EXHIBIT 10(i)
BIG LOTS, INC.
SAVINGS PLAN AND TRUST
AMENDED AND RESTATED
EFFECTIVE
JANUARY 1, 1999
BIG LOTS, INC.
SAVINGS PLAN AND TRUST
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Introduction 6
Section I - Definitions
1.01 Actual Contribution Percentage 7
1.02 Actual Deferral Percentage 7
1.03 Affiliate 7
1.04 Annual Additions 7
1.05 Associate 7
1.06 Beneficiary 8
1.07 Board 8
1.08 Break in Service 8
1.09 Code 8
1.10 Committee 8
1.11 Company 8
1.12 Company Profit Sharing Contribution Account 8
1.13 Company Profit Sharing Contributions 9
1.14 Compensation 9
1.15 Contributing Participant 9
1.16 Defined Benefit Plan 9
1.17 Defined Contribution Plan 9
1.18 Disability 9
1.19 Early Retirement Date 10
1.20 Effective Date 10
1.21 Eligibility Computation Period 10
1.22 Employer 10
1.23 Entry Date 10
1.24 Fiduciary 10
1.25 Former Participant 10
1.26 Fund 11
1.27 Highly Compensated Employee 12
1.28 Hour of Service 12
1.29 Income 12
1.30 Individual Account 12
1.31 Investment Fund 13
1.32 Investment Manager 13
1.33 Key Employee 14
1.34 Limitation Year 14
1.35 Matching Contribution Account 14
1.36 Matching Contributions 14
1.37 Normal Retirement Age 14
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1.38 Normal Retirement Date 14
1.39 Participant 14
1.40 Plan Year 14
1.41 Rollover Account 14
1.42 Rollover Contributions 14
1.43 Salary Deferral 14
1.44 Salary Deferral Account 14
1.45 Termination of Employment 15
1.46 Top Heavy Plan 16
1.47 Trust Agreement 16
1.48 Trustee 16
1.49 Valuation Date 16
1.50 Vesting Service 16
1.51 Years of Eligibility Service 17
Section II - Participation
2.01 Participation 18
2.02 Contribution Participant 18
2.03 Reemployment 18
2.04 Leaves of Absence 19
2.05 Cessation of Participation 19
2.06 Beneficiary designation 19
2.07 Investment Fund Direction 19
2.08 Notification of Individual Account Balance 20
2.09 Plan Binding 20
Section III - Contributions
3.01 Salary Deferral 21
3.02 Matching Contributions 22
3.03 Restrictions and Conditions on Matching Contributions 23
3.04 Company Profit Sharing Contributions 24
3.05 Restrictions and Conditions on Company Profit Sharing Contributions 24
3.06 Qualified Nonelective Contributions 24
3.07 Qualified Matching Contributions 25
Section IV - Limitation on Contributions
4.01 Testing of Salary Redirection 26
4.02 Testing of Matching Contributions 28
4.03 Multiple Use Limitation 30
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Section V - Investments
5.01 Investment Funds 32
5.02 Investment Fund elections for Current Contributions 32
5.03 Investment Fund Elections for Prior Contributions 33
5.04 Special Rules Affecting Officers and Directors 33
Section VI - Rollovers
6.01 Rollovers from Other Plans 34
Section VII - Allocations to Individual Accounts
7.01 Individual Accounts 35
7.02 Allocation of Matching Contributions and Profit Sharing Contributions 35
7.03 Allocation of Income 35
7.04 Trustee and Committee Judgment Controls 35
7.05 Maximum Additions 36
7.06 Corrective Adjustments 36
7.07 Defined Contribution and Defined Benefit Plan Fraction 37
Section VIII - Distributions
8.01 Distribution upon Retirement, Disability or Termination of Employment 38
8.02 Distribution upon Death 39
8.03 Commencement of Benefits for Terminated, Retired and Disabled Participants 39
8.04 Commencement of Benefits to a Beneficiary 41
8.05 Methods of Payment 41
8.06 Reemployment of a Terminated Participant 42
8.07 Payments to Minors and Incompetents 43
8.08 Required Distributions for Active Participants 43
8.09 Unclaimed Benefits 44
8.10 Account Valuation 45
8.11 Termination of Employment Due to Merger, Consolidation or Spinoff 45
Section IX - Withdrawals
9.01 Withdrawals Generally 46
9.02 Hardship Withdrawal 46
9.03 Withdrawals After Age 59-1/2 47
9.04 Participant Loans 48
Section X - Funding
10.01 Contributions 49
10.02 Trustee 49
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10.03 Funding Policy 49
Section XI - Fiduciaries
11.01 General 50
11.02 Company 50
11.03 Trustee 51
11.04 Administrative Committee 51
11.05 Claims Procedures 52
11.06 Records 53
Section XII - Amendment and Termination of the Plan
12.01 Amendment of the Plan 54
12.02 Termination of the Plan 54
12.03 Return of Contributions 55
Section XIII - Provisions Relative To Employers Included in Plan
13.01 Method of Participation 56
13.02 Withdrawal 56
Section XIV - Miscellaneous
14.01 Governing Law 57
14.02 Construction 57
14.03 Administration Expenses 57
14.04 Participant's Rights 57
14.05 Spendthrift Clause 57
14.06 Merger, Consolidation or Transfer 58
14.07 Counterparts 58
14.08 Limitation of Liability 58
14.09 Indemnification 58
14.10 Compliance with ERISA 59
14.11 Payment to Alternate Payee 59
14.12 Securities Voting Rights 59
14.13 Approved Alternative Methods of Written Elections by Participants 59
14.14 Mistaken Contributions and Allocations 60
Section XV - Top Heavy Plan
15.01 Requirements 61
Section XVI - Adoption of the Plan 62
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INTRODUCTION
Effective April 1, 1988, the Board of Directors of Consolidated Stores
Corporation, a Delaware corporation, adopted the Consolidated Stores Corporation
Savings Plan and Trust Agreement in order to provide benefits for certain of its
eligible Associates of those of its Affiliates which the Corporation agreed
should be Employers under the Plan Effective January 1, 1989, the Plan was
amended and restated into a separate plan and the trust agreement was also
amended and restated in its entirety into a separate trust agreement. The Plan
was amended from time to time to take into account law changes and is now again
amended and restated in its entirety, effective as of January 1, 1999 to reflect
all recent changes made to the law and applicable regulations, including the
Economic Growth and Tax Relief Reconciliation Act of 2001 (effective as of
January 1, 2002, unless otherwise indicated herein). Furthermore, Consolidated
Stores Corporation changed its name to Big Lots, Inc. and Big Lots, Inc. is
hereby referred to as the "Company" and the plan is hereby referred to as the
Big Lots, Inc. Savings Plan and Trust.
This Plan and Trust shall apply solely to an Associate whose employment with the
employer terminates on or after the Effective Date of this amended and restated
Plan. An Associate whose employment with the employer terminated prior to the
Effective Date of this Plan shall be entitled to a benefit, if any, as
determined under the provisions of the Plan and Trust as in effect on the date
his employment terminated.
It is intended that this Plan meet all the pertinent requirements of the
Internal Revenue Code of 1986 (hereinafter referred to as the "Code") and the
Employee Retirement Income Security Act of 1974 (hereinafter referred to as
"ERISA"), and shall be interpreted, wherever possible, to comply with the terms
of said laws, as amended, and all formal regulations and rulings issued
thereunder.
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ARTICLE I
DEFINITIONS
1.01 Actual Contribution Percentage means the average of the ratios
(calculated separately for each Participant in a specified group) of
(1) the amount of Matching Contributions to be paid over to the
Trust Fund on behalf of each such Participant for such Plan
Year to
(2) the Participant's Compensation as defined in Section 1.14 for
such Plan Year (whether or not the Participant was a
Contributing Participant for the entire Plan Year).
1.02 Actual Deferral Percentage means the average of the ratios (calculated
separately for each Participant in a specified group) of
(1) the amount of Salary Redirection to be paid over to the Trust
Fund on behalf of each such Participant for such Plan Year to
(2) the Participant's Compensation as defined in Section 1.14 for
such Plan Year (whether or not the Participant was a
Contributing Participant for the entire Plan Year).
1.03 Affiliate means
(1) any corporation which, with the Company, is a member of a
controlled group of corporations under Section 414(b) of the
Code;
(2) any trade or business which is under common control with the
Company under Section 414(c) of the Code;
(3) any member of an affiliated service group containing the
Company under Section 414(m) of the Code; or
(4) any other entity specified by the Secretary of the Treasury to
be combined with the Company as a single employer under
Section 414(o) of the Code;
1.04 Annual Addition means for any Participant in any Limitation Year, the
sum of (a) Profit Sharing and Qualified Nonelective, (b) Salary
Deferral, (c) Matching and Qualified Matching Contributions allocated
to a Participant's Individual Account, Nondeductible Employer
Contributions, and Forfeitures. Amounts derived from contributions paid
or accrued which are attributable to post retirement medical benefits
allocated to the separate account of a Key Employee, as required by
Section 419A(d) of the Code, maintained by the Employer, are treated as
Annual Additions to a Defined Contribution Plan.
1.05 Associate means each current or future common law employee of an
Employer as defined in the records of the Company, excluding (i) any
leased employee as defined in Section 414(n)(2) of the Code, and (ii)
any employee represented by a collective
7
bargaining unit, provided there is evidence that retirement benefits
were the subject of good faith bargaining between such collective
bargaining unit and the Employer, unless the Employer and the
collective bargaining unit have agreed to coverage hereunder.
1.06 Beneficiary means any person designated by a Participant to receive
such benefits as may become payable hereunder after the death of such
Participant, provided, however, that a married Participant may not name
as his Beneficiary someone other than his spouse unless the spouse
consents in writing to such designation, which consent shall be
acknowledged by a Plan representative or by a notary public.
1.07 Board means the board of directors of the Company.
1.08 Break in Service means a Plan Year during which as Associate or former
Associate has earned fewer than five hundred and one (501) Hours of
Service due to termination of employment.
Solely to determine whether a Break in Service occurred, an Associate
who is absent from work for maternity or paternity reasons shall
receive credit for up to 501 Hours of Service which would otherwise
have been credited to such employee but for such absence, or in any
case in which such Hours cannot be determined, eight (8) Hours per day
of such absence. For purposes of this paragraph, an absence from work
for maternity or paternity reasons means an absence (1) by reason of
the pregnancy of the Participant, (2) by reason of a birth of a child
of the Participant, (3) by reason of the placement of a child with the
Participant in connection with the adoption of such child by the
Participant, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be credited
(1) in the Plan Year in which the absence begins if the crediting is
necessary to prevent a Break in Service in that period, or (2) in all
other cases, in the following Plan Year or other applicable computation
period.
1.09 Code means the Internal Revenue Code of 1986, as amended and revised
from time to time.
1.10 Committee means the Committee provided for in Article XI hereof.
1.11 Company means Big Lots, Inc. (formerly, Consolidated Stores
Corporation) and its Affiliates.
1.12 Company Profit Sharing Contribution Account means that portion of a
Participant's Individual Account attributable to (a) Company Profit
Sharing Contributions and (b) the Participant's proportionate share,
attributable to his Company Profit Sharing Contribution Account, of
Income, reduced by any distributions from such account
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pursuant to Article VIII and any withdrawals from such Account pursuant
to Article IX.
1.13 Company Profit Sharing Contributions means contributions made to the
Fund by an Employer pursuant to Section 3.04 that are allocated to all
eligible Participants based on their Compensation pursuant to Section
7.02.
1.14 Compensation means, for any Associate, the Associate's base
compensation paid by the Employer during the Plan Year, including
salary reduction contributions made to a cafeteria plan under Section
125 of the Code and Salary Deferral made pursuant to Section 3.01, but
excluding overtime, bonuses, commissions and other monetary
remuneration as reported on the Associate's Federal Income Tax
Withholding Statement (Form W-2). Compensation shall not include any
Company Profit Sharing Contributions allocated to the Associate's
Individual Account, any other accrued unpaid earnings, nonqualified
deferred compensation, other than that which is deferred and held
specifically for contribution to the Plan by any supplemental savings
plan maintained by the Company for such purposes, or any other fringe
benefit (whether or not taxable). For Plan Years beginning on or after
January 1, 1989, Compensation as defined in this Section shall be
limited to the amount permitted under Section 401(a)(17) of the Code
(as adjusted by the Secretary of the Treasury). For Plan Years
beginning on and after January 1, 2002, Compensation shall not exceed
$200,000, as adjusted for cost-of-living increases in accordance with
Section 401(a)(17) of the Code.
1.15 Contributing Participant means an eligible Participant who has elected
to make Salary Deferral contributions to the Plan during a Plan Year as
provided in Section 2.02.
1.16 Defined Benefit Plan means a plan established and qualified under
Section 401(a) of the Code, except to the extent it is, or is treated
as, a Defined Contribution Plan.
1.17 Defined Contribution Plan means a plan which is established and
qualified under Section 401(a) of the Code, which provides for an
individual account for each participant therein and for benefits based
solely on the amount contributed to each participant's account and any
income and expenses or gains or losses (both realized and unrealized)
that my be allocated to such account.
1.18 Disability means a physical or mental condition that, in the judgment
of the Committee based upon medical reports and other evidence
satisfactory to the Committee, will permanently prevent the Participant
from satisfactorily performing his usual duties for the Employer or the
duties of such other position or job that the Employer makes available
to him and for which such Participant is qualified by reason of
training, education or experience.
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Effective as of January 1, 1996, Disability means a physical or mental
condition which has continued for six (6) months or more and which is
expected to be permanent, as determined by the Social Security
Administration.
1.19 Early Retirement Date means the first day of the calendar month
coincident with or immediately following the date a Participant attains
age fifty-five (55) and completes ten (10) years of Vesting Service.
1.20 Effective Date means January 1, 1999, the Effective Date of this
amended and restated Plan.
1.21 Eligibility Computation Period means the twelve (12) consecutive month
period used to measure Years of Eligibility Service and Breaks in
Service for purposes of eligibility to begin and maintain participation
in the Plan. The initial Eligibility Computation Period for any
Associate shall be the twelve (12) consecutive month period beginning
with the Associate's date of employment or reemployment with the
Employer in which the associate performs his first Hour of Service. All
subsequent Eligibility Computation Periods shall begin with the Plan
Year in which the anniversary date of the Associate's date of
employment or reemployment with the Employer occurs, and each
succeeding Pan Year thereafter. Notwithstanding any provision of the
Plan to the contrary, contributions, benefits, and service credit with
respect to qualified military service will be provided in accordance
with Section 414(u) of the Code.
1.22 Employer means, collectively or individually as the context may
indicate, the Company and any other corporation which (a) is an
Affiliate, (b) the Board shall have authorized to adopt the Plan, and
(c) by action of its own board of directors shall have adopted the Plan
and the Trust Agreement, or any successor to one or more of such
entities.
1.23 Entry Date means the date during each Plan Year after which an
Associate has satisfied the eligibility requirements of Section 2.01 of
the Plan.
1.24 Fiduciary means the Employer, the Trustee, the Committee and any
individual, corporation, firm or other entity that assumes, in
accordance with Article XI, responsibilities of the Employer, the
Trustee or the Committee respecting management of the Plan or the
disposition of its assets.
1.25 Former Participant means a Participant whose participation in the Plan
has terminated but who has not received payment in full of the balance
in his Individual Account to which he is entitled.
1.26 Fund means the trust fund created in accordance with Article X hereof.
1.27 Highly Compensated Employee means any Associate who performs service
for the
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Company or an Affiliate during the determination year, and who, during the
look-back year: (i) received compensation from the Company or an Affiliate in
excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code; (ii)
received compensation from the Company or an Affiliate in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code and was a member of the group
consisting of the top twenty percent (20%) of Associates of the Company and its
Affiliates when ranked on the basis of compensation for such year (the "top paid
group"); or (iii) was an officer of the Company or an Affiliate and received
compensation during such year that is greater than 50 percent of the dollar
limitation in effect under Section 415(b)(1)(A) of the code. The term Highly
Compensated Employee also includes (i) Associates who are both described in the
preceding sentence if the term "determination year" is substituted for the term
"look back year" and who are one of the 100 Associates who received the most
compensation from the Employer during the determination year; and (ii)
Associates who are 5 percent or more owners at any time during the look back
year or the determination year. If no officer has satisfied the compensation
requirement of (iii) above during either a determination year or look back year,
the highest paid officer for such year shall be treated as a Highly Compensated
Employee. For purposes of this Section, the determination year shall be the Plan
Year. The look back year shall be the twelve (12) month period immediately
preceding the determination year. The term Highly Compensated Employee also
includes any Associate who separated from service (or was deemed to have
separated) prior to the determination year, performs no service for the Employer
during the determination year, and was a Highly Compensated Employee for either
the separation year or any determination year ending on or after the Associate's
55th birthday. If an Associate is, during a determination year or look back
year, a family member of either a 5 percent or more owner who is an active or
former Associate or a Highly Compensated Employee who is one of the 10 most
highly compensated Associates ranked on the basis of compensation paid by the
Employer during such year, then the family member and the 5 percent or more
owner or top ten Highly Compensated Employee. For purposes of this Section,
family member includes the spouse, lineal ascendant and descendants of the
Associate or former Associate and the spouses of such lineal ascendant and
descendants. The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Associates in the top
paid group, the top 100 Associates, the number of Associates treated as officers
and the compensation that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
Effective for Plan Years beginning after December 31, 1996, a Highly
Compensated Employee means any Associate who: (1) was a 5 percent or
more owner at ant time during the Plan Year of the preceding Plan Year,
or (2) for the preceding Plan Year had Compensation from the Employer
in excess of $80,000 and was in the top-paid group for the preceding
Plan Year. The $80,000 amount shall be adjusted at the same time and in
the same manner as under Section 415(d), except that the base period
shall be the calendar quarter ending September 30, 1996. For purposes
of this Section, the applicable year of the Plan for which a
determination shall be made is called the determination year and the
preceding 12-month period is called the look-back year. A Highly
Compensated former Employee is based on the rules applicable
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to determining Highly Compensated Employee status as in effect for that
determination year, in accordance with Section 1.414(q)-1T of the
temporary Income Tax Regulations and IRS Notice 9745. In determining
whether an Associate is a Highly Compensated Employee for the 1997 Plan
Year, the amendments to Section 414(q) of the Code stated above shall
be treated as in effect for the Plan Year beginning in 1996.
Non Highly Compensated Employee means any Associate who is not a Highly
Compensated Employee.
1.28 Hour of Service means any hour for which an Associate is paid or
entitled to payment by the Company or an Affiliate during the Plan Year
or other applicable computation period (1) for the performance of
duties for the Company or the Affiliate; (2) on account of a period of
time during which no duties are performed (irrespective of whether the
employment relationship has terminated due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence). No more than 501 Hours of Service will be
credited under this paragraph for any single continuous period (whether
or not such period occurs in a single computation periods); and (3) as
a result of a back pay award which has been agreed to or made by the
Company or the Affiliate, irrespective of mitigation of damages, to the
extent that such hour has not been previously credited under item (1)
or item (2) above.
Hours of Service shall be determined in accordance with Department of
Labor Regulation Section 2530.200b-2, which is incorporated herein by
this reference. Hours of Service shall be credited to the appropriate
computation period in accordance with Department of Labor Regulation
Section 2530.200b-2(c).
1.29 Income means the net gain or loss of the Fund from investments, as
reflected by interest payments, dividends, realized and unrealized
gains and losses on securities, other investment transactions and
expenses paid from the Fund. In determining the income of the Fund as
of any date, assets shall be valued on the basis of their fair market
value.
1.30 Individual Account means the detailed record kept of the amounts
credited or charged to each Participant in accordance with the terms
hereof. Such Individual Account is comprised of a Salary Deferral
Account, a Matching Contribution Account, a Company Profit Sharing
Contribution Account, and a Rollover Account, as applicable.
1.31 Investment Fund means an Investment Fund as described in Article V.
1.32 Investment Manager means a person(s) or organization(s) who is
appointed under Section 11.04 to direct the investment of all or a part
of the Fund and who is either (a) registered in good standing as an
Investment Adviser under the Investment
12
Advisers Act of 1940, (b) a bank, as defined in said Act, (c) an
insurance company qualified to perform investment management service,
or (d) a Fiduciary.
1.33 Key Employee means, for any Plan Year prior to January 1, 2002, any
Associate, former Associate or Beneficiary thereof in an IRS qualified
plan adopted by the Employer who at any time during the Plan Year or
any of the four (4) preceding Plan Years is:
(a) an officer of the Employer having an annual
compensation greater than fifty percent (50%) of the
amount in effect under Section 415(b)(1)(A) of the
Code for any Plan Year;
(b) one (1) of the ten (10) Associates having an annual
compensation from the Employer of more than the
limitation in effect under Section 415(c)(1)(AP of
the Code and owning (or considered as owning within
the meaning of Section 318) of the Code both more
than a one-half percent (1/2%) interest, and the
largest interest in the Employer;
(c) a five (5) percent or more owner of the Employer; or
(d) a one (1) percent or more owner of the Employer
having an annual compensation from the Employer of
more than one hundred fifty thousand dollars
($150,000).
For Plan Years beginning after December 31, 2001, Key Employee means
any Associate or former Associate or Beneficiary (including any
deceased Associate) who at any time during the Plan Year that includes
the determination year is:
(a) an officer of the Employer having an annual
compensation greater than $130,000 (as adjusted under
Section 416(i)(1) of the Code for Plan Years
beginning after December 31, 2002);
(b) a five (5) percent or more owner of the Employer;
(c) a one (1) percent or more owner of the Employer
having annual compensation from the Employer of more
than one hundred fifty thousand dollars ($150,000).
For purposes of this definition, annual compensation means compensation
as defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Associate's gross income under Sections
125, 402(a)(8), or 403(b) of the Code.
This definition shall be interpreted consistent with Code Section 416
and rules and regulations issued thereunder. Further, such law and
regulations shall be controlling requirements stated thereunder but
hereinabove absent.
Non Key Employee means any Associate who is not a Key Employee.
1.34 Limitation Year means the twelve (12) month period beginning on January
1 and ending on December 31.
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1.35 Matching Contribution Account means that portion of a Participant's
Individual Account attributable to (a) Matching Contributions made on
his behalf pursuant to Section 3.02, and (b) the Participant's
proportionate share, attributable to his Matching Contribution Account,
of the Income, reduced by any distributions from such Account pursuant
to Article VIII and any withdrawals from such Account pursuant to
Article IX.
1.36 Matching Contributions means contributions made to the Fund by the
Employer pursuant to Sections 3.02, 3.06 and 3.07 that are allocated to
Contributing Participants based on their Salary Deferral during a Plan
Year pursuant to Section 7.02.
1.37 Normal Retirement Age means the Participant's attainment of age
sixty-five (65). An Associate shall have a nonforfeitable right to one
hundred percent (100%) of his Individual Account upon attainment of his
Normal Retirement Age.
1.38 Normal Retirement Date means the first day of the month coincident with
or next following the Participant's Normal retirement Age, or if later
than the attained age of the Associate, on the fifth anniversary of the
date the Associate commenced participation in the Plan.
1.39 Participant means any Associate who becomes a Participant as provided
in Article II hereof.
1.40 Plan Year means the twelve (12) month period beginning January 1 and
ending December 31.
1.41 Rollover Account means that portion of an Associate's Individual
Account attributable to (a) Rollover Contributions made pursuant to
Article VI, and (b) the Associate's proportionate share, attributable
to his Rollover Account, of the Income, reduced by any distribution
from the such Account pursuant to Article VIII and any withdrawals from
such Account pursuant to Article IX. The balance of an Associate's
Rollover Account shall be fully vested and nonforfeitable at all times.
1.42 Rollover Contributions means contributions made by an Associate to such
Associate's Rollover Account pursuant to Article VI.
1.43 Salary Deferral means contributions made to the Fund by an Employer on
behalf of a Contributing Participant pursuant to Section 3.01.
1.44 Salary Deferral Account means that portion of a Participant's
Individual Account attributable to (a) Salary Deferral amounts made on
his behalf pursuant to Section 3.01, and (b) the Participant's
proportionate share, attributable to his Salary Deferral Account, of
Income, reduced by any distribution from such Account pursuant to
Article VIII and any withdrawals from such Account pursuant to Article
IX. The
14
balance of a Participant's Salary Deferral Account shall be fully
vested and nonforfeitable at all times.
1.45 Termination of Employment shall be deemed to occur when an Associate
has an interruption in continuity of his employment by the Employer.
Such termination may have resulted from retirement, death, voluntary or
involuntary termination of employment, unauthorized absence, or by
failure to return to active employment with the Employer or to retire
by the date on which an authorized leave of absence expired.
1.46 Top Heavy Plan means any plan under which, as of any determination
date, the present value of the cumulative accrued benefits under the
plan for Key Employees exceeds sixty (60) percent of the present value
of the cumulative accrued benefits under the plan for all Associates.
For purposes of this definition:
(d) If such plan is a Defined Contribution Plan, the
present value of cumulative accrued benefits shall be
deemed to be the market value of all Associate
accounts under the plan, other than voluntary
deductible employee contributions. If such plan is a
Defined Benefit Plan, the present value of cumulative
accrued benefits shall be the lump sum present value
determined pursuant to said plan.
(e) A plan shall be considered Top Heavy for any Plan
Year if, on the last day of the preceding Plan year
(the determination date), the above rules were met.
For the first Plan Year that the plan shall be in
effect, the determination of whether said Plan is Top
Heavy shall be made as of the last day of such Plan
Year.
(f) Each plan of the Employer required to be included in
an "aggregation group" shall be treated as a Top
Heavy Plan is such group is a top heavy group.
(g) The term "aggregation group" means
(i) each qualified plan of the Employer in which
a Key Employee is a Participant and
(ii) each other qualified plan of the Employer
which enable any plan in (i) above to meet
the requirements of Sections 401(a)(4) of
the Code.
The term "aggregation group" includes any plans of
the Employer that have been terminated during the
previous five (5) Plan Years.
(h) The term "permissive aggregation group" means the
aggregation group and each other plan or plans of the
Employer that are not required to be included in the
aggregation group, as defined in Section 1.47(d)
above, and which, if treated as being part of such
group, would not cause such
15
group to fail to meet the requirements of Sections
401(a)(4) and 410 of the Code.
(i) The account balances and accrued benefits of a
Participant (1) who is not a Key Employee but who was
a Key Employee in a prior year, or (2) who has not
been credited with at least one Hour of Service with
the Employer maintaining the Plan during the five (5)
year period (one (1) year period for Plan Years
beginning after December 31, 2001) ending on the
determination date will be disregarded.
(j) For Plan Years beginning after December 31, 2001, the
accounts balances and accrued benefits of a
Participant as of the determination date shall be
increased by the distributions made with respect to
the Participant under the Plan and any plan
aggregated with this Plan under Section 416(g)(2) of
the Code during the one year period ending on said
determination date. This subsection shall also apply
to distributions under a terminated plan that, had it
not been terminated, would have been aggregated with
this Plan. In the case of a distribution made for a
reason other than Termination of Employment, death,
or being Disabled, this subsection shall be applied
as if the one year period is a five year period.
(k) This definition shall be interpreted consistent with
Section 416 of the Code and rules and regulations
issued thereunder.
Further, such law and regulations shall be controlling in all
determinations under this definition inclusive of any provisions and
requirements stated thereunder but hereinabove absent.
1.47 Trust Agreement means the agreement entered into between the Company
and the Trustee.
1.48 Trustee means such person(s) or financial institution(s) qualified
under the Code as shall be designated in the Trust Agreement to hold in
trust any assets of the Plan for the purpose of providing benefits
under the Plan, and shall include any successor trustee designated
thereunder.
1.49 Valuation Date means the business close of each business day in the
Plan Year as of which date the Fund shall be valued at fair market
value.
1.50 Vesting Service means, subject to the reemployment provisions of
Section 2.03, the total number of calendar years (including years prior
to the Effective Date) during which an Associate has at least one
thousand (1,000) Hours of Service for the Employer.
If an Associate incurs five (5) or more consecutive Breaks in Service,
the associate's Vesting Service prior to the consecutive Breaks in
Service will be disregarded if the Associate does not have a
nonforfeitable interest in his Company Profit Sharing Contribution
Account or Matching Contribution Account and the number of consecutive
Breaks in Service equals or exceeds the associate's Vesting Service
16
earned before the commencement of the consecutive Breaks in Service. If
an Associate has incurred less than five (5) consecutive Breaks in
Service, upon reemployment, his Vesting Service shall not be
disregarded.
Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Code.
1.51 Year of Eligibility Service means an Eligibility Computation Period
during which an Associate has completed at least one thousand (1,000)
Hours of Service.
Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Code.
17
ARTICLE II
PARTICIPATION
2.01 PARTICIPATION
Each Associate who has attained age twenty-one (21) and has completed one Year
of Eligibility Service prior to January 1, 1999 and is employed on January 1,
1999 shall continue to be a Participant in the Plan as of January 1, 1999.
Each Associate who is employed in January 1, 1999 but had not either (a)
attained age twenty-one (21) or (b) completed one year of Eligibility Service as
of January 1, 1999, shall become a Participant on the Entry Date coincident with
or immediately following the date on which he both attains age twenty-one (21)
and completes one Year of Eligibility Service.
Any Associate whose date of hire is on or after January 1, 1999 shall become a
Participant in the Plan on the entry Date coincident with or immediately
following the later of (i) the attainment of age twenty-one (21) and (ii)
completion of one Year of Eligibility Service.
2.02 CONTRIBUTING PARTICIPANT
An Associate who satisfies the requirements of Section 2.01 may become a
Contributing Participant by electing to have Salary Deferral made on his behalf
pursuant to Section 3.01, and by making the election required by Section 5.02.
Such election may, subject to the provisions of Section 3.01, be made effective
as of the first pay period coincident with or next following the Entry Date on
which the Participant becomes a Contributing Participant.
2.03 REEMPLOYMENT
Upon the reemployment of any person after the Effective Date, the following
rules shall apply in determining his eligibility to participate in the Plan.
(a) If an Associate who was not eligible to become a Participant
in the Plan during his prior period of employment is
reemployed, he shall be eligible to participate in the Plan as
of the first Entry Date after he has met the requirements of
Section 2.01.
(b) If an Associate who as a Participant, or eligible to become a
Participant, in the Plan during his prior period of employment
is reemployed, he shall again become eligible to participate
in the Plan as of the Entry Date coincident with or next
following his date of reemployment
18
Nevertheless, the service earned by an Associate during his prior period of
employment will be disregarded until he has completed another Year of
Eligibility Service after reemployment but only if the Associate incurred a
Break in Service.
2.04 LEAVES OF ABSENCE
Subject to the following rules, participation shall continue during the
Participant's employment by the employer. Fur purposes of the preceding
sentence, a Participant will continue to be treated as employed by an Employer
if he is on approved leave of absence, if the Participant returns to work before
or at the expiration of such leave of absence or any extension thereof. Failure
to return at the end of such leave of absence, as determined by the Employer,
shall be treated as a termination of employment as of the date on which the
Participant fails to return from the leave of absence, except that in the case
of death or retirement, the termination shall be deemed to have occurred as of
the date of death or retirement.
2.05 CESSATION OF PARTICIPATION
Participation in the Plan shall cease upon Termination of Employment with the
Employer. Cessation of participation shall not require a distribution of the
balance of an Individual Account except as provided in Article VIII.
2.06 BENEFICIARY DESIGNATION
Subject to the consent provisions of Section 1.06, upon commencing
participation, each Participant shall designate a Beneficiary on forms furnished
by the Committee. Such Participant may then from time to time change his
designated Beneficiary by written notice to the Committee (with spousal consent,
if necessary) and, upon such change, the rights of al previously designated
Beneficiaries to receive any benefits under this Plan shall cease. If at the
time of a Participant's death while benefits are still outstanding, his named
Beneficiary does not survive him, the benefits shall be paid to his named
contingent Beneficiary. If a deceased Participant is not survived by either a
named Beneficiary or contingent Beneficiary (or if no Beneficiary was
effectively named), the benefits shall be paid in a single sum to the person(s)
in the first of the following classes of successive preference beneficiaries
then surviving: the Participant's (a) widow or widower, (b) children, (c)
parents, (d) brothers and sisters, (e) executors and administrators. If the
Beneficiary or contingent Beneficiary is living at the death of the Participant,
but such person dies prior to receiving the entire death benefit, the remaining
portion of such death benefits shall be paid in a single sum to the estate of
such deceased Beneficiary or contingent Beneficiary.
2.07 INVESTMENT FUND DIRECTION
Upon commencement of participant in the Plan, each Participant shall have the
right to designate by any method approved by the Committee, including but not
limited to
19
electronic or telephonic, the Participant's selection of Investment Funds in
which Salary Deferral and Qualified Matching Contributions shall be invested.
2.08 NOTIFICATION OF INDIVIDUAL ACCOUNT BALANCE
At least once each Plan Year, or more frequently as determined by the Committee,
the Committee shall notify each Participant of the amount of his share in the
Income, Company Profit Sharing Contributions, Matching Contributions, Rollover
Contributions, and Salary Deferral for the period just completed, and the new
balance of his Individual Account.
2.09 PLAN BINDING
Upon becoming a Participant, a Participant shall be bound then and thereafter by
the terms of this Plan and Trust Agreement, including all amendments to the Plan
and the Trust Agreement made in the manner herein authorized or as otherwise
authorized by law.
20
ARTICLE III
CONTRIBUTIONS
3.01 SALARY DEFERRAL
Each Participant who satisfies the requirements of Section 2.01 may elect
pursuant to Section 2.02 to become a Contributing Participant by electing to
have Salary Deferral made on his behalf by completing a Salary Deferral
agreement. The Salary Deferral agreement with the Participant's Employer shall
provide that it is agreed that his Employer shall redirect a portion of the
Participant's Compensation during each pay period and that the Employer will
contribute that amount to the Fund on his behalf. All Salary Deferral elections
shall be subject to the provisions of Section 5.04.
The Salary Deferral agreement shall be made by any method approved by the
Committee including but not limited to electronic or telephonic. In the event a
Participant does not so elect when first eligible, he may subsequently elect to
have Salary Deferral made on his behalf commencing as soon as is
administratively feasible coincident with or next following any Entry Date.
A Participant may elect to redirect a portion of his Compensation, expressed as
a whole dollar amount or a whole percentage of his Compensation, during each pay
period in an amount not less than one percent (1%) nor greater than (50%) fifty
percent of his Compensation. In no event, however, shall the amount of Salary
Deferral be less than three dollars ($3.00) per week (effective as of January 1,
1996, two dollars ($2.00) per week). Beginning with the 2002 Plan Year, the
amount of Salary Deferral shall be made only in whole percentages as described
hereof.
A Participant's Salary Deferral, including contributions to any other plan of
the Company that are made pursuant to Section 402(a)(8) of the Code, may not
exceed ten thousand five hundred dollars ($10,500.00) in any one calendar year.
The dollar limitation in the preceding sentence shall be adjusted in accordance
with Section 415(d) of the Code.
Effective for Plan Years beginning on and after January 1, 2002, all Associates
who are eligible to become Participants and make Salary Deferral to this Plan
who have attained age fifty (50) before the close of the Plan Year shall be
eligible to make catch-up Salary Deferral contributions in accordance with and
subject to the limitations of Section 414(v) of the Code. Such catch-up
contributions shall not be taken into account for purposes of Section 7.05 of
this Plan nor taken into account for purposes of the required limitations as
specified in Sections 402(g) and 415 of the Code or the requirements of Sections
401(k)(3), 401(k)(11), 401(k)(12) or 416 of the Code.
21
If, during any calendar year, a Participant makes Salary Deferral to this Plan
in excess of the limit provided in the preceding paragraph, and if the
Participant notifies the Committee in writing by March 1 following the close of
the calendar year of the portion of the amount contributed in excess of said
limit to all plans pursuant to Section 402(a)(8) of the Code, such amount shall
be deemed an "excess deferral" and the Committee shall direct the Trustee to
distribute to the Participant (not later than the April 15 following the
calendar year in which the excess deferral was made) the amount of the excess
deferral plus any income and minus any loss allocable to such amount. For
purposes of determining the income or losses on excess deferrals that will be
returned to the Participant, such income or losses shall include the Income
attributable to such excess deferrals for the Plan Year during which the excess
deferral was made plus the income attributable to such excess deferral from the
end of the Plan Year in which they were made to the date the excess deferral is
returned to the Participant, as described in the regulations under Section
401(g) of the Code.
Once contributed to the Fund, Salary Deferral shall be credited to the
Participant's Salary Deferral Account and shall not be subject to withdrawal
except as provided in Article IX.
A Participant electing to have Salary Deferral made on his behalf to the Plan
pursuant to this Section may, as soon as is administratively feasible following
notice to the Committee, increase or decrease his Salary Deferral percentage
(within the appropriate minimum and maximum). However, a Participant who is an
insider under Section 16 of the Securities Exchange Act of 1934 may change his
Salary Deferral only in accordance with procedures established by the Company.
Any Contributing Participant may elect to cease future Salary Deferral to the
Plan effective as soon as is administratively feasible following notice to the
Committee. In the event any such Participant desires thereafter to recommence
having Salary Deferral made on his behalf, he shall be allowed to do so
effective as soon as is administratively feasible following notice to the
Committee.
Any of the notice requirements in this Section may be made by any method
approved by the Committee including but not limited to the use of electronic or
telephonic means.
The Employer shall pay to the Trustee any Salary Deferral made on behalf of any
Contributing Participant within a reasonable time following the end of each
regular pay period.
3.02 MATCHING CONTRIBUTIONS
An Employer, by action of its board of directors, shall make a Matching
Contribution. Such Matching Contribution shall be in an amount as determined by
the Board and communicated to the Participants each Plan Year. Such Matching
22
Contribution shall be allocated to the Matching Contribution Account of each
Participant. Such Matching Contribution shall be allocated in proportion to
Salary Deferral made to all Investment Funds on behalf of the Participant. For
Plan Years beginning on and after January 1, 1996, Matching Contributions shall
be allocated to the Company Matching Contribution Account of each Participant
who (1) is an active Participant and employed by the Employer on such December
31 Valuation Date (including a Participant who is on an approved leave of
absence or layoff) and who completed one Year of Vesting Service for the Plan
Year; or (2) is retired, became Disabled, or died during the Plan Year ending on
such December 31 Valuation Date.
Effective for the 1996 Plan Year and for each Plan Year thereafter (unless
otherwise determined by the Board of the Company), the Matching Contribution to
the Plan shall be determined as follows:
(a) 100% of the first two percent (2%) of the Participant's Salary
Deferral made to the Fund by the Employer on behalf of a
Contributing Participant for the Plan Year; and
(b) 50% of the next four percent (4%)of the Participant's Salary
Deferral made to the Fund by the Employer on behalf of a
Contributing Participant for the Plan Year.
Effective as of February 1, 1998, a Matching Contribution made to the Plan shall
be in the form of Company Stock unless the Committee in its sole and final
discretion determines otherwise.
As used in this Plan, the term "Company Stock" means common stock of the Company
that shall be held in a pooled investment account consisting of Company Stock
and cash that shall be maintained pursuant to an administrative services
agreement between the Company and the Trustee.
3.03 RESTRICTIONS AND CONDITIONS ON MATCHING CONTRIBUTIONS
Matching Contributions shall be subject to the following restrictions and
conditions:
(a) In no event shall an Employer be obligated to make a Matching
Contribution for a given Plan Year in excess of the maximum amount
deductible under Section 404(a)(3)(A) of the Code, or any statute or
rule of similar import.
(b) If due to a mistake of fact, the Matching Contribution to the Fund
for any Plan Year exceeds the amount intended to be contributed,
notwithstanding any provision to the contrary, the Employer, as soon as
such mistake of fact is discovered, shall notify the Trustee.
23
The Employer shall direct that the Trustee return such excess to the
Employer, provided such return is made within one (1) year of the date on
which the Employer made the Matching Contribution.
3.04 COMPANY PROFIT SHARING CONTRIBUTIONS
On each December 31 Valuation Date, an Employer may make a Company Profit
Sharing Contributions, in addition to amounts contributed pursuant to Section
3.02 in an amount determined by the Employer in its total and complete
discretion. No Company Profit Sharing Contribution shall be required in any
given Plan Year. Company Profit Sharing Contributions shall be allocated to the
Company Profit Sharing Contribution Account of each Participant (1) who is a
Participant on such December 31 Valuation Date (including a Participant who in
on an approved leave of absence or layoff) and who completed one year of Vesting
Service for the Plan Year, or, (2) who retired, became Disabled, or died during
the Plan year ending on such December 31, Valuation date. Such company Profit
Sharing Contribution allocation shall be on the basis of the ratio of each such
eligible Participant's Compensation, while an Associate of such contributing
employer for the Plan Year over the total Compensation for all such eligible
Participants while Associates of such contributing Employer for the Plan Year.
3.05 RESTRICTIONS AND CONDITIONS ON COMPANY PROFIT SHARING CONTRIBUTIONS
Company Profit Sharing Contributions shall be subject to the following
restrictions and conditions:
(a) In no event shall an Employer be obligated to make a Company Profit
Sharing Contribution for a given Plan Year in excess of the maximum
amount deductible under Section 404(a)(3)(A) of the Code, or any
statute or rule of similar import.
(b) If due to a mistake of fact, the Company Profit Sharing
Contribution to the Fund for any Plan Year exceeds the amount intended
to be contributed, notwithstanding any provision to the contrary, the
Employer, as soon as such mistake of fact is discovered, shall notify
the Trustee.
The Employer shall direct that the Trustee return such excess to the
Employer, provided such return is made within one (1) year of the date on
which the Employer made the Company Profit Sharing Contribution.
3.06 QUALIFIED NONELECTIVE CONTRIBUTIONS
If so elected, an Employer may make Qualified Nonelective Contributions to the
Plan on behalf of its Associates. Such contributions shall be allocated to the
Participant's Individual Account in the same manner as Company Profit Sharing
Contributions. For purposes of this Section, Qualified Nonelective Contributions
are contributions that Participants may not elect to receive in cash until
distributed from the Plan, are nonforfeitable when made and are distributable
only in
24
accordance with the distribution provisions applicable to Salary Deferrals other
than withdrawals by reason of hardship pursuant to Article IX.
3.07 QUALIFIED MATCHING CONTRIBUTIONS
If so elected, an Employer may make Qualified Matching Contributions to the Plan
on behalf of its Associates. Such contributions shall be allocated to the
Participant's Individual Account in the same manner as Matching Contributions.
For purposes of this Section, Qualified Matching Contributions are contributions
that Participants may not elect to receive in cash until distributed from the
Plan, are nonforfeitable when made and are distributable only in accordance with
the distribution provisions applicable to Salary Deferrals other than
withdrawals by reason of hardship pursuant to Article IX.
25
ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS
4.01 TESTING OF SALARY DEFERRAL
Notwithstanding anything contained herein to the contrary, in each Plan Year in
which Salary Deferrals are made to the Plan, such Salary Deferrals shall be
subject to the following tests (the "ADP tests"). For purposes of the ADP tests,
all Salary Deferrals made under any plans that are aggregated for purposes of
Sections 401(a)(4) or 410(b) of the Code (without regard to Section
410(b)(2)(A)(ii) of the Code) shall be treated as made under a single plan of
the Employer, and such aggregated plans must satisfy Sections 401(a)(4) and
410(b) of the Code as though they were a single plan. The Salary Deferral under
this Plan and elective contributions under all other cash or deferred
arrangements of the Employer made on behalf of Highly Compensated Employees
shall be combined for purposes of the ADP tests. Such plans may be aggregated to
satisfy Section 401(k) of the Code only if they have the same Plan Year. The ADP
tests shall apply to the Salary Deferrals made for the Plan Year as determined
as of the end of the Plan Year. The Employer may apply the ADP tests at any
other time during the Plan Year.
In performing the test all participants shall be separated into two (2) groups -
the Highly Compensated Employee group and the Non Highly Compensated Employee
group.
Only one of the following two ADP tests needs to be satisfied for there not to
be an adjustment to Salary Deferral as provided below.
Test I: The Actual Deferral Percentage for the Plan Year for the eligible Highly
Compensated Employee group for each Plan Year is not more than the Actual
Deferral Percentage of the Non Highly Compensated Employee group for the prior
Plan Year multiplied by 1.25.
Test II: The excess of the Actual Deferral percentage for the Plan Year for the
eligible Highly Compensated Employee group for each Plan Year over that of the
Non Highly Compensated Employee group for the prior Plan Year is not more than
two percentage points, and the Actual Deferral Percentage for the Plan Year for
the Highly Compensated Employee group for each Plan Year is not more than the
Actual Deferral Percentage for the prior Plan Year for the Non Highly
Compensated Employee group for the prior Plan Year multiplied by 2.0.
Any adjustments to the Non Highly Compensated Employee group Actual Deferral
Percentage for the prior Plan Year shall be made in accordance with IRS Notice
98-1 and any superceding guidance issued by the IRS.
26
For purposes of determining who is a Highly Compensated Employee, a Participant
is a Highly Compensated Employee for a particular Plan Year if the Participant
meets the definition of Highly Compensated Employee if effect for that Plan
Year. A Participant is a Non Highly Compensated Employee if the Participant does
not meet the definition of Highly Compensated Employee in effect for that Plan
Year.
The Actual Deferral Percentage shall include (1) any Salary Deferrals, including
excess deferrals described in Section 3.01, but excluding any Salary Deferrals
that are taken into account in satisfying the ACP tests described in Section
4.01 (provided the ADP test described herein is satisfied both with and without
exclusion of such Salary Deferrals) and (2) if so elected by the Committee, any
Qualified Nonelective Contributions and qualified Matching Contributions. To the
extent contributions in (2) above are so applied, they shall not be included in
the computation of the Actual Contribution Percentage otherwise applicable to
such contributions. For purposes of computing Actual Deferral Percentages, an
Associate who would be a Participant but for the failure to make Salary
Deferrals shall be treated as a Participant on whose behalf no Salary Deferrals
are made.
Upon the application of the ADP tests prior to the end of the Plan Year, if
neither test is met, the committee may adjust the Highly Compensated Employee's
election for the remainder of the Plan Year to the extent necessary to meet
either test.
Upon the application of the tests at the end of the Plan Year, if neither test
is met, the Committee shall return to the Highly Compensated Employee, by the
end of the next Plan Year, the amount of Salary Deferral, inclusive of earnings
or losses, necessary to meet either test. However, such amounts must be returned
within two and one-half months after the end of the affected Plan Year to avoid
an excise tax upon the Employer. The adjustment of Salary Deferrals of Highly
Compensated Employees to be returned (after excess Salary Deferrals and other
Employer contributions required to be taken into account in determining amounts
under Section 402(g) of the Code have been returned) shall be allocated to those
Highly Compensated Employees with the largest amounts of contributions taken
into account in determining the ADP test for the Plan Year in which the excess
arose, beginning with the Highly Compensated Employee with the largest amount of
such contributions and continuing in descending order until all the excess
contributions have been allocated. For purposes of determining the earnings or
losses on Salary Deferral that will be returned to the Highly Compensated
Employee, such earnings or losses shall include the Income attributable to such
Salary Deferral for the Plan Year during which the excess Salary Deferral was
made plus the Income attributable to such Salary Deferral from the end of the
Plan Year in which they were made to the date the excess Salary Deferral is
distributed to the Participant, as described in the regulations under Section
401(k) of the Code.
The amount of excess Salary Deferral that may be distributed shall be reduced by
the amount of any excess deferrals pursuant to Section 402(g) of the Code, as
27
described in Section 3.01, previously distributed in the Participant's taxable
year ending with or within the applicable Plan Year.
It is specifically provided hereunder that any Matching Contribution shall be
conditioned upon permissible Salary Deferral. Salary Deferral shall only be
permissible to the extent they meet the ADP tests provided herein. In the event
such ADP tests require the return of excess Salary Deferral, the corresponding
Matching Contribution shall not be made to the Plan or, if such Matching
Contribution has already been made to the Plan prior to the time the ADP tests
are performed, then such Matching Contribution shall be returned to the
Employer.
Subject to the limitation of Section 4.03, the determination of which ADP test
shall be met shall be based upon the test that requires the adjustment of the
smallest amount of Salary Deferral.
The Committee shall establish rules and procedures for modifying the election
with respect to the Highly Compensated Employees to ensure, to the extent
possible, that either of the ADP tests will be met.
The Employer shall maintain records sufficient to demonstrate compliance with
the ADP test.
All rules of application with reference to the ADP tests shall be governed by
Section 401(k) of the Code and any rules and regulations issued pursuant
thereto.
4.02 TESTING OF MATCHING CONTRIBUTIONS
In each Plan Year in which Matching Contributions are made to the Plan, such
Matching Contributions shall be subject to the following tests (the "ACP
tests"). For purposes of the ACP tests, all Matching Contributions made under
any plans that are aggregated for purposes of Sections 401(a)(4) or 410(b) of
the Code (without regard to Section 410(b)(2)(A)(ii)) of the Code shall be
treated as made under a single plan of the Employer, and such aggregated plans
must satisfy Sections 401(a)(4) and 410(b) of the Code as though they were a
single plan. The Matching Contributions under this Plan and elective
contributions under all other cash or deferred arrangements of the Employer made
on behalf of Highly Compensated Employees shall be combined for purposes of the
ACP tests. Such plan may be aggregated to satisfy Section 401(m) of the Code
only if they have the same Plan Year. The ACP tests shall apply to the Matching
Contributions made for the Plan Year as determined as of the end of the Plan
Year. The Employer may apply the ACP tests at any other time during the Plan
Year.
Salary Deferral contributions may, at the election of the Employer, be treated
as Matching Contributions to the extent that (1) Salary Deferral contributions
satisfy the ADP tests under Section 4.01, including those amounts treated as
Matching
28
Contributions, and (2) Salary Deferral contributions satisfy the ADP tests under
Section 4.01, excluding those amounts treated as Matching Contributions.
In performing the test all participants shall be separated into two (2) groups -
the Highly Compensated Employee group and the Non Highly Compensated Employee
group.
Only one of the following two ACP tests needs to be satisfied for there not to
be an adjustment to Salary Deferral as provided below.
Test I: The Actual Contribution Percentage for the Plan Year for the eligible
Highly Compensated Employee group for the Plan Year is not more than the Actual
Contribution Percentage for the prior Plan Year of the Non Highly Compensated
Employee group for the prior Plan Year multiplied by 1.25.
Test II: The excess of the Actual Contribution percentage for the Plan Year for
the eligible Highly Compensated Employee group for the Plan Year over that of
the Non Highly Compensated Employee group for the prior Plan Year is not more
than two percentage points, and the Actual Contribution Percentage for the
Highly Compensated Employee group for the Plan Year is not more than the Actual
Contribution Percentage for the prior Plan Year for the Non Highly Compensated
employee group for the prior Plan Year multiplied by 2.0.
Any adjustments to the Non Highly Compensated Employee group Actual Contribution
Percentage for the prior Plan Year shall be made in accordance with IRS Notice
98-1 and any superceding guidance issued by the IRS.
For purposes of determining who is a Highly Compensated Employee, a Participant
is a Highly Compensated Employee for a particular Plan Year if the Participant
meets the definition of Highly Compensated Employee if effect for that Plan
Year. A Participant is a Non Highly Compensated Employee if the Participant does
not meet the definition of Highly Compensated Employee in effect for that Plan
Year.
For purposes of determining the Actual Contribution Percentage, Matching
Contributions are considered to be made for a Plan Year if made no later than
the end of the twelve month period beginning on the day after the close of the
Plan Year.
Upon the application of the tests at the end of the Plan Year, if neither test
is met, then Matching Contributions, not previously deemed "forfeited" pursuant
to Section 4.01, made on behalf of Highly Compensated Employees shall then be
reduced. The reduction shall be made on the basis of the respective portions of
such amounts attributable to each High Compensated Employee. The vested portion
of such Matching contributions plus earnings or losses shall be distributed to
the highly Compensated employee by the end of the next Plan Year. However, such
amount must be returned within two and one-half months after the end of the Plan
Year to avoid an excise tax upon the Employer. For purposes of determining the
earnings or
29
losses on Salary Deferral that will be returned to the Highly Compensated
Employee, such earnings or losses shall include the Income attributable to such
vested Matching Contributions for the Plan Year during which the excess Matching
Contributions was made plus the Income attributable to such vested Matching
Contributions from the end of the Plan Year in which they were made to the date
the excess vested Matching Contributions is distributed to the Participant, as
described in the regulations under Section 401(m) of the Code.
Subject to the limitation of Section 4.03, the determination of which ACP test
shall be met shall be based upon the test that requires the adjustment of the
smallest amount of Matching Contributions.
The Committee shall establish rules and procedures for modifying the election
with respect to the Highly Compensated Employees to ensure, to the extent
possible, that either of the ACP tests will be met.
The Employer shall maintain records sufficient to demonstrate compliance with
the ACP test.
All rules of application with reference to the ACP tests shall be governed by
Section 401(m) of the Code and any rules and regulations issued pursuant
thereto.
4.03 MULTIPLE USE LIMITATION
Effective for Plan Years beginning prior to January 1, 2002, in the event the
Employer or an Affiliate sponsors one or more qualified plans to which Sections
401(k) and 401(m) of the Code apply, additional rules shall be applicable to
prevent the multiple use of the alternative test described in Sections
401(k)(3)(A)(ii)(ll) and 401(m)(2)(A)(ii) of the Code with respect to any
Participant.
The multiple use of the alternative test as referenced above occurs if: (a) one
or more Highly Compensated Employees are eligible under a plan subject to
Sections 401(k) and 401(m) of the Code; and (b) the sum of the actual Deferral
Percentage of the entire group of eligible Highly Compensated Employees subject
to Section 401(k) of the Code and the Actual Contribution Percentage of the
entire group of eligible Highly Compensated Employees under the plan subject to
Section 401(m) of the Code exceeds the "Aggregate Limit".
The Aggregate Limit is the greater of (1) and (2) below:
(1) The sum of
(a) One hundred and twenty-five percent of the greater of
(i) the Actual Deferral Percentage of the group of
Non Highly Compensated Employees eligible under the
Plan subject to Section 401(k) of the Code for the
Plan Year or (ii) the Actual Contribution Percentage
of the group of Non Highly
30
Compensated Employees eligible under the Plan subject
to Section 401(m) of the Code for the Plan Year; and
(b) Two plus the lesser of (i) or (ii) above. In no
event, however, shall this amount exceed two hundred
percent of the lesser of (i) or (ii) above.
(2) The sum of
(a) One hundred and twenty-five percent of the greater of
(i) the Actual Deferral Percentage of the group of
Non Highly Compensated employees eligible under the
Plan subject to Section 401(k) of the Code for the
Plan Year or (ii) the Actual Contribution Percentage
of the group of Non Highly Compensated Employees
eligible under the Plan subject to Section 401(m) of
the Code for the Plan Year; and
(b) Two plus the lesser of (i) or (ii) above. In no
event, however, shall this amount exceed two hundred
percent of the lesser of (i) or (ii) above.
In the event the Aggregate Limit is exceeded, the Employer shall reduce the
Actual Contribution Percentage of those Highly Compensated Employees who also
have an Actual Deferral Percentage to the extent necessary to ensure compliance
with the limitation stated in the preceding paragraph, by reducing the Actual
Contribution Percentage of the Highly Compensated Employee with the highest
percentage. The amount by which the Actual Contribution Percentage of Highly
Compensated Employees must be reduced shall be treated as a reduction under
Section 4.02.
This Section shall not apply if both the Actual Deferral Percentage and the
Actual Contribution Percentage of the Highly Compensated Employee group does not
exceed 1.25 multiplied by the Actual Deferral Percentage and Actual Contribution
Percentage of the Non Highly Compensated Employee group.
All rules of application with respect to this multiple use limitation shall be
governed by Sections 401(k) and 401(m) of the Code and any rules and regulations
issued pursuant thereto.
31
ARTICLE V
INVESTMENTS
5.01 INVESTMENT FUNDS
The Trustee shall establish and maintain such Investment Fund(s) so designated
from time to time by the Committee. Such Funds available for investment by
Participants shall be communicated to the Participants by the Committee.
The Committee may, for administrative purposes, establish unit values for one or
more Investment Funds (or any portion thereof) and maintain the accounts setting
forth each Participant's interest in such Investment Fund (or any portion
thereof) in terms of such units, all in accordance with such rules and
procedures that the Committee shall deem fair, equitable and administratively
feasible. A Participant's interest in an Investment Fund (or any portion
thereof) in the event unit account is established shall be determined by
multiplying the then value of a unit in said Investment Fund (or any portion
thereof) by the number of units then credited to the Participant's Individual
Account.
The Trustee shall allocate to and invest as part of each Investment Fund the
contributions in accordance with the directions of the Committee. Income from
investments in each Investment Fund shall be reinvested in the same Investment
Funds. The Trustee shall transfer assets from one Investment Fund to the other
as directed by the Committee.
5.02 INVESTMENT FUND ELECTIONS FOR CURRENT CONTRIBUTIONS
Prior to or after the date an Associate becomes a Participant, he shall have the
right to direct the Committee as to the investment of that portion of his Salary
Deferral and Matching Contribution (and any other Employer contributions made on
his behalf) to be made on and after such date. Such election shall be made by
any method approved by the Committee including but not limited to electronic or
telephonic means.
For any other Associate who is a Participant, a Salary Deferral and Matching
Contribution (and any other Employer contributions made on his behalf) election
shall remain in effect until a subsequent election is made. Such elections may
be made as frequently as daily, provided however that they are made in
accordance with specified instructions as determined by the Committee. The
election described in this Section shall apply to all Salary Deferrals (and
other Employer contributions made on behalf of the Participant; provided,
however, that Matching Contributions shall always be made by the Employer in the
form of Company Stock unless otherwise determined by the Committee.
Notwithstanding any of the above within this Section 5.02, all rights of a
participant to direct the investment of any Salary
32
Deferral (and any other Employer contributions made on behalf of the
Participant) shall be subject to the provisions of Section 5.04.
5.03 INVESTMENT FUND ELECTIONS FOR PRIOR CONTRIBUTIONS
Any time as described in Section 5.02, each Participant shall have the right to
direct the Committee to have his Individual Account invested in whole
percentages in the Investment Funds specified in Section 5.01, including his
Company Matching Contribution Account (effective as of February 1, 1998). Such
election shall be effective as soon as administratively feasible following the
receipt of such election. Receipt of such election may be in the form of paper
and/or electronic or telephonic media as determined by the Committee and
communicated to the Participants and shall be presumed to be accurate. An
election under this Section 5.03 shall only apply to amounts actually allocated
to the Individual Account of the Participant. The direction of investments for
current ongoing contributions shall be as determined pursuant to Section 5.02.
5.04 SPECIAL RULES AFFECTING OFFICERS AND DIRECTORS
Any Participant who is at any time designated by the Company to be an "Officer"
or "Director" of Big Lots, Inc., within the meaning of the Securities and
Exchange Act of 1934 and the rules thereunder promulgated (generally known as
Section 16), shall be subject to the procedures from time to time adopted by the
Committee for purposes of compliance with Section 16. All accounts, and all
activity with respect to accounts of Participants who are designated "Officers"
or "Directors" shall be restricted governed by such procedures, and no activity
with respect to any account of such a Participant shall be permitted that does
not comply with such procedures. To the extent that any provisions of this Plan
create rights or privileges contrary to or greater than those permitted by the
procedures adopted by the Committee, such rights or privileges shall be null and
void with respect to Participants who are "Officers" and "Directors".
33
ARTICLE VI
ROLLOVERS
6.01 ROLLOVERS FROM OTHER PLANS
Any Associate who has had distributed to him a "qualified total distribution"
(within the meaning of Section 402(a)(5)(E) of the Code, from a Defined
Contribution Plan or a Defined Benefit Plan that meets the requirements of
Section 401(a) of the Code as a result of (i) termination of employment, (ii)
plan termination, (iii) disability (or Disabled), or (iv) attaining age
fifty-nine and one-half (59-1/2), may transfer the distribution received from
such other plan, or from an individual retirement account into which such
distribution has been transferred or rolled over, to the Trustee, provided the
following conditions are met:
(a) In the case of a transfer directly from such a plan, the transfer
occurs on or before the sixtieth day following his receipt of the
distribution from the other plan and the amount transferred equals the
amount of the total distribution he received from the other plan less
the amount (if any) considered contributed by him in accordance with
Section 401(e)(4)(D)(i) of the Code; or
(b) In the case of a rollover (or transfer) from such an individual
retirement account, such rollover or transfer constituted a "rollover
contribution" within the meaning of Section 4089d)(3)(a)(ii) of the
Code.
Effective as of January 1, 2002, the Plan shall also accept rollovers and direct
transfers of the following types of distributions:
(a) an annuity contract described in Section 403(b) of the Code, excluding
after-tax employee contributions; and
(b) an eligible plan under Section 457(b) of the Code that is maintained by
a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state.
The Committee shall develop such procedures, and may require such information
from the Associate desiring to make such transfer, as it deems necessary or
desirable to determine that the proposed transfer will meet the requirements of
this Section and the Code.
Upon approval by the Committee, the amount transferred, which must consist of
cash only, shall be deposited in the fund and shall be credited to the
Associate's Rollover Account. Immediately prior to the transfer of such assets,
the Associate shall give direction to the Committee as to how the amounts
transferred are to be invested in the Investment Funds then available for
investment under Section 5.01.
34
ARTICLE VII
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
7.01 INDIVIDUAL ACCOUNTS
The Committee shall establish and maintain an Individual Account in the name of
the Participant to which the Committee shall credit all amounts allocated to
each such Participant pursuant to Article III, Article IV and the following
Sections of this Article VII. Each Individual Account shall be comprised of
whichever of the following are applicable to a particular Participant: a Salary
Deferral Account, a Matching Contribution Account, a Company Profit Sharing
Contribution Account, and a Rollover Account. The Committee shall also maintain
records to indicate the amount of each Participant's various accounts comprising
his Individual Account invested in each Investment Fund.
7.02 ALLOCATION OF MATCHING CONTRIBUTIONS AND COMPANY PROFIT SHARING
CONTRIBUTIONS
Matching Contributions shall be allocated as provided in Section 3.02. Company
Profit Sharing Contributions (if any) shall be allocated, as of each December 31
Valuation Date, as provided in Section 3.04.
7.03 ALLOCATION OF INCOME
The Committee shall determine the Income for the period elapsed since the last
preceding Valuation Date. Under the terms of this Plan, each Participant's
Individual Account shall be valued and the Income determined on a daily basis.
Such Income shall be allocated as of each Valuation date to the accounts of all
participants and Former participants who maintain a credit balance in their
Individual Account. Such allocation shall be made in relation to that portion of
their Individual Accounts attributable to their Salary Deferral Account,
Matching Contribution Account, Company Profit Sharing Contribution Account or
Rollover Account.
7.04 TRUSTEE AND COMMITTEE JUDGMENT CONTROLS
In determining the fair market value of the Fund and of Individual Accounts, the
Trustee and the Committee shall exercise their best judgment, and all such
determinations of value (in the absence of bad faith) shall be binding upon all
Participants and their Beneficiaries.
35
7.05 MAXIMUM ADDITIONS
Anything herein to the contrary notwithstanding, the total Annual Additions made
to the Individual Account of a Participant for any Limitation Year, when
combined with any similar Annual Additions credited to the Participant for the
same period from any other qualified Defined Contribution Plan maintained by the
employer, shall not exceed the lesser of:
(a) $30,000 or the specific amount, determined by the Commissioner of the
Internal Revenue as of January 1, of each calendar year, to apply to
the Limitation Year ending with or within that calendar year (for Plan
Years beginning on and after January 1, 2002, $40,000 as adjusted for
increases in the cost-of-living under Section 415(d) of the Code); or
(b) Twenty-five (25%) percent of the Participant's total compensation
(under Section 415 of the Code) received from the Employer for such
Limitation Year, (for Plan Years beginning on and after January 1,
2002, one hundred percent (100%) of the Participant's total
compensation within the meaning of Section 415(c)(3) of the Code, but
not taking into account contributions from medical benefits after
Termination of Employment (within the meaning of Section 401(h) of the
Code or Section 419A(f)(2) of the Code) that are otherwise treated as
Annual Additions.
In the event a Participant is covered by one or more Defined Contribution Plans
maintained by the Employer, the maximum Annual Additions as noted above shall be
decreased in any other Defined Contribution Plan as determined necessary by the
employer, prior to a reduction of this Plan, to ensure that all such plans will
remain qualified under the Code.
7.06 CORRECTIVE ADJUSTMENTS
In the event that as of any Valuation Date corrective adjustments in the Annual
addition to any Participant's Individual Account are required as the result of a
reasonable error in estimating a Participant's total compensation, the following
corrective adjustments shall be made in the following order of precedence:
(a) The Participant's unmatched Salary Deferral (plus attributable
earnings) shall be reduced to ensure compliance with Section 7.05. Any
affected Salary Deferral shall be used to offset Salary Deferral for
the next Limitation Year (and succeeding Limitation Years as necessary)
for that Participant.
(b) The Participant's matched Salary Deferral (plus attributable earnings)
and his Matching Contributions (plus attributable earnings) shall be
reduced to insure compliance with Section 7.05. Any affected Salary
Deferral shall be used to offset Salary Deferral for the next
Limitation year (and succeeding Limitation Years as necessary) for that
Participant. Any affected Matching Contributions shall be used to
reduce future Matching Contributions.
36
(c) The Participant's Company Profit Sharing Contributions shall be reduced
to ensure compliance with Section 7.05. Any affected Company Profit
Sharing Contributions shall be returned to the Employer.
7.07 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLAN FRACTION
For Plan Years beginning prior to January 1, 2000, if a Participant is a
participant in a Defined Benefit Plan maintained by the Employer, the sum of his
defined benefit plan fraction and his defined contribution plan fraction for any
Limitation Year may not exceed 1.0.
For purposes of this Section, the term "defined contribution plan fraction"
shall mean a fraction, the numerator of which is the sum of all of the Annual
Additions to the Participant's Individual Account under this Plan as of the
close of the Limitation Year and the denominator of which is the sum of the
lesser of the following amounts determined for such Limitation Year and for each
prior Limitation Year of employment with the Employer:
(a) the product of 1.25 multiplied by the dollar limitation described in
Section 7.05(a) for such Limitation Year; or
(b) the product of 1.4 multiplied by the amount calculated pursuant to
Section 7.05(b) with respect to each individual under the Plan for such
Limitation Year.
For purposes of this Section, the term, "defined benefit plan fraction" shall
mean a fraction, the numerator of which is the Participant's projected annual
benefit (as defined in the Defined Benefit Plan) determined as of the close of
the Limitation Year and the denominator of which is the lesser of:
(a) the product of 1.25 multiplied by the dollar limitation in effect
pursuant to Section 415(b)(1)(A) of the Code for such Limitation Year;
or
(b) the product of 1.4 multiplied by the amount which may be taken into
account pursuant to Section 415(b)(1)(B) of the Code with respect to
each individual under the Plan for such Limitation Year.
The limitation on aggregate benefits from a Defined Benefit Plan and a Defined
Contribution Plan that is contained in Section 2004 of ERISA, as amended, shall
be complied with by a reduction (if necessary) in the Participant's benefits
under that Defined benefit Plan (in accordance with the provisions of said plan)
and his benefits herein shall not be affected by such aggregate limitation.
37
ARTICLE VIII
DISTRIBUTIONS
8.01 DISTRIBUTION UPON RETIREMENT, DISABILITY OR TERMINATION OF EMPLOYMENT
A Participant whose Termination of Employment is due to retirement, Disability,
or for any other reason than death, shall be eligible to receive a distribution
from the Plan determined as follows:
(a) If the Participant's termination is due to disability (or Disabled),
the Participant shall receive the balance of his Salary Deferral
Account, Rollover Account, Matching Contribution Account, and Company
Profit Sharing Contribution Account, determined as of the Valuation
Date coincident with his Termination of Employment Date (plus or minus
gains or losses to the date the check is issued), less any withdrawals
made on said Valuation Date. In addition, the Participant shall receive
the Company Profit Sharing Contributions made for such Plan Year
pursuant to Section 3.04, as of the December 31 Valuation Date
immediately following the date on which his Disability occurred.
(b) If the Participant's termination is after the Participant's Normal
Retirement Age, the Participant shall receive the balance of his Salary
Deferral Account, Rollover Account, Matching Contribution Account and
Company Profit Sharing Contribution Account, determined as of the
Valuation Date coincident with his Termination of Employment date, less
any withdrawals made on said Valuation Date. In addition, the
Participant, if he retires on or after his Normal Retirement Age, shall
receive the Company Profit Sharing Contributions made for such Plan
Year, pursuant to Section 3.04, respectively, as of the December 31
Valuation Date immediately following the date on which his retirement
occurs.
(c) If the Participant's termination is due to reason other than
retirement, Disability, or death, the Participant shall receive the
balance of his Salary Deferral Account, Rollover Account, and, in
accordance with Section 8.01(d), the vested portion of his Matching
Contribution Account, including Matching Contributions credited to the
Participant's Matching Contributions Account since the prior Valuation
Date, and Company Profit Sharing Contribution Account, determined as of
the Valuation Date coincident with his Termination of Employment date,
less any withdrawals made on said Valuation Date. The Participant shall
not be entitled to an allocation of Company Profit Sharing
Contributions, made pursuant to Section 3.04, for the period in which
his Termination of Employment occurs.
(d) Upon the Termination of Employment of a Participant under Section
8.01(c), the Participant shall be vested in a percentage of the balance
of his Matching Contribution Account and Company Profit Sharing
Contribution Account, based on his years of Vesting Service at his date
of termination, as follows:
38
Years of Vesting Service Vested Percentage of
At Termination Account
- ------------------------ ---------------------
Fewer than 2 0%
2 25%
3 50%
4 75%
5 or more 100%
Notwithstanding the above, a participant shall be fully vested in his Matching
Contribution Account and Company Profit Sharing Contribution Account upon
attaining Normal Retirement Age. Any amount not so vested shall be held in the
Participant's matching Contribution Account and Company Profit Sharing
Contribution Account until the end of the Plan Year in which he separates from
service, at which time it shall be treated as a distribution of $0 and
forfeited.
Any amounts forfeited by a Participant pursuant to this Section shall be used to
reduce future Matching Contributions made pursuant to Section 3.02 and Company
Profit Sharing Contributions made pursuant to Section 3.04, or at the discretion
of the Company, used to reduce Plan expenses.
The committee shall direct the Trustee to distribute to the Participant the
amount determined above in accordance with Section 8.03 hereof.
8.02 DISTRIBUTION UPON DEATH
Upon the death of a Participant before Termination of Employment, the balance of
such Participant's Individual Account, as of the Valuation Date coincident with
the date of death of the Participant (plus or minus gains or losses to the date
the check is issued), less any withdrawals made on said Valuation Date shall
become payable and the Committee shall direct the Trustee to distribute to such
Participant's Beneficiary such amount in accordance with Section 8.04 hereof. In
addition, the Beneficiary shall be entitled to the Participant's allocation of
the Company Profit Sharing Contributions, made for the current Plan Year
pursuant to Section 3.04, as of the December 31 Valuation Date immediately
following the date on which the Participant died.
8.03 COMMENCEMENT OF BENEFITS FOR TERMINATED, RETIRED AND DISABLED PARTICIPANTS
Any benefits payable under this Article shall be paid to a terminated, retired
or Disabled Participant as soon as reasonably possible following the
Participant's actual date of Termination of Employment.
39
If (i) the value of the Participant's Individual Account does not exceed $5,000,
or (ii) the Participant agrees in writing, the Committee shall direct that the
distribution be paid in a lump sum to such terminated, retired, or Disabled
Participant. No other benefits of any type shall be payable to such former
Participant or his Beneficiaries. If the value of the Participant's Individual
Account exceeds $5,000, the Committee may not require a lump sum distribution
without the written consent of the Participant.
If the value of the Participant's Individual Account (i) for Plan Years
beginning before August 6, 1997, exceeds $3,500 (or exceeded $3,500 at the time
of any prior Distribution, (ii) for Plan Years beginning after August 5, 1997
and for a distribution made prior to March 22, 1999, exceeds $5,000 (or exceeded
$5,000 at the time of any prior distribution, and (iii) for Plan Years beginning
after August 5, 1997 and for a distribution made after March 21, 1999, that
either exceeds $5,000 or is a remaining payment under a selected optional form
of payment that exceeded $5,000 at the time the selected payment began, and the
Individual Account is immediately distributable, the Participants and the
Participant's spouse (or survivor, if applicable) must consent in writing to any
such distribution of said Individual Account.
For purposes of this Section, the value of a Participant's Individual Account
shall be determined without regard to that portion of the Individual Account
that is attributable to rollover contributions (and earnings thereon) within the
meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and
457(e)(16) of the Code.
The Committee shall provide to each such Participant whose consent is required
no less than thirty (30) days and no more than ninety (90) days prior to the
commencement of benefit payments, a written explanation of the material features
and relative values of the forms of benefit under the Plan, and his right (if
any) to defer receipt of the distribution. A Participant may elect to commence
his distribution in less than thirty (30) days from the date he is provided with
the explanation provided he is informed of his right to the thirty (30) day
period. Provided, however, that the Participant's written consent to a
distribution must not be made prior to the time he receives the written
explanation and must not be made after ninety (90) days before benefit payments
commence.
The distribution of a Participant's Individual Account under the Plan shall
begin not later than the earlier of (1) or (2) where:
(1) is the later of:
i. the sixtieth (60th) day after the close of the Plan
Year in which occurs the latest of:
(A) the attainment by the Participant of Normal
Retirement Age
(B) the fifth (5th) anniversary of the date on
which the participant commenced participation
in the Plan, or
40
(C) the termination of the Participant's service
with the Employer;
ii. such date as the Participant may elect (but not
earlier than the consent of a person if required
above); or
(2) is the April 1 of the calendar year following the later of:
i. the calendar year in which the Participant attains
age 70-1/2, or
ii. the calendar year in which the Participant retires,
provided that such Participant is not a five percent
(5%) or more owner.
8.04 COMMENCEMENT OF BENEFITS TO A BENEFICIARY
Upon the death of a Participant, the benefits payable to his Beneficiary shall
be paid as soon as reasonably possible after the Participant's date of death, in
the manner specified in Section 8.05.
If the amount of the distribution is for more than $5,000, the Beneficiary may
elect to defer the distribution but not beyond the date on which the Participant
would have attained age seventy and one-half (70-1/2). If the Beneficiary is
the spouse of the Participant and such spouse dies before payments occur, the
distribution shall be made as if the spouse had been the Participant.
8.05 METHODS OF PAYMENT
All distributions from this Plan shall be paid as a lump sum distribution in
cash or in kind (or in combination thereof) to a Participant or Beneficiary.
Effective for distributions beginning prior to December 1, 2001, at the election
of the Participant or Beneficiary, distributions from this Plan shall be made in
monthly, quarterly, or annual installments over a fixed period of time not to
exceed the lesser of (i) ten (10) years, (ii) the life expectancy of the
Participant, or (iii) the joint live and last survivor expectancy of the
Participant and his designated Beneficiary. Furthermore, upon the written
request of the Participant or Beneficiary (if applicable), the Committee shall
accelerate payment of all or any portion of the Participant's unpaid Individual
Account.
For purposes of this Section, distribution of the note evidencing a loan under
Section 9.04 shall be a "deemed" distribution of cash equal to the outstanding
loan balance.
After December 31, 1992, any recipient of an "eligible rollover distribution"
may elect, at the time and in the manner prescribed by the Committee, to have
any portion of that distribution paid directly to any eligible retirement plan
he designates.
(3) Definitions
41
(a) "eligible rollover distribution" means any
distribution of all or any portion of the balance to
the credit of the distributee, except (I) any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten (10) years or more (II) any
portion of the distribution required to be made under
Section 401(a)(9) of the Code, or (III) any hardship
distribution described in Section 401(k)(2)(B)(i)(iv)
of the Code received after December 31, 1998, or (IV)
any portion of the distribution that is not
includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with
respect to employer securities).
(b) "eligible retirement plan" means an individual
retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described
in Section 403(a) of the Code, (effective for
distributions made after December 31, 2001, an
annuity contract described in Section 403(b) of the
Code, and an eligible plan under Section 457(b) of
the Code that is maintained by a state or political
subdivision of a state, or any agency or
instrumentality of a state or political subdivision
of a state and that agrees to separately account for
amounts transferred into such plan from this Plan),
or a qualified plan and trust described in Section
401(a) of the Code, that will accept the
distributee's eligible rollover distribution.
However, if the eligible rollover distribution is
being made to a surviving spouse, an eligible
retirement plan is an individual retirement account
or individual retirement annuity.
(c) "distributee" means an Associate or former Associate
and, with respect to their interests only, the
Associate's or former Associate's surviving spouse
who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the
Code.
(d) "direct rollover" means a payment by the Plan to the
eligible retirement plan specified by the
distributee.
8.06 REEMPLOYMENT OF A TERMINATED PARTICIPANT
A terminated Participant who terminates employment with the Company or Employer
with less than a one hundred (100%) vested interest in his Matching Contribution
Account and/or Company Profit Sharing Contribution Account, who received a
distribution of his vested interest, and who resumes employment with the
42
Employer prior to incurring five (5) consecutive one year Breaks in Service, may
repay such distribution from the said Accounts and receive the vested value of
his said Accounts (including previously forfeited amounts) based on his total
years of Vesting Service when he again terminates employment (including Vesting
Service prior to termination). Repayment hereunder must be made by the earlier
of the five 95) years from the date of reemployment or a period of five (5)
consecutive one year Breaks in Service. A Participant who terminated with a zero
percent (0%) vested interest in his Matching Contribution Account and/or Company
Profit Sharing Contribution Account, and who resumes employment with the
Employer prior to incurring five (5) consecutive Breaks in Service, shall
receive the vested value of said Accounts (including previously forfeited
amounts) based on his total years of Vesting Service when he again terminates
employment (including years of Vesting Service prior to termination).
Restoration of forfeited amounts will come from forfeitures in the year in which
the Participant makes repayment under this Section and, to the extent such
forfeitures are not sufficient, from a special Employer contribution.
A terminated Participant who is reemployed and again becomes a Participant after
incurring five (5) or more consecutive one year Breaks in Service shall not be
allowed to repay any amount distributed to him and shall not have any amount
forfeited restored to his Matching Contribution Account and/or Company Profit
Sharing Contribution Account.
8.07 PAYMENTS TO MINORS AND INCOMPETENTS
In case any person entitled to receive payment under the Plan shall be a minor,
the Committee, in its discretion, may dispose of such amount in any one or more
of the following ways:
(a) By payment thereof directly to such minor;
(b) By application thereof for benefit of such minor; or
(c) By payment thereof to either parent of such minor or to any adult
person with whom such minor may at the time be living or to any person
who shall legally be qualified and shall be acting as guardian of the
person or the property of such minor; provided only that the parent or
adult person to whom any amount shall be paid shall have advised the
Committee in written affidavit that he will hold or use such amount for
the benefit of such minor.
In the event that it shall be found that a person entitled to receive payment
under the Plan is physically or mentally incapable of personally receiving and
giving a valid receipt for any payment due (unless prior claim therefore shall
have been made by a duly qualified person or other legal representative), such
payment may be made to the spouse, son, daughter, parent, brother, sister or
other person deemed by the Committee to have incurred expense for such person
otherwise entitled to payment.
43
8.08 REQUIRED DISTRIBUTIONS FOR ACTIVE PARTICIPANTS
Distributions of an active Participant's Individual Account must commence no
later than (i) the first day of April following the calendar year in which such
individual attains age seventy and one-half (70-1/2), or (ii) the date on which
the Participant terminates employment with the Employer; provided, however, that
(ii) above shall not apply to a Participant who is a five percent (5%) or more
owner. For distributions to a Participant who is a five percent (5%) or more
owner, they shall be made in a lump sum in cash or in kind as of April 1 (for
the initial distribution) and as of each December 1 thereafter.
For a Participant who is not a five percent (5%) or more owner, the Participant
may elect to commence receiving benefits under (i) above in a manner described
in Section 8.05; provided, however, that a Participant may elect to receive the
minimum required distribution as determined under regulations issued by the
Secretary of the Treasury, of his delegate, under (i) above and upon actual
Termination of Employment with the Employer, elect a manner of distribution as
described in Section 8.05. Such election shall be made on a form and in a manner
as prescribed by the Committee.
All distributions required under this Section shall be determined and made in
accordance with the Income Tax Regulations under Section 401(a)(9) of the Code
including the minimum distribution incidental benefit requirements of Section
1.401(a)(9)-2 of said Regulations.
Notwithstanding any provisions of the Plan to the contrary with respect to
distributions under the Plan made for Plan Years beginning on and after January
1, 2002, the Plan shall apply the minimum distribution requirements of Section
401(a)(9) of the Code in accordance with the regulations under Section 401(a)(9)
of the Code as proposed in January 2001. This shall continue in effect until the
last day of the last calendar year beginning before the effective date of the
final regulations under Section 401(a)(9) of the Code, or at such other days as
may be specified in guidance published by the Internal Revenue Service.
8.09 UNCLAIMED BENEFITS
If, after diligent effort, a Participant, spouse or Beneficiary who is entitled
to a distribution cannot be located as of the date such distribution was to
commence, the distributable Individual Account balance shall be forfeited and
used to reduce the Employer's Matching Contributions. Provided, however, that
any such forfeited amounts shall be reinstated and become payable if a claim is
made by the Participant or Beneficiary for such Individual Account. The
Committee shall prescribe uniform and nondiscriminatory rules for implementing
this provision.
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8.10 ACCOUNT VALUATION
The Plan and its Investment Funds shall be valued on a daily basis and in a
manner consistent with acceptable practices in the industry.
8.11 TERMINATION OF EMPLOYMENT DUE TO MERGER, CONSOLIDATION, OR SPINOFF
Effective as of December 31, 2001, in the event a Participant in this Plan
terminates employment with the Employer by reason of merger, consolidation or
spinoff of the Employer as an Affiliate of the Company, but continues to work
for the Employer after said merger, consolidation or spinoff, such termination
shall be deemed to be a Termination of Employment for purposes of this Plan.
45
ARTICLE IX
WITHDRAWALS
9.01 WITHDRAWALS GENERALLY
A Participant may make application to the Committee for withdrawal of all or a
portion of those of his Individual Accounts specified in Section 9.02 or 9.03
without Termination of Employment with the Employer, but only in such amounts
and under such conditions as specified in such Sections. Withdrawals may be made
only in cash.
Notwithstanding the above paragraph, a Participant may withdraw a portion of his
Rollover Account at any time. Such withdrawal shall be limited to the balance in
his Rollover Account as of the Valuation Date immediately preceding the date of
such withdrawal. Any withdrawal from the Participant's Rollover Account will be
made proportionately from the Investment Funds in which his Rollover Account in
invested.
9.02 HARDSHIP WITHDRAWAL
Except as otherwise provided in this Section, upon proper application by a
Participant to the Committee, the Committee in its sole discretion may permit
the Participant to withdraw a portion of the balance of his Salary Deferral
Account, other than Income allocated to such Account, determined as of the
Valuation Date coincident with the date of application.
The reason for such withdrawal must be to enable the Participant to meet unusual
or special situations in his financial affairs resulting in immediate and heavy
financial needs of the Participant. Such situations shall be limited to:
(a) medical expenses (described in Section 213(d) of the Code) incurred by
the Participant, the Participant's spouse or any dependents of the
Participant (as defined in Section 152 of the Code);
(b) purchase (excluding mortgage payments) of a principal residence for the
Participant;
(c) payment of tuition for the next semester or quarter of post-secondary
education for the Participant, his or her spouse, children, or
dependents;
(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; or
46
(e) any additional items that may be added to the list of deemed immediate
and heavy financial needs by the Commissioner of the Internal Revenue
through publication of rulings, notices, and other documents of general
applicability.
Any withdrawal hereunder may not exceed the amount required to meet the
immediate financial need created, and provided further that such amount must not
be reasonable available from other resources of the Participant. In granting or
refusing any request for withdrawal or in shortening the notice period, the
Committee shall apply uniform standards consistently and such discretionary
powers shall not be applied so as to discriminate in favor of officers,
stockholders, or Highly Compensated Employees.
The withdrawals under this Section shall in no way affect the Participant's
continued participation in this Plan except by the reduction in account balances
caused by such withdrawals and except as provided below.
If a Participant withdraws Salary Deferral pursuant to the provisions of this
Section, the following shall apply:
(a) A withdrawal may be made pursuant to this Section only after the
Participant has obtained all distributions other than hardship
distributions, including withdrawals available pursuant to Section
9.01, loans pursuant to Section 9.04, all other nontaxable loans
available under all other plans maintained by the Employer.
(b) Salary Deferral under this Plan shall be suspended until the Entry Date
that is at least twelve (12) months (for hardship withdrawals made
after December 31, 2001, at least six (6) months) after receipt of the
withdrawal of Salary Deferral pursuant to this Section.
(c) The dollar limitation provided for in Section 3.01 for the taxable year
of the Participant following the taxable year of withdrawal pursuant to
this Section shall be reduced by the Participant's Salary Deferral and
other elective contributions for the taxable year of the participant
during which the withdrawal pursuant to this Section is taken.
Any withdrawal shall be made proportionately from the Investment Funds in which
the Participant's Salary Deferral is invested.
9.03 WITHDRAWALS AFTER AGE 59-1/2
Once the Participant reaches age fifty-nine and one-half (59 1/2) he may apply
for a withdrawal of any portion of the vested balance of his Individual Account.
Any such withdrawal will be made first from the Participant's Rollover Account;
second from his Salary Deferral Account; third, from his Matching Contribution
Account; and, lastly, from his Company Profit Sharing Contribution Account. The
withdrawal from any of these Accounts shall be made proportionately from the
Investment Funds in which such Accounts are invested.
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9.04 PARTICIPANT LOANS
The Committee is hereby authorized to establish and administer a loan program
and to establish rules and procedures for such loan program. Such rules, which
are incorporated herein by reference, shall meet all the pertinent requirements
of the Code and ERISA, as amended, and shall be interpreted, wherever possible,
to comply with the terms of said laws, as amended, and all formal regulations
and rulings issued thereunder.
48
ARTICLE X
FUNDING
10.01 CONTRIBUTIONS
Contributions by the Employer and by the Participants as provided for in Article
III shall be paid over to the Trustee. All contributions by the Employer to the
Fund shall be irrevocable, except as herein provided, and may be used only for
the exclusive benefit of the Participants, Former Participants, and their
Beneficiaries.
10.02 TRUSTEE
The Company has entered into an agreement with the Trustee whereunder the
Trustee will receive, invest and administer as a trust fund contributions made
under this Plan in accordance with the Trust Agreement.
Such Trust Agreement is incorporated by reference as a part of the Plan, and the
rights of all persons hereunder are subject to the terms of the Trust Agreement.
The Trust Agreement specifically provides, among other things, for the
investment and reinvestment of the Fund and the income thereof, the management
of the Fund, the responsibilities and immunities of the Trustee, removal of the
Trustee and appointment of a successor, accounting by the Trustee and the
disbursement of the assets of the Fund.
The Trustee shall, in accordance with the terms of such Trust Agreement, accept
and receive all sums of money paid to it from time to time by the Employer, and
shall hold, invest, reinvest, manage and administer such moneys and the
increment, increase, earnings and income thereof as a trust fund for the
exclusive benefit of the Participants, Former Participants and their
Beneficiaries or the payment of reasonable expenses of administering the Plan.
10.03 FUNDING POLICY
The Committee shall periodically establish and adopt procedures necessary for
implementing a funding policy(ies) by reviewing the recommendations of the
consultants selected by it, if any, and defining the actions necessary to
implement a funding policy complying with Title I, Part 3 of ERISA , as amended.
A written record shall be made of the actions taken to adopt and implement the
funding policy(ies), including the reasons for such decisions.
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ARTICLE XI
FIDUCIARIES
11.01 GENERAL
Each Fiduciary who is allocated specific duties or responsibilities under the
Plan or any Fiduciary who assumes such a position with the Plan shall discharge
his duties solely in the interest of the Participants, Former Participants, and
Beneficiaries and for the exclusive purpose of providing such benefits as
stipulated herein to such Participants, Former Participants and Beneficiaries,
or defraying reasonable expenses of administering the Plan. Each Fiduciary, in
carrying out such duties and responsibilities, shall act with the care, skill,
prudence, and diligence under the circumstance then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in
exercising such authority or duties.
A Fiduciary may serve in more than one Fiduciary capacity and may employ one or
more persons to render advice with regard to his Fiduciary responsibilities. If
the Fiduciary is serving as such without compensation, all expenses reasonably
incurred by such Fiduciary shall be paid from the Fund or, at the Company's
discretion, by the Employer.
A Fiduciary may delegate any of his responsibilities for the operation and
administration of the Plan. In limitation of this right, the Committee may not
allocate any responsibilities as contained herein relating to the management or
control of the Fund except through the employment of an investment manager as
provided in Section 11.03 and in the Trust Agreement relating to the Fund.
However, the Committee may delegate to one or more persons or institutions
certain administrative functions pursuant to a written agreement between said
person(s) and/or institutions and the Committee.
11.02 COMPANY
The Company established and currently maintains this Plan for the exclusive
benefit of its Associates and the Associates of the other Employers and of
necessity retains control of the operation and administration of the Plan. The
Company, in accordance with specific provisions of the Plan, has as herein
indicated, delegated certain of these rights and obligations to the Trustee, and
the Committee and these parties shall be solely responsible for these, and only
these, delegated rights and obligations.
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The Employer shall supply such full and timely information for all matters
relating to the Plan as (a) the Committee, (b) the Trustee, and (c) the
accountant engaged on behalf of the Plan by the Company may require for the
effective discharge of their respective duties.
11.03 TRUSTEE
The Trustee shall be retained as a directed Trustee as defined under Section
403(a) of ERISA in accordance with the Trust Agreement, shall have exclusive
authority and discretion to manage and control the Fund, except that the
Committee may in its discretion employ at any time and from time to time an
investment manager (as defined in Section 3(38) of ERISA, as amended) to direct
the Trustee with respect to all or a designated portion of the assets comprising
the Fund.
11.04 ADMINISTRATIVE COMMITTEE
The Board of the Company shall appoint a committee of not less than three (3)
persons to hold office for the pleasure of the Company, such committee to be
known as the Committee. No compensation shall be paid to members of the
Committee from the Fund for service on such Committee. The Committee shall
choose from among its members a chairman and a secretary. Any action of the
Committee shall be determined by the vote of a majority of its members. Either
the chairman or the secretary may execute any certificate or written direction
on behalf of the Committee.
The Committee shall hold meetings upon such notice, as such place and at such
time as the Committee may from time to time determine. Meetings shall be called
by the chairman or any two (2) members of the Committee. A majority of the
members of the Committee at the time in office shall constitute a quorum for the
transaction of business.
In accordance with the provisions hereof, the Committee has been delegated
certain administrative functions relating to the Plan with all powers necessary
to enable it properly to carry out such duties. The Committee shall have no
power in any way to modify, alter, add to or subtract from, any provisions of
the Plan. The Committee shall have the power to construe the Plan and to
determine all questions that may arise thereunder relating to (a) the
eligibility of the individuals to participate in the Plan and, (b) the amount of
benefits to which any Participant, Former Participant or Beneficiary may become
entitled hereunder. All disbursements by the Trustee, except for the ordinary
expenses of administration of the Fund or the reimbursement of reasonable
expenses at the direction of the Company, as provided herein, shall be made
upon, and in accordance with, the written directions of the Committee. When the
Committee is required in the performance of its duties hereunder to administer
or construe, or to reach a determination, under any of the provisions of the
Plan, it shall do so on a uniform, equitable and nondiscriminatory basis.
51
The Committee shall establish rules and procedures to be followed by the
Participants, Former Participants, and Beneficiaries in filing applications for
benefits and for furnishing and verifying proofs necessary to establish age,
Vesting Service, and any other matters required in order to establish their
rights to benefits in accordance with the Plan. Additionally, the Committee
shall establish accounting procedures for the purpose of making the allocations,
valuations and adjustments to the Participants' accounts. Should the Committee
determine that the strict application of its accounting procedures will not
result in an equitable and nondiscriminatory allocation among the accounts of
Participants, it may modify its procedures for the purpose of achieving an
equitable and nondiscriminatory allocation in accordance with the general
concepts of the Plan, provided however that such adjustments to achieve equity
shall not reduce the vested portion of a Participant's interest.
The Committee may employ such counsel, accountants, and other agents as it shall
deem advisable. The Committee may also engage the services of an Investment
Manager(s) as defined in Section 3(38) of ERISA, each of whom shall have the
power and authority to manage, acquire or dispose (or direct the Trustees with
respect to acquisition or disposition) of any Plan asset under its control. The
Company shall pay, or cause to be paid from the Trust Fund (or from the Employer
is so determined by the Committee), the compensation of such counsel,
accountants, and other agents and any other expenses incurred by the Committee
in the administration of the Plan and Trust.
The Committee shall also have the authority and discretion to engage such
person(s) or institutions to perform, without discretionary authority or
control, certain administrative functions within the framework of policies,
interpretations, rules, practices, and procedures made by the Committee or other
Fiduciary. Any action made or taken by such person(s) or institutions may be
appealed by an affected Participant to the Committee in accordance with the
claims review procedures provided in Section 11.05. Any decisions requiring
interpretation of this Plan's provisions that have not previously been made by
the Committee shall be made only by the Committee.
11.05 CLAIMS PROCEDURES
The Committee shall receive all applications for benefits. Upon receipt by the
Committee of such an application, it shall determine all facts that are
necessary to establish the right of an applicant to benefits under the
provisions of the Plan and the amount thereof as herein provided. Upon request,
the Committee will afford the applicant the right of a hearing with respect to
any finding of fact or determination. The applicant shall be notified in writing
of any adverse decision with respect to his claim within 90 days after its
submission. The notice shall be written in a manner calculated to be understood
by the applicant and shall include:
(a) The specific reasons(s) for the denial;
52
(b) Specific references to the pertinent Plan provisions on which the
denial is based;
(c) A description of any additional material or information necessary for
the applicant to perfect the claim and an explanation of why such
material or information is necessary; and (d) An explanation of the
Plan's claim review procedures.
If special circumstances require an extension of time for processing the initial
claim, a written notice of the extension and the reason therefore shall be
furnished to the claimant before the end of the 90 day period. In no event shall
such extension exceed 90 days.
In the event a claim for benefits is denied or if the applicant has had no
response to such claim within 90 days of its submission (in which case the claim
for benefits shall be deemed to have been denied), the applicant or his duly
authorized representative, at the applicant's sole expense, may appeal the
denial to the Committee within 60 days of the receipt of written notice of
denial or 60 days from the date such claim is deemed to be denied. In pursuing
such appeal the applicant or his duly authorized representative:
(a) May request in writing that the Committee review the denial;
(b) May review pertinent documents; and
(c) May submit issues and comments in writing.
The decision on review shall be made within 60 days of receipt of the request
for review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as possible, but
not later than 120 days after receipt of a request for review. If such an
extension of time is required, written notice of the extension shall be
furnished to the claimant before the end of the original 60 day period. The
decision on review shall be made in writing, shall be written in a manner
calculated to be understood by the claimant, and shall include specific
references to the provisions of the Plan on which such denial is based. If the
decision on review is not furnished within the time specified above, the claim
shall be deemed denied on review.
11.06 RECORDS
All acts and determinations of the Committee shall be duly recorded by the
secretary thereof and all such records together with such other documents as may
be necessary in exercising its duties under the Plan shall be preserved in the
custody of such secretary. Such records and documents shall at all times be open
for inspection and for the purpose of making copies by any person designated by
the Company. The Committee shall provide such timely information, resulting from
the application of its responsibilities under the Plan, as needed by the Trustee
and the accountant engaged on behalf of the Plan by the Company, for the
effective discharge of its duties.
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ARTICLE XII
AMENDMENT AND TERMINATION OF THE PLAN
12.01 AMENDMENT OF THE PLAN
The Company shall have the right at any time by action of the Board to modify,
alter or amend the Plan in whole or in part; provided, however, that the duties,
powers and liability of the Trustee hereunder shall not be increased without its
written consent; and provided, further, that the amount of benefits that, at the
time of any such modification, alteration or amendment, shall have accrued for
any Participant, Former Participant or Beneficiary hereunder shall not be
adversely affected thereby; and provided, further, that no such amendment shall
have the effect of reverting in the Employer any part of the principal or income
of the Fund. No amendment to the Plan shall decrease a participant's account
balance or eliminate an optional form of distribution, except as otherwise
provided by law and this Plan.
12.02 TERMINATION OF THE PLAN
The Company expects to continue the Plan indefinitely, but continuance is not
assumed as a contractual obligation and each Employer reserves the right at any
time by action of its Board to terminate the Plan as applicable to itself. If an
Employer terminates or partially terminates the Plan or permanently discontinues
its contributions at any time, each Participant affected thereby shall be then
vested with the amount to the credit in his Individual Account.
In the event an Employer terminates its participation in the Plan, the Committee
shall value the Fund as of the termination of participation date. That portion
of the Fund applicable to any Employer for which the Plan has not been
terminated shall be unaffected. That portion of the Fund applicable to the
Employer for which the Plan has been terminated will be treated in one of the
following ways, as determined by the Committee:
(a) The Individual Accounts of the Participants, Former Participants, and
Beneficiaries shall continue to be administered as a part of the Fund;
or
(b) The Individual Accounts of active Participants may be transferred to
another plan of the Employer who terminated participation in the Plan
if such Plan is qualified under Section 401(a) of the Code; or
(c) The Individual Accounts of active Participants may be distributed to
them in a lump sum if (i) no successor plan is established that is
qualified under Section
54
401(a) of the Code, or (ii) the termination of the Employer in the Plan
results from the sale of a subsidiary, or a sale of substantially all
of the Employer's assets used in a trade or business.
12.03 RETURN OF CONTRIBUTIONS
Contributions made to this Plan by the Employer shall be returned to the
Employer under the following circumstances:
(a) All contributions made to this Plan are conditioned upon the Employer
obtaining a deduction under Section 404 of the Code in an equal amount
for the Employer's taxable year ending with or within the Plan Year for
which the contribution is made. If all or any portion of the Employer's
contribution is not deductible under Section 404 of the Code for such
year, the amount so determined to be nondeductible shall be returned to
the Employer within one year of the disallowance of the deduction by
the Internal Revenue Service.
(b) At the direction of the Employer, a contribution made by the Employer
due to a mistake of fact shall be returned to the Employer if the
Committee so determines that such mistake existed at the time of the
contribution, provided that the contribution is returned to the
Employer within 12 months of the date it was made to the Fund.
(c) All contributions made to this Plan are conditioned upon initial
qualification of the Plan under Section 401(a) of the Code, but only if
the application for qualification is made by the time prescribed by law
for the filing of the Employer's tax return for the taxable year in
which the Plan is adopted. If the Plan fails to qualify under Section
401(a) of the Code, all amounts contributed during the time the Plan
failed to qualify shall be returned to the Employer within one year
after the date of the denial of the initial qualification of the Plan
by the Internal Revenue Service.
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ARTICLE XIII
PROVISIONS RELATIVE TO EMPLOYERS INCLUDED IN THE PLAN
13.01 METHOD OF PARTICIPATION
Any Affiliate, with the approval of the board, by appropriate action of its own
board of directors, may become a party to the Plan, by adopting the Plan for its
Associates. Any Affiliate that becomes a party to the Plan shall thereafter
promptly deliver to the Trustee provided for in Article X hereof a certified
copy of the resolutions or other documents evidencing its adoption of the Plan
or a similar plan and also a written instrument showing the Board's approval of
such Affiliate's becoming a party to the Plan.
13.02 WITHDRAWAL
Any one or more of the Employers included in the Plan may withdraw from the Plan
at any time by giving six months advance notice in writing of its or their
intention to withdraw to the Board and the Committee (unless a shorter notice
shall be agreed to by the Board).
Upon receipt of notice of any such withdrawal, the Committee shall certify to
the Trustee the equitable share of such withdrawing Employer in the Fund, as
applicable, to be determined by the Committee. The Trustee shall thereupon set
aside from the Fund then held by it such securities and other property as it
shall, in its sole discretion, deem to be equal in value to such equitable
share. If the Plan is to be terminated with respect to such Employer, the amount
set aside shall be dealt with in accordance with the provisions of Section
12.02. If the Plan is not to be terminated with respect to such Employer, the
Trustee shall turn over such amount to such trustee as may be designated by such
withdrawing Employer, and such securities and other property shall thereafter be
held and invested as a separate trust, and shall be used and applied according
to the terms of the new agreement and declaration of trust between the Employer
and the trustee so designated.
Neither the segregation of the Fund assets upon the withdrawal of an Employer,
nor the execution of a new agreement and declaration of trust pursuant to any of
the provisions of this Section, shall operate to permit any part or the corpus
or income of the fund to be used for or diverted to purposes other than for the
exclusive benefit of Participants, Former Participants and Beneficiaries.
56
ARTICLE XIV
MISCELLANEOUS
14.01 GOVERNING LAW
The Plan shall be construed, regulated and administered according to the laws of
the State of Ohio, except in those areas preempted by the laws of the United
States of America.
14.02 CONSTRUCTION
The headings and subheadings in the Plan have been inserted for convenience of
reference only and shall not affect the construction of the provisions hereof.
In any necessary construction the masculine shall include the feminine and the
singular shall include the plural, and vice versa.
14.03 ADMINISTRATION EXPENSES
The expenses of administering the Fund and the Plan, to the extent provided by
law, shall be paid for from the Fund, unless the Company directs that the
expense (or any part of them) be paid by the Employer. The Trustee, investment
manager and recordkeeper shall receive reasonable compensation as may be agreed
upon from time to time between the Company (or the Committee) and such service
provider(s).
14.04 PARTICIPANT'S RIGHTS
No Participant in the Plan shall acquire any right to be retained in the
Employer's employ by virtue of the Plan, nor upon his dismissal, or upon his
voluntary Termination of Employment, shall he have any right or interest in and
to the Fund other than as specifically provided for herein. The Employer shall
not be liable for the payment of any benefit provided for herein; all benefits
hereunder shall be payable only from the Fund.
14.05 SPENDTHRIFT CLAUSE
To the extent permitted by law, none of the benefits, payments, proceeds, or
distributions under this Plan shall be subject to the claim of any creditor of
the Participant, Former Participant, or any Beneficiary hereunder or to any
legal process
57
by any creditor of such Participant, Former participant, or any such
beneficiary. Neither shall such Participant, Former Participant or any such
Beneficiary have any right to alienate, commute, anticipate, or assign any of
the benefits, payments, proceeds or distributions under this Plan. The preceding
sentence shall also apply to the creation, assignment, or recognition of a right
to any benefit payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined to be a qualified domestic
relations order, as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985, under which payments have
commenced prior to such date. The rights of an "alternate payee" as such term is
defined in Section 414(p) of the Code, with respect to the amount assigned by a
qualified domestic relations order pursuant to the preceding sentence shall be
limited to those provided for in Section 14.11 below.
14.06 MERGER, CONSOLIDATION, OR TRANSFER
In the event of the merger or consolidation of the Plan with another plan or
transfer of assets or liabilities from the Plan to another plan, each then
Participant, Former Participant or Beneficiary shall not, as a result of such
event, be entitled on the day following such merger, consolidation or transfer
under the termination of the Plan provisions to a lesser benefit than the
benefit he was entitled to on the date immediately prior to the merger,
consolidation or transfer if the Plan had then terminated.
14.07 COUNTERPARTS
The Plan and the Trust Agreement may be executed in any number of counterparts,
each of which shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.
14.08 LIMITATION OF LIABILITY
Neither the Company, any Employer, the Committee members nor any Associate or
director of the Company or any employer shall incur any liability individually
or on behalf of other individuals or on behalf of the Company for any act or
failure to act unless such act or failure to act constitutes a lack of good
faith, willful misconduct or gross negligence in relation to the Plan or Fund.
14.09 INDEMNIFICATION
The Committee members and any Associate, officer, or director of the Company or
any Employer shall be indemnified by the Fund, or at the election of the
Company, by the Company against any and all liabilities arising by reason of any
act or failure to act in relation to the Plan or Fund unless such act or failure
to act is due to his own gross negligence or willful misconduct or lack of good
faith in relation to the Plan or Fund. Such indemnification shall include
without limitation, expenses reasonable incurred in the defense of any claim
relating thereto, attorney and legal
58
fees and amounts paid in any settlement or compromise; provided, however, that
the foregoing shall be of no force and to the extent that it is not permitted by
applicable law. To the extent the Fund assets are insufficient or if
indemnification is not permitted by applicable law, the Company shall then be
responsible for such indemnification. The indemnification provided by this
Section shall not be deemed exclusive of any other rights to which those
indemnified may be entitled and shall continue as to a person who has ceased to
be a director, officer, member, agent or Associate of the Committee or an
officer, director, or Associate of the Company and shall inure to the benefit of
his heirs and representatives.
14.10 COMPLIANCE WITH EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA) OF 1974
Anything herein to the contrary notwithstanding, nothing above or any other
provision contained elsewhere in the Plan shall relieve a Fiduciary or other
person of any responsibility or liability for an responsibility, obligation or
duty imposed upon him pursuant to Title I, Part 4 of ERISA, as amended.
Furthermore, anything in this plan to the contrary notwithstanding, if any
provision of this Plan is voided by Section 410 or 411 of ERISA, such
provision(s) shall be of no force and effect only to the extent that it is
voided by such Section.
14.11 PAYMENT TO ALTERNATE PAYEE
If Section 14.05 applies, the account of the alternate payee shall be
established and administered in the following manner:
(a) Unless otherwise specified, an account shall be established in the name
of the alternate payee by transferring the necessary assets from the
Individual Account of the Participant to the account of the alternate
payee proportionately from each Investment Fund.
(b) The account of the alternate payee will share in the allocation of
adjustments pursuant to Section 7.03.
(c) The alternate payee shall be eligible to receive benefits from the Plan
at the same time the Participant would become eligible to receive
benefits from the Plan pursuant to Article VIII. However, the alternate
payee may choose to receive an immediate lump sum.
(d) The alternate payee shall be permitted to make investment elections
pursuant to Section 5.03.
(e) The alternate payee shall not be permitted to make any withdrawals or
loans as provided in Article IX.
14.12 SECURITIES VOTING RIGHTS
With respect to all securities (including Company Stock) held by the Trustee
under the terms of the Plan, voting and all other rights incident thereto shall
be exercised by the Trustee, but only to the extent as specifically directed by
the Committee.
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14.13 APPROVED ALTERNATIVE METHODS OF WRITTEN ELECTIONS BY PARTICIPANTS
Notwithstanding any provision in this Plan to the contrary, Salary Deferral
arrangements and changes and modifications thereto, investment elections,
changes or transfers, loans, withdrawals, and any other decision or election by
a Participant (or Beneficiary) under this Plan may be accomplished by electronic
or telephonic means that are not otherwise prohibited by law and that are in
accordance with procedures and/or systems approved or arranged by the Committee
or its delegates.
14.14 MISTAKEN CONTRIBUTIONS AND ALLOCATIONS
If, after the Employer's contribution has been made and allocated, it should
appear that, through oversight or a mistake of fact or law, a Participant (or an
Associate who should have been considered a Participant) who should have been
entitled to share in such contribution, receives no allocation or received an
allocation that was less than he should have received, the Company may, at its
election and in lieu of reallocating such contribution, make a special make-up
contribution for the Individual Account of such Participant in an amount
sufficient to provide the same addition to the Individual Account as the
Participant should have received. Similarly, if a Participant received an
allocation that was more than the Participant should have received (or an
Associate was inappropriately included in the Plan), the Company, at its
election, may reallocate such contribution, offset other Company contributions
against such allocation, or use such allocation to pay Plan expenses.
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ARTICLE XV
TOP HEAVY PLAN
15.01 REQUIREMENTS
Notwithstanding anything in this Plan to the contrary, if this Plan when
combined with all other plans required to be aggregated pursuant to Section 416
of the Code is deemed to be Top Heavy for any Plan Year, the following shall
apply to such Plan Year and all future Plan Years:
(a) Regardless of hours worked, each active Participant who is not a Key
Employee shall be entitled to a minimum allocation of contributions
(excluding Salary Deferral equal to the lesser if (i) three percent of
the Participant's Compensation for the Plan Year; or (ii) the highest
percentage of compensation contributed on behalf of a Key Employee
(including Salary Deferral contributions).
(b) The multiplier of 1.25 in Section 7.07 shall be reduced to 1.0 unless
(i) all plans required or permitted to be aggregated pursuant to
Section 416 of the Code, when aggregated are 90% or less Top Heavy, and
(ii) the minimum accrued benefit referenced in Section 15.01(a) above
is modified by substituting such minimum accrued benefit with the
applicable minimum accrued benefit as provided in the Big Lots, Inc.
Amended and Restated Defined Benefit Pension Plan.
Effective for Plan Years beginning after December 31, 2001, the Top Heavy
requirements of Section 416 of the Code and therefore the requirements of this
Article XV shall not apply in any Plan Year beginning on and after January 1,
2002 that meets the requirements of section 401(k)(12) of the Code and matching
contributions that meet the requirements of Section 401(k)(11) of the Code.
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ARTICLE XVI
ADOPTION OF THE PLAN
As evidence of its adoption of the Plan, the Company has caused this instrument
to be signed by its officers duly authorized, and its corporate seal to be
affixed hereto this 26th day of February, 2002.
ATTEST: BIG LOTS, INC.
BY: /s/Charles W. Haubiel II BY: /s/ Albert J. Bell
-------------------------- ------------------------
Vice President, General
ITS: Counsel and Secretary ITS: Vice Chairman
SEAL
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