1
EXHIBIT 10.4
LSI INDUSTRIES INC.
RETIREMENT PLAN AND TRUST
(Amended and Restated as of July 1, 1989)
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Annual Employer Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 Compensation Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.10 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.11 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.12 Eligibility Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.13 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.14 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.15 Employer Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.16 Excess Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.17 401(k) Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.18 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.19 Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.20 Investment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.21 Leased Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.22 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.23 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.24 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.25 Plan Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.26 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.27 Profit Sharing Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.28 Related Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.29 Rollover Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.30 Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.31 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.32 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.33 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 2 HOURS OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2 Limitations Applicable to Subsection 2.1(b) . . . . . . . . . . . . . . . . . . 15
2.3 Determination of Hours of Service Under Subsection 2.1(b) . . . . . . . . . . . 16
2.4 Crediting of Hours of Service to Computation
Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.5 "Computation Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 3 EMPLOYEE PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2 Eligibility Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3 Election Relating to 401(k) Contributions . . . . . . . . . . . . . . . . . . . 20
3.4 Years of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.5 Reemployment After Break in Service . . . . . . . . . . . . . . . . . . . . . . 21
3
- ii -
3.6 Certification of New Participants . . . . . . . . . . . . . . . . . . . . . . 22
3.7 Changes in Employment Status; Transfers of
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 4 BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.1 Designation of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2 Beneficiary in Absence of Designation . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 5 CONTRIBUTIONS MADE ON BEHALF OF PARTICIPANTS . . . . . . . . . . . . . . . . . 26
5.1 401(k) Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Administration and Limitation . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Changes in Reduction Authorizations . . . . . . . . . . . . . . . . . . . . . 29
5.4 Suspension of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.5 Distribution of Excess Contributions . . . . . . . . . . . . . . . . . . . . . 30
5.6 Distribution of Excess Deferrals . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 6 OTHER EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.1 Amount of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Payment of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3 Limitation on Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4 Profit-Sharing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.5 Finality of Determination . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.6 Effect of Plan Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 7 ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.1 Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.2 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.3 Rollover Contributions Not Considered for
Certain Plan Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 8 DEPOSIT AND INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 40
8.1 Deposit of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.2 Investment Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 9 INVESTMENT FUNDS AND PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . . 42
9.1 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.2 Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.3 Account Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 10 ALLOCATIONS TO ACCOUNT AND VALUATIONS . . . . . . . . . . . . . . . . . . . . 44
10.1 Allocation of Annual Employer Contributions
Among Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
10.2 Allocation of Profit Sharing Contributions
Among Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.3 Limitation on Crediting of Contributions . . . . . . . . . . . . . . . . . . . 46
10.4 Valuation of Participant's Interest . . . . . . . . . . . . . . . . . . . . . 50
10.5 Finality of Trustee's Determination . . . . . . . . . . . . . . . . . . . . . 51
10.6 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4
- iii -
ARTICLE 11 TERMINATION OF PARTICIPATION AND DISTRIBUTION . . . . . . . . . . . . . . . . . . 53
11.1 Termination of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.2 Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.3 Years of Vested Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.4 Election of Former Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.5 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.6 Disposition of Non-vested Amounts . . . . . . . . . . . . . . . . . . . . . . . . 62
11.7 Effect of Committee's Determination . . . . . . . . . . . . . . . . . . . . . . . 63
11.8 Reemployment of Former Participant . . . . . . . . . . . . . . . . . . . . . . . . 63
11.9 Restrictions on Alienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.10 Facility of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.11 Buy Back of Forfeited Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.12 Distribution Upon Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 12 THE COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.1 Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.2 Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.3 Authority of Committee and Employers . . . . . . . . . . . . . . . . . . . . . . . 68
12.4 Action of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.5 Claims Review Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.6 Resignation, Removal, and Designation
of Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.7 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.8 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.10 Qualified Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 13 POWERS AND DUTIES OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.1 Trust Property and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.2 Claims Against Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.3 Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.4 Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.5 Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.6 Employer Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
13.7 Registration of Securities; Nominees . . . . . . . . . . . . . . . . . . . . . . . 78
13.8 Agents, Attorneys, Actuaries, and Accountants . . . . . . . . . . . . . . . . . . 78
13.9 Deposit of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.10 Legal Advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.11 Other Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
13.12 Court Action Not Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.13 Trustee's Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.14 Directions to the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
13.15 Payment of Taxes; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.16 Compensation and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.17 Records and Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE 14 SUCCESSOR TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.1 Resignation or Removal of the Trustee . . . . . . . . . . . . . . . . . . . . . . 83
14.2 Appointment of the Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . 83
14.3 Commingled Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5
- iv -
ARTICLE 15 AMENDMENT, TERMINATION, AND WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . 85
15.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
15.2 Limitation on Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
15.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
15.4 Withdrawal of an Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
15.5 Corporate Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE 16 EXTENSION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
16.1 Adoption by Related Corporations . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE 17 TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
17.1 Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
17.2 Top-Heavy Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
17.3 Accelerated Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
17.4 Minimum Employer Contribution . . . . . . . . . . . . . . . . . . . . . . . . . 92
17.5 Adjustment to Section 415 Limitations . . . . . . . . . . . . . . . . . . . . . 94
ARTICLE 18 MINIMUM DISTRIBUTION REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . 96
18.1 Overriding Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
18.2 Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
18.3 Limits on Distribution Periods . . . . . . . . . . . . . . . . . . . . . . . . . 96
18.4 Distribution Beginning Before Death . . . . . . . . . . . . . . . . . . . . . . 96
18.5 Distribution Beginning After Death . . . . . . . . . . . . . . . . . . . . . . . 97
18.6 Death of Surviving Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
18.7 Amounts Payable to Child . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
18.8 Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
18.9 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
18.10 Transitional Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
ARTICLE 19 PLAN MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
19.1 Merger of Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
ARTICLE 20 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
20.1 Availability of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
20.2 Accounting for Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
20.3 Terms and Conditions of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . 107
20.4 Repayment of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
ARTICLE 21 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.1 Commitment as to Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.2 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.3 No Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.4 Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.5 Duty to Furnish Information . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.6 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
21.7 Merger, Consolidation, or Transfer of
Plan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
21.8 Condition on Employer Contributions . . . . . . . . . . . . . . . . . . . . . . 110
21.9 Back Pay Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
21.10 Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
21.11 Parties Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
6
LSI INDUSTRIES INC.
RETIREMENT PLAN AND TRUST
THIS AGREEMENT, made and entered into at Cincinnati, Ohio, as of this
_____ day of _______________, 1995, by and between LSI INDUSTRIES INC., an Ohio
corporation, as the Company, and THE FIFTH THIRD BANK, an Ohio Banking
Corporation, as Trustee,
W I T N E S S E T H:
WHEREAS, the Company currently maintained the Profit Sharing Plan of
LSI Industries Inc. Plan under a Plan originally effective July 1, 1977, and
amended and restated July 1, 1984 (the "Profit Sharing Plan") for the exclusive
benefit of eligible employees and their beneficiaries; and
WHEREAS, in addition, the Company currently maintained the Pension
Plan of LSI Industries Inc. under a Plan originally effective July 1, 1980 and
amended and restated July 1, 1984 (the "Prior Pension Plan") for the exclusive
benefit of eligible employees and their beneficiaries; and
WHEREAS, it is deemed desirable (1) to amend and restate the Profit
Sharing Plan, and (2) to merge the assets of the Prior Pension Plan into this
Plan, and (3) to add a 401(k) feature to this Plan.
NOW, THEREFORE, the parties agree that, as of the Effective Date as
herein defined, the Prior Pension Plan and Profit Sharing Plan are hereby
amended and restated in their entirety and merged into a single plan, and that
the Trustee shall hold all assets presently held under the Trust and all funds
and other property
7
- 2 -
hereafter contributed to the Trust pursuant to the provisions hereof, together
with all the increments, proceeds, investments, and reinvestments thereof, in
trust, for the uses and purposes and upon the terms and conditions hereinafter
set forth.
8
- 3 -
ARTICLE 1
DEFINITIONS
The following words and phrases as used herein shall have the
following meanings, unless a different meaning is plainly required by the
context:
1.1 "ACT" means the Employee Retirement Income Security Act of
1974, as amended from time to time. Reference to a section of the Act shall
include such section and any comparable section or sections of any future
legislation that amends, supplements, or supersedes such section.
1.2 "AGREEMENT" means this Trust Agreement, including any
amendment hereof.
1.3 "ANNUAL EMPLOYER CONTRIBUTION" means the annual amount
contributed to the Plan by each Employer in accordance with the provisions of
Section 6.1.
1.4 "BENEFICIARY" of a Participant, or of a former Participant,
means the person or persons who, under the provisions of Article 4, shall be
entitled to receive a distribution hereunder in the event such Participant or
former Participant dies before his interest shall have been distributed to him
in full.
1.5 "BREAK IN SERVICE" means any Plan Year during which a person's
employment by an Employer or a Related Corporation results in his completing
less than 501 Hours of Service for such Employer or such Related Corporation or
during which a person completes no Hours of Service for such Employer
9
- 4 -
or such Related Corporation; provided, however, that no person shall incur a
Break in Service solely by reason of (i) temporary absence from work not
exceeding 12 months resulting from illness, layoff, or other cause if
authorized in advance by an Employer or a Related Corporation pursuant to its
uniform leave policy, if his employment shall not otherwise be terminated
during the period of such absence; or (ii) absence from work due to military
service in the Armed Forces of the United States, so long as he returns to work
with an Employer or a Related Corporation within the period during which he
retains reemployment rights under federal law.
1.6 "CODE" means the Internal Revenue Code of 1986, as amended
from time to time. Reference to a section of the Code shall include such
section and any comparable section or sections of any future legislation that
amends, supplements, or supersedes such section.
1.7 "COMMITTEE" means the Committee established in accordance with
the provisions of Article 12, at the time designated, qualified, and acting
hereunder.
1.8 "COMPENSATION" of a Participant for any Plan Year means the
Employee's wages, salaries, fees for professional services, and other amounts
received for personal services actually rendered in the course of employment
with an Employer to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for
services on the
10
- 5 -
basis of a percentage of profits and bonuses. The determination of
Compensation shall be made by including amounts which are contributed by an
Employer pursuant to the provisions of a salary reduction agreement and that
are not includible in the gross income of the Participant under Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457, of the Code and Employee contributions
described in Section 414(h)(2) of the Code that are treated as Employer
Contributions. The determination of compensation shall be made by excluding
(even if includible in gross income) reimbursements or other expense
allowances, fringe benefits (cash or noncash), moving expenses, deferred
compensation and welfare benefits. For any Plan Year beginning after December
31, 1988, Compensation in excess of the Compensation Limit, as defined herein,
shall be disregarded.
1.9 "COMPENSATION LIMIT" means the maximum amount of Compensation
taken into account under the Plan for any Plan Year as set forth in Section
401(a)(17) of the Code and as may be adjusted by the Secretary of Treasury to
reflect increases in the cost of living. In addition to other applicable
limitations set forth in the Plan, and notwithstanding any other provision of
the Plan to the contrary, for Plan Years beginning on or after July 1, 1994,
the annual Compensation of each Employee taken into account under the Plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for increases
in the cost of living in accordance with Section 401(a)(17)(B) of the Code.
The cost of living adjustment in effect for a calendar year applies to any
period, not
11
- 6 -
exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12. For Plan Years
beginning on or after July 1, 1994, any referenced in this Plan to the
limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
For purposes of this Section, the rules of Section 414(q)(6) of the
Code 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 19 before the end of the year. If, as a
result of the application of such rules, the adjusted Compensation Limit is
exceeded, then the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as determined under this
Section prior to the application of this limitation.
12
- 7 -
1.10 "COMPANY" means LSI Industries Inc., an Ohio corporation, its
corporate successors and any corporation into which it is merged or
consolidated.
1.11 "EFFECTIVE DATE" means July 1, 1989 for purposes of any
provisions of this amendment and restatement that are required to comply with
the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986, the
Omnibus Budget Reconciliation Act of 1987, the Technical and Miscellaneous
Revenue Act of 1988, and the Omnibus Budget Reconciliation Act of 1989 and all
subsequent legislation. For purposes of the merger of the Prior Pension Plan
into the Profit Sharing Plan, the Effective Date shall mean June 30, 1995. For
all other purposes, the Effective Date of this amendment and restatement shall
mean July 1, 1995, unless specifically provided otherwise.
1.12 "ELIGIBILITY DATE" means, with respect to any Employee, the
earliest date on which the Employee may become a Participant pursuant to
Article 3.
1.13 "EMPLOYEE" means any person who is employed by an Employer,
including for all Plan purposes except participating in the Plan and sharing in
Employer Contributions, any "leased employee," as defined below, except that
the term shall not include any person who renders service to an Employer solely
as a director or an independent contractor or any person covered by a
collective bargaining agreement unless such agreement specifically provides for
coverage under the Plan.
13
- 8 -
1.14 "EMPLOYER" means the Company and any Related Corporation which
adopts the Plan, as provided in Section 16.1, so long as such Related
Corporation has not withdrawn from the Plan.
1.15 "EMPLOYER CONTRIBUTION" means an amount contributed to the
Plan by an Employer in accordance with the provisions of Section 6.1, which
shall include such Employer's Annual Employer Contribution and Profit Sharing
Contribution as described therein.
1.16 "EXCESS COMPENSATION" means the portion, if any, of
compensation for a Plan Year that exceeds the Taxable Wage Base. Taxable Wage
Base means for any Plan Year, the maximum amount of earnings at the beginning
of such year which may be considered wages for such year under Section
3121(a)(1) of the Code.
1.17 "401(K) CONTRIBUTION" means, with respect to a Participant,
the percentage of Compensation by which such Participant has elected to have
his earnings reduced in accordance with the provisions of Section 5.1.
1.18 "HIGHLY COMPENSATED EMPLOYEE" means an Employee or former
Employee who is a highly compensated active employee or highly compensated
former employee as defined hereunder. A "highly compensated active employee"
includes any Employee who performs services for an Employer during the
determination year and who (i) was a 5% owner at any time during the
determination year or the look-back year; (ii) received Compensation from an
Employer during the look-back year in excess of $75,000 (subject to adjustment
annually at the same time and in the same manner as under Section 415(d) of the
Code; the amount for 1995 is $100,000);
14
- 9 -
(iii) was in the top-paid group of employees for the Plan Year and received
Compensation from an Employer during the look-back year in excess of $50,000
(subject to adjustment annually at the same time and in the same manner as
under Section 415(d) of the Code; the amount for 1995 is $66,000); (iv) was an
officer of an Employer during the look-back year and received Compensation
during that year in excess of 50% of the dollar limitation in effect for that
year under Section 415(b)(1)(A) of the Code or, if no officer received
Compensation in excess of that amount for the look-back year or the
determination year, received the greatest Compensation for the look-back year
of any officer; or (v) was one of the 100 employees paid the greatest
Compensation by an Employer for the determination year and would be described
in (ii), (iii), or (iv) above if the term "determination year" were substituted
for "look-back year". A "highly compensated former employee" includes any
Employee who separated from service with the Employer (or is deemed to have
separated from service with the Employer) prior to the determination year,
performed no services for an Employer 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 date the Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top-paid
group, the 100 employees receiving the greatest Compensation from an Employer,
the number of employees treated as officers, and the Compensation considered,
shall be made in
15
- 10 -
accordance with the provisions of Section 414(q) of the Code and regulations
issued thereunder. For purposes of this definition, the following terms shall
have the following meanings:
(a) The "determination year" means the Plan Year.
(b) The "look-back year" means the 12-month period
immediately preceding the determination year.
1.19 "HOUR OF SERVICE" means, with respect to any person, an hour
which is determined and credited as such in accordance with the provisions of
Article 2.
1.20 "INVESTMENT FUND" means any separate investment trust fund
maintained by the Trustee for the Plan and referred to in Section 9.1.
1.21 "LEASED EMPLOYEE" means any person (other than an Employee)
who pursuant to an agreement between the Employer and any other person
("leasing organization") has performed services for the Employer (or for the
Employer and related persons determined in accordance with Section 414(n)(6) of
the Code) on a substantially full-time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the Employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to services
performed for the Employer shall be treated as provided by the Employer. A
Leased Employee shall not be considered an Employee of the Employer if: (a)
such Employee is covered by a money purchase pension plan providing: (i) a
nonintegrated Employer contribution rate of at least 10% of
16
- 11 -
Compensation, as defined in Section 415(c)(3) of the Code, but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Sections 125, 402(a)(8),
402(h) or 403(b) of the Code, (ii) immediate participation, and (iii) full and
immediate vesting; and (b) Leased Employees do not constitute more than 20% of
the Employer's Employees who are not Highly Compensated Employees.
1.22 "PARTICIPANT" means a person who becomes eligible to
participate in the Plan in accordance with the provisions of Article 3, and
whose participation has not been terminated.
1.23 "PLAN" means this LSI Industries Inc. Retirement Plan.
1.24 "PLAN ADMINISTRATOR" means the individual or committee
designated by the Company as Administrator of the Plan, but if there is no
individual or committee specifically designated, the Company shall be the
Administrator. This is the administrator for purposes of the Act and the plan
administrator for purposes of the Code.
1.25 "PLAN QUARTER" means each calendar quarter.
1.26 "PLAN YEAR" means the 12-month period which ends on June 30 of
each year; provided, that the term shall not include any such 12-month period
which ended prior to the Effective Date of the Plan.
1.27 "PROFIT SHARING CONTRIBUTION" means the amount contributed to
the Plan by the Employer in accordance with the provisions of Section 6.1 of
the Plan.
17
- 12 -
1.28 "RELATED CORPORATION" means any corporation, other than an
Employer, which is a member of a controlled group of corporations of which an
Employer is a member as determined under Section 1563(a) of the Code, without
regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of the Code, any trade
or business (whether or not incorporated) which is a member of a group under
common control with the Company as determined under Section 414(c) of the Code,
any organization, other than the Company, which is a member of an affiliated
service group of which the Company is also a member as determined under Section
414(m) of the Code and any entity, other than the Company, which is required to
be aggregated with an Employer pursuant to regulations under Section 414(o) of
the Code.
1.29 "ROLLOVER CONTRIBUTION" means an amount contributed to the
Plan by a Participant in accordance with the provisions of Section 7.1.
1.30 "SEPARATE ACCOUNT" means any of the accounts maintained by the
Trustee in the name of a Participant in the Trust, and shall include his Profit
Sharing Contributions Account, his 401(k) Account, his Rollover Account, and
his Annual Employer Contributions Account.
1.31 "TRUST" means the Trust originally established on July 1, 1977
for the Profit Sharing Plan of LSI Industries Inc. and on July 1, 1980 for the
Pension Plan of LSI Industries Inc., as currently maintained under this
Agreement. The Trust shall include each
18
- 13 -
Investment Fund and the Trust is called the "LSI Industries Inc. Retirement
Trust".
1.32 "TRUSTEE" means The Fifth Third Bank, an Ohio Banking
Corporation, or any successor trustee which at the time shall be designated,
qualified, and acting hereunder.
1.33 "VALUATION DATE" means the last day of each Plan Quarter and
such additional dates as may be fixed by the Administrator for the valuation of
the Trust fund.
The masculine pronoun wherever used herein shall include the feminine
in any case so requiring.
---------------------
End of Article 1
19
- 14 -
ARTICLE 2
HOURS OF SERVICE
2.1 GENERAL RULE. An "Hour of Service" with respect to any
person means the following:
(a) each hour for which he is paid, or entitled to
payment, for the performance of duties for an Employer or a Related
Corporation during the applicable computation period; provided,
however, that hours paid for at a premium rate shall be treated as
straight-time hours;
(b) subject to the provisions of Section 2.2, each hour
for which he is paid, or entitled to payment, by an Employer or a
Related Corporation on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty,
or leave of absence; and
(c) each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by an Employer or a Related
Corporation; provided, however, that the same Hour of Service shall
not be credited both under subsections 2.1(a) or 2.1(b), as the case
may be, and under this subsection 2.1(c); and provided, further, that
the crediting of Hours of Service for back pay awarded or agreed to
with respect to periods described in such subsection 2.1(b) shall be
subject to the limitations set forth therein and in Section 2.2.
Notwithstanding the foregoing and solely for purposes of determining whether a
person, who is absent from employment with an Employer or a Related Corporation
(i) by reason of the person's pregnancy; (ii) by reason of the birth of the
person's child; (iii) by reason of the placement of a child with the person in
connection with the person's adoption of the child; or (iv) for purposes of
caring for such child during the period immediately following birth or
adoption, has incurred a Break in Service, Hours of Service shall include those
hours with which such person would
20
- 15 -
otherwise have been credited but for such absence, or shall include eight Hours
of Service for each day of absence if the actual hours to be credited cannot be
determined; except that not more than 501 hours are to be credited by reason of
any such pregnancy, birth, placement or period of such child care. Any hours
included as Hours of Service pursuant to the immediately preceding sentence
shall be credited to the computation period in which the absence from
employment begins, if such person otherwise would incur a Break in Service in
such computation period, or in any other case, to the immediately following
computation period; except that no such credit will be given unless the person
furnishes to the Plan Administrator such timely information as may reasonably
be required to establish that the absence from employment was for one of the
reasons enumerated in the immediately foregoing sentence, and the number of
days for which there was such an absence.
2.2 LIMITATIONS APPLICABLE TO SUBSECTION 2.1(B). In the
application of the provisions of subsection 2.1(b), the following provisions
shall apply:
(a) No more than 501 Hours of Service shall be credited
under such subsection 2.1(b) to a person on account of any single
continuous period during which he performs no duties (whether or not
such period occurs in a single computation period).
(b) An hour for which a person is directly or indirectly
paid, or entitled to payment, on account of a period during which no
duties are performed shall not be credited to him if such payment is
made or due under a plan maintained solely for the purpose of
complying with applicable Workers' Compensation, unemployment
compensation, or disability insurance laws.
21
- 16 -
(c) Hours of Service shall not be credited with respect
to a payment which solely reimburses a person for medical or medically
related expenses incurred by him.
(d) For purposes of such subsection 2.1(b), a payment
shall be deemed to be made by or due from an Employer or a Related
Corporation (i) regardless of whether such payment is made by or due
from such employer directly or indirectly, through (among others) a
trust fund or insurer to which any such employer contributes or pays
premiums, and (ii) regardless of whether contributions made or due to
such trust fund, insurer, or other entity are for the benefit of
particular persons or are on behalf of a group of persons in the
aggregate.
2.3 DETERMINATION OF HOURS OF SERVICE UNDER SUBSECTION 2.1(B). In
the case of a payment which is made or due on account of a period during which
a person performs no duties, and which results in the crediting of Hours of
Service under subsection 2.1(b), or in the case of an award or agreement for
back pay, to the extent that such award or agreement is made with respect to a
period described in such subsection 2.1(b), the number of Hours of Service to
be credited shall be determined in accordance with the following provisions:
(a) Except as provided in subsection 2.3(d), in the case
of a payment made or due which is calculated on the basis of units of
time, such as hours, days, weeks, or months, the number of Hours of
Service to be credited shall be the number of regularly scheduled
working hours included in the units of time on the basis of which the
payment is calculated. For purposes of the preceding sentence, in the
case of a person without a regular work schedule, the number of hours
to be credited shall be calculated on the basis of a 40-hour workweek
and an eight-hour workday.
(b) Except as provided in such subsection 2.3(d), in the
case of a payment made or due which is not calculated on the basis of
units of time, the number of Hours of Service to be credited shall be
equal to the amount of the payment divided by the person's most recent
hourly rate of compensation (as determined under subsection 2.3(c))
before the period during which no duties are performed.
22
- 17 -
(c) For purposes of subsection 2.3(b) a person's
hourly rate of compensation shall be determined in accordance
with the following provisions:
(i) In the case of a person whose compensation is
determined on the basis of an hourly rate, such hourly rate
shall be such person's most recent hourly rate of
compensation.
(ii) In the case of a person whose compensation is
determined on the basis of a fixed rate for specified periods
of time (other than hours) such as days, weeks, or months,
such person's hourly rate of compensation shall be his most
recent rate of compensation for a specified period of time
(other than an hour), divided by the number of hours regularly
scheduled for the performance of duties during such period of
time. For purposes of the preceding sentence, in the case of
a person without a regular work schedule, such person's hourly
rate of compensation shall be calculated on the basis of a
40-hour workweek and an eight-hour workday.
(iii) In the case of a person whose compensation is
not determined on the basis of a fixed rate for specified
periods of time, such person's hourly rate of compensation
shall be the lowest hourly rate of compensation paid to
persons in the same job classification as that of such person
or, if no one in the same job classification has an hourly
rate, the minimum wage as established from time to time under
Section 6(a)(1) of the Fair Labor Standards Act of 1938, as
amended.
(d) Notwithstanding the provisions of subsections 2.3(a)
and 2.3(b), a person shall not be credited on account of a period
during which no duties are performed with a number of Hours of Service
which is greater than the number of hours regularly scheduled for the
performance of duties during such period. For purposes of applying
the preceding sentence in the case of a person without a regular work
schedule, the number of Hours of Service to be credited to such person
for a period during which no duties are performed shall be calculated
on the basis of a 40-hour workweek and an eight-hour workday.
2.4 CREDITING OF HOURS OF SERVICE TO COMPUTATION PERIODS.
Hours of Service determined under Section 2.1 shall be credited to
23
- 18 -
the appropriate computation period in accordance with the following provisions:
(a) Hours of Service described in subsection 2.1(a) shall
be credited to the computation period in which the duties are
performed.
(b) Hours of Service described in subsection 2.1(b) shall
be credited as follows:
(i) Hours of Service credited to a person on
account of a payment which is calculated on the basis of units
of time, such as hours, days, weeks, or months, shall be
credited to the computation period or periods in which the
period during which no duties are performed occurs, beginning
with the first unit of time to which the payment relates; and
(ii) Hours of Service credited to a person on
account of a payment which is not calculated on the basis of
units of time shall be credited to the computation period in
which the period during which no duties are performed occurs,
or, if the period during which no duties are performed extends
beyond one computation period, such Hours of Service shall be
allocated equally between the first two such computation
periods.
(c) Hours of Service described in subsection 2.1(c) shall
be credited to the computation period or periods to which the award or
agreement for back pay pertains, rather than to the computation period
in which the award, agreement, or payment is made.
(d) Notwithstanding the provisions of this Section 2.4,
in the case of Hours of Service to be credited to a person in
connection with a period of no more than 31 days which extends beyond
one computation period, all such Hours of Service shall be credited to
the second such computation period.
2.5 "COMPUTATION PERIOD". For purposes only of this Article 2,
a "computation period", with respect to the determination of an Employee's
years of vested service and with respect to the determination of a person's
years of service for purposes of eligibility shall mean the 12-month period
commencing
24
- 19 -
on the first date he completes an Hour of Service and each anniversary date
thereafter.
---------------------
End of Article 2
25
- 20 -
ARTICLE 3
EMPLOYEE PARTICIPATION
3.1 PARTICIPATION. Each Employee who was a Participant on July
1, 1989 and on June 30, 1995, shall continue as a Participant hereunder. Each
other Employee shall become a Participant on the earliest Eligibility Date
occurring on or after July 1, 1995, on which he has attained age 21 and has
completed one year of service.
3.2 ELIGIBILITY DATES. An Employee shall become a Participant as
of the January 1 or July 1 coinciding with or next following the first date on
which the Employee has satisfied the age and service eligibility requirements
specified in Section 3.1. In addition, an Employee is eligible to make 401(k)
Contributions pursuant to Section 5.1 as of January 1, April 1, July 1 or
October 1 upon satisfying such eligibility requirements.
3.3 ELECTION RELATING TO 401(K) CONTRIBUTIONS. During the month
prior to which a Participant has satisfied the eligibility requirements
specified in Section 3.1, but not in any event effective prior to the January 1
or July 1 as of which he becomes a Participant, such Participant may file with
the Committee a written election with respect to a Compensation reduction
authorization on a form prescribed by the Committee, which authorizes his
Employer to make 401(k) Contributions on his behalf in accordance with the
provisions of Section 5.1, effective for the first payroll period ending on or
after the January 1, April 1, July 1, or October 1 first following receipt of
such election by the Committee, as the case may be.
26
- 21 -
3.4 YEARS OF SERVICE. For the purpose only of applying the
eligibility requirements set forth in Section 3.1, years of service shall be
determined in accordance with the following provisions:
(a) An Employee will be credited with a year of service
if, as of the end of the 12-month period commencing on the first date
he completes an Hour of Service, he has completed at least 1,000 Hours
of Service. If an Employee fails to complete 1,000 Hours of Service
during this 12-month period, he will be credited with a year of
service for each 12-month period beginning on the anniversary date of
his employment commencement date during which he completes at least
1,000 Hours of Service. He shall be credited with an additional year
of service for each 12-month period in which he completes at least
1,000 Hours of Service.
(b) In the case of an Employee who has a Break in Service,
(i) if an Employee did not have a vested right to
any portion of any Employer derived Separate Account before
his Break in Service commenced, his years of service prior to
the Break in Service shall be disregarded for purposes of
determining his eligibility if the number of his consecutive
Breaks in Service equals or exceeds the greater of five or the
aggregate number of years of service such Employee had before
his Break in Service commenced; and
(ii) if his years of service are not excluded
under (i) above or if he had a vested right to any portion of
any Employer derived Separate Account before his Break in
Service commenced, his years commenced will be reinstated upon
his again completing an Hour of Service as an Employee.
3.5 REEMPLOYMENT AFTER BREAK IN SERVICE. If an Employee who
incurs a Break in Service after his employment is terminated is thereafter
reemployed as an Employee, and if his years of service prior to such Break in
Service are reinstated under subsection 3.4(b)(ii), he shall become a
Participant or again become a Participant, as the case may be, on the date such
service is reinstated. If a former Employee who incurs a Break in Service
27
- 22 -
after his employment is terminated is thereafter reemployed as an
Employee, and if he does not become a Participant immediately upon his
completing an Hour of Service as an Employee in accordance with the
preceding provisions of this Section 3.5, he shall become a Participant or
again become a Participant, as the case may be, on the earliest Eligibility
Date indicated in Section 3.2 with respect to which he meets the eligibility
requirements indicated in Section 3.1 on his period of reemployment.
3.6 CERTIFICATION OF NEW PARTICIPANTS. As soon as
practicable after each Eligibility Date, each Employer shall transmit to the
Company, the Trustee, and the Committee a certified list of all Employees
becoming Participants on such date. Each Employee so certified shall be
notified of such fact by his Employer. Upon becoming a Participant hereunder,
an Employee shall become entitled to the benefits under the Plan and shall be
bound by all provisions of this Agreement.
3.7 CHANGES IN EMPLOYMENT STATUS; TRANSFERS OF EMPLOYMENT.
If a Participant ceases to be an Employee but continues in the employment of
(i) an Employer in some other capacity, or (ii) a Related Corporation, he shall
nevertheless continue as a Participant until his participation is otherwise
terminated in accordance with the provisions of this Agreement; provided,
however, that such Participant shall share in any Employer Contributions for
any Plan Year of such participation only to the extent and on the basis of his
Compensation for services as an Employee or on the basis of 401(k)
Contributions made on his behalf
28
- 23 -
during such Plan Year, as the case may be; and provided, further, that no
401(k) Contributions shall be made on behalf of such Participant in accordance
with the terms of his Compensation reduction authorization except on the basis
of his Compensation for services as an Employee during such Plan Year.
Moreover, if a person is transferred directly from employment (i) with an
Employer as an Employee or (ii) with a Related Corporation, to employment with
an Employer as an Employee, his service with such Employer or such Related
Corporation shall be included in determining his eligibility under Section 3.1.
-----------------
End of Article 3
29
- 24 -
ARTICLE 4
BENEFICIARIES
4.1 DESIGNATION OF BENEFICIARY. In the case of a Participant or
former Participant who is not married, the Beneficiary to whom distribution
shall be made hereunder in the event such Participant or former Participant
dies before his interest shall have been distributed to him in full shall be
such person or persons as designated by the Participant or former Participant.
In the case of a Participant or former Participant who is married, the
Beneficiary to whom distribution shall be made hereunder in the event such
Participant or former Participant dies before his interest shall have been
distributed to him in full shall be his surviving spouse, if any, or
alternately such person or persons as designated by the Participant or former
Participant, provided that such designation has been consented to in writing by
the surviving spouse, if any, of such Participant or former Participant. To be
effective, any such consent must acknowledge the effect of such action and be
witnessed by a notary public or a Plan representative, unless a Plan
representative finds that such consent cannot be obtained because the spouse
cannot be located or because of other circumstances set forth in Section
417(a)(2) of the Code and regulations issued thereunder. A designation of
Beneficiary hereunder may be changed at any time and from time to time by the
Participant or former Participant, provided that such change of designation has
been consented to in the manner described above by the surviving spouse, if
any, of such Participant or
30
- 25 -
former Participant. Any such designation or change of designation, with
spousal consent when necessary, shall be made in writing in the form prescribed
by the Committee, and shall become effective only when filed by the Participant
or former Participant with the Committee; provided, however, that any such
designation or change of designation which is received by the Committee after
the death of the Participant or former Participant shall be disregarded.
4.2 BENEFICIARY IN ABSENCE OF DESIGNATION. If a deceased
Participant or former Participant has no surviving spouse, and if either no
Beneficiary for such Participant or former Participant shall have been
designated or all those designated as his Beneficiary shall have died prior to
the death of such Participant or former Participant, then the Beneficiary shall
be the estate of such Participant or former Participant. If any Beneficiary
shall die after becoming entitled to receive distribution hereunder and before
such distribution is made in full, and if no other person or persons shall have
been designated to receive the balance of such distribution upon the happening
of such contingency, the estate of such deceased Beneficiary shall become the
Beneficiary as to such balance.
-----------------
End of Article 4
31
- 26 -
ARTICLE 5
CONTRIBUTIONS MADE ON BEHALF OF PARTICIPANTS
5.1 401(K) CONTRIBUTIONS. Commencing with the first payroll
period with respect to which Participant has made an election described in
Section 3.3, each Participant may elect to have a 401(k) Contribution made to
the Plan by his Employer which shall be a whole percentage of his Compensation
of not less than 1% nor more than 12%; provided, however, that the 401(k)
Contribution to be made on behalf of a Participant shall not, when aggregated
with all other elective deferrals made on behalf of the Participant under any
other plan, contract, or arrangement of an Employer or a Related Corporation
exceed the "applicable limit" for the Participant's taxable year beginning in
the calendar year. The "applicable limit" for a Participant's taxable year
beginning the 1987 calendar year is $7,000 and for each subsequent calendar
year is an adjusted amount established by the Secretary of Treasury pursuant to
Section 402(g)(5) of the Code. For 1995, the amount of the applicable limit is
$9,240. In the event a Participant elects to have his Employer make any 401(k)
Contribution on his behalf, the Compensation of such Participant shall be
reduced for each payroll period by the percentage he elected to have
contributed on his behalf to the Plan in accordance with the terms of the
Compensation reduction authorization in effect for such Participant pursuant to
this Section 3.1 and Section 3.3 or Section 5.3, as the case may be, except
that if the Company determines that a Compensation reduction authorization by a
Participant will result
32
- 27 -
in his exceeding the annual limitation described above, the Company shall
adjust the Compensation reduction authorization of such Participant to such
smaller percentage as will result in the annual limitation not being exceeded.
Notwithstanding any other provision in this Agreement to the contrary, no
401(k) Contributions made with respect to a Plan Year on behalf of Participants
who are Highly Compensated Employees shall result in an average actual deferral
percentage for such Participants which exceeds the greater of:
(a) a percentage which is equal to 125% of the average
actual deferral percentage for all other Participants; or
(b) a percentage which is not more than 200% of the
average actual deferral percentage for all other Participants and
which is not more than two percentage points higher than the average
actual deferral percentage for all other Participants.
The Company shall adjust as required the projected actual deferral percentages
of Highly Compensated Employees by reducing such percentages in order,
beginning with the highest of such percentages, to such smaller percentages
that will result in the limits set forth above not being exceeded. The Company
shall then adjust the Compensation reduction authorizations of affected Highly
Compensated Employees to reflect the adjustment made to their actual deferral
percentages. For purposes of this Section 5.1, the following terms shall have
the following meanings:
(c) The term "Compensation" means Compensation as defined
in Section 414(s) of the Code, including any amount contributed by the
Employers pursuant to a salary reduction agreement that is not
includible in the gross income of an Employee under Sections 125,
402(a)(8), 402(h), or 403(b) of the Code.
33
- 28 -
(d) The term "actual deferral percentage" with respect to
a Participant for a Plan Year means the ratio of the 401(k)
Contributions made on his behalf with respect to the Plan Year to his
Compensation for such Plan Year.
(e) The term "Family Member" with respect to a
Participant means the Participant's spouse, his lineal ascendants, his
lineal descendants, and the spouses of such lineal ascendants and
descendants.
For purposes of applying the limitation contained in this Section 5.1, the
401(k) Contributions and Compensation of any Participant who is a Family Member
of a Participant who is (i) 5.1 a 5% owner or (ii) among the ten Highly
Compensated Employees receiving the greatest Compensation for the Plan Year,
shall be aggregated with the 401(k) Contributions and Compensation of such 5%
owner or Highly Compensated Employee Participant, and such Family Member shall
not be considered a Participant for purposes of determining the average actual
deferral percentage for all other Participants.
5.2 ADMINISTRATION AND LIMITATION. Each Employer shall cause to
be delivered to the Trustee all 401(k) Contributions made in accordance with
the provisions of Section 5.1 as soon as reasonably practicable, but not later
than 30 days after the last day of the calendar month in which ends the payroll
period with respect to which such 401(k) Contributions are made; provided,
however, that each Employer's Contribution hereunder for any Plan Year shall
not exceed the limitation specified in Section 6.3. Subject to the provisions
of Article 8, the Trustee shall credit the amount of 401(k) Contributions made
by each Employer on behalf of a Participant to such Participant's 401(k)
Account as soon as administratively practical but, not later than the last day
of the
34
- 29 -
Plan Quarter in which the payroll period with respect to which they are made
ends.
5.3 CHANGES IN REDUCTION AUTHORIZATIONS. A Participant may change
the percentage of his Compensation which he causes to be contributed on his
behalf as 401(k) Contributions as of any January 1, April 1, July 1 or October
1 by filing an amended Compensation reduction authorization with the Personnel
Department during the preceding month. A Participant shall continue to be
limited to selecting a percentage of his Compensation of not less than 1% nor
more than 12%. The 401(k) Contributions shall be made on behalf of such
Participant by his Employer, pursuant to the amended Compensation reduction
authorization filed in accordance with the foregoing provisions of this Section
5.3, commencing with the first payroll period for which such filing becomes
effective, until otherwise altered or terminated in accordance with this
Agreement.
5.4 SUSPENSION OF CONTRIBUTIONS. Any Participant for whom 401(k)
Contributions are being made under this Article 5 may have such contributions
suspended at any time by giving at least 15 days advance written notice to the
Personnel Department, unless the Personnel Department shall accept as adequate
shorter notice. Any suspension which results in the cessation of 401(k)
Contributions shall take effect no later than with the first payment of
Compensation to such Participant following the expiration of the 15-day notice
period and shall remain in effect until 401(k) Contributions are resumed as
hereinafter set forth, but in no event
35
- 30 -
sooner than six months after such cessation. Any Participant who has suspended
his 401(k) Contributions in accordance with the foregoing provisions of this
Section 5.4 may have such contributions resumed as of the first payroll period
ending on or after January 1, April 1, July 1, or October 1 first following
receipt of a new Compensation reduction authorization by the Personnel
Department only by filing such Compensation reduction authorization with the
Committee in the preceding month.
5.5 DISTRIBUTION OF EXCESS CONTRIBUTIONS. Notwithstanding any
other provision of this Agreement to the contrary, in the event that the
limitation contained in Section 5.1 is exceeded in any Plan Year, the excess
401(k) Contributions with respect to a Highly Compensated Employee, plus any
allocable income for the Plan Year, shall be charged against his interest in
the various Investment Funds in which such amounts are invested in accordance
with procedures adopted by the Committee and shall be distributed to the Highly
Compensated Employee prior to the end of the succeeding Plan Year. The income
allocable to excess 401(k) Contributions shall be determined by multiplying the
gain or loss allocable for the Plan Year to the 401(k) Contributions made on
behalf of the Participant by a fraction the numerator of which is the amount of
the Participant's excess 401(k) Contributions and the denominator of which is
the sum of (a) the balance of the Participant's 401(k) Account as of the
beginning of the Plan Year, plus (b) the 401(k) Contributions made on behalf of
the Participant for the Plan Year. For purposes of this Section 5.5, "excess
401(k) Contributions"
36
- 31 -
with respect to a Highly Compensated Employee means the excess of the 401(k)
Contributions made on his behalf over the maximum amount permitted to be
contributed on his behalf under Section 5.2, determined by reducing 401(k)
Contributions made on behalf of Highly Compensated Employees in order of their
actual deferral percentages beginning with the highest of such percentages.
The amount of excess 401(k) Contributions for a Plan Year shall be reduced by
any excess deferrals as defined in Section 5.6 previously distributed to the
Highly Compensated Employee for the Highly Compensated Employee's taxable year
ending with or within such Plan Year.
5.6 DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding anything to
the contrary contained in the Agreement, in the event that a Participant
notifies the Company in writing no later than the first of March following the
close of his taxable year that excess deferrals have been made on his behalf
under the Plan for such taxable year, such excess amounts, plus any income
allocable for the taxable year, shall be charged against his interest in the
various Investment Funds in which such amounts are invested in accordance with
procedures adopted by the Committee and shall be distributed to the Participant
no later than the April 15 immediately following such taxable year. For
purposes of this Section 5.6, "excess deferrals" means that portion of a
Participant's 401(k) Contributions that, when added to amounts deferred under
other plans or arrangements described in Sections 401(k), 408(k) or 403(b) of
the Code, would exceed the limit
37
- 32 -
imposed on the Participant under Section 402(g) of the Code for the taxable
year of the Participant in which the 401(k) Contributions were made. In the
event that a Participant's aggregate elective deferrals under all plans of the
Employers and all Related Corporations exceed the applicable limit under
Section 402(g) of the Code for the taxable year, the Participant, no later than
the first March 1 following the close of such taxable year shall be deemed to
have designated the allocation of the excess deferrals among the Plan and any
other plan of an Employer or a Related Corporation under which the elective
deferrals occurred and shall be deemed to have notified each plan of the
portion allocated to it, which shall be the excess deferrals multiplied by a
fraction the numerator of which is the Participant's elective deferrals for the
taxable year under the plan and the denominator of which is the Participant's
elective deferrals for the taxable year, and the Company, not later than the
first April 15 following the close of the taxable year, shall direct
distribution to the Participant of the amount of the excess elective deferrals
allocated to the Plan and any income allocable thereto for the taxable year;
provided, however, that any such distributed excess deferrals shall
nevertheless be taken into account for purposes of computing deferral
percentages for the Plan Year in which made under Section 5.1, but with respect
only to Highly Compensated Employees. The income allocable to excess deferrals
under the Plan shall be determined in the manner set forth in Section 5.5, but
substituting "taxable year" for Plan Year and "excess deferrals" for excess
401(k)
38
- 33 -
Contributions and deleting references to amounts other than elective
deferrals which have been treated as elective contributions for purposes of
Section 5.1. The amount of excess deferrals for a taxable year under this
Section 5.6 shall be reduced by any excess 401(k) Contributions as defined in
Section 5.5 previously distributed with respect to the Participant for the Plan
Year beginning with or within such taxable year.
-----------------
End of Article 5
39
- 34 -
ARTICLE 6
OTHER EMPLOYER CONTRIBUTIONS
6.1 AMOUNT OF CONTRIBUTIONS. Each Employer shall contribute for
each Plan Year beginning on or after July 1, 1994, an amount equal to the sum
of:
(a) Four percent of Compensation plus four percent of
Excess Compensation for such Plan Year paid by such Employer to each
Participant included on the list described in Section 10.1 for such
Plan Year (such amount being hereinafter referred to as the "Annual
Employer Contribution"); and
(b) Such additional amount, if any, as the Board of
Directors of the Company shall determine in its sole discretion by
action specifying the amount of such contribution and the Plan Year
for which it is being made (such amount being hereinafter referred to
as such Employer's "Profit Sharing Contribution"). The Company may
establish separate discretionary "Contribution Pools" for separate
business locations. Profit Sharing Contributions to each of the
"Contribution Pools" are discretionary and determined separately each
year by the Board of Directors.
6.2 PAYMENT OF CONTRIBUTIONS. All Employer Contributions for any
Plan Year shall be paid in cash to the Trustee. All Employer Contributions for
such Plan Year, regardless of when actually paid, shall, for all purposes of
this Agreement, be deemed to have been made on the last day of such Plan Year.
Upon receipt of any such Employer Contribution, the Trustee shall deposit the
same in the Investment Funds as further described in Section 8.1.
6.3 LIMITATION ON AMOUNT. Notwithstanding anything to the
contrary contained in this Agreement, the total contribution of any Employer
for any Plan Year, including 401(k) Contributions made on behalf of Employees,
shall in no event exceed (i) the maximum amount which will constitute an
allowable deduction for such year
40
- 35 -
to such Employer under Section 404 of the Code, (ii) the maximum amount which
may be contributed by such Employer under Section 415 of the Code, or (iii) the
maximum amount which may be contributed pursuant to any wage stabilization law,
or any regulation, ruling, or order issued pursuant to law.
6.4 PROFIT-SHARING PLAN. An Employer may contribute to the Plan
without regard to current or accumulated earnings and profits for the taxable
year or years ending with or within the Plan Year. Notwithstanding the
foregoing, the Plan shall continue to be designed to qualify as a profit
sharing plan under the Code.
6.5 FINALITY OF DETERMINATION. The Company shall have exclusive
responsibility with respect to determining the amount of Profit Sharing
Contributions and, upon determining the amount of the contribution to be made
by each Employer for a Plan Year, shall transmit to the Trustee and to the
Committee a written statement of the amount thereof, together with a
certification by an authorized officer of the Company certifying to the
correctness thereof. A determination so made and certified shall be final and
conclusive upon all Employers, the Trustee, the Committee, and all
Participants, former Participants, and beneficiaries.
6.6 EFFECT OF PLAN TERMINATION. Notwithstanding anything to the
contrary contained in this Agreement, a termination of the Plan by the Company
shall operate as a termination of the liability of the Company and all other
Employers to make further contributions hereunder; and a termination of the
Plan as to any Employer shall operate as a termination of the liability of such
Employer to make
41
- 36 -
further contributions hereunder; provided, however, that no such termination
shall relieve any Employer of its obligation to pay contributions hereunder for
Plan Years ended prior to the date of any such termination.
-----------------
End of Article 6
42
- 37 -
ARTICLE 7
ROLLOVER CONTRIBUTIONS
7.1 ROLLOVER CONTRIBUTIONS. A Participant who prior to his
employment with an Employer was a participant in a plan maintained by a
previous employer and qualified under Section 401 of the Code and who receives
a distribution from such plan that he either elects (i) to roll over
immediately to a qualified retirement plan or (ii) to roll over into a conduit
XXX from which he receives a later distribution, may elect to make a Rollover
Contribution to the Plan if he is entitled under Section 402 of the Code to
roll over such distribution to another qualified retirement plan. The
Committee shall establish procedures for determining whether a particular
distribution meets the requirement to be accepted as a Rollover Contribution
hereunder, and all Rollover Contributions shall be made subject to any such
procedures. A Participant shall make a Rollover Contribution to the Plan by
delivering, or causing to be delivered, to the Trustee the Rollover
Contribution amount within 60 days of receipt of the distribution from the plan
or from the conduit XXX in such manner as shall be specified by the Committee.
The Plan will only accept rollovers in an amount of $3,500 or more.
7.2 ADMINISTRATION. Notwithstanding anything to the contrary
contained in the Agreement, all Rollover Contributions received by the Trustee
shall be held and administered by the Trustee in accordance with the provisions
of this Article 7. Upon receipt of any Rollover Contribution, the Trustee
shall credit the Rollover
43
- 38 -
Account of the Participant to whom it is attributable with the fair market
value of the Rollover Contribution on such date (except that for purposes only
of subsection 10.4(c), with respect to the first valuation following such
deposit, only a portion of such amount shall be taken into consideration, which
portion shall be determined by multiplying such amount by a fraction, the
numerator of which is the number of days remaining in the valuation period
after such amount is credited to his Rollover Account and the denominator of
which is the number of days in the valuation period), and such Rollover
Contribution shall be deposited in the Investment Funds as further described in
Section 8.1. The determination of the fair market value of the Rollover
Contribution shall be made by the Trustee, subject to the provisions of Section
10.4. The Participant's interest in his Rollover Account shall at all time be
fully vested.
7.3 ROLLOVER CONTRIBUTIONS NOT CONSIDERED FOR CERTAIN PLAN
PURPOSES. Separate Accounts to which any Rollover Contributions have been
credited shall not be aggregated with the other Separate Accounts maintained
under the Plan for purposes of determining whether the Plan is top heavy within
the meaning of subsection 17.2(h), except that amounts contained in a Separate
Account that are attributable to any Rollover Contributions made from a Plan
maintained by an Employer or a Related Corporation shall be aggregated with the
other Separate Accounts maintained
44
- 39 -
under the Plan for purposes of determining whether the Plan is top heavy.
-----------------
End of Article 7
45
- 40 -
ARTICLE 8
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
8.1 DEPOSIT OF CONTRIBUTIONS. All Employer Contributions shall be
deposited by the Trustee in the Investment Funds in accordance with directions
received from the Committee. All 401(k) Contributions and Rollover
Contributions shall be deposited by the Trustee in accordance with directions
received from the Committee; provided, however, that the Committee's directions
shall be based upon the investment election of each Participant, former
Participant, or Beneficiary made in accordance with the provisions of Section
8.2.
8.2 INVESTMENT ELECTIONS. Each Participant, upon becoming a
Participant, shall make an investment election in the manner and form
prescribed by the Committee directing the manner in which 401(k) Contributions
and Rollover Contributions, if any, made by him or on his behalf shall be
deposited and held by the Trustee. An investment election shall specify the
percentage, in 10% increments, of such contributions that shall be invested in
one or more of the Investment Funds with the sum of such percentages equaling
100%. With respect to any person who is a Participant, former Participant, or
Beneficiary of a deceased Participant or former Participant on June 30, 1995,
the investment election he makes for the period beginning on July 1, 1995 shall
govern the investment of his existing Separate Account balances. The
investment election made by a Participant, former Participant, or Beneficiary
of a deceased Participant or former Participant shall
46
- 41 -
remain in effect until he files a change of investment election with the
Company, in such form as the Committee shall prescribe. An investment election
or change of election may be made one time during the calendar quarter
effective as soon thereafter after the receipt of the election as is
practicable. An investment election must be filed with the Company prior to
the effective date or be made by calling a toll-free number as the Committee
shall prescribe. In the event a Participant, former Participant, or
Beneficiary of a deceased Participant or former Participant changes his
investment election, amounts credited to his Separate Accounts as of the
Effective Date of the election shall be transferred between the Investment
Funds in accordance with the percentages specified in his election and future
contributions made by him or on his behalf shall be deposited in the Investment
Funds in the manner specified in such election.
-----------------
End of Article 8
47
- 42 -
ARTICLE 9
INVESTMENT FUNDS AND PARTICIPANTS' ACCOUNTS
9.1 INVESTMENT FUNDS. The Trustee shall establish one or more
Trust funds, each of which is herein referred to as an Investment Fund, to
hold and administer all of the assets of the Trust. The Company shall
determine the number and type of Investment Funds which are from time to time
to be maintained and shall notify the Committee and the Trustee in writing
concerning the same. The interest of each Participant in any Investment Fund
shall be an undivided interest.
9.2 SEPARATE ACCOUNTS. With respect to each Employee who
becomes a Participant, there may be up to five Separate Accounts maintained in
his name, as follows: (i) a Profit Sharing Contributions Account, which shall
reflect his share of Profit Sharing Contributions made with respect to Plan
Years ending prior to July 1, 1995, his share of Profit Sharing Contributions
made with respect to Plan Years ending after July 1, 1995, as well as such
account's share of net increase or decrease in value of the assets of the
Investment Funds; (ii) a 401(k) Account, which shall reflect his 401(k)
Contributions, as well as such account's share of net increase or decrease in
value of the assets of the Investment Funds; (iii) an Annual Employer
Contributions Account, which shall reflect his share of the Contributions made
to the Prior Pension Plan made with respect to Plan Years ending prior to July
1, 1995, his share of the Annual Employer Contributions made with respect to
Plan Years ending after July 1, 1995, as well as
48
- 43 -
such account's share of net increase or decrease in value of the assets of the
Investment Funds; (iv) a Rollover Account, which shall reflect his own Rollover
Contributions, as well as such account's share of net increase or decrease in
value of the assets of the Investment Funds; and (v) a Loan Account, if any,
which shall reflect any loan granted to a borrower pursuant to the terms of
Article 20. The Trustee shall cause such separate accounts to be maintained
and administered for each Participant in accordance with the provisions of this
Agreement. Sub-accounts shall be maintained under each Separate Account to
reflect separately contributions allocated to each Investment Fund established
hereunder and the earnings and losses attributable thereto. Such other
sub-accounts may be established as are necessary or appropriate to reflect a
Participant's interest in the Trust.
9.3 ACCOUNT BALANCES. For all purposes of this Agreement,
the balance of each Separate Account of a Participant as of any date shall be
the balance of each such account after all credits and charges thereto, for and
as of such date, have been made as provided in this Agreement.
-----------------
End of Article 9
49
- 44 -
ARTICLE 10
ALLOCATIONS TO ACCOUNT AND VALUATIONS
10.1 ALLOCATION OF ANNUAL EMPLOYER CONTRIBUTIONS AMONG
PARTICIPANTS. Within a reasonable time after the end of each Plan Year
commencing on or after July 1, 1994, each Employer shall certify and deliver to
the Trustee and to the Committee a list of all persons who were Participants
during the Plan Year, together with a statement of the amount of 401(k)
Contributions, if any, made on behalf of each such Participant for such Plan
Year. Notwithstanding the foregoing, such list shall not include any
Participant (i) who did not complete at least 1,000 Hours of Service during
such Plan Year, unless such Participant was reinstated as a Participant under
Section 3.5 after the first day of such Plan Year AND (ii) who was not an
Employee of an Employer as of the last day of the Plan Year. After delivery of
such list, Annual Employer Contributions for such Plan Year shall thereupon be
allocated among all Participants included on such list who were paid
Compensation for such Plan Year. Subject to the provisions of Section 10.3,
the Employer shall contribute for each Participant eligible to receive an
allocation an amount determined in accordance with the following:
(a) An amount equal to 4% multiplied by each
Participant's Compensation for that Plan Year shall be allocated to
the Annual Employer Contributions Account of each Participant.
(b) An amount equal to 4% multiplied by each
Participant's Excess Compensation for that Plan Year shall be
allocated to the Annual Employer Contributions Account of each
Participant with Excess Compensation.
50
- 45 -
As of the last day of such Plan Year, the Annual Employer Contributions Account
of each Participant shall be credited with his share of Annual Employer
Contributions as so determined. Notwithstanding the portions of this Section
10.1 which provide that Annual Employer Contributions are allocated as of the
last day of a Plan Year, the provisions of Section 6.2, and the provisions of
subsection 10.4(e), in the event a Participant's employment is terminated prior
to the last day of a Plan Year under any of the circumstances set forth in
subsections 11.1(a), 11.1(b), and 11.1(c), the amount allocable to such
Participant hereunder for such Plan Year shall be credited to his Annual
Employer Contributions Account as of the earlier of the date he receives
distribution of all amounts then credited to his Annual Employer Contributions
Account or the last day of such Plan Year, and any such distribution occurring
no later than the last day of such Plan Year shall include such amount.
10.2 ALLOCATION OF PROFIT SHARING CONTRIBUTIONS AMONG
PARTICIPANTS. In connection with the preparation of the list described in
Section 10.1 for each Plan Year, each Employer shall also specify which
Participants were no longer employed by an Employer or a Related Corporation on
the last day of such Plan Year for reasons other than termination of employment
in accordance with subsections 11.1(a), 11.1(b), and 11.1(c). After delivery
of such list, Profit Sharing contributions for such Plan Year shall thereupon
be allocated among the Participants included on such list, excluding, however,
those who are no longer employed by an
51
- 46 -
Employer or a Related Corporation on the last day of such Plan Year for reasons
other than termination of employment in accordance with subsections 11.1(a),
11.1(b), and 11.1(c). Subject to the provisions of Section 10.3, the share of
each Participant eligible to share in such allocation shall be in the ratio
which his Compensation for such Plan Year bears to the aggregate Compensation
for such Plan Year of all Participants eligible to share in such allocation in
the Contribution Pool. As of the last day of such Plan Year, the Profit
Sharing Account of each Participant eligible to share in such allocation shall
be credited with his share of Profit Sharing Contributions, as so determined.
In the case of a Participant who has terminated service as provided in
subsections 11.1(a), 11.1(b), and 11.1(c) prior to the allocation of Profit
Sharing Contributions, if any, pursuant to this Section 10.2 for such Plan
Year, his allocation shall be credited to his Profit Sharing Contributions
Account.
10.3 LIMITATION ON CREDITING OF CONTRIBUTIONS. Notwithstanding
anything to the contrary contained in this Agreement, the amount of Employer
Contributions and 401(k) Contributions which may be credited to the Separate
Accounts of any Participant shall be subject to the following provisions:
(a) For purposes of this Section 10.3, the annual
addition with respect to a Participant or former Participant shall
mean the sum for any Plan Year of the following amounts:
(i) 401(k) Contributions and Employer
Contributions which are credited to any Separate Account of
such Participant or former Participant for such Plan Year
pursuant to Section 5.2 and Sections 10.1 and 10.2;
52
- 47 -
(ii) the amount, if any, of contributions
as provided in (i) above and voluntary employee
contributions which are credited to the Participant
or former Participant under any other qualified
defined contribution plan (whether or not terminated)
maintained by an Employer or a Related Corporation
concurrently with the Plan; and
(iii) the amount, if any, attributable to medical
benefits allocated to an account for such Participant or
former Participant established under Section 419A(d)(2) of the
Code for such Plan Year.
(b) For purposes of this Section 10.3, the Plan Year
shall be the "limitation year" within the meaning of Section 415 of
the Code, and the "Compensation" of a Participant shall be as defined
in Section 1.8.
(c) For the Plan Year commencing July 1, 1989, and each
Plan Year thereafter, the annual addition with respect to a
Participant or former Participant shall not exceed the lesser of (i)
$30,000 or 25% of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code in effect for the limitation year, or
(ii) 25% of such Participant's Compensation for such Plan Year. If
the annual addition to the accounts of a Participant or former
Participant in any Plan Year would exceed the limitation contained in
this Section 10.3 absent such limitation, there shall first be
distributed to such Participant or former Participant the amount of
401(k) Contributions made on his behalf for such Plan Year which is
necessary to eliminate such excess (plus the earnings, if any,
attributable to such excess), but only to the extent that no matching
Employer Contributions, if any, have been allocated with respect
thereto. If the limitation contained in this Section 10.3 would still
be exceeded, the portion of the Annual Employer Contributions and
Profit Sharing Contribution (and any forfeitures) which would exceed
the limitation herein, shall be deemed a forfeiture for such Plan Year
and shall be applied against the Employers' Contribution obligation
for the next following Plan Year (and succeeding Plan Years, as
necessary). Finally, if the limitation contained in this Section 10.3
would still be exceeded, the 401(k) Contributions to be made on behalf
of such Participant or former Participant shall, to the extent
necessary to eliminate such excess (plus the earnings, if any,
attributable to such excess), be distributed to such Participant or
former Participant. For purposes of this subsection 10.3(c), "excess
annual additions" shall result only from a reasonable error in
estimating annual Compensation, a reasonable error in determining the
amount of 401(k) Contributions that may be made with respect to any
53
- 48 -
Participant under the limits of Section 415 of the Code, or other
limited facts and circumstances that the Commissioner of Internal
Revenue finds justify the availability of the provisions set forth
above.
(d) If any Participant or former Participant in the Plan
also shall be covered by a qualified defined benefit plan (whether or
not terminated) maintained by an Employer or a Related Corporation
concurrently with the Plan, the sum of the defined benefit plan
fraction (as defined below) and the defined contribution plan fraction
(as defined below) shall in no event exceed 1.0 in any Plan Year. In
the event the special limitation contained in this subsection 10.3(d)
is exceeded, the benefits otherwise payable to the Participant or
former Participant under any such qualified defined benefit plan shall
be reduced to the extent necessary to meet such limitation.
(e) In the event that a Participant or former Participant
is covered by any other qualified defined contribution plan (whether
or not terminated) maintained by an Employer or a Related Corporation
concurrently with the Plan, the procedure set forth in subsection
10.3(c) shall be implemented first by returning the Participant's or
former Participant's own contributions for such Plan Year under all of
the defined contribution plans. If the limitation contained in this
Section 10.3 still is not satisfied after returning all of the
Participant's own contributions under all such plans, the procedure
set forth in subsection 10.3(c) shall be implemented by distributing
to the Participant or former Participant the amount of 401(k)
Contributions and elective deferrals under all of the defined
contribution plans. If the limitation contained in this Section 10.3
still is not satisfied, the amount of the Employer Contributions which
is deemed a forfeiture under subsection 10.3(c) shall be effected
first under the Plan and, if the limitation still is not satisfied, on
a pro rata basis among all of such other plans, unless the Participant
is covered by a money purchase pension plan, in which event the
forfeiture shall be effected first under the defined contribution
plans which are not money purchase pension plans and, if the
limitation still is not satisfied, then under such money purchase
pension plans. In the event that a Participant is covered by a
qualified defined benefit plan, the procedure set forth in subsection
10.3(d) shall be implemented prior to effecting any reduction in the
Participant's benefit under the defined contribution plans.
(f) For purposes of this Section 10.3, the meaning of
"Related Corporation" shall be as modified by Section 415(h) of the
Code.
54
- 49 -
(g) For purposes of this Section 10.4, the
"defined benefit plan fraction" for the limitation year shall
mean a fraction, the numerator of which shall be the projected
annual benefit of the Participant under the defined benefit
plan(s) (whether or not terminated) maintained by an Employer
or Related Corporation determined as of the close of the
limitation year and the denominator of which shall be an
amount equal to the lesser of: (i) the product of 1.25
multiplied by the dollar limitation in effect for such
limitation year under Section 415(b)(1)(A) of the Code, as
adjusted under Section 415(d)(1)(A), or (ii) the product of
1.4 multiplied by the amount which may be taken into account
for such limitation year under Section 415(b)(1)(B) of the
Code with respect to such Participant.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by an Employer or Related Corporation which were in
existence on May 6, 1986, the denominator of this fraction will not be
less than 125% of the sum of the annual benefits under such Plans
which the Participant had accrued as of the close of the last
limitation year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the Plan after May 5, 1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Section 415 of the Code for all limitation years beginning before
January 1, 1987.
(h) For purposes of this Section 10.3, the "defined
contribution fraction" for a limitation year shall mean a fraction,
the numerator of which shall be the sum of the Annual Additions to the
Participant's Accounts under all defined contribution plan(s) (whether
or not terminated) maintained by an Employer or Related Corporation as
of the close of the limitation year, and the denominator of which
shall be the sum of the lesser of the following amounts determined for
each such plan for the limitation year and for each prior year of
service with an Employer or a Related Corporation: (i) the product of
1.25 multiplied by the dollar limitation in effect for such limitation
year under Section 415(c)(1)(A) of the Code, as adjusted under Section
415(d)(1)(B), (determined without regard to Section 415(c)(6) of the
Code) or (ii) the product of 1.4 multiplied by the amount that may be
taken into account under Section 415(c)(1)(B) of the Code with respect
to such individual under the defined contribution plan(s) for the
limitation year.
If the Participant was a Participant as of the end of the
first day of the first limitation year beginning after
55
- 50 -
December 31, 1986, in one or more defined contribution plans
maintained by an Employer or Related Corporation which were in
existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last limitation year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the Section
415 of the Code limitation applicable to the first limitation year
beginning on or after January 1, 1987.
10.4 VALUATION OF PARTICIPANT'S INTEREST. As of each
Valuation Date the Trustee shall adjust each Separate Account of each
Participant to reflect any increase or decrease in net worth of each Investment
Fund since the immediately preceding Valuation Date, in the following manner:
(a) The Trustee shall value all of the assets of the
Investment Fund at fair market value.
(b) The Trustee shall then, on the basis of the valuation
provided under subsection 10.4(a) and after making appropriate
adjustments for the amount of any contribution made with respect to
the Plan Year or Plan Quarter ending on such date, for any
distributions and withdrawals from the Investment Fund since the
immediately preceding Valuation Date and prior to such date, for any
transfers to or from the Investment Fund since such preceding
Valuation Date and prior to such date, ascertain the net increase or
decrease in net worth of the Investment Fund which is attributable to
net earnings and all profits and losses, realized and unrealized,
since the immediately preceding Valuation Date.
(c) The Trustee shall then allocate the net increase or
decrease in the net worth of the Investment Fund as thus determined
among all Participants, former Participants, and beneficiaries who
have an interest in such Fund in the ratio that the sub-account
balance invested therein of each such Participant and former
Participant or Beneficiary, on the date immediately preceding such
Valuation Date, but adjusted for this purpose only by adding to the
401(k) Account balance of
56
- 51 -
each such Participant an amount equal to one-half of the 401(k)
Contributions made on his behalf for the Plan Quarter ending on such
Valuation Date, and by adding an amount equal to one-half of the
transfers from his separate loan account attributable to monthly (or
other periodic) installment payments during such Plan Quarter, bears
to the aggregate of the sub-account balances of all such sub-accounts
as so adjusted on the day immediately preceding such Valuation Date,
and shall credit or charge, as the case may be, each such sub-account
with the amount of its allocated share.
(d) There shall then be credited to the 401(k) Account of
each Participant the portions of the 401(k) Contributions made by the
Employers for the Plan Quarter ending on such date and allocated to
such Participant or former Participant pursuant to Section 5.2.
(e) Finally, there shall then be credited to the Profit
Sharing Account and 401(k) Account of each Participant the portions of
the contributions made by the Employers for the Plan Year ending on
such date allocated to such Participant or former Participant pursuant
to Sections 10.1 and 10.2.
10.5 FINALITY OF TRUSTEE'S DETERMINATION. The Trustee shall have
exclusive responsibility for determining the net income, liabilities, and value
of the assets of the Investment Funds, and the balance of each account
maintained hereunder. The Trustee's determination thereof shall be conclusive
upon the Employers, the Committee, and all Participants, former Participants,
and beneficiaries hereunder.
10.6 NOTIFICATION. Following each Valuation Date, the Trustee
shall furnish each Employer and the Committee with a list showing the balances
of all Separate Accounts of Participants, former Participants and beneficiaries
as of such Valuation Date. As soon as reasonably possible after the end of
each Plan Year, each Employer shall notify each Participant, former
Participant, or Beneficiary of the balances of his Separate Accounts as of the
last
57
- 52 -
day of such Plan Year. The notification also shall state with respect to each
Separate Account the portion of such account which is nonforfeitable as of the
last day of such Plan Year.
-----------------------
End of Article 10
58
- 53 -
ARTICLE 11
TERMINATION OF PARTICIPATION AND DISTRIBUTION
11.1 TERMINATION OF PARTICIPATION. Each Participant shall
cease to be a Participant hereunder upon the first to occur of the following
dates:
(a) on the date such Participant's employment with an
Employer or a Related Corporation is terminated after he has attained
age 60;
(b) on the date such Participant's employment with an
Employer or a Related Corporation is terminated because of physical or
mental disability preventing his continuing in the service of such
Employer, as determined by the Committee upon the basis of a written
certificate of a physician selected by it;
(c) on the date such Participant's employment with an
Employer or a Related Corporation is terminated because of the death
of such Participant;
(d) on the date such Participant's employment with an
Employer or a Related Corporation is terminated under any other
circumstances;
provided, however, that if such date shall be the last day of any quarter of a
Plan Year, such Participant shall for all purposes hereof cease to be a
Participant upon the next succeeding day. The date upon which a Participant
ceases to be such is hereinafter referred to as his "settlement date," and
written notice thereof shall be given promptly by his Employer to the Trustee.
Notwithstanding anything to the contrary contained in this Agreement, on his
attainment of age 60, a Participant's right to receive distribution of the
balance of his Separate Accounts in accordance with the provisions of this
Article 11, shall be fully vested and nonforfeitable.
59
- 54 -
11.2 VESTING SCHEDULE. A Participant whose employment with an
Employer or a Related Corporation terminated in accordance with subsection
11.1(d) shall have a vested interest in his Annual Employer Contributions
Account and Profit Sharing Contributions Account equal to a percentage
determined in accordance with the applicable schedule set forth below.
(a) If the Participant's settlement date under such
subsection 11.1(d) occurred prior to July 1, 1989, or he does not
complete an Hour of Service on or after such date, the following
schedule shall apply:
YEARS OF VESTED SERVICE PERCENTAGE
----------------------- ----------
Less than four 0
Four but less than five 40
Five but less than six 50
Six but less than seven 60
Seven but less than eight 70
Eight but less than nine 80
Nine but less than ten 90
Ten or more 100
(b) Effective July 1, 1989, if the Participant completes
an Hour of Service on or after such date and his settlement date under
such subsection 11.1(d) occurs on or after July 1, 1989, the
Participant shall have a vested interest in his Annual Employer
Contributions Account and Profit Sharing Contributions Account
determined in accordance with the following schedule:
YEARS OF VESTED SERVICE PERCENTAGE
----------------------- ----------
Less than two 0
Two but less than three 20
Three but less than four 40
Four but less than five 60
Five but less than six 80
Six or more 100
Notwithstanding the foregoing provisions of Sections 11.1 and 11.2, the vested
interest of each person who was a Participant on the day immediately prior to
the date of execution of this Agreement shall not on such execution date be
less than his vested interest under
60
- 55 -
the Plan as in effect on the day immediately prior to such execution date.
11.3 YEARS OF VESTED SERVICE. For the purpose of applying the
vesting schedule set forth in Section 11.2, a Participant shall be credited
with a year of vested service for each 12-month period beginning on his
employment commencement date and each anniversary date thereafter during which
he completes at least 1,000 Hours of Service; provided, however, that service
which the Participant completed prior to a Break in Service shall not be
included in determining a Participant's years of vested service unless the
number of consecutive Plan Years in which he had a Break in Service is less
than the greater of five or the aggregate number of years of vested service
which he had when his Break in Service commenced.
11.4 ELECTION OF FORMER SCHEDULE. In the event the Company adopts
an amendment to the Plan that directly or indirectly affects the computation of
a Participant's nonforfeitable interest in his Annual Employer Contributions
Account or Profit Sharing Contributions Account, any Participant with three or
more years of vested service shall have a right to have his nonforfeitable
interest in such Separate Accounts continue to be determined under the vesting
schedule in effect prior to such amendment rather than under the new vesting
schedule, unless the nonforfeitable interest of such Participant in such
Separate Accounts under the Plan, as amended, at any time, is not less than
such interest determined without regard to such amendment. Such Participant
shall exercise such right by giving written notice of his exercise thereof to
the
61
- 56 -
Company within 60 days after the latest of (a) the date he received notice of
such amendment of the Company, (b) the Effective Date of the amendment, or (c)
the date the amendment is adopted. Notwithstanding the foregoing provisions of
this Section 11.5, the vested interest of each Participant on the Effective
Date of such amendment shall not be less than his vested interest under the
Plan as in effect immediately prior to the Effective Date thereof.
11.5 DISTRIBUTION.
(a) The Trustee shall make a distribution to or for the benefit of the
former Participant or his Beneficiary, as the case may be, from his interest in
the Investment Funds which, on any date, shall be equal to the balance carried
in his Separate Accounts as of such date. Distribution shall be made in one of
the following ways:
(i) In the form of a single sum payment.
(ii) In a series of installments over a period not in
excess of the normal life expectancy of the distributee, such
installments to be equal in amount except as necessary to adjust for
any net earnings of and changes in the market value of the Investment
Funds as the case may be, or by any other method reasonably calculated
to provide a more rapid distribution of his interest.
(iii) For distributions after December 31, 1992, by an
Eligible Rollover Distribution paid directly to an Eligible Retirement
Plan specified by the Distributee in a Direct Rollover.
(iv) In the form of a joint and survivor annuity for married
participants and a single life annuity for unmarried participants as
described in subsections 11.5(b) through (g).
(b) A former Participant who is not married may receive distribution
of his Accounts in the form of an annuity for life
62
- 57 -
("Life Annuity"), which shall be provided through the purchase with the
Accounts with a single premium, nontransferable annuity contract, unless
another method of distribution under Section 11.5 is elected pursuant to a
qualified election within the 90 day period ending on the date benefit payments
would commence.
(c) A former Participant who is married shall receive distribution of
his Accounts in the form of an annuity for the life of the former Participant
with a survivor annuity for the life of the former Participant's spouse that is
equal to 50% of the amount of the annuity payable during the joint lives of the
former Participant and the spouse ("50% Joint and Survivor Annuity"), which
shall be provided through the purchase with the Accounts of a single premium,
nontransferable annuity contract, unless another method of distribution under
Section 11.5 is elected pursuant to a qualified election within the 90 day
period ending on the date benefit payments would commence.
(d) A qualified election for purposes of paragraphs (b), (c) and (f)
of this Section 11.5 means a written waiver of the Life Annuity or 50% Joint
and Survivor Annuity or Pre-retirement Survivor Annuity, if applicable in
designation of an alternative method of distribution, which waiver has been
consented to by the Participant's spouse, if any, and the consent acknowledges
the effect of the waiver, has been witnessed by a Plan representative or notary
public, and is limited to a benefit for a specific alternate Beneficiary or to
a specific form of benefit. A written waiver by a Participant without spousal
consent will constitute a
63
- 58 -
qualified election if the Participant establishes to the satisfaction of a plan
representative that spousal consent cannot be attained either because their is
no spouse or because the spouse cannot be located. Any spousal consent to a
waiver of a 50% Joint and Survivor Annuity and Pre-retirement Survivor Annuity
shall be valid only with respect to the spouse who signs the consent or, in the
case of a deemed qualified election, with respect to the designated spouse. A
Participant may revoke a prior qualified election without spousal consent at
anytime before the commencement of benefits, but any subsequent waiver shall be
valid only if it satisfies the requirements of a qualified election.
(e) Each Participant shall be provided by the Company no less than 30
days and no more than 90 days before the commencement of benefits a written
explanation of (i) the terms and conditions of the Life Annuity or 50% Joint
and Survivor Annuity, (ii) the Participants right to make in the effect to
waive the Life Annuity or 50% Joint and Survivor Annuity, (iii) the rights of a
Participant's spouse, if applicable, and (iv) the eligibility conditions and
other material features of the other methods of distribution, including the
relative values of the distribution methods.
(f) A Participant who is and has been married throughout the one year
period ending on the date of his death and who dies prior to the commencement
of distribution shall be deemed to have elected distribution of 50% of his
Account in the form an annuity for the life of the surviving spouse of the
Participant ("Pre-retirement
64
- 59 -
Survivor Annuity"), which shall be provided through the purchase with 50% of
the Account of a single premium, nontransferable annuity contract, unless the
Participant has filed a qualified election as defined in paragraph (d) of this
Section 11.5, with the Company during the applicable election period that has
not been withdrawn; provided, however, that any Accounts under the Plan that
are not distributed in the form of a Pre-retirement Survivor Annuity shall be
distributed pursuant to the qualified election of the Participant on file with
the Company or alternatively pursuant to the provisions of Article 4. The
surviving spouse may elect to have payment commence within a reasonable period
of time following the date of the Participant's death. The applicable election
period is the period which begins on the first day of the Plan Year in which
the Participant attains age 35 and ends on the date of the Participant's death.
If a Participant separates from service prior to the first date of the Plan
Year in which age 35 is attained, the election period with respect to a
Pre-retirement Survivor Annuity shall begin on the date of separation.
(g) Each Participant shall be provided by the Company within the
applicable period a written explanation of (i) the terms and conditions of the
Pre-retirement Survivor Annuity, (ii) the Participant's right to make the
effect of an election to waive the Pre-retirement Survivor Annuity, and (iii)
the rights of a Participant's spouse. The term "Applicable Period" means with
respect to a Participant, whichever of the following periods ends last:
65
- 60 -
(1) the period beginning with the first day of the Plan
Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
(2) a reasonable period after the individual
becomes a Participant;
(3) a reasonable period ending after the Pre-retirement
Survivor Annuity is no longer fully subsidized;
(4) a reasonable period ending after Section
401(a)(11) of the Code applies to the Participant;
(5) a reasonable period after separation from service in
the case of a Participant who separates before
attaining age 35.
(h) For purposes of this Section 11.5, the following
definitions shall apply:
(i) "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint lives
(or joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(ii) "Eligible Retirement Plan" shall mean an individual
retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code,
an annuity plan described in Section 403(a) of the Code, or a
qualified Trust described in Section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(iii) "Distributee" shall include an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former
66
- 61 -
Employee's spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(iv) "Direct Rollover" shall mean a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
(i) Distribution under any such method shall be made or commenced as
soon as reasonably practicable after the former Participant's settlement date,
but in no event later than 60 days after the close of the Plan Year in which
such date occurs or, if earlier, the Plan Year in which the former Participant
terminated employment after having attained age 60; provided, however, that at
the election of the Participant the Trustee shall defer making or commencing
distribution until the earlier of a specified date or the date referred to in
Section 18.2. A former Participant after his date of termination in accordance
with Sections 10.1, 10.2, or 10.3, the Trustee shall make or commence
distribution to the former Participant or his Beneficiary, as the case may be,
as soon as reasonably practicable after the last day of the Plan Year or Plan
Quarter, as the case may be, on which such amount is credited, subject to the
deferral provision set forth above. Notwithstanding the foregoing, (i) if the
amount distributable to a former Participant is in excess of $3,500 (or was at
the time of any prior distribution) and the former Participant has not attained
age 60, no distribution shall be made to such former Participant without his
written consent, and (ii) if the amount distributable to a former Participant
is $3,500 or less (and did not exceed $3,500 at
67
- 62 -
the time of any prior distribution), such interest shall be distributed as a
lump sum as soon as reasonably practicable following his settlement date. If
there is no amount credited to the Participant's Separate Accounts, there shall
be a deemed distribution of the Participant's balance of his Separate Accounts.
Distributions shall also be made in accordance with and subject to Article 18.
11.6 DISPOSITION OF NON-VESTED AMOUNTS. In the case of a
Participant who terminates service under the conditions specified in subsection
11.1(d), any nonvested amounts in the Participant's Annual Employer
Contributions Account and Profit Sharing Contributions Account following the
occurrence of his date of termination shall be disposed of as follows:
(a) In the event that the former Participant receives
distribution of his entire Separate Accounts (including a deemed
distribution) prior to the end of the second Plan Year beginning on or
after his settlement date, the non-vested balances remaining in the
Participant's Annual Employer Contributions Account and Profit Sharing
Contributions Account will be treated as a forfeiture as of the date
such distribution is made, at which time the Participant's Annual
Employer Contributions Account and Profit Sharing Contributions
Account shall be closed.
(b) In the event that subsection 11.6(a) is not
applicable, the non-vested balances remaining in the Participant's
Annual Employer Contributions Account and Profit Sharing Contributions
Account will continue to be held in such accounts and will not be
treated as a forfeiture until the last day of the Plan Year in which
the Participant terminates service. In the event that such a
Participant returns to employment with an Employer or a Related
Corporation prior to incurring five consecutive Breaks in Service, the
balance of his Separate Accounts, determined as of the Valuation Date
next following his date of rehire, shall be recredited as of such
Valuation Date to his Annual Employer
68
- 63 -
Contributions Account, Profit Sharing Contributions Account, 401(k)
Account, and Rollover Account in the same proportions as the amount
previously credited to his Separate Accounts.
Whenever the interest of a Participant or former Participant in his Annual
Employer Contributions Account and Profit Sharing Contributions Account is
either forfeited or otherwise deemed a forfeiture under the provisions of the
Plan with respect to a Plan Year, the forfeiture, as of the last day of such
Plan Year, shall be used to offset contributions by the Employer under either
the Annual Employer Contributions Account or the Profit Sharing Contributions
Account.
11.7 EFFECT OF COMMITTEE'S DETERMINATION. In exercising its
authority under this Article 11, the Committee shall act in such manner as it
shall in good faith determine will most adequately and fairly meet the needs of
each former Participant or Beneficiary, as the case may be. No authority shall
be exercised in such manner as to discriminate between any class or group of
Participants. The Committee's determination of all questions which may arise
under this Article 11 (if made in accordance with the standards prescribed
herein) shall be conclusive upon all persons claiming to have any interest
hereunder. In making any determinations hereunder, the Committee may rely upon
any signed statement which the Participant files with it.
11.8 REEMPLOYMENT OF FORMER PARTICIPANT. If a former
Participant is reemployed by an Employer or by any Related Corporation, he
shall be treated as a new employee for all purposes
69
- 64 -
of this Agreement, subject to the provisions hereof relating to crediting years
of service and years of vested service; provided, however, that in no event
shall any years of vested service attributable to the former Participant's
service with an Employer or a Related Corporation after his reemployment affect
the portion of the balance of any Separate Account as of his prior date of
termination. All or part of any distributions which are otherwise payable
hereunder by reason of his former participation in the Plan shall be suspended
during the period of such reemployment, or until the Plan is terminated,
whichever first occurs, at which time payment shall be resumed in accordance
with any of the methods provided in Section 11.5. Furthermore, if such former
Participant again becomes a Participant in accordance with Article 3, the
Committee, upon his subsequent termination of participation, may consolidate
his new Separate Accounts with his prior Separate Accounts.
11.9 RESTRICTIONS ON ALIENATION. Except as provided in Section
401(a)(13)(B) of the Code relating to qualified domestic relations orders, no
right or interest under the Plan at any time shall be subject in any manner to
anticipation, alienation, assignment (either at law or in equity), encumbrance,
garnishment, levy, execution or other legal or equitable process. No person
shall have power in any manner to anticipate, transfer, assign (either at law
or in equity), alienate, or subject to attachment, garnishment, levy,
execution, or other legal or equitable process,
70
- 65 -
or in any way encumber his rights or interests under the Plan, and nay attempt
to do so shall be void.
11.10 FACILITY OF PAYMENT. In the event that it shall be found
that any person to whom an amount is payable hereunder is incapable of
attending to his financial affairs because of any mental or physical condition,
including the infirmities of advanced age, such amount (unless prior claim
therefor shall have been made by a duly qualified guardian or other legal
representative) may, in the discretion of the Committee, be paid to another
person for the use or benefit of the person found incapable of attending to his
financial affairs or in satisfaction of legal obligations incurred by or on
behalf of such person. The Trustee shall make such payment only upon receipt of
written instructions to such effect from the Committee. Any such payment shall
be charged to the Separate Account of the person found incapable of attending
to his financial affairs and shall be a complete discharge of any liability
therefor under this Agreement.
11.11 BUY BACK OF FORFEITED AMOUNTS. A Participant who receives a
distribution on account of termination under the conditions specified in
subsection 11.1(d), and who, as a result thereof, forfeits all or a portion of
the amounts credited to his Annual Employer Contributions Account or Profit
Sharing Contributions Account, shall have such forfeited amounts recredited to
his Annual Employer Contributions Account or Profit Sharing Contributions
Account upon his subsequent resumption of employment covered under the Plan,
without adjustment for interim gains or
71
- 66 -
losses experienced by the Investment Funds, provided that he repays to the Plan
the full amount of the distribution he received as a result of his prior
settlement date, and provided, further, that such repayment occurs no later
than the earlier of five years after the date of the Participant's resumption
of employment covered under the Plan or the time when the Participant has
incurred five consecutive one year Breaks in Service following the date of the
distribution. Funds needed in any Plan Year to recredit the Separate Account
of a reemployed Participant with the amount of prior forfeitures in accordance
with the preceding sentence, to the extent not provided by his Employer by way
of a separate Plan contribution, shall first come from forfeitures that arise
during such Plan Year, to the extent sufficient, and shall then come from Trust
income earned in such Plan Year.
11.12 DISTRIBUTION UPON CERTAIN EVENTS. Notwithstanding any
provision to the contrary, distribution of a Participant's interest under the
Plan may be made, in accordance with the provisions of Section 11.5, upon the
occurrence of one of the following events:
(a) The termination of the Plan without establishment or
maintenance of another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code).
(b) The disposition by an Employer of substantially all
of the assets (within the meaning of Section 409(d)(2) of the Code)
used by such Employer in a trade or business of such Employer, but
only with respect to an employee who continues employment with the
corporation acquiring such assets.
(c) The disposition by an Employer of such Employer's
interest in a subsidiary (within the meaning of
72
- 67 -
Section 409(d)(3) of the Code), but only with respect to an employee
who continues employment with such subsidiary.
An event shall not be treated as described in this Section 11.12 with respect
to any employee unless the employee receives a lump sum distribution by reason
of the event. For purposes of this Section 11.12, the term "lump sum
distribution" has the meaning given such term by Section 402(d)(4) of the Code,
without regard to clauses (i), (ii), (iii), and (iv) of subparagraph (A),
subparagraph (B), or subparagraph (F) thereof. An event shall not be treated
as described in subsection 11.12(b) or 11.12(c) unless the transferor
corporation continues to maintain the Plan after the disposition and the
purchaser does not maintain the Plan after the disposition. Moreover, a
disposition that results in the employee's transfer to the purchaser and
generally must be made by the end of the second calendar year after the
calendar year in which the disposition occurred.
---------------------
End of Article 11
73
- 68 -
ARTICLE 12
THE COMMITTEE
12.1 MEMBERSHIP. The Company, by action of its Board of
Directors, shall appoint a Committee of at least three persons to administer
the Plan as hereinafter set forth. Upon his appointment to the Committee by
the Company, each such appointee shall become a member of the Committee by
accepting his appointment in a writing signed by him and delivered to the
Company.
12.2 RULES AND REGULATIONS. The Committee may from time to time
formulate such rules and regulations for its organization and the transaction
of its business as it deems suitable and as are consistent with the provisions
of this Agreement.
12.3 AUTHORITY OF COMMITTEE AND EMPLOYERS. Each of the
Employers and the Committee shall have the authority to perform the functions
conferred upon it herein, and shall have all the powers and authority which are
required in connection therewith, subject, however, to the limitations
hereinafter set forth. The Committee shall have all the powers and authority
expressly conferred upon it herein and further shall have the discretionary
power and authority to interpret and construe the Plan and to resolve any
disputes arising thereunder, subject, however, to the provisions of Section
12.5. The Committee may employ such attorneys, agents, and accountants as it
may deem necessary or advisable to assist it in carrying out its duties
hereunder. The Committee shall have no authority to allocate any of its
powers, authority, or responsibilities for the operation and administration of
the Plan
74
- 69 -
to any other person. Each Employer, the Committee, and the Trustee are hereby
designated as "named fiduciaries" of the Plan as such term is defined in
Section 402(a)(2) of the Act. The Company, by action of its Board of
Directors, may
(a) allocate any of the powers, authority, or
responsibilities for the operation and administration of the Plan,
which are retained by it or granted by this Article 12 to the
Committee, to itself, to one or more other Employers, to the
Committee, or to the Trustee; and
(b) designate a person other than itself or the Committee
to carry out any of such powers, authority, or responsibilities;
provided, however, that no powers, authority, or responsibilities of the
Trustee shall be subject to the provisions of subsection 12.3(b); and provided,
further, that no allocation or delegation by the Company of any of its or of
the Committee's powers, authority, or responsibilities to the Trustee shall
become effective unless such allocation or delegation shall first be accepted
by the Trustee in a writing signed by it and delivered to the Company.
12.4 ACTION OF COMMITTEE. Any act authorized, permitted, or
required to be taken by the Committee under the Plan may be taken by a majority
of the members of the Committee at the time acting hereunder, either by vote at
a meeting, or in writing without a meeting. All notices, advices, directions,
certifications, approvals, and instructions required or authorized to be given
by the Committee under the Plan shall be in writing and signed by a majority of
the members of the Committee, or by such member or members as may be designated
by an instrument in writing, signed by
75
- 70 -
all members thereof and filed with the Trustee, as having authority to execute
such documents on its behalf. Subject to the provisions of Section 12.5, any
action taken by the Committee which is authorized, permitted, or required under
the Plan shall be final and binding upon the parties to this Agreement, all
persons who have or who claim an interest under the Plan, and all third parties
dealing with an Employer, the Committee, or the Trustee.
12.5 CLAIMS REVIEW PROCEDURE. Whenever the Committee decides for
whatever reason to deny, whether in whole or in part, a claim for benefits
filed by any person (hereinafter referred to as the "Claimant"), the Plan
Administrator shall transmit a written notice of the Committee's decision to
the Claimant, which shall be written in a manner calculated to be understood by
the Claimant and contain a statement of the specific reasons for the denial of
the claim and a statement advising the Claimant that, within 60 days of the
date on which he receives such notice, he may obtain review of the decision of
the Committee in accordance with the procedures hereinafter set forth. Within
such 60-day period, the Claimant or his authorized representative may request
that the claim denial be reviewed by filing with the Plan Administrator a
written request therefore, which request shall contain the following
information:
(a) the date on which the Claimant's request was filed
with the Plan Administrator; provided, however, that the date on which
the Claimant's request for review was in fact filed with the Plan
Administrator shall control in the event that the date of the actual
filing is later than the date stated by the Claimant pursuant to this
subsection 12.5(a);
(b) the specific portions of the denial of his claim
which the Claimant requests the Plan Administrator to review;
76
- 71 -
(c) a statement by the Claimant setting forth the basis
upon which he believes the Plan Administrator should reverse the
Committee's previous denial of his claim for benefits and accept this
claim as made; and
(d) any written material (offered as exhibits) which the
Claimant desires the Plan Administrator to examine in its
consideration of his position as stated pursuant to subsection
12.5(c).
Within 60 days of the date determined pursuant to subsection 12.5(a), the Plan
Administrator shall conduct a full and fair review of the Committee's decision
denying the Claimant's claim for benefits. Within 60 days of the date of such
hearing, the Plan Administrator shall render its written decision on review,
written in a manner calculated to be understood by the Claimant, specifying the
reasons and Plan provisions upon which its decision was based.
12.6 RESIGNATION, REMOVAL, AND DESIGNATION OF SUCCESSORS. Any
member of the Committee may at any time resign, and any member may be removed
by action of the Board of Directors of the Company. Vacancies for these or
other reasons shall be filled by appointees of the Board of Directors of the
Company, and any such appointee shall become a member of the Committee by
accepting his appointment as provided in Section 12.1. The Committee shall
promptly notify the Trustee of any change in its membership. Nothing herein
contained shall be construed to prevent any Participant or any director,
officer, employee, or shareholder of an Employer from serving as a member of
the Committee, but no member of the Committee who is a Participant shall take
any part in any action relating solely to his participation.
77
- 72 -
12.7 RECORDS. The Committee shall maintain records of all
meetings, proceedings, and actions held, undertaken, or performed by it, and
shall furnish to the Company such reports as it may from time to time request.
The Committee may appoint as its Secretary, to keep a record of its meetings,
proceedings, and actions, a person who may, but need not be, a member of the
Committee.
12.8 COMPENSATION. The members of the Committee shall receive no
Compensation for their services performed as such, but any and all expenses,
including, without limitation, Compensation to agents and counsel, reasonably
incurred by them in carrying out the powers and duties herein conferred, shall
be paid from the Trust property in accordance with and subject to the
provisions of Section 13.7, subject, however, to allocation among all
Employers, the share of each to be determined by the Company on a fair and
equitable basis.
12.9 INDEMNIFICATION. In addition to whatever rights of
indemnification the members of the Committee or of the Board of Directors of an
Employer, or any other person or persons (other than the Trustee) to whom any
power, authority, or responsibility of the Company or of the Committee is
delegated pursuant to subsection 12.3(b), may be entitled under the Articles of
Incorporation, regulations, or by-laws of an Employer, under any provision of
law, or under any other agreement, the Company shall satisfy, subject, however,
to allocation among all Employers, the share of each to be determined by the
Company on a fair and equitable basis, any liability actually and reasonably
incurred by any such member or such other person or persons, including
78
- 73 -
expenses, attorneys' fees, judgments, fines, and amounts paid in settlement, in
connection with any threatened, pending, or completed action, suit, or
proceeding which is related to the exercise or failure to exercise by such
member or such other person or persons of any of the powers, authority,
responsibilities, or discretion provided under this Agreement, or reasonably
believed by such member or such other person or persons to be provided
hereunder, and any action taken by such member or such other person or persons
in connection therewith.
12.10 QUALIFIED DOMESTIC RELATIONS ORDERS. The Committee shall
establish reasonable procedures to determine the status of domestic relations
orders and to administer distributions under domestic relations orders which
are deemed to be qualified orders. Such procedures shall be in writing and
shall comply with the provisions of Section 414(p) of the Code and regulations
issued thereunder. Notwithstanding anything to the contrary contained in the
Plan, the Committee shall direct the Trustee to make immediate distribution to
or for the benefit of an alternate payee under a domestic relations order that
has been determined to be a qualified order of the alternate payee's benefit
under the Plan in any form which such benefit may be paid under the plan to the
Participant or former Participant with respect to whom such qualified order
applies, but only if the qualified order provides for the immediate
distribution.
---------------------
End of Article 12
79
- 74 -
ARTICLE 13
POWERS AND DUTIES OF THE TRUSTEE
In the administration of the Trust, the Trustee shall have the powers
and duties set forth in this Article 13, in addition to all powers and duties
otherwise expressly set forth in this Agreement. All provisions pertaining to
the Trust shall be effective as of July 1, 1995.
13.1 TRUST PROPERTY AND INVESTMENTS. Subject to the provisions of
Section 13.5, the Trustee is empowered:
(a) to invest and reinvest all or any part of the Trust
property, including both principal and income, in such securities,
real estate, and other property as may be selected by it; moreover,
the Trustee may invest and reinvest the entire Trust property or any
part thereof in qualifying employer securities;
(b) to sell, lease, exchange, or otherwise dispose of all
or any part of the Trust property at such prices, upon such terms and
conditions, and in such manner as it shall determine, including the
right to lease, with or without option to purchase, for any term,
irrespective of the period of the Trust;
(c) to exercise, buy, or sell rights of conversion or
subscription; provided, however, that any conversion of employer
securities shall be on the same terms as are applicable to all holders
of the convertible securities and in exchange for at least the fair
market value of the securities converted;
(d) to enter into or oppose any plan of consolidation,
merger, reorganization, capital readjustment, or liquidation of any
corporation or other issuer of securities held hereunder (including
any plan for the sale, lease, or mortgage of any of its property or
the adjustment or liquidation of any of its indebtedness) and, in
connection with any such plan, to enter into any security holders'
agreement, to deposit securities under such agreement, and to pay
assessments or subscriptions from the other assets held hereunder;
(e) to retain in cash or otherwise in a form unproductive
of income such portion of the Trust property as
80
- 75 -
it shall determine is necessitated by the cash requirements of the
Trust; provided, however, that, to the maximum extent feasible, such
amounts shall be held in forms of investment which are productive of
income but are sufficiently liquid to meet such cash requirements;
(f) to deposit any securities held hereunder in any
depository;
(g) to deposit all or any part of the Trust property,
including both principal and income, in its own banking department;
provided, however, that any such deposits shall bear a reasonable rate
of interest; and provided, further, that such deposits shall be
subject to the provisions of Section 13.8; and
(h) to commingle assets of the Trust with assets of other
trusts (which in each case form a part of a pension or profit sharing
plan qualified under the Code and constitute an exempt trust within
the meaning of the Code) for the collective investment thereof.
The term "securities", wherever used in this Agreement, shall include common
and preferred stocks, contractual obligations of every kind, whether secured or
unsecured, equitable interests in real or personal property, and intangible
property of every description and howsoever evidenced. Notwithstanding the
foregoing provisions of this Section 13.1 the Trustee shall not acquire or hold
any employer security unless it is a qualifying employer security and shall not
acquire or hold any employer real property unless it is qualifying employer
real property. The terms "employer security", "qualifying employer security",
"employer real property", and "qualifying employer real property" shall have
the meanings provided in Section 407(d) of the Act.
13.2 CLAIMS AGAINST TRUST. Subject to the provisions of Section
13.6, the Trustee is empowered to compromise and adjust any and all claims,
debts, or obligations in favor of or against the
81
- 76 -
Trust, whether such claims be in litigation or not, upon such terms and
conditions as it shall determine, and to reduce the rate of interest on, to
extend or otherwise modify, or to foreclose upon default or otherwise enforce
any such claim, debt, or obligation.
13.3 BORROWING. Subject to the provisions of Section 13.6, the
Trustee is empowered to make advances or borrow money upon such terms and
conditions as it deems desirable or proper for the improvement, protection,
preservation, or other best interest of the Trust. For the repayment of any
such advance with interest, the Trustee shall have a lien upon the property of
the Trust, and for any sum so borrowed may issue its promissory note as Trustee
and secure the repayment thereof by mortgaging or pledging any part or all of
the Trust property.
13.4 VOTING RIGHTS. Subject to the provisions of Section 13.5,
the Trustee is empowered to exercise the voting rights appurtenant to any
securities held hereunder, either in person or by proxy, and to execute proxies
or powers of attorney to any one or more persons.
13.5 INVESTMENT MANAGER. The powers conferred upon the Trustee
in Sections 13.1 and 13.4 shall be exercised by the Trustee in its sole
discretion; provided, however, that the Company at any time and from time to
time, by action of its Board of Directors, may appoint an Investment Manager to
manage the investment of any assets of the Trust. The term "Investment
Manager" shall have the same meaning as provided in Section 3(38) of the Act.
Upon appointment of the Investment Manager in writing and the written
82
- 77 -
acknowledgment by the Investment Manager of its status as a fiduciary with
respect to the Plan and Trust, it shall have such authority as is delegated to
it by the resolution of the Board of Directors in which it is appointed,
together with such authority as thereafter from time to time may be delegated
to it by resolution of the Board of Directors. Upon the appointment of an
Investment Manager and the delegation to it of authority over investment
management as herein provided, the Trustee shall be required to follow the
written investment directions of the Investment Manager. Any such written
direction of the Investment Manager may be of a continuing nature, or
otherwise, and may be revoked or superseded by the Investment Manager at any
time by notice in writing to the Trustee.
13.6 EMPLOYER DIRECTIONS. The powers conferred upon the Trustee
in Sections 13.2 and 13.3 shall be exercised by the Trustee in its sole
discretion; provided, however, that the Company may at any time and from time
to time, by action of its Board of Directors, direct the Trustee in writing to
obtain written approval of the Committee or of such person or persons as the
Board of Directors of the Company may designate before exercising any one or
more of such powers. Moreover, the Company may at any time and from time to
time, by action of its Board of Directors, direct the Trustee in writing to
follow any written directions of the Committee or of such person or persons as
the Board of Directors may designate, with respect to the exercising of any one
or more of such powers. Any such written directions by the Committee or by
83
- 78 -
such designated person or persons may be of a continuing nature, or otherwise,
and may be revoked or superseded by the Committee or by such person or persons,
or by the Board of Directors, at any time by notice in writing to the Trustee.
The Trustee shall be required to follow the directions so given to it;
provided, however, that the Trustee shall not be required to follow any
directions which would result in a breach of the Trustee's fiduciary duties;
and provided, further, that the Trustee shall have no obligation by reason of
any such direction to make any advance or loan in its banking capacity.
13.7 REGISTRATION OF SECURITIES; NOMINEES. The Trustee is
empowered to register securities in its own name, or in the name of its nominee
without disclosing the Trust, or to hold the same in bearer form, and to take
title to other property in its own name or in the name of its nominee without
disclosing the Trust; but the Trustee shall be responsible for the acts of its
nominee.
13.8 AGENTS, ATTORNEYS, ACTUARIES, AND ACCOUNTANTS. The Trustee
and the Company are empowered to employ such agents, attorneys (including
attorneys who may be counsel for the Company), actuaries, and accountants,
including insurance company depository services for insurance contracts, as
they, or either of them, may deem necessary or proper in connection with the
maintenance and administration of the Plan and Trust. Subject to the
provisions of Section 18.16, the reasonable Compensation and expenses of such
agents, attorneys, actuaries, and accountants shall be paid out of the Trust
property and the Trustee is empowered to pay the same out
84
- 79 -
of the Trust property as a general charge thereon; provided, however, that the
Company may elect to make payment of such amounts, subject, however, to
allocation among all Employers, the share of each to be determined by the
Company on a fair and equitable basis.
13.9 DEPOSIT OF FUNDS. The Trustee is empowered to deposit funds,
pending investment or distribution thereof, in any bank organized under the
national banking laws of the United States or under the laws of the State of
Ohio, or in an insured savings and loan association located in the State of
Ohio; and it is authorized to accept such regulations covering the withdrawal
of funds so deposited as it shall deem proper; provided, however, that no funds
may be deposited by the Trustee in its own banking department under this
Section 13.8 unless authorized pursuant to the provisions of Section 408 of the
Act.
13.10 LEGAL ADVICE. The Trustee may consult with counsel selected
by it, who may be of counsel for an Employer or a Related Corporation, as to
any matters or questions arising hereunder, and the opinion of said counsel
shall be full and complete authority and protection in respect to any action
taken, suffered, or omitted by the Trustee in good faith and in accordance with
the opinion of said counsel.
13.11 OTHER AUTHORITY. The Trustee is authorized to execute and
deliver any and all instruments and to perform any and all acts which may be
necessary or proper to enable it to discharge
85
- 80 -
its duties under this Agreement and to carry out the powers and authority
conferred upon it.
13.12 COURT ACTION NOT REQUIRED. All the powers and authority
herein conferred upon the Trustee shall be exercised by it without the
necessity of applying to any court for leave or confirmation. No person
dealing with the Trustee shall be required to ascertain whether the Trustee
shall have obtained the approval of any court or of any person to any action
which it may propose to take hereunder, but every such person may rely solely
upon the deed, transfer, or assurance of the Trustee.
13.13 TRUSTEE'S PERFORMANCE. In the exercise of any of the powers
and authority hereinbefore conferred upon it, the Trustee shall at all times
adhere to the fiduciary standards established by the Act.
13.14 DIRECTIONS TO THE TRUSTEE. Any written direction, request,
approval, or other document signed in the name of an Employer by an officer
thereof, shall be conclusively deemed to constitute the written direction,
approval, or other document of such Employer. Any written direction, request,
or certification signed in the name of the Committee by a majority of the
members thereof, or by such member or members thereof as shall be designated as
having authority to execute such documents on behalf of the Committee, in
accordance with the provisions of Section 12.4, shall be conclusively deemed to
constitute the written direction or certification of the Committee.
86
- 81 -
13.15 PAYMENT OF TAXES; INDEMNITY. The Trustee is empowered to pay
out of the assets of the Trust, as a general charge thereon, any and all taxes
of whatsoever nature assessed on or in respect thereto; provided, however, that
if the Company shall notify the Trustee in writing that in the opinion of its
counsel any such tax is not lawfully assessed, the Trustee, if so requested by
the Company, shall contest the validity of such tax in any manner deemed
appropriate by the Company or its counsel. The word "taxes", as used herein,
shall be deemed to include any interest or penalties assessed in respect to
such taxes. Unless the Trustee shall first have been indemnified to its
satisfaction, the Trustee shall not be required to contest the validity of any
tax, to institute, maintain, or defend against any other action or proceeding,
or to incur any other expense in connection with the Trust except to the extent
that the same is sufficient therefor.
13.16 COMPENSATION AND EXPENSES. The Trustee shall be entitled to
such reasonable Compensation for its services as the Company and the Trustee
from time to time shall agree, and shall be entitled to reimbursement for all
reasonable expenses incurred by the Trustee in the administration of the Trust.
Such Compensation and expenses shall be paid from the Trust property and the
Trustee is empowered to pay the same out of the Trust property as a general
charge thereon; provided, however, that the Company may elect to make payment
of such amounts, subject, however, to allocation among all Employers, the share
of each to be determined by the Company on a fair and equitable basis.
87
- 82 -
13.17 RECORDS AND STATEMENTS. The Trustee shall keep accurate
records of all receipts, disbursements, and other transactions affecting the
Trust which, together with the assets comprising the Trust and all evidences
thereof, shall be available during the Trustee's usual business hours for
inspection (or for the purpose of making copies or reproductions thereof) by
the Company, the Committee, or their duly authorized representatives. The
Trustee shall render to the Company quarterly statements of all receipts,
disbursements, and other transactions affecting the Trust during the preceding
quarter, and the Trustee shall further render to the Company annually, or more
frequently if requested, a statement of all assets then held by it hereunder.
-----------------------
End of Article 13
88
- 83 -
ARTICLE 14
SUCCESSOR TRUSTEE
14.1 RESIGNATION OR REMOVAL OF THE TRUSTEE. The Trustee may
resign at any time by giving notice in writing to the Company and the Committee
at least 30 days before such resignation is to become effective, unless the
Company shall accept as adequate a shorter notice. The Company, by action of
its Board of Directors, may, with or without cause, remove any Trustee acting
hereunder by giving notice in writing to such Trustee at least 30 days before
such removal is to become effective, unless the Trustee shall accept as
adequate a shorter notice.
14.2 APPOINTMENT OF THE SUCCESSOR TRUSTEE. If for any reason a
vacancy should occur in the trusteeship, then a successor Trustee shall be
designated by the Company, by action of its Board of Directors, which successor
Trustee may be either a corporation authorized to carry on a trust business, a
national banking association, or any three or more individuals selected by the
Company. Any successor Trustee appointed hereunder shall execute, acknowledge,
and deliver to the Company an instrument in writing accepting such appointment
hereunder. Such successor Trustee thereupon shall become vested with the same
title to the property comprising the Trust property, and the same powers and
duties with respect thereto, as are hereby vested in the original Trustee. The
predecessor Trustee shall execute all such instruments and perform all such
other acts as the successor Trustee shall reasonably request to effectuate the
provisions hereof. The successor Trustee
89
- 84 -
shall have no duty to inquire into the administration of the Trust for any
period prior to its succession. No Trustee shall be liable for any act or
omission of any predecessor Trustee.
14.3 COMMINGLED INVESTMENT FUNDS. Notwithstanding the foregoing
provisions of this Article 14, a Trustee ceasing to act in such capacity shall
not transfer to a successor Trustee any units of any commingled investment
funds, or group or common funds, then held as part of the Trust property, but
in lieu of such transfer shall cause units to be redeemed at the earliest
reasonable opportunity and shall pay over the proceeds thereof to the successor
Trustee.
---------------------
End of Article 14
90
- 85 -
ARTICLE 15
AMENDMENT, TERMINATION, AND WITHDRAWAL
15.1 AMENDMENT. Subject to the provisions of Section 15.2, the
Company may at any time and from time to time, by action of its Board of
Directors, in a writing signed by an officer of the Company, amend this
Agreement; provided, however, that no such amendment shall substantially change
the powers, duties, or liabilities of the Trustee, without the approval of the
Trustee.
15.2 LIMITATION ON AMENDMENT. The Company shall make no amendment
to this Agreement which shall result in the forfeiture or reduction of the
interest of any Participant, former Participant, or Beneficiary in any
Investment Fund established hereunder for his benefit, or in any insurance
contract held hereunder; provided, however, that nothing herein contained shall
restrict the right to amend the provisions hereof relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be
made hereunder which shall permit any part of the Trust property to revert to
an Employer or be used for or be diverted to purposes other than the exclusive
benefit of the Participants, former Participants, and their beneficiaries.
15.3 TERMINATION. The Company reserves the right, by action of
its Board of Directors, to terminate the Plan at any time, which termination
shall become effective upon notice in writing to the Committee and to the
Trustee (the Effective Date of such termination being hereinafter referred to
as the "termination date"). The Plan shall terminate automatically if there
shall be
91
- 86 -
a complete discontinuance of contributions by all Employers hereunder. In the
event of the termination of the Plan by the Company, any other Employer may
continue the Plan in effect for the benefit of its own employees. In the event
of the termination of the Plan, written notice thereof shall be given to all
persons who have a vested interest hereunder and to the Trustee. Upon any such
termination of the Plan, the Trustee shall take the following actions for the
benefit of Participants, former Participants, and beneficiaries:
(a) As of the termination date, the Trustee shall value
the Investment Funds and adjust all accounts in the manner provided in
Section 10.4, with any unallocated contributions being allocated on
the basis of Compensation or 401(k) Contributions for the Plan Year up
to the termination date as otherwise provided in this Agreement. The
termination date shall become a Valuation Date for purposes of Article
10. In determining the net worth of the Investment Funds, the Trustee
shall include as a liability such amounts as in its judgment shall be
necessary to pay all expenses in connection with the termination of
the Trust and the liquidation and distribution of the Trust property,
as well as other expenses, whether or not accrued, and shall include
as an asset all accrued income.
Notwithstanding anything to the contrary contained in this Agreement, upon any
such Plan termination, the interest of each Participant, former Participant,
and the Beneficiary shall become fully vested and nonforfeitable; and, if there
is a partial termination of the Plan, the interest of each Participant, former
Participant, and Beneficiary who is affected by such partial termination shall
become fully vested and nonforfeitable. Notwithstanding any termination of
the Plan, the Committee shall continue in existence for all purposes of
administration until all
92
- 87 -
assets of the Trust are completely distributed by the Trustee, at which time
the Trust itself shall automatically terminate.
15.4 WITHDRAWAL OF AN EMPLOYER. Any Employer other than the
Company may, by action of its Board of Directors, withdraw from the Plan, such
withdrawal to be effective upon notice in writing to the Committee and the
Trustee (the Effective Date of such withdrawal being hereinafter referred to as
the "withdrawal date"); and such withdrawing Employer shall thereupon cease to
be an Employer for all purposes hereof. Moreover, a complete discontinuance by
such an Employer of the contributions otherwise required of it hereunder shall
be deemed automatically to constitute a withdrawal of such Employer from the
Plan. In the event of any such withdrawal, the Trustee shall, as of the
withdrawal date, take the following action or actions for the benefit of the
Participants and former Participants employed by or formerly employed by such
withdrawing Employer, or their beneficiaries:
(a) The Trustee shall value and adjust, as of such
withdrawal date, the balances of the Separate Accounts in the manner
provided in Section 10.4 with respect to a Valuation Date, including
any accrued income and expenses. Any 401(k) Contributions made by
such Employer with respect to periods prior to the withdrawal date
shall be credited to the 401(k) Accounts of the Participants and
former Participants on behalf of whom made.
(b) The balances of such accounts, as determined under
subsection 15.4(a), of each such Participant employed solely by such
withdrawing Employer, who is not transferred to or continued in
employment with any other Employer or any Related Corporation, and of
each such former Participant and Beneficiary, shall be held by the
Trustee for the benefit of such Participant, former Participant, or
Beneficiary on a nonforfeitable basis, and it shall dispose of the
same by one or more of the methods permitted under Section 11.5. The
interest of any Participant employed by such withdrawing
93
- 88 -
Employer, who is transferred to or continued in employment with any
other Employer or any Related Corporation, shall remain unaffected by
such withdrawal, and he shall continue as a Participant hereunder.
Notwithstanding the foregoing provisions of this Section 15.4, such withdrawing
Employer may continue the Plan in effect for the benefit of its own employees.
15.5 CORPORATE REORGANIZATION. The merger, consolidation, or
liquidation of the Company, any Employer, or any Related Corporation with or
into the Company, any other Employer, or any other Related Corporation shall
not constitute a termination of the Plan as to the Company or such Employer.
----------------------
End of Article 15
94
- 89 -
ARTICLE 16
EXTENSION OF PLAN
16.1 ADOPTION BY RELATED CORPORATIONS. A Related Corporation may,
by action of its Board of Directors and with the consent of the Board of
Directors of the Company, adopt the Plan as of a specified date and become an
Employer hereunder by causing an appropriate written instrument evidencing such
adoption to be executed pursuant to the authority of its Board of Directors and
filed with the Company, the Committee, and the Trustee; and notice of such
adoption shall be given by the adopting Employer to its Employees.
---------------------
End of Article 16
95
- 90 -
ARTICLE 17
TOP-HEAVY PROVISIONS
17.1 APPLICABILITY. Notwithstanding any other provision to the
contrary, in the event the Plan is deemed to be a top-heavy plan for any Plan
Year, the provisions contained in this Article 17 with respect to vesting and
Employer Contributions shall be applicable with respect to such Plan Year. In
the event that the Plan is determined to be a top-heavy plan and upon a
subsequent determination date is determined to no longer be a top-heavy plan,
the vesting and the Employer Contribution provisions in effect immediately
preceding the Plan Year in which the Plan was determined to be a top-heavy plan
shall again become applicable as of such subsequent determination date;
provided, however, that in the event such prior vesting schedule does again
become applicable, the provisions of Section 11.4 and Section 15.2 shall apply
(a) to preserve the nonforfeitable accrued benefit of any Participant, former
Participant, or Beneficiary and (b) to permit any Participant with the
requisite number of years of vested service specified in Section 11.4 to elect
to continue to have his nonforfeitable interest in his Annual Employer
Contributions Account and his Profit Sharing Contributions Account determined
in accordance with the vesting schedule applicable while the Plan was a
top-heavy plan.
17.2 TOP-HEAVY DEFINITIONS. For purposes of this Article 17, the
following definitions shall apply:
96
- 91 -
(a) The term "determination date" with respect to any Plan
Year shall mean the last day of the preceding Plan Year (or, in the
case of the first Plan Year of the Plan, the last day of the first
Plan Year).
(b) The term "key employee" shall mean any Participant or
former Participant who is a key employee pursuant to the provisions of
Section 416(i)(1) of the Code and any Beneficiary of such Participant
or former Participant.
(c) The term "non-key employee" shall mean any
Participant who is not a key employee.
(d) The term "permissive aggregation group" shall mean
those plans included in an Employer's required aggregation group in
conjunction with any other plan or plans of an Employer, so long as
the entire group of plans would continue to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
(e) A "super top-heavy group" with respect to a
particular Plan Year shall mean a required or permissive aggregation
group that, as of the determination date, would qualify as a top-heavy
group under the definition in subsection 17.2(h) with "90%"
substituted for "60%" each place where "60%" appears in such
definition.
(f) The term "super top-heavy plan" with respect to a
particular Plan Year shall mean a plan that, as of the determination
date, would qualify as a top-heavy plan under the definition in
subsection 17.2(i) with "90%" substituted for "60%" each place where
"60%" appears in such definition. A plan is also a "super top-heavy
plan" if it is part of a super top-heavy group.
(g) The term "top-heavy group" with respect to a
particular Plan Year shall mean a required or a permissive aggregation
group if the sum, as of the determination date, of the present value
of the cumulative accrued benefits for key employees under all defined
benefit plans included in such group and the aggregate of the account
balances of key employees under all defined contribution plans
included in such group exceeds 60% of a similar sum determined for all
employees covered by the plans included in such group.
(h) The term "top-heavy plan" with respect to a
particular Plan Year shall mean (i), in the case of a defined
contribution plan, a plan for which, as of the determination date, the
aggregate of the accounts (within the meaning of Section 416(g) of the
Code and the Regulations thereunder) of key employees exceeds 60% of
the aggregate of the accounts of
97
- 92 -
all participants under the plan, with the accounts valued as of the most recent
Valuation Date under the plan coinciding with or preceding the determination
date, and (ii), in the case of a defined benefit plan for which, as of the
determination date, the present value, as of the relevant Valuation Date, of
the cumulative accrued benefits payable under the plan (within the meaning of
Section 416(g) of the Code and the Regulations thereunder) to key employees
exceeds 60% of the present value, as of the relevant Valuation Date, of the
cumulative accrued benefits under the plan for all employees, with present
value of accrued benefits to be determined in accordance with the actuarial
assumptions specified in such defined benefit plan. In the case of a defined
benefit plan, the accrued benefit of a Participant other than a key employee
shall be determined under the method, if any, that uniformly applies for
accrual under all defined benefit plans maintained by the Employer or if there
is no such method, as if such benefit accrued not more rapidly than the slowed
accrual rate permitted under the fractional rule of Section 411(b)(1)(C) of the
Code. A plan is also a "top-heavy plan" if it is part of a top-heavy group.
For purposes of this Article 17, the "Valuation Date" with respect to each
determination date for a defined benefit plan shall mean the most recent date
on which plan costs for minimum funding purposes have been determined. For
purposes of this subsection 17.2(i), for any Plan Year beginning after December
31, 1984, the accounts and accrued benefits of any employee who has not
performed any service for any Employer or a Related Corporation during the
five- year period ending on the determination date shall be disregarded.
(i) The term "Compensation" with respect to any
Participant shall mean Compensation as defined under Section 415 of
the Code.
17.3 ACCELERATED VESTING. In the event the Plan is determined to
be a top-heavy plan with respect to any Plan Year beginning after December 31,
1983, a Participant shall have the nonforfeitable percentage of the balances of
his Annual Employer Contributions Account and Profit Sharing Contributions
Account determined pursuant to the vesting schedule under Section 11.2.
17.4 MINIMUM EMPLOYER CONTRIBUTION. In the event the Plan is
determined to be a top-heavy plan with respect to any Plan Year
98
- 93 -
beginning after December 31, 1988, the Employer Contributions (other than
401(k) Contributions) allocated to the Separate Accounts of each Participant
who is a non-key employee who is not separated from service with the Employers
as of the end of such Plan Year shall be no less than the lesser of (i) 3% of
his Compensation or (ii) the largest percentage of Compensation that is
allocated for such Plan Year to the Separate Accounts of any key employee
attributable to Employer Contributions (including 401(k) Contributions), except
that, in the event the Plan is part of a required aggregation group, and the
Plan enables a defined benefit plan included in such group to meet the
requirements of Section 401(a)(4) or 410 of the Code, the minimum allocation of
Employer Contributions to the Separate Accounts of each non-key employee shall
be 3% of the Compensation of such non-key employee. Any minimum allocation to
the Separate Accounts of a Participant required by this Section 17.4 shall be
made without regard to the number of Hours of Service credited to such
Participant for the Plan Year and without regard to any social security
contribution made by an Employer on behalf of the Participant. Notwithstanding
the minimum top-heavy allocation requirements of this Section 17.4, in the
event that the Plan is a top-heavy plan, each non-key employee hereunder who is
also covered under a top-heavy defined benefit plan maintained by an Employer
will receive the top-heavy benefits provided for under such defined benefit
plan equal to his average Compensation during the testing period multiplied by
the lesser of 2% times years of service with the Employers or 20%, all
99
- 94 -
as described in such plan, in lieu of the minimum top-heavy allocation under
the Plan.
17.5 ADJUSTMENT TO SECTION 415 LIMITATIONS. Notwithstanding the
provisions of subsection 10.3(d), in the event that the Plan is a top-heavy
plan and an Employer maintains a defined benefit plan covering some or all of
the employees that are covered by the Plan, the denominators of the defined
benefit and defined contribution fractions described in subsection ? of the
Plan, shall be computed by substituting "1.0" for "1.25," and the special
transition rule for the defined contribution fraction for Plan Years ending
after December 31, 1982, as permitted by Section 415(e)(6)(B)(i) of the Code,
shall be applied to the Plan by substituting "$41,500" for "$51,875"; except
that such substitutions shall not be applied to the Plan if (i) the Plan is not
a super top-heavy plan, (ii) the Employer Contribution for such Plan Year
allocated to a non-key employee who participates only under one or more defined
contribution plans of an Employer is not less than 4% of such non-key
employee's Compensation, and (iii) the minimum annual retirement benefit
accrued by a non-key employee who participates only under one or more defined
benefit plans of an Employer or who participates under both a defined benefit
and a defined contribution plan of an Employer is not less than the lesser of
his average Compensation during the testing period multiplied by the
100
- 95 -
lesser of 3% times years of service with an Employer or 30%, all as described
in such defined benefit plans.
-----------------------
End of Article 17
101
- 96 -
ARTICLE 18
MINIMUM DISTRIBUTION REQUIREMENTS
18.1 OVERRIDING PROVISION. The requirements of this Article 18
shall apply to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of the Plan. All distributions
required under this Article 18 shall be determined and made in accordance with
the Treasury Regulations under Section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of Treasury Reg. Section
1.401(a)(9)-2.
18.2 REQUIRED BEGINNING DATE. The entire interest of a
Participant must be distributed or begin to be distributed no later than the
Participant's required beginning date, otherwise in accordance with the
provisions of Section 11.5.
18.3 LIMITS ON DISTRIBUTION PERIODS. As of the first distribution
calendar year, distributions, if not made in a single lump-sum payment, may
only be made over one of the following periods (or a combination thereof):
(a) the life of the Participant;
(b) the life of the Participant and a Beneficiary;
(c) a period certain not extending beyond the life
expectancy of the Participant; or
(d) a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a Beneficiary.
18.4 DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies
after distribution of his interest has begun, the remaining portion of such
interest will continue to be distributed at least
102
- 97 -
as rapidly as under the method of distribution being used prior to the
Participant's death.
18.5 DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies
before distribution of his interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the
extent that an election is made to receive distributions in accordance with (a)
or (b) below:
(a) if any portion of the Participant's interest is
payable to a Beneficiary, distributions may be made over a period
certain not greater than the life expectancy of the Beneficiary
commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(b) if the Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance
with (a) above shall not be earlier than the later of (1) December 31
of the calendar year immediately following the calendar year in which
the Participant died and (2) December 31 of the calendar year in which
the Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this Section 18.5 by
the time of his death, the Participant's Beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of the calendar year
in which distributions would be required to begin under this Section 18.5, or
(2) December 31 of the calendar year which contains the fifth anniversary of
the date of death of the Participant. If the Participant has no Beneficiary,
or if the Beneficiary does not elect a method of distribution, distribution of
the Participant's
103
- 98 -
entire interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
18.6 DEATH OF SURVIVING SPOUSE. For purposes of Section 18.5, if
the surviving spouse dies after the Participant, but before payments to such
spouse begin, the provisions of Section 18.5, with the exception of subsection
18.5(b), shall be applied as if the surviving spouse were the Participant.
18.7 AMOUNTS PAYABLE TO CHILD. For purposes of Sections 18.4 and
18.5, any amount paid to a child of the Participant will be treated as if it
had been paid to the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
18.8 COMMENCEMENT DATE. For the purposes of Sections 18.4, 18.5,
18.6, and 18.7, distribution of a Participant's interest is considered to begin
on the Participant's required beginning date (or, if Section 18.6 is
applicable, the date distribution is required to begin to the surviving spouse
pursuant to Section 18.5).
18.9 DEFINITIONS. For purposes of this Article 18, the following
definitions and other provisions shall apply:
(a) APPLICABLE LIFE EXPECTANCY. The life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or Beneficiary) as of the Participant's (or
Beneficiary's) birthday in the applicable calendar year reduced by one
for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being
recalculated, the applicable life expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall be
the first distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
104
- 99 -
(b) BENEFICIARY. The individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of the
Code and the regulations thereunder.
(c) DISTRIBUTION CALENDAR YEAR. A calendar year for
which a minimum distribution is required. For distributions beginning
before the Participant's death, the first distribution calendar year
is the calendar year immediately preceding the calendar year which
contains the Participant's required beginning date. For distributions
beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are required
to begin pursuant to Sections 18.4, 18.5, 18.6, 18.7, and 18.8.
(d) LIFE EXPECTANCY. Life expectancy and joint and last
survivor expectancy are computed by use of the expected return
multiples in Tables V and VI of Treasury Reg. Section 1.72-9.
Unless otherwise elected by the Participant (or spouse, in
the case of distributions described in subsection 18.5(b)) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The
life expectancy of a non-spouse Beneficiary may not be recalculated.
(e) REQUIRED BEGINNING DATE.
(i) GENERAL RULE. The required beginning date of
a Participant is the first day of April of the calendar year
following the calendar year in which the Participant attains
age 70 1/2.
(ii) TRANSITIONAL RULE. The required beginning
date of a Participant who attains age 70 1/2 before January 1,
1988, shall be determined in accordance with (1) or (2) below:
(1) NON-5% OWNERS. The required
beginning date of a Participant who is not a "5%
owner" (as defined in (iii) below) is the first day
of April of the calendar year in which the later of
retirement or attainment of age 70 1/2 occurs.
(2) 5% OWNERS. The required beginning
date of a Participant who is a 5% owner during any
year beginning after December 31, 1979, is the first
day of April following the later of:
(A) the calendar year in which the
Participant attains age 70 1/2, or
105
- 100 -
(B) the earlier of the calendar year
with or within which ends the Plan Year in
which the Participant becomes a 5% owner, or
the calendar year in which the Participant
retires.
The required beginning date of a Participant who is
not a 5% owner who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April
1, 1990.
(iii) 5% OWNER. A Participant is treated as a 5%
owner for purposes of this subsection 18.9(e) if such
Participant is a 5% owner as defined in Section 416(i) of the
Code (determined in accordance with Section 416 of the Code
but without regard to whether the Plan is top-heavy) at any
time during the Plan Year ending with or within the calendar
year in which such owner attains age 66 1/2 or any subsequent
Plan Year.
(iv) Once distributions have begun to a 5% owner
under this subsection 18.9(e) they must continue to be
distributed, even if the Participant ceases to be a 5% owner
in a subsequent year.
18.10 TRANSITIONAL RULE. Notwithstanding the other requirements of
this Article 18, distribution on behalf of any Participant, including a 5%
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(a) The distribution by the Trust is one which would not
have disqualified the Trust under Section 401(a)(9) of the Code as in
effect prior to amendment by the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the Participant whose interest in the Trust
is being distributed or, if the Participant is deceased, by a
Beneficiary of such Participant.
(c) Such designation was in writing, was signed by the
Participant or the Beneficiary, and was made before January 1, 1984.
000
- 000 -
(x) The Participant had accrued a benefit under the Plan
as of December 31, 1983.
(e) The method of distribution designated by the
Participant or the Beneficiary specifies the time at which
distribution will commence, the period over which distributions will
be made, and in the case of any distribution upon the Participant's
death, the beneficiaries of the Participant listed in order of
priority.
A distribution upon death will not be covered by this transitional rule unless
the information in the designation contains the required information described
above with respect to the distributions to be made upon the death of the
Participant. For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Participant or the Beneficiary to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfied the
requirements in subsections 18.10(a) and 18.10(e). If a designation is revoked
any subsequent distribution must satisfy the requirements of Section 401(a)(9)
of the Code and the regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin, the Trust must
distribute by the end of the calendar year following the calendar year in which
the revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Section 401(a)(9) of the Code
and the regulations thereunder, but for the Section 242(b)(2) election. For
calendar years beginning
107
- 102 -
after December 31, 1988, such distributions must meet the minimum distribution
incidental benefit requirements in Treasury Reg. Section 1.401(a)(9)-2. Any
changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another Beneficiary
(one not named in the designation) under the designation will not be considered
to be a revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is transferred or rolled over
from one plan to another plan, the rules in Q&A J-2 and Q&A J-3 of Treasury
Reg. Section 1.401(a)(9)-1 shall apply.
----------------------
End of Article 18
108
- 103 -
ARTICLE 19
PLAN MERGER
19.1 MERGER OF PLANS. Effective as of June 30, 1995, the Prior
Pension Plan was merged into and made a part of this Plan, and its related
Trust (the "Money Purchase Trust") was merged into and made a part of this
Trust, and the provisions of this Agreement thereafter govern with respect to
the interests of participants in the Prior Plan.
End of Article 19
109
- 104 -
ARTICLE 20
PARTICIPANT LOANS
20.1 AVAILABILITY OF LOANS. A Participant, former Participant,
Beneficiary, or alternate payee under a qualified domestic relations order (the
"borrower") may make written application to the Committee for a loan from the
assets of the Trust, which loans shall be available to all such individuals on
a reasonably equivalent basis for the following reason:
(a) expenses for medical care described in Section 213(d) of
the Code previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in Section
152 of the Code) or necessary for these persons to obtain medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Participant;
(c) payment of tuition and related educational
fees for the next 12 months of post-secondary education for the
Participant, his spouse, children or dependents (as defined in Section
152 of the Code);
(d) payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence;
(e) expenses for the rehabilitation or remodeling of the
principal residence of the borrower; or
(f) expenses for the funeral of a member of the
immediate family of the borrower.
The terms, conditions, and procedures governing or otherwise relating
to any loan shall be as set forth herein, as well as those specified by the
Committee in the form of Loan Application and Promissory Note and Pledge of
Security, which are hereby
110
- 105 -
incorporated by reference into the Plan as the same are from time to
time in effect, that are consistent with the requirements of Section
4975(d)(1) of the Code. An application for a loan must be received by
the Committee at least 30 days in advance of the date as of which the
loan is to be made. In determining whether to grant a loan to a
borrower and the amount of any such loan, the Committee shall give
consideration to (i) whether the borrower has a sufficient level of
income to amortize the loan according to its terms, (ii) whether the
loan meets the requirements of this Article 20, (iii) the basic
purposes of the Plan, and (iv) the financial condition of the Trust.
As collateral for any loan granted hereunder, the borrower shall grant
to the Plan a security interest in 50% of his non-forfeitable interest
under the Plan determined as of the date as of which the loan is made
and, in the case of a borrower who is an active employee, also shall
enter into an agreement to repay the loan by payroll withholding. A
loan shall not be granted unless the borrower consents in writing to
the charging of his Plan accounts for unpaid principal and interest
amounts in the event the loan is declared to be in default.
Furthermore, if the borrower is married at the time the loan is to be
made, the loan shall not be granted unless the borrower's spouse also
consents in writing to the charging of the borrower's Plan accounts
for unpaid principal and interest amounts in the event the loan is
declared to be in default. Any such spousal consent shall be
irrevocable, shall acknowledge the effect of the consent, and shall be
witnessed by a Plan representative or a Notary Public,
111
- 106 -
unless the Committee finds that such consent cannot be obtained because the
spouse cannot be located or because of other circumstances set forth in Section
401(a)(11) of the Code and the regulations issued thereunder.
20.2 ACCOUNTING FOR LOANS. Any loan granted to the borrower shall
be deemed an earmarked investment made solely for the borrower's benefit and
shall be evidenced by a separate loan account of the borrower. A borrower's
separate loan account shall be established as of the date on which the loan is
made and shall be funded with an amount equal to the principal amount of the
loan that is transferred to such account from first, the borrower's 401(k)
Account, next from the borrower's Rollover Account, next the borrower's Annual
Employer Contribution Account, and finally from the borrower's Profit Sharing
Contributions Account. Transfers to a loan account shall be made from such of
the Investment Funds in which such accounts are invested as the borrower shall
direct and shall be subject to any restrictions and limitations applicable
under the terms of any insurance company guaranteed investment contract or
other instrument in which the borrower's other Plan accounts are invested. All
principal and interest payments made on a loan granted hereunder shall be
allocated upon receipt to the borrower's other Plan accounts in the proportion
that such accounts were debited to fund the borrower's separate loan account,
but based upon his investment election then in effect pursuant to Article 8.
The balance of the borrower's separate loan account shall be decreased by the
amount of principal payments and the loan
112
- 107 -
account shall be closed when the loan has been repaid in full. Any expenses of
the Trustee which are directly attributable to its administration of a
borrower's separate loan account, as determined by the Trustee, shall be
charged to and paid from the borrower's Plan accounts in the proportion that
such accounts were debited to fund the borrower's separate loan account.
20.3 TERMS AND CONDITIONS OF LOAN. The Committee shall prescribe
the terms and conditions of any loan granted hereunder, but in any event the
following shall apply:
(a) The interest rate shall be determined from time to
time by the Committee and shall be a reasonable interest rate
commensurate with current interest rates charged for loans made under
similar circumstances by persons in the business of lending money.
(b) The term shall be no greater than five years, except
in the case of a loan used to acquire any dwelling unit which within a
reasonable time is to be used (determined at the time the loan is
made) as a principal residence of the Participant.
(c) The original principal amount of any loan shall not
be less than $500, and the Committee may limit the number and
frequency of loans made to a borrower in accordance with uniform rules
and procedures.
(d) The principal amount of any loan hereunder to a
borrower shall not exceed, when aggregated with the outstanding
balance of all loans to the borrower from other plans maintained by an
Employer or a Related Corporation, and amount equal to the lessor of:
(i) $50,000 (reduced by the highest outstanding
balance of any other loan to the borrower from the Plan or
another plan of an Employer or a Related Corporation during
the preceding 12-month period), or
(ii) 50% of the aggregate amount of the borrower's
non-forfeitable interest under the Plan and his nonforfeitable
interest under all other plans maintained by an Employer or a
Related Corporation.
113
- 108 -
(e) The principal amount of any loan hereunder to
a borrower shall not exceed the lesser of (i) the amounts
credited to his 401(k) Account, or (ii) 50% of the borrower's
non-forfeitable interest under the Plan, determined as of the
date as of which the loan is made.
20.4 REPAYMENT OF LOAN. The loan shall be repaid, with interest,
no less rapidly than in equal monthly installments over the term of the loan.
In the case of a borrower who is on the payroll of an Employer or a Related
Corporation, the loan payments shall be made by payroll deduction. A borrower
may, however, prepay the entire balance of his loan in one single lump sum
without the imposition of any prepayment penalty. In the event of failure on
the part of a borrower to make, or cause to be made, any payment required under
the terms of the loan within 60 days following the date on which such payment
shall become due, the Committee may declare the loan to be in default, and the
entire unpaid balance of such loan, together with accrued interest, shall be
immediately due and payable. In any such event, if such balance and interest
thereon is not then paid, the Trustee shall charge the accounts of the borrower
with the amount of such balance and interest as of the earliest date a
distribution may be made from the Plan to the borrower without adversely
affecting the tax qualification of the Plan.
------------------------
End of Article 20
114
- 109 -
ARTICLE 21
MISCELLANEOUS PROVISIONS
21.1 COMMITMENT AS TO EMPLOYMENT. Nothing herein contained shall
be construed as a commitment or agreement upon the part of any Participant
hereunder to continue his employment with an Employer, and nothing herein
contained shall be construed as a commitment on the part of an Employer to
continue the employment or rate of Compensation of any Participant hereunder
for any period.
21.2 BENEFITS. Nothing in this Agreement shall be construed to
confer any right or claim upon any person other than the parties hereto,
Participants, former Participants, and beneficiaries.
21.3 NO GUARANTEES. Neither any Employer, the Committee, nor the
Trustee guarantees the Trust from loss or depreciation, nor the payment of any
amount which may become due to any person hereunder.
21.4 PRECEDENT. Except as otherwise specifically provided, no
action taken in accordance with this Agreement by the Company, any other
Employer, the Committee, or the Trustee shall be construed or relied upon as a
precedent for similar action under similar circumstances.
21.5 DUTY TO FURNISH INFORMATION. Each of the Company, the other
Employers, the Committee, or the Trustee shall furnish to any of the others any
documents, reports, returns, statements, or other information that any of the
others reasonably deems necessary to perform its duties imposed hereunder or
otherwise imposed by law.
21.6 WITHHOLDING. The Trustee shall withhold any tax which by any
present or future law is required to be withheld from any
115
- 110 -
payment to any Participant, former Participant, or Beneficiary hereunder.
21.7 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS. The Plan
shall not be merged or consolidated with any other plan, nor shall any of its
assets or liabilities be transferred to another plan, unless, immediately after
such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at
least equal to the benefit he would have received immediately prior to such
merger, consolidation, or transfer of assets or liabilities (assuming in each
instance that the Plan had then terminated).
21.8 CONDITION ON EMPLOYER CONTRIBUTIONS. Notwithstanding anything
to the contrary contained in this agreement, any obligation of any Employer to
make any contribution hereunder is hereby conditioned upon (i) the continued
qualification of the Plan under Section 401(a) of the Code, provided that any
contribution shall be returned to such Employer within one year after the date
of denial of qualification of the Plan in connection with an amendment to the
Plan or Trust and (ii) the deductibility of the contribution shall be returned
to such Employer (to the extent disallowed) within one year after the
disallowance of the deduction. Furthermore, a contribution which is made by
any Employer under a mistake of fact shall be returned to such Employer within
one year after the payment of the contribution. Except as otherwise provided
in this Section 21.8, however, in no event shall
116
- 111 -
any portion of the Trust property ever revert to or otherwise inure to the
benefit of any Employer or a Related Corporation.
21.9 BACK PAY AWARDS. The provisions of this Section 21.9
shall apply only to an Employee or former Employee who becomes entitled to back
pay by an award or agreement of an Employer without regard to mitigation of
damages. If a person to whom this Section 21.9 applies was or would have been
eligible to make an election under Section 3.3 after the Hours of Service
applicable to such back pay award or agreement have been credited in accordance
with the provisions of Article 2, and if such person shall make within 30 days
of the date he receives notice of the provisions of this Section 21.9 an
election under Section 3.3 (retroactive to any payroll period he was or has
become eligible to do so), then any 401(k) Contributions which were not
previously made but which, after application of the foregoing provisions of
this Section 21.9, would have been made under the provisions of Section 5.1, if
such Participant so elects, shall be made out of the proceeds of such back pay
award or agreement. The amount of such additional contributions shall be
credited to his 401(k) Account, Profit Sharing Contributions Account, and
Annual Employer Contributions Account, as appropriate, if such person is a
Participant when the award or agreement is made or becomes a Participant as a
result of the provisions of this Section 21.9. Any additional contributions
made by such Employer pursuant to this Section 21.9 shall be made in accordance
with, and subject to the limitations of, Article 5 and 6.
117
- 112 -
21.10 VALIDITY OF AGREEMENT. The validity of this Agreement shall
be determined and this Agreement shall be construed and interpreted in
accordance with the laws of the State of Ohio except to the extent preempted by
federal law. The invalidity or illegality of any provision of this Agreement
shall not affect the legality or validity of any other part thereof.
21.11 PARTIES BOUND. This Agreement shall be binding upon the
parties hereto, the Employers, the Committee, all Participants, former
Participants, and beneficiaries hereunder, and, as the case may be, the heirs,
executors, administrators, successors, and assigns of each of them.
-----------------
End of Article 21
118
- 113 -
IN WITNESS WHEREOF, the parties hereto, each by its duly authorized
officers, have caused this Agreement to be executed as of the day and year
first above written.
LSI INDUSTRIES INC.
BY: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Title: Chief Financial Officer
and Treasurer
THE FIFTH THIRD BANK
BY: /s/
----------------------------
Title: Trust Officer
119
ADOPTION OF THE LSI INDUSTRIES INC.
RETIREMENT PLAN AND TRUST
(Amended and Restated as of July 1, 1989)
The undersigned hereby adopts the LSI Industries Inc. Retirement Plan
and Trust as amended and restated July 1, 1989, except as otherwise provided.
SGI INTEGRATED
GRAPHIC SYSTEMS, INC.
BY: Xxxxxx X. Xxxxxxx
ITS: Treasurer
DATE: 6-27-95
XXXXXXXX LIGHTING INC.
BY: Xxxxxx X. Xxxxxxx
ITS: Treasurer
DATE: 6-27-95
279554.2
