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Exhibit 10.18
WERNER HOLDING CO. (DE), INC.
EMPLOYEE SAVINGS PLAN
EFFECTIVE JANUARY 1, 1991
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CONTENTS
Page
INTRODUCTION v
ARTICLE I DEFINITIONS 1
ARTICLE II ELIGIBILITY AND PARTICIPATION
2.01 Eligibility 9
2.02 Termination and Reemployment 10
ARTICLE III SERVICE
3.01 Definitions 11
3.02 Applicable Computation Period 13
ARTICLE IV CONTRIBUTIONS
4.01 Company Matching Contributions 15
4.02 Salary Reduction Contributions 15
4.03 Voluntary Employee Contributions 25
4.04 Company Contribution 26
ARTICLE V ALLOCATIONS, ACCOUNTING, AND ADJUSTMENTS
5.01 Composition of Trust Fund 28
5.02 Allocation of Earnings to Accounts 28
5.03 Timing of Allocation of Company Contributions
and Company Matching Contributions 28
5.04 Allocation of Other Contributions 29
5.05 Maximum Annual Additions 29
5.06 Participation in Defined Benefit Plan 33
5.07 Allocation of Company Contributions and
Company Matching Contributions 35
5.08 Participant Election of Investment Funds 42
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CONTENTS
(continued)
Page
ARTICLE VI VESTING
6.01 Company Contribution Account 44
6.02 Termination of Employment 44
6.03 Effect of Breaks in Service 46
6.04 Salary Reduction Contribution Account and
Voluntary Employee Contribution Account 46
ARTICLE VII TIME AND METHOD OF PAYMENT
7.01 Manner of Payment 47
7.02 Optional Forms of Payment 48
7.03 Time of Payment 51
7.04 Payments to Beneficiaries 52
7.05 Distribution of Unallocated Contributions 58
7.06 Certain Retroactive Payments 58
ARTICLE VIII LOANS AND OTHER WITHDRAWALS
8.01 Availability of Loans 59
8.02 Multiple Loans Prohibited 63
8.03 Hardship Withdrawal 63
8.04 Withdrawals After Age Fifty-Nine and
One-Half (59 1/2) 66
8.05 Voluntary Employee Contributions 66
8.06 Spousal Consent to Withdrawals 66
ARTICLE IX ROLLOVERS AND TRANSFERS
9.01 Rollovers 68
9.02 Transfers 69
9.03 Rollover Account 69
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CONTENTS
(continued)
Page
ARTICLE X TOP-HEAVY PROVISIONS
10.01 Effective Date 70
10.02 Definitions 70
10.03 Special Code Section 415 Limitations 75
10.04 Minimum Allocation Requirements 75
10.05 Minimum Vesting Requirements 76
ARTICLE XI MANAGEMENT OF FUNDS
11.01 Appointment of Trustee 78
11.02 Assets of Trust 78
11.03 Reversion of Company Contributions 78
ARTICLE XII ADMINISTRATION OF PLAN
12.01 Plan Administrator 80
12.02 Rights, Powers, and Duties of Plan Administrator 80
12.03 Exercise of Plan Administrator's Duties 82
12.04 Indemnification of Fiduciaries 82
12.05 Compensation 83
ARTICLE XIII CLAIMS PROCEDURES
13.01 Claims Review 84
13.02 Appeals Procedure 85
ARTICLE XIV AMENDMENT AND TERMINATION
14.01 Termination 86
14.02 Right to Amend, Modify, Change, or Revise Plan 87
14.03 Merger and Consolidation of Plan; Transfer
of Plan Assets 88
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CONTENTS
(continued)
Page
ARTICLE XV MISCELLANEOUS
15.01 No Contract of Employment 89
15.02 Restrictions Upon Assignments and Creditors'
Claims 89
15.03 Restriction of Claims Against Trust 90
15.04 Benefits Payable by Trust 90
15.05 Successor to Company 90
15.06 Applicable Law 90
15.07 Data 91
15.08 Internal Revenue Service Approval 91
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WERNER HOLDING CO. (DE), INC.
EMPLOYEE SAVINGS PLAN
Effective August 1, 1987, R. D. Werner Co., Inc. (hereinafter referred to as the
"Sponsoring Company"), a corporation organized and existing under the laws of
the State of Pennsylvania, adopted the R. D. Werner Co., Inc. Salaried Employees
Savings Plan. Effective December 31, 1989, the name of the R. D. Werner Co.,
Inc. Salaried Employees Savings Plan was changed to the Werner Holding Co. (DE),
Inc. Salaried Employees Savings Plan.
Effective December 31, 1989, Florida Ladder Company, Gold Medal Ladder Co.,
Manufacturers Indemnity and Insurance Company of America, Kentucky Ladder
Company, and Werner Management Inc. adopted the Werner Holding Co. (DE), Inc.
Salaried Employees Savings Plan and assets relating to salaried employees from
prior plans were transferred to the Werner Holding Co. (DE), Inc. Salaried
Employees Savings Plan.
Effective January 2, 1990, Phoenix Management Services, Inc. adopted the Werner
Holding Co. (DE), Inc. Salaried Employees Savings Plan.
Effective June 1, 1987, the Sponsoring Company adopted the R. D. Werner Co.,
Inc. Employees Savings Plan For Employees Covered Under the USWA Local 3713,
Greenville, Pennsylvania, Collective Bargaining Agreement (the "Local 3713
Plan").
Effective October 1, 1987, the Sponsoring Company adopted the R. D. Werner Co.,
Inc. Employees Savings Plan For Employees Covered Under IAM & AW Local 2032
Collective Bargaining Agreement (the "Local 2032 Plan").
Effective October 1, 1987, the Sponsoring Company adopted the R. D. Werner Co.,
Inc. Employees Savings Plan For Employees Covered Under Teamsters Local 261
Collective Bargaining Agreement (the "Local 261 Plan").
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Effective June 30, 1989, the Sponsoring Company adopted the R. D. Werner Co.,
Inc. Employee Savings Plan For Employees Covered Under the S.M.W. Local 170,
Bell, California, Collective Bargaining Agreement (the "Local 170 Bell Plan").
Effective November 30, 1989, the Sponsoring Company adopted the R. D. Werner
Co., Inc. Anniston Division Hourly Employee 401(k) Plan (the "Anniston Plan").
Effective August 1, 1987, Florida Ladder Company adopted the Florida Ladder
Company Employee Savings Plan (the "Florida Ladder Plan").
Effective September 1, 1989, Kentucky Ladder Company adopted the Kentucky Ladder
Company Hourly Employee 401(k) Pension Plan (the "Kentucky Ladder Plan").
Effective August 1, 1987, Gold Medal Ladder Co. adopted the Gold Medal Ladder
Co. Employee Savings Plan (the "Gold Medal Ladder Plan").
Effective January 1, 1991, Werner Holding Co. (DE), Inc. hereby adopts the
Werner Holding Co. (DE), Inc. Employee Savings Plan (the "Plan") and the assets
of the Werner Holding Co. (DE), Inc. Salaried Employees Savings Plan are
transferred to and merged with the Plan.
Effective January 1, 1991, R. D. Werner Co., Inc., Florida Ladder Company, Gold
Medal Ladder Co., Manufacturers Indemnity and Insurance Company of America,
Kentucky Ladder Company, Werner Management Inc., and Phoenix Management
Services, Inc. adopt the Werner Holding Co. (DE), Inc. Employee Savings Plan.
Effective January 1, 1991, the assets of the Local 3713 Plan, the Local 2032
Plan, the Local 261 Plan, the Local 170 Bell Plan, the Anniston Plan, the
Florida Ladder Plan, the Gold Medal Ladder Plan, and the Kentucky Ladder Plan
are transferred to and merged with the Werner Holding Co. (DE), Inc. Employee
Savings Plan.
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ARTICLE I
DEFINITIONS
Whenever used herein with the initial letter capitalized, words and phrases
shall have the meanings stated below unless a different meaning is plainly
required by context. For purposes of construction of this Plan, the masculine
term shall include the feminine and the singular shall include the plural in all
cases in which they could thus be applied.
ACCOUNT(S) means the separate Account or Accounts which are maintained for the
benefit of each Participant.
ACCOUNT BALANCE(S) means, for each Participant, the total balance standing to
his Account or Accounts under the date of reference determined in accordance
with valuation procedures described in Section 5.02.
AFFILIATE means any corporation or other business entity which is included in a
controlled group of corporations within which the Company is also included, as
provided in Section 414(b) of the Code (as modified, for purposes of Sections
5.05 and 5.06 of the Plan, by Section 415(h) of the Code); or which is a trade
or business under common control with the Company, as provided in Section 414(c)
of the Code (as modified, for purposes of Sections 5.05 and 5.06 of the Plan, by
Section 415(h) of the Code); or which constitutes a member of an affiliated
service group within which the Company is also included, as provided in Section
414(m) of the Code; or which is required to be aggregated with the Company
pursuant to regulations issued under Section 414(0) of the Code.
ALTERNATE PAYEE means any spouse, former spouse, child, or other dependent of a
Participant who is recognized by a Domestic Relations Order as having a right to
receive all or a portion of a Participant's benefits payable under the Plan.
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ANNISTON DIVISION means the Anniston division of R. D. Werner Co., Inc.
ANNUITY STARTING DATE means the first day of the first period for which a
benefit is payable.
APPROVED ABSENCE means an absence from work approved by the Participating
Employer under uniform rules and conditions for all Employees, and shall include
a military leave.
BENEFICIARY means the person or persons or other entity designated by a
Participant to receive any benefits under the Plan which may be due upon the
Participant's death.
BREAK IN SERVICE means an interruption in service as defined in Section 3.01.
CODE means the Internal Revenue Code of 1986, as amended from time to time.
COMPANY means Werner Holding Co. (DE), Inc.
COMPANY CONTRIBUTION ACCOUNT means the separate Account which shall be
maintained by the Trustee for each Participant to reflect all Company
Contributions and all Company Matching Contributions made on behalf of such
Participant and any earnings thereon.
COMPANY CONTRIBUTIONS means the amount the Participating Employer may pay to the
Trust on behalf of each Participant for each Plan Year, as set forth in Section
4.04 of the Plan.
COMPANY MATCHING CONTRIBUTIONS means the amount the Participating Employer may
pay to the Trust on behalf of a Nonunion Employee Participant for each Plan
Year, as set forth in Section 4.01 of the Plan.
COMPENSATION means the total amount of cash compensation paid to or accrued for
an Employee by the Participating Employer in a Plan Year for Federal
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income tax purposes, including commissions, bonuses, overtime, and amounts
deferred under a salary reduction agreement pursuant to Section 401(k) or
Section 125 of the Code, but excluding any other extraordinary remuneration. If
an Employee becomes a Participant during a Plan Year, his Compensation in such
Plan Year, for purposes of determining the amount of the Company Contributions
contributed on his behalf pursuant to Section 4.04 of the Plan, shall be his
Compensation for the full Plan Year multiplied by a fraction, the numerator of
which shall be his months of Plan participation and the denominator of which
shall be twelve (12). For all other purposes, if an Employee becomes a
Participant during a Plan Year, his Compensation shall be his Compensation for
the full Plan Year. Effective for Plan Years beginning January 1, 1989 and
thereafter, Compensation in excess of two hundred thousand dollars ($200,000)
(or such other amount as may be established by the Secretary of the Treasury)
shall be disregarded.
DOMESTIC RELATIONS ORDER means any judgment, decree, or order (including
approval of a property settlement agreement) that relates to the provision of
child support, alimony payments, or marital property rights to an Alternate
Payee and is made pursuant to a state domestic relations law, including a
community property law.
EARLY RETIREMENT AGE means the age at which the Participant terminates his
employment on or after he completes five (5) Years of Service and has attained
age fifty-five (55).
EFFECTIVE DATE means January 1, 1991.
EMPLOYEE means a person employed by the Company or any Affiliate and shall
include any leased employee deemed to be an Employee as provided in Section
414(n) of the Code.
ENTRY DATE means the first day of the month coincident with or next following
fulfilling the eligibility requirements of Section 2.01.
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FORFEITURE means the portion of a Participant's Company Contribution Account to
which he is not entitled, as determined under Section 6.02.
HOUR OF SERVICE means:
(a) Each hour for which an Employee is paid or entitled to payment for the
performance of duties for the Participating Employer, the Company, or
an Affiliate. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed; and
(b) Each hour for which an Employee is paid or entitled to payment by the
Participating Employer, the Company, or an Affiliate 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 Approved Absence. No more than five hundred one (501)
Hours of Service shall be credited under this paragraph (b) for any
single continuous period (whether or not such period occurs in a single
computation period). Hours of Service under this paragraph (b) shall be
calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations, which are incorporated herein by this
reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Participating Employer, the Company,
or an Affiliate. The same Hours of Service shall not be credited both
under paragraph (a) or paragraph (b), as the case may be, and under
this paragraph (c). These hours shall be credited to the Employee for
the computation period or periods to which the award, agreement, or
payment pertains rather than the computation period in which the award,
agreement, or payment is made.
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(d) In the event that records are not kept which accurately reflect the
number of hours worked, an Employee will be credited with forty-five
(45) Hours of Service for each week in which he would be credited with
at least one (1) Hour of Service.
LIFE ANNUITY means an annuity for the life of the Participant which is the
actuarial equivalent of the Participant's vested Account Balance.
LIMITATION YEAR means the Plan Year.
NONUNION EMPLOYEE means an Employee who is not a Union Employee.
NORMAL RETIREMENT AGE means a Participant's sixty-fifth birthday.
PARTICIPANT means an Employee who fulfills the eligibility requirements as
provided in Article II and who continues to qualify as a Participant.
PARTICIPATING EMPLOYER means the Company and any Affiliate which adopts this
Plan with the approval of the Company.
PLAN means the Werner Holding Co. (DE), Inc. Employee Savings Plan.
PLAN ADMINISTRATOR means the Company, which shall serve pursuant to the terms of
Article XII.
PLAN YEAR means the twelve (12) month period which begins on January 1 and which
ends on December 31.
PRIOR PLAN means any of the following plans:
(a) The Werner Holding Co. (DE), Inc. Salaried Employees Savings Plan;
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(b) The R. D. Werner Co., Inc. Employees Savings Plan For Employees Covered
Under the USWA Local 3713, Greenville, Pennsylvania, Collective
Bargaining Agreement;
(c) The R. D. Werner Co., Inc. Employees Savings Plan For Employees Covered
Under IAM & AW Local 2032 Collective Bargaining Agreement;
(d) The R. D. Werner Co., Inc. Employees Savings Plan For Employees Covered
Under Teamsters Local 261 Collective Bargaining Agreement;
(e) The R. D. Werner Co., Inc. Employees Savings Plan For Employees Covered
Under the S.M.W. Local 170, Bell, California, Collective Bargaining
Agreement;
(f) The R. D. Werner Co., Inc., Anniston Division Hourly Employee 401(k)
Plan;
(g) The Kentucky Ladder Company Hourly Employee 401(k) Pension Plan;
(h) The Florida Ladder Company Employees Savings Plan; and
(i) The Gold Medal Ladder Co. Employee Savings Plan.
QUALIFIED DOMESTIC RELATIONS ORDER means any Domestic Relations Order that
creates, recognizes, or assigns to an Alternate Payee the right to receive all
or a portion of a Participant's benefits payable hereunder and meets the
requirements of Section 414(p) of the Code.
QUALIFIED JOINT AND SURVIVOR ANNUITY means an annuity for the life of the
Participant with a survivor annuity for the life of the Participant's surviving
spouse equal to fifty percent (50%) of the amount of the annuity which
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is payable during the joint lives of the Participant and his surviving spouse.
The Qualified Joint and Survivor Annuity shall be the actuarial equivalent of
the Participant's vested Account Balance.
QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY means an annuity for the life of the
surviving spouse of the Participant which is the actuarial equivalent of the
Participant's vested Account Balance.
ROLLOVER ACCOUNT means the separate Account which shall be maintained for a
Participant or Employee to reflect any Rollover Contributions made by the
Participant or Employee, and any earnings thereon.
ROLLOVER CONTRIBUTIONS means the contributions made by a Participant or
Employee, as set forth in Section 9.01 of the Plan.
SALARY REDUCTION CONTRIBUTION ACCOUNT means the separate Account maintained for
each Participant who elects a salary reduction pursuant to Section 4.02 of the
Plan to reflect all of his Salary Reduction Contributions and any earnings
thereon.
SALARY REDUCTION CONTRIBUTIONS means the contributions made by the Participating
Employer that are attributable to the reduction in salary a Participant agrees
to accept from the Participating Employer each Plan Year, as set forth in
Section 4.02 of the Plan.
TOTAL AND PERMANENT DISABILITY means a Participant is unable for physical or
mental reasons for the foreseeable future to perform his normal work for the
Participating Employer or any other work for which he is qualified by reason of
education, training, or experience, as determined by a competent physician
chosen by the Plan Administrator or upon adjudication by the Social Security
Administration that the Participant is disabled within the meaning of the Social
Security Act. Uniform standards shall apply to Participants in similar
conditions.
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TRUST AGREEMENT or TRUST means, respectively, the trust agreement establishing
the Werner Holding Co. (DE), Inc. Employee Savings Trust, as amended from time
to time, and the trust established thereunder.
TRUST FUND means all cash, securities, real estate, or any other property held
by the Trustee pursuant to the terms of the Trust Agreement, together with
income therefrom.
TRUSTEE means the person, persons, or entity appointed by the Company as
provided under Section 11.01 of the Plan to act as Trustee of the Trust.
UNION EMPLOYEE means an Employee who is a member of the USWA Local 3713, the IAM
& AW Local 2032, the Teamsters Local 261, the S.M.W. Local 170, or the
Textile Processors Service Trades, Health Care, Professional and Technical
Employees International Union #218 (FLC).
VALUATION DATE means each day of the Plan Year.
VOLUNTARY EMPLOYEE CONTRIBUTION ACCOUNT means the separate Account maintained
for each Participant who elects to make a Voluntary Employee Contribution
pursuant to Section 4.03 of the Plan to reflect all of his Voluntary Employee
Contributions and any earnings thereon.
VOLUNTARY EMPLOYEE CONTRIBUTIONS means the contributions made to the Trust as
set forth in Section 4.03 of the Plan.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY
Each Employee who was a Participant in a Prior Plan on the day prior to
the Effective Date shall continue to participate in the Plan on the
Effective Date if still employed by a Participating Employer on that
date.
Each other Employee of a Participating Employer shall become a
Participant in the Plan as follows:
(a) A nonsalaried Employee of Florida Ladder Company, Kentucky
Ladder Company, Gold Medal Ladder Company, and the Anniston
Division shall become a Participant in the Plan on his Date of
Employment. The preceding sentence notwithstanding, such an
Employee shall not be eligible to make Salary Reduction
Contributions pursuant to Section 4.02 until the Entry Date
coincident with or next following completion of Six (6) Months
of Service after his Date of Employment or Reemployment, if
applicable.
(b) A Union Employee who is a member of the S.M.W. Local 170 or
USWA Local 3713 shall become a Participant in the Plan on his
Date of Employment. The preceding sentence notwithstanding,
such an Employee shall not be eligible to make Salary
Reduction Contributions pursuant to Section 4.02 until the
Entry Date coincident with or next following completion of Six
(6) Months of Service after his Date of Employment or
Reemployment, if applicable.
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(c) All other Employees shall become a Participant in the Plan on
the Entry Date coincident with or next following completion of
Six (6) Months of Service after his Date of Employment or
Reemployment, if applicable.
2.02 TERMINATION AND REEMPLOYMENT
(a) A Participant who terminates employment and is subsequently
reemployed shall become a Participant on the Entry Date
coincident with or next following his Date of Reemployment.
(b) An Employee who terminates employment before becoming a
Participant and is reemployed before incurring a Break in
Service shall become a Participant when he satisfies the
eligibility requirements of Section 2.01, based on his
original Date of Employment.
(c) An Employee who terminates employment before becoming a
Participant and is reemployed after incurring a Break in
Service shall become a Participant when he satisfies the
eligibility requirements of Section 2.01, based on his Date of
Reemployment.
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ARTICLE III
SERVICE
3.01 DEFINITIONS
ANNIVERSARY YEAR means the twelve (12) consecutive month period
commencing on an Employee's Date of Employment or Date of Reemployment,
if applicable, and anniversaries of such date.
BREAK IN SERVICE means a one (1) year period, commencing on an
Employee's Severance From Service, during which such Employee does not
perform duties for a Participating Employer or an Affiliate.
DATE OF EMPLOYMENT or DATE OF REEMPLOYMENT means the date on which an
Employee first completes an Hour of Service after employment or
reemployment with a Participating Employer, if applicable.
MID-YEAR ANNIVERSARY DATE means the date which is the first day
following the six (6) month period commencing on the Participant's Date
of Employment or Date of Reemployment, if applicable.
MONTHS OF SERVICE means any calendar month in which an Employee
completes at least one (1) Hour of Service.
SEVERANCE FROM SERVICE means the earlier of the following dates:
(a) The date on which an Employee terminates employment, is
discharged, retires, or dies; or
(b) The first anniversary of the first day of a period in which an
Employee remains absent from service (with or without pay)
from the Company or an Affiliated Company for any reason other
than a reason listed in paragraph (a).
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An Employee who fails to return to employment at the
expiration of a leave of absence approved by the Employer
shall be deemed to have incurred a Severance From Service on
the first to occur of the expiration of his leave or the first
anniversary of the first day of his absence.
Notwithstanding anything herein to the contrary, for purposes of
determining whether a one (1) year Break in Service has occurred, an
Employee shall not incur a Severance From Service due to an absence for
maternity or paternity reasons until the second anniversary of the
first date of such absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an absence:
(a) By reason of the pregnancy of the individual;
(b) By reason of a birth of a child of the individual; or
(c) By reason of the placement of a child with the individual in
connection with the adoption of such child by such individual.
SIX (6) MONTHS OF SERVICE means a computation period in which an
Employee completes at least five hundred (500) Hours of Service.
YEAR OF VESTING SERVICE means a unit of service credited to an Employee
for purposes of determining the nonforfeitable balance of the
Participant's Accounts.
(a) An Employee shall be credited with one (1) Year of Vesting
Service for each full year in the period commencing on his
Date of Employment or Date of Reemployment and ending on his
Severance From Service. An Employee also shall be credited
with one three-hundred-sixty-fifth (1/365) of a
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Year of Vesting Service for each additional day in such period
for which he did not receive credit pursuant to the preceding
sentence.
(b) A former Employee who is reemployed and who performs duties
for the Company or an Affiliated Company within twelve (12)
calendar months of his Severance From Service shall be
credited with the entire period of his absence as if he had
worked each day during such period.
3.02 APPLICABLE COMPUTATION PERIOD
(a) For purposes of determining whether an Employee has completed
Six (6) Months of Service, the applicable computation period
shall be the six (6) consecutive month period commencing on
(1) the Participant's Date of Employment or Date of
Reemployment, if applicable, and (2) the Participant's
Mid-Year Anniversary Date, and anniversaries of such dates.
(b) For purposes of determining an Employee's Years of Vesting
Service, the following rules shall apply:
(1) Years of Vesting Service for Nonunion Employees,
other than Nonunion Employees of the Anniston
Division, shall not include computation periods prior
to the effective date of a Prior Plan in which such
individual was eligible to participate.
(2) For Union Employees who are members of the IAM & AW
Local 2032 or the Teamsters Local 261. Years of
Vesting Service shall not include periods prior to
the effective date of a Prior
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Plan in which such individual was eligible to
participate.
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ARTICLE IV
CONTRIBUTIONS
4.01 COMPANY MATCHING CONTRIBUTIONS
Each Plan Year, the Participating Employer shall contribute to the
Trust Fund on behalf of each Nonunion Employee of such Participating
Employer a Company Matching Contribution equal to fifty percent (50%)
of such individual's Salary Reduction Contribution for such year. In
applying the Company Matching Contribution percentage specified above,
Salary Reduction Contributions in excess of four percent (4%) of
Compensation shall be disregarded. Company Matching Contributions shall
be paid to the Trustee monthly, but not later than the time prescribed
by law for filing the Company's Federal income tax return for the year,
including any extensions thereof. Notwithstanding the above, Company
Matching Contributions, Company Contributions, and Salary Reduction
Contributions for any year shall not exceed the maximum amount
deductible by the Participating Employer for such year for Federal
income tax purposes under Section 404 of the Code. All Company Matching
Contributions, Company Contributions, and Salary Reduction
Contributions are specifically conditioned on their deductibility under
Section 404 of the Code.
4.02 SALARY REDUCTION CONTRIBUTIONS
(a) Each Participant shall have the option to enter into a written
salary reduction agreement with the Participating Employer
which shall be applicable to all Compensation received
thereafter. The salary reduction agreements shall provide that
the Participant agrees to accept a reduction in salary from
the Participating Employer equal to between one percent (1%)
and fifteen percent (15%) of his Compensation in integral
percentages, as elected by
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the Participant. In addition, subject to the limitations
contained in Sections 4.02(e), 4.02(f), and 5.05 of the Plan,
a Participant may elect to have the Company contribute all or
any portion of any bonus as a Salary Reduction Contribution.
The Participating Employer shall contribute to the Trust Fund,
as soon as practicable after the end of each payroll period,
but not later than thirty (30) days after the end of the Plan
Year, an amount equal to the Salary Reduction Contributions of
all Participants of such Participating Employer for such Plan
Year.
(b) Each Participant may change the rate of his Salary Reduction
Contribution by filing a new salary reduction agreement with
the Participating Employer. The new rate shall become
effective as soon as practicable after receipt of the new
salary reduction agreement by the Participating Employer. Such
new salary reduction agreement shall be applicable to all
Compensation received thereafter.
(c) Each Participant may discontinue his Salary Reduction
Contributions by notifying the Participating Employer in
writing. The discontinuance will become effective as soon as
practicable after receipt of such written notice by the
Participating Employer.
(d) The Company shall direct the Trustee to establish and maintain
a Salary Reduction Contribution Account in the name of each
Participant who elects to enter into a salary reduction
agreement.
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(e) Notwithstanding the above, the maximum amount of Salary
Reduction Contributions which can be made on behalf of each
Participant in any calendar year shall not exceed seven
thousand dollars ($7,000) or such other amount as may be
established by the Secretary of the Treasury pursuant to
Section 402(g) of the Code. In the event that a Participant's
Salary Reduction Contributions for any calendar year exceed
the maximum permissible amount (and/or in the event that the
Participant has had more than such amount of such
contributions made on his behalf under this Plan and any other
qualified plans of any employer or any other plans subject to
Section 402(g) of the Code in which he is covered and has, by
writing, communicated to the Plan Administrator prior to March
1 of the year following the year for which such contributions
were made the amount of such excess contributions which are to
be attributed to this Plan), such excess amount shall be
included in such Participant's taxable earnings for such year.
Such excess contributions (and income) shall be distributed to
the Participant prior to April 15 of the year following the
year to which the excess contributions relate and shall be
designated by the Plan as a distribution of excess
contributions (and income) under Section 402(g) of the Code.
When excess contributions are distributed, the amount to be
distributed shall be increased by earnings thereon or reduced
by losses thereon for the calendar year and for the period
between the end of the calendar year and the date of
distribution. (Earnings and losses shall be determined without
regard to whether there has been realized appreciation or
loss.)
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The earnings or losses allocable to the excess contributions
for the calendar year are determined by multiplying net
earnings or losses for the calendar year in the Participant's
Salary Reduction Contribution Account by a fraction. The
numerator of the fraction is the amount of the excess
contributions on behalf of the Participant for the calendar
year. The denominator of the fraction is the total balance of
the Participant's Salary Reduction Contribution Account as of
the last day of the calendar year, reduced by the gain
allocable to such Account for the calendar year or increased
by the loss allocable to such Account for the calendar year.
The earnings or losses for the period between the end of the
calendar year and the date of the corrective distribution
shall be equal to ten percent (10%) of the earnings or losses
allocable to excess contributions for the calendar year
multiplied by the number of calendar months that have elapsed
since the end of the calendar year. For purposes of
determining the number of calendar months that have elapsed, a
distribution occurring on or before the 15th day of the month
will be treated as having been made on the last day of the
preceding month and the distribution occurring after such 15th
day will be treated as having been made on the first day of
the next month.
In the event that amounts are to be distributed to
Participants as a result of excess contributions under this
paragraph (e) and in the event that amounts have been
distributed previously to Participants as a result of excess
contributions under paragraph (f) below, the excess
contributions (plus earnings or reduced by losses thereon) for
purposes of this paragraph shall be reduced by any excess
contributions (plus earnings or reduced by losses
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thereon) described in paragraph (f) below which have been
distributed previously.
(f) The Participating Employer may amend or revoke any salary
reduction agreement entered into by a Participant at any time
if the Participating Employer determines that such amendment
or revocation is necessary to ensure that the additions to a
Participant's Accounts for any Plan Year shall not exceed the
limitations set forth in Section 5.05 of the Plan, or to
ensure that one (1) of the following nondiscrimination tests
contained in Section 401(k) of the Code is satisfied for any
Plan Year:
(1) The actual deferral percentage for the Plan Year for
eligible Participants who are highly compensated
Employees as a group is not more than one and
one-quarter (1 1/4) times the actual deferral
percentage for the Plan Year for all other eligible
Participants as a group; or
(2) The actual deferral percentage for the Plan Year for
eligible Participants who are highly compensated
Employees as a group is not more than two (2)
percentage points (or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent
the multiple use of this alternative limitation with
respect to any highly compensated Employee) greater
than, and not more than two (2) times, the actual
deferral percentage for the Plan Year for all other
eligible Participants as a group.
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27
Section 4.02, in the event no officer of the
Participating Employer or Affiliate received
compensation from the Participating Employer and
Affiliates in excess of fifty percent (50%) of the
amount in effect under Section 415(b)-(1)(A) of the
Code for such Plan Year, the highest paid officer
shall be treated as highly compensated. Further, no
more than fifty (50) Employees (or, if lesser, the
greater of three (3) Employees or ten percent (10%)
of the Employees) shall be treated as officers for
purposes of this Section 4.02 in determining a highly
compensated Employee.
In the case of the Plan Year for which the determination is
made, an Employee not described in (2), (3), or (4) above for
the preceding year (without regard to this sentence) shall not
be treated as described in (2), (3), or (4) above unless such
Employee is a member of the group consisting of the one
hundred (100) Employees paid the greatest compensation during
the Plan Year for which the determination is being made.
If any individual is the spouse, lineal ascendant, lineal
descendant, or spouse of a lineal ascendant or descendant of a
five percent (5%) owner or of a highly compensated Employee in
the group consisting of the ten (10) highly compensated
Employees paid the greatest compensation during the year, then
such individual shall not be treated as a separate Employee,
and any compensation paid to such individual (and any Salary
Reduction Contribution on behalf of such individual) shall be
treated as if paid to (or on behalf of) the five percent (5%)
owner or highly compensated Employee.
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28
(3) Deferral percentages shall be rounded to the nearest
one-hundredth of one percentage point (1/100).
For purposes of this paragraph (f), a "highly compensated
Employee" for a Plan Year is any Employee who, during such
Plan Year or the immediately preceding Plan Year:
(1) Was at any time a five percent (5%) owner of the
Participating Employer (within the meaning of Section
416(i)(1) of the Code);
(2) Received compensation from the Participating Employer
and Affiliates in excess of seventy-five thousand
dollars ($75,000) (or such other amount as determined
under Section 414(q) of the Code);
(3) Received compensation from the Participating Employer
and Affiliates in excess of fifty thousand dollars
($50,000) (or such other amount as determined under
Section 414(q) of the Code) and was in the top twenty
percent (20%) of the group of Employees determined
under Section 414(q)(8) of the Code when ranked on
the basis of compensation in such Plan Year; or
(4) Was at any time an officer of the Participating
Employer or Affiliate and received compensation from
the Participating Employer and Affiliates in excess
of fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for such Plan Year.
For purposes of this
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A former Employee who had a separation year prior to the Plan
Year for which the determination is made who was a highly
compensated Employee for either such former Employee's final
year of employment or any determination year ending on or
after the Employee's fifty-fifth birthday shall be included as
a highly compensated Employee.
All determinations of highly compensated Employees shall be
made in accordance with Section 414(q) of the Code.
For purposes of this paragraph (f), the "actual deferral
percentage" for a Plan Year for a group of eligible
Participants is the average of the ratios (calculated
separately for each eligible Participant in such group) of the
amount of Salary Reduction Contributions credited to an
eligible Participant's Salary Reduction Contribution Account
for such Plan Year to the eligible Participant's compensation,
as defined in Section 414(s) of the Code, for such Plan Year.
The actual deferral percentage of an eligible Participant who
is a "highly compensated Employee" for the Plan Year and who
is eligible to make salary reduction contributions under two
(2) or more plans or arrangements described in Section 401(k)
of the Code that are maintained by a Participating Employer or
Affiliate shall be determined as if all such salary reduction
contributions were made under a single arrangement. If an
eligible highly compensated Employee is subject to the family
aggregation rules because he is either a five percent (5%)
owner or one (1) of the ten (10) most highly compensated
Employees, the actual deferral percentage for the family group
(which is treated as one (1) highly compensated Employee)
shall be deter-
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30
mined by combining the Salary Reduction Contributions and
compensation of all eligible family members.
For purposes of this paragraph (f), an "eligible Participant"
is any Employee of a Participating Employer who is authorized
under the terms of the Plan to make Salary Reduction
Contributions for the Plan Year.
In the event that one (1) of the tests set forth above is not
satisfied for any Plan Year, the excess Salary Reduction
Contributions (within the meaning of Section 401(k)(8)(B) of
the Code), along with the earnings of the Trust Fund allocable
to such amount, must be distributed to the affected
Participant before the last day of the immediately following
Plan Year. The amount of excess Salary Reduction Contributions
for a highly compensated Employee for a Plan Year shall be
determined by the leveling method described in Regulation
Section 1.401(k)-1(f)(2). If an eligible highly compensated
Employee is subject to the family aggregation rules because he
is either a five percent (5%) owner or one (1) of the ten (10)
most highly compensated Employees, the amount of excess Salary
Reduction Contributions for the family group (determined by
the leveling method described in Regulation Section
1.401(k)-(1)(f)(2)) shall be allocated among the family
members in proportion to the Salary Reduction Contribution of
each family member that is combined to determine the actual
deferral percentage.
The earnings or losses allocable to the excess contributions
for the Plan Year are determined by multiplying net earnings
or losses for the Plan Year in the Participant's Salary
Reduction Contribution Account by a fraction. The numerator of
the fraction is the amount of the excess
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31
contributions on behalf of the Participant for the Plan Year.
The denominator of the fraction is the total balance of the
Participant's Salary Reduction Contribution Account as of the
last day of the Plan Year, reduced by the gain allocable to
such Account for the Plan Year or increased by the loss
allocable to such Account for the Plan Year.
The earnings or losses for the period between the end of the
Plan Year and the date of the corrective distribution shall be
equal to ten percent (10%) of the earnings or losses allocable
to excess contributions for the Plan Year multiplied by the
number of calendar months that have elapsed since the end of
the Plan Year. For purposes of determining the number of
calendar months that have elapsed, a distribution occurring on
or before the 15th day of the month will be treated as having
been made on the last day of the preceding month and the
distribution occurring after such 15th day will be treated as
having been made on the first day of the next month.
The amount of excess Salary Reduction Contributions to be
distributed under this paragraph (f) with respect to a
Participant for a Plan Year shall be reduced by any Salary
Reduction Contributions in excess of the amount established by
the Secretary of the Treasury pursuant to Section 402(g) of
the Code which were previously distributed to such Participant
for the Participant's taxable year ending with or within such
Plan Year.
(g) The distribution of a Participant's Salary Reduction
Contribution Account shall not commence prior to his
attainment of age fifty-nine and one-half (59 1/2), death,
Total and Permanent Disability, or other termination of
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32
(employment except upon his demonstration of financial
hardship in accordance with the provisions of Section 8.03.
Notwithstanding the foregoing, in the event of a termination
of the Plan without establishment of a successor plan or upon
the occurrence of other circumstances defined in Section
401(k)(10) of the Code, the distribution of a Participant's
Salary Reduction Account shall be permitted.
4.03 VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) Each Plan Year each Participant may elect to contribute to the
Trust Fund as a Voluntary Employee Contribution an amount
equal to between one percent (1%) and eight percent (8%) of
his Compensation in integral percentages. A Participant who
elects to make Voluntary Employee Contributions shall complete
an authorization form as prescribed by the Plan Administrator.
The Participating Employer shall deduct each Participant's
Voluntary Employee Contribution from his Compensation for each
pay period.
(b) Each Participant may change the rate of his Voluntary Employee
Contributions by filing a new authorization form with the
Participating Employer. The new rate shall become effective as
soon as practicable after receipt of the new authorization
form by the Participating Employer.
(c) Each Participant may discontinue his Voluntary Employee
Contributions at any time by notifying the Participating
Employer. The discontinuance will become effective as soon as
practicable following receipt of such notice by the
Participating Employer.
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33
(d) The Company shall direct the Trustee to establish and maintain
a Voluntary Employee Contribution Account in the name of each
Participant who elects to make Voluntary Employee
Contributions pursuant to this Section 4.03.
(e) The Voluntary Employee Contributions shall satisfy one (1) of
the nondiscrimination tests described in Section 5.07(b) of
the Plan.
4.04 COMPANY CONTRIBUTION
(a) Each Plan Year, the Participating Employer shall contribute to
the Trust Fund, on behalf of each Participant who is a
nonsalaried Employee of Florida Ladder Company, Kentucky
Ladder Company, and Gold Medal Ladder Company, a Company
Contribution equal to five cents ($.05) per Hour of Service of
each such Participant.
(b) Each Plan Year, the Participating Employer shall contribute to
the Trust Fund, on behalf of each Participant who is a Union
Employee and a member of the S.M.W. Local 170, a Company
Contribution equal to five cents ($.05) per Hour of Service of
each such Participant.
(c) Each Plan Year, the Participating Employer shall contribute to
the Trust Fund, on behalf of each Participant who is a
nonsalaried Employee of the Anniston Division, a Company
Contribution equal to two percent (2%) of such individual's
gross pay for such year.
(d) Each Plan Year, the Participating Employer shall contribute to
the Trust Fund, on behalf of each Participant who is a Union
Employee and a member of USWA Local 3713,
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34
a Company Contribution equal to twenty cents ($.20) per Hour
of Service of each such Participant.
(e) Each Plan Year, the Participating Employer shall contribute to
the Trust Fund, on behalf of each Participant who is a
salaried Employee, such amount as the Participating Employer
shall determine.
(f) Company Contributions shall be paid to the Trustee monthly,
but not later than the time prescribed by law for filing the
Company's Federal income tax return for the year, including
any extensions thereof.
(g) Notwithstanding the above, Company Contributions, Company
Matching Contributions, and Salary Reduction Contributions for
any year shall not exceed the maximum amount deductible by the
Participating Employer for such year for Federal income tax
purposes under Section 404 of the Code. All Company
Contributions, Company Matching Contributions, and Salary
Reduction Contributions are specifically conditioned on their
deductibility under Section 404 of the Code.
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35
ARTICLE V
ALLOCATIONS, ACCOUNTING, AND ADJUSTMENTS
5.01 COMPOSITION OF TRUST FUND
All amounts contributed to the Plan, as increased or decreased by
income, expenditure, appreciation, and depreciation, shall constitute a
single fund known as the Trust Fund. A separate Company Contribution
Account shall be maintained for each Participant. Additional Accounts
shall be maintained for each Participant as required by Article IV and
Article IX.
5.02 ALLOCATION OF EARNINGS TO ACCOUNTS
Earnings shall be allocated to the Accounts of all Participants daily
by credit or deduction therefrom, as the case may be, of a portion of
the increase or decrease in the value of the respective investment
funds of the Trust Fund since the preceding day attributable to
interest, dividends, changes in market value, expenses, and gains and
losses realized from the sale of assets. Such allocation shall be made
in the proportion that the opening balance of each such Account
invested in such investment fund bears to the total of the opening
balances of all such Accounts invested in the investment fund.
5.03 TIMING OF ALLOCATION OF COMPANY CONTRIBUTIONS AND COMPANY MATCHING
CONTRIBUTIONS
At the time the contributions are received by the Trustee, the Company
Contributions and Company Matching Contributions for such month shall
be allocated according to the allocation procedures in Section 5.07.
Notwithstanding the preceding sentence, Company Contributions
attributable to a Plan Year received by the Trustee
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36
after the end of such Plan Year shall be considered allocated as of the
end of such Plan Year for purposes of Sections 5.05 and 5.06.
5.04 ALLOCATION OF OTHER CONTRIBUTIONS
At the time the contributions are received by the Trustee, Salary
Reduction Contributions and Voluntary Employee Contributions made to
the Plan during such month by or on behalf of each Participant shall be
credited to such Participant's appropriate Account. Notwithstanding the
preceding sentence, Salary Reduction Contributions and Voluntary
Employee Contributions attributable to a Plan Year received by the
Trustee after the end of such Plan Year shall be considered allocated
as of the end of such Plan Year for purposes of Sections 5.05 and 5.06.
5.05 MAXIMUM ANNUAL ADDITIONS
(a) The sum of the following additions to a Participant's Accounts
in any Limitation Year shall not exceed the lesser of (1) the
greater of thirty thousand dollars ($30,000) or one-fourth
(14) of the dollar limitation in effect under Section
415(b)(1)(A) of the Code, or (2) twenty-five percent (25%) of
the Participant's compensation for such Limitation Year:
(1) The Company Contributions and Company Matching
Contributions allocated to such Participant's Company
Contribution Account.
(2) The Salary Reduction Contributions allocated to such
Participant's Salary Reduction Contribution Account.
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37
(3) The Forfeitures, if any, allocated to such
Participant's Company Contribution Account.
(4) The Voluntary Employee Contributions allocated to
such Participant's Voluntary Employee Contribution
Account.
(b) If, as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual compensation, or
such other facts and circumstances to which Internal Revenue
Service Regulation 1.415-6 would be applicable, the additions
to a Participant's Accounts under Section 5.05(a) in any
Limitation Year would be in excess of the maximum annual
limits, his Voluntary Employee Contributions shall be returned
to him to the extent necessary to bring the additions within
the required limits. If the additions to such Participant's
Accounts would still remain in excess of the maximum annual
limits, his Salary Reduction Contributions otherwise allocable
shall be allocated to a suspense account to the extent
necessary to bring the additions within the required limits.
Such suspense account shall share in the allocation of
earnings under Section 5.02 and shall be allocated to the
Salary Reduction Contribution Account of such Participant in
future Limitation Years. If the additions to such
Participant's Accounts would still remain in excess of the
maximum annual limits, amounts otherwise allocable to the
Company Contribution Account of such Participant for such
Limitation Year shall be allocated to a suspense account in an
amount necessary to bring the additions within the maximum
annual limits which shall share in the allocation of earnings
under Section 5.02 and shall be allocated to the Company
Contribution Account of such Participant in future Limitation
Years or
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38
as otherwise provided by Internal Revenue Service Regulation
Section 1.415-6.
(c) For purposes of this Section 5.05, this Plan and any other
qualified defined contribution plan maintained by the Company,
a Participating Employer, or an Affiliate shall be considered
as a single defined contribution plan if a Participant is a
participant in both plans. Amounts allocated in Limitation
Years beginning after March 31, 1984 to a Participant's
individual medical benefit account, as defined in Section
415(l)(1) of the Code, which is part of a defined benefit plan
maintained by the Company, a Participating Employer, or an
Affiliate shall be treated as annual additions to a defined
contribution plan. Amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to post-retirement medical
benefits allocated to the separate account of a Participant
who is a key employee, as defined in Section 419A(d) of the
Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Company, a Participating
Employer, or an Affiliate, shall be treated as annual
additions to a defined contribution plan. Notwithstanding the
foregoing, the compensation limit described above shall not
apply to any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after separation
from service which is otherwise treated as an annual addition
under Section 415(l)(1) of the Code. If a reduction is
necessary under paragraph (b), then the reduction shall first
be made to the annual additions under this Plan.
(d) For purposes of determining the maximum contribution
limitations pursuant to this Section 5.05, "compensation"
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39
means a Participant's earned income, wages, salaries, fees for
professional services, and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Participating Employer to the extent that
the amounts are includable in gross income (including, but not
limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, tips,
bonuses, fringe benefits, reimbursements, and expense
allowances), and excluding the following:
(1) Participating Employer contributions to a plan of
deferred compensation which are not includable in the
Participant's gross income for the taxable year in
which contributed, or any distributions from a plan
of deferred compensation;
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Participant either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which receive special tax benefits, or
contributions made by the Participating Employer
(whether or not under a salary reduction agreement)
towards the purchase of an annuity described in
Section 403(b)
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40
of the Code (whether or not the amounts are actually
excludable from the gross income of the Participant).
5.06 PARTICIPATION IN DEFINED BENEFIT PLAN
(a) If any Participant has also participated in any qualified
defined benefit plan maintained by the Company, a
Participating Employer, or an Affiliate, the sum of the
defined benefit plan fraction and the defined contribution
plan fraction for any Limitation Year shall not exceed 1.0. In
the event this limitation would otherwise be exceeded in any
Limitation Year, the Participant's benefits under the defined
benefit plan shall be limited to the extent necessary.
(b) The defined contribution plan fraction for any Limitation Year
is a fraction, the numerator of which is the sum of the annual
additions to the Participant's Accounts as of the close of the
Limitation Year under this Plan and the denominator of which
is the sum of the lesser of the following amounts determined
for such Limitation Year and each prior year of service with
the Company, Participating Employer, or Affiliate:
(1) The product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of
the Code for such Limitation Year; or
(2) The product of 1.4 multiplied by the amount which may
be taken into account under Section 415(c)(l)(B) of
the Code for such Limitation Year.
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41
The annual additions for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all Employee
Contributions as annual additions.
(c) The defined benefit plan fraction for any Limitation Year is a
fraction, the numerator of which is the projected annual
benefit of the Participant under such plan (determined as of
the close of its limitation year) and the denominator of which
is the lesser of:
(1) The product of 1.25 multiplied by the maximum dollar
limitation in effect under Section 415(b)(1)(A) of
the Code for such Limitation Year; or
(2) The product of 1.4 multiplied by the amount which may
be taken into account under Section 415(b)(l)(B) of
the Code for such Limitation Year.
(d) If the Plan satisfied the applicable requirements of Section
415 of the Code as in effect for all Limitation Years
beginning before January 1, 1987, an amount shall be
subtracted from the numerator of the defined contribution plan
fraction (not exceeding such numerator), as prescribed by the
Secretary of the Treasury, so that the sum of the defined
benefit plan fraction and the defined contribution plan
fraction computed under Section 415(e)(1) of the Code does not
exceed one (1).
(e) For purposes of this Section 5.06, all defined benefit or
defined contribution plans shall be treated as one (1) plan by
class.
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42
5.07 ALLOCATION OF COMPANY CONTRIBUTIONS AND COMPANY MATCHING CONTRIBUTIONS
(a) The Company Contributions and Company Matching Contributions
shall be allocated as follows:
(1) The Company Contributions shall be allocated to the
Company Contribution Accounts of eligible
Participants who are entitled to a Company
Contribution pursuant to Section 4.04. Such
allocation shall be based on the contribution rates
set forth in Section 4.04. Notwithstanding the
preceding sentence, a Participant eligible to share
in Company Contributions made pursuant to Section
4.04(e) shall share such Company Contributions in the
proportion that his Compensation bears to the
Compensation of all Participants eligible for such
Company Contribution for the Plan Year.
(2) The Company Matching Contributions shall be allocated
to the Company Contribution Accounts of eligible
Participants who made Salary Reduction Contributions
for such Plan Year. Such allocation shall be based on
the contribution rate set forth in Section 4.01 of
the Plan.
(b) The Company Matching Contributions and any Voluntary Employee
Contributions for any Plan Year shall satisfy one (1) of the
following nondiscrimination tests contained in Section 401(m)
of the Code:
(1) The contribution percentage for the Plan Year for
eligible Participants who are highly com-
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43
pensated Employees as a group is not more than one
and one-quarter (1 1/4) times the contribution
percentage for the Plan Year for all other eligible
Participants as a group; or
(2) The contribution percentage for the Plan Year for
eligible Participants who are highly compensated
Employees as a group is not more than two (2)
percentage points (or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent
the multiple use of this alternative limitation with
respect to any highly compensated Employee) greater
than, and not more than two (2) times, the
contribution percentage for the Plan Year for all
other eligible Participants as a group.
(c) For purposes of this Section 5.07, the following definitions
shall apply:
(1) A "highly compensated Employee" for a Plan Year is
any Employee who, during such Plan Year or the
immediately preceding Plan Year:
(A) Was at any time a five percent (5%) owner of
the Participating Employer (within the
meaning of Section 416(i)(1) of the Code);
(B) Received compensation from the Participating
Employer and Affiliates in excess of
seventy-five thousand dollars ($75,000) (or
such other amount
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44
as determined under Section 414(q) of the
Code);
(C) Received compensation from the Participating
Employer and Affiliates in excess of fifty
thousand dollars ($50,000) (or such other
amount as determined under Section 414(q) of
the Code) and was in the top twenty percent
(20%) of the group of Employees determined
under Section 414(q)(8) of the Code when
ranked on the basis of compensation in such
Plan Year; or
(D) Was at any time an officer of the
Participating Employer or Affiliate and
received compensation from the Participating
Employer and Affiliates in excess of fifty
percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for such
Plan Year. For purposes of this Section
5.07, in the event no officer of the
Participating Employer or Affiliate received
compensation from the Participating Employer
and Affiliates in excess of fifty percent
(50%) of the amount in effect under Section
415(b)(l)(A) of the Code for such Plan Year,
the highest paid officer shall be treated as
highly compensated. Further, no more than
fifty (50) Employees (or, if lesser,
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45
the greater of three (3) Employees or ten
percent (10%) of the Employees) shall be
treated as officers for purposes of this
Section 5.07 in determining a highly
compensated Employee.
In the case of the Plan Year for which the
determination is made, an Employee not described in
(B), (C), or (D) above for the preceding year
(without regard to this sentence) shall not be
treated as described in (B), (C), or (D) above unless
such Employee is a member of the group consisting of
the one hundred (100) Employees paid the greatest
compensation during the Plan Year for which the
determination is being made.
If any individual is the spouse, lineal ascendant,
lineal descendant, or spouse of a lineal ascendant or
descendant of a five percent (5%) owner or of a
highly compensated Employee in the group consisting
of the ten (10) highly compensated Employees paid the
greatest compensation during the year, then such
individual shall not be treated as a separate
Employee, and any compensation paid to such
individual (and any Voluntary Employee Contribution
and Company Matching Contribution made on behalf of
such individual) shall be treated as if paid to (or
on behalf of) the five percent (5%) owner or highly
compensated Employee.
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46
A former Employee who had a separation year prior to
the Plan Year for which the determination is made who
was a highly compensated Employee for either such
former Employee's final year of employment or any
determination year ending on or after an Employee's
fifty-fifth birthday shall be included as a highly
compensated Employee.
All determinations of highly compensated Employees
shall be made in accordance with Section 414(q) of
the Code.
(2) The "contribution percentage" for a Plan Year for a
group of eligible Participants is the average of the
ratios (calculated separately for each eligible
Participant in such group) of the Company Matching
Contributions allocated to an eligible Participant's
Company Contribution Account plus the Voluntary
Employee Contributions credited to an eligible
Participant's Voluntary Employee Contribution Account
for the Plan Year to the eligible Participant's
compensation, as defined in Section 414(s) of the
Code, for the Plan Year. The contribution percentage
of an eligible Participant who is a "highly
compensated Employee" for the Plan Year and who is
eligible to make employee contributions or to receive
matching contributions, as defined in Section
401(m)(4) of the Code, under two (2) or more plans
described in Section 401(a) of the Code that are
maintained by the Participating Employer or an
Affiliate shall be determined as if all such
contributions were
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47
made under a single plan. If an eligible highly
compensated Employee is subject to the family
aggregation rules because he is either a five percent
(5%) owner or one (1) of the ten (10) most highly
compensated Employees, the contribution percentage
for the family group (which is treated as one (1)
highly compensated Employee) shall be determined by
combining the Company Matching Contributions, the
Voluntary Employee Contributions, and the
compensation of all eligible family members.
An "eligible Participant" is any Employee who is authorized to
receive Company Matching Contributions or is authorized to
make Voluntary Employee Contributions under the terms of the
Plan for the Plan Year.
(d) In the event that one (1) of the tests set forth in paragraph
(b) is not satisfied for any Plan Year, the excess aggregate
Company Matching Contributions and Voluntary Employee
Contributions (within the meaning of Section 401(m)(6)(B) of
the Code), along with the earnings of the Trust Fund allocable
to such amount, shall, before the last day of the immediately
following Plan Year:
(1) To the extent not vested, be forfeited and allocated,
after all other Forfeitures under the Plan, in the
same manner as such other Forfeitures; and
(2) To the extent vested, be distributed to the affected
Participant.
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48
Notwithstanding the foregoing, no Forfeitures arising under
this paragraph shall be allocated to the Company Contribution
Account of any eligible Participant who is a highly
compensated Employee.
The amount of excess aggregate Company Matching Contributions
and Voluntary Employee Contributions for a highly compensated
Employee for a Plan Year shall be determined by the leveling
method described in Proposed Regulation Section
1.401(m)-1(e)(2). If an eligible highly compensated Employee
is subject to the family aggregation rules because he is
either a five percent (5%) owner or one (1) of the ten (10)
most highly compensated Employees, the amount of excess
aggregate Company Matching Contributions and Voluntary
Employee Contributions for the family group (determined by the
leveling method described in Regulation (Section
1.401(m)-(1)(e)(2)) shall be allocated among the family
members in proportion to the Company Matching Contribution and
Voluntary Employee Contributions of each family member that is
combined to determine the contribution percentage.
The earnings or losses allocable to the excess aggregate
contributions for the Plan Year are determined by multiplying
net earnings or losses for the Plan Year in the Participant's
Company Contribution Account and Voluntary Employee
Contribution Account by a fraction. The numerator of the
fraction is the amount of the excess aggregate contributions
on behalf of the Participant for the Plan Year. The
denominator of the fraction is the total balance of the
Participant's Company Contribution Account and Voluntary
Employee Contribution Account as of the last day of the Plan
Year, reduced by the gain allocable to
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such Account for the Plan Year or increased by the loss
allocable to each such Account for the Plan Year.
The earnings or losses for the period between the end of the
Plan Year and the date of reallocation or corrective
distribution shall be equal to ten percent (10%) of the
earnings or losses allocable to excess aggregate contributions
for the Plan Year multiplied by the number of calendar months
that have elapsed since the end of the Plan Year. For purposes
of determining the number of calendar months that have
elapsed, a distribution occurring on or before the 15th day of
the month will be treated as having been made on the last day
of the preceding month and the distribution occurring after
such 15th day will be treated as having been made on the first
day of the next month.
5.08 PARTICIPANT ELECTION OF INVESTMENT FUNDS
Each Participant in the Plan may elect the investment fund or funds in
which his Accounts shall be invested. Each such election shall be made
in writing on forms to be furnished by the Plan Administrator and shall
specify that portion of the Participant's existing Account Balance on
the date of such election to be invested in each respective investment
fund established by the Company. Each of the Participant's Accounts
shall be invested in the same proportions in each investment fund.
Changes in the Account Balances invested in the specified funds due to
earnings and losses shall not require reallocation of the Account
Balances in the specified proportions unless subsequently elected by
the Participant.
A Participant may change his investment fund elections regarding
existing Account Balances and future contributions and Forfeitures
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in accordance with procedures established by the Plan Administrator.
Such change shall be effective as of the close of business on the day
appropriate notice is provided.
If no election form has been executed by the Participant and submitted
to the Trustee by the Plan Administrator, the entire Account shall be
invested in the investment fund designated by the Plan Administrator.
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ARTICLE VI
VESTING
6.01 COMPANY CONTRIBUTION ACCOUNT
A Participant shall have a fully vested, nonforfeitable interest in his
Company Contribution Account on the first to occur of the following
events (regardless of the number of completed Years of Vesting Service):
(a) His attainment of Early Retirement Age or Normal Retirement Age;
(b) The date on which he shall be determined to have a Total and
Permanent Disability;
(c) The date of his death; or
(d) Upon the completion of the number of Years of Vesting Service
required for full vesting.
6.02 TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment with all Participating
Employers and Affiliates for any reason other than Total and
Permanent Disability or death and before his Early or Normal
Retirement Age, he shall be vested in the percentage of his
Company Contribution Account set forth in the following table:
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Completed Years
of Vesting Service Vested Percentage
------------------ -----------------
Less than 5 0%
5 100%
(b) The portion of the Participant's Company Contribution Account in
which he is not vested at his termination of employment shall be
declared a Forfeiture upon the occurrence of a Break in Service.
Such Forfeiture shall be used first to restore previously
forfeited amounts to other Participants, and then to reduce the
Company's future contributions. Any person who terminates
employment with no vested interest in his Accounts shall be deemed
to have had an immediate distribution of the vested portion of his
Accounts at the time of his termination of employment. If the
Participant who is reemployed before incurring five (5)
consecutive Breaks in Service shall again terminate his employment
under circumstances in which he is not fully vested in his Company
Contribution Account, such Participant's vested balance in his
Company Contribution Account shall be determined by adding to the
amount actually held by the Trust any amount previously
distributed to him. The vested percentage shall be applied to this
total, the amount of any previous distributions shall be
subtracted, and the remaining amount shall be his vested balance
in his Company Contribution Account.
(c) If the Participant returns to the employ of a Participating
Employer or Affiliate before he incurs five (5) consecutive Breaks
in Service, the portion of his Company Contribution Account that
had been forfeited shall be reinstated to his Company Contribution
Account in full, unadjusted b any gains or losses occurring
subsequent to the Valuation Date
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immediately preceding his termination of employment, by using the
Forfeitures during the Plan Year in which his reemployment
occurred. If the Forfeitures in the year of reemployment are
insufficient to restore the forfeited amount, the remainder shall
be restored by a Company Contribution. Such a Participant shall
continue vesting in such Account. If the Participant incurs five
(5) consecutive Breaks in Service, he shall not regain any
interest in any Forfeiture.
6.03 EFFECT OF BREAKS IN SERVICE
If a Participant or Employee incurs five (5) or more consecutive
Breaks in Service and is thereafter reemployed by a Participating
Employer or Affiliate, he shall regain his Years of Vesting Service
earned before such Breaks in Service upon such reemployment. However, he
shall not regain any interest in any Forfeiture. If a Participant or
other Employee incurs fewer than five (5) consecutive Breaks in Service
and is thereafter reemployed by a Participating Employer or Affiliate,
he shall regain his Years of Vesting Service earned before such Breaks
in Service and any Forfeiture shall be restored pursuant to Section
6.02.
6.04 SALARY REDUCTION CONTRIBUTION ACCOUNT AND VOLUNTARY EMPLOYEE
CONTRIBUTION ACCOUNT
A Participant shall at all times have a fully vested, nonforfeitable
interest in his Salary Reduction Contribution Account and Voluntary
Employee Contribution Account.
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ARTICLE VII
TIME AND METHOD OF PAYMENT
7.01 MANNER OF PAYMENT
(a) Whenever the Plan Administrator shall direct the Trustee to make
payment to a Participant upon termination of the Participant's
employment (whether by reason of retirement, Total and Permanent
Disability, or for any other reason other than death), the Plan
Administrator shall direct the Trustee to pay the vested
percentage of the Participant's Account Balance (determined as of
the Valuation Date preceding his Annuity Starting Date) to or for
the benefit of the Participant as of the payment date and in such
of the following ways as the Participant ant shall elect:
(1) In a lump sum; or
(2) In the form of an annuity.
Notwithstanding the foregoing, if the vested value of the
Participant's Account Balance (determined as of the Valuation Date
preceding his termination of employment) is three thousand five
hundred dollars ($3,500) or less, payment shall be made as soon as
practicable in one (1) lump sum. If the Participant does not make
an election of form of payment, payment shall be made in a lump
sum.
(b) If the Participant elects payment in the form of an annuity, the
provisions of this paragraph (b) and Section 7.02 shall apply. If
a Participant is legally married on the Annuity Starting Date,
payment to the Participant shall be made in the form of a
Qualified Joint and
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Survivor Annuity, unless an optional form of payment is selected
pursuant to a qualified election, as described in Section 7.02.
If a Participant is not married on the Annuity Starting Date,
payment to the Participant shall be made in the form of a Life
Annuity, unless an optional form of payment is selected pursuant
to a qualified election, as described in Section 7.02.
Notwithstanding the foregoing, if the value of the Participant's
vested Account Balance (determined as of the Valuation Date
preceding his termination of employment) is three thousand five
hundred dollars ($3,500) or less, payment shall be made as soon
as practicable in one (1) lump sum.
7.02 OPTIONAL FORMS OF PAYMENT
(a) Any Participant may choose to receive payment of his vested
Account Balance in a form of annuity other than the applicable
normal form following his termination of employment by making a
qualified election, as described in paragraph (b) below.
In addition, a married Participant may choose to receive payment
in the form of a Life Annuity by making a qualified election, as
described in paragraph (b) of this Section 7.02. Notwithstanding
the foregoing, distribution may not be made over any period that
exceeds:
(1) The life of the Participant;
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(2) The life of the Participant and a designated Beneficiary;
(3) A period certain not extending beyond the life expectancy
of the Participant; or
(4) A period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(b) To make a qualified election, a married Participant must waive his
right to the Qualified Joint and Survivor Annuity within the
ninety (90) day period ending on the Annuity Starting Date. An
unmarried Participant must waive his right to the Life Annuity in
the same manner as if it were a waiver of the Qualified Joint and
Survivor Annuity. A married Participant's spouse must consent to
his waiver of the Qualified Joint and Survivor Annuity. The
spouse's consent to the waiver must be in writing, must
acknowledge the effect of the waiver, and must specify both the
optional form of benefit selected and the specific Beneficiary
designated, if applicable.
In order to be valid, the spousal consent must be witnessed by a
Plan representative or a notary public. Such spousal consent
shall be revocable by the spouse at any time prior to the Annuity
Starting Date.
Notwithstanding this consent requirement, if the Participant
establishes to the satisfaction of the Plan Administrator that
such written consent may not be obtained because there is no
spouse or the spouse cannot be located, a waiver will be deemed a
qualified election. In the event that the spouse of a Participant
is legally
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incompetent to give consent, such consent may be given by the
spouse's legal guardian, which shall include the Participant in
the event the Participant is the legal guardian of the spouse. In
the event the Participant is legally separated or has been
abandoned, as provided by a court order, spousal consent shall not
be required, except where otherwise provided by a Qualified
Domestic Relations Order.
Any consent necessary under this provision will be valid only with
respect to the spouse who signs the consent or, in the event of a
deemed qualified election, the designated spouse. A revocation of
a prior waiver may be made by a Participant without the consent of
the spouse at any time before the Annuity Starting Date. The
number of revocations shall not be limited.
(c) The Plan Administrator shall provide to each Participant, no less
than thirty (30) days and no more than ninety (90) days prior to
the Annuity Starting Date, a written explanation of:
(1) The terms and conditions of a Qualified Joint and Survivor
Annuity or Life Annuity, as appropriate;
(2) The Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor Annuity
or Life Annuity form of payment, as appropriate;
(3) The rights of the Participant's spouse;
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(4) The right to make and the effect of a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity or Life Annuity, as appropriate; and
(5) The relative values of the various forms of benefit
available under the Plan.
If a Participant dies after election of an optional form but
before the Annuity Starting Date, payment shall be made in
accordance with Section 7.04 of the Plan.
(d) A Participant's life expectancy may be recalculated no more
frequently than annually; however, the life expectancy of a
nonspouse Beneficiary may not be recalculated. For calendar years
beginning before January 1, 1989, if a Participant's spouse is not
the designated Beneficiary, the method of distribution selected
must assure that at least fifty percent (50%) of the present value
of the amount available for distribution is paid within the life
expectancy of the Participant. For calendar years beginning after
December 31, 1988, distributions shall be made in accordance with
Proposed Regulation Section 1.401(a)9-2.
7.03 TIME OF PAYMENT
Subject to the provisions of Section 7.06, payment shall be made or
shall commence as of the later of: (1) the date the Participant attains
(or would have attained) Normal Retirement Age, or (2) sixty (60) days
after the close of the Plan Year in which the employment of the
Participant terminate ant terminates, unless the Participant, or his
Beneficiary in the event of his death, requests payment at an earlier
date. In such event, payment shall be made or shall
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commence as of the date requested. If the Participant's vested Account
Balance exceeds three thousand five hundred dollars ($3,500) and payment
is to be made prior to the Participant's Normal Retirement Age, the
Participant must consent in writing to the distribution before payment
of any portion of the distribution commences. In such a case, the
Participant's spouse also must consent in writing to the timing of the
distribution unless payment is made in the form of a Qualified Joint and
Survivor Annuity. Notwithstanding the foregoing, effective January 1,
1989, in all cases payment shall be made or shall commence by the April
1 immediately following the year in which the Participant attains the
age of seventy and one-half (70 1/2), even if he has not retired. The
preceding sentence shall not apply to a Participant who:
(a) Has made a written election to receive his benefits under the Plan
at a later date in accordance with Section 242(b) of the Tax
Equity and Fiscal Responsibility Act of 1982; or
(b) Has attained age seventy and one-half (70 1/2) before January 1,
1988 and who was not a five percent (5%) owner of the
Participating Employer at any time during the Plan Year ending
with or within the calendar year in which such individual attained
age sixty-six and one-half (66 1/2) or any subsequent Plan Year.
7.04 PAYMENTS TO BENEFICIARIES
(a) If a Participant who has elected to receive benefits in the form
of an annuity dies before the Annuity Starting Date, payment of
his vested Account Balance shall be made to the surviving spouse
of the Participant in the form of a Qualified Pre-retirement
Survivor Annuity unless the Participant either has no spouse or
has designated another
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(Beneficiary in the manner described in this Section 7.04(a), or
the spouse elects to receive payment in a single lump sum. The
surviving spouse may elect to receive payment as soon as
administratively feasible after the Participant's death.
Notwithstanding anything to the contrary, if the Participant's
vested Account Balance is three thousand five hundred dollars
($3,500) or less, payment will be made to the surviving spouse in
a single lump sum as soon as administratively feasible following
the Participant's death. In order for the designation of a
Beneficiary other than the spouse to be valid, the designation
must have been made after the first day of the Plan Year in which
the Participant attains age thirty-five (35), the designation must
contain a waiver of the Qualified Pre-retirement Survivor Annuity,
and the Participant's spouse must consent in writing to the waiver
(of the Qualified Pre-retirement Survivor Annuity and to the
specific nonspouse Beneficiary designation. A valid spousal
consent shall be witnessed by either a representative of the Plan
or a notary public and shall be revocable by the spouse at any
time prior to the Annuity Starting Date. The Plan Administrator
shall provide to each Participant a written explanation of the
Qualified Pre-retirement Survivor Annuity within the applicable
period. With respect to any Participant, the applicable period
means whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan Year in which
the Participant attains age thirty-two (32) and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-five (35);
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(2) A reasonable period ending after the individual becomes a
Participant; or
(3) A reasonable period ending after Section 401(a)(11) of the Code
first applies to the Participant.
Notwithstanding the foregoing, in the case of a Participant who
separates from service before attaining age thirty-five (35), the
applicable period means the period beginning one (1) year before
the separation from service and ending one (1) year after such
separation. The written explanation of the Qualified
Pre-retirement. Survivor Annuity shall provide comparable notice
and information to that described in Section 7.02 with respect to
the Qualified Joint and Survivor Annuity.
A married Participant may designate a nonspouse Beneficiary prior
to the first day of the Plan Year in which the Participant attains
age thirty-five (35) if a written explanation of the benefit
provided under this Section 7.04 is given to the Participant by
the Plan Administrator within a reasonable period prior to the
time of the designation. Such early nonspouse Beneficiary
designation shall become invalid as of the first day of the Plan
Year in which the Participant attains age thirty-five (35). The
designation of a nonspouse Beneficiary shall be revoked
automatically upon the marriage or remarriage of a Participant.
Notwithstanding the foregoing, the spousal consent requirement
shall not apply if it is established to the satisfaction of the
Plan Administrator either that the spouse cannot be located or
that other circumstances set forth in regulations promulgated
under Section 417 of
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the Code which preclude the necessity of the spouse's
consent are present with respect to the Participant.
(b) A Participant who is not married or who has not elected the
annuity form of payment may designate a Beneficiary at any time.
If a Participant is married on the date of his death, the
Beneficiary of such Participant shall be his spouse unless the
Participant's spouse consents in writing not to be said
Beneficiary. The spouse's consent must acknowledge the effect of
such consent not to be the Participant's Beneficiary and such
written consent must be witnessed by either the Plan Administrator
or a notary public. The consent must be limited to a benefit for a
specific alternate Beneficiary. The designation of a nonspouse
Beneficiary shall be revoked automatically upon the marriage or
remarriage of a Participant. Notwithstanding the foregoing, this
paragraph (b) shall not apply if it is established to the Plan
Administrator's satisfaction either that the spouse cannot be
located or that other circumstances set forth in regulations
promulgated under Section 417 of the Code which preclude the
necessity of the spouse's consent are present with respect to the
Participant.
If a Participant is not married, has not elected the annuity form
of payment, or has designated a Beneficiary other than his spouse
in accordance with Section 7.04(a), upon his death, his vested
Account Balance shall be paid to his surviving spouse or other
designated Beneficiary in the form of a single lump sum payment as
soon as administratively feasible following the Participant's
death. If the Participant has elected the annuity form of payment
and his surviving spouse is his Beneficiary, his surviving spouse
may elect to receive payment in the form of a lump
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sum in lieu of the Qualified Pre-retirement Survivor Annuity
within a reasonable period before benefits commence. If a
designated Beneficiary shall die before the Participant, his
interest shall terminate, and, unless otherwise provided in the
Participant's designation, such interest shall be paid in equal
shares to those Beneficiaries, if any, who survive the
Participant.
Except as otherwise provided in paragraph (a), the Participant
shall have the right to revoke the designation of any Beneficiary
without the consent of the Beneficiary.
(c) If a Participant fails to designate a Beneficiary, if such
designation shall for any reason be illegal or ineffective, or if
no Beneficiary survives the Participant, his death benefits shall
be paid:
(1) To his surviving spouse;
(2) If there is no surviving spouse, to his descendants
(including legally adopted children and their descendants)
PER STIRPES; or
(3) If there is neither surviving spouse nor surviving
descendants, to the executor or other personal
representative of the Participant to be distributed in
accordance with the Participant's will or applicable law.
(d) Notwithstanding the foregoing provisions of this Section 7.04, in
the event of the Participant's death prior to the Annuity Starting
Date, the entire interest of the Participant will be distributed
within five (5) years after
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the death of the Participant, unless one (1) of the following
exceptions is met:
(1)(A) Any portion of the Participant's Account is payable to
(or for the benefit of) a designated Beneficiary;
(B) Such portion of the Participant's Account shall be
distributed over a period not extending beyond the life or
life expectancy of the designated Beneficiary; and
(C) Such distribution commences no later than one (1) year after
the date of the Participant's death.
(2)(A) The portion of the Participant's Account to which his
surviving spouse is entitled shall be distributed over a
period not extending beyond the life or life expectancy of
the surviving spouse; and
(B) Such distribution commences no later than the date on which
the Participant would have attained age seventy and one-half
(70 1/2).
If the Participant dies after the Annuity Starting Date, the remaining
portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Participant's death.
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7.05 DISTRIBUTION OF UNALLOCATED CONTRIBUTIONS
If on the date of termination of a Participant's employment the
Participating Employer shall be holding contributions made by or on
behalf of the Participant but not yet allocated to his Accounts, the
Participating Employer shall pay such amounts either directly to the
Participant (or his Beneficiary, as the case may be) or to the Trustee,
to be distributed by the Trustee in accordance with the method of
distribution determined under Section 7.01 or Section 7.04.
7.06 CERTAIN RETROACTIVE PAYMENTS
If the amount of the payment required to be made or commence on the date
determined in this Article VII cannot be ascertained by such date, a
payment may be made no later than sixty (60) days after the earliest
date on which the amount of such payment can be ascertained under the
Plan.
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ARTICLE VIII
LOANS AND OTHER WITHDRAWALS
8.01 AVAILABILITY OF LOANS
(a) Upon application by a Participant or a Party-in-Interest, the
Trustee may lend a Participant, on account of a qualifying
emergency, an amount which does not exceed the lesser of (1) fifty
thousand dollars ($50,000) reduced by the highest outstanding
balance of loans to the Participant or Party-in-Interest from the
Plan during the one (1) year period ending on the day before the
date on which such loan is to be made, or (2) one-half (1/2) of
the nonforfeitable value of his Account Balance, if any, under the
Plan as of the date on which the loan is approved.
(b) Notwithstanding Section 8.01(a) above, upon application by a
Participant or a Party-in-Interest, the Trustee may lend a
Participant an amount which does not exceed the lesser of:
(1) Twenty thousand dollars ($20,000) reduced by the highest
outstanding balance of loans to the Participant or
Party-in-Interest from the Plan during the one (1) year
period ending on the day before the date on which such loan
is made; or
(2) One-fourth (1/4) of the nonforfeitable value of his Account
Balance, if any, under the Plan as of the date on which the
loan is approved.
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(c) All loans shall follow a uniform, nondiscriminatory policy. Loans
shall not be made available to highly compensated employees, as
defined in Section 414(q) of the Code, in an amount greater than
the amount available to other Employees. For purposes of this
Article VIII, "Party-in-Interest" shall include former employees,
retirees, Alternate Payees, and Beneficiaries who are
parties-in-interest as defined in Section 3(14) of the Employee
Retirement Income Security Act of 1974. In the event a Participant
or Party-in-Interest is married at the time of the loan and has
elected to receive distribution of his Accounts in the form of an
annuity, the spouse of such Participant or Party-in-Interest must
consent to the loan and the possible reduction of the Account
Balance of the Participant or Party-in-Interest to satisfy the
loan. Such spousal consent must be in writing, must be made within
the ninety (90) day period prior to making the loan, must
acknowledge the effect of the loan, and must witnessed by either a
Plan representative or a notary public. The consent requirements
shall not apply if it is established to the satisfaction of the
Plan Administrator either that the spouse cannot be located or
that other circumstances set forth in regulations issued by the
Secretary of the Treasury which preclude the necessity of the
spouse's consent are present. Further spousal consent is not
required regardless of whether the Participant or
Party-in-Interest subsequently has a change in spouse or change in
marital status. Any renegotiation, extension, renewal, or other
revision of a loan shall be treated as a new loan, requiring a new
spousal consent in accordance with this paragraph.
(d) A distribution will be based on a qualifying emergency if the
distribution is on account of:
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(1) Expenses related to a death in the immediate family;
(2) Payment of tuition for the education of an immediate
family member;
(3) Expenses related to the disability of a Participant other
than Total and Permanent Disability;
(4) Expenses related to an illness in the immediate family;
and
(5) The purchase of a principal residence of the Participant.
(e) In addition to such rules and regulations as the Plan
Administrator may adopt, all loans shall comply with the following
terms and conditions:
(1) An application for a loan by a Participant or
Party-in-Interest shall be made in accordance with
procedures established by the Plan Administrator or its
designee whose action thereon shall be final. The Plan
Administrator shall specify the form of the application
and any supporting data required.
(2) The period of repayment for any loan shall be five (5)
years. Any loan used to acquire a dwelling unit which
within a reasonable time will be used as the principal
residence of the Participant or Party-in-Interest does not
have to be repaid within five (5) years but shall be
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paid in a time determined by the Plan Administrator. Loans
shall be repayable in substantially equal amortized
installments of both principal and interest payable not
less frequently than quarterly. Any loan described in this
Article VIII shall be considered an investment of the
Account from which it was borrowed. Such a Participant's
Account shall not share in the allocation of earnings
under Section 5.02 to the extent of such loan.
(3) Each loan shall bear interest at a rate which is not less
than the rate being charged by the area banking business
for similar, well-secured loans.
(4) Each loan shall be supported by collateral equal to no
more than fifty percent (50%) of the present value of the
Participant's or Party-in-Interest's Accounts. A loan
shall also be supported by the Participant's or
Party-in-Interest's promissory note for the amount of the
loan, including interest, payable to the order of the
Trustee. The promissory note shall require that the unpaid
principal and interest will (at the Trustee's option)
become due and payable if the loan payment is not made
within thirty (30) days after the due date of any
installment. In the event of default, foreclosure on the
note and attachment of security will not occur until a
distributable event occurs in the Plan.
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(5) No loans shall be made to any Shareholder-employee or
Owner-employee. For purposes of this Section, the term
"Shareholder-employee" means an Employee or officer of an
electing small business corporation who owns (or is
considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year
of such corporation, more than five percent (5%) of the
outstanding stock of the corporation.
8.02 MULTIPLE LOANS PROHIBITED
A Participant or Party-in-Interest shall not receive more than one (1)
loan at a time from the Trust. If a Participant or Party-in-Interest
borrows amounts under more than one (1) qualified plan maintained by the
Participating Employer, all the plans are treated as one (1) plan for
purposes of the borrowing restrictions outlined in Section 8.01.
Moreover, no distribution shall be made to a Participant or. his
Beneficiary or a Party-in-Interest unless and until all unpaid loans,
including accrued interest thereon, have been paid.
8.03 HARDSHIP WITHDRAWAL
(a) A Participant may receive a distribution based on financial
hardship of his Salary Reduction Contributions (and not any
earnings thereon) from his Salary Reduction Contribution Account;
however, income on Salary Reduction Contributions made to a Prior
Plan credited as of December 31, 1988 will continue to be eligible
for hardship withdrawals.
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(b) The Participant must request a hardship withdrawal in writing at
least thirty (30) days prior to the effective date of the
withdrawal and must make his request on a form approved by the
Plan Administrator.
(c) A distribution based upon financial hardship may be made only if
the Participant has an immediate and heavy financial need and
cannot exceed the amount required to satisfy such financial need
which may not be satisfied from other resources reasonably
available to the Participant. The determination of the existence
of an immediate and heavy financial need and the amount required
to be distributed to meet the need created by the hardship must be
made by the Plan Administrator based on the applicable facts and
circumstances in accordance with uniform and nondiscriminatory
standards applicable to all Participants. Notwithstanding the
preceding sentence, a Participant will be deemed to have an
immediate and heavy financial need only if the distribution is on
account of:
(1) Medical expenses described in Code Section 213(d) incurred
by the Participant, the Participant's spouse, or any of the
Participant's dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence of the Participant;
(3) Payment of tuition for the next semester or quarter of
postsecondary education for the Participant, his spouse,
children, or dependents; or
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(4) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of
the Participant's principal residence.
Further, the distribution will be deemed necessary to satisfy the
financial need if both of the following requirements are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant; and
(2) The Plan Administrator has reasonably relied upon the
Participant's representation that the need cannot be
relieved:
(A) Through reimbursement or compensation by insurance or
otherwise;
(B) By reasonable liquidation of the Participant's
assets, to the extent that such liquidation would not
itself cause an immediate and heavy financial need;
(C) By cessation of elective contributions under the
Plan; or
(D) By other distributions or nontaxable (at the time of
the loan) loans from plans maintained by the
Participating Employer or by any other employer, or
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by borrowing from commercial sources on reasonable
commercial terms.
8.04 WITHDRAWALS AFTER AGE FIFTY-NINE AND ONE-HALF (59 1/2)
(a) A Participant who has attained age fifty-nine and one-half (59
1/2) may elect in writing to withdraw the entire value of his
Salary Reduction Contribution Account or any portion thereof for
any reason.
(b) The Participant must request the distribution at least thirty (30)
days prior to the effective date of the withdrawal and must make
his request on a form approved by the Plan Administrator.
8.05 VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) A Participant may elect in writing to withdraw the entire value of
his Voluntary Employee Contribution Account or any portion
thereof.
(b) The Participant must request the withdrawal at least thirty (30)
days prior to the effective date of the withdrawal and must make
his request on a form approved by the Plan Administrator.
8.06 SPOUSAL CONSENT TO WITHDRAWALS
In the event a Participant is married at the time of any withdrawal and
has elected to receive distribution of his Accounts in the form of an
annuity, the Participant's spouse must consent to the withdrawal within
the ninety (90) day period preceding the date of the withdrawal. Such
spousal consent must be in writing, must
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acknowledge the effect of the withdrawal, and must be witnessed by either a Plan
representative or a notary public.
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ARTICLE IX
ROLLOVERS AND TRANSFERS
9.01 ROLLOVERS
Any Employee, regardless of whether or not he has become a Participant
in the Plan pursuant to Article II, may, subject to obtaining the prior
approval of the Plan Administrator, at any time transfer (or cause to be
transferred) to the Trust Fund:
(a) Up to the entire amount of money and other property received from
another qualified trust under Section 401(a) of the Code which
constitutes a qualifying rollover distribution within the meaning
of Section 402(a)(5) of the Code, provided that such amount must
be received by the Trustee within sixty (60) days after the
Employee's receipt of such payment; and
(b) Up to the entire amount of money and other property received by
the Employee that was in an "individual retirement account" or an
"individual retirement annuity" (as defined in Section 408 of the
Code) which contains only those amounts described above in
paragraph (a) plus any earnings thereon.
The Employee shall furnish the Plan Administrator with a written
statement that the contribution to the Trust Fund is a rollover
contribution) together with such other statements and information as may
be required by the Plan Administrator in order to establish that such
contribution does not contain amounts from sources other than provided
above, and that such rollover contribution otherwise meets the
requirements of law. Acceptance by the Plan Administrator of any amount
under these provisions shall not be construed as a
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determination of the Employee's tax consequences by the Plan
Administrator.
9.02 TRANSFERS
The Trustee is hereby authorized to accept assets that represent an
Employee's interest (whether attributable to employer or employee
contributions) from another qualified trust under Section 401(a) of the
Code directly from such other trust's trustees, whether or not such
other plan is maintained by a Participating Employer.
No amount shall be transferred to this Plan from any other plan if the
accrued benefit payable to the Participant under such other plan must be
provided in the form of a qualified joint and survivor annuity or if a
qualified pre-retirement survivor annuity must be provided to the
surviving spouse of such Participant with respect to such accrued
benefit.
9.03 ROLLOVER ACCOUNT
The Company shall direct the Trustee to establish and maintain a
Rollover Account in the name of each Employee who elects to transfer or
roll over amounts into the Trust Fund pursuant to the provisions of this
Article IX. The Rollover Account shall be maintained by the Trustee for
the exclusive benefit of the Employee, shall be credited with earnings
thereon as provided by Section 5.02, and shall at all times be fully
vested and nonforfeitable.
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ARTICLE X
TOP-HEAVY PROVISIONS
10.01 EFFECTIVE DATE
Notwithstanding anything herein to the contrary, the following
provisions shall apply and shall supersede any conflicting Plan
provisions with respect to any Plan Year beginning after December 31,
1983 in which this Plan is deemed to be Top-heavy.
10.02 DEFINITIONS
DETERMINATION DATE means, with respect to any Plan Year, the last
calendar day of the immediately preceding Plan Year or, in the case of
the first Plan Year, the last calendar day of the first Plan Year.
KEY EMPLOYEE means any Employee or former Employee (or any Beneficiary
of such Employee) who, at any time during the Plan Year or any of the
four (4) immediately preceding Plan Years (or, if fewer, the total
number of Plan Years during which the Plan has been in effect) is or
was:
(a) An officer of the Participating Employer or an Affiliate whose
compensation exceeds fifty percent (50%) of the amount in effect
under Section 415(b)(1)(A) of the Code for such Plan Year;
(b) One (1) of the ten (10) Employees whose compensation exceeds the
amount in effect under Section 415(c)(1)(A) of the Code and who
owns (or is considered to own under Section 318 of the Code) one
(1) of the largest interests in the Participating Employer or an
Affiliate;
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(c) A five percent (5%) owner of the Participating Employer; or
(d) A one percent (1%) owner of the Participating Employer whose
annual compensation from the Participating Employer and Affiliates
exceeds one hundred fifty thousand dollars ($150,000).
An officer is defined as an actual officer of the Participating Employer
or an Affiliate; provided, however, that not more than the greater of
three (3) Employees or ten percent (10%) of the Employees (but in no
event more than fifty (50) Employees) shall be considered as officers in
determining whether the Plan is Top-heavy.
NONKEY EMPLOYEE means any Employee who is not a Key Employee.
PERMISSIVE AGGREGATION GROUP means the Required Aggregation Group of
plans plus any other plan or plans of the Participating Employer or an
Affiliate which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
REQUIRED AGGREGATION GROUP means the group of:
(a) Each qualified plan of the Participating Employer or an Affiliate
in which at least one (1) Key Employee participates; and
(b) Any other qualified plan of the Participating Employer or an
Affiliate which enables a plan described in paragraph (a) above to
meet the requirements of Section 401(a)(4) or Section 410 of the
Code.
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TOP-HEAVY
The Plan shall be deemed to be Top-heavy for any Plan Year if, as of the
Determination Date for such Plan Year, any of the following conditions
exists:
(a) If the Top-heavy Ratio for the Plan exceeds sixty percent (60%)
and the Plan is not part of a Required Aggregation Group of plans
or a Permissive Aggregation Group of plans;
(b) If the Plan is part of a Required Aggregation Group of plans (but
is not part of a Permissive Aggregation Group of plans) and the
Top-heavy Ratio for the group of plans exceeds sixty percent
(60%); or
(c) If the Plan is part of a Required Aggregation Group of plans and
part of a Permissive Aggregation Group of plans and the Top-heavy
Ratio for the Permissive Aggregation Group of plans exceeds sixty
percent (60%).
TOP-HEAVY RATIO
(a) If the Participating Employer or an Affiliate maintains one (1) or
more defined contribution plans (including any simplified employee
pension plan) and the Participating Employer or Affiliate has not
maintained any defined benefit plan which, during the five (5)
Plan Year period ending on the Determination Date, has or has had
any accrued benefits, the Top-heavy Ratio for the Plan or for the
Required Aggregation Group or the Permissive Aggregation Group, as
appropriate, shall be a fraction, the numerator of which is the
sum of the account balances of all Key Employees under the
aggregated defined contribution plans as of the Determination Date
(including any
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part of any account balance distributed in the five (5) Plan Year
period ending on the Determination Date) and the denominator of
which is the sum of all account balances (including any part of
any account balance distributed in the five (5) Plan Year period
ending on the Determination Date) of all Participants as of the
Determination Date, both computed in accordance with Section 416
of the Code. The numerator and denominator of the Top-heavy Ratio
shall be adjusted to reflect any contribution not actually made as
of the Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code.
(b) If the Participating Employer or an Affiliate maintains or has
maintained one (1) or more defined contribution plans (including
any simplified employee pension plan) and the Participating
Employer or Affiliate maintains or has maintained one (1) or more
defined benefit plans which, during the five (5) Plan Year period
ending on the Determination Date, has or has had any accrued
benefits, the Top-heavy Ratio for the Required Aggregation Group
or the Permissive Aggregation Group, as appropriate, shall be a
fraction, the numerator of which is the sum of the account
balances of all Key Employees under the aggregated defined
contribution plans and the present value of the accrued benefits
of all Key Employees under the aggregated defined benefit plans as
of the Determination Date, and the denominator of which is the sum
of the account balances of all Participants under the aggregated
defined contribution plans and the present value of the accrued
benefits of all Participants under the aggregated defined benefit
plans as of the Determination Date, determined in accordance with
Section 416 of the Code. The numerator and denominator of the
Top-heavy Ratio shall be adjusted
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for any distribution of an account balance or accrued benefit made
in the five (5) Plan Year period ending on the Determination Date
and any contribution due but unpaid as of the Determination Date.
(c) For purposes of paragraphs (a) and (b) above, the value of the
account balances and the present value of the accrued benefits
shall be determined as of the most recent Valuation Date occurring
within the twelve (12) month period ending on the Determination
Date, except as provided in Section 416 of the Code for the first
and second Plan Years of a defined benefit plan. Effective January
1, 1987, the accrued benefits of Nonkey Employees shall be
determined under the method which is used for accrual purposes for
all plans of the Participating Employers and Affiliates or, if
there is no such method, then as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Code Section 411(b)(1)(C). The account
balances and the accrued benefits of a Participant who is not a
Key Employee but who was a Key Employee in a prior Plan Year or,
effective for Plan Years beginning on and after January 1, 1985,
who has not performed any services for the Participating Employer
under the Plan at any time during the five (5) Plan Year period
ending on the Determination Date shall be disregarded. The
calculation of the Top-heavy Ratio and the extent to which
distributions, rollovers, and direct transfers are taken into
account shall be made in accordance with Section 416 of the Code.
When aggregating plans, the value of the account balances and the
present value of the accrued benefits shall be calculated with
reference to the Determination Dates that fall within the same
calendar year.
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VALUATION DATE means the same valuation date used for computing plan
costs for minimum funding, regardless of whether an actuarial valuation
is performed that year.
10.03 SPECIAL CODE SECTION 415 LIMITATIONS
For purposes of Section 5.06, in any Plan Year during which the Plan is
deemed to be Top-heavy and in which the Participating Employer also
maintains a defined benefit plan which is deemed to be Top- heavy, the
number 1.25 shall be replaced by the number 1.0 to the extent required
under Section 416(h) of the Code; provided, however, that such
adjustment shall not occur if the Top-heavy Ratio does not exceed ninety
percent (90%) and additional contributions or benefits are provided for
Nonkey Employees in accordance with the provisions of Sections
416(h)(2)(A) and (B) of the Code. In such case, a minimum accrued
benefit shall be provided under the defined benefit plan for each Nonkey
Employee covered under both plans equal to three percent (3%) of the
Participant's average compensation for the five (5) consecutive years
for which the Participant had the highest compensation, subject to a
maximum of thirty percent (30%) of such compensation.
10.04 MINIMUM ALLOCATION REQUIREMENTS
(a) The Company Contributions allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of
three percent (3%) of such Participant's compensation or the
largest percentage of Company Contributions allocated on behalf of
any Key Employee for that Plan Year, without, in either event,
taking into consideration any contributions or benefits under
Social Security or any similar legislation. The preceding
provisions shall not apply to any Participant who was not
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employed by a Participating Employer on the last day of the Plan
Year.
(b) The minimum allocation in paragraph (a) shall be made even though,
under other Plan provisions, the Participant would not otherwise
be entitled to receive an allocation, or would have received a
lesser allocation for the Plan Year because the Participant failed
to complete at least one thousand (1,000) Hours of Service, the
Participant's compensation was less than any stated amount, or the
Participant failed to make mandatory contributions to the Plan.
For purposes of computing the minimum allocation, compensation
shall mean compensation as defined in Section 5.05(d) of the Plan.
The minimum allocation above shall not apply to a Participant
covered under another defined contribution plan of a Participating
Employer if such Participant receives the minimum allocation under
such other plan.
(c) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or 411(a)- (3)(D) of the
Code.
(d) For Plan Years beginning prior to January 1, 1989, amounts
contributed as Salary Reduction Contributions shall be counted
toward the minimum allocation required by this Section 10.04.
10.05 MINIMUM VESTING REQUIREMENTS
(a) For any Plan Year in which the Plan is Top-heavy, the Plan shall
have the following vesting schedule:
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Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(b) The vesting schedule contained in paragraph (a) above shall apply
to the Participant's total Company Contribution Account Balance,
including that portion which was allocated prior to the Plan Year
that the Plan became Top-heavy. However, such vesting schedule
shall apply only to the extent that it provides more favorable
vesting than Section 6.02.
(c) A shift to the vesting schedule contained in paragraph (a) ( above
shall be deemed to be an amendment to the vesting schedule
contained in Section 6.02.
(d) Anything to the contrary notwithstanding, this Section 10.05 shall
not apply to any Participant who has not received credit for an
Hour of Service after the Plan initially became Top-heavy.
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ARTICLE XI
MANAGEMENT OF FUNDS
11.01 APPOINTMENT OF TRUSTEE
A Trustee shall be appointed by the Company to administer the Trust
Fund. The Trustee shall serve at the pleasure of the Company and shall
have the rights, powers, and duties set forth in the Trust Agreement.
All assets of the Trust Fund shall be held, invested, and reinvested by
the Trustee.
11.02 ASSETS OF TRUST
All contributions under this Plan shall be paid to the Trustee and,
except as provided in Section 11.03, all assets of the Trust Fund,
including income from investments and from all other sources, shall be
retained for the exclusive benefit of Participants, former Participants,
and their Beneficiaries, and shall be used to pay benefits to such
persons, or to pay expenses of administration of the Plan and Trust to
the extent not paid by the Company or Participating Employer.
11.03 REVERSION OF COMPANY CONTRIBUTIONS
At no time shall any part of the corpus or income of the Trust Fund be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries.
Notwithstanding the above, contributions made by a Participating
Employer may be returned to a Participating Employer in the following
cases:
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(a) If a contribution is made by a Participating Employer by a mistake
in fact, such contribution shall be returned to such Participating
Employer within one (1) year after the payment of the contribution
to the Trust Fund.
(b) If a contribution is conditioned on initial qualification of the
Plan under Section 410(a) of the Code, and if the Plan does not
qualify, then such contribution shall be returned to the
Participating Employer within one (1) year after the date of
denial of qualification of the Plan.
(c) If a contribution is conditioned upon the deductibility of the
contribution under Section 404(a) of the Code, then, to the extent
the deduction is disallowed, such a contribution shall be returned
to the Participating Employer within one (1) year after the
disallowance of the deduction if so requested by the Participating
Employer.
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ARTICLE XII
ADMINISTRATION OF PLAN
12.01 PLAN ADMINISTRATOR
The Company shall be the Plan Administrator. The Company may appoint one
(1) or more persons to act as its agent or delegate to aid in carrying
out its administrative duties.
12.02 RIGHTS, POWERS, AND DUTIES OF PLAN ADMINISTRATOR
The Plan Administrator shall have such authority as may be necessary to
discharge its responsibilities under the Plan, including the following
rights, powers, and duties:
(a) The Plan Administrator shall adopt rules governing its procedures
not inconsistent herewith, and shall keep a permanent record of
its meetings and actions. The Plan Administrator shall administer
the Plan uniformly and consistently with respect to persons who
are similarly situated. The Plan Administrator shall maintain the
Accounts of Participants and Beneficiaries under the Plan or shall
cause them to be maintained under its direction.
(b) The Plan Administrator shall direct the Trustee in writing to make
payments from the Trust Fund to persons who qualify for such
payments hereunder. Such written order to the Trustee shall
specify the name of the person, his address, and the amount and
frequency of such payments.
(c) The Plan Administrator shall not take action or direct the Trustee
to take any action with respect to any of the benefits provided
hereunder which would be discriminatory
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in favor of those Participants or Employees who are officers,
shareholders, or highly compensated Employees of a Participating
Employer.
(d) The Plan Administrator shall have the sole responsibility for the
administration of the Plan, and, except as herein expressly
provided, the Plan Administrator shall have the exclusive right to
interpret the provisions of the Plan and to determine any question
arising hereunder or in connection with the administration of the
Plan, including the remedying of any omission, inconsistency, or
ambiguity, and its decision or action in respect thereof shall be
conclusive and binding upon any and all Participants, former
Participants, Beneficiaries, heirs, distributees, executors,
administrators, and assigns, subject to the provisions of Article
XIII. Any final determination by the Plan Administrator, including
a final claims decision under Article XIII, shall be binding on
all parties. If challenged in court, such determination shall not
be subject to DE NOVO review.
(e) The Plan Administrator may employ such counsel and agents in such
clerical, medical, accounting, and other services as it may
require in carrying out the provisions of the Plan.
(f) Participants, former Participants, or their Beneficiaries shall be
notified by the Plan Administrator of their right to receive
benefits. The Plan Administrator shall establish a uniform
procedure for such notification.
(g) The Plan Administrator shall establish reasonable procedures to
determine whether a Domestic Relations Order is a Qualified
Domestic Relations Order. Such procedures
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must be in writing, must provide for the prompt notification of
each person specified in the order as being entitled to payment of
benefits under the Plan, and must permit an Alternate Payee to
designate a representative for receipt of copies of notices that
are sent to the Alternate Payee with respect to a Domestic
Relations Order.
(h) The Plan Administrator may establish procedures which a
Participant must follow in verifying maternity or paternity leave
and the length thereof.
12.03 EXERCISE OF PLAN ADMINISTRATOR'S DUTIES
The Plan Administrator shall discharge its duties solely in the interest
of Participants, former Participants, and their Beneficiaries:
(a) For the exclusive purposes of providing benefits to such
Participants, former Participants, and Beneficiaries and, in the
discretion of the Company, defraying reasonable expenses of Plan
administration; and
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims.
12.04 INDEMNIFICATION OF FIDUCIARIES
The Participating Employers shall indemnify all officers or
representatives of the Participating Employers and Employees assigned
fiduciary responsibility under Federal law to the extent that such
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officers or representatives of the Participating Employers or Employees
incur loss or damage which may result from such officers' or
representatives' or Employees' duties, exercises of discretion under the
Plan, or any other acts or omissions hereunder. Such duties, exercises
of discretion, acts, or omissions shall not be indemnified by the
Participating Employers in the event that such loss or damage is
judicially determined or agreed by the officers or representatives of
the Participating Employers or Employees to be due to their respective
gross negligence or willful misconduct.
12.05 COMPENSATION
Any individual acting as agent of the Plan Administrator shall serve
without compensation for services as such, but all proper expenses
incurred by the individual incident to the functioning of the Plan shall
be paid by the Participating Employers.
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ARTICLE XIII
CLAIMS PROCEDURES
13.01 CLAIMS REVIEW
Any Participant, former Participant, or Beneficiary of either who wishes
to request a review of a claim for benefits or who wishes an explanation
of a benefit or its denial may direct to the Plan Administrator a
written request for such review. The Plan Administrator shall respond to
the request by issuing a notice to the claimant as soon as possible but
in no event later than ninety (90) days from the date of the request.
This notice furnished by the Plan Administrator shall be written in a
manner calculated to be understood by the claimant and shall include the
following:
(a) The specific reason or reasons for any denial of benefits;
(b) The specific Plan provisions on which any denial is based;
(c) A description of any further material or information which is
necessary for the claimant to perfect his claim and an explanation
of why the material or information is needed; and
(d) An explanation of the Plan's claim appeals procedure.
If the claimant does not respond to the notice, posted by first-class
mail to the address of record of the Plan Administrator, within sixty
(60) days from the posting of the notice, the claimant shall be
considered satisfied in all respects. If the Plan Administrator fails to
respond to the claimant's written request for review within ninety (90)
days of its receipt, the claimant shall be
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entitled to proceed to the claim appeals procedure described in Section
13.02.
13.02 APPEALS PROCEDURE
In the event that the claimant wishes to appeal the claim review denial,
the claimant or his duly authorized representative shall submit to the
Plan Administrator, within sixty (60) days of the posting of the notice,
a written notification of appeal of the claim denial. The notification
of appeal of the claim denial shall permit the claimant or his duly
authorized representative to utilize the following formal claim review
procedures:
(a) To review pertinent documents; and
(b) To submit issues and comments in writing to which the Plan
Administrator shall respond.
The Plan Administrator shall furnish a written decision on the appeal no
later than sixty (60) days after receipt of the notification of appeal,
unless special circumstances require an extension of the time for
processing the appeal. In no event, however, shall the Plan
Administrator respond later than one hundred twenty (120) days after a
request for a formal review. The decision on the appeal shall be in
writing and shall include specific reasons for the decision, and shall
be written in a manner calculated to be understood by the claimant and
contain specific reference to the pertinent Plan provisions on which the
decision is based.
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ARTICLE XIV
AMENDMENT AND TERMINATION
14.01 TERMINATION
(a) It is the expectation of the Company and each Participating
Employer that it shall continue this Plan and the payment of
contributions hereunder indefinitely, but the continuation of the
Plan is not assumed as a contractual obligation of the Company or
of any Participating Employer, and the right is reserved by the
Company and each Participating Employer at any time to permanently
discontinue its contributions hereunder. In the event that the
Plan is terminated in whole or in part or if contributions by the
Company or any Participating Employer are permanently
discontinued, the interest of all affected Participants shall be
fully vested and nonforfeitable.
(b) This Plan may be terminated by the Company at any time when, in
its judgment, business, financial, or other good causes make such
termination necessary. In addition, each Participating Employer
may terminate the Plan with respect to its Employees at any time.
Any such termination shall become effective upon the execution and
delivery by the Company or Participating Employer to the Trustee
of a written instrument signed on its behalf by its authorized
representative and. stating the fact that the Plan is terminated.
(c) Upon complete termination of the Plan, further payment of Company
Contributions to the Trust shall cease. Upon termination of the
Plan with respect to a Participating Employer, further payment of
that Participating Employer's
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contributions to the Trust shall cease. The Plan Administrator
shall notify each affected Participant of the termination of the
Plan. Each affected Participant shall be entitled to receive the
entire amount of his Account Balances and the Trustee shall make
payment to each such Participant of such amount.
14.02 RIGHT TO AMEND, MODIFY, CHANGE, OR REVISE PLAN
The Company, by appropriate action, may at any time and from time to
time amend, modify, change, or revise this Plan in whole or in part by
notice thereof in writing delivered to the Trustee, and each
Participating Employer shall be bound thereby; provided, however:
(a) That no amendment shall have the effect of vesting in the Company
or any Participating Employer any interest in or control of any
funds, securities, or other property subject to the terms of the
Trust;
(b) That no amendment shall authorize or permit at any time any part
of the corpus or income of the Trust Fund to be used for or
diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries, except as provided in
Section 11.03;
(c) That no amendment shall have any retroactive effect as to deprive
any Participant, former Participant, or Beneficiary of any benefit
already accrued, save only that no amendment made in conformance
with the provisions of the Code or any other statute relating to
employees' trusts, or of any official regulation or rulings issued
pursuant thereto, shall be considered prejudicial to the rights of
any Participant or Beneficiary; and
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(d) That no amendment shall eliminate an optional form of benefit or
decrease an Account Balance.
14.03 MERGER AND CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS
In the case of any merger or consolidation with or transfer of assets
and liabilities to any other plan, provisions shall be made so that each
Participant in the Plan on the date thereof (if the Plan then
terminated) would receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately prior to the merger,
consolidation, or transfer (if the Plan had terminated).
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ARTICLE XV
MISCELLANEOUS
15.01 NO CONTRACT OF EMPLOYMENT
Nothing herein contained shall be construed to constitute a contract of
employment between a Participating Employer and any Employee. The
employment records of the Participating Employer and the Trustee's
records shall be final and binding upon all Employees as to liability
and participation.
15.02 RESTRICTIONS UPON ASSIGNMENTS AND CREDITORS' CLAIMS
No interest of any person or entity in or right to receive distributions
from the Trust Fund shall be subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or other alienation or
encumbrance of any kind, nor may any such interest or right to receive
distributions be taken, either voluntarily or involuntarily, for the
satisfaction of the debts of or other obligations or claims against such
person or entity. 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. A Domestic Relations Order entered before January 1, 1985 shall
be treated as a Qualified Domestic Relations Order if payment of
benefits pursuant to the order has commenced as of such date and may be
treated as a Qualified Domestic Relations Order if payment of benefits
has not commenced as of such date, even though the order does not
satisfy the requirements of Section 414(p) of the Code.
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15.03 RESTRICTION OF CLAIMS AGAINST TRUST
The Trust under this Plan and the Trust Agreement from its inception
shall be a separate entity aside and apart from the Company and each
Participating Employer and its assets. The Trust and the corpus and
income thereof shall in no event and in no manner whatsoever be subject
to the rights or claims of any creditor of the Company or any
Participating Employer. Neither the establishment of the Trust, the
modification thereof, the creation of any fund or account, nor the
payment of any benefits shall be construed as giving any Participant or
any other person whomsoever any legal or equitable rights against the
Company, any other Participating Employer, or the Trustee unless the
same shall be specifically provided for in this Plan.
15.04 BENEFITS PAYABLE BY TRUST
All benefits payable under the Plan shall be paid or provided for solely
from the Trust, and the Company and the Participating Employers do not
assume any liability or responsibility therefor.
15.05 SUCCESSOR TO COMPANY
In the event that any successor to the Company or Participating
Employer, by merger, consolidation, purchase, or otherwise, shall elect
to adopt the Plan, such successor shall be substituted hereunder for the
Company or for such Participating Employer upon filing in writing with
the Trustee of its election to do so.
15.06 APPLICABLE LAW
The Plan shall be construed and administered in accordance with ERISA
and with the laws of the Commonwealth of Delaware, to the extent that
such laws are not preempted by ERISA.
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15.07 DATA
It shall be a condition precedent to the payment of all benefits under
the Plan that each Participant and surviving spouse must furnish to the
Plan Administrator such documents, evidence, or information as the Plan
Administrator considers necessary or desirable for the purpose of
administering the Plan, or to protect the Company, the Participating
Employers, or the Trustee.
15.08 INTERNAL REVENUE SERVICE APPROVAL
This Plan shall be effective as of the aforementioned Effective Date,
provided that the Company shall obtain a favorable determination letter
from the Internal Revenue Service that this Plan and the related Trust
Agreement qualify under Sections 401(a) and 501(a) of the Code. Any
modification or amendment of this Plan may be made retroactive as
necessary or appropriate in order to secure or maintain such
qualification.
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99
FIRST AMENDMENT
TO
WERNER HOLDING CO. (DE), INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, effective January 1, 1991, Werner Holding Co. (DE), Inc. (the
"Company") adopted the Werner Holding Co. (DE), Inc. Employee Savings P1 an (the
"Plan") for the exclusive benefit of its eligible employees; and
WHEREAS, the Company has reserved the right to amend the Plan; and
WHEREAS, pursuant to the authority reserved to the Corn 14.02 of the Plan, the
Company desires to amend the Plan to comply with the Tax Reform Act of 1986, as
amended, and certain other legislation.
NOW, THEREFORE, the Company hereby amends the Plan as follows, effective as
specified herein:
1. Effective January 1, 1994, the definition of Compensation in
Article I is amended in its entirety to read as follows:
COMPENSATION means the total amount of cash compensation paid to
an Employee by the Participating Employer in a Plan Year for
Federal income tax purposes, including commissions, bonuses,
overtime, and amounts deferred under a salary reduction
agreement pursuant to Section 401(K) or Section 125 of the Code,
but excluding any other extraordinary remuneration. If an Employee
becomes a Participant during a Plan Year, his Compensation in such
Plan Year, for purposes of determining the amount of the Company
Contributions contributed on his behalf pursuant to Section 4.04
of the Plan, shall be his Compensation for the full Plan Year
multiplied by a fraction, the numerator of which shall be his
months of Plan participation and the denominator of which shall be
twelve (12). For all other purposes, if an Employee becomes a
Participant during a Plan Year, his Compensation shall be his
Compensation for the full Plan Year. Effective for Plan Years
beginning January 1, 1989 and thereafter, excess of two hundred
thousand dollars ($200,000) shall be disregarded.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994 the
annual Compensation of each Employee taken into account under the
Plan shall not exceed the OBRA 93 annual compensation limit. The
OBRA '93 annual compensation limit is one hundred fifty thousand
dollars ($150,000), as adjusted by the Commissioner for increases
in the cost-of-living in accordance with Section 401(a)(l7)(B)of
the Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding twelve (12) months, over
which Compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer
than twelve (12) months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the denominator
of which is twelve (12). For Plan Years beginning on or after
January 1 1994, any reference in this Plan to the limitation under
Section 401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision. In determining the
Compensation of a Participant for purposes of this limitation, the
rules of Section 41 4(q)(6)of the Code relating to the treatment
of certain family members shall apply,
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100
except that in applying such rules the term "family" shall include
only the spouse of die Participant and an lineal descendants of
the Participant who have not attained age nineteen (19) before the
close of the Plan Year. If; as a result of the application of such
rules, the adjusted one hundred fifty thousand dollar ($150,000)
limitation is exceeded, then the limitation shall be prorated
among the affected Participants in proportion to each such
Participant's Compensation, as determined this provision prior to
the application of this limitation.
For purposes of the limitation on allocations under Code Section
415, Compensation is further defined in Section 5.05 of the Plan.
2. Effective January 1, 1991, the last paragraph (i) under the
definition of PRIOR PLAN in Article I shall be deleted.
3. Effective January 1, 1991 Section 5.05(d) is amended in its
entirety and a new Section 5.05(e) is added to read as follows:
(d) Inclusions. Solely for the purpose of applying the
limitations of Section 5.05, the compensation of a
Participant includes:
(1) A Participant's wages, salaries, fees for
professional services, and other amounts received
(without regard to whether or not an amount is paid
in cash) for personal services actually rendered in
the course of employment with the Participating
Employer to the extent that the amounts are
includable in gross income (including, but not
limited to, commissions paid to salesmen,
compensation for services on the basis of a
percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits,
reimbursements, and expense allowances);
(2) In the case of a Participant who is an employee
within the meaning of Section 401(c)(1) of the Code
and the regulations thereunder the participant's
earned income (as described in Section 401(c)(2) of
the Code and the regulations thereunder);
(3) Amounts described in Sections 104(a)(3), 105(a), and
105(11) of the Code, but only to the extent these
amounts are includable in the gross income of the
Participant;
(4) Amounts paid or reimbursed by the Participating
Employer or moving expenses incurred by a
Participant, but only to the extent that these
amounts are not deductible by the Participant under
Section 217 of the Code;
(5) The value of a nonqualified stock option granted to
a Participant by the Participating Employer, but
only to the extent that the value of the option is
includable in the gross income of the Participant or
the taxable year in which granted; and
(6) The amount includable in the gross income of a upon
making the election described in Section 83(b) of
the
(e) Exclusions from compensation. Solely for the purpose of
applying the limitations of Section 5.05, the compensation
of a Participant excludes:
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101
(1) Employer contributions to a plan of deferred
compensation which are not included in the
Participant's gross income for the taxable year in
which contributed, Employer contributions under a
simplified employee pension plan to the extent such
contributions are excluded from the Participant's
gross income, or any distributions from a plan of
deferred compensation;
(2) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the Participant either becomes freely
transferable or is no longer subject to substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified
stock option; and
(4) Other amounts which received special tax benefits,
or contributions made by the Employer (whether or
not under a salary reduction agreement) toward the
purchase of an annuity described in Code Section
403(b) (whether or not the amounts are actually
excludable from the gross income of the
Participant).
4. Effective January 1, 1993, a new Section 7.07 is added at the end
of Article VII to read as follows:
7.07 DIRECT ROLLOVERS
This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision
of the Plan to the contrary that would otherwise
limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.
For purposes of this Section 7.07, the following
definitions apply:
(a) ELIGIBLE ROLLOVER DISTRIBUTION: An Eligible
Rollover Distribution is any distribution of
all or any portion of the balance to the
credit of the Distributee, except that an
Eligible Rollover Distribution does not
include any distribution that is one (1) of a
series of substantially equal periodic
payments (not less frequently than annually)
made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life
expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution
is required under Section 401 (a)(9) of the
is not includable in gross income (determined
without regard to the exclusion for net
unrealized appreciation with respect to
employer securities).
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102
(b) ELIGIBLE RETIREMENT PLAN: An Eligible
Retirement Plan is an individual retirement
account described in Section 408(a) of the
Code, an individual retirement annuity
described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of
the Code or a qualified trust described in
Section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual
retirement account or individual retirement
annuity.
(c) DISTRIBUTEE: A Distributee includes an
Employee or former Employee. In addition, the
Employee's or former Employee's surviving
spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate
payee under a qualified domestic relations
order, as defined in Section 414(p) of the
Code, are Distributees with regard to the
interest of the spouse or former spouse.
(d) DIRECT ROLLOVER: A Direct Rollover is a
payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
5. Effective January 1, 1994, Sections 8.03(c)(1) and 8.03(c)(3) are
amended to read as follows:
(1) Expenses for medical care described in Code Section
213(d) previously incurred by the Participant, the
Participant's spouse, or any dependents of the
employee (as defined in Code Section 152) or
necessary for these persons to obtain medical care
described in Code Section 213(d);
(3) Payment of tuition and related educational fees for
the next twelve (12) months of post-secondary
education for the Participant, or the Participants
spouse, children, or dependents (as defined in Code
Section 152).
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103
SECOND AMENDMENT TO WERNER HOLDING CO. (DE), INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, effective January 1, 1991, Werner Holding Co. (DE), Inc., (the
"Company") adopted the Werner Holding Co. (DE), Inc. Employee Savings Plan (the
"Plan") for the exclusive benefit of its eligible employees and the eligible
employees of participating affiliates; and
WHEREAS, the Company has reserved the right to amend the Plan; and
WHEREAS, pursuant to the authority reserved to the Company in Section
14.02 of the Plan, the Company desires to amend the Plan to provide for one
hundred percent vesting under certain specified circumstances.
NOW, THEREFORE, the Company hereby amends the Plan as follows, effective
as specified herein:
1. Effective January 1, 1996, a new sentence shall be added to the
end of Section 6.01, to read as follows:
Notwithstanding the foregoing, any Participant who is an
active Employee of Florida Ladder Company on January 1,
1996 shall have a fully vested, nonforfeitable interest in
his Company Contribution Account on such date (regardless
of the number of completed Years of Vesting Service);
provided, however that this provision shall not apply to
any such Participant who is a "highly compensated
Employee" on such date.