Exhibit 10.10.3
AMENDMENT NUMBER 3
McGRATH RENTCORP
EMPLOYEE STOCK OWNERSHIP PLAN
Pursuant to and in accordance with the provisions of Section 19 of the
McGrath RentCorp Employee Stock Ownership Plan (the "Plan"), the Board of
Directors of McGrath RentCorp (the "Company") does hereby amend said Plan as
follows:
Subsection 1(b): This Subsection is amended by adding the following new
paragraph to the end of this Subsection:
"Effective for all Plan Years beginning after
December 31, 2001, this Plan reflects certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"),
intended as good faith compliance with the requirements of EGTRRA. Such
EGTRRA provisions, if applicable, shall be construed in accordance with
EGTRRA and the guidance issued thereunder, and shall supercede those
specific provisions of the Plan to the extent those provisions are
inconsistent with the EGTRRA provisions."
Section 2: The definition of "COVERED COMPENSATION" is amended by adding
the following to the end of this definition:
"However, the Covered Compensation of each Participant taken
into account in determining allocations for any Plan Year
beginning after December 31, 2001, shall not exceed $200,000,
as adjusted for cost-of-living increases in accordance with
Section 401(a)(17)(B) of the Code. Covered Compensation means
compensation during the Plan Year or such other consecutive
12-month period over which compensation is otherwise determined
under the Plan (the determination period). The cost-of-living
adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or
within such calendar year."
Section 2: The definitions of "ELIGIBLE RETIREMENT PLAN" and "ELIGIBLE
ROLLOVER DISTRIBUTION" are amended to read as follows:
"ELIGIBLE RETIREMENT PLAN
"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.
"For purposes of distributions made after December 31, 2001,
the definition of Eligible Retirement Plan shall also mean an
annuity contract described in Section 403(b) of the Code and an
eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision
of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of
Eligible Retirement Plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former
spouse who is the Alternate Payee under a qualified Domestic
Relation Order, as defined in Section 414(p) of the Code."
"ELIGIBLE ROLLOVER DISTRIBUTION
"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 hardship distribution,
including but not limited to a hardship distribution, described
in Section 401(k)(2)(B)(i)(IV), any distribution that is one of
a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten (10)
years or more; any distribution to the extent such distribution
is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer Securities).
"Notwithstanding the foregoing, effective for all distributions
made after December 31, 2001, for purposes of Section 14(h) of
the Plan, a portion of a distribution shall not fail to be an
Eligible Rollover Distribution merely because the portion
consists of after-tax employee contributions which are not
includable in gross income. However, such portion may be
transferred only to an individual retirement account or annuity
described in Section 408(a) or (b) of the Code, or to a
qualified defined contribution plan described in Section 401(a)
or 403(a) of the Code that agrees to separately account for
amounts so transferred, including separately accounting for the
portion
of such distribution which is includable in gross income and
the portion of such distribution which is not so includable."
Section 4: This Section is amended by adding the following two provisions
to the end of this Section:
"Omission of Eligible Employee.
"If, in any Plan Year, any Employee who should be
included as a Participant in the Plan is erroneously omitted, and
discovery of such omission is not made until after a Contribution by
the Employer for the Plan Year has been made, the Employer shall make a
subsequent Contribution with respect to the omitted Employee in the
amount which the Company would have contributed if he or she had not
been omitted. Such Contribution shall be made regardless of whether or
not it is deductible in whole or in part in any taxable year under the
applicable provisions of the Code.
"Inclusion of Ineligible Employee.
"If, in any Plan Year, any Employee who should not
have been included as a Participant in the Plan is erroneously
included, and discovery of such incorrect inclusion is not made until
after a Contribution by the Company for the year has been made, the
Company shall not be entitled to recover the Contribution made with
respect to the ineligible Employee regardless of whether a deduction is
allowable with respect to such Contribution. In such event, the amount
contributed with respect to the ineligible Employee shall constitute a
Forfeiture for the Plan Year in which the discovery is made."
Subsection 11(b)(1): This Subsection is amended by adding the following
paragraph to the end of this Subsection:
"Notwithstanding the foregoing, for Limitation Years beginning
after December 31, 2001, except to the extent permitted under Section
414(v) of the Code, if applicable, the Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for
any Limitation Year shall not exceed the lesser of:
"(i) $40,000, as adjusted for increases in the
cost-of-living under Section 415(d) of the Code, or
"(ii) 100 percent of the Participant's compensation, within
the meaning of Section 415(c)(3)of the Code, for the
Limitation Year.
"The compensation limit referred to in (ii) shall not apply to
any Contribution for medical benefits after separation from
service (within the meaning of Section 401(h) or Section
419(A)(f)(2) of the Code) which is otherwise treated as an
Annual Addition."
Subsection 14(e): This Subsection is amended by adding the following new
sentence to follow after the first sentence of this Subsection:
"For all distributions made after December 31, 2001, with respect to
all Participants, the value of a Participant's nonforfeitable account
balance shall be determined without regard to that portion of the Plan
Benefit, if any, attributable to any rollover contributions (and
earnings allocable thereto) within the meaning of Sections 402(c),
403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code."
Subsection 14(f): This Subsection is deleted in its entirety and replaced with
the following:
"(f) Required Commencement of Benefit Distribution.
"(1) Distribution of a Participant's Plan Benefit
shall commence not later than sixty (60) days after the Anniversary
Date coinciding with or next following the latest of (1) the
Participant's Retirement, (2) the tenth (10th) anniversary of the date
the Participant became a Participant, or (3) the Participant's
separation from service.
"If the amount of a Participant's Plan
Benefit cannot be determined (by the Committee) by the date on which
a distribution is to commence, or the Participant cannot be located,
distribution of the Participant's Plan Benefit shall commence within
sixty (60) days after the date on which the Participant's Plan Benefit
can be determined or after the date on which the Committee locates the
Participant.
"(2) The distribution of the Plan Benefit of any
Participant who attains age seventy and one-half (70 1/2) in a calendar
year must commence not later than April 1 of the next calendar year
(even if the Participant has not terminated). Effective for all Plan
Years beginning on or after January 1, 1998, except in the case of a
five percent (5%) owner (as defined in Section 416(i)(1)(B)(i) of the
Code), distributions shall commence in accordance with Subsection
14(f)(2) unless the Participant elects otherwise. In the event a
Participant elects not to receive the distributions, or in the
case of a Participant (other than a five percent (5%) owner) who has
begun receiving distributions in accordance with this Subsection who
elects to cease receiving such distributions, the distributions shall
commence (or recommence) no later than April 1 of the calendar year
following the calendar year in which the Participant separates from
service with the Employer. All distributions made under this Subsection
14(f)(2) shall be determined and made in accordance with the Proposed
Regulations under Section 401(a)(9), including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the Proposed
Regulations.
"Notwithstanding the foregoing, effective for
purposes of determining required minimum distributions for calendar
years beginning with the 2003 calendar year, all distributions made
under this Subsection 14(f) shall be determined and made in accordance
with the final and temporary regulations under 401(a)(9), pursuant to
Rev. Proc. 2002-29."
Section 14: This Section is amended by adding the following new Subsection
(k) to this Section:
"(k) Automatic Rollovers.
"Any distribution in excess of $1,000 may be made by
transferring the amount to be distributed to an individual retirement
plan designated by the Plan Committee, unless the Participant or
Beneficiary entitled to receive the distribution elects (1) to receive
the distribution directly, or (2) to have the distribution paid
directly to another Eligible Retirement Plan as described in Section 10
of the Plan. The requirement of this paragraph shall not be effective
until the effective date of regulations issued by the Department of
Labor with respect to the requirements of the Plan Committee's
selection of individual retirement plans."
Section 21: This Section is replaced in its entirety with the following:
"Section 21. TOP-HEAVY RULES.
"(a) Purpose and Effect
"The purpose of this Section 21 is to comply with the
requirements of Section 416 of the Code. The provisions of
this Section 21 are effective for each Plan Year beginning on
or after the Effective Date in which the Plan is a `Top-Heavy
Plan' within the meaning of Section 416(g) of the Code.
"(b) Top-Heavy Plan
"In general, the Plan will be a Top-Heavy Plan for
any Plan Year if, as of the `Determination Date' (that is, the
last day of the preceding Plan Year), the sum of the amounts
in paragraphs (i), (ii) and (iii) below for Key Employees
exceeds sixty percent of the sum of such amounts for all
Employees who are covered by this Plan or by a defined
contribution plan or defined benefit plan that is aggregated
with this Plan in accordance with Section 21(d):
"(i) The aggregate Account balances of
Participants under this Plan.
"(ii) The aggregate Account balances of
Participants under any other defined
contribution plan included under Section
21(d).
"(iii) The present value of the cumulative accrued
benefits of Participants calculated under
any defined benefit plan included in Section
21(d).
"In making the foregoing determination: (i) a
Participant's Account balances or cumulative accrued benefits
shall be increased by the aggregate distributions, if any,
made with respect to the Participant during the 5-year period
(or, for Plan Years commencing after 2001, the 1-year period,
except with respect to in-service distributions, for which the
5-year period shall continue to apply) ending on the
Determination Date, including distributions under a terminated
plan that, if it had not been terminated, would have been
required to be included in the aggregation group, (ii) the
Account balances or cumulative accrued benefits of a
Participant who was previously a Key Employee, but who is no
longer a Key Employee, shall be disregarded, (iii) the Account
balances or cumulative accrued benefits of a Beneficiary of a
Participant shall be considered Accounts or accrued benefits
of the Participant, (iv) the Account balances or cumulative
accrued benefits of a Participant who has not performed
services for an Employer or an Affiliated Company at any time
during the 5-year period (or, for Plan Years commencing after
2001, the 1-year period) ending on the Determination Date
shall be disregarded and (v) any rollover contribution (or
similar transfer) from a plan maintained by a corporation
other than an Employer
under this Plan initiated by a Participant shall not be taken
into account as part of the Participant's aggregate Account
balances under this Plan.
"(c) Key Employee
"In general, a `Key Employee' is an Employee (or a
former or deceased Employee) who, at any time during the Plan
Year (or, for Plan Years commencing before 2002, for any of
the 4 preceding Plan Years), is or was:
"(i) for Plan Years commencing before 2002, an
officer of an Employer having annual
compensation greater than fifty percent of
the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year; for
Plan Years commencing after 2001, an officer
of the Employer having annual compensation
greater than $130,000, as adjusted from time
to time by the Internal Revenue Service;
provided that, for purposes of this
paragraph, no more than fifty Employees of
the Employer (or, if lesser, the greater of
three Employees or ten percent of the
Employees) shall be treated as officers;
"(ii) for Plan Years commencing before 2002, one
of the ten Employees who have annual
compensation from an Employer of more than
the limitation in effect under Code Section
415(c)(1)(A) (the defined contribution
maximum) for that year and owning or
considered as owning, within the meaning of
Section 318 of the Code, the largest
interests in the Employer; provided that if
two Employees have the same interest in the
Employer, the Employee having greater annual
compensation from the Employer shall be
treated as having a larger interest;
"(iii) a five percent or greater owner of an
Employer; or
"(iv) a one percent or greater owner of an
Employer having annual compensation from the
Employer of more than $150,000 (as adjusted
by the Internal Revenue Service).
"For purposes of this Section 21, the term
'compensation' means compensation as defined by Code Section
414(q)(7).
"(d) Aggregated Plans
"Each other defined contribution plan and defined
benefit plan maintained by an Employer that covers a Key
Employee as a Participant or that is maintained by an Employer
in order for a plan covering a Key Employee to satisfy Section
401(a)(4) or 410 of the Code shall be aggregated with this
Plan in determining whether this Plan is top-heavy. In
addition, any other defined contribution or defined benefit
plan of an Employer may be included if all such plans that are
included, when aggregated, will not discriminate in favor of
officers, shareholders or Highly Compensated Employees and
will satisfy all of the applicable requirements of Sections
401(a)(4) and 410 of the Code.
"(e) Minimum Vesting
"For any Plan Year in which the Plan is a Top-Heavy
Plan, the vested percentage of a Participant's Accounts shall
not be less than the percentage determined under the following
table:
Vested
Years of Service Percentage
---------------- ----------
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
"If the foregoing provisions of this Section 21(e)
become effective, and the Plan subsequently ceases to be a
Top-Heavy Plan, the Participant's vested Accounts shall not be
reduced, and each Participant who has then completed three or
more Years of Service may elect to continue to have the vested
percentage of such Participant's Accounts determined under the
provisions of this Section.
"(f) Minimum Employer Contribution
"Subject to the following provisions of this Section
and Section 21(g), for any Plan Year in which the Plan is a
Top-Heavy Plan, the Employer Contribution credited to each
Participant who is not a Key Employee shall not be less than 3
percent of such Participant's compensation from the Employers
for that year. In no event, however, shall the total Employer
Contribution credited in any year to a Participant who is not
a Key Employee (expressed as a percentage of such
Participant's compensation from the Employers) be required to
exceed the maximum total Employer Contribution credited in
that year to a Key Employee (expressed as a percentage of such
Key Employee's compensation from the Employers). Contributions
made by an Employer under the Plan pursuant to Participants'
income deferral authorizations shall not be deemed Employer
Contributions for purposes of this Section. For Plan Years
commencing after 2001, employer matching contributions (as
defined in Code Section 401(m)(4)(A)) shall be taken into
account for purposes of this paragraph. The amount of minimum
Employer Contribution otherwise required to be allocated to
any Participant for any Plan Year under this Section shall be
reduced by the amount of Employer Contributions allocated to
such Participant for a Plan Year ending with or within that
Plan Year under any other tax-qualified defined contribution
plan maintained by an Employer.
"(g) Coordination of Benefits
"For any Plan Year in which the Plan is top-heavy, in
the case of a Participant who is a non-Key Employee and who is
a Participant in a top-heavy tax-qualified defined benefit
plan that is maintained by an Employer and that is subject to
Section 416 of the Code, Section 21(f) shall not apply, and
the minimum benefit to be provided to each such Participant in
accordance with this Section 21 and Section 416(c) of the Code
shall be the minimum annual retirement benefit to which such
Participant is entitled under such defined benefit plan in
accordance with such Section 416(c), reduced by the amount of
annual retirement benefit purchasable with such Participant's
Accounts (or portions thereof) attributable to Employer
Contributions under this Plan and any other tax-qualified
defined contribution plan maintained by an Employer."
Except as otherwise indicated, this Amendment to said Plan shall be
effective as of January 1, 2002.
McGRATH RENTCORP
Date: November 22, 2002 By /s/ DENNIS C. KAKURES
---------------------
Dennis C. Kakures, President
(SEAL)