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Exhibit 4.3
PROFIT-SHARING RETIREMENT PLAN AND
TRUST AGREEMENT
FOR EMPLOYEES OF SUTRO & CO. INCORPORATED
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TABLE OF CONTENTS
Page(s)
ARTICLE I. INTRODUCTION............................................. 2
1.01 Creation of Trust........................................ 2
1.02 Interpretation of Trust Agreement........................ 2
ARTICLE II. DEFINITIONS.............................................. 3
2.01 "Affiliate Company"...................................... 3
2.02 "Agreement".............................................. 3
2.03 "Anniversary Date"....................................... 3
2.04 "Beneficiary"............................................ 3
2.05 "Board of Directors"..................................... 4
2.06 "Break in Service"....................................... 4
2.07 "Committee".............................................. 4
2.08 "Company"................................................ 4
2.09 "Company Contributions".................................. 4
2.10 "Compensation"........................................... 4
2.11 "Eligible Retirement Plan"............................... 4
2.12 "Eligible Rollover Distribution"......................... 6
2.13 "Employee"............................................... 7
2.14 "Excess Aggregate Contributions"......................... 8
2.15 "Excess Contributions"................................... 8
2.16 "Family Member".......................................... 8
2.17 "Highly Compensated Employee"............................ 8
2.18 "Hours of Service"....................................... 9
2.19 "Investment Media"....................................... 11
2.20 "Leased Employees"....................................... 12
2.21 "Matching Contributions"................................. 13
2.22 "Net Profits"............................................ 14
2.23 "Non-Highly Compensated Participant"..................... 14
2.24 "Normal Retirement Age".................................. 15
2.25 "Participant"............................................ 15
2.26 "Plan"................................................... 15
2.27 "Plan Year" and "Limitation Year"........................ 15
2.28 "Qualified Matching Contributions"....................... 15
2.29 "Qualified Nonelective Contributions".................... 15
2.30 "Salary Reduction Agreement"............................. 15
2.31 "Self-Directed Account".................................. 16
2.32 "Tax Deferred Contributions"............................. 16
2.33 "Trust".................................................. 16
2.34 "Trustees"............................................... 16
2.35 "Valuation Date"......................................... 16
2.36 "Voluntary Contributions"................................ 16
2.37 "Year of Service"........................................ 16
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Page(s)
ARTICLE III. PARTICIPATION............................................ 17
3.01 Eligibility for Participation............................ 17
3.02 Determination of Eligibility by Committee................ 19
3.03 Duration of Eligibility.................................. 19
3.04 Salary Reduction Agreement............................... 19
ARTICLE IV. CONTRIBUTIONS UNDER THE PLAN............................. 20
4.01 Tax Deferred Contributions............................... 21
4.02 Matching Contributions................................... 21
4.03 Qualified Nonelective Contributions
and Qualified Matching Contributions..................... 23
4.04 Company Contributions.................................... 24
4.05 Payment of Contributions................................. 24
4.06 Reversion of Certain Contributions Made by the Company... 25
4.07 Voluntary Contributions.................................. 26
4.08 Rollover Contributions................................... 26
4.09 Conditions of Rollover................................... 27
4.10 Transfers from Other Plans............................... 28
ARTICLE V. PARTICIPANTS' ACCOUNTS; ALLOCATION OF
ASSETS AND CONTRIBUTIONS; PARTICIPANTS'
INVESTMENT ELECTIONS..................................... 28
5.01 Participants' Accounts................................... 28
5.02 Allocation of Tax Deferred Contributions................. 29
5.03 Allocation of Qualified Nonelective Contributions and
Qualified Matching Contributions......................... 29
5.04 Allocation of Matching Contributions
(Including Forfeitures).................................. 30
5.05 Allocation of Company Contributions...................... 30
5.06 Allocation of Rollover Contributions..................... 32
5.07 Valuation and Allocation of Assets....................... 32
5.08 Distributions and Forfeitures............................ 33
5.09 Election of Investments.................................. 33
ARTICLE VI. LIMITATIONS ON CONTRIBUTIONS
AND ALLOCATIONS.......................................... 34
6.01 Contributions to be Deductible........................... 34
6.02 Limitation on Tax Deferred Contributions................. 34
6.03 Return of Excess Deferrals............................... 39
6.04 Limitation on Matching and Voluntary Contributions....... 40
6.05 Limitations on Annual Additions.......................... 44
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Page(s)
ARTICLE VII. PAYMENTS TO OR FOR THE ACCOUNT OF
PARTICIPANTS OR TERMINATED PARTICIPANTS.................. 48
7.01 Restrictions on Payments and Distributions............... 48
7.02 Retirement............................................... 49
7.03 Disability Retirement.................................... 49
7.04 Death Benefits........................................... 50
7.05 Termination of Employment Prior to Retirement or Death... 52
7.06 Reemployment............................................. 53
7.07 Methods of Payment....................................... 54
7.08 Restrictions on Method and Timing of Payment............. 55
7.09 Withdrawals During Employment............................ 58
7.10 Loans to Members......................................... 60
7.11 Discharge of Trustees' Obligation to Make Payments....... 64
7.12 Qualified Domestic Relations Order....................... 65
7.13 Procedures for Direct Rollovers to an Eligible
Retirement Plan.......................................... 65
7.14 Transfer to Other Qualified Plan......................... 68
ARTICLE VIII. AMENDMENT AND TERMINATION................................ 68
8.01 Right to Amend or Terminate.............................. 68
8.02 Amendment for Tax Exemption.............................. 69
8.03 Liquidation of Trust in Event of Termination............. 70
8.04 Termination of Plan and Trust............................ 70
8.05 Amendment of Vesting Schedule............................ 70
ARTICLE IX. ADMINISTRATION OF THE PLAN............................... 71
9.01 Named Fiduciaries........................................ 71
9.02 Appointment of Committee................................. 72
9.03 Powers of Committee...................................... 73
9.04 Action by Committee...................................... 73
9.05 Discretionary Action..................................... 74
9.06 Evidence on Which Committee May Act...................... 74
9.07 Employment of Agents..................................... 74
9.08 Compensation and Expense of Committee.................... 75
9.09 Indemnification of Committee Members..................... 75
ARTICLE X. THE TRUSTEES............................................. 76
10.01 Powers of Trustees....................................... 76
10.02 Investments.............................................. 76
10.03 Method of Holding, Buying, and Selling Securities........ 77
10.04 Exercise of Rights....................................... 77
10.05 Reliance on Trustees as Owners........................... 78
10.06 Liquidation of Assets.................................... 78
10.07 Direction by Committee................................... 78
10.08 Records and Accounting................................... 79
10.09 Payment of Taxes......................................... 80
10.10 Trustees' Compensation and Expenses...................... 81
10.11 Resignation or Removal of Trustees....................... 81
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Page(s)
10.12 Indemnification of Trustee............................... 82
ARTICLE XI. THE COMPANY.............................................. 82
11.01 No Contract of Employment................................ 82
11.02 No Contract to Maintain Plan............................. 83
11.03 Liability of the Company................................. 83
11.04 Action by the Company.................................... 83
11.05 Successor to Business of the Company..................... 84
11.06 Dissolution of the Company............................... 84
ARTICLE XII. ADDITIONAL PARTICIPATING COMPANIES....................... 85
12.01 Participation............................................ 85
12.02 Effective Date........................................... 85
12.03 Administration........................................... 85
12.04 Termination.............................................. 86
ARTICLE XIII. TOP-HEAVY PROVISIONS..................................... 86
13.01 General Rule............................................. 86
13.02 Minimum Contribution Provisions.......................... 86
13.03 Top-Heavy Plan Definition................................ 87
13.04 Key Employee............................................. 90
13.05 Non-Key Employee......................................... 90
13.06 Limitation on Contributions.............................. 90
ARTICLE XIV. MISCELLANEOUS............................................ 90
14.01 Spendthrift Provision.................................... 90
14.02 Appointment of Person to Receive Payment................. 91
14.03 Construction............................................. 91
14.04 Impossibility of Performance............................. 91
14.05 Definition of Words...................................... 92
14.06 Titles................................................... 92
14.07 Merger or Consolidation.................................. 92
14.08 Claims Procedure......................................... 92
14.09 Effective Date of Amendment and Restatement.............. 93
14.10 Execution of Agreement................................... 93
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PROFIT-SHARING RETIREMENT PLAN AND
TRUST AGREEMENT
FOR EMPLOYEES OF SUTRO & CO. INCORPORATED
This Trust Agreement is made effective as of the 1st day of January,
1989, by and between Sutro & Co. Incorporated, a California corporation having
its principal place of business in San Francisco, California (hereinafter called
the "Company"), and the individuals who have signed below as Trustees
(hereinafter called the "Trustees"), to be effective as of January 1, 1989.
WITNESSETH THAT:
WHEREAS, the Company recognizes the contribution being made to the
successful operation of its business by its employees and desires to reward such
contribution and therefore established a qualified plan entitled "Sutro Tax
Deferred Voluntary Investment Plan" and a separate-trust agreement to accompany
said plan entitled "Employee's 401(k) Trust," which have been subsequently
amended from time to time; and
WHEREAS, such restated Plan document, as subsequently amended, was
submitted to the Internal Revenue Service ("IRS") pursuant to an application for
issuance of a favorable determination letter as to the qualified status of the
Plan; and
WHEREAS, the IRS issued a favorable determination letter covering
such document; and
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WHEREAS, the determination letter is conditioned upon adoption by the
Company of certain amendments ("IRS Amendments") submitted to the IRS in
connection with the processing of the determination letter application; and
WHEREAS, the Company now desires to amend and completely restate the
Plan to incorporate such IRS Amendments.
NOW, THEREFORE, the Company and the Trustees, each in consideration of
the covenants, agreements, and declarations of the other, mutually covenant,
agree, and declare as follows:
ARTICLE I.
INTRODUCTION
1.01 CREATION OF TRUST. There has been hereby established a trust
known as the "Profit-Sharing Retirement Trust for Employees of Sutro & Co.
Incorporated" (formerly known as the "Employee's 401(k) Trust") (the "Trust").
The Trustees shall receive any contributions paid to the Trust and all
contributions so received, together with the income therefrom, shall be held,
managed, and administered as a fund in trust pursuant to the terms of this
Agreement. The Trustees hereby confirm their acceptance of the Trust created
hereunder and agree to perform the provisions of this Agreement on their part to
be performed.
1.02 INTERPRETATION OF TRUST AGREEMENT. The Trust is established for
the exclusive benefit of the eligible Employees and their Beneficiaries. So far
as possible, this Agreement shall be interpreted in a manner consistent with
this intent and with the intent of the Company that the Trust established
hereunder shall continue to satisfy those
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provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") and
of the Internal Revenue Code of 1986 (the "Code") relating to qualified plans
and exempt employees' trusts, as either of them may from time to time be
amended. Except as otherwise provided in Section 4.06 hereof, under no
circumstances shall any property, whether corpus or income of the Trust
hereunder, or any funds contributed to the Trust, ever revert to or be used or
enjoyed by the Company or be used for any purpose other than for the exclusive
benefit of the eligible Employees or their Beneficiaries.
ARTICLE II.
DEFINITIONS
Whenever used in this Agreement, unless the context clearly indicates
otherwise, the following words shall have the following meanings:
2.01 "AFFILIATE COMPANY" means (a) a corporation which, together with
the Company, is a member of a controlled group of corporations (as defined in
section 414(b) of the Code), (b) a trade or business (whether or not
incorporated) which is under common control (as defined in section 414(c) of the
Code) with the Company, (c) a corporation, partnership, or other entity which,
together with the Company, is a member of an affiliated service group (as
defined in section 414(m) of the Code), or (d) any entity required to be
aggregated with the Company under section 414(o) of the Code.
2.02 "AGREEMENT" means this Agreement, as amended from time to
time.
2.03 "ANNIVERSARY DATE" means December 31 in each year.
2.04 "BENEFICIARY" means the person or persons designated by a
Participant, pursuant to the provisions of Section 7.04 of this Agreement, to
receive
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distribution of such Participant's share upon his death, and includes a
co-beneficiary or a contingent beneficiary. The term "Beneficiary" also includes
a Participant's surviving spouse if such spouse is deemed to be such
-Participant's Beneficiary pursuant to Section 7.04.
2.05 "BOARD OF DIRECTORS" means the board of directors of the Company
in office from time to time or the Management Committee of such board, with
respect to such powers as have been delegated to it by the Board.
2.06 'BREAK IN SERVICE" means any Plan Year during which an Employee
has not completed or been credited with more than five hundred (500) Hours of
Service with the Company and/or an Affiliated Company.
2.07 "COMMITTEE" means the Administrative Committee constituted under
Article IX of this Agreement in office from time to time.
2.08 "COMPANY" means Sutro & Co. Incorporated and also means any
successor to all or a major portion of its business which adopts this Plan and
Trust pursuant to Section 11.05.
2.09 "COMPANY CONTRIBUTIONS" means the contributions, if any, made by
the Company pursuant to Section 4.04.
2.10 "COMPENSATION" means compensation, except as hereinafter defined,
paid by the Company to the Participant for the Plan Year which is required to be
reported as wages on the Participant's Form W-2. For purposes of this Section,
Compensation shall be determined as described below:
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(a) Compensation shall include amounts contributed by the
Company pursuant to a salary reduction agreement which are excludible from an
Employee's gross income under Code Section 125 (pertaining to cafeteria plans),
Code Section 402(e)(3) (pertaining to Code Section 401(k) salary reductions),
Code Section 402(h) (pertaining to simplified employee pensions) and Code
Section 403(b) (pertaining to tax sheltered annuities) and shall not include any
amounts includible on Form W-2 which are attributable to any group insurance or
other employee welfare plan.
(b) Compensation taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed One Hundred
Fifty Thousand Dollars ($150,000) as adjusted at the time and in such manner as
permitted under Code Section 401(a)(17)(B). Notwithstanding the foregoing, (i)
for Plan Years beginning prior to January 1, 1994, Compensation taken into
account for determining all benefits provided under the Plan for any Plan Year
shall not exceed Two Hundred Thousand Dollars ($200,000) as adjusted in such
manner as permitted under Code Section 415(d) and shall be determined as of the
first day of such Plan Year; and (ii) for Plan Years beginning prior to January
1, 1989, the Two Hundred Thousand Dollars ($200,000) limitation shall apply to
Top Heavy Plan Years and shall not be adjusted. In the event of a Short Plan
Year, the dollar limitation shall be multiplied by the Short Plan Year Fraction.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in applying
such rules, the term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age nineteen
(19) before the end of
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the Plan Year. If as a result of the application of such rules the dollar
limitation is exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if the Plan provides for permitted
disparity) the dollar limitation shall be prorated among the affected
participants in proportion to each such Participant's Compensation as determined
under this Section prior to the application of the dollar limitation.
The One Hundred Fifty Thousand Dollars ($150,000) Compensation
limit and the Two Hundred Thousand Dollars ($200,000) Compensation limit apply
to the combined compensation of the Employee and of any Family Member aggregated
with the Employee under IRC section 414(q) who is either (1) the Employee's
spouse; or (2) the Employee's lineal descendants under the age of nineteen (19).
If the Compensation limitation is applied to the combined Compensation of the
Employee and one or more Family Members, the contribution allocation provisions
of Article VI shall be applied by prorating the Compensation limitation among
the affected individuals in proportion to each individual's Compensation
determined prior to the application of this limitation.
2.11 "ELIGIBLE RETIREMENT PLAN" means:
(a) an individual retirement account described in Code
Section 408(a);
(b) an individual retirement annuity described in Code
Section 408(b);
(c) an employees' trust described in Code Section 401(a)
that is exempt from tax under Code Section 501(a); or
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(d) an annuity plan described in Code Section 403(a).
2.12 Eligible Rollover Distribution' means any distribution occurring
after December 31, 1992 to a Participant of all or a portion of his or her
benefits under the Plan except:
(a) A distribution which is one of a series of substantially
equal periodic payments made over the life expectancy of the Participant or the
joint life expectancies of the Participant and his or her designated beneficiary
or over a period of ten (10) years or more. The determination of whether or not
a distribution is one of a series of substantially equal periodic payments shall
generally be made at the time as payments begin without regard to contingencies
or modifications that have not yet occurred, and social security supplements
under Code Section 411(a)(9) shall be disregarded for this purpose;
(b) A distribution that is required under Code Section
401(a)(9);
(c) Any portion of a distribution that is not includible in
the recipient's gross income (determined without regard to the exclusion for net
unrealized appreciation described in Code Section 402(e)(4));
(d) Loans to Participants that are (1) treated as
distributions under Code Section 72(p) and not excepted by Code Section
72(p)(2); or (2) are in default and are deemed distributions to the Participant;
(e) Returns of elective deferrals under Code Section
401(k) as a result of Code Section 415 limitations;
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(f) Corrective distributions of excess contributions and
excess deferrals under Regulation Sections 1.401(k)-1(f)(4) and 1.402(g)-l(e)(3)
or corrective distributions of excess aggregate contributions under Regulation
Section 1.401(m)-l(e)(3), together with the income allocable to these
distributions;
(g) The cost of life insurance coverage, i.e., T.S. 58"
costs; and
(h) Similar items designated by the Commissioner of Internal
Revenue in revenue rulings, notices, and other guidance of general
applicability.
2.13 "EMPLOYEE" means any person who is employed by the Company,
excluding employees who are non-resident aliens whose compensation constitutes
foreign source income for United States federal income tax purposes. An
Employee's employment shall be deemed to have commenced on the date on which he
first performs an Hour of Service as an Employee.
2.14 "EXCESS AGGREGATE CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of:
(a) Matching Contributions, Qualified Nonelective
Contributions and/or Qualified Matching Contributions actually taken into
account in computing the Actual Contribution Percentages of Highly
Compensated Employees for such Plan Year, over
(b) The maximum amount of such Matching Contributions
permitted under the Actual Contribution Percentage Test as determined by
reducing such Matching Contributions made on behalf of Highly Compensated
Employees in order of their Actual Contribution Percentages, beginning with the
highest of such ratios.
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Such determination shall be made after first determining
Excess Contributions pursuant to this Section.
2.15 "EXCESS CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of:
(a) The Defined Contributions, Qualified Nonelective
Contributions and/or Qualified Matching Contributions actually taken into
account in computing the Actual Deferral Percentages of Highly Compensated
Employees for such Plan Year, over
(b) The maximum amount of such Tax Deferred Contributions
permitted under the Actual Deferral Percentage Test as determined by reducing
such Tax Deferral Contributions made on behalf of Highly Compensated Employees
in order of their Actual Deferral Percentages, beginning with the highest of
such percentages.
2.16 "FAMILY MEMBER" means an individual who is described as such in
section 414(q)(6)(B) of the Code and who is a Participant of the Plan.
2.17 "HIGHLY COMPENSATED EMPLOYEE." The term Highly Compensated
Employee includes highly compensated active employees and highly compensated
former-employees.
A highly compensated active employee included any employee who
performs service for the Company during the determination year and who, during
the look-back year: (i) received compensation from the Company in excess of
Seventy-Five Thousand Dollars ($75,000) (as adjusted pursuant to Section 415(d)
of the Code); (ii) received compensation from the Company in excess of Fifth
Thousand Dollars ($50,000)
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(as adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Company and
received compensation during such year that is greater than fifty (50%) of the
dollar limitation in effect under Section 415(b)(1)(A) of the Code.
The term Highly Compensated Employee also includes: (i)
employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
employee is one of the one hundred (100) employees who received the most
compensation from the Company during the determination year; and (ii) employees
who are five percent (5%) owners at any time during the look-back year or
determination year.
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the twelve (12) month period immediately
preceding the determination year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Company during the determination
year, and was a highly compensated active employee for either the separation
year or any determination year ending on or after the employee's fifty-fifth
(55th) birthday.
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If an employee is, during a determination year or look-back
year, a family member of either a five percent (5%) owner who is an active or
former employee or a Highly Compensated Employee who is one of the ten (10) most
highly compensated employees ranked on the basis of compensation paid by the
Company during such year, then the family member and the five percent (5%) owner
or top-ten highly compensated employee shall be aggregated. In such case, the
family member and five percent (5%) owner or top-ten Highly Compensated Employee
shall be treated as a single employee receiving compensation and Plan
contributions or benefits equal to the sum of such member and five percent (5%)
owner or top-ten highly compensated employee. For purposes of this section,
family member includes the spouse, lineal ascendants and descendants of the
employee or former employee and the spouse of such lineal ascendant and
descendants.
The determination of who is a Highly Compensated Employee,
including the determination of the number and identity of employees in the
top-paid group, the top one hundred (100) employees, the number of employees
treated as officers and the compensation that is considered, win be made in
accordance with Section 414(g) of the Code and the regulations thereunder.
If elected by the Company for a Plan Year, the preceding sentence will
be modified by substituting Fifty Thousand Dollars ($50,000) for Seventy-Five
Thousand Dollars ($75,000) in (i) and by disregarding (ii). This simplified
definition of highly compensated employee will apply only to Companies that
maintain significant business .- activities (and employ employees) in at least
two significantly separate geographic areas.
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2.18 "HOURS OF SERVICE" means:
(a) Each hour for which an employee is directly or indirectly
paid or entitled to payment by the Company or an Affiliated Company for the
performance of duties. These hours shall be credited to the employee for the
Plan Year(s) in which the duties are performed; and
(b) Each hour for which an employee is directly or indirectly
paid or entitled to payment by the Company or an Affiliated Company 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 or other similar
reason. These hours shall be calculated and credited pursuant to section
2530.200b-2 of the Department of Labor Regulations which are incorporated herein
by reference; and
(c) Each hour for which back pay, irrespective of mitigation
of damages, has been either awarded or agreed to by the Company or an Affiliated
Company. The same hours shall not be credited under both 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 Plan Year(s) to which the award or
agreement pertains rather than the Plan Year in which the award, agreement or
payment is made; and
(d) Each hour credited, at the rate of forty (40) hours per
week for each week involved, for the following periods of time:
(i) Unpaid periods of absence authorized by the Company
in accordance with standard personnel policies of the Company,
provided the
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Employee returns to employment with the Company immediately upon the
expiration of such authorized absence;
(ii) Unpaid military leave while the Employee's
reemployment rights are protected by law, provided the Employee
returns to employment with the Company within the period prescribed by
law.
Solely for purposes of determining whether a Break in Service
has occurred in a Plan Year, an Employee who is absent from work by reason of
pregnancy, birth or adoption of a child, or for purposes of caring for such
child for a period beginning immediately following such birth or adoption shall
receive credit for the Hours of Service which would otherwise have been credited
to such Employee but for such absence, or in any case in which such hours cannot
be determined, eight (8) Hours of Service per day of such absence, provided,
however, that the number of Hours of Service credited under this paragraph shall
not exceed the difference between 501 and the number of Hours of Service with
which such Employee would have been credited for the Plan Year to which this
paragraph is applicable. The Hours of Service credited under this paragraph
shall be credited in the first Plan Year in which such credit is necessary to
avoid a Break in Service.
2.19 "INVESTMENT MEDIA" means such marketable securities and/or money
market mutual funds, and in such amounts, as are specifically selected and
specified by a Participant in directions to the Trustees (in such form as may be
acceptable to the Trustees) for the investment of assets held in a Self-Directed
Account pursuant to Section 5.09. The Trustees may designate one or more
Investment Media which are
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sponsored and/or managed by the Company or any Affiliated Company. For
investments made after February 1, 1993, the following types of investments are
not permitted under any circumstances: unhedged short options; limited
partnership interests except Company sponsored employee limited partnerships;
stocks with a value of less than $5, unless on the current recommended Buy List
of the Company, its Affiliates or selected Research Correspondents, and in no
case stocks with a value of less than $2; investments in bonds or convertibles
rated less than Baa/BBB. A below investment grade bond OR convertible can be
approved if the Company has (a) a common stock which is recommended for purchase
or rated attractive or hold by either Sutro, Xxxxxx Xxxxxxx or our national
correspondent or, (b) a bond or convertible which has been internally reviewed
by our Research Department which rates the bond or convertible as a buy or hold.
2.20 "LEASED EMPLOYEES." The Plan treats a Leased Employee as an
Employee of the Company. A Leased Employee is an individual (who otherwise is
not an Employee of the Company) who, pursuant to a Leasing Agreement between the
Company and any other person, has performed services for the Company (or for the
Company and any persons related to the Company within the meaning of IRC section
144(a)(3) on a substantially full-time basis for at least one year and who
performs services historically performed by Employees in the Company's business
field. If the Leased Employee is treated as an Employee by reason of this
section, "Compensation" includes compensation from the leasing organization
which is attributable to services performed for the Company.
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The Plan does not treat a Leased Employee as an Employee if
the leasing organization covers the Employee in a safe harbor plan and, prior to
the as application of the safe harbor plan exception, twenty percent (20%) or
less of the Company's Employees (other- than highly compensated Employees) are
Leased Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least ten percent (10%) of the Employee's
Compensation without regard to employment by the leasing organization on a
specified date. The safe harbor plan must determine the ten percent (10%)
contribution on the basis of Compensation as defined in section 415(c) of the
Code, plus elective contributions.
The Committee must apply this section in a manner consistent
with sections 414(n) and 414(o) of the Code and regulations issued thereunder.
The Committee will reduce the Leased Employee's allocation of Employer
Contributions under this plan by the Leased Employee's allocation under the
leasing organizations) plan, but only to the extent that allocation is
attributable to the Leased Employee's service provided to the Employer. The
leasing organization's plan must be a money purchase plan which would satisfy
the definition under this section of a safe harbor plan.
2.21 "MATCHING CONTRIBUTIONS" means the contributions made by the
Company pursuant to Section 4.02.
2.22 "NET PROFITS" means the net profits of the Company as determined
in accordance with sound accounting practices, after making such adjustments and
estimates as may be appropriate, but before provision for any federal or state
taxes based
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upon or measured by income and before Company Contributions to this
Plan. In computing net profits and accumulated earnings, there shall be excluded
net gains or losses on the sale or other disposition or revolution of securities
bought for capital appreciation by the Company. Such determination shall be
final and shall not be subject to revision by reason of any subsequent
adjustments affecting accounts or estimates involved.
2.23 "NON-HIGHLY COMPENSATED PARTICIPANT" means any Participant who is
neither Highly Compensated Employee nor a family member of such whose
compensation and any employer contributions allocated on his or her behalf is
required to be aggregated with a Highly Compensated Employee.
2.24 "NORMAL RETIREMENT AGE" means age sixty-five (65).
2.25 "PARTICIPANT" means an Employee who is eligible to participate in
the Plan as determined under Article III of the Plan.
2.26 "PLAN" means the "Profit-Sharing Retirement Plan for
Employees of Sutro, & Co. Incorporated" as set forth herein, together with
any and all amendments hereto.
2.27 "PLAN YEAR' AND 'LIMITATION YEAR" mean the fiscal year of the
Trust, being the twelve (12) months ending on each Anniversary Date.
2.28 "QUALIFIED MATCHING CONTRIBUTIONS" means Company contributions
described in Section 4.03(d) and which meet the requirements of Treasury
Regulations Section 1.401(k)-1(g)(13)(iii).
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2.29 "QUALIFIED NONELECTIVE CONTRIBUTIONS" means Company contributions
described in Section 4.03(d) and which meet the requirements of Treasury
Regulations Section 1.401(k)-l(g)(13)(iii).
2.30 "SALARY REDUCTION AGREEMENT" means the agreement entered into
between the Company and an Employee pursuant to the provisions of Section 3.04.
2.31 "SELF-DIRECTED ACCOUNT" means an account established for the
investment and reinvestment of Tax Deferred Contributions, Voluntary
Contributions, Rollover Contributions and vested Matching Contributions upon the
authorization of the Committee. Said Account may be invested only in authorized
Investment Media. 2.32 'Tax Deferred Contributions' means the contributions made
by the Company pursuant to section 4.01 of the Plan in consideration of a
Participant's agreement to reduce his cash Compensation by a comparable amount
pursuant to a Salary Reduction Agreement.
2.33 "TRUST" means the trust fund created by this Agreement, including
all Investment Media, and held by the Trustees hereunder, into which all
contributions and income thereon shall be paid and out of which all payments and
distributions shall be made.
2.34 "TRUSTEES" means the individuals named herein as trustees and any
duly appointed successor trustee or trustees.
2.35 "VALUATION DATE" means the Anniversary Date and, with respect to
each Investment Medium, each other date which the Committee in its sole
discretion selects for the revolution of that Investment Medium.
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2.36 "VOLUNTARY CONTRIBUTIONS" shall mean the amounts contributed by a
Participant in accordance with Section 4.07.
2.37 "YEAR OF SERVICE" means one (1) year of an employee's employment
with the Company, and any Affiliated Company, whether or not continuous;
provided, however, that the determination of Years of Service will be subject to
the following rules:
(a) The computation of Years of Service will be made on the
basis of Hours of Service performed by the employee during each Plan Year. An
employee will be-considered to have completed one (a) Year of Service with
respect to his employment during any Plan Year if and only if such employee
completes at least 1,000 Hours in such Plan Year. Notwithstanding the foregoing,
an employee's Years of Service with respect to a period of employment prior to
January 1, 1989 shall in no event be less than such employee's Years of Service
as determined under the Plan as in effect on December 31, 1988.
(b) In any case in which an individual becomes an Employee by
reason of the acquisition of his prior employment by the Company, whether by
merger, acquisition of assets or stock or otherwise, his service with such prior
employer shall be included in determining his Years of Service hereunder only to
the extent that such service is required to be credited hereunder by section
414(a) of the Code and any regulations promulgated thereunder, by the terms of
the agreement pursuant to which such prior employer was acquired by the Company
or by a vote of the Board.
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(c) In the event an Employee terminates his employment and is
subsequently reemployed, such Employee's Years of Service completed prior to
such termination shall be restored upon reemployment.
ARTICLE III.
PARTICIPATION
3.01 ELIGIBILITY FOR PARTICIPATION. Each Employee who was a
Participant on December 31, 1988, shall continue to be a Participant on January
1, 1989, provided he is still employed by the Company on that date. Each other
Employee, including each Employee hired on or after January 1, 1989, shall
become a Participant under the Plan on the first day of the month following the
month in which he completes three (3) Months-of Service except for (a) an hourly
paid employee who is not classified as regular; (b) an employee who has not
reached the age of 21; and (c) an employee who is represented by a collective
bargaining agreement where retirement benefits were the subject of good faith
negotiations between employer and employee representative. For purposes of this
Section 3.01 an Employee shall be deemed to have completed three (3) Months of
Service if he or she has completed one Hour of Service with the Company, or any
Affiliated Company, during the period commencing with the Employee's employment
commencement date and ending with the date on which falls the three-month
anniversary of the Employee's employment commencement date. For purposes of this
Section 3.01, the following terms shall be defined as follows: (a) an "hourly
paid employee not classified as regular" shall mean an employee who is paid on
an hourly basis and who has not been designated by the Company as a regular
employee including, but not limited to,
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any employee in one of the following categories: cold caller, registered cold
caller, registered dialer, legal researcher, project sales assistant, project
registered sales assistant, clerk, file clerk hired after December 31, 1994,
data entry clerk hired after December 31, 1993, valuation clerk, marketing
assistant, branch administrator hired before June 30, 1996, dining services
administrator, catering assistant, supervisory analyst, intern, registered
intern, telemarketer; (b) "employment commencement date" shall mean the first
day on which an Employee accrues an Hour of Service. Notwithstanding the
foregoing, for the Plan Year ending December 31, 1995, an Employee who is an
hourly paid employee not classified as regular shall become a Participant under
the Plan on the first day of the month following the month in which he completes
1,000 Hours of Service in an eligibility computation period or a shorter period
of time. For. purposes of the foregoing, an Employee's initial eligibility
..computation period shall be the twelve consecutive month period beginning on
the Employee's employment commencement date, and subsequent eligibility
computation periods shall be the Plan Year with the first such Plan Year
including the first anniversary of the Employee's employment commencement date.
3.02 DETERMINATION OF ELIGIBILITY BY COMMITTEE. The determination of
an Employee's eligibility for membership under the Plan shall be made by the
Committee from the Company's records, and the Committee's decisions on these
matters shall be conclusive and binding upon all persons.
3.03 DURATION OF ELIGIBILITY. A Participant shall continue as an
active Participant until his termination of employment with the Company and,
except as
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otherwise specifically provided herein, shall cease to be an active Participant
entitled to share in contributions hereunder upon such termination of
employment. To the extent a former Participant's accounts have not been fully
distributed, such former Participant shall be treated as a Participant for
purposes of applying the provisions of the Plan to such accounts. A former
Participant shall once again become an active Participant under the Plan on the
date on which he again becomes an Employee.
3.04 SALARY REDUCTION AGREEMENT. Each Participant may, but shall not
be required to, enter into a Salary Reduction Agreement with the Company. The
terms of any such Salary Reduction Agreement shall provide that such Participant
agrees to accept a reduction in cash Compensation from the Company, in an amount
equal to any whole number percentage of his Compensation, in consideration of
the Company's agreement to contribute an equal amount into the Trust on his
behalf; provided, such salary reduction percentage shall not exceed fifteen
percent (15%) of his Compensation; and provided further, such reduction shall
not exceed the dollar amount that is established from time to time by the
Secretary of the Treasury under section 402(g) of the Code for any calendar
year. A Salary Reduction Agreement made by a Participant immediately upon
satisfaction of the Eligibility Requirements shall be effective for the
Participant's first pay period in the month which begins not less than fifteen
(15) days (or such shorter period that the Committee allows) after the delivery
of such Salary Reduction Agreement to the Company. A Salary Reduction Agreement
made by a Participant who has previously satisfied the eligibility requirements,
and any subsequent changes to a Participant's Salary Reduction Agreement, shall
become effective as of the first pay period of any calendar
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quarter. At any time a Participant by giving fifteen (15) days' notice (or such
shorter period that the Committee allows) may completely suspend the Salary
Reduction Agreement. The salary reduction percentage in effect at any time shall
continue in effect unless and until changed in accordance with the provisions of
the preceding sentences.
ARTICLE IV.
CONTRIBUTIONS UNDER THE PLAN
4.01 TAX DEFERRED CONTRIBUTIONS. The Company shall make a Tax Deferred
Contribution to the Trust for each Compensation pay period on behalf of each
Participant who has entered into a Salary Reduction Agreement, equal to the
amount specified in said Salary Reduction Agreement. Notwithstanding anything
herein to the contrary, Tax Deferred Contributions shall be subject to the
limitations described in Article VI of the Plan.
4.02 MATCHING CONTRIBUTIONS.
(a) Beginning with the calendar quarter commencing October 1,
1996, and for each subsequent calendar quarter that the Plan is in effect, the
Company shall determine whether it shall make a Matching Contribution to the
Trust under the Plan for each eligible Participant for whom the Company made Tax
Deferred Contributions during such calendar quarter in accordance with the
following rules:
(i) If the Company's pre-tax Net Profits for a calendar
quarter equal or exceed Two Hundred Fifty Thousand Dollars ($250,000),
the Company shall make a Matching Contribution equal to one hundred
percent (100%) of each eligible Participant's Tax Deferred
Contributions made during
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such calendar quarter, not to exceed the lesser of (i) three percent
(3%) of the Participant's Compensation during such calendar quarter, or
(ii) Seven Hundred Fifty Dollars ($750) per calendar quarter (or Three
Thousand Dollars ($3,000) annually).
(ii) If the Company's pre-tax Net Profits for a calendar
quarter are less than Two Hundred Fifty Thousand Dollars ($250,000),
the Company may make a Matching Contribution up to one hundred percent
(100%) of each eligible Participant's Tax Deferred Contributions made
during such calendar quarter, not to exceed the lesser of (i) three
percent (3%) of the Participant's Compensation during such calendar
quarter, or (ii) Seven Hundred Fifty Dollars ($750) per calendar
quarter (or Three Thousand Dollars ($3,000) annually). The Company, in
its discretion, shall determine whether to make a Matching
Contribution for a calendar quarter under this Section 4.02(a)(ji)
and, if so, the exact amount or percentage of such Matching
Contribution.
For purposes of this Section 4.02(a), the Net Profits threshold
shall be determined on a calendar quarter by calendar quarter basis, with no
carryover or carryback of profits to or from any other calendar quarter. The
Company's Matching Contribution for any Plan Year shall be reduced by the amount
of forfeitures available for that Plan Year pursuant to Section 7.05. A
Participant shall be eligible for the Matching Contribution provided by this
Section 4.02(a), if, and only if, such Participant either (A) is an Employee on
the last day of the calendar quarter for which the Matching
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Contribution is made, or (B) died, retired on or after his Normal Retirement
Age, or became disabled (within the meaning of Section 7.03) during such
calendar quarter. However, if in any year a Participant's Tax Deferred
Contributions are funded to the maximum amount allowable under section 402(g) of
the Code in a period less than the four calendar quarters of that year, Matching
Contributions shall be determined and allocated as though such Tax Deferred
Contributions were made ratably over each of the four calendar quarters.
(b) Notwithstanding the foregoing, beginning with the calendar
quarter commencing January 1, 1990, and for each subsequent calendar quarter
through the calendar quarter ending September 30, 1996, the Company shall make a
Matching, Contribution to the Trust under the Plan for each eligible Participant
for whom the Company made Tax Deferred Contributions during said calendar
quarter, equal to one hundred percent (100%) of the Participant's Tax Deferred
Contributions made during such calendar quarter, not to exceed the lesser of (i)
three percent (3%) of the Participant's Compensation during such calendar
quarter, or (ii) Seven Hundred Fifty Dollars ($750) per quarter (Three Thousand
Dollars ($3,000) annually), provided that Company's pre-tax Net Profits for that
quarter equal or exceeded Two Hundred Fifty Thousand Dollars ($250,000). For
purposes of this Section 402(b), the Net Profits threshold shall be determined
on a calendar quarter by calendar quarter basis, with no carryover or carryback
of profits to or from any other calendar quarter. The Company's Matching
Contribution for any Plan Year shall be reduced by the amount of forfeitures
available for that Plan Year pursuant to Section 7.05. A Participant shall be
eligible for the Matching
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Contribution provided by this Section 4.02(b) if, and only if, such Participant
either (A) is an Employee on the last day of the calendar quarter for which the
Matching Contribution is made, or (B) died, retired on or after his Normal
Retirement Age, or became disabled (within the meaning of Section 7.03) during
such calendar quarter. However, if in any year a Participant's Tax Deferred
Contributions are funded to the maximum amount allowable under section 402(g) of
the Code in a period less than the four calendar quarters of that year, Matching
Contribution win be determined and allocated as though such Tax Deferred
Contributions were made ratably over each of the four calendar quarters.
(c) Notwithstanding the foregoing, for the 1989 Plan Year,
Matching Contributions shall be made for each Participant equal to one hundred
percent (100%) of the first Five Hundred Dollars ($500) of a Participant's Tax
Deferred Contribution, plus fifty percent (50%) of the next Three Thousand
Dollars ($3,000) of a Participant's Tax Deferred Contribution.
4.03 QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS. The Company may contribute to the Trust that amount in cash or
property which the Company, in its sole discretion, determines to be a proper
contribution, and which shall be allocated pursuant to Section 5.03.
4.04 COMPANY CONTRIBUTIONS. For the 1989 Plan Year, and for each Plan
Year thereafter, the Company may in its sole discretion contribute to the Trust,
as a Company Contribution, an amount up to the sum of (1) twenty percent (20%)
of that portion of the Company's Net Profits for such Plan Year that does not
exceed twenty percent (20%) of the Compensation of all Participants and (2) ten
percent (10%) of that
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portion of such Net Profits, if any, that exceeds twenty percent (20%) of the
Compensation of all Participants. The Company may, but is not required to,
contribute such additional amount out of Net Profits or accumulated earnings as
the Company, in its sole discretion, shall determine. The amount of the
Company's Contribution shall be determined by the Company's Board of Directors,
in its discretion, as soon as practicable after the end of each Plan Year.
Company Contributions shall be allocated to Participants in the Plan as of the
last day of the Plan Year, and a Participant must be employed on such day in
order to receive such an allocation. The Plan Year for which each such Company
Contribution is made shall be designated at the time of the contribution.
4.05 PAYMENT OF CONTRIBUTIONS.
(a) The Tax Deferred Contributions made by the Company on
behalf of each Participant with respect to each pay period shall be paid into
the Trust by the Company not later than thirty (30) days after the last day of
each pay period and invested pursuant to the election of such Participant under
Section 5.09 of the Plan.
(b) The Matching Contributions made by the Company on behalf
of each Participant with respect to each calendar quarter shall be paid into the
Trust not later than thirty (30) days after the last day of each calendar
quarter. Matching Contributions shall be allocated to a Participant's Company
Account.
(c) The Company Contributions, if any, made by the Company on
behalf of Participants for each calendar year shall be paid into the Trust not
later than the date required for such contributions to be deductible for federal
income tax purposes for
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such Plan Year and, after being allocated among Participants pursuant to Section
5.05, shall be deposited in the Participant's Company Account.
(d) Qualified Nonelective Contributions and/or Qualified
Matching Contributions, if any, shall be deposited to the Trust not later than
the end of the twelve (12) month period immediately following the end of such
Plan Year.
4.06 REVERSION OF CERTAIN CONTRIBUTIONS MADE BY THE COMPANY. All
employer contributions made pursuant to this Plan shall be made upon the
condition that such contributions are fully deductible for federal income tax
purposes. In the event that any such deduction is disallowed in whole or in
part, then the Company may direct the Trustees to return the amount of such
contributions (to the extent disallowed) (decreased by losses attributable to
such amount, but not including any earnings attributable to such amount) to the
Company at any time within the twelve (12)-month period commencing on the date
of disallowance. In the event that the Company shall make employer contributions
pursuant to the terms of this Plan on the basis of a mistake of fact, the
Company may direct the Trustees to return the amount of such contributions
(decreased by losses attributable to such amount, but not including any earnings
attributable to such amount) to the Company at any time within the twelve
(12)-month period commencing on the date of contribution. In no event shall the
return of a contribution hereunder cause any Participant's accounts to be
returned to less than they would have been had the nondeductible or mistaken
amount not been contributed. For purposes of this Section 4.06, the term
"employer contributions" shall include any contributions of an Employer subject
to the provisions of Section 404 of the Code.
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4.07 VOLUNTARY CONTRIBUTIONS. For Plan Years beginning prior to
January 1, 1990, a Participant may make Voluntary Contributions. A Participant's
Voluntary Contributions under all of the Employer's Plans in which the
Participant participates may not exceed five percent (5%) of the Participant's
Compensation. All Voluntary Contributions shall be deposited into the
Participant's Voluntary Contribution Account. Effective on and after January 1,
1990, no Voluntary Contributions shall be permitted under the Plan.
4.08 ROLLOVER CONTRIBUTIONS.
(a) Notwithstanding anything to the contrary elsewhere herein,
any Participant may make contributions of all or any part of (i) any amount
received by such Participant from another plan and trust qualified as an exempt
employee benefit plan and trust under sections 401(a) and 501(a) of the Code or
(ii) any amount received by such Participant out of an individual retirement
account which consists of a prior rollover contribution from a qualified
employee benefit plan which, in either case, but for such contribution to the
Plan, would have been taxable income to such Participant. Contributions under
this Section 4.08 shall be in cash or such other form of property as is
acceptable to the Trustees and as is necessary to avoid imposition of tax on the
distribution. Any such rollover contribution shall be credited to a Rollover
Account for the benefit of such Participant.
(b) An Employee, on or after January 1, 1993, with the consent
of the Committee and subject to Section 4.09 below, may authorize another
qualified plan to make a direct rollover of an Eligible Rollover Distribution to
the Plan.
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(c) Any amount transferred under this Section shall be
maintained for such Employee and shall be known as his or her "Rollover Account"
as described in Code Sections 402(c) and 408(d)(3).
4.09 CONDITIONS OF ROLLOVER.
Subject to the Committee's approval, amounts which an Employee
has received from any other employee benefit plan may, in accordance with
uniform and nondiscriminatory procedures adopted by the Committee, be
transferred by the Employee to the Plan, and if transferred, shall be credited
to such Employee's Rollover Account hereunder, provided the following conditions
are satisfied:
(a) Amounts that have been previously distributed to the
Employee from another qualified plan shall be credited to the Employee's
Rollover Account.
(b) The amounts delivered to the Committee must have
previously been received by the Employee as:
(i) an Eligible Rollover Distribution; or
(ii) a rollover from a conduit individual retirement
account or annuity which has received a rollover contribution
described in Code Section 408(d)(3).
(c) The amounts tendered must not include amounts
attributable to:
(i) Nondeductible employee contributions made to a
qualified plan by the Employee;
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(ii) Contributions to an individual retirement
account or annuity that are deductible under Code Section 219; or
(iii) A distribution required to be made under Code
Section 401(a)(9) or the incidental death benefit requirement of Code
Section 401(a)(9)(G).
(d) The transfer to the Plan of amounts described in
subsection (b) will only be accepted if the Employee presents to the Committee
the Internal Revenue Service Form 1099, or equivalent evidence, and any other
evidence as the Committee may require to ensure that the receipt of the amount
win not adversely affect the qualified status of the Plan.
(e) Amounts must be received by the Committee not later than
60 days after a distribution was received by the Employee.
4.10 TRANSFERS FROM OTHER PLANS. This Plan shall not accept any direct
or indirect transfer from a defined benefit plan or from a defined contribution
plan which is subject to the funding standards of Section 412 of the Code.
ARTICLE V.
PARTICIPANTS' ACCOUNTS;
ALLOCATION OF ASSETS AND CONTRIBUTIONS;
PARTICIPANTS' INVESTMENT ELECTIONS
5.01 PARTICIPANTS' ACCOUNTS. The Committee shall maintain the
following accounts for each Participant under the Plan: (a) a Tax Deferred
Account to which Tax Deferred Contributions made by the Company for the benefit
of such
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Participant shall be credited; (b) a Company Account to which Matching
Contributions and Company Contributions made by the Company for the benefit of
such Participant shall be credited; (c) a Qualified Nonelective Contribution
Account to which Qualified Nonelective Contributions and Qualified Matching
Contributions made by the Company for the benefit of such Participant shall be
credited; (d) a Voluntary Contribution Account to which Voluntary Contributions
made by such Participant prior to January 1, 1990, shall be credited; and (e) a
Rollover Account to which rollover contributions made by the Participant
pursuant to section 407 of the Code shall be credited; provided, however, that
if a Participant made Rollover Contributions prior to January 1, 1989, which are
invested in a Self-Directed Account, a separate Rollover Account shall be
maintained with respect thereto. The rights of each Participant to the amounts
allocated to his Tax Deferred, Voluntary and Rollover Accounts shall be fully
vested and nonforfeitable at all times.
5.02 ALLOCATION OF TAX DEFERRED CONTRIBUTIONS. At the time of payment
of any Tax Deferred Contributions to the Trust, the Committee shall deliver to
the Company a schedule showing the name of each Participant and the amount of
Tax Deferred Contributions made on his behalf. The schedule shall also contain
such other information as the Committee may reasonable require for the proper
administration of the Plan. Upon receiving all such schedules with respect to
pay period ending on a Valuation Date and after the account balances of the
Participants have been adjusted as provided in Section 5.07, the Committee shall
credit to the Tax Deferred Account of each Participant listed on such schedules
the amount of Tax Deferred Contributions made to the Trust on his behalf as
shown therein.
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5.03 ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED
MATCHING CONTRIBUTIONS. A Non-Highly Compensated Participant shall be eligible
to share in Qualified Nonelective Contributions and Qualified Matching
Contributions for the Plan Year only if he or she has completed at least one (1)
Hour of Service with Employer during the Plan Year. Qualified Nonelective
Contributions and Qualified Matching Contributions shall be allocated on the
last day of the Plan Year to the Qualified Nonelective Contribution Account of
each Non-Highly Compensated Participant eligible to share in any Qualified
Nonelective Contributions and Qualified Matching Contributions for the Plan Year
in the ratio that such Non-Highly Compensated Participant's Compensation bears
to the total of all Non-Highly Compensated Participants' Compensation.
5.04 ALLOCATION OF MATCHING CONTRIBUTIONS (INCLUDING FORFEITURES). As
soon as practicable after the end of each Plan Year, the Company shall deliver
to the Committee a schedule showing the name of each Participant who (a) was an
Employee of the Company on the Anniversary Date of such Plan Year and was
credited with at least one thousand (1,000) Hours of Service during such Plan
Year, or (b) died, retired on or after Normal Retirement Age or became disabled
(within the meaning of Section 7.03) during such Plan Year and the amount of
Matching Contributions (including forfeitures) made on his behalf pursuant to
Section 4.02. The schedule shall also contain such other information as the
Committee may reasonably require for the proper administration of the Plan. Upon
receiving such schedule with respect to a Plan Year and after the account
balances of the Participants have been adjusted as of such Anniversary Date as
provided
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in Section 5.07, the Committee shall credit to the Company Account of each
Participant listed on such schedule the amount of the Matching Contributions
(including forfeitures) made to the Trust on his behalf as shown therein.
5.05 ALLOCATION OF COMPANY CONTRIBUTIONS. As soon as practicable after
the end of each Plan Year for which a Company Contribution has been made to the
Trust pursuant to Section 4.04, the Company shall deliver to the Committee a
schedule showing the name of each Participant who (a) was an Employee of the
Company on the last-day of such Plan Year and was credited with at least one
thousand (1,000) Hours of Service during such Plan Year or (b) died, retired on
or after Normal Retirement Age or became disabled (within the meaning of Section
7.03) during such Plan Year, and opposite the name of each such Participant the
amount of Compensation paid to such Participant by the Company during such Plan
Year. The schedule shall also contain such other information as the Committee
may reasonably require for the proper administration of the Plan. Upon receiving
such schedule and the total contribution, if any, made by the Company for such
Plan Year, and after the account balances of the Participants have been adjusted
as provided in Section 5.07, the Committee shall allocate a portion of the
Company Contribution for the Plan Year to the Company Account of each
Participant listed on such schedule on the following basis:
(a) Each Participant shall receive one allocation unit for
each $100 of Compensation for the Plan Year. No fractional allocation units
shall be credited, and Compensation in amounts less than $100 shall be
disregarded. For purposes of this subsection the Company may, at its sole
discretion, place a cap on the amount of
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Compensation to be considered for each Plan Year, provided that such cap be no
greater than the limitation imposed by Section 401(a)(17) of the Code.
(b) Each Participant's Company Account shall be credited with
a portion of the total Company Contribution to the Plan for such Plan Year which
bears the same ratio to such total Company Contribution as the Participant's
total allocation units for such Plan Year bear to the total allocation units of
all eligible Participant for such Plan Year. Any amount which is in excess of
the maximum set forth in Section 6.05 shall be reallocated among all other
Participants in accordance with the above procedures. Any such amount which
cannot be reallocated shall be reallocated in the following Plan Year.
5.06 ALLOCATION OF ROLLOVER CONTRIBUTIONS. After the receipt of any
rollover contribution made by a Participant and after the account balances of
the Participants have been adjusted as provided in Section 5.071, the Committee
shall credit such rollover contribution to such Participant's Rollover Account
as of the Valuation Date coincident with or next following the receipt of such
rollover contribution.
5.07 VALUATION AND ALLOCATION OF ASSETS. The Accounts of each
Participant which are maintained by the Trustees shall be valued by the Trustees
and adjusted to reflect appreciation or depredation in the value of the Trust.
AR expenses of the Trust which are allocable to a Participant Account or
Investment Medium shall be charged to such Account or Investment Medium. AR such
expenses allocable to an Investment Medium shall be charged against all
Participant Accounts in the same proportion as the amount credited to such
Participant account and invested in such Investment Medium bears to the total
amount invested in such Investment Medium. All
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such expenses allocable to a Participant Account will be charged against the
interest of such Account invested in each Investment Medium in the same
proportion as each such interest bears to the total value of the Account. Such
valuations and adjustments of the Participants' Accounts shall be made so as to
preserve for each Account of each Participant its beneficial interest in each of
the Investment Media. The value of a Participant Account as of any Valuation
Date shall be the sum of the interests of the Participant Account invested in
each Investment Medium as of the Valuation Date for each such Investment Medium
which is coincident with or immediately preceding the Valuation Date as of which
the Participant Account is being valued.
5.08 DISTRIBUTIONS AND FORFEITURES. Whenever the Trustees shall make
any distribution to or on behalf of a Participant in accordance with the
provisions of Article V11, or whenever a Participant shall forfeit all or any
portion of his Company Account in accordance with the provisions of Section
7.05, such Participant's accounts shall be charged with the amount of such
distribution or forfeiture. In the event of any distribution. or forfeiture of
less than the full amount standing to the credit of a Participant's accounts,
the amount charged against such Participant's accounts shall be charged against
such Participant's interest in the Investment Media in accordance with
administrative policies established by the Committee, or in the absence of any
such policy, on a pro rata basis. AR distributions and forfeitures shall be
based upon the value of the Participant's accounts determined as of the
Valuation Date next preceding such distribution or forfeiture. The accounts of
any Participant shall continue to be maintained under the Plan and shall
continue to share in the allocation of income, gain, losses,
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41
appreciation, and depreciation of assets pursuant to Section 5.07 until such
accounts have been fully distributed.
5.09 ELECTION OF INVESTMENTS.
(a) The Plan is intended to be interpreted consistent with the
requirements of Section 404(c) of ERISA and the regulations pursuant thereto.
Each Participant shall have the right to elect the manner of investment of the
amounts standing to the credit of his Self-Directed Account among the Investment
Media established under the Trust. The non-vested portion of the Matching
Contribution shall be invested by the Trustees. The Trustees shall maintain
separate records for Participant directed investments. Earnings or losses on
such investments shall be allocated solely to the Accounts of the Participant
who directed the investments.
(b) The Company, the Committee and the Trustees shall have no
responsibility for the investment elections of the Participants and shall incur
no liability on account of investing the assets of the Trust in accordance with
such directions.
(c) For purposes of this Section 5.09, all references to a
Participant shall include a former Participant and the Beneficiary of a deceased
Participant to the extent that such former Participant or Beneficiary has an
interest under the Trust.
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ARTICLE VI.
LIMITATIONS ON CONTRIBUTIONS
AND ALLOCATIONS
6.01 CONTRIBUTIONS TO BE DEDUCTIBLE. Tax Deferred Contributions,
Matching Contributions, Company Contributions, Qualified Nonelective
Contributions and Qualified Matching Contributions under the Plan with respect
to a Plan Year shall not exceed that amount which, when added to the
contributions made by the Company for that Plan Year to all other qualified
pension or profit sharing plans maintained by the Company, equals the maximum
amount allowable as a deduction by the Company pursuant to section 404 of the
Code with respect to such Plan Year.
6.02 LIMITATION ON TAX DEFERRED CONTRIBUTIONS.
(a) The Tax Deferred Contributions made by a Participant for a
Plan Year shall satisfy the test set forth in (i)(A) below, or the alternative
test set forth in (i)(B) below, and to the extent required by Treasury
Regulations under Code Section 401(m), also shall satisfy the test identified in
(ii) below:
(i) (A) the Actual Deferral Percentage for the Highly
Compensated Employees who are eligible for Tax Deferred
Contributions is not more than the Actual Deferral Percentage
for all other Employees who are eligible for Tax Deferred
Contributions multiplied by 1.25; or
(B) The excess of the Actual Deferral Percentage
for the Highly Compensated Employees who are eligible for Tax
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Deferred Contributions over the Actual Deferral Percentage for
all other Employees who are eligible for Tax Deferred
Contributions is not more than two (2) percentage points, and
the Actual Deferral Percentage for the Highly Compensated
Employees who are eligible for Tax Deferred Contributions is
not more than the Actual Deferral Percentage for all other
Employees who are eligible for Tax Deferred Contributions
multiplied by two (2).
(ii) The Actual Contribution Percentage of Highly
Compensated Employees eligible to participate in this Plan and a plan
of the Company or an Affiliated Company that is subject to the
limitations of Section 401(m) of the Code including, if applicable,
this Plan, shall be reduced in accordance with Section 6.04(b), to the
extent necessary to satisfy the requirements of Treasury Regulations
Section 1.401(m)-2.
For the purposes of this subsection (a), "Actual
Deferral Percentage" for a specified group of Employees for a Plan Year shall be
the average of the ratios calculated separately for each Employee in such group
(herein the "Actual Deferral Ratios") (A) (i) the amount of Contributions and
Qualified Matching Contributions which meet the requirements of Treasury
Regulations Section 1.401(k)-l(b)(5), and which Employer, in its sole
discretion, elects to treat as Tax Deferred Contributions for purposes of the
Actual Deferral Percentage Test and which are actually paid over to the Trust on
behalf of the Employee for such Plan Year to (B) the Employee's Compensation for
the Plan Year. In determining the deferral percentage of a
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Highly Compensated Employee who has a Family Member, the Tax Deferred
Contribution, Qualified Nonelective Contributions and Qualified Matching
Contributions made on behalf of such Highly Compensated Employee and the
Compensation of such Highly Compensated Employee shall include the Tax Deferred
Contributions, Qualified Nonelective Contributions, Qualified Matching
Contributions and Compensation of his Family Member(s), and such Family
Member(s) shall not be considered a separate Employee for purposes of
determining the Actual Deferral Percentage for any group under the Plan to the
extent required by section 414(q) of the Code and any regulations promulgated
thereunder.
In the event that as of the last day of a Plan Year this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of Section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then this Section shall be a plied by determining the Actual
Deferral Ratios of employees as if all such plans P were a single plan, in
accordance with Treasury Regulations under Section 401(k) of the Code. For
purposes of this Section, the Actual Deferral Ratio for any employee who is a
Highly Compensated Employee under two or more Code Section 401(a) plans of the
Company or an Affiliated Company, to the extent required by Code Section 401(k),
shall be determined in a manner taking into account the elective contributions
for such employee under each of such plans.
At any time during the Plan Year, the Committee may direct the
Company to suspend or reduce the amount of Tax Deferred Contributions with
respect to
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any Participant if the Committee determines that such suspension or reduction is
necessary to cause the tests described above to be met.
(b) If the Plan fails to satisfy the Actual Deferral
Percentage Test for any Plan Year as set forth in subsection (a) above, the
Committee shall correct Excess Contributions as
set forth below:
(i) For purposes of satisfying the Actual Deferral
Percentage Test for a Plan Year, the Company, in its sole discretion,
may contribute Qualified Nonelective Contributions and/or Qualified
Matching Contributions to the Trust which shall be allocated to the
Account(s) of Employees eligible to share in Qualified Nonelective
Contributions and/or Qualified Matching Contributions for the Plan
Year in accordance with the provisions of Article 4. The amount of
Qualified Nonelective Contributions and/or Qualified Matching
Contributions taken into account as Tax Deferred Contributions for
purposes of calculating the Actual Deferral Percentages of Employees
shall be such Qualified Nonelective Contributions and/or Qualified
Matching Contributions as are necessary to satisfy the Actual Deferral
Percentage Test for the Plan Year, subject to such other requirements
as may be prescribed by the Secretary of Treasury.
(ii) To the extent Qualified Nonelective Contributions
and/or Qualified Matching Contributions are not made or are
insufficient to satisfy the Actual Deferral Percentage Test, the
Committee shall direct the Trustees to reduce the Tax Defer-red
Contributions of the Highly
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Compensated Employees in order of their deferral percentages beginning
with the highest of such percentages, to the extent necessary to cause
the Plan to meet the limitation set forth in subsection (a) above. Any
Tax Deferred Contributions so reduced, together with the income or loss
allocable thereto determined in accordance with section 401(k) of the
Code and regulations thereunder, shall be distributed to the Highly
Compensated Employee on whose behalf such contributions were made no
later than March 15 of the following Plan Year. Notwithstanding the
foregoing, the amount that would otherwise be distributed to a
Participant in accordance with the provisions of this Section 6.02
shall be reduced by the amount, if any, of the Excess Deferrals
previously distributed for the taxable year ending in the same Plan
Year. Further, the distribution of excess contributions will include
the income allocable thereto. The income allocable to excess
contributions includes both income for the Plan Year for which the
excess contributions were made and income for the period between the
end of the Plan Year and the date of distribution. For purposes of
Section 6.02(b) the income allocable to excess contributions shall be
calculated in accordance with Treasury Regulations Section
1.401(k)-l(f)(4).
The determination and correction of excess contributions
made by and on behalf of a Highly Compensated Employee whose Actual
Deferral Ratio is determined under the family aggregation rules shall
be accomplished by reducing the Actual Deferral Ratio as required
under the foregoing
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paragraph and allocating the excess contributions for the family unit
in proportion to the Tax Deferred Contributions of each family member
that are combined to determine the Actual Deferral Ratio.
(c) The Committee shall determine each Plan Year whether the
limitation set forth in subsection (a) above is met and its determination shall
be final and binding on all persons.
6.03 RETURN OF EXCESS DEFERRALS. If, during any calendar year, more
than the maximum permissible dollar amount under Section 3.04 of the Plan (and
section 402(g) of the Code) is allocated pursuant to one or more cash or
deferred arrangements to a Participant's accounts under this Plan and any other
plan described in sections 401(k), 408(k), or 403(b) of the Code, the following
provisions shall apply:
(a) no later than March 1, of the next succeeding calendar
year, the Participant may, but is not required to, allocate all or part of such
contributions in excess of the maximum permissible dollar amount ("Excess
Deferrals") to the Plan. To be effective, such allocation must be in writing,
state that excess deferrals have been made on behalf of such Participant for the
preceding calendar year, and be submitted to the Committee;
(b) to the extent a Participant allocates Excess Deferrals in
a timely manner to this Plan pursuant to (a) above, the Committee shall direct
the Trustees to return such Excess Deferrals, as adjusted for income or losses,
to the Company for distribution to the Participant no later than April 15
following such allocation; and
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(c) the Excess Deferrals that are distributed for a taxable
year will be reduced by excess contributions previously distributed or
recharacterized for the Plan beginning in such taxable year.
6.04 LIMITATION ON MATCHING AND VOLUNTARY CONTRIBUTIONS.
(a) The Matching Contributions made on behalf of a Participant
for a Plan Year shall satisfy the test set forth in (i)(A) below, or the
alternative test set forth in (i)(B) below, and to the extent required by
Treasury Regulations under Code Section 401(m), also shall satisfy the test
identified in (ii) below:
(i) (A) the Actual Contribution Percentage for the
Highly Compensated Employees is not more than the Actual
Contribution Percentage for all other Employees multiplied by
1.25; or
(B) the excess of the Actual Contribution
Percentage for the Highly Compensated Employees over the Actual
Contribution Percentage for all other Employees is not more
than two (2) percentage points, and the Actual Contribution
Percentage for the Highly Compensated Employees is not more
than the Actual Contribution Percentage for all other Employees
multiplied by two (2). (ii) The Actual Contribution Percentage
Highly Compensated Employees eligible to participate in this
Plan and a plan of the Company or an Affiliated Company that is
subject to the limitations of Section 401(m) of the Code
including, if applicable, this Plan, shall be
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reduced in accordance with Section 6.04(b), to the extent necessary to
satisfy the requirements of Treasury Regulations Section 1.401(m)-2.
For purpose of this subsection (a), the "Actual Contribution
Percentage" for a specified group of Participants for a Plan Year shall be the
average of the ratios calculated separately for each Employee in such group
(herein the "Actual Contribution Ratios") (A) the sum of (i) Matching
Contributions, (ii) Qualified Nonelective Contributions and Qualified Matching
Contributions which meet the requirements of Treasury. Regulations Section
1.401(k)-l(b)(5) to the extent such Contributions are not taken into account for
purposes of satisfying the Actual Deferral Percentage Test and which the
Company, in its sole discretion, elects to treat as Matching Contributions for
purposes of satisfying the Actual Contributions Percentage Test actually paid
over. to the Trust on behalf of the Participant for such Plan Year, and (iii)
Voluntary Contributions contributed under the Plan on behalf of each such
Participant for such Plan Year to (B) the Participant's Compensation for the
Plan Year. In determining the contribution percentage of a Highly Compensated
Employee who has a Family Member, the Matching Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions made on behalf of
and the Compensation of such Highly Compensated Employee shall include the
Matching Contributions, Qualified Nonelective Contributions and Qualified
Matching Contributions and Compensation of his Family Member(s), and such Family
Member(s) shall not be considered a separate Participant for purposes of
determining the Actual Contribution Percentage for any group under the Plan to
the
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extent required by section 414(q) of the Code and any regulations promulgated
thereunder.
In the event that as of the last day of a Plan Year this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of Section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then this Section shall be applied by determining the Actual
Contribution Ratios of employees as if all such plans were a single plan, in
accordance with Treasury Regulations under Section 401(m) of the Code. For
purposes of this Section, the Actual Contribution Ratio for any employee who is
a Highly Compensated Employee under two or more Code Section 401(a) plans of the
Company or an Affiliated Company, to the extent required by Code Section-401(m),
shall be determined in a manner taking into account the voluntary employee
contributions and matching contributions for such employee under each of such
plans.
To the extent determined by the Committee and in accordance
with applicable Treasury Regulations under Code Section 401(m)(3), Tax Deferred
Contributions and Qualified Nonelective Contributions made on behalf of a
Participant may be taken into account for purposes of calculating the Actual
Contribution Ratio of such Participant, but only if the conditions set forth in
Treasury Regulations Section 1.401(m)-l(b)(5) are satisfied.
At any time during the Plan Year, the Committee may direct the
Company to suspend or reduce the amount of Matching Contributions with respect
to any
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Participant if the Committee determines that such suspension or reduction is
necessary to cause the tests described above to be met.
(b) If the Plan fails to satisfy the Actual Contribution
Percentage Test for any Plan Year, the Committee shall correct Excess Aggregate
Contributions as set forth below:
(i) For purposes of satisfying the Actual Contribution
Percentage Test for a Plan Year, in its sole discretion, may
contribute Qualified Nonelective Contributions and/or Qualified
Matching Contributions to the Trust which shall be allocated to those
Participants eligible to share in the Qualified Nonelective
Contributions and/or Qualified Matching Contributions for the Plan
Year in accordance with the provisions of Article 4. The amount of
Qualified Nonelective Contributions and/or Qualified Matching
Contributions taken into account as- Matching Contributions for
purposes of calculating the Actual Contribution Ratios of Employees
shall be such Qualified Nonelective Contributions and/or Qualified
Matching Contributions as are necessary to satisfy the Actual
Contribution Percentage Test for the Plan Year subject to such other
requirements as may be prescribed by the Secretary of Treasury.
(ii) To the extent Qualified Nonelective Contributions
and/or Qualified Matching Contributions are not made or are
insufficient to satisfy the Actual Contribution Percentage Test, the
Committee shall direct the Trustees to distribute to the Highly
Compensated Employees, in order of their
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contribution percentages beginning with the highest of such
percentages, the amount of Excess Aggregate Contributions, plus
earnings thereon, necessary to cause the Plan to meet such limitation
for such Plan Year. Excess Aggregate Contributions shall be distributed
first from a Participant's Voluntary Contributions and, if necessary,
from the Participant's vested Matching Contributions for the Plan Year.
All such Excess Aggregate Contributions together with the income and
loss allocable thereto determined in accordance with section 401(m) of
the Code and the regulations thereunder, shall be distributed to the
Highly Compensated Employee on whose behalf such contributions were
made no later than March 15 of the following Plan Year. Nonvested
Matching Contributions which constitute Excess Aggregate Contributions
will be forfeited and reallocated to the Accounts of Participants who
do not have Excess Aggregate Contributions.
The determination and correction of Excess Aggregate Contributions
made by and on behalf of a Highly Compensated Employee whose Actual Contribution
Ratio is determined under the family aggregation rules shall be accomplished by
reducing the Actual Contribution Ratio as required under the foregoing paragraph
and allocating the Excess Aggregate Contributions for the family unit in
proportion to the Matching Contributions of each family member that are combined
to determine the Actual Contribution Ratio.
6.05 LIMITATIONS ON ANNUAL ADDITIONS. Notwithstanding anything
hereinabove to the contrary, the sum of the amounts credited to the accounts of
any
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Participant for any Plan Year pursuant to Section 5.02 (dealing with Tax
Deferred Contributions), Section 5.03 (dealing with Matching Contributions),
Section 5.04 (dealing with Company Contributions), Section 5.05 (dealing with
Qualified Nonelective Contributions and Qualified Matching Contributions), and
this Section 6.05 shall be reduced to the extent that such amounts, plus any
other Annual Additions (as defined below) would cause the sum of all such
contributions and Annual Additions credited to the accounts of such Participant
under the Plan for such Plan Year to exceed the lesser of (a) Thirty Thousand
Dollars ($30,000) (or, if greater, one-fourth of the defined benefit dollar
limitation set forth in section 415(b) of the Code, as adjusted pursuant to
section 415(d) of the Code), or (b) twenty-five percent (25%) of such
Participant's total compensation (determined in accordance with section 415 of
the Code and the regulations thereunder) for such Plan Year, provided, however,
that a Participant's total compensation shall not exceed Two Hundred Thousand
Dollars ($200,000) for any Plan Year for Plan Years beginning prior to January
1, 1994 and One Hundred Fifty Thousand Dollars ($150,000) for any Plan Year for
Plan Years beginning on or after January 1, 1994 (or such larger amount as the
Secretary of the Treasury may determine for such Plan Year under section
401(a)(17) of the Code). Any reduction required pursuant to the foregoing
sentence shall be made only if such reduction is the result of the allocation of
forfeitures, a reasonable error in estimating a Participant's annual
compensation, a reasonable error in determining the amount of Tax Deferred
Contributions that may be made with respect to any individual under the limits
of Code Section 415, or under other limited facts and
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circumstances permitted by the Commissioner of the Internal Revenue Service. Any
such reductions shall be made in the following order:
(i) the unmatched Tax Deferred Contributions allocated
to such Participant's Tax Deferred Account pursuant to Section 5.02
shall be reduced first;
(ii) the matched Tax Deferred Contributions allocated to
such Participant's Tax Deferred Account pursuant to Section 5.02 shall
be reduced next;
(iii) the Matching Contributions allocated to such
Participant's Company Account pursuant to Section 5.04 shall be
reduced next; and
(iv) the Company Contributions allocated to such
Participant's Company Account pursuant to Section 5.05 shall be
reduced next;
(v) the Qualified Nonelective Contributions allocated to
such Participant's Tax Deferred Account pursuant to Section 5.03 shall
be reduced next; and
(vi) the Qualified Matching Contributions allocated to
such Participant's Company Account pursuant to Section 5.03 shall be
reduced last.
In the event any reduction is required pursuant to subsection
(i) above, the amount of such reduction shall be returned to the Participant. In
the event any reduction is required pursuant to subsection (ii) above, the
amount of such reduction shall be returned to the Participant and any Matching
Contributions attributable thereto shall be
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reduced to the extent necessary to eliminate any remaining excess amount. In the
event any reduction of amounts other than Tax Deferred Contributions is
required, the amount of such reduction shall be allocated and credited pursuant
to the procedures set forth in Section 5.05 above (with respect to the
allocation of Company Contributions) to the Company Accounts of remaining
Participants exclusive of any other Participant for whom a reduction for such
Plan Year has been required pursuant to this Section 6.05. Any such reductions
which cannot be so reallocated shall be held unallocated by the Trustees and
shall be treated as if they were a Company Contribution to be allocated under
Section 5.05 with respect to the succeeding Plan Year.
For purposes of this Section 6.05, the term "Annual Additions"
means the sum of the following amounts credited to a Participant's Account for
any Limitation Year:
(a) employer contributions;
(b) forfeitures;
(c) voluntary employee contributions;
(d) amounts allocated to an individual medical account, as
defined in Code Section 415(l)(2) which is part of a pension or annuity plan
maintained by the Company;
(e) amounts derived from contributions which are attributable
to postretirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)) under a welfare benefit plan,
as defined in Code Section 419(e), maintained. by the Company; and
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(f) Amounts allocated under a simplified employee pension (as
defined in Code Section 408(k)).
For purposes of this Section 6.05, the following special rules
shall apply: First, all defined contribution plans of the Company shall be
treated as one defined contribution plan for purposes of applying the
limitations set forth above in this Section. Second, if the Company is a member
of a controlled group of corporations or trades or businesses under common
control (as defined in Code Section 1563(a) or Code Sections 414(b) or (c) as
modified by Code Section 415(h)), an affiliated service group (as defined by
Code Section 414(m)), or a group of entities required to be aggregated pursuant
to Code Section 414(o), all employees of such employers shall be considered to
be employed by a single employer. The limitations of this Section 6.05 shall be
allocated among the members as the members shall agree, or absent agreement, in
proportion to the Participant's Compensation from each member.
In the event a Participant hereunder also is a participant in
any qualified defined benefit plan (within the meaning of Section 415(k) of the
Code) of the Company or an Affiliated Company, then the benefit payable under
such defined benefit plan, or any of them, shall be reduced for so long and to
the extent necessary to provide that the sum of the "defined benefit fraction"
and the "defined contribution fraction' for any Limitation Year shall not exceed
1. For purposes of this Section 6.05, the "defined benefit fraction" shall be a
fraction, the numerator of which is the projected benefit of a Participant under
all qualified defined benefit plans adopted by the Company or an Affiliated
Company expressed as either an annual straight life annuity or a qualified joint
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and survivor annuity providing the maximum permissible survivor benefit
(determined as of the close of the Limitation Year), and the denomination of
which is the lesser of (i) the maximum dollar amount otherwise allowable for
such Limitation Year under applicable law times 1.25 or (ii) the percentage of
the compensation limit for such Limitation Year times 1.4. For purposes of this
Section 6.05, the "defined contribution fraction" shall be a fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under this Plan and any other defined contribution plans adopted by the
Company or an Affiliated Company for each Limitation Year, and the denominator
of which is the lesser for each such Limitation Year of (i) the maximum Annual
Addition which could have been made under this Plan and any other defined
contribution plans adopted by the Company or an Affiliated Company for such
Limitation Year and for each prior Limitation Year of service with the Company
or an Affiliated Company times 1.25 or (ii) the amount determined under the
percentage of compensation limit for such Limitation Year times 1.4. For
purposes of this paragraph, the status of an entity as an Affiliated Company
shall be determined by reference to the percentage tests set forth in Code
Section 415(h).
ARTICLE VII.
PAYMENTS TO OR FOR THE ACCOUNT OF
PARTICIPANTS OR TERMINATED PARTICIPANTS
7.01 RESTRICTIONS ON PAYMENTS AND DISTRIBUTIONS. No money or other
property of the Trust shall be paid out or distributed by the Trustees except
(a) for the purchase or other acquisition of appropriate investments; (b) for
defraying the-expenses,
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including taxes, if any, of administering the Trust as elsewhere herein
provided; (c) for the purpose of making distributions to or for the account of
Participants at the written direction of the Committee in accordance with the
rules set forth below; (d) for the return of Company contributions pursuant to
Section 4.06; or (e) for the purpose of complying with the terms of a qualified
domestic relations order, within the meaning of section 414(p) of the Code. All
benefits payable under the Plan shall be paid or provided for solely from the
Trust, and the Company assumes no liability or responsibility therefore.
7.02 RETIREMENT. A Participant shall become fully vested in his
accounts upon attainment of Normal Retirement Age. Upon retirement of a
Participant, which shall be deemed to mean any termination of his employment
with the Company at or after his Normal Retirement Age, the full amount then
standing to the credit of such Participant's accounts shall be distributed to
him or applied for his benefit as provided in Section 7.07. A Participant who
remains in the active employ of the Company after attaining Normal Retirement
Age shall continue as a Participant for all purposes of the Plan until the date
of his actual retirement.
7.03 DISABILITY RETIREMENT. If the Committee shall determine, on the
basis of such medical evidence as it may reasonably require, that a Participant
is totally incapable of performing his assigned duties with the Company and is
therefore unable to continue in the employ of the Company by reason of the
sickness or disability (whether mental or physical) of such Participant which is
causing such total incapacity, the Company shall direct the Trustees to apply
the full amount then standing to the credit of such Participant's accounts for
his. benefit as provided in Section 7.07. The Committee's
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determination as to whether a Participant has become sick or disabled so as to
be unable to continue in the employ of the Company shall be conclusive and
binding on all persons.
7.04 DEATH BENEFITS.
(a) Upon the death of any Participant who has a surviving
spouse, the Committee shall direct the Trustees to distribute the full amount
standing to the credit of such Participant's accounts (reduced by any security
interest held by the Plan by reason of a loan outstanding to the Participant) to
the Participant's surviving spouse, unless the exception provided by paragraph
(b) of this Section 7.04 applies.
(b) The requirement of subsection (a) of this Section 7.04
shall not apply if (i) the Participant elects to designate a Beneficiary other
than his spouse and his spouse (A) consents in writing to such election, (B)
such election designates a beneficiary which may not be changed without the
consent of the spouse (or the consent of the spouse expressly permits
designations by the Participant without any requirement of further consent by
the spouse), and (C) the spouse's consent acknowledges the effect of such
election and is witnessed by a Plan representative or a notary public, or (ii)
if it is established to the satisfaction of the Committee that the consent of
the surviving spouse could not have been obtained because there is no spouse,
because the spouse cannot be located, or because of other circumstances
prescribed by regulations under section 417(a)(2) of the Code.
A former spouse shall be treated as a surviving spouse to the
extent benefits must be paid to such former spouse upon the Participant's death
pursuant to a qualified domestic relations order (as defined in section 414(p)
of the Code), except that
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no consent shall be required from such former spouse with respect to the
designation of a Beneficiary to receive benefits not subject to said order.
(c) If, and only if, a Participant is not married or, if
married, is permitted under this Section 7.04 to designate a Beneficiary other
than his surviving spouse, then such Participant's accounts shall be distributed
in accordance with this subsection (c) of Section 7.04. Such a Participant shall
have the right to designate one or more Beneficiaries, including contingent
Beneficiaries, entitled to receive the amount payable in behalf of such
Participant under the provisions of this Plan in the event of death. Such
designation shall be made in writing in such manner as the Committee shall
determine. A Participant may change such designation from time to time, and may
revoke such designation; provided, however, that any subsequent designation must
meet the requirements of this Section 7.04. Upon the death of any Participant,
the Committee shall direct the Trustees to distribute, for the benefit of such
Participant's Beneficiaries and subject to the provisions of Section 7.08, the
full amount standing to the credit of the Participant's accounts. If a
Participant dies without having designated a Beneficiary, or if none of the
designated Beneficiaries survives the Participant, or if the Committee is in
doubt as to the effective status of a Beneficiary designation, payment of any
sum that would otherwise have been payable to such Beneficiary will be made to
the first surviving class of the following classes of successive preference
Beneficiaries, all members of such class to share equally: the Participant's (i)
surviving spouse; (ii) surviving issue (including adopted children) per stirpes;
(iii) surviving parents; (iv) brothers and sisters, in equal shares; and (v)
executors and administrators. If a Beneficiary entitled to receive any
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amount payable in behalf of a Participant dies before receiving the entire
amount to which such Beneficiary is entitled, the undistributed balance,
together with any income or loss accumulated thereon, shall be distributed to
such Beneficiary's estate in accordance with Section 7.07.
7.05 TERMINATION OF PRIOR TO RETIREMENT OR DEATH.
(a) If any Participant's employment with the Company
terminates under circumstances other than by reason of retirement, disability or
death, as provided for under Sections 7.02 through 7.04, he shall be entitled to
a vested benefit equal to the sum of (i) 100% of the amounts standing to the
credit of his Tax Deferred Account, Voluntary Contribution Account, Rollover
Account, Qualified Nonelective Contributions Account, plus (ii) that percentage
of the amount standing to the credit of his Company Account, based upon his
Years of Vesting Service, which shall be determined under the following
schedule.
YEARS VESTED
OF SERVICE PERCENTAGE
---------- ----------
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
A Participant whose employment with the Company terminates and
who immediately thereafter becomes an employee of an Affiliated Company shall
not be considered to have terminated his employment for purposes of this section
until his employment with the Affiliated Company subsequently terminates.
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The vested benefit determined in accordance with the foregoing
provision shall never be adjusted or altered in any fashion on account of any
Years of Vesting Service which the Participant might complete upon reemployment
with the Company or an Affiliated Company after a Break in Service., except as
provided in Section 7.06.
(b) The determination of the amount to which such terminated
Participant is entitled in accordance with the foregoing rules shall be made by
the Committee and communicated to the Trustees.
(c) Any amount standing to the credit of a Participant's
Company Account to which he is not entitled at the time of his termination of
employment shall be forfeited by him upon the earlier of the payment of the full
amount to which such Participant is entitled under the Plan or the incurrence of
five (5) Consecutive Breaks in Service by the Participant. For purposes of the
preceding sentence, a terminated Participant who is not entitled to receive any
amount under the Plan shall be deemed to have received the entire amount to
which he is entitled on the date his employment terminates and shall forfeit his
entire Company Account as of that date. At the close of the Plan Year in which
any forfeitures occur, all such forfeited amounts shall be applied to reduce the
Company's Matching Contributions for such Plan Year.
7.06 REEMPLOYMENT. If a terminated Participant is reemployed by the
Company, he shall again become an active Participant upon reemployment pursuant
to Section 3.03.
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If such a reemployed Participant was not 100% vested in his
Company Account under Section 7.05(a) at the time of his prior termination, the
following special provisions shall apply:
(a) If such a terminated Participant is reemployed after
incurring five (5) consecutive Breaks in Service, he shall have no rights with
respect to any amounts previously forfeited from his Company Account, and any
portion of his Company Account which has not been distributed shall be held in a
separate, fully vested Company Account until such Participant becomes 100%
vested under Section 7.05(a) whereupon it shall be merged with the Company
Account otherwise maintained form him.
(b) If such a terminated Participant is reemployed before
incurring five (5) consecutive Break in Service, the full amount, if any, which
was forfeited from his Company Account as a result of his prior termination
shall be restored to his Company Account as of the date of reemployment. If such
terminated Participant had previously received a distribution of all or any part
of the vested portion of his Company Account, the vested portion of his Company
Account shall thereafter be determined by (i) adding the amount previously
distributed to his current Company Account balance, (ii) multiplying the
resulting sum by his current vesting percentage and (iii) subtracting from the
resulting product the amount previously distributed.
7.07 METHODS OF PAYMENT.
(a) Whenever under this Article VU any amount is required to
be distributed or applied for the benefit of any Participant or Beneficiary or
other person,
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such distribution shall be made by the payment or commencement of payments under
such one or more of the following methods as the Participant or Beneficiary may
elect.
Option A. One lump sum payment in cash (or in kind or party in
cash and partly in kind).
Option B. Payments in annual periodic installments, in cash (or
in kind or partly in cash and partly in kind),
reasonably nearly equal in amount, over any period not
exceeding fifteen (15) years.
If a Participant or Beneficiary fails to make an election under this Section
7.07(a), he shall receive his benefit (in a single cash payment) pursuant to
Option A. Notwithstanding the foregoing, if the amount standing to the credit of
a Participant's accounts does not exceed (and has never exceeded before any
prior distribution) Three Thousand Five Hundred Dollars ($3,500), the
-Participant or Beneficiary shall automatically receive his benefit in one lump
sum payment in cash.
(b) Whenever during any Plan Year the amount standing to the
credit of a Participant's accounts becomes distributable pursuant to Sections
7.02 through 7.05, distribution at such retirement, disability, death or
termination of employment, as the case may be, shall be made or commenced within
a reasonable time after the latest of (1) the end of the Plan Year in which such
termination occurs, (2) the determination of the allocation to which the
Participant is entitled under Section 5.04 with respect to such Plan Year, or
(3) if Section 7.08(a) is applicable to such Participant, the date the
Participant consents to a distribution pursuant to that Section.
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(c) Notwithstanding anything herein to the contrary, effective
January 1, 1993, a Participant may elect to have an Eligible Rollover
Distribution paid directly by the Trustee to the trustee of an Eligible
Retirement Plan.
7.08 RESTRICTIONS ON METHOD AND TIMING OF PAYMENT. Notwithstanding any
provision of the contrary, in order to comply with Sections 401(a)(9),
411(a)(11) and 414(p) of the Code, the following provisions shall apply:
(a) If the sum of a Participant's account balances to be
distributed upon retirement, disability or severance under Sections 7.02, 7.03
or 7.05 is greater than Three Thousand Five Hundred Dollars ($3,500), such
account balances shall not be distributed in whole or in part until the earlier
of (i) the date the Participant attains Normal Retirement Age or (ii) the
Participant's death, unless the Participant consents to such earlier
distribution in writing.
(b) In the case of distribution to a Participant, the period
of years selected under Option B shall be such that the requirements set forth
in both (i) and (ii) below are satisfied at the time distribution to such
Participant is to commence.
(i) No method of payment hereunder may be selected which
would provide for payment to any person during any period longer than
the life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and his Beneficiary, determined
using attained ages as of the calendar year in which payments commence
and Table V or VI of Treasury Regulation section 1.72-9.
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(ii) If someone other than the Participant's spouse is
designated to receive benefits, then the period of years over which
installment payments are to be paid shall be such that any period of
years remaining as of the calendar year in which the Participant
attains age seventy and one-half (70'1/2) or any subsequent calendar
year shall meet the minimum distribution incidental benefit
requirement which shall be determined in accordance with regulations
promulgated under section 401(a)(9) of the Code.
For purposes of this Section 7.08(b) and Section 7.08(e), a
Participant's Beneficiary shall be determined in accordance with regulations
promulgated under section 401(a)(9) of the Code.
(c) In no event shall the distribution of a Participant's
Accounts, unless the Participant otherwise elects, begin later than the sixtieth
(60th) day after the close of the Plan Year in which the later of the following
events occurs:
(i) the Participant's sixty-fifth (65th) birthday;
(ii) the tenth (10th) anniversary of the date on
which the Participant first became a Participant; or
(iii) the Participant's termination of service with
the Company (and any Affiliated Company).
(d) In no event shall the distribution of benefits to a
Participant begin later than the April 1 next following the calendar year in
which such Participant attains age seventy and one-half (70%) (the 'Required
Distribution Date"). Notwithstanding the foregoing, the Required Distribution
Date for any Participant (i) who
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is not a "five-percent owner" (within the meaning of section 416(i)(1)(B)(i) of
the Code) at any time during the five Plan Year period ending in the calendar
year in which the Participant attains age seventy and one-half (70%) and (ii)
who attains age seventy and one-half (70%) before January 1, 1988, shall be no
earlier than the April 1 next following the calendar year in which the
Participant terminates employment with the Company.
(e) In the event a Participant dies before his Required
Distribution Date and his surviving spouse is not his Beneficiary, his entire
interest shall be paid to his Beneficiary in a lump sum no later than December
31 of the calendar year containing the fifth (5th) anniversary of the
Participant's death; provided, however, that the Participant's Beneficiary may
elect, no later than December 31 of the calendar year following the calendar
year in which the Participant died, to receive installment payments commencing
no later than such date and payable over a period not exceeding the
Beneficiary's life expectancy. If the Participant's Beneficiary is his surviving
spouse, the Participant's entire interest shall be paid to his surviving spouse
in installment payments commencing no later than December 31 of the calendar
year in which the Participant would have attained age seventy and one-half
(70-1/2) and payable over a period not exceeding the life expectancy of the
surviving spouse, provided, however, that the surviving spouse always as has the
right to elect to receive her benefits in a lump sum. If the spouse dies before
said date, subsequent distributions shall be made as if the spouse had been the
Participant. Life expectancy win be calculated in accordance with Treasury
Regulation section 1.72-9 and regulations promulgated under section 401(a)(9) of
the Code.
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If a Participant dies on or after his Required Distribution
Date, the Participant's remaining interest in the Plan shall be distributed at
least as rapidly as under the method of distribution being used as of the date
of death.
(f) If, and to the extent that, any portion of a Participant's
account balances is payable to a former spouse or dependent pursuant to a
qualified domestic relations order within the meaning of sections 401(a)(13)(B)
and 414(p) of the Code, the provisions of said order shall govern the
distribution thereof. Such an order may provide for payments to a former spouse
or dependent even though the Participant is still employed by the Company or is
otherwise not eligible for the distribution of benefits under the Plan.
7.09 WITHDRAWALS DURING EMPLOYMENT.
(a) Upon written notice given to the Committee at least thirty
(30) days (or such shorter period as the Committee allows) prior to a Valuation
Date, a Participant may withdraw fifty percent (50%) or one hundred percent
(100%) of the amount standing to the credit of his Voluntary Contribution
Account and/or Rollover Account as of such Valuation Date.
(b) Upon written notice to the Committee at least thirty (30)
days (or such shorter period as the Committee allows) prior to a Valuation Date,
a Participant who has not yet attained age fifty-nine and one-half (59Y2) and
has withdrawn the full amount, if any, standing to the credit of his Voluntary
Contribution Account and/or Rollover Account, may at any time during his
employment with the Company withdraw all or any portion of the amount
(determined as of such Valuation Date) standing to the
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credit of his Tax Deferred Account, excluding any outstanding loan amounts with
respect to such account, but only in order, and to the extent necessary, to meet
a "Financial Hardship"; provided, no such withdrawal may exceed the aggregate
amount of the Tax Deferred Contributions made on his behalf by the Company,
reduced by the sum of all prior withdrawals from such Participant's Tax Deferred
Account. The determination that the Participant is faced with a Financial
Hardship and of the amount required to meet such Financial Hardship which is not
reasonably available from other resources of the Participant shall be made by
the Committee in accordance with uniform and nondiscriminatory standards and
policies which shall be adopted by the Committee and consistently applied to
each application for a withdrawal pursuant to this Section 7.09(b). For purposes
of this Section 7.09(b), 'Financial Hardship" shall mean an immediate and heavy
financial need which such Participant is not able to meet from any other
reasonably available resources. In determining that such Participant is not able
to meet such Financial Hardship from any other sources, the Committee may
reasonably rely upon the written certification of the Participant given in
accordance with the regulations under section 401(k). Subject to the foregoing
and the requirements of section 401(k) of the Code and any regulations
thereunder, the term 'Financial Hardship" shall mean and include the following:
(i) the purchase (excluding mortgage payments) of a
principal residence of the Participant;
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(ii) the payment of the tuition for the next
semester or quarter of post-secondary education for the
Participant, his spouse, children, or dependents;
(iii) the medical expenses described in section 213(d)
of the Code which are incurred by the Participant, his spouse or any
dependent, and which are not covered by insurance; or
(iv) the need to prevent an eviction or mortgage
foreclosure on the Participant's principal residence.
(c) Upon written notice to the Committee at least thirty (30)
days (or such shorter period as the Committee allows) prior to a Valuation Date,
a Participant who is at least fifty-nine and one-half (59%) years old shall be
entitled to withdraw all or any portion of his Tax Deferred Account as of such
Valuation Date.
(d) A Participant may specify that a withdrawal under this
Section 7.09 is to be charged to his interest in one or more specific Investment
Media in which the account charged with the withdrawal is invested. Unless so
specified, distribution will be made out of the interests of such account in
each Investment Medium in accordance with the proportion which the interest of
such account in such Investment Medium bears to the total value of such account,
subject however to such restrictions as may be applicable to the particular
Investment Media.
(e) AR withdrawals under this Section 7.09 shall be made as
soon as practicable after the Valuation Date next following timely receipt by
the Committee of the Participant's written notice.
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7.10 LOANS TO MEMBERS. The Committee shall be responsible for establishing
and administering the loan program described below. Upon written application of
a Participant submitted to the Committee at least thirty (30) days (or such
shorter period as the Committee allows) prior to a Valuation Date, the Committee
may direct the Trustees to lend to such Participant such amount or amounts from
his Tax Deferred Account, and the vested portion of his Company Account, as the
Committee may determine proper. The loan, when added to all other loans
outstanding from the Plan, may not exceed the lesser of:
(a) Fifty Thousand Dollars ($50,000), reduced by the excess, if
any, of:
(i) The highest outstanding balance of loans from the Plan
during the one (1) year period ending on the date before the date such
loan is made, over
(ii) The outstanding balance of loans from the Plan on the
date such loan is made; or
(b) fifty percent (50%) of the vested balance of such Participant's
Account (excluding any accumulated deductible Employee Contributions as defined
in section 72(o)(5)(B) of the Code).
Loans shall be made available to all Participants on a reasonably
equivalent basis, except that the Committee may make reasonable distinctions
based upon credit-worthiness, length of employment, other obligations of the
Participant and other factors that may adversely affect the ability to assure
repayment. The Committee may also consider liquidity. The decision as to whether
a loan shall or shall not be made in any
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case shall rest solely within the discretion of the Committee, such discretion
to be exercised consistently with the provisions of Section 9.05 and with such
procedures as the Committee may establish pursuant to this Section 7.10. Loans
will not be granted for amounts less than Five Hundred Dollars ($500). Loans
approved under this Section 7.10 shall be made as soon as reasonably practicable
after the Valuation Date next following timely receipt by the Committee of the
Participant's written application.
Each such loan shall be made at such reasonable rate of interest as
the Committee may determine, which shall be commensurate with rates charged by
commercial lenders for similar loans to similar borrowers, and shall be subject
to such other terms and conditions as the Committee may deem proper, and shall
be evidenced by the promissory note of the Participant and adequately secured
with collateral of sufficient value to reasonably compensate for a loss of
principal and interest in case of default. For loans granted or renewed after
October 18, 1989, no more than fifty percent (50%) of the present value of a
Participant's vested accrued benefit, computed immediately after the origination
of the loan, may be considered as security for Plan loans made to that
Participant. Other collateral, if required, shall be similar in amount and type
to that which would be required by a commercial lender in a typical arm's length
transaction under similar circumstances. Each such loan shall be repaid by
payroll deduction as authorized by the Committee, shall be amortized over the
term of the loan in level payments made not less frequently than quarterly, and
shall be repaid within five (5) years unless such loan is used to acquire a
dwelling unit which within a reasonable period of time is to be
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used determined at the time the loan is made) as the principal residence of the
Participant in which case the repayment period shall not exceed twenty (20)
years.
Each such loan shall be deemed to be an investment made at the
direction of such Participant and shall be credited to a separate investment
account for the borrowing Participant. An amount equal to the principal amount
of such loan when made shall be charged to the interests of such Participant's
Self-Directed Account.
A Participant may specify that a loan under this Section 7.10 is to
be charged to his interest in one or more specific Investment media in which his
Self Directed Account is invested. Unless so specified, the loan amounts shall
be made out of the interest of such account in each Investment Medium in
accordance with the proportion of which the interest of such account in such
Investment Medium bears to the total value of such account, subject, however, to
such restrictions as may be applicable to the particular Investment Media.
All interest and loan repayments shall be credited to the
Self-Directed Account of such Participant and shall be reinvested in the
Investment Media in accordance with the most recent investment election of such
Participant with respect to contributions credited to such account. All expenses
incurred by the Committee and the Trustees, including reasonable attorneys' fees
and court costs, as a result of a default by a Participant shall be charged
against the Participant's accounts.
A loan under this Section 7. 10 will be deemed in default upon
failure of the borrower to make any payment of principal or interest when due,
and the Trustees shall in that event take such steps at such times as may be
reasonably necessary to protect and
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preserve Plan assets. Notwithstanding the foregoing, in the event of default,
foreclosure on the collateral for a loan under this section will not occur until
a distributable event occurs in the Plan. If any loan has been in default for
six (6) consecutive months, and is not current as of the end of the Plan Year,
the Committee shall deduct the outstanding balance of the loan, including
interest, from any distribution of Trust Assets to which a Participant or his
Beneficiary may be entitled if a distribution may be made to the Participant at
the end of the Plan Year. If the Participant's Account is not sufficient to pay
the remaining balance of any such loan, he shall be liable for any balance still
due, and shall continue to make payments to the Trustees. No distribution shall
be made to any Participant or his Beneficiary until all loans, including
interest thereon, have been paid. If any Participant is in default on a loan
made under this Section 7.10 and has been in default for six (6) consecutive
months, the Salary Deferral Election of such Participant shall be automatically
suspended until the loan is brought current.
In the case of a Participant who is married at the time a loan is
made, the consent of his spouse must be obtained as a condition precedent to the
making of the loan. The consent must be obtained within the ninety (90) day
period prior to the making of the loan. The consent shall be in writing, be
witnessed by a Plan representative or a notary public and shall acknowledge the
rights of the Trustees to make appropriate offset against the benefits payable
to a Participant in the amount of any principal and interest outstanding on the
loan at the time benefits become distributable under the terms of the Plan.
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7.11 DISCHARGE OF TRUSTEES' OBLIGATION TO MAKE PAYMENTS. Whenever the
Trustees are required to make any payment or payments to any person in
accordance with the provisions of this Article VII or Article VIII, the
Committee shall notify the Trustees in writing of such person's last known
address as it appears in the Committee's records; and the obligations of the
Trustees and the Committee to make such payment or payments shall be fully
discharged by mailing the same to the address specified by the Committee.
7.12 QUALIFIED DOMESTIC RELATIONS ORDER. Nothing contained in this
Plan prevents the Trustees, in accordance with the directions of the Committee,
from complying with the provisions of a qualified domestic relations order (as
defined in section 414(p) of the Code). This Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order at
any time, irrespective of whether the Participant has attained his earliest
retirement age (as defined in section 414(p) of the Code) under the Plan. A
distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if:
(a) The order specifies distribution at that time or permits
an agreement between the Plan and the alternate payee to authorize an earlier
distribution; and
(b) If the present value of the alternate payee's benefits
under the Plan exceeds Three Thousand Five Hundred Dollars ($3,500), the order
requires the alternate payee to consent to any distribution occurring prior to
the Participant's attainment of earliest retirement age. Nothing in this section
permits the Participant the
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right to receive distribution at a time otherwise not permitted under the Plan,
nor does it permit the alternate payee to receive a form of distribution not
permitted under the Plan.
7.13 PROCEDURES FOR DIRECT ROLLOVERS TO AN ELIGIBLE RETIREMENT
PLAN.
(a) The Committee shall notify each Employee who is to receive
an Eligible Rollover Distribution of the availability of a direct rollover of
his or her benefits to an Eligible Retirement Plan. Such notice shall conform to
Code Section 402(f) and the Regulations issued thereunder, and shall be provided
not more than ninety (90) days and not less than thirty (30) days prior to the
Annuity Starting Date, provided, however, to the extent permitted under
applicable law, a Participant may waive the requirement that notice be given no
less than thirty (30) days before the Annuity I Starting Date. If a Participant
or Beneficiary has elected to take distributions in the form of periodic
payments, such notice must be provided only prior to the first payment.
(i) An election by the Employee to have a direct
rollover must be made pursuant to reasonable procedures established by
the Committee, and must include information adequate to enable the
Trustee to effect such rollover. Such information shall include:
(A) the name of the Eligible Retirement Plan;
(B) the address (and name, if the Eligible
Retirement Plan is an individual retirement arrangement) -of the
Trustee of the Eligible Retirement Plan;
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(C) a representation by the Employee that the
recipient plan is an Eligible Retirement Plan and that such plan will
accept a direct rollover; and
(D) such other information as is reasonably
necessary in order to permit the Trustee and Committee to accomplish
the direct rollover.
(ii) In the event that a Employee makes no direction to
the Trustee under subsection (i) above prior to the Annuity Starting
Date, distributions shall proceed pursuant to Section 7.07.
(iii) The Trustee may accomplish the direct rollover to
the Eligible Retirement Plan selected by the Employee by any
reasonable means, including, but not limited to: making a wire
transfer directed to the trustee or custodian of the Eligible
Retirement Plan, mailing a check directly to the trustee or custodian
of the Eligible Retirement Plan, if such check is negotiable only by
the trustee of such Plan; or providing the check to the Employee for
delivery to the Eligible Retirement Plan, if such check is made
payable to the trustee of such Eligible Retirement Plan and is
negotiable only by the trustee of such Eligible Retirement Plan.
(iv) An election by a Employee either to have or not to
have a direct rollover of all or a portion of his or her benefits to
an Eligible Retirement Plan may be revoked within the period during
which any election relating to the form of distribution may be revoked
under this Article.
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(v) If a Employee elects to receive periodic payments
under Section 8.3 above and such payments qualify as Eligible Rollover
Distributions, an election to have such payments rolled over directly
to an Eligible Retirement Plan shall be effective for all future
periodic payments until revoked by the Employee. Such revocation shall
be effective for future payments as soon as is administratively
feasible.
(vi) The Committee may establish additional procedures
relating to direct rollovers to an Eligible Retirement Plan, as long
as such procedures are reasonable and do not result in the effective
elimination of a Employee's ability to elect a direct rollover.
(b) Distributions to Individuals other than the Employee.
(i) If an Eligible Rollover Distribution is paid to the
Employee's surviving spouse (or to a spouse or former spouse by reason
of being an Alternate Payee under a Qualified Domestic Relations
Order) after the Employee's death, an Eligible Retirement Plan shall
be limited to an individual retirement account or an individual
retirement annuity as described in Code Section 408.
(ii) A distribution attributable to a Employee payable
to an individual other than a spouse or former spouse shall not be
considered to be an Eligible Rollover Distribution.
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7.14 TRANSFER TO OTHER QUALIFIED PLAN.
If a Employee terminates employment with Employer and becomes
an employee of another employer that has adopted a profit-sharing or pension
plan and trust qualified as tax exempt under Code Sections 401 and 501, and the
Employee so elects, and the Committee approves, then the Committee shall direct
the Trustee to distribute the vested portion of such Employee's Account(s)
directly to the trustee of such other plan or plans to be held by such trustee
for the benefit of such Employee in accordance with the provisions of such plan
or plans. Any transfer under this Section shall be deemed to be a distribution
or an elective transfer which meets the requirements of Treasury Regulation
Section 1.411(d)-4 (Q/A-3(b)) and shall be made in the manner that satisfies the
provisions of this Article, including the provisions of Section 7.08(a)
requiring the Participant's consent.
ARTICLE VIII.
AMENDMENT AND TERMINATION
8.01 RIGHT TO AMEND OR TERMINATE. The Company reserves the right at
any time and from time to time to amend this Agreement, or discontinue or
terminate the Plan and Trust by delivering to the Committee and Trustees a copy
of an amendment or appropriate Board of Directors' Resolution of Discontinuance
or Termination certified by an officer of the Company; provided, however, that
except as provided in Section 8.02, the Company shall have no power to amend or
terminate this Agreement in such manner as would cause or permit (a) any of the
trust assets to be diverted to purposes other than for the exclusive benefit of
the employees of the Company or their beneficiary; (b) any reduction in the
amount thereto or credited to any Participant; (c) any portion of the trust
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assets to revert to or become the property of the Company; (d) the rights and
responsibilities of the Committee or Trustees to be increased without their
written consent; (e) the elimination of an optional form of benefit with respect
to amounts credited to a Participant's accounts before the amendment; and/or (f)
the elimination or reduction of an early retirement benefit or a retirement type
subsidy. In the case of a retirement type subsidy, the preceding sentence shall
apply only with respect to a Participant who satisfies (either before or after
the amendment) the preamendment conditions for the subsidy. In general, a
retirement type subsidy is a subsidy that continues after retirement, but does
not include a qualified disability benefit, a medical benefit, a social security
supplement, or a death benefit (including life insurance). Furthermore, if the
vesting schedule of a Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or becomes
effective, the nonforfeitable percentage (determined as of such date) of such
Participant's Company derived account balance will not be less than the
percentage computed under the Plan without regard to such amendment.
8.02 AMENDMENT FOR TAX EXEMPTION. The Company reserves the right to
amend this Agreement and the Plan and Trust hereunder in such manner as may be
necessary or advisable so that said Trust may continue to qualify as an exempt
employee's trust under the provisions of the Code; and any such amendment may be
made retroactively.
8.03 LIQUIDATION OF TRUST IN EVENT OF TERMINATION. In the event of
termination or partial termination (within the meaning of section 411(d)(3) of
the Code)
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of this Plan and Trust, or complete discontinuance of contributions thereto by
the Company, the rights of all Participants (or in the case of a partial
termination, the rights of Participants affected thereby) to amounts therefore
credited to all their accounts shall be fully vested and nonforfeitable. In the
event of such termination or discontinuance, the Trustees shall, subject to the
direction of the Committee, hold the assets of the Trust in accordance with the
provisions of the Plan and distribute such assets from time to time to
Participants entitled thereto in accordance with such provisions.
8.04 TERMINATION OF PLAN AND TRUST. This Agreement and the Plan and
Trust hereunder shall in any event terminate whenever all property held by the
Trustees shall have been distributed in accordance with the terms hereof.
8.05 AMENDMENT OF VESTING SCHEDULE. If the Plan's vesting schedule is
amended or the Plan is amended in any way that directly or indirectly affects
the computation of a Participant's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a top heavy vesting schedule,
each Participant with at least three (3) years of service with the Company may
elect within a reasonable period after the adoption of the amendment or change,
to have his nonforfeitable percentage computed under the Plan without regard to
such amendment or change. The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be made and shall
end on the latest of (1) sixty (60) days after the amendment is adopted; (2)
sixty (60) days after the amendment becomes effective; or (3) sixty (60) days
after the Participant is issued written-notice of the amendment by the Company
or Plan Administrator.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
9.01 NAMED FIDUCIARIES. The named fiduciaries with respect to the Plan
shall be the Company, the Committee and the Trustees. The Company shall be the
"plan administrator of the Plan for all purposes of ERISA. The responsibilities
of the named fiduciaries shall be allocated as provided herein, and each such
fiduciary shall have only those responsibilities and obligations that are
specifically imposed upon it by this Trust Agreement or by applicable law. It is
intended that each of the named fiduciaries shall be responsible for the proper
exercise of its own powers, duties, responsibilities, and obligations under the
Plan and shall not be responsible for any act or omissions of any other
fiduciary. The Company, the Trustees, and the Committee, as named fiduciaries,
shall be entitled to delegate all or any part of their fiduciary
responsibilities, and obligations to any other person or entity. In the event of
any such delegation, (a) the named fiduciary shall not be liable for any act or
omission of the person to whom the responsibility has been delegated as long as
the selection and retention of such person is prudent and (b) the person to whom
the fiduciary powers and obligations are delegated shall be responsible only for
the proper exercise of the powers, duties, responsibilities, and obligations
that have been specifically delegated to him. The responsibilities of the named
fiduciaries are:
(i) The Company shall have the sole responsibility to
appoint and remove (in accordance with Section 10.11) the Trustees and
successor Trustees, to appoint and remove or replace the members of
the
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Committee as herein provided, and shall have such other powers and
do such other things - as are herein specifically provided.
(ii) The Trustees shall, except as otherwise specifically
provided in this Agreement, have the sole responsibility for the
investment and control of the assets of the Plan and Trust in
accordance with the terms hereof, and for the appointment, retention,
and/or removal of any Investment Manager.
(iii) The Committee shall have the sole responsibility
for the general administration of the Plan and for carrying out its
provisions. In addition, the Committee shall have such powers and
responsibilities as are herein specifically provided.
The Committee shall conduct its business in accordance with
the terms of this Article IX.
9.02 APPOINTMENT OF COMMITTEE. The Company shall appoint a Committee
of three (3) or more persons, any or all of whom may be officers or employees of
the Company or any other individuals, to be known as the "Retirement Plan
Committee. Each Trustee shall be deemed to have been appointed a member of the
Committee by the Company if the Company has not appointed any other persons to
be members of the Committee. If the Committee consists of no members other than
the Trustees, all requirements under the Plan that there be a direction,
designation or other communication between the Committee and the Trustees shall
be disregarded. The members of the Committee shall serve at the pleasure of and
may be removed by the
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Company. Vacancies in the Committee arising by resignation, death, removal, or
otherwise shall be filled by the Company. The number of members of the Committee
shall be as designated by the Company from time to time. The Trustees shall
accept and may rely upon a certification by the Company as to the number and
identity of the individuals comprising the Committee from time to time.
9.03 POWERS OF COMMITTEE. The Committee shall have all powers and
authority necessary in order to carry out its duties and responsibilities in
connection with the administration of the Plan and Trust as herein provided, and
the Committee may make such rules and regulations as it may deem necessary or
desirable to carry out the provisions of the Plan and Trust. The Committee shall
determine any question arising in the administration, interpretation, and
application of the Plan and Trust, including any question submitted by the
Trustees on a matter necessary for them properly to discharge their duties; and
the decision of the Committee shall be conclusive and binding on all persons.
9.04 ACTION BY COMMITTEE. The Committee shall act by a majority of its
members at the time in office and such action may be taken by vote at a meeting
or in writing without a meeting. The Committee may by such majority action
authorize any one or more of its members to execute any direction or document or
take any other action on behalf of the Committee, and in such event any one of
the members of the Committee may certify in writing to the Trustees or any other
person the taking of such action and the name or names of the members of the
Committee so authorized, including himself . The execution of any direction,
document, or certificate on behalf of the Committee by
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any of its members shall constitute his certification of his authority with
respect thereto, and the Trustees or other person shall be protected in
accepting and relying upon any such direction, document, or certificate and is
released from inquiry into the authority of any of the members of the Committee.
Notwithstanding anything to the contrary elsewhere-herein contained, no member
of the Committee shall take any action as a member of the Committee with respect
to any matter concerning himself as a Participant of the Plan.
9.05 DISCRETIONARY ACTION. Wherever under the provisions of this
Agreement the Committee is given any discretionary power or powers, such power
or powers shall not be exercised in such manner as to cause any discrimination
in favor of or against any Employee or class of Employees.
9.06 EVIDENCE ON WHICH COMMITTEE MAY ACT. In taking any action or
determining any fact or question which may arise under this Plan and Trust, the
Committee may, with respect to the affairs of the Company or its Employee, rely
upon any statement by the Company with respect thereto. In the event that any
dispute may arise regarding the payment of any sums or regarding any act to be
performed by the Committee or the Trustees, the Committee may in its sole
discretion direct that such payment be retained or postpone or direct the
postponement of the performance of such act until actual adjudication of such
dispute shall have been made in a court of competent jurisdiction, or until the
Company, the Committee and/or the Trustees shall have been indemnified against
loss to the satisfaction of the Committee; provided, however, that in the event
of any such dispute, the Company may rely upon and act in accordance with any
directions received from the Company.
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9.07 EMPLOYMENT OF AGENTS. The Committee may employ agents, including,
but not limited to, custodians, accountants, consultants, or attorneys, to
exercise and perform such of the powers and duties of the Committee hereunder as
the Committee may delegate to them, and otherwise to render such services to the
Committee as the Committee may determine, and the Committee may enter into
agreements setting forth the terms and conditions of such service. The Committee
may appoint an independent public accountant to audit the Plan. The compensation
of such agents shall be an expense chargeable in accordance with Section 9.08.
The Committee shall be fully protected in delegating any such power or duty to
or in acting upon the advice of any such agent, in whole or in part, and except
as may be required by federal law, shall not be liable for any act or omissions
of any such agent, the Committee's only duty being to use reasonable care in the
selection and retention of any such agent.
9.08 COMPENSATION AND EXPENSE OF COMMITTEE. The members of the
Committee shall serve without compensation for services as such. The Company
may, but is not obligated to, pay all or part of the expenses of the Committee.
To the extent not paid by the Company, the expenses of the Committee shall be
paid by the Trust. To the extent any expenses which are paid out of the Trust
are properly allocable to an Investment Medium or to the separate account of a
Participant, they shall be so allocated and charged. Such expenses shall include
any expenses incident to the functioning of the Trust, including, but not
limited to, attorneys' fees and the compensation of other agents, accounting and
clerical charges, expenses, if any, of being bonded as required by ERISA, and
other costs of administering the Trust.
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9.09 INDEMNIFICATION OF COMMITTEE MEMBERS. The Company shall indemnify
and hold harmless each member of the Committee from and against any and all
claims, losses, damages, expenses (including reasonable attorneys' fees approved
by the Company), and liability (including any reasonable amounts paid in
settlement with the Company's approval), arising from any act or omission of
such member, except when the same is judicially determined to be due to the
willful misconduct of such member.
ARTICLE X.
THE TRUSTEES
10.01 POWERS OF TRUSTEES. It shall be the duty of the Trustees to hold
and, subject to the provisions of this Article, to invest and reinvest the funds
of the Trust and to make distributions therefrom in accordance with the written
directions of the Committee. The Trustees shall have no responsibility for the
correctness under the terms of the Plan of any written directions which they
receive from the Committee. The Trustees shall not be responsible for the
collection of contributions payable to the Trust by the Company pursuant to
Article IV.
10.02 INVESTMENTS. Except as provided in Section 7.10, the Trustees
shall invest and reinvest the assets of the Trust and keep the same invested,
without distinction between principal and income, subject to the following
general investment policies:
(a) All amounts attributable to a Participant's accounts shall
be invested pursuant to the Participant's investment elections under Section
5.08 in one or more of the Investment Media under the Plan.
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(b) AR interest, dividends, and other income, as well as any
cash proceeds from the sale or disposition of securities or other property,
received with respect to any Investment Media (unless received in additional
shares or investment units of such Investment Media) shall be reinvested in the
same Investment Media which produced such interest, dividends, and other income.
If any distribution with respect to an Investment Media may be received at the
election of the holder of shares or investment units in such Investment Media in
the form of additional shares or investment units or in cash or other property,
the Trustees shall elect to receive it in additional shares of investment units
of the Investment Media.
(c) The Trustees shall have no responsibility for any
investment elections, directions or instructions exercised by Participants
hereunder and shall incur no liability on account of investing or administering
the assets of the Trust in accordance with such elections, directions, or
instructions.
10.03 METHOD OF HOLDING, BUYING, AND SELLING SECURITIES. The Trustees
may keep any or all securities or other property in the name of some other
person, firm, or corporation or in their own name without disclosing fiduciary
capacity. The Trustees may sell at public auction or by private contract,
redeem, or otherwise realize upon any securities, investments, or other property
forming a part of the Trust fund and for such purposes may execute such
instruments and writings and do such things as they shall deem proper.
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10.04 EXERCISE OF RIGHTS.
(a) Each Participant shall have the right to exercise the
powers described in paragraph (b) below or, where required by the Investment
Media, to direct the Trustees to exercise such powers in the manner elected by
the Participant, but only with respect to those stocks, bonds, or other
securities of a corporation, association or trust which are credited to such
Participant's Self-Directed Account under the Plan. The Trustees shall have the
right to exercise the powers described in paragraph (b) with respect to any
stocks, bonds or other securities of a corporation, association or trust which
are not credited to a Participant's Self-Directed Account under the Plan.
(b) The powers described in this paragraph (b) are the
following powers: to vote upon stocks, bonds or other securities of any
corporation, association or trust; to consent to or request any action on the
part of such corporation, association or trust; to give general or special
proxies or powers of attorney, with or without power of substitution; to
participate in reorganizations, recapitalizations, consolidations, mergers, and
similar transactions; to deposit such stocks and other securities in any voting
trust, or with any protective or like committee, or with a trustee, or with
designated depositories; and generally to exercise the powers of an owner
consistent with the requirements of the Plan and ERISA.
10.05 RELIANCE ON TRUSTEES AS OWNERS. No person dealing with the
Trustees shall be required to take any notice of this Agreement, but all persons
so dealing shall be protected in treating the Trustees as the absolute owners
with full power of disposition of all the monies, securities, and other property
of the Trust, and all persons
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dealing with the Trustees are released from inquiry into the decision or
authority of the Trustees and from seeing to the application of monies,
securities, and other property paid or delivered to the Trustees.
10.06 LIQUIDATION OF ASSETS. In the event that cash is required by the
Trustees to effect any action or distribution under this Trust, or to pay any
expenses of this Trust, or for any other reason deemed sufficient by the
Trustees consistent with any outstanding obligations of the Trust, the Trustees
shall take such action as to the disposition of securities or other property
forming a part of the Trust as will provide the amount of cash necessary for
such payments.
10.07 DIRECTION BY COMMITTEE. Whenever the Committee consists of
members other than or in addition to the Trustees, and whenever the Trustees are
required or authorized to take any action hereunder pursuant to any written
direction or determination of the Committee, such direction or determination
shall be sufficient protection to the Trustees if contained in a writing signed
by any one or more of its members authorized to execute documents on behalf of
the Committee pursuant to Section 9.04. By such writing the Committee may
ratify, approve, or confirm any action taken by the Trustees, and upon such
ratification, approval, or confirmation the Trustees shall be protected as
though authorization or determination by the Committee had preceded such action.
In the absence of direction by the Committee as to any matter provided in this
Plan, the Trustees may in their discretion take such action as they deem fit and
proper with respect thereto after reasonable attempts to secure Committee
direction. The Trustees may deliver documents to the Committee by delivering the
same
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to each member of the Committee or by mailing the same, postage prepaid,
addressed to the Committee in care of the Company at its principal office.
10.08 RECORDS AND ACCOUNTING. The Trustees or their designated agent
shall keep accurate and detailed records of their transactions hereunder and all
their accounts, books, and records relating thereto shall be open at all
reasonable times to the inspection of the Committee, the Company, and their
authorized representatives. The Trustees shall render in writing, at least once
each twelve (12) months, accounts of their transactions under this Agreement to
the Company and each member of the Committee, and the Committee (or the Company
if the Trustees are the sole members of the Committee) may approve such accounts
of the Trustees by an instrument in writing delivered to the Trustees. In the
absence of the filing in writing with the Trustees by the Committee (or the
Company if the Trustees are the sole members of the Committee) of exceptions or
objections to any such account within ninety (90) days after the receipt by the
Committee (or the Company if the Trustees are the sole members of the Committee)
of any such account, the Committee (or the Company if the Trustees are the sole
members of the Committee) shall be deemed to have approved such account; and in
such case, or upon the written approval of the Committee (or the Company if the
Trustees are the sole members of the Committee) of any such account, the
Trustees shall be released, relieved, and discharged with respect to all matters
and things set forth in such account. Except as may otherwise be required by
applicable federal law, no person interested in the Trust or otherwise other
than the Company or the Committee may require an accounting or bring any action
against the Trustees with respect to the Trust and its actions as Trustees. In
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any proceeding instituted by the Trustees, the Company, and/or the Committee
with respect to these accounts, only the Company, the Committee, and the
Trustees shall be the necessary parties. The Trustees shall from time to time
make such other reports and furnish such other information concerning the Trust
as the Committee may in writing reasonably request or as may be required by
applicable federal law.
10.09 PAYMENT OF TAXES. The Trustees shall upon direction of the
Company pay out of the Trust fund any and all taxes of any and all kinds,
including without limitation property taxes and income taxes levied or assessed
under existing or future laws upon or in respect of the Trust or any monies,
securities, or other property forming a part thereof or the income therefrom
subject to the terms of any agreements or contracts made with respect to trust
investments which make other provision for such tax payments. The Trustees may
assume that any taxes assessed on or in respect of the Trust or its income are
lawfully assessed unless the Company shall in writing advise the Trustees that
in the opinion of counsel for the Company such taxes are or may be unlawfully
assessed. In the event that the Company shall so advise the Trustees, the
Trustees will, if so requested in writing by the Company, contest the validity
of such taxes in any manner deemed appropriate by the Company or its counsel; or
the Company may itself contest the validity of any such taxes in the name of the
Trustees; and the Trustees agree to execute all documents, instruments, claims,
and petitions necessary or advisable in the opinion of the Company or its
counsel for the refund, abatement, reduction, or elimination of any such taxes.
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10.10 TRUSTEES' COMPENSATION AND EXPENSES. 'The Trustees shall not
receive compensation from the Plan for their services as such, but all
reasonable expenses of the Trustees, including those arising under Section 10.09
hereof may, at the election of the Company, be paid by the Company and unless or
until so paid shall constitute a charge upon the Trust. Such expenses shall
include any expenses incident to the functioning of the Plan, including but not
limited to attorneys' fees and the compensation of other agents, accounting and
clerical charges, the cost of obtaining any bonds required by ERISA, and other
costs of administering the Plan or the Trust. To the extent that any expenses
(including those arising under Section 10.09 hereof) which are paid out of the
Trust are properly allocable to an Investment Medium or to the separate account
of a Participant, they shall be so allocated and charged.
10.11 RESIGNATION OR REMOVAL OF TRUSTEES. Any Trustees acting
hereunder may resign at any time upon thirty (30) days' written notice to the
Company, the Committee and the remaining Trustees, and the Company may remove
any Trustees upon thirty (30) days' written notice to the Trustees and the
Committee; but the Company and such Trustee may by written instrument waive such
notice. If any Trustee shall resign, be removed, or for any other reason cease
to be Trustee, the Company shall appoint a successor Trustee or Trustees.
Subject to the foregoing provisions, any resignation or removal of the Trustee
or appointment of a new Trustee shall be by an instrument in writing and shall
become effective on the date therein specified. Any successor Trustee shall have
the same powers and duties as the succeeded Trustee, subject to such changes as
the Company may then determine. The appointment of any successor
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Trustee or Trustees hereunder shall without any separate instrument or
conveyance immediately vest title to the assets of the Trust in such successor
Trustee or Trustees. Upon request of such successor Trustee or Trustees, the
Company and the Trustee ceasing to act shall execute and deliver such
instruments of conveyance and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
such successor Trustee or Trustees all the right, title, and interest of the
retiring Trustee in and to the Trust funds.
10.12 INDEMNIFICATION OF TRUSTEE. The Company shall indemnify and hold
harmless each Trustee from and against any and all claims, losses, damages,
expenses (including reasonable attorneys' fees approved by the Company), and
liability (including any reasonable amounts paid in settlement with the
Company's approval), arising from any act or omission of such Trustee, except
when the same is judicially determined to be due to the willful misconduct of
such Trustee.
ARTICLE XI.
THE COMPANY
11.01 NO CONTRACT OF EMPLOYMENT. This Trust shall not be construed as
creating any contract of employment between the Company and any Participant,
Employee, or other person, and nothing herein contained shall give any person
the right to be retained in the employ of the Company or otherwise restrain the
Company's right to deal with its employees, including Participants and
Employees, and their hiring,-discharge, layoff, compensation, and all other
conditions of employment in all respects as though this Trust did not exist.
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11.02 NO CONTRACT TO MAINTAIN PLAN. The Company by the creation of the
Plan does not enter into any agreement to maintain the Plan or to make any
future contributions thereto or reimbursement of expenses incurred hereunder.
Each contribution by the Company shall be voluntary, and the Company reserves
the right to suspend payment of its contributions hereunder, and no party hereto
or Participant or any other person shall have any cause or right of action
against the Company by reason of any failure by the Company to make
contributions to the Trust, or by reason of any action by the Company in
terminating the Plan and Trust.
11.03 LIABILITY OF THE COMPANY. Subject to its agreement to indemnify
the members of the Committee and the Trustee, as provided in Sections 9.09 and
10.12, neither the Company nor any person acting in behalf of the Company shall
be liable for any act or omission on the part of any member of the Committee, on
the part of the Trustees, or on the part of any Investment Manager or for any
act performed or the failure to perform any act by any person with respect to
this Agreement, the Plan, or Trust, the Company's only duty being to use
reasonable care in the selection and retention of the Trustees and the members
of the Committee.
11.04 ACTION BY THE COMPANY. Whenever under the terms of this
Agreement the Company is permitted or required to take any action, such action
shall be taken by the Board of Directors, or any duly authorized committee
thereof, or by any officer of the Company thereunto duly authorized, by the
Board of Directors or otherwise. In such event, any such officer may certify to
the Committee or the Trustees or any other person the taking of such action and
the name or names of the officers so authorized,
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including himself or herself. The execution of any direction, document, or
certificate on behalf of the Company by any of its officers shall constitute a
certification of the authority of such officer with respect thereto, and the
Committee, the Trustees, or other person shall be protected in accepting and
relying upon any such direction, document, or certificate and are released from
inquiry into the authority of any officer of the Company.
11.05 SUCCESSOR TO BUSINESS OF THE COMPANY. Unless this Plan and Trust
be sooner terminated, a successor to the business of the Company, by whatever
form or manner resulting, may continue the Plan and Trust by executing as
appropriate supplementary agreement and such successor shall ipso facto succeed
to all the rights, powers, and duties of the Company hereunder. The employment
of any Employee who has continued in the employ of such successor shall not be
deemed to have been terminated or severed for any purposes hereunder.
11.06 DISSOLUTION OF THE COMPANY. If the Company is dissolved by
reason of bankruptcy or insolvency or otherwise, without any provision being
made for the continuation of this Plan and Trust by a successor to the business
of the Company, the Plan and Trust hereunder shall terminate, and the Trustees
shall proceed in the same manner as though the Plan and Trust were being
terminated by the Company as provided in Section 8.03.
ARTICLE XII.
ADDITIONAL PARTICIPATING COMPANIES
12.01 PARTICIPATION. Any subsidiary or affiliate of the Company may,
with the consent of the Company, become a participating employer by action of
the Board
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of Directors of such subsidiary or affiliate adopting the Plan and Trust as a
Plan and Trust for the benefit of its employees. Any such additional
participating employer is hereinafter referred to in this Article XII as a
"Participating Subsidiary."
12.02 EFFECTIVE DATE. The participation of any Participating
Subsidiary shall take effect as of the date of its action to adopt the Plan and
Trust or such other date as it may specify with the Company's approval.
12.03 ADMINISTRATION. Each Participating Subsidiary shall be deemed
the 'Company" and shall have and exercise all the rights, powers, and duties
thereof with respect to the Plan as applied to itself and its employees and that
part of the Trust which represents accounts of Participants employed by it.
Subject to Section 12.04, each Participating Subsidiary hereby authorizes Sutro
& Co. Incorporated to exercise on its behalf all such rights, powers, and
duties, including amendment or termination of the Plan, appointment of the
Trustees and the members of the Committee, and serving as the Plan
Administrator. Each participating employer, including the Company and each
Participating Subsidiary, shall make contributions hereunder on behalf of its
employees in accordance with Article IV.
Forfeitures with respect to any Plan Year shall be applied to
reduce the Matching Contributions for such Plan Year of each such participating
employer in proportion to the amount of Matching Contribution otherwise required
of such participating employer pursuant to Section 4.02.
12.04 TERMINATION. If the Plan shall be terminated by any one
Participating Subsidiary, the Trust shall be valued and the accounts of all
Participants
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adjusted pursuant to Section 5.07 and assets representing the accounts of all
Participants employed by such Participating Subsidiary shall be segregated into
a separate trust and held subject to the provisions of the Plan, and all rights,
powers, and duties of the Company with respect to such separate trust shall be
exercised by such Participating Subsidiary.
ARTICLE XIII.
TOP-HEAVY PROVISIONS
13.01 GENERAL RULE. For any Plan Year for which this Plan is a
"top-heavy plan" as defined in Section 13.03 below, any other provisions of this
Plan to the contrary notwithstanding, this Plan shall be subject to the minimum
contribution provisions set by Section 13.02 and the limitation on contributions
set by Section 13.06.
13.02 MINIMUM CONTRIBUTION PROVISIONS. Each Participant who is a
nonkey employee (as defined in Section 13.05 below) and who is an Employee as of
the last day of such Plan Year shall be entitled to a minimum contribution
which, when added to the amount of any employer contributions (excluding Tax
Deferred Contributions and Matching Contributions made with respect to Plan
Years commencing after January 1, 1989) allocated to the Participant's accounts
under this Plan and all other defined contribution plans maintained by the
Company or any Affiliated Company, will cause the sum of all such contributions
to equal the lesser of (a) three percent (3%) of such Participant's compensation
for such Plan Year or (b) the percentage at which contributions are made for the
key employee (as defined in Section 13.04 below) for whom such percentage is the
highest for such Plan Year; provided, if such Participant
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is also a non-key employee covered under a defined benefit plan maintained by
the Company or an Affiliated Company, such Participant shall be entitled to a
minimum benefit-under such defined benefit plan instead of the minimum
contribution described in this Section 13.02. The minimum contribution described
in this Section 13.02 shall be made even though under other Plan provisions, the
Participant would not otherwise be eligible to receive a contribution because
the Participant failed to complete 1,000 Hours of Service, failed to make
mandatory nondeductible employee contributions to the Plan, or had Compensation
which was less than a stated amount. For purposes of this Section 13.02,
"compensation" shall be determined within the meaning of section 415 of the
Code; provided, however, that in no event shall a Participant's compensation
exceed Two Hundred Thousand Dollars ($200,000) for any Plan Year for Plan Years
beginning prior to January 1, 1994 and One Hundred Fifty Thousand Dollars
($150,000) for any Plan Year for Plan Years beginning on or after January 1,
1994 (or such larger amount as the Secretary of the Treasury may determine for
such Plan Year under section 401(a)(17) of the Code).
13.03 TOP-HEAVY PLAN DEFINITION. This Plan shall be a "top-heavy plan"
for any Plan Year if, as of the determination date (as defined in Section
13.03(a) below), the sum of all accounts under the Plan for Participants
(including former Participants but excluding the accounts of Employees who have
not performed any services for the Company at any time during the five (5) year
period ending on the determination date) who are "key employees" (as defined in
Section 13.04 below) exceeds sixty percent (60%) of the sum of all accounts
under the Plan for all Participants (excluding the
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accounts of former "key employees" and of Employees who have not performed any
services for the Company at any time during the five (5) year period ending on
the determination date) unless the Plan is part of an aggregation group or if
this Plan is part of an aggregation group (as de-fined in Section 13.03(b)
below) which for such Plan Year is a "top-heavy group" (as defined in Section
13.03 below). Solely for purposes of this Section 13.03, a Participant's account
shall include any distribution made in the five (5) year period ending on the
determination date, and any contribution due but unpaid as of the determination
date.
(a) "Determination date" means for any Plan Year the last day
of the immediately preceding Plan Year; provided, the "determination date" for
the first Plan Year shall be the last day of such first Plan Year. If two or
more plans are being aggregated, they shall be aggregated by adding together the
results for each plan as of the determination dates for such plans that fall
within the same calendar year.
(b) "Aggregation group" means the group of plans, if any, that
includes the group of plans that are required to be aggregated and, if the
Committee so elects, the group of plans that are permitted to be aggregated.
(i) The group of plans that are required to be
aggregated (the "required aggregation group") includes:
(A) each plan of the Company and of any
Affiliated Company in which a "key employee" is a member, and
(B) each other plan of the Company and any
Affiliated Company which enables a plan in which a key employee is a
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member to meet the requirements of either section 401(a)(4) or section
410 of the Code.
(ii)The plans that are permitted to be aggregated (the
permissive aggregation group" include any plan that is not part of the
"required aggregation group" that the Committee certifies as
constituting a plan within the "permissive aggregation group." Such
plans may be added to the 'permissive aggregation group" only if,
after the addition, the "aggregation group" as a whole continues to
meet the requirements of both section 401(a)(4) and section 410 of the
Code.
(c) "Top-heavy group"means the "aggregation group," if, as of
the applicable determination date, the sum of the present value of the accrued
benefits for 'key employees" under all defined benefit plans included in the
"aggregation group" plus the aggregate of the accounts of "key employees"
(excluding the accounts of Employees who have not performed any services for the
Company at any time during the five (5) year period ending on the determination
date) under all defined contribution plans included in the "aggregation group'
exceeds sixty percent (60%) of the sum of the present value of the accrued
benefits for all employees under an such defined benefit plans plus the
aggregate accounts for all Employees under such defined contribution plans
(excluding the accounts of former "key employees" and of Employees who have not
performed any services for the Company at any time during the five (5) year
period ending on the determination date). Solely for purposes of this subsection
(c), the accrued benefits of "non-key employees" shall be determined under (i)
the method, if any, that
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uniformly applies for accrual purposes under all defined benefit plans
maintained by the Company and any Affiliated Company, or (H) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under section 411(b)(1)(C) of the Code.
(d) In determining whether this Plan constitutes a" top-heavy
plan," the Committee shall follow the rules set forth in section 416 of the Code
and regulations pertaining thereto.
13.04 KEY EMPLOYEE. The term "key employee" means any Employee (and
any Beneficiary of an Employee) under this Plan who is a "key employee" as
determined in accordance with section 416(i)(1) of the Code.
13.05 NON-KEY EMPLOYEE. The term 'non-key employee" means any
Employee (and any Beneficiary of an Employee) who is a "non-key employee" as
determined in accordance with section 416(i)(2) of the Code.
13.06 LIMITATION ON CONTRIBUTIONS. For each Plan Year that the Plan is
a top-heavy plan, 1.0 shall be substituted for 1.25 as the multiplicand of the
dollar limitation in determining the denominator of the defined benefit plan
fraction and of the defined contribution plan fraction for purposes of section
415(e) of the Code.
ARTICLE XIV.
MISCELLANEOUS
14.01 SPENDTHRIFT PROVISION. It is a condition of the Plan, to which
all rights of each Participant shall be subject, that no right or interest of
any Participant in the Plan or in the Trust shall be assignable or transferable
in whole or in part, either directly
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or indirectly, by operation of law or otherwise, including but not by way of
limitation, execution, levy, garnishment, attachment, pledge, bankruptcy, or -in
any other manner, but excluding devolution by death or acquisition by a guardian
or committee of a mental incompetent, and no rights or interest of any
Participant in the Plan or in the Trust shall be liable for or subject to any
obligation or liability of such Participant except obligations of a Participant
under a qualified domestic relations order within the meaning of section 414(p)
of the Code or obligations to the Trust pursuant to section 7.06.
14.02 APPOINTMENT OF PERSON TO RECEIVE PAYMENT. If a Participant or
Beneficiary entitled to receive any benefits hereunder is an donor or is deemed
by the Company or is adjudged to be legally incapable of giving valid receipt
and discharge for such benefits, they will be paid to such persons as the
Committee may designate or to the duly appointed guardian. In the event any
amount shall become payable hereunder to any person (or the Beneficiary or
estate of such person), and if after written notice from the Trustees mailed to
such person's last known address as shown on the Committee's records, such
person or personal representative shall not have presented himself to the
Trustees or notified the Trustees in writing of his address within one (1) year
after the mailing of such notice, then the Committee shall in its discretion
appoint one or more of the spouse and blood relatives of such person to receive
such amount, including any amount thereafter becoming due to such person (or
estate), in the proportions determined by them. Any action of the Committee
hereunder shall be binding and conclusive upon all persons.
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14.03 CONSTRUCTION. In any question of interpretation or other matter
of doubt, the Trustees, the Committee, and the Company may rely upon the opinion
of counsel for the Company or any other attorney at law designated by the
Company with the approval of the Trustees. The provisions of this Agreement
shall be construed, administered, and enforced according to the law of the
United States and, to the extent permitted by such law, by the law of the State
of California. Contributions to the Trust shall be deemed to be made in the
State of California.
14.04 IMPOSSIBILITY OF PERFORMANCE. In case it becomes impossible for
the Company, the Committee, or the Trustees to perform any act under this Plan
and Trust, that act shall be performed which in the judgment of the Committee
will most nearly carry out the intent and purpose of this Plan and Trust. AR
parties to this Agreement or in any way interested in this Plan and Trust shall
be bound by any acts performed under such condition.
14.05 DEFINITION OF WORDS. Feminine or neuter pronouns shall be
substituted for those of the masculine form, and the plural shall be substituted
for the singular, in any place or places herein where the context may require
such substitution or substitutions.
14.06 TITLES. The titles of articles and sections are included only
for convenience and shall not be construed as a part of this Agreement or in any
respect affecting or modifying its provisions.
14.07 MERGER OR CONSOLIDATION. In the event that this Plan is merged
with or consolidated with any other plan, or the assets or liabilities accrued
under this Plan are
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transferred to any other plan, each Participant's benefit under such other plan
shall be at least as great immediately after such merger, consolidation, or
transfer (if such plan were then to terminate) as the benefit to which such
Participant would have been entitled under this Plan immediately before such
merger, consolidation, or transfer (if the Plan were then to terminate).
14.08 CLAIMS PROCEDURE. In accordance with section 503 of the
ERISA and the regulations of the Secretary of Labor prescribed thereunder:
(a) AR claims for benefits under this Plan shall be filed in
writing with the Committee in accordance with such procedures as the Committee
shall reasonably establish;
(b) The Committee shall, within ninety (90) days of submission
of a claim, provide adequate notice in writing to any claimant whose claim for
benefits under the Plan has been denied, setting forth the specific reasons for
such denial and such other information as is required by said regulations
written in a manner calculated to be understood by the claimant;
(c) The Committee shall, upon written request by a claimant
within sixty (60) days of the receipt of the notice that the claim has been
denied, afford a reasonable opportunity to such claimant for a full and fair
review by the Committee of the decision denying the claim; and
(d) The Committee shall, within sixty (60) days of receipt of
a request for a review, render a written decision on its review setting forth
the specific reasons for such decision, written in a manner to be understood by
the claimant.
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14.09 EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT. The effective date
of this amendment and restatement shall be January 1, 1989, except as otherwise
specifically provided herein, and shall apply only to Employees credited with at
least one (1) Hour of Service on or after said date. Provided, however, that
provisions which were required under the Code to be effective for Plan Years
beginning prior to January 1, 1989, are deemed to have been adopted as of the
required effective date.
14.10 EXECUTION OF AGREEMENT. This Agreement may be executed in any
number of counterparts and each fully executed counterpart shall be deemed an
original.
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IN WITNESS WHEREOF, the Company, by its duly authorized officer, and
the Trustees have caused these presents to be signed and in the case of the
Company, its corporate seal affixed, this 24th day of January, 1997.
SUTRO & CO. INCORPORATED
By: /s/ Xxxx Xxxx Xxxxxxx
-------------------------------------
Title: Executive Vice-President
TRUSTEES:
/s/ Xxxxxx X. Xxxxx
--------------------------------------
/s/ Xxxxxx Xxxxxx
--------------------------------------
/s/ Xxxxx Xxxxxxxx
--------------------------------------
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FIRST AMENDMENT
TO
PROFIT-SHARING RETIREMENT PLAN
AND
TRUST AGREEMENT
FOR EMPLOYEES OF SUTRO & CO., INCORPORATED
The PROFIT-SHARING RETIREMENT PLAN AND TRUST AGREEMENT FOR EMPLOYEES OF SUTRO &
CO., INCORPORATED as restated on January 24, 1997 is hereby amended as follows:
1. The first sentence of Section 2.19 is hereby amended as follows:
2.19 "INVESTMENT MEDIA" means such marketable securities, Company
Stock, and/or money market mutual funds, and in such amounts, as are
specifically selected and specified by a Participant in directions to the
Trustees (in such form as may be acceptable to the Trustees) for the
investment of assets held in a Self-Directed Account pursuant to Section
5.09.
2. Section 2.31 is hereby amended as follows:
2.31 "SELF-DIRECTED ACCOUNT" means an account established for the
investment and reinvestment of Tax Deferred Contributions, Voluntary
Contributions, Rollover Contributions and vested Company and Matching
Contributions upon the authorization of the Committee. Said Account may be
invested only in authorized Investment Media.
3. Article 2 is hereby amended by adding the following Section 2.38:
2.38 "COMPANY STOCK" means any class of stock of the Company or an
Affiliate Company which constitutes "qualifying employer securities" as
defined in section 407(d)(5) of ERISA and "employer securities" as defined
in section 409(l) of the Code. Consistent with Part 4 of ERISA, the assets
of the Plan may be used to acquire and hold Company Stock in any
proportions or amounts.
4. Section 4.02(a) is hereby amended as follows:
4.02 MATCHING CONTRIBUTIONS.
(a) Beginning with the Plan Year commencing January 1, 1998, and
for each subsequent Plan Year, the Company shall determine whether it
shall make a Matching Contribution (in cash or property, including Company
Stock, in the discretion of the Company) to the Trust under the Plan for
each eligible Participant for whom the Company made Tax Deferred
Contributions during such Plan Year in accordance with the following
rules:
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(i) If the Company's pre-tax Net Profits for a Plan
Year equal or exceed One Million Dollars ($1,000,000), the Company
shall make a Matching Contribution equal to 100% of each eligible
Participant's Tax Deferred Contributions made during such Plan Year,
not to exceed the lesser of (i) three percent (3%) of the Participant's
Compensation during such Plan Year, or (ii) Three Thousand Dollars
($3,000) annually.
(ii) If the Company's pre-tax Net Profits for a Plan
Year are less than One Million Dollars ($1,000,000), the Company may
make a Matching Contribution equal to 100% of each eligible
Participant's Tax Deferred Contributions made during such Plan Year,
not to exceed the lesser of (i) three percent (3%) of the Participant's
Compensation during such Plan Year, or (ii) Three Thousand Dollars
($3,000) annually. The Company, in its discretion, shall determine
whether to make a Matching Contribution for a Plan Year under this
Section 4.02(a)(ii) and, if so, the exact amount or percentage of such
Matching Contribution.
For purposes of this Section 4.02(a), the Net Profits
threshold shall be determined on a Plan Year by Plan Year basis, with
no carryover or carryback of profits to or from any other Plan Year.
The Company's Matching Contribution for any Plan Year shall be reduced
by the amount of forfeitures available for that Plan Year pursuant to
Section 7.05. A Participant shall be eligible for the Matching
Contribution provided by this Section 4.02(a), if, and only if, such
Participant either (A) is an Employee on the last day of the Plan Year
for which the Matching Contribution is made, or (B) died, retired on or
after his Normal Retirement Age, or became disabled (within the meaning
of Section 7.03) during such Plan Year.
(b) Notwithstanding the foregoing, for the calendar
quarter commencing on January 1, 1998 and ending on March 31, 1998, the
Company shall determine whether it shall make a Matching Contribution
to the Trust under the Plan for each eligible Participant for whom the
Company made Tax Deferred Contributions for such calendar quarter in
accordance with the rules set forth in Section 4.02(a) prior to this
amendment, within the time prescribed by Section 4.05(b), as amended.
The Company's Matching Contribution for the remaining portion of the
Plan Year shall be determined in accordance with the rules set forth in
Sections 4.02 and 4.05(b), each as amended, and shall be reduced by the
amount of Matching Contribution made under this Section 4.02(b).
5. The first sentence of Section 4.04 is hereby amended as follows:
4.04 COMPANY CONTRIBUTIONS. For each Plan Year, the
Company may in its sole discretion contribute to the Trust, as a
Company Contribution (in cash or property, including Company Stock, in
the discretion of the Company), an amount up to the sum of (1) twenty
percent (20%) of the portion of the Company's Not Profits for such Plan
Year that does not exceed twenty percent (20%) of the Compensation of
all Participants and (2)
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ten percent (10%) of that portion of such Net Profits, if any, that
exceeds twenty percent (20%) of the Compensation of all Participants.
6. Section 4.05(b) is hereby amended as follows:
(b) Effective January 1, 1998, Matching Contributions, if any,
made by the Company on behalf of each Participant with respect to each
Plan Year shall be paid into the Trust not later than the end of the
three (3) month period immediately following the end of such Plan Year.
Matching Contributions shall be allocated to a Participant's Company
Account.
7. Section 5.07 is hereby amended as follows:
5.07 VALUATION AND ALLOCATION OF ASSETS. The Accounts of each
Participant which are maintained by the Trustees shall be valued by the
Trustees and adjusted to reflect appreciation or depreciation in the
value of the Trust. The value of a Participant Account as of any
Valuation Date shall be the sum of the interests of the Participant
Account invested in each Investment Medium as of the Valuation Date for
each such Investment Medium which is coincident with or immediately
preceding the Valuation Date as of which the Participant Account is
being valued. Such valuations and adjustments of the Participants'
Accounts shall be made so as to preserve for each Account of each
Participant its beneficial interest in each of the Investment Medium
subject to the following rules:
(a) All expenses of the Trust which are allocable to a
Participant Account or Investment Medium shall be charged to such
Account or Investment Medium. All such expenses allocable to an
Investment Medium shall be charged against all Participant Accounts in
the same proportion as the amount credited to such Participant Account
and invested in such Investment Medium bears to the total amount
invested in such Investment Medium. All such expenses allocable to a
Participant Account shall be charged against the interest of such
Account invested in each Investment Medium in the same proportion as
each such interest bears to the total value of the Account.
(b) Company Stock held by the Trust shall be valued according
to the following rules: (1) in the case of Company Stock that is
publicly traded on a national securities exchange, such stock shall be
valued by reference to the closing price of such stock on such exchange
on the last trading day of the month for which such stock is being
valued and (2) in the case of Company Stock that is not publicly traded
on a national securities exchange, such stock shall be valued as of the
first day of each Plan Year, or such other time as established by the
Trustees, by determining the fair market value of such stock through
the use of an independent appraiser.
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(c) Any Company Stock received by the Trustees as a stock
split, dividend, or as a result of a reorganization or other
recapitalization of the Company shall be allocated in the same manner
as the Company Stock to which it is attributable is then allocated.
(d) All cash dividends paid to the Trustees with respect
to Company Stock that has been allocated to a Participant's Account as
of the quarterly date on which the dividend is received by the Trustees
shall be allocated to the Participant's Account. If a Participant (or
Beneficiary) has a current right to a distribution in Company Stock and
such stock has not yet been registered in the name of the Participant
(or Beneficiary) as of the record date of any dividend on such stock,
such dividend shall be distributed to the Participant (or Beneficiary).
8. Article 15 is hereby added in its entirety to read as follows:
ARTICLE XV
TENDER OFFERS AND VOTING OF COMPANY STOCK
15.01 TENDER OFFERS FOR COMPANY STOCK. Notwithstanding any
other provision of the Plan to the contrary, in the event an offer is
received by the Trustees (including but not limited to a tender offer
or exchange offer within the meaning of the Securities Exchange Act of
1934, as from time to time amended and in effect) to acquire any or all
shares of Company Stock held by the Trust (an "Offer"), the discretion
or authority to sell, exchange or transfer any of such shares shall be
determined in accordance with the following rules:
(a) The Trustees shall have no discretion or authority to
sell, exchange or transfer any of such shares pursuant to such Offer
except to the extent, and only to the extent, that the Trustees are
timely directed to do so in writing by each Participant with respect to
any such shares that are allocated to such Participant's Accounts. Upon
timely receipt of such instructions, the Trustees shall, subject to the
provisions of (c) and (l) of this Section, exchange or transfer
pursuant to such Offer, only such shares as to which instructions were
given. The Trustees shall use their best efforts to communicate or
cause to be communicated to each Participant the consequences of any
failure to provide timely instructions to the Trustees. In the event,
under the terms of an Offer or otherwise, any shares of Company Stock
tendered for sale, exchange or transfer pursuant to such Offer may be
withdrawn from such Offer, the Trustees shall follow such instructions
respecting the withdrawal of such shares from such Offer in the same
manner and the same proportion as is timely received by the Trustees
from the Participants entitled under this subsection (a) to give
instructions as to the sale, exchange or transfer of securities
pursuant to such Offer.
(b) In the event that an Offer for fewer than all of the
shares of Company Stock held by the Trustees in the Trust is received
by the Trustees, each Participant shall be entitled to direct the
Trustees as to the acceptance or rejection of such Offer (as provided
by subsection (a) above) with respect to the largest portion of such
Company
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Stock as may be possible given the total number or amount of shares of
Company Stock the Plan may sell, exchange or transfer pursuant to the
Offer based upon the instructions received by the Trustees from all
Participants who timely instruct the Trustees pursuant to this
subsection to sell, exchange or transfer such shares pursuant to such
Offer, each on a pro rata basis in accordance with the maximum number
of shares each such Participant would have been permitted to direct
under subsection (a) had the Offer been for all shares of Company Stock
held in the Trust.
(c) In the event an Offer is received by the Trustees and
prior to termination of such Offer, another Offer is received by the
Trustees for the shares subject to the first Offer, the Trustees shall
use their best efforts under the circumstances to solicit instructions
from the Participants (i) with respect to shares tendered for sale,
exchange or transfer pursuant to the first Offer, whether to withdraw
such tender, if possible, and, if withdrawn, whether to tender any
shares so withdrawn for sale, exchange or transfer pursuant to the
second Offer and (ii) with respect to shares not tendered for sale,
exchange or transfer pursuant to the first Offer, whether to tender or
not to tender such shares for sale, exchange or transfer pursuant to
the second Offer. The Trustees shall follow all such instructions
received in a timely manner from Participants in the same manner and in
the same proportion as provided in subsection (a) above. With respect
to any further Offer for any Company Stock received by the Trustees and
subject to any earlier Offer (including successive Offers from one or
more existing offerors), the Trustees shall act in the same manner as
described above.
(d) With respect to any Offer received by the Trustees, the
Trustees shall distribute, at the Company's expense, copies of all
relevant material including but not limited to material filed with the
Securities and Exchange Commission with such Offer or regarding such
Offer, and shall seek confidential written instructions from each
Participant who is entitled to respond to such Offer. The identities of
Participants and the amount of Company Stock allocated to their
Accounts shall be determined from the list of Participants delivered to
the Trustees by the Company which shall take all reasonable steps
necessary to provide the Trustees with the latest possible information.
(e) The Trustees shall distribute and/or make available to
each Participant who is entitled to respond to an Offer an instruction
form to be used by each such Participant who wishes to instruct the
Trustees. The instruction form shall state that (i) if the Participant
fails to return an instruction form to the Trustees by the indicated
deadline, the Company Stock with respect to which he is entitled to
give instructions will not be sold, exchanged or transferred pursuant
to such Offer, (ii) the Participant will be a named fiduciary (as
described in subsection (j) below) with respect to all shares for which
he is entitled to give instructions, and (iii) the Company acknowledges
and agrees to honor the confidentiality of the Participant's
instructions to the Trustees.
(f) Each Participant may choose to instruct the Trustees in
one of the following two ways: (i) not to sell, exchange or transfer
any shares of Company Stock for which he is entitled to give
'instructions, or (ii) to sell, exchange or transfer some or all
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Company Stock for which he is entitled to give instructions. The
Trustees shall follow up with additional mailings and postings of
bulletins, as reasonable under the time constraints then prevailing, to
obtain instructions from Participants not otherwise responding to such
requests for instructions. Subject to subsection (c), the Trustees
shall then sell, exchange or transfer shares according to instructions
from Participants, except that Company Stock for which no instructions
are received shall not be sold, exchanged or transferred.
(g) The Company shall furnish former Participants who have
received distributions of Company Stock so recently as to not be
shareholders of record with the information given to Participants
pursuant to subsections (d), (e) and (f) of this Section. The Trustees
are hereby authorized to sell, exchange or transfer pursuant to an
Offer any such Company Stock in accordance with appropriate
instructions from such former Participants.
(h) The Trustees shall not express any opinion or give any
advice or recommendation to any Participant concerning the Offer, nor
shall they have any authority or responsibility to do so. The Trustees
shall have no duty to monitor or police the party making the Offer.
(i) The Trustees shall not reveal or release a Participant's
instructions to the Company, its officers, directors, employees, or
representatives. If some but not all Company Stock held by the Trust is
sold, exchanged, or transferred pursuant to an Offer, the Company, with
the Trustees' cooperation, shall take such action as is necessary to
maintain the confidentiality of Participants' records including without
limitation, establishment of a security system and procedures which
restrict access to Participant records and retention of an independent
agent to maintain such records. If an independent record keeping agent
is retained, such agent must agree, as a condition of its retention by
the Company, not to disclose the composition of any Participant
Accounts to the Company, its officers, directors, employees, or
representatives.
(j) Each Participant shall be a named fiduciary (as that term
is defined in section 402(a)(2) of ERISA) with respect to Company Stock
allocated to his Accounts under the Plan solely for purposes of
exercising the rights of a shareholder with respect to an Offer
pursuant to this Section 15.01 and voting rights pursuant to Section
15.02.
(k) The Trustees shall have the discretion or authority to
sell, exchange or transfer shares pursuant to an Offer to the extent,
and only to the extent, any such shares are not allocated to
Participants' Accounts. In exercising their fiduciary responsibility
with respect to such sale, exchange or transfer, the Trustees may
delegate their discretion or authority to an independent third party
who shall serve as a fiduciary or may seek advice from a third party
with respect to exercising their fiduciary responsibility.
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(l) In the event a court of competent jurisdiction shall issue
an opinion or order to the Plan, the Company or the Trustees an opinion
or order, which shall, in the opinion of counsel to the Company or the
Trustees, invalidate, in all circumstances or in any particular
circumstances, any provision or provisions of this Section regarding
the determination to be made as to whether or not Company Stock held by
the Trustees shall be sold, exchanged or transferred pursuant to an
Offer or cause any such provision or provisions to conflict with
securities laws, then, upon notice thereof to the Company or the
Trustees, as the case may be, such invalid or conflicting provisions of
this Section shall be given no further force or effect.
15.02 VOTING OF COMPANY STOCK. Notwithstanding any other
provision of the Plan. to the contrary, the voting of all Company Stock
held in the Trust Fund shall be voted by the Trustees as provided
below:
(a) If the Company has a registration-type class of securities
(as defined in section 409(c)(4) of the Code), then with respect to all
corporate matters, each Participant shall be entitled to direct the
Trustees as to the voting of all Company Stock allocated and credited
to his Accounts. If the Company does not have a registration-type class
of securities, then only with respect to such matters as the approval
or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of trade or business, or such similar
transactions as may be prescribed in Treasury Regulations, each
Participant shall be entitled to direct the Trustees as to the voting
of all Company Stock allocated and credited to his Accounts.
(b) All Participants entitled to direct such voting shall be
notified by the Company, pursuant to its normal communications with
shareholders, of each occasion for the exercise of such voting rights
within a reasonable time before such rights are to be exercised. Such
notification shall include all information distributed to shareholders
either by the Company or any other party regarding the exercise of such
rights. Such Participants shall be so entitled to direct the voting of
fractional shares (or fractional interests in shares), provided,
however, that the Trustees may, to the extent possible, vote the
combined fractional shares (or fractional interests in shares) so as to
reflect the aggregate direction of all Participants giving directions
with respect to fractional shares (or fractional interests in shares).
(c) The Trustees shall not express any opinion or give my
advice or recommendation to any Participant concerning the voting
direction of Company Stock allocated to his Account, nor shall they
have any authority or responsibility to do so.
(d) The Trustees shall maintain confidentiality with respect
to the voting directions of all Participants and shall not reveal or
release a Participant's voting directions to the Company, its officers,
directors, employees, or representatives. The Company, with the
Trustees' cooperation, may take such action as is necessary to maintain
the confidentiality of Participants' records including without
limitation,
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establishment of a security system and procedures which restrict access
to Participant records and retention of an independent agent to
maintain such records. If an independent record keeping agent is
retained, such agent must agree, as a condition of its retention by the
Company, not to disclose the voting directions of any Participant to
the Company, its officers, directors, employees, or representatives.
(e) Each Participant shall be a named fiduciary (as that term
is defined section 402(a)(2) of ERISA) with respect to Company Stock
for which he has the right to direct the voting under the Plan but
solely for the purpose of exercising voting rights pursuant to this
Section 15.02 or Offers pursuant to Section 15.01.
(f) The Trustees shall have the discretion or authority to
exercise any voting rights of any Company Stock to the extent, and only
to the extent, any such Company Stock is not allocated to Participants'
Accounts or a Participant fails to direct the Trustees as to the
exercise of voting rights arising under any Company Stock credited to
his Accounts. In exercising their fiduciary responsibility with respect
to voting, the Trustees may delegate their discretion or authority to
an independent third party who shall serve as a fiduciary or may seek
advice from a third party with respect to their fiduciary
responsibility.
(g) In the event a court of competent jurisdiction shall issue
an opinion or order to the Plan, the Company or the Trustees, which
shall, in the opinion of counsel to the Company or the Trustees,
invalidate, in all circumstances or in any particular circumstances,
any provision or provisions of this Section regarding the manner in
which Company Stock held in the Trust shall be voted or cause any such
provision or provisions to conflict with ERISA, then, upon notice
thereof to the Company or the Trustees, as the case may be, such
invalid or conflicting provisions of this Section shall be given no
further force or effect.
15.03 STOCK RIGHTS, WARRANTS OR OPTIONS. In the event any
rights, warrants, or options are issued on Company Stock allocated to
Participants' Accounts, the Trustees shall exercise them or sell them
as directed by the Participant. With respect to any rights, warrants,
or options issued on Company Stock not allocated to Participants'
Accounts, the Trustees shall have the discretion or authority to
exercise them for the acquisition of additional Company Stock to the
extent that cash is then available in the Trust Fund or to sell them.
Any Company Stock acquired in this fashion shall be treated as Company
Stock purchased by the Trustees for the net price paid and shall be
allocated in the same manner as the funds used to purchase the Company
Stock were or would be allocated under the provisions of the Plan and
any' proceeds from the sale of any right, warrant, or option shall be
allocated in accordance with the source of the Company Stock with
respect to which the rights, warrants, or options were issued.
15.04 SECURITIES LAW LIMITATION. The Trustees shall not be
required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock or permitting
contributions or withdrawals, which they determine in their
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sole discretion might tend to subject the Trustees, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal
or state securities laws.
10. The effective date of this First Amendment shall be January 1, 1998.
Executed this 11th day of March, 1998 at San Francisco, California.
Employer: Sutro & Co., Incorporated
By: /s/ XXXX XXXXXXX
-------------------------------------
President and Chief Executive Officer
Trustees:
____________________________________
____________________________________
____________________________________
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CERTIFICATION BY SECRETARY
OF
SUTRO & CO., INCORPORATED
I hereby certify that I am the duly elected, qualified and acting
secretary of the Sutro & Co., Incorporated ("Company") and that Xxxx Xxxxxxx,
who is President and Chief Executive Officer of the Company is authorized to act
on behalf of the Company to make amendments to the Profit-Sharing Retirement
Plan and Trust for Employees of Sutro & Co., Incorporated.
Dated: March 11, 1998
By: /s/ XXXX XXXX XXXXXXX
---------------------
Secretary
10
