employment
before the second anniversary of the first day of such absence but, if he does
not return within such period, his "severance date" shall be the first
anniversary of the first date of such paid leave of absence.
2.2 CREDITING OF HOURS OF SERVICE
A person shall be credited with an Hour of Service for each hour for which he is
paid, or entitled to payment, for the performance of duties for an Employer, a
Predecessor Employer, or any Related Company. Except as otherwise specifically
provided with respect to Predecessor Employers, Hours of Service shall not be
credited for employment with a corporation or business prior to the date such
corporation or business becomes a Related Company.
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2.3 CREDITING OF CONTINUOUS SERVICE
A person shall be credited with "continuous service" for the aggregate of the
periods of time between his "employment commencement date" or any "reemployment
commencement date" and the "severance date" that next follows such "employment
commencement date" or "reemployment commencement date"; provided, however, that
an Employee who has a "reemployment commencement date" within the
12-consecutive-month period following the earlier of the first date of his
absence or his "severance date" shall be credited with "continuous service" for
the period between his "severance date" and "reemployment commencement date".
2.4 ELIGIBILITY SERVICE
An Employee shall be credited with Eligibility Service equal to his "continuous
service".
2.5 VESTING SERVICE
Because contributions to the Plan are always 100 percent vested, there shall be
no Vesting Service credited under the Plan.
2.6 CREDITING OF SERVICE ON TRANSFER OR AMENDMENT
Notwithstanding any other provision of the Plan to the contrary, if an Employee
is transferred from employment covered under a qualified plan maintained by an
Employer or a Related Company for which service is credited based on Hours of
Service and computation periods in accordance with Department of Labor
Regulations Section 2530.200 through 2530.203 to employment covered under the
Plan or, prior to amendment, the Plan provided for crediting of service on the
basis of Hours of Service and computation periods in accordance with Department
of Labor Regulations Section 2530.200 through 2530.203, an affected Employee
shall be credited with Eligibility Service hereunder as provided in Treasury
Regulations Section 1.410(a)-7(f)(1).
2.7 CREDITING OF SERVICE TO LEASED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, a "leased
employee" working for an Employer or a Related Company (other than an
"excludable leased employee") shall be considered an employee of such Employer
or Related Company for purposes of Eligibility Service crediting under the Plan,
but shall not be eligible to participate in the Plan. Such "leased employee"
shall also be considered an employee of such Employer or Related Company for
purposes of applying Code Sections 401(a)(3), (4), (7), and (16), and 408(k),
415, and 416.
A "leased employee" means any person who performs services for an Employer or a
Related Company (the "recipient") (other than an employee of the "recipient")
pursuant to an agreement
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between the "recipient" and any other person (the "leasing organization") on a
substantially full-time basis for a period of at least one year, provided that
such services are performed under primary direction of or control by the
"recipient". An "excludable leased employee" means any "leased employee" of the
"recipient" who is covered by a money purchase pension plan maintained by the
"leasing organization" which provides for (i) a nonintegrated employer
contribution on behalf of each participant in the plan equal to at least ten
percent of compensation, (ii) full and immediate vesting, and (iii) immediate
participation by employees of the "leasing organization" (other than employees
who perform substantially all of their services for the "leasing organization"
or whose compensation from the "leasing organization" in each plan year during
the four-year period ending with the plan year is less than $1,000); provided,
however, that "leased employees" do not constitute more than 20 percent of the
"recipient's" nonhighly compensated work force. For purposes of this Section,
contributions or benefits provided to a "leased employee" by the "leasing
organization" that are attributable to services performed for the "recipient"
shall be treated as provided by the "recipient".
10
ARTICLE III
ELIGIBILITY
3.1 ELIGIBILITY
Each Employee who was an Eligible Employee immediately prior to January 1, 2002
shall continue to be an Eligible Employee on January 1, 2002. Each other
Employee shall become an Eligible Employee as of the Enrollment Date coinciding
with or next following the date on which he is a member of the "eligible class"
and has completed 30 days of Eligibility Service.
For purposes of the Plan, the "eligible class" means any person who is
classified by an Employer as an Employee other than an Employee who is (i)
covered by a collective bargaining agreement that does not specifically provide
for coverage under the Plan, (ii) a "leased employee" (as defined in Section
2.7), (iii) a resident of Puerto Rico or, (iv) a non- resident alien with no U.
S. source income.
3.2 TRANSFERS OF EMPLOYMENT
If a person is transferred directly from employment with an Employer or with a
Related Company outside the "eligible class" to employment within the "eligible
class", he shall become an Eligible Employee as of the date he is so transferred
if prior to an Enrollment Date coinciding with or preceding such transfer date
he has met the eligibility requirements of Section 3.1. Otherwise, the
eligibility of a person who is so transferred to elect to have Tax-Deferred
Contributions made to the Plan on his behalf shall be determined in accordance
with Section 3.1.
3.3 REEMPLOYMENT
If a person who terminated employment with an Employer and all Related Companies
is reemployed within the "eligible class" and if he had been an Eligible
Employee prior to his termination of employment, he shall again become an
Eligible Employee on the date he is reemployed. Otherwise, the eligibility of a
person who terminated employment with an Employer and all Related Companies and
who is reemployed by an Employer or a Related Company to elect to have
Tax-Deferred Contributions made to the Plan on his behalf shall be determined in
accordance with Section 3.1 or 3.2.
3.4 EFFECT AND DURATION
Upon becoming an Eligible Employee, an Employee shall be entitled to make
Tax-Deferred Contributions to the Plan in accordance with the provisions of
Article IV and receive allocations of Employer Contributions in accordance with
the provisions of Article VI (provided he meets any applicable requirements
thereunder) and shall be bound by all the terms and conditions of the
11
Plan and the Trust Agreement. A person shall continue as an Eligible Employee
eligible to make Tax-Deferred Contributions to the Plan and to participate in
allocations of Employer Contributions only so long as he continues employment as
an Employee within the "eligible class".
12
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 TAX-DEFERRED CONTRIBUTIONS
Effective as of the date he becomes an Eligible Employee, each Eligible Employee
may elect, in accordance with rules prescribed by the Administrator, to have
Tax-Deferred Contributions made to the Plan on his behalf by his Employer as
hereinafter provided. An Eligible Employee's election shall include his
authorization for his Employer to reduce his Compensation and to make
Tax-Deferred Contributions on his behalf. An Eligible Employee who elects not to
have Tax-Deferred Contributions made to the Plan as of the first Enrollment Date
he becomes eligible to participate may change his election by amending his
reduction authorization as prescribed in this Article.
Tax-Deferred Contributions on behalf of an Eligible Employee shall commence with
the first payment of Compensation made on or after the date on which his
election is effective.
4.2 AMOUNT OF TAX-DEFERRED CONTRIBUTIONS
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of an
Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than one percent nor more than 15 percent.
Notwithstanding the foregoing, the Administrator may limit or reduce the amount
of Tax-Deferred Contributions to be made to the Plan by Highly Compensated
Employees in order to comply with the requirements of Section 7.4. In the event
an Eligible Employee elects to have his Employer make Tax-Deferred Contributions
on his behalf, his Compensation shall be reduced for each payroll period by the
percentage he elects to have contributed on his behalf to the Plan in accordance
with the terms of his currently effective reduction authorization.
4.3 AUTOMATIC DEFERRAL ELECTIONS
If at the time he becomes an Eligible Employee an Employee has not affirmatively
elected to have Tax-Deferred Contributions made to the Plan on his behalf in
accordance with the provisions of Sections 4.1 and 4.2, his Employer shall make
Tax-Deferred Contributions on his behalf in an amount equal to three percent of
the Eligible Employee's Compensation. The Compensation otherwise payable to an
Eligible Employee on whose behalf Tax-Deferred Contributions are made in
accordance with the provisions of this Section shall be reduced by the amount of
such Tax-Deferred Contributions.
As of the date he becomes an Eligible Employee, an Eligible Employee to whom
this Section would otherwise apply may affirmatively elect, in accordance with
rules prescribed by the
13
Administrator, not to have Tax-Deferred Contributions made on his behalf in
accordance with the provisions of this Section. Such affirmative election must
be recorded with the Administrator either prior to the date the Employee becomes
an Eligible Employee or within a reasonable period of time following such date,
but not later than the first date Compensation subject to reduction hereunder
becomes available to the Eligible Employee.
An Eligible Employee shall have a reasonable period following his receipt of the
automatic reduction notice described in Section 4.4 and before the first date
Compensation subject to the automatic reduction becomes available to him in
which to make an affirmative election hereunder. If an Eligible Employee does
not make the affirmative election described herein within the prescribed time
period, Tax-Deferred Contributions shall continue to be made on his behalf in
accordance with the provisions of this Section until the Eligible Employee
elects either to change the amount of his Compensation that his Employer
contributes as Tax-Deferred Contributions or to have Tax-Deferred Contributions
suspended, as provided in this Article.
4.4 NOTICE OF AUTOMATIC DEFERRAL ELECTION
At the time an Employee becomes an Eligible Employee, the Administrator shall
provide the Eligible Employee with a notice explaining the automatic reduction
in his Compensation for purposes of making Tax-Deferred Contributions in
accordance with the preceding Section and the Employee's right to affirmatively
elect either a different reduction amount or no reduction. The notice shall
describe the procedures for making such an election and the period in which such
an election may be made. In addition, the Administrator shall provide annual
notice to Eligible Employees of the amount by which their Compensation is being
reduced for purposes of making Tax-Deferred Contributions, if any, and their
right to change such amount as provided in the Plan.
4.5 AMENDMENTS TO REDUCTION AUTHORIZATION
An Eligible Employee may elect, in the manner prescribed by the Administrator,
to change the amount of his future Compensation that his Employer contributes on
his behalf as Tax-Deferred Contributions. An Eligible Employee may amend his
reduction authorization at such time or times during the Plan Year as the
Administrator may prescribe by giving such number of days advance notice of his
election as the Administrator may prescribe. An Eligible Employee who amends his
reduction authorization shall be limited to selecting an amount of his
Compensation that is otherwise permitted under this Article IV. Tax-Deferred
Contributions shall be made on behalf of such Eligible Employee by his Employer
pursuant to his properly amended reduction authorization commencing with
Compensation paid to the Eligible Employee on or after the date such amendment
is effective, until otherwise altered or terminated in accordance with the Plan.
14
4.6 SUSPENSION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may elect, in the manner prescribed by the Administrator, to have such
contributions suspended at any time by giving such number of days advance notice
to his Employer as the Administrator may prescribe. Any such voluntary
suspension shall take effect commencing with Compensation paid to such Eligible
Employee on or after the expiration of the required notice period and shall
remain in effect until Tax-Deferred Contributions are resumed as hereinafter set
forth.
4.7 RESUMPTION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions may elect, in the manner prescribed by the Administrator, to have
such contributions resumed. An Eligible Employee may make such election at such
time or times during the Plan Year as the Administrator may prescribe, by giving
such number of days advance notice of his election as the Administrator may
prescribe.
4.8 DELIVERY OF TAX-DEFERRED CONTRIBUTIONS
As soon after the date an amount would otherwise be paid to an Eligible Employee
as it can reasonably be separated from Employer assets, , but in any event not
later than 15 business days after the end of the month in which such
contributions are withheld, each Employer shall cause to be delivered to the
Trustee in cash all Tax-Deferred Contributions attributable to such amounts.
4.9 VESTING OF TAX-DEFERRED CONTRIBUTIONS
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
15
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 NO AFTER-TAX CONTRIBUTIONS
There shall be no After-Tax Contributions made to the Plan.
5.2 ROLLOVER CONTRIBUTIONS
An Eligible Employee who was a participant in a plan qualified under Code
Section 401 and who receives (or is eligible to receive) a cash distribution
from such plan that he elects either (i) to roll over immediately to a qualified
retirement plan or (ii) to roll over into a conduit IRA from which he receives a
later cash distribution, may elect to make a Rollover Contribution to the Plan
if he is entitled under Code Section 402(c) or 408(d)(3)(A) to roll over such
distribution to another qualified retirement plan, provided, however, that in no
event will an Eligible Employee be permitted to make a Rollover Contribution of
after-tax contributions to the Plan. The Administrator may require an Eligible
Employee to provide it with such information as it deems necessary or desirable
to show that he is entitled to roll over such distribution to another qualified
retirement plan. An Eligible Employee shall make a Rollover Contribution to the
Plan by delivering, or causing to be delivered, to the Trustee the cash that
constitutes the Rollover Contribution amount. If the Eligible Employee received
a cash distribution that he is rolling over, such delivery must be made within
60 days of receipt of the distribution from the plan or from the conduit IRA in
the manner prescribed by the Administrator. Notwithstanding the foregoing, the
Administrator, in its sole and absolute discretion, may accept a Rollover
Contribution of a non-cash distribution.
5.3 VESTING OF ROLLOVER CONTRIBUTIONS
A Participant's vested interest in his Rollover Contributions Sub-Account shall
be at all times 100 percent.
16
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 CONTRIBUTION PERIOD
The Contribution Period for Employer Contributions under the Plan is each Plan
Year.
6.2 QUALIFIED NONELECTIVE CONTRIBUTIONS
Each Employer may, in its discretion, make a Qualified Nonelective Contribution
to the Plan for the Contribution Period in an amount determined by the Sponsor.
6.3 ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS
Any Qualified Nonelective Contribution made for a Contribution Period shall be
allocated among the Eligible Employees during the Contribution Period who have
met the allocation requirements for Qualified Nonelective Contributions
described in this Article, other than any such Eligible Employee who is a Highly
Compensated Employee. The allocable share of each such Eligible Employee in the
Qualified Nonelective Contribution shall be in the ratio which his Compensation
from the Employer for the Plan Year bears to the aggregate of such Compensation
for all such Eligible Employees.
6.4 VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE SPONSOR
The Sponsor shall verify the amount of Employer Contributions to be made by each
Employer in accordance with the provisions of the Plan. Notwithstanding any
other provision of the Plan to the contrary, the Sponsor shall determine the
portion of the Employer Contribution to be made by each Employer with respect to
an Eligible Employee who transfers from employment with one Employer as an
Eligible Employee to employment with another Employer as an Eligible Employee.
6.5 PAYMENT OF EMPLOYER CONTRIBUTIONS
Employer Contributions made for a Contribution Period shall be paid in cash to
the Trustee within the period of time required under the Code in order for the
contribution to be deductible by the Employer in determining its Federal income
taxes for the Plan Year.
17
6.6 ALLOCATION REQUIREMENTS FOR EMPLOYER CONTRIBUTIONS
A person who was an Eligible Employee at any time during a Contribution Period
shall be eligible to receive an allocation of Qualified Nonelective
Contributions for such Contribution Period.
6.7 VESTING OF EMPLOYER CONTRIBUTIONS
A Participant's vested interest in his Employer Contributions Sub-Account shall
be at all times 100 percent.
18
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
The "ANNUAL ADDITION" with respect to a Participant for a "limitation year"
means the sum of the Tax-Deferred Contributions and Employer Contributions
allocated to his Account for the "limitation year" (including any "excess
contributions" that are distributed pursuant to this Article), the employer
contributions, "employee contributions", and forfeitures allocated to his
accounts for the "limitation year" under any other qualified defined
contribution plan (whether or not terminated) maintained by an Employer or a
Related Company concurrently with the Plan, and amounts described in Code
Sections 415(l)(2) and 419A(d)(2) allocated to his account for the "limitation
year".
The "DEFERRAL PERCENTAGE" with respect to an Eligible Employee for a particular
Plan Year means the ratio of the Tax-Deferred Contributions made on his behalf
for the Plan Year to his "test compensation" for the Plan Year. To the extent
permitted by regulations issued under Code Section 401(k), the Sponsor may elect
to include Qualified Nonelective Contributions made to the Plan on the Eligible
Employee's behalf for the Plan Year in computing the numerator of such Eligible
Employee's "deferral percentage".
Contributions made on an Eligible Employee's behalf for a Plan Year shall be
included in determining his "deferral percentage" for such Plan Year only if
they meet the following requirements:
(a) Tax-Deferred Contributions must relate to Compensation that would, but
for the Eligible Employee's deferral election, have been received by
the Eligible Employee during such Plan Year.
(b) The contributions must be allocated to the Eligible Employee's Account
as of a date within such Plan Year.
(c) The contributions must be made to the Plan before the end of the
12-month period immediately following the Plan Year to which they
relate.
The determination of an Eligible Employee's "deferral percentage" shall be made
after any reduction required to satisfy the Code Section 415 limitations is made
as provided in this Article VII and shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
19
An "ELECTIVE CONTRIBUTION" means any employer contribution made to a plan
maintained by an Employer or a Related Company on behalf of a Participant in
lieu of cash compensation pursuant to his written election to defer under any
qualified CODA as described in Code Section 401(k), any simplified employee
pension cash or deferred arrangement as described in Code Section 402(h)(1)(B),
any eligible deferred compensation plan under Code Section 457, or any plan as
described in Code Section 501(c)(18), and any contribution made on behalf of the
Participant by an Employer or a Related Company for the purchase of an annuity
contract under Code Section 403(b) pursuant to a salary reduction agreement.
An "EMPLOYEE CONTRIBUTION" means any employee after-tax contribution allocated
to an Eligible Employee's account under any qualified plan of an Employer or a
Related Company.
An "EXCESS CONTRIBUTION" means any contribution made to the Plan on behalf of a
Participant that exceeds one of the limitations described in this Article.
An "EXCESS DEFERRAL" with respect to a Participant means that portion of a
Participant's Tax-Deferred Contributions for his taxable year that, when added
to amounts deferred for such taxable year under other plans or arrangements
described in Code Section 401(k), 408(k), or 403(b) (other than any such plan or
arrangement that is maintained by an Employer or a Related Company), would
exceed the dollar limit imposed under Code Section 402(g) as in effect on
January 1 of the calendar year in which such taxable year begins and is
includible in the Participant's gross income under Code Section 402(g).
A "LIMITATION YEAR" means the Plan Year.
A "QUALIFIED MATCHING CONTRIBUTION" means any employer contribution allocated to
an Eligible Employee's account under any plan of an Employer or a Related
Company solely on account of "elective contributions" made on his behalf or
"employee contributions" made by him that is a qualified matching contribution
as defined in regulations issued under Code Section 401(k), is nonforfeitable
when made, and is distributable only as permitted in regulations issued under
Code Section 401(k).
A "QUALIFIED NONELECTIVE CONTRIBUTION" means any employer contribution allocated
to an Eligible Employee's account under any plan of an Employer or a Related
Company that the Participant could not elect instead to receive in cash, that is
a qualified nonelective contribution as defined in Code Sections 401(k) and
401(m) and regulations issued thereunder, is nonforfeitable when made, and is
distributable only as permitted in regulations issued under Code Section 401(k).
The "TEST COMPENSATION" of an Eligible Employee for a Plan Year means
compensation as defined in Code Section 414(s) and regulations issued
thereunder, limited, however, to $150,000
20
(subject to adjustment annually as provided in Code Sections 401(a)(17)(B) and
415(d); provided, however, that the dollar increase in effect on January 1 of
any calendar year, if any, is effective for Plan Years beginning in such
calendar year) and, if elected by the Sponsor, further limited solely to "test
compensation" of an Employee attributable to periods of time when he is an
Eligible Employee. If the "test compensation" of an Eligible Employee is
determined over a period of time that contains fewer than 12 calendar months,
then the annual compensation limitation described above shall be adjusted with
respect to that Eligible Employee by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator of which is
the number of full months in the period and the denominator of which is 12;
provided, however, that no proration is required for an Eligible Employee who is
covered under the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12 months.
Effective January 1, 2001, the term test compensation shall include elective
amounts that are not includible in the gross income of an Eligible Employee by
reason of Section 132(f)(4) of the Code and, effective January 1, 2002, shall
include "deemed Section 125 compensation" as defined in Rev. Rul. 2002-27.
The "TESTING YEAR" means the Plan Year for which the limitations on "deferral
percentages" of Highly Compensated Employees are being determined.
7.2 CODE SECTION 402(g) LIMIT
In no event shall the amount of the Tax-Deferred Contributions made on behalf of
an Eligible Employee for his taxable year, when aggregated with any "elective
contributions" made on behalf of the Eligible Employee under any other plan of
an Employer or a Related Company for his taxable year, exceed the dollar limit
imposed under Code Section 402(g), as in effect on January 1 of the calendar
year in which such taxable year begins. In the event that the Administrator
determines that the reduction percentage elected by an Eligible Employee will
result in his exceeding the Code Section 402(g) limit, the Administrator may
adjust the reduction authorization of such Eligible Employee by reducing the
percentage of his Tax-Deferred Contributions to such smaller percentage that
will result in the Code Section 402(g) limit not being exceeded. If the
Administrator determines that the Tax-Deferred Contributions made on behalf of
an Eligible Employee would exceed the Code Section 402(g) limit for his taxable
year, the Tax-Deferred Contributions for such Participant shall be automatically
suspended for the remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit has
nevertheless been exceeded by an Eligible Employee for his taxable year, the
Tax-Deferred Contributions that, when aggregated with "elective contributions"
made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company, would exceed the Code Section 402(g) limit, plus any income and
minus any losses attributable thereto, shall be distributed to the Eligible
Employee no later than the April 15 immediately following such taxable year. Any
Tax-Deferred Contributions that are distributed to an Eligible Employee in
accordance with this
21
Section shall not be taken into account in determining the Eligible Employee's
"deferral percentage" for the "testing year" in which the Tax-Deferred
Contributions were made, unless the Eligible Employee is a Highly Compensated
Employee.
7.3 DISTRIBUTION OF EXCESS DEFERRALS
Notwithstanding any other provision of the Plan to the contrary, if a
Participant notifies the Administrator in writing no later than the March 1
following the close of the Participant's taxable year that "excess deferrals"
have been made on his behalf under the Plan for such taxable year, the "excess
deferrals", plus any income and minus any losses attributable thereto, shall be
distributed to the Participant no later than the April 15 immediately following
such taxable year. Any Tax-Deferred Contributions that are distributed to a
Participant in accordance with this Section shall nevertheless be taken into
account in determining the Participant's "deferral percentage" for the "testing
year" in which the Tax-Deferred Contributions were made.
7.4 LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY COMPENSATED
EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average "deferral percentage" for such Eligible Employees that exceeds the
greater of:
(a) a percentage that is equal to 125 percent of the average "deferral
percentage" for all other Eligible Employees for the "testing year"; or
(b) a percentage that is not more than 200 percent of the average "deferral
percentage" for all other Eligible Employees for the "testing year" and
that is not more than two percentage points higher than the average
"deferral percentage" for all other Eligible Employees for the "testing
year",
unless the "excess contributions", determined as provided in Section 7.5, are
distributed as provided in Section 7.6.
In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year or to adjust the projected "deferral
percentages" of Highly Compensated Employees by reducing the percentage of their
deferral elections for any remaining portion of a Plan Year to such smaller
percentage that will result in the limitation set forth above not being
exceeded. In the event of any such suspension or reduction, Highly Compensated
Employees affected thereby shall be notified of the reduction or suspension as
soon as possible and shall be given an opportunity to
22
make a new deferral election to be effective the first day of the next following
Plan Year. In the absence of such an election, the election in effect
immediately prior to the suspension or adjustment described above shall be
reinstated as of the first day of the next following Plan Year.
In determining the "deferral percentage" for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year, "elective contributions",
"qualified nonelective contributions", and "qualified matching contributions"
(to the extent that "qualified nonelective contributions" and "qualified
matching contributions" are taken into account in determining "deferral
percentages") made to his accounts under any plan of an Employer or a Related
Company that is not mandatorily disaggregated pursuant to IRS regulations
Section 1.410(b)-7(c), as modified by Section 1.401(k)-1(g)(11), shall be
treated as if all such contributions were made to the Plan; provided, however,
that if such a plan has a plan year different from the Plan Year, any such
contributions made to the Highly Compensated Employee's accounts under the plan
for the plan year ending with or within the same calendar year as the Plan Year
shall be treated as if such contributions were made to the Plan. Notwithstanding
the foregoing, such contributions shall not be treated as if they were made to
the Plan if regulations issued under Code Section 401(k) do not permit such plan
to be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Code Section 401(a)(4) or
410(b), then "deferral percentages" under the Plan shall be calculated as if the
Plan and such one or more other plans were a single plan. Plans may be
aggregated to satisfy Code Section 401(k) only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the "qualified nonelective contributions" and/or "qualified matching
contributions" taken into account in determining "deferral percentages" for any
Plan Year.
7.5 DETERMINATION AND ALLOCATION OF EXCESS TAX-DEFERRED CONTRIBUTIONS AMONG
HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation on Tax-Deferred Contributions described in Section 7.4 is
exceeded in any Plan Year, the Administrator shall determine the dollar amount
of the excess by reducing the dollar amount of the contributions included in
determining the "deferral percentage" of Highly Compensated Employees in order
of their "deferral percentages" as follows:
(a) The highest "deferral percentage(s)" shall be reduced to the greater of
(1) the maximum "deferral percentage" that satisfies the limitation on
Tax-Deferred Contributions described in Section 7.4 or (2) the next
highest "deferral percentage".
23
(b) If the limitation on Tax-Deferred Contributions described in Section
7.4 would still be exceeded after application of the provisions of
paragraph (a), the Administrator shall continue reducing "deferral
percentages" of Highly Compensated Employees, continuing with the next
highest "deferral percentage", in the manner provided in paragraph (a)
until the limitation on Tax-Deferred Contributions described in Section
7.4 is satisfied.
The determination of the amount of "excess contributions" hereunder shall be
made after Tax-Deferred Contributions and "excess deferrals" have been
distributed pursuant to Sections 7.2 and 7.3, if applicable.
After determining the dollar amount of the "excess contributions" that have been
made to the Plan, the Administrator shall allocate such excess among Highly
Compensated Employees in order of the dollar amount of the Tax-Deferred
Contributions allocated to their Accounts as follows:
(c) The contributions made on behalf of the Highly Compensated Employee(s)
with the largest dollar amount of Tax-Deferred Contributions allocated
to his Account for the Plan Year shall be reduced by the dollar amount
of the excess (with such dollar amount being allocated equally among
all such Highly Compensated Employees), but not below the dollar amount
of such contributions made on behalf of the Highly Compensated
Employee(s) with the next highest dollar amount of such contributions
allocated to his Account for the Plan Year.
(d) If the excess has not been fully allocated after application of the
provisions of paragraph (c), the Administrator shall continue reducing
the contributions made on behalf of Highly Compensated Employees,
continuing with the Highly Compensated Employees with the largest
remaining dollar amount of such contributions allocated to their
Accounts for the Plan Year, in the manner provided in paragraph (c)
until the entire excess determined above has been allocated.
7.6 DISTRIBUTION OF EXCESS TAX-DEFERRED CONTRIBUTIONS
"Excess contributions" allocated to a Highly Compensated Employee pursuant to
the preceding Section, plus any income and minus any losses attributable
thereto, shall be distributed to the Highly Compensated Employee prior to the
end of the next succeeding Plan Year. If such excess amounts are distributed
more than 2 1/2 months after the last day of the Plan Year for which the excess
occurred, an excise tax may be imposed under Code Section 4979 on the Employer
maintaining the Plan with respect to such amounts.
24
7.7 DETERMINATION OF INCOME OR LOSS
The income or loss attributable to "excess contributions" that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participants'
Accounts.
7.8 CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS AND
FORFEITURES
Notwithstanding any other provision of the Plan to the contrary, the "annual
addition" with respect to a Participant for a "limitation year" shall in no
event exceed the lesser of (i) $30,000 (adjusted as provided in Code Section
415(d)) or (ii) 25 percent of the Participant's compensation, as defined in Code
Section 415(c)(3) and regulations issued thereunder, for the "limitation year";
provided, however, that the limit in clause (i) shall be pro-rated for any short
"limitation year". For limitation years beginning on and after January 1, 2001,
for purposes of applying this limitation, compensation paid or made available
during such limitation years shall include elective amounts that are not
includible in the gross income of the Participant by reason of Sections 125,
401(k) or 132(f)(4) of the Code, and, effective January 1, 2002 shall include
'deemed Section 125 compensation' as defined in Rev. Rul. 2002-27. If the
"annual addition" to the Account of a Participant in any "limitation year" would
otherwise exceed the amount that may be applied for his benefit under the
limitation contained in this Section, the limitation shall be satisfied by
reducing contributions made to the Participant's Account to the extent necessary
in the following order:
Tax-Deferred Contributions made on behalf of the Participant for the
"limitation year", if any, shall be reduced.
Qualified Nonelective Contributions otherwise allocable to the
Participant's Account for the "limitation year", if any, shall be
reduced.
The amount of any reduction of Tax-Deferred Contributions (plus any income
attributable thereto) shall be returned to the Participant. The amount of any
reduction of Employer Contributions shall be deemed a forfeiture for the
"limitation year".
Amounts deemed to be forfeitures under this Section shall be held unallocated in
a suspense account established for the "limitation year" and shall be applied
against the Employer's contribution obligation for the next following
"limitation year" (and succeeding "limitation years", as necessary). If a
suspense account is in existence at any time during a "limitation year", all
amounts in the suspense account must be applied against the Employer's
contribution obligation before any further contributions that would constitute
"annual additions" may be made to the Plan. No suspense account established
hereunder shall share in any increase or decrease in the net worth of the Trust.
25
For purposes of this Article, excesses shall result only from the allocation of
forfeitures, a reasonable error in estimating a Participant's annual
compensation (as defined above), a reasonable error in determining the amount of
"elective contributions" that may be made with respect to any Participant under
the limits of Code Section 415, or other limited facts and circumstances that
justify the availability of the provisions set forth above.
7.9 APPLICATION OF CODE SECTION 415 LIMITATIONS WHERE PARTICIPANT IS
COVERED UNDER OTHER QUALIFIED DEFINED CONTRIBUTION PLAN
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the "annual addition" for the "limitation
year" would otherwise exceed the amount that may be applied for the
Participant's benefit under the limitation contained in the preceding Section,
such excess shall be reduced first by reducing "annual additions" under the Plan
as provided in the preceding Section. If the limitation contained in the
preceding Section still is not satisfied, such excess shall be reduced as
provided in the defined contribution plans other than the Plan.
7.10 SCOPE OF LIMITATIONS
The Code Section 415 limitations contained in the preceding Sections shall be
applicable only with respect to benefits provided pursuant to defined
contribution plans and defined benefit plans described in Code Section 415(k).
For purposes of applying the Code Section 415 limitations contained in the
preceding Sections, the term "Related Company" shall be adjusted as provided in
Code Section 415(h).
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ARTICLE VIII
TRUST FUNDS AND ACCOUNTS
8.1 GENERAL FUND
The Trustee shall maintain a General Fund as required to hold and administer any
assets of the Trust that are not allocated among the Investment Funds as
provided in the Plan or the Trust Agreement. The General Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in the General Fund shall be an undivided
interest.
8.2 INVESTMENT FUNDS
The Sponsor (or its delegate) shall determine the number and type of Investment
Funds and shall communicate the same and any changes therein in writing to the
Administrator and the Trustee. Each Investment Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in any Investment Fund shall be an undivided
interest.
The Sponsor (or its delegate) may determine to offer one or more Investment
Funds that are invested primarily in equity securities issued by an Employer or
a Related Company that are publicly traded and are "qualifying employer
securities" as defined in ERISA Section 407(d)(5). In no event may a
Participant's Tax-Deferred Contributions made for any Plan Year beginning on or
after January 1, 1999 in excess of one percent of the Participant's Compensation
for such Plan Year be required to be invested in such equity securities.
8.3 LOAN INVESTMENT FUND
If a loan from the Plan to a Participant is approved in accordance with the
provisions of Article XII, the Sponsor (or its delegate) shall direct the
establishment and maintenance of a loan Investment Fund in the Participant's
name. The assets of the loan Investment Fund shall be held as a separate trust
fund. A Participant's loan Investment Fund shall be invested in the note(s)
reflecting the loan(s) made to the Participant in accordance with the provisions
of Article XII. Notwithstanding any other provision of the Plan to the contrary,
income received with respect to a Participant's loan Investment Fund shall be
allocated and the loan Investment Fund shall be administered as provided in
Article XII.
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8.4 INCOME ON TRUST
Any dividends, interest, distributions, or other income received by the Trustee
with respect to any Trust Fund maintained hereunder shall be allocated by the
Trustee to the Trust Fund for which the income was received.
8.5 ACCOUNTS
As of the first date a contribution is made by or on behalf of an Eligible
Employee there shall be established an Account in his name reflecting his
interest in the Trust. Each Account shall be maintained and administered for
each Participant and Beneficiary in accordance with the provisions of the Plan.
The balance of each Account shall be the balance of the account after all
credits and charges thereto, for and as of such date, have been made as provided
herein.
8.6 SUB-ACCOUNTS
A Participant's Account shall be divided into such separate, individual
Sub-Accounts as are necessary or appropriate to reflect the Participant's
interest in the Trust.
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ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 NO LIFE INSURANCE CONTRACTS
A Participant's Account may not be invested in life insurance contracts on the
life of the Participant.
29
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 FUTURE CONTRIBUTION INVESTMENT ELECTIONS
Each Eligible Employee shall make an investment election in the manner and form
prescribed by the Administrator directing the manner in which the contributions
made on his behalf shall be invested. An Eligible Employee's investment election
shall specify the percentage, in the percentage increments prescribed by the
Administrator, of such contributions that shall be allocated to one or more of
the Investment Funds with the sum of such percentages equaling 100 percent. The
investment election by a Participant shall remain in effect until his entire
interest under the Plan is distributed or forfeited in accordance with the
provisions of the Plan or until he records a change of investment election with
the Administrator, in such form as the Administrator shall prescribe. If
recorded in accordance with any rules prescribed by the Administrator, a
Participant's change of investment election may be implemented effective as of
the date or dates prescribed by the Administrator. In the absence of an
effective investment election, the Participant's Account shall be invested in an
Investment Fund designated by the Administrator.
10.2 DEPOSIT OF CONTRIBUTIONS
All contributions made on a Participant's behalf shall be deposited in the Trust
and allocated among the Investment Funds in accordance with the Participant's
currently effective investment election. If no investment election is recorded
with the Administrator at the time contributions are to be deposited to a
Participant's Account, his contributions shall be allocated among the Investment
Funds as directed by the Administrator.
10.3 ELECTION TO TRANSFER BETWEEN FUNDS
A Participant may elect to transfer investments from any Investment Fund to any
other Investment Fund. The Participant's transfer election shall specify either
(i) a percentage, in the percentage increments prescribed by the Administrator,
of the amount eligible for transfer, which percentage may not exceed 100
percent, or (ii) a dollar amount that is to be transferred. Any transfer
election must be recorded with the Administrator, in such form as the
Administrator shall prescribe. Subject to any restrictions pertaining to a
particular Investment Fund, if recorded in accordance with any rules prescribed
by the Administrator, a Participant's transfer election may be implemented
effective as of the date or dates prescribed by the Administrator.
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10.4 404(c) PROTECTION
The Plan is intended to constitute a plan described in ERISA Section 404(c) and
regulations issued thereunder. The fiduciaries of the Plan may be relieved of
liability for any losses that are the direct and necessary result of investment
instructions given by a Participant, his Beneficiary, or an alternate payee
under a qualified domestic relations order.
31
ARTICLE XI
CREDITING AND VALUING ACCOUNTS
11.1 CREDITING ACCOUNTS
All contributions made under the provisions of the Plan shall be credited to
Accounts in the Trust Funds by the Trustee, in accordance with procedures
established in writing by the Administrator, either when received or on the
succeeding Valuation Date after valuation of the Trust Fund has been completed
for such Valuation Date as provided in Section 11.2, as shall be determined by
the Administrator.
11.2 VALUING ACCOUNTS
Accounts in the Trust Funds shall be valued by the Trustee on the Valuation
Date, in accordance with procedures established in writing by the Administrator,
either in the manner adopted by the Trustee and approved by the Administrator or
in the manner set forth in Section 11.3 as Plan valuation procedures, as
determined by the Administrator.
11.3 PLAN VALUATION PROCEDURES
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Accounts in a Trust Fund shall be adjusted to
reflect any increase or decrease in the value of the Trust Fund for the period
of time occurring since the immediately preceding Valuation Date for the Trust
Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be determined by valuing all
of the assets of the Trust Fund at fair market value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized and
unrealized, during the valuation period shall be determined on the
basis of the valuation under paragraph (a) taking into account
appropriate adjustments for contributions, loan payments, and transfers
to and distributions, withdrawals, loans, and transfers from such Trust
Fund during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust Fund
shall be allocated among Accounts in the Trust Fund in the ratio of the
balance of the portion of such Account in the Trust Fund as of the
preceding Valuation Date less any distributions, withdrawals, loans,
and transfers from such Account balance in the Trust Fund since the
Valuation Date to the aggregate balances of the portions of all
Accounts in the Trust Fund
32
similarly adjusted, and each Account in the Trust Fund shall be
credited or charged with the amount of its allocated share.
Notwithstanding the foregoing, the Administrator may adopt such
accounting procedures as it considers appropriate and equitable to
establish a proportionate crediting of net increase or decrease in the
value of the Trust Fund for contributions, loan payments, and transfers
to and distributions, withdrawals, loans, and transfers from such Trust
Fund made by or on behalf of a Participant during the valuation period.
11.4 FINALITY OF DETERMINATIONS
The Trustee shall have exclusive responsibility for determining the value of
each Account maintained hereunder. The Trustee's determinations thereof shall be
conclusive upon all interested parties.
33
ARTICLE XII
LOANS
12.1 APPLICATION FOR LOAN
To the extent permitted by applicable law (including, without limitation,
Federal securities laws), a Participant who is either an active Employee or a
party in interest as defined in ERISA Section 3(14) may make application to the
Administrator for a loan from his Account. Loans shall be made to Participants
in accordance with written guidelines which are hereby incorporated into and
made a part of the Plan. To the extent that such written guidelines comply with
the requirements of Code Section 72(p), but are inconsistent with the provisions
of this Article, such written guidelines shall be given effect.
As collateral for any loan granted hereunder, the Participant shall grant to the
Plan a security interest in his vested interest under the Plan equal to the
amount of the loan; provided, however, that in no event may the security
interest exceed 50 percent of the Participant's vested interest under the Plan
determined as of the date as of which the loan is originated in accordance with
Plan provisions. In the case of a Participant who is an active Employee, the
Participant also shall enter into an agreement to repay the loan by payroll
withholding. No loan in excess of 50 percent of the Participant's vested
interest under the Plan shall be made from the Plan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the amount
made available to other Employees.
A loan shall not be granted unless the Participant consents to the charging of
his Account for unpaid principal and interest amounts in the event the loan is
declared to be in default.
12.2 REDUCTION OF ACCOUNT UPON DISTRIBUTION
Notwithstanding any other provision of the Plan, the amount of a Participant's
Account that is distributable to the Participant or his Beneficiary under
Article XIII or XV shall be reduced by the portion of his vested interest that
is held by the Plan as security for any loan outstanding to the Participant,
provided that the reduction is used to repay the loan. If distribution is made
because of the Participant's death prior to the commencement of distribution of
his Account and the Participant's vested interest in his Account is payable to
more than one individual as Beneficiary, then the balance of the Participant's
vested interest in his Account shall be adjusted by reducing the vested account
balance by the amount of the security used to repay the loan, as provided in the
preceding sentence, prior to determining the amount of the benefit payable to
each such individual.
34
12.3 REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, the following
terms and conditions shall apply to any loan made to a Participant under this
Article:
(a) The interest rate on any loan to a Participant shall be a reasonable
interest rate commensurate with current interest rates charged for
loans made under similar circumstances by persons in the business of
lending money.
(b) The amount of any loan to a Participant (when added to the outstanding
balance of all other loans to the Participant from the Plan or any
other plan maintained by an Employer or a Related Company) shall not
exceed the lesser of:
(i) $50,000, reduced by the excess, if any, of the highest
outstanding balance of any other loan to the Participant from
the Plan or any other plan maintained by an Employer or a
Related Company during the preceding 12-month period over the
outstanding balance of such loans on the date a loan is made
hereunder; or
(ii) 50 percent of the vested portions of the Participant's Account
and his vested interest under all other plans maintained by an
Employer or a Related Company.
(c) The term of any loan to a Participant shall be no greater than five
years.
(d) Substantially level amortization shall be required over the term of the
loan with payments made not less frequently than quarterly, except that
if so provided in the written guidelines applicable to Plan loans, the
amortization schedule may be waived and payments suspended while a
Participant is on a leave of absence from employment with an Employer
or any Related Company (for periods in which the Participant does not
perform military service as described in paragraph (e)), provided that
all of the following requirements are met:
(i) Such leave is either without pay or at a reduced rate of pay
that, after withholding for employment and income taxes, is
less than the amount required to be paid under the
amortization schedule;
(ii) Payments resume after the earlier of (a) the date such leave
of absence ends or (b) the one-year anniversary of the date
such leave began;
(iii) The period during which payments are suspended does not exceed
one year;
(iv) Payments resume in an amount not less than the amount required
under the original amortization schedule; and
35
(v) The waiver of the amortization schedule does not extend the
period of the loan beyond the maximum period permitted under
this Article.
(e) If a Participant is absent from employment with any Employer or any
Related Company for a period during which he performs services in the
uniformed services (as defined in chapter 45 of title 38 of the United
States Code), whether or not such services constitute qualified
military service, the suspension of payments shall not be taken into
account for purposes of applying either paragraph (c) or paragraph (d)
of this Section provided that all of the following requirements are
met:
(i) Payments resume upon completion of such military service;
(ii) Payments resume in an amount not less than the amount required
under the original amortization schedule and continue in such
amount until the loan is repaid in full;
(iii) Upon resumption, payments are made no less frequently than
required under the original amortization schedule and continue
under such schedule until the loan is repaid in full; and
(iv) The loan is repaid in full, including interest accrued during
the period of such military service, no later than the last
scheduled repayment date under the original amortization
schedule extended by the period of such military service.
(f) The loan shall be evidenced by a legally enforceable agreement that
demonstrates compliance with the provisions of this section.
12.4 ADMINISTRATION OF LOAN INVESTMENT FUND
Upon approval of a loan to a Participant, the Trustee shall transfer an amount
equal to the loan amount from the Investment Funds in which it is invested to
the loan Investment Fund established in the Participant's name. Any loan shall
be made to the Participant out of the Participant's loan Investment Fund. All
principal and interest paid by the Participant on a loan made under this Article
shall be deposited to his Account and shall be allocated upon receipt among the
Investment Funds in accordance with the Participant's currently effective
investment election. The balance of the Participant's loan Investment Fund shall
be decreased by the amount of principal payments and the loan Investment Fund
shall be terminated when the loan has been repaid in full.
36
12.5 DEFAULT
If either (1) a Participant fails to make or cause to be made, any payment
required under the terms of the loan within 90 days following the date on which
such payment shall become due, unless payment is not made because the
Participant is on a leave of absence and the amortization schedule is waived as
provided in Section 12.3(d) or (e), or (2) there is an outstanding principal
balance existing on a loan after the last scheduled repayment date (extended as
provided in Section 12.3(e), if applicable), the Administrator shall direct the
Trustee to declare the loan to be in default, and the entire unpaid balance of
such loan, together with accrued interest, shall be immediately due and payable.
In any such event, if such balance and interest thereon is not then paid, the
Trustee shall charge the Account of the borrower with the amount of such balance
and interest as of the earliest date a distribution may be made from the Plan to
the borrower without adversely affecting the tax qualification of the Plan or of
the cash or deferred arrangement.
12.6 DEEMED DISTRIBUTION UNDER CODE SECTION 72(p)
If a Participant's loan is in default as provided in Section 12.5, the
Participant shall be deemed to have received a taxable distribution in the
amount of the outstanding loan balance as required under Code Section 72(p),
whether or not distribution may actually be made from the Plan without adversely
affecting the tax qualification of the Plan.
If a Participant is deemed to have received distribution of an outstanding loan
balance hereunder, no further loans may be made to such Participant from his
Account unless either (a) there is a legally enforceable arrangement among the
Participant, the Plan, and the Participant's employer that repayment of such
loan shall be made by payroll withholding or (b) the loan is secured by such
additional collateral consisting of real, personal, or other property
satisfactory to the Administrator to provide adequate security for the loan.
12.7 TREATMENT OF OUTSTANDING BALANCE OF LOAN DEEMED DISTRIBUTED UNDER CODE
SECTION 72(p)
With respect to any loan made on or after January 1, 2002, the balance of such
loan that is deemed to have been distributed to a Participant hereunder shall
cease to be an outstanding loan for purposes of Code Section 72(p) and a
Participant shall not be treated as having received a taxable distribution when
his Account is offset by such outstanding loan balance as provided in Section
12.5. Any interest that accrues on a loan after it is deemed to have been
distributed shall not be treated as an additional loan to the Participant and
shall not be included in the Participant's taxable income as a deemed
distribution. Notwithstanding the foregoing, however, unless a Participant
repays such loan, with interest, the amount of such loan, with interest thereon
calculated as provided in the original loan note, shall continue to be
considered an outstanding loan for purposes of determining the maximum
permissible amount of any subsequent loan under Section 12.3(b).
37
12.8 SPECIAL RULES APPLICABLE TO LOANS
Any loan made hereunder shall be subject to the following rules:
(a) Minimum Loan Amount: A Participant may not request a loan for less than
$1,000.
(b) Maximum Number of Outstanding Loans: A Participant may not have more
than two outstanding loans at any time. A Participant with two
outstanding loans may not apply for another loan until all but one of
the existing loans is repaid in full and may not refinance an existing
loan or obtain a third loan for the purpose of paying off an existing
loan.
(c) Pre-Payment Without Penalty: A Participant may pre-pay the balance of
any loan hereunder prior to the date it is due without penalty.
(d) Effect of Termination of Employment: Upon a Participant's termination
of employment, the balance of any outstanding loan hereunder shall
immediately become due and owing.
(e) Loan Fees: Loans will be subject to such fees as are determined from
time to time by the Administrator.
12.9 LOANS GRANTED PRIOR TO AMENDMENT
Notwithstanding any other provision of this Article to the contrary, any loan
made under the provisions of the Plan as in effect prior to this amendment and
restatement shall remain outstanding until repaid in accordance with its terms
or the otherwise applicable Plan provisions.
38
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 NON-HARDSHIP WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company may elect at
any time, subject to the limitations and conditions prescribed in this Article,
to make a cash withdrawal from his Rollover Contributions Sub-Account.
13.2 AGE 59 1/2 WITHDRAWALS
A Participant who is employed by an Employer or a Related Company and who has
attained age 59 1/2 may elect, subject to the limitations and conditions
prescribed in this Article, to make a cash withdrawal from his vested interest
in any of the following Sub-Accounts:
(a) his Tax-Deferred Contributions Sub-Account.
13.3 OVERALL LIMITATIONS ON NON-HARDSHIP WITHDRAWALS
Non-hardship withdrawals made pursuant to this Article shall be subject to the
following conditions and limitations:
(a) A Participant must apply for a non-hardship withdrawal such number of
days prior to the date as of which it is to be effective as the
Administrator may prescribe.
(b) Withdrawals may be made effective as soon as administratively
practicable after the Administrator's approval of the Participant's
withdrawal application.
13.4 HARDSHIP WITHDRAWALS
A Participant who is employed by an Employer or a Related Company and who is
determined by the Administrator to have incurred a hardship in accordance with
the provisions of this Article may elect, subject to the limitations and
conditions prescribed in this Article, to make a cash withdrawal from his vested
interest in any of the following Sub-Accounts:
(a) his Tax-Deferred Contributions Sub-Account, excluding any income
credited to such Sub-Account.
39
13.5 HARDSHIP DETERMINATION
The Administrator shall grant a hardship withdrawal only if it determines that
the withdrawal is necessary to meet an immediate and heavy financial need of the
Participant. An immediate and heavy financial need of the Participant means a
financial need on account of:
(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the Code) medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage payments) of
a principal residence for the Participant;
(c) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, or any dependent of the
Participant; or
(d) the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's principal
residence.
13.6 SATISFACTION OF NECESSITY REQUIREMENT FOR HARDSHIP WITHDRAWALS
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if the Participant satisfies all of the
following requirements:
(a) The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant.
(b) The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under all
plans maintained by an Employer or any Related Company.
(c) The Participant's Tax-Deferred Contributions and the Participant's
"elective contributions" and "employee contributions", as defined in
Article VII, under all other qualified and non-qualified deferred
compensation plans maintained by an Employer or any Related Company
shall be suspended for at least 12 months after his receipt of the
withdrawal.
A Participant shall not fail to be treated as an Eligible Employee for purposes
of applying the limitations contained in Article VII of the Plan merely because
his Tax-Deferred Contributions are suspended in accordance with this Section.
40
13.7 CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS
Hardship withdrawals made pursuant to this Article shall be subject to the
following conditions and limitations:
(a) A Participant must apply for a hardship withdrawal such number of days
prior to the date as of which it is to be effective as the
Administrator may prescribe.
(b) Hardship withdrawals may be made effective as soon as administratively
practicable after the Administrator's approval of the Participant's
withdrawal application.
(c) The amount of a hardship withdrawal may include any amounts necessary
to pay any Federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
13.8 ORDER OF WITHDRAWAL FROM A PARTICIPANT'S SUB-ACCOUNTS
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the order prescribed by the
Administrator, which order shall be uniform with respect to all Participants and
non-discriminatory. If the Sub-Account from which a Participant is receiving a
withdrawal is invested in more than one Investment Fund, the withdrawal shall be
charged against the Investment Funds pro-rata.
41
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
A Participant's Settlement Date shall occur on the date he terminates employment
with the Employers and all Related Companies because of death, disability,
retirement, or other termination of employment. Written notice of a
Participant's Settlement Date shall be given by the Administrator to the
Trustee.
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ARTICLE XV
DISTRIBUTIONS
15.1 DISTRIBUTIONS TO PARTICIPANTS
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Account in the form provided under Article XVI beginning
as soon as reasonably practicable following his Settlement Date or the date his
application for distribution is filed with the Administrator, if later.
15.2 DISTRIBUTIONS TO BENEFICIARIES
If a Participant dies prior to his Benefit Payment Date, his Beneficiary shall
receive distribution of the Participant's vested interest in his Account in the
form provided under Article XVI beginning as soon as reasonably practicable
following the date the Beneficiary's application for distribution is filed with
the Administrator. Unless distribution is to be made over the life or over a
period certain not greater than the life expectancy of the Beneficiary,
distribution of the Participant's entire vested interest shall be made to the
Beneficiary no later than the end of the fifth calendar year beginning after the
Participant's death. If distribution is to be made over the life or over a
period certain no greater than the life expectancy of the Beneficiary,
distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the
first calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's death
or (ii) the end of the calendar year in which the Participant would
have attained age 70 1/2.
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
If a Participant dies after the date distribution of his vested interest in his
Account begins under this Article, but before his entire vested interest in his
Account is distributed, his Beneficiary shall receive distribution of the
remainder of the Participant's vested interest in his Account beginning as soon
as reasonably practicable following the Participant's date of death in a form
that provides for distribution at least as rapidly as under the form in which
the Participant was receiving distribution.
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15.3 CASH OUTS AND PARTICIPANT CONSENT
Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Account does not exceed $5,000,
distribution of such vested interest shall be made to the Participant in a
single sum payment or through a direct rollover, as described in Article XVI, as
soon as reasonably practicable following his Settlement Date. If a Participant
has no vested interest in his Account on his Settlement Date, he shall be deemed
to have received distribution of such vested interest on his Settlement Date.
If a Participant's vested interest in his Account exceeds $5,000, distribution
shall not commence to such Participant prior to his Normal Retirement Date
without the Participant's written consent.
15.4 REQUIRED COMMENCEMENT OF DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, distribution of
a Participant's vested interest in his Account shall commence to the Participant
no later than the earlier of:
(a) unless the Participant elects a later date, 60 days after the close of
the Plan Year in which (i) the Participant's Normal Retirement Date
occurs, (ii) the tenth anniversary of the year in which he commenced
participation in the Plan occurs, or (iii) his Settlement Date occurs,
whichever is latest; or
(b) his Required Beginning Date.
Distributions required to commence under this Section shall be made in the form
provided under Article XVI and in accordance with Code Section 401(a)(9) and
regulations issued thereunder, including the minimum distribution incidental
benefit requirements.
15.5 REEMPLOYMENT OF A PARTICIPANT
If a Participant whose Settlement Date has occurred is reemployed by an Employer
or a Related Company, he shall lose his right to any distribution or further
distributions from the Trust arising from his prior Settlement Date and his
interest in the Trust shall thereafter be treated in the same manner as that of
any other Participant whose Settlement Date has not occurred.
15.6 RESTRICTIONS ON ALIENATION
Except as provided in Code Section 401(a)(13) (relating to qualified domestic
relations orders), Code Section 401(a)(13)(C) and (D) (relating to offsets
ordered or required under a criminal conviction involving the Plan, a civil
judgment in connection with a violation or alleged violation of fiduciary
responsibilities under ERISA, or a settlement agreement between the Participant
and the Department of Labor in connection with a violation or alleged violation
of
44
fiduciary responsibilities under ERISA), Section 1.401(a)-13(b)(2) of Treasury
regulations (relating to Federal tax levies and judgments), or as otherwise
required by law, no benefit under the Plan at any time shall be subject in any
manner to anticipation, alienation, assignment (either at law or in equity),
encumbrance, garnishment, levy, execution, or other legal or equitable process;
and no person shall have power in any manner to anticipate, transfer, assign
(either at law or in equity), alienate or subject to attachment, garnishment,
levy, execution, or other legal or equitable process, or in any way encumber his
benefits under the Plan, or any part thereof, and any attempt to do so shall be
void.
15.7 FACILITY OF PAYMENT
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefore shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment only upon receipt of written instructions to
such effect from the Administrator. Any such payment shall be charged to the
Account from which any such payment would otherwise have been paid to the
individual found incapable of attending to his financial affairs and shall be a
complete discharge of any liability therefore under the Plan.
15.8 INABILITY TO LOCATE PAYEE
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within a reasonable
period after the Administrator mails written notice of his eligibility to
receive a distribution hereunder to his last known address and makes such other
diligent effort to locate the person as the Administrator determines, that
benefit will be forfeited. However, if the payee later files a claim for that
benefit, the benefit will be restored.
15.9 DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS
Notwithstanding any other provision of the Plan to the contrary, if a qualified
domestic relations order so provides, distribution may be made to an alternate
payee pursuant to a qualified domestic relations order, as defined in Code
Section 414(p), regardless of whether the Participant's Settlement Date has
occurred or whether the Participant is otherwise entitled to receive a
distribution under the Plan. The Administrator shall establish procedures to
determine the qualified status of domestic relations orders and to administer
distributions under such orders in accordance with Code Section 414(p).
45
15.10 SPECIAL PROVISIONS RELATING TO FORMER PROFIT SHARING PLAN PARTICIPANTS
(a) Effective on the close of business on January 24, 2002 (the "Merger
Date"), the Premier Farnell Corp. Master Profit Sharing Plan (a frozen
plan) (the "Profit Sharing Plan") was merged into the Plan.
Notwithstanding any other provision of the Plan to the contrary, the
provisions of this Section shall apply to former Profit Sharing Plan
participants.
(b) Amounts transferred from the Profit Sharing Plan shall be allocated to
a "transferee Sub-Account" in the name of each former Profit Sharing
Plan participant, in accordance with the provisions of Section 21.15
hereof.
(c) Unless or until a former Profit Sharing Plan participant makes an
election with respect to the investment of his transferee Sub-Account
balance, such Sub-Account shall be invested in the default investment
fund designated by the Plan Administrator.
(d) The transferee Sub-Accounts of all former Profit Sharing Plan
participants shall be fully vested.
(e) The benefit payable with respect to a Participant who was a former
Profit Sharing Plan participant (including, without limitation, persons
whose account balances were transferred to the Profit Sharing Plan from
the Premier Farnell Corp. Employee Stock Ownership Plan & Trust
("PAYSOP")) shall be equal to the amount of the Participant's
transferee Sub-Account balance which was transferred to the Plan on the
Merger Date (as adjusted for subsequent investment gains or losses).
Such benefit shall be paid in accordance with the terms and conditions
of the Profit Sharing Plan as in effect on the Merger Date, which terms
and conditions are described below:
(i) Former Profit Sharing Plan participants shall be entitled to
receive a distribution of their transferee Sub-Account balance
at any time (including periods prior to a termination of
employment).
(ii) The transferee Sub-Account balances of former Profit Sharing
Plan participants shall be paid only in the form of a single
lump sum payment, equal to the entire value of such
Sub-Account.
(iii) The transferee Sub-Account balances of former Profit Sharing
Plan participants who were not former PAYSOP participants
shall be paid in cash, except to the extent that such
participants shall be permitted to receive distribution in the
form of Employer stock, to the extent such transferee
Sub-Account is invested therein. The transferee Sub-Account
balances of former Profit Sharing Plan participants who were
former PAYSOP participants shall be paid in cash, except that
such participants shall be permitted to elect to receive all
or a portion of such
46
distribution in the form of Employer stock (whether or not
such transferee Sub-Account is invested therein).
(iv) To the extent they are not contrary to the foregoing
provisions, the provisions of Articles VIII, X, XI and XV
through XXII shall also apply to the transferee Sub-Account
balances of former Profit Sharing Plan participants.
47
ARTICLE XVI
FORM OF PAYMENT
16.1 NORMAL FORM OF PAYMENT
Unless a Participant, or his Beneficiary, if the Participant has died, elects
the optional form of payment, distribution shall be made to the Participant, or
his Beneficiary, as the case may be, in a single sum cash payment.
16.2 OPTIONAL FORM OF PAYMENT
A Participant, or his Beneficiary, as the case may be, may elect to receive
distribution of all or a portion of his Account in a series of monthly cash
installments over a period not exceeding ten years or, if less, the life
expectancy of the Participant, or the Participant's Beneficiary, if the
Participant has died, or a period not exceeding the joint life and last survivor
expectancy of the Participant and his Beneficiary. Each installment shall be
equal in amount except as necessary to adjust for any changes in the value of
the Participant's Account. The determination of life expectancies shall be made
on the basis of the expected return multiples in Tables V or VI of Section
1.72-9 of the Treasury regulations and shall be calculated once at the time
installment payments begin.
16.3 CHANGE OF ELECTION
A Participant or Beneficiary who has elected the optional form of payment may
revoke or change his election at any time prior to his Benefit Payment Date by
filing his election with the Administrator in the form prescribed by the
Administrator.
16.4 DIRECT ROLLOVER
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in a form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have a portion or all of any "eligible
rollover distribution" paid directly by the Plan to the "eligible retirement
plan" designated by the "qualified distributee". Any such payment by the Plan to
another "eligible retirement plan" shall be a direct rollover.
Notwithstanding the foregoing, a "qualified distributee" may not elect a direct
rollover with respect to an "eligible rollover distribution" if the total value
of such distribution is less than $200 or with respect to a portion of an
"eligible rollover distribution" if the value of such portion is less than $500.
For purposes of this Section, the following terms have the following meanings:
48
(a) An "eligible retirement plan" means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a)
that accepts rollovers; provided, however, that, in the case of a
direct rollover by a surviving spouse, an eligible retirement plan does
not include a qualified trust described in Code Section 401(a).
(b) An "eligible rollover distribution" means any distribution of all or
any portion of the balance of a Participant's Account; provided,
however, that an eligible rollover distribution does not include the
following:
(i) any distribution to the extent such distribution is required
under Code Section 401(a)(9).
(ii) any distribution that is one of a series of substantially
equal periodic payment made not less frequently than annually
for the life or life expectancy of the "qualified distributee"
or the joint lives or life expectancies of the "qualified
distributee" and the "qualified distributee's" designated
beneficiary, or for a specified period of ten years or more.
(iii) any hardship withdrawal of Tax-Deferred Contributions made in
accordance with the provisions of Article XIII.
(c) A "qualified distributee" means a Participant, his surviving spouse, or
his spouse or former spouse who is an alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p).
16.5 NOTICE REGARDING FORMS OF PAYMENT
Within the 60 day period ending 30 days before a Participant's Benefit Payment
Date, the Administrator shall provide the Participant with a written explanation
of his right to defer distribution until his Normal Retirement Date, or such
later date as may be provided in the Plan, his right to make a direct rollover,
and the forms of payment provided under the Plan. Distribution of the
Participant's Account may commence fewer than 30 days after such notice is
provided to the Participant if (i) the Administrator clearly informs the
Participant of his right to consider his election of whether or not to make a
direct rollover or to receive a distribution prior to his Normal Retirement Date
and his form of payment for a period of at least 30 days following his receipt
of the notice and (ii) the Participant, after receiving the notice,
affirmatively elects an early distribution.
49
16.6 REEMPLOYMENT
If a Participant is reemployed by an Employer or a Related Company prior to
receiving distribution of the entire balance of his vested interest in his
Account, his prior election of a form of payment hereunder shall become
ineffective.
16.7 DISTRIBUTION IN THE FORM OF EMPLOYER STOCK
Notwithstanding any other provision of the Plan to the contrary, to the extent
that his Account is invested in Employer stock on the date distribution is to be
made to a Participant, the Participant may elect to receive distribution of the
fair market value of such Account in the form of Employer stock.
50
ARTICLE XVII
BENEFICIARIES
17.1 DESIGNATION OF BENEFICIARY
An unmarried Participant's Beneficiary shall be the person or persons designated
by such Participant in accordance with rules prescribed by the Administrator. A
married Participant's Beneficiary shall be his spouse, unless the Participant
designates a person or persons other than his spouse as Beneficiary with his
spouse's written consent. For purposes of this Section, a Participant shall be
treated as unmarried and spousal consent shall not be required if the
Participant is not married on his Benefit Payment Date.
If no Beneficiary has been designated pursuant to the provisions of this
Section, or if no Beneficiary survives the Participant and he has no surviving
spouse, then the Beneficiary under the Plan shall be the Participant's estate.
If a Beneficiary dies after becoming entitled to receive a distribution under
the Plan but before distribution is made to him in full, and if the Participant
has not designated another Beneficiary to receive the balance of the
distribution in that event, the estate of the deceased Beneficiary shall be the
Beneficiary as to the balance of the distribution.
17.2 SPOUSAL CONSENT REQUIREMENTS
Any written spousal consent given pursuant to this Article must acknowledge the
effect of the action taken and must be witnessed by a Plan representative or a
notary public. In addition, the spouse's written consent must either (i) specify
any non-spouse Beneficiary designated by the Participant and that such
Beneficiary may not be changed without written spousal consent or (ii)
acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, but permit the Participant to change the designated Beneficiary
without the spouse's further consent. A Participant's spouse will be deemed to
have given written consent to the Participant's designation of Beneficiary if
the Participant establishes to the satisfaction of a Plan representative that
such consent cannot be obtained because the spouse cannot be located or because
of other circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. Any written consent given or deemed to have been
given by a Participant's spouse hereunder shall be valid only with respect to
the spouse who signs the consent.
51
ARTICLE XVIII
ADMINISTRATION
18.1 AUTHORITY OF THE SPONSOR
The Sponsor, which shall be the administrator for purposes of ERISA and the Plan
Administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out its
duties hereunder. The Sponsor shall be a "named fiduciary" as that term is
defined in ERISA Section 402(a)(2). The Sponsor, by action of its board of
directors, may:
(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan (other than trustee
responsibilities as defined in ERISA Section 405(c)(3)) among named
fiduciaries; and
(b) designate a person or persons other than a named fiduciary to carry out
any of such powers, authority, or responsibilities;
except that no allocation by the Sponsor of, or designation by the
Sponsor with respect to, any of such powers, authority, or
responsibilities to another named fiduciary or a person other than a
named fiduciary shall become effective unless such allocation or
designation shall first be accepted by such named fiduciary or other
person in a writing signed by it and delivered to the Sponsor.
(c) The Board of Directors of the Sponsor shall appoint an Administrative
Committee (the "Committee") to act as Administrator hereof. The
Administrative Committee shall consist of two or more members who may
be, but are not required to be, Participants, Employees, directors,
officers or shareholders of any Employer or Related Employer. The
Sponsor shall certify the names of the Committee members to the Trustee
and the Trustee may rely on any such certification until it receives
written notice from the Sponsor as to a change in the Committee
members. The members of the Committee shall serve without remuneration
for such services and shall have such functions and duties with respect
to the Plan as are specifically conferred upon it by the Plan or as may
be delegated to it. Any action taken by the Administrative Committee
with respect to the rights or benefits under the Plan of any person
shall be revocable by the Committee as to payments or distributions not
theretofore made; and appropriate adjustments may be made in future
payments or distributions to a person to offset any excess payment or
52
underpayment theretofore made to such person from the Plan. The
Committee may adopt and amend such rules for its government and the
conduct of its business as it deems advisable. Except as otherwise
provided in such rules, any action authorized, permitted or required to
be taken by the Committee may be taken by any two of its members either
at a meeting or in writing without a meeting.
18.2 DISCRETIONARY AUTHORITY
In carrying out its duties under the Plan, including making benefit
determinations, interpreting or construing the provisions of the Plan, and
resolving disputes, the Sponsor (or any individual to whom authority has been
delegated in accordance with Section 18.1) shall have absolute discretionary
authority.
18.3 ACTION OF THE SPONSOR
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18.1, may be
taken by a majority of the members of the board of directors of the Sponsor,
either by vote at a meeting, or in writing without a meeting, or by the employee
or employees of the Sponsor designated by the board of directors to carry out
such acts on behalf of the Sponsor. All notices, advice, directions,
certifications, approvals, and instructions required or authorized to be given
by the Sponsor as under the Plan shall be in writing and signed by either (i) a
majority of the members of the Sponsor's board of directors or by such member or
members as may be designated by an instrument in writing, signed by all the
members thereof, as having authority to execute such documents on its behalf, or
(ii) the employee or employees authorized to act for the Sponsor in accordance
with the provisions of this Section.
18.4 CLAIMS REVIEW PROCEDURE
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Administrative Committee shall (within 90 days after such claim was filed, plus
an additional 90 days if the Administrative Committee determines that special
circumstances require an extension, of time for processing the claim and if
written notice of the additional 90-day extension of time indicating the
specific circumstances requiring the extension and the date by which a decision
shall be rendered is given to the Claimant within the first 90-day period)
transmit a written notice of such decision to the Claimant, which notice shall
be written in a manner calculated to be understood by the Claimant and shall
contain a statement of (i) the specific reasons for the denial of the claim,
(ii) specific reference to pertinent Plan and/or Trust Agreement provisions on
which the denial is based, (iii) a description of any additional material or
information necessary for the Claimant to perfect the claim and an explanation
of why such information is necessary, and (iv) the Plan's review procedures and
the time limits applicable to such procedures, including a statement that the
53
Claimant has a right to bring a civil action under ERISA Section 502(a) if the
decision on review is adverse to the Claimant. The notice shall also include a
statement advising the Claimant that, within 60 days of the date on which he
receives such notice, he may obtain review of such decision in accordance with
the procedures hereinafter set forth.
(a) the date on which the Claimant's request was filed with the
Administrative Committee; provided, however, that the date on which the
Claimant's request for review was in fact filed with the Administrative
Committee shall control in the event that the date of the actual filing
is later than the date stated by the Claimant pursuant to this
paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Administrative Committee to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the previous denial of his claim for benefits should be
reversed and accept his claim as made; and
(d) any written material (offered as exhibits) which the Claimant desires
the reviewer to examine in its consideration of his position as stated
pursuant to paragraph (c) of this Section.
If an appeal is so filed, the Committee, or a named fiduciary designated by the
Committee, shall conduct a full and fair review of such appeal. To the extent
that a named fiduciary is appointed to conduct the review procedure, such named
fiduciary shall have the same powers to interpret the Plan as are granted to the
Administrative Committee under Section 18.8. During such full and fair review,
the Claimant shall be provided with the opportunity to submit written comments,
documents, records, and other information relating to the claim for benefits,
and reasonable access to and copies of, upon request and free of charge, all
documents, records, and other information relevant to the Claimant's claim for
benefits. In addition, such full and fair review shall 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.
Within 60 days of the date determined pursuant to paragraph (a) of this Section
the reviewer shall render its written decision on review to the Claimant unless
special circumstances require an extension of time for processing. If the
Committee, or named fiduciary designated by the Committee, determines that an
extension of time for processing is required, written notice of the extension
shall be furnished to the Claimant who filed the appeal setting forth the
special circumstances requiring an extension of time and the date by which the
Committee, or the named fiduciary, designated by the Committee expects to render
a decision on review, and shall be furnished prior to the termination of the
initial 60-day period. In no event shall such extension exceed a period of 60
days from the end of the initial 60-day period. The reviewer's decision shall
(i) be written in a manner calculated to be understood by the Claimant, (ii)
specify the
54
reasons for the decision, (iii) make reference to the specific provisions of the
Plan and/or Trust Agreement on which the determination was based, (iv) contain 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 (v) contain a
statement that no additional appeal procedures are offered by the Plan; provided
the Claimant has the right to bring an action under ERISA Section 502(a). To the
extent permitted by applicable law, the determination on review shall be final
and binding on all interested persons.
18.5 QUALIFIED DOMESTIC RELATIONS ORDERS
The Administrator shall establish reasonable procedures to determine the status
of domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures shall
be in writing and shall comply with the provisions of Code Section 414(p) and
regulations issued thereunder.
18.6 INDEMNIFICATION
In addition to whatever rights of indemnification the Trustee or the members of
the Sponsor's board of directors or any employee or employees of the Sponsor to
whom any power, authority, or responsibility is delegated pursuant to Section
18.1 or 18.3, may be entitled under the articles of incorporation or regulations
of the Sponsor, under any provision of law, or under any other agreement, the
Sponsor shall satisfy any liability actually and reasonably incurred by any such
person or persons, including expenses, attorneys' fees, judgments, fines, and
amounts paid in settlement (other than amounts paid in settlement not approved
by the Sponsor), in connection with any threatened, pending or completed action,
suit, or proceeding which is related to the exercising or failure to exercise by
such person or persons of any of the powers, authority, responsibilities, or
discretion as provided under the Plan, or reasonably believed by such person or
persons to be provided hereunder, and any action taken by such person or persons
in connection therewith, unless the same is judicially determined to be the
result of such person or persons' gross negligence or willful misconduct.
18.7 ACTIONS BINDING
Subject to the provisions of Section 18.4, any action taken by the Sponsor which
is authorized, permitted, or required under the Plan shall be final and binding
upon the Employers, the Trustee, all persons who have or who claim an interest
under the Plan, and all third parties dealing with the Employers or the Trustee.
55
18.8 PLAN INTERPRETATIONS AND FINDINGS OF FACT
The Committee shall have sole and absolute discretion to interpret the
provisions of the Plan (including, without limitation, by supplying omissions
from, correcting deficiencies in, or resolving inconsistencies or ambiguities
in, the language of the Plan), to make factual findings with respect to any
issue arising under the Plan, to determine the rights and status under the Plan
of Participants and other persons, to decide disputes arising under the Plan and
to make any determinations and findings (including factual findings) with
respect to the benefits payable thereunder and the persons entitled thereto as
may be required for the purposes of the Plan.
18.9 FILING OF DOCUMENTS
Although various provisions of the Plan provide for the filing with the
Employers or the Administrator of various documents, the Administrator may, by
general announcement, specifically designated some other person(s), office(s) or
department(s) with whom or which any or all of the documents may be filed.
18.10 PLAN CONVERSIONS
Notwithstanding any provision of the Plan to the contrary, during any conversion
period, in accordance with procedures established by the Administrator and
subject to the requirements of applicable law, the Administrator may temporarily
suspend, in whole or in part, certain provisions of the Plan, which may include,
but are not limited to, a Participant's right to change his contribution
election, a Participant's right to change his investment election and a
Participant's right to borrow or withdraw from his Account or obtain a
distribution from his Account.
56
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 AMENDMENT
Subject to the provisions of Section 19.2, the Sponsor may at any time and from
time to time, by action of the Administrative Committee, amend the Plan, either
prospectively or retroactively. Any such amendment shall be by written
instrument executed by two members of the Administrative Committee and shall be
effective as of the date designated in such instrument. If no effective date is
designated, the amendment will be effective on the date of the execution of the
amendment.
19.2 LIMITATION ON AMENDMENT
The Administrative Committee shall make no amendment to the Plan which shall
decrease the accrued benefit of any Participant or Beneficiary, except that
nothing contained herein shall restrict the right to amend the provisions of the
Plan relating to the administration of the Plan and Trust. Moreover, no such
amendment shall be made hereunder which shall permit any part of the Trust to
revert to an Employer or any Related Company or be used or be diverted to
purposes other than the exclusive benefit of Participants and Beneficiaries. The
Administrative Committee shall make no retroactive amendment to the Plan unless
such amendment satisfies the requirements of Code Section 401(b) and/or Section
1.401(a)(4)-11(g) of the Treasury regulations, as applicable.
19.3 TERMINATION
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon any
such termination of the Plan, the following actions shall be taken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and
all Accounts and Sub-Accounts shall be adjusted in the manner provided
in Article XI, with any unallocated contributions or forfeitures being
allocated as of the termination date in the manner otherwise provided
in the Plan. The termination date shall become a Valuation Date for
purposes of Article XI. In determining the net worth of the Trust,
there shall be included as a liability such amounts as shall be
necessary to pay all expenses in connection with the termination of the
Trust and the liquidation and distribution of the property of the
Trust, as well as other expenses, whether or not accrued, and shall
include as an asset all accrued income.
57
(b) All Accounts shall then be disposed of to or for the benefit of each
Participant or Beneficiary in accordance with the provisions of Article
XV as if the termination date were his Settlement Date; provided,
however, that notwithstanding the provisions of Article XV, if the Plan
does not offer an annuity option and if neither his Employer nor a
Related Company establishes or maintains another defined contribution
plan (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)), the Participant's written consent to the
commencement of distribution shall not be required regardless of the
value of the vested portions of his Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the
balance of his Tax-Deferred Contributions Sub-Account prior to his
separation from service (other than a distribution made in accordance
with Article XIII or required in accordance with Code Section
401(a)(9)) unless (i) neither his Employer nor a Related Company
establishes or maintains another defined contribution plan (other than
an employee stock ownership plan as defined in Code Section 4975(e)(7),
a tax credit employee stock ownership plan as defined in Code Section
409, or a simplified employee pension as defined in Code Section
408(k)) either at the time the Plan is terminated or at any time during
the period ending 12 months after distribution of all assets from the
Plan; provided, however, that this provision shall not apply if fewer
than two percent of the Eligible Employees under the Plan were eligible
to participate at any time in such other defined contribution plan
during the 24-month period beginning 12 months before the Plan
termination, and (ii) the distribution the Participant receives is a
"lump sum distribution" as defined in Code Section 402(e)(4), without
regard to clauses (I), (II), (III), and (IV) of sub-paragraph (D)(i)
thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each Participant and Beneficiary in his
Employer Contributions Sub-Account shall be 100 percent; and, if there is a
partial termination of the Plan, the vested interest of each Participant and
Beneficiary who is affected by the partial termination in his Employer
Contributions Sub-Account shall be 100 percent. For purposes of the preceding
sentence only, the Plan shall be deemed to terminate automatically if there
shall be a complete discontinuance of contributions hereunder by all Employers.
19.4 REORGANIZATION
The merger, consolidation, or liquidation of any Employer with or into any other
Employer or a Related Company shall not constitute a termination of the Plan as
to such Employer. If an Employer disposes of substantially all of the assets
used by the Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such Participant
from his Tax-Deferred Contributions Sub-Account prior to his separation from
service (other than a
58
distribution made in accordance with Article XIII or required in accordance with
Code Section 401(a)(9)), except that a distribution shall be permitted to be
made in such a case, subject to the Participant's consent (to the extent
required by law), if (i) the distribution would constitute a "lump sum
distribution" as defined in Code Section 402(e)(4), without regard to clauses
(I), (II), (III), or (IV) of sub-paragraph (D)(i) thereof, (ii) the Employer
continues to maintain the Plan after the disposition, (iii) the purchaser does
not maintain the Plan after the disposition, and (iv) the distribution is made
by the end of the second calendar year after the calendar year in which the
disposition occurred.
19.5 WITHDRAWAL OF AN EMPLOYER
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor or
any other Employer. Upon the withdrawal of an Employer, the withdrawing Employer
shall determine whether a partial termination has occurred with respect to its
Eligible Employees. In the event that the withdrawing Employer determines a
partial termination has occurred, the action specified in Section 19.3 shall be
taken as of the withdrawal date, as on a termination of the Plan, but with
respect only to Participants who are employed solely by the withdrawing
Employer, and who, upon such withdrawal, are neither transferred to nor
continued in employment with any other Employer or a Related Company. The
interest of any Participant employed by the withdrawing Employer who is
transferred to or continues in employment with any other Employer or a Related
Company, and the interest of any Participant employed solely by an Employer or a
Related Company other than the withdrawing Employer, shall remain unaffected by
such withdrawal; no adjustment to his Accounts shall be made by reason of the
withdrawal; and he shall continue as a Participant hereunder subject to the
remaining provisions of the Plan.
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ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 ADOPTION BY RELATED COMPANIES
A Related Company that is not an Employer may, with the consent of the Sponsor,
adopt the Plan and become an Employer hereunder by causing an appropriate
written instrument evidencing such adoption to be executed in accordance with
the requirements of its organizational authority. Any such instrument shall
specify the effective date of the adoption.
20.2 EFFECTIVE PLAN PROVISIONS
An Employer who adopts the Plan shall be bound by the provisions of the Plan in
effect at the time of the adoption and as subsequently in effect because of any
amendment to the Plan.
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 NO COMMITMENT AS TO EMPLOYMENT
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any period.
21.2 BENEFITS
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 NO GUARANTEES
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount which
may become due to any person hereunder.
21.4 EXPENSES
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust as a general
charge thereon, unless the Sponsor elects to make payment or directs the
Employers to make payment. Notwithstanding the foregoing, the Sponsor (or its
delegate) may direct that administrative expenses that are allocable to the
Account of a specific Participant shall be paid from that Account and that the
costs incident to the management of the assets of an Investment Fund or to the
purchase or sale of securities held in an Investment Fund shall be paid by the
Trustee from such Investment Fund. . In furtherance of, but without limiting the
foregoing, (1) the Account of a Participant shall be charged an annual
administrative fee in an amount determined from time to time by the
Administrator and (2) the Account of a Participant who elects to receive a
distribution or withdrawal shall be charged an administrative fee for the
process of such distribution or withdrawal.
21.5 PRECEDENT
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
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21.6 DUTY TO FURNISH INFORMATION
The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
the other reasonably deems necessary to perform its duties hereunder or
otherwise imposed by law.
21.7 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS
The Sponsor (by action of the Administrative Committee) reserves the right to
merge or consolidate all or part of the assets of the Plan with another Plan.
The Plan shall not be merged or consolidated with any other plan, nor shall any
of its assets or liabilities be transferred to another plan, unless, immediately
after such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at least
equal to the benefit he would have received immediately prior to such merger,
consolidation, or transfer of assets or liabilities (assuming in each instance
that the Plan had then terminated).
21.8 BACK PAY AWARDS
The provisions of this Section shall apply only to an Eligible Employee or
former Eligible Employee who becomes entitled to back pay by an award or
agreement of an Employer without regard to mitigation of damages. If a person to
whom this Section applies was or would have become an Eligible Employee after
such back pay award or agreement has been effected, and if any such person who
had not previously elected to make Tax-Deferred Contributions pursuant to
Section 4.1 shall within 30 days of the date he receives notice of the
provisions of this Section make an election to make Tax-Deferred Contributions
in accordance with such Section 4.1 (retroactive to any Enrollment Date as of
which he was or has become eligible to do so), then such Participant may elect
that any Tax-Deferred Contributions not previously made on his behalf but which,
after application of the foregoing provisions of this Section, would have been
made under the provisions of Article IV shall be made out of the proceeds of
such back pay award or agreement. In addition, if any such Employee or former
Employee would have been eligible to participate in the allocation of Employer
Contributions under the provisions of Article VI or XXII for any prior Plan Year
after such back pay award or agreement has been effected, his Employer shall
make an Employer Contribution equal to the amount of the Employer Contribution
which would have been allocated to such Participant under the provisions of
Article VI or XXII as in effect during each such Plan Year. The amounts of such
additional contributions shall be credited to the Account of such Participant.
Any additional contributions made pursuant to this Section shall be made in
accordance with, and subject to the limitations of the applicable provisions of
the Plan.
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21.9 CONDITION ON EMPLOYER CONTRIBUTIONS
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Code Section 401(a), the exempt status
of the Trust under Code Section 501(a), and the deductibility of the
contribution under Code Section 404. Except as otherwise provided in this
Section and Section 21.10, however, in no event shall any portion of the
property of the Trust ever revert to or otherwise inure to the benefit of an
Employer or any Related Company.
21.10 RETURN OF CONTRIBUTIONS TO AN EMPLOYER
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Code Section 404,
such contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the extent
disallowed, whichever is applicable. In the event the Plan does not initially
qualify under Code Section 401(a), any contribution of an Employer made
hereunder may be returned to the Employer within one year of the date of denial
of the initial qualification of the Plan, but only if an application for
determination was made within the period of time prescribed under ERISA Section
403(c)(2)(B).
21.11 VALIDITY OF PLAN
The validity of the Plan shall be determined and the Plan shall be construed and
interpreted in accordance with the laws of the state or commonwealth in which
the Trustee has its principal place of business or, if the Trustee is an
individual or group of individuals, the state or commonwealth in which the
Sponsor has its principal place of business, except as preempted by applicable
Federal law. The invalidity or illegality of any provision of the Plan shall not
affect the legality or validity of any other part thereof.
21.12 TRUST AGREEMENT
The Trust Agreement and the Trust maintained thereunder shall be deemed to be a
part of the Plan as if fully set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the Plan.
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21.13 PARTIES BOUND
The Plan shall be binding upon the Employers, all Participants and Beneficiaries
hereunder, and, as the case may be, the heirs, executors, administrators,
successors, and assigns of each of them.
21.14 APPLICATION OF CERTAIN PLAN PROVISIONS
For purposes of the general administrative provisions and limitations of the
Plan, a Participant's Beneficiary or alternate payee under a qualified domestic
relations order shall be treated as any other person entitled to receive
benefits under the Plan. Upon any termination of the Plan, any such Beneficiary
or alternate payee under a qualified domestic relations order who has an
interest under the Plan at the time of such termination, which does not cease by
reason thereof, shall be deemed to be a Participant for all purposes of the
Plan. A Participant's Beneficiary, if the Participant has died, or alternate
payee under a qualified domestic relations order shall be treated as a
Participant for purposes of directing investments as provided in Article X.
21.15 MERGED PLANS
In the event another defined contribution plan (the "merged plan") is merged
into and made a part of the Plan, each Employee who was eligible to participate
in the "merged plan" immediately prior to the merger shall become a Participant
on the date of the merger. Such Employees shall only become Eligible Employees
if they satisfy the requirements of Sections 1.1 and 3.1 of the Plan, in which
case they shall become Eligible Employees on the date of the merger. In no event
shall a Participant's vested interest in his Sub-Account attributable to amounts
transferred to the Plan from the "merged plan" (his "transferee Sub-Account") on
and after the merger be less than his vested interest in his account under the
"merged plan" immediately prior to the merger. Notwithstanding any other
provision of the Plan to the contrary, a Participant's service credited for
eligibility and vesting purposes under the "merged plan" as of the merger, if
any, shall be included as Eligibility and Vesting Service under the Plan to the
extent Eligibility and Vesting Service are credited under the Plan. Special
provisions applicable to a Participant's "transferee Sub-Account", if any, shall
be specifically reflected in the Plan or in an Addendum to the Plan.
21.16 TRANSFERRED FUNDS
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and shall
be accounted for separately to the extent necessary to accomplish the foregoing.
In addition, notwithstanding any other provision of the Plan to the contrary,
the forms of payment and other provisions that were available with respect to
such funds immediately prior to the transfer or merger and that may not be
eliminated under Section
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411(d)(6) of the Code shall continue to be available under the Plan with respect
to amounts attributable to the transferred or merged funds.
21.17 VETERANS REEMPLOYMENT RIGHTS
Notwithstanding any other provision of the Plan to the contrary, contributions,
benefits, and service credit with respect to qualified military service shall be
provided in accordance with Code Section 414(u). The Administrator shall notify
the Trustee of any Participant with respect to whom additional contributions are
made because of qualified military service.
21.18 DELIVERY OF CASH AMOUNTS
To the extent that the Plan requires the Employers to deliver cash amounts to
the Trustee, such delivery may be made through any means acceptable to the
Trustee, including wire transfer.
21.19 WRITTEN COMMUNICATIONS
Any communication among the Employers, the Administrator, and the Trustee that
is stipulated under the Plan to be made in writing may be made in any medium
that is acceptable to the receiving party and permitted under applicable law. In
addition, any communication or disclosure to or from Participants and/or
Beneficiaries that is required under the terms of the Plan to be made in writing
may be provided in any other medium (electronic, telephonic, or otherwise) that
is acceptable to the Administrator and permitted under applicable law.
21.20 EMPLOYER STOCK PROVISIONS
(a) Voting and Consents. Employer stock held by the Trustee in Participant
Accounts shall be voted by the Trustee at each stockholders meeting as
instructed in writing by the Participant to whose Account such stock is
credited, subject to the provisions of this Section. A reasonable time
prior to the meeting, the Administrator shall cause each Participant to
be provided with a copy of the notice of each meeting of stockholders
and the proxy statement relating thereto, together with an appropriate
form for the Participant to indicate his voting or consent instructions
to the Trustee. If instructions are not received by the Trustee with
respect to any Employer stock at least ten (10) days prior to such
meeting, the Trustee shall vote the uninstructed stock or give such
consents in the same proportions as the Trustee was instructed to vote
or give such consents with respect to all of the stock held in the
Accounts for which it received instructions.
(b) Tender or Exchange Offer. In the event of a tender or exchange offer
for shares of Employer stock, the Administrative Committee shall
utilize its best efforts to timely distribute or cause to be
distributed to each Participant (or Beneficiary, if applicable) such
information as will be distributed to stockholders in connection with
any such tender or
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exchange offer, together with a form requesting confidential
instructions as to whether or not shares of Employer stock in such
Participant's Account shall be tendered or exchanged by the Trustee.
Each Participant (or Beneficiary) shall have the right, to the extent
of shares of stock in the Participant's Account, to direct the Trustee
in writing as to the manner in which to respond to such tender or
exchange offer and the Trustee shall respond in accordance with the
instructions so received. If the Trustee shall not receive timely
direction from a Participant (or Beneficiary) as to the manner in which
to respond to such tender or exchange offer, the Trustee shall not
tender or exchange any shares of stock held in such Participant's
Account and the Trustee shall have no discretion in such matter. The
Trustee shall not divulge to the Employer the instructions of any
Participant.
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ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 DEFINITIONS
For purposes of this Article, the following terms shall have the following
meanings:
The "COMPENSATION" of an employee means compensation as defined in Code Section
415 and regulations issued thereunder. In no event, however, shall the
"compensation" of a Participant taken into account under the Plan for any Plan
Year exceed $150,000 (subject to adjustment annually as provided in Code
Sections 401(a)(17)(B) and 415(d); provided, however, that the dollar increase
in effect on January 1 of any calendar year, if any, is effective for Plan Years
beginning in such calendar year). If the "compensation" of a Participant is
determined over a period of time that contains fewer than 12 calendar months,
then the annual "compensation" limitation described above shall be adjusted with
respect to that Participant by multiplying the annual "compensation" limitation
in effect for the Plan Year by a fraction the numerator of which is the number
of full months in the period and the denominator of which is 12; provided,
however, that no proration is "required" for a Participant who is covered under
the Plan for less than one full Plan Year if the formula for allocations is
based on "compensation" for a period of at least 12 months.
The "DETERMINATION DATE" with respect to any Plan Year means the last day of the
preceding Plan Year, except that the "determination date" with respect to the
first Plan Year of the Plan, shall mean the last day of such Plan Year.
A "KEY EMPLOYEE" means any Eligible Employee or former Eligible Employee who is
a "key employee" pursuant to the provisions of Code Section 416(i)(1) and any
Beneficiary of such Eligible Employee or former Eligible Employee.
A "NON-KEY EMPLOYEE" means any Eligible Employee who is not a "key employee".
A "PERMISSIVE AGGREGATION GROUP" means those plans included in each Employer's
"required aggregation group" together with any other plan or plans of the
Employer, so long as the entire group of plans would continue to meet the
requirements of Code Sections 401(a)(4) and 410.
A "REQUIRED AGGREGATION GROUP" means the group of tax-qualified plans maintained
by an Employer or a Related Company consisting of each plan in which a "key
employee" participates and each other plan that enables a plan in which a "key
employee" participates to meet the requirements of Code Section 401(a)(4) or
Code Section 410, including any plan that terminated within the five-year period
ending on the relevant "determination date".
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A "SUPER TOP-HEAVY GROUP" with respect to a particular Plan Year means a
"required" or "permissive aggregation group" that, as of the "determination
date", would qualify as a "top-heavy group" under the definition in this Section
with "90 percent" substituted for "60 percent" each place where "60 percent"
appears in the definition.
A "SUPER TOP-HEAVY PLAN" with respect to a particular Plan Year means a plan
that, as of the "determination date", would qualify as a "top-heavy plan" under
the definition in this Section with "90 percent" substituted for "60 percent"
each place where "60 percent" appears in the definition. A plan is also a "super
top-heavy plan" if it is part of a "super top-heavy group".
A "TOP-HEAVY GROUP" with respect to a particular Plan Year means a "required" or
"permissive aggregation group" if the sum, as of the "determination date", of
the present value of the cumulative accrued benefits for "key employees" under
all defined benefit plans included in such group and the aggregate of the
account balances of "key employees" under all defined contribution plans
included in such group exceeds 60 percent of a similar sum determined for all
employees covered by the plans included in such group.
A "TOP-HEAVY PLAN" with respect to a particular Plan Year means (i), in the case
of a defined contribution plan (including any simplified employee pension plan),
a plan for which, as of the "determination date", the aggregate of the accounts
(within the meaning of Code Section 416(g) and the regulations and rulings
thereunder) of "key employees" exceeds 60 percent of the aggregate of the
accounts of all participants under the plan, with the accounts valued as of the
relevant valuation date and increased for any distribution of an account balance
made in the five-year period ending on the "determination date", (ii), in the
case of a defined benefit plan, a plan for which, as of the "determination
date", the present value of the cumulative accrued benefits payable under the
plan (within the meaning of Code Section 416(g) and the regulations and rulings
thereunder) to "key employees" exceeds 60 percent of the present value of the
cumulative accrued benefits under the plan for all employees, with the present
value of accrued benefits for employees (other than "key employees") to be
determined under the accrual method uniformly used under all plans maintained by
an Employer or, if no such method exists, under the slowest accrual method
permitted under the fractional accrual rate of Code Section 411(b)(1)(C) and
including the present value of any part of any accrued benefits distributed in
the five-year period ending on the "determination date", and (iii) any plan
(including any simplified employee pension plan) included in a "required
aggregation group" that is a "top-heavy group". For purposes of this paragraph,
the accounts and accrued benefits of any employee who has not performed services
for an Employer or a Related Company during the five-year period ending on the
"determination date" shall be disregarded. For purposes of this paragraph, the
present value of cumulative accrued benefits under a defined benefit plan for
purposes of top-heavy determinations shall be calculated using the actuarial
assumptions otherwise employed under such plan, except that the same actuarial
assumptions shall be used for all plans within a "required" or "permissive
aggregation group". A Participant's interest in the Plan attributable to any
Rollover Contributions, except Rollover Contributions made from a plan
maintained by an
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Employer or a Related Company, shall not be considered in determining whether
the Plan is top-heavy. Notwithstanding the foregoing, if a plan is included in a
"required" or "permissive aggregation group" that is not a "top-heavy group",
such plan shall not be a "top-heavy plan".
The "VALUATION DATE" with respect to any "determination date" means the most
recent Valuation Date occurring within the 12-month period ending on the
"determination date".
22.2 APPLICABILITY
Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article shall be applicable during any Plan Year in which the Plan is
determined to be a "top-heavy plan" as hereinafter defined.
22.3 MINIMUM EMPLOYER CONTRIBUTION
If the Plan is determined to be a "top-heavy plan" for a Plan Year, the Employer
Contributions allocated to the Account of each "non-key employee" who is an
Eligible Employee and who is employed by an Employer or a Related Company on the
last day of such top-heavy Plan Year shall be no less than the lesser of (i)
three percent of his "compensation" or (ii) the largest percentage of
"compensation" that is allocated as an Employer Contribution and/or Tax-Deferred
Contribution for such Plan Year to the Account of any "key employee"; except
that, in the event the Plan is part of a "required aggregation group", and the
Plan enables a defined benefit plan included in such group to meet the
requirements of Code Section 401(a)(4) or 410, the minimum allocation of
Employer Contributions to each such "non-key employee" shall be three percent of
the "compensation" of such "non-key employee". In lieu of the minimum allocation
described in the preceding sentence, the Employer Contributions allocated to the
Account of each "non-key employee" who is employed by an Employer or a Related
Company on the last day of a top-heavy Plan Year and who is also covered under a
top-heavy defined benefit plan maintained by an Employer or a Related Company
will be no less than five percent of his "compensation". Any minimum allocation
to a "non-key employee" required by this Section shall be made without regard to
any social security contribution made on behalf of the non-key employee, his
number of hours of service, his level of "compensation", or whether he declined
to make elective or mandatory contributions.
Employer Contributions allocated to a Participant's Account in accordance with
this Section shall be considered "annual additions" under Article VII for the
"limitation year" for which they are made and shall be separately accounted for.
Employer Contributions allocated to a Participant's Account shall be allocated
upon receipt among the Investment Funds in accordance with the Participant's
currently effective investment election.
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22.5 ACCELERATED VESTING
If the Plan is determined to be a top-heavy plan, a Participant shall have an
immediate 100% vested interest in his Employer Contributions Sub-Account.
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ARTICLE XXIII
EFFECTIVE DATE
23.1 GUST EFFECTIVE DATES
Unless otherwise specifically provided by the terms of the Plan, this amendment
and restatement is effective with respect to each change made to satisfy the
provisions of (i) the Uniformed Services Employment and Reemployment Rights Act
of 1994 ("USERRA"), (ii) Small Business Job Protection Act of 1996 ("SBJPA"),
(iii) the Taxpayer Relief Act of 1997 ("TRA '97"), (iv) any other change in the
Code or ERISA, or (v) regulations, rulings, or other published guidance issued
under the Code, ERISA, USERRA, SBJPA, or TRA '97 (collectively the "GUST
required changes"), the first day of the first period (which may or may not be
the first day of a Plan Year) with respect to which such change became required
because of such provision (including any day that became such as a result of an
election or waiver by an Employee or a waiver or exemption issued under the
Code, ERISA, USERRA, SBJPA, or TRA '97), including, but not limited to, the
following:
(a) The addition of amounts deferred under Code Section 132(f)(4) to the
various definitions of compensation is effective January 1, 2001 and
the addition of "deemed 125 compensation" is effective January 1, 2002.
(b) The addition of a new Section to Article XXI entitled "Veterans
Reemployment Rights" is effective April 1, 1999.
(c) The changes to the 401(k) discrimination test in Article VII of the
Plan and changes to the method of correction where the Plan fails to
satisfy the test are effective for Plan Years beginning on or after
April 1, 1999.
(d) Changes in the definition of "Required Beginning Date" in Article I of
the Plan are effective April 1, 1999, but with respect only to
Employees who attain age 70 1/2 on or after that date.
(e) Changes to the anti-alienation provisions of Article XV to include the
exceptions in Code Section 401(a)(13)(C) and (D) are effective for
judgments, orders, and decrees issued and settlement agreements entered
into on or after April 1, 1999.
(f) Elimination of the look back rule for determining whether the value of
a Participant's Account exceeds the cashout limit is effective April 1,
1999.
(g) Exclusion of hardship withdrawals of Tax-Deferred Contributions from
the definition of "eligible rollover distribution" is effective May 1,
1999.
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(h) Elimination of the combined limit on defined benefit and defined
contribution plans under Code Section 415(e) is effective the first day
of the first "limitation year" beginning on or after January 1, 2000.
* * *
EXECUTED AT Independence, Ohio, this 31 day of March, 2003.
PREMIER FARNELL CORP.
By: /s/ Peter D. Costello
-------------------------------
Administrative Committee Member
And: /s/ Joseph R. Daprile
-------------------------------
Administrative Committee Member
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