Document/Exhibit Description Pages Size
1: 10-K Annual Report 58± 302K
2: EX-10 Material Contract 55± 216K
3: EX-10 Material Contract 19± 45K
4: EX-10 Material Contract 85± 305K
5: EX-10 Material Contract 2± 10K
6: EX-10 Material Contract 10± 47K
7: EX-10 Material Contract 7± 33K
8: EX-11 Statement re: Computation of Earnings Per Share 1 8K
9: EX-21 Subsidiaries of the Registrant 1 5K
10: EX-27 Financial Data Schedule (Pre-XBRL) 1 6K
Exhibit 10.1
Introduction
SCM Corporation adopted the Retirement Savings and
Investment Plan of SCM Corporation effective October 28, 1971 for
the benefit of certain of its employees including employees of
certain of its affiliates ("Prior Plan"). From and after 1985
employees of Smith Corona Corporation, an affiliate of SCM
Corporation, together with the employees of three wholly-owned
subsidiaries of Smith Corona Corporation, namely, Hulse
Manufacturing Company, SCM Office Supplies, Inc. and Histacount
Corporation, participated in the Prior Plan.
In July, 1989, Smith Corona Corporation became a public
company with an offering of a majority of its common stock on the
New York Stock Exchange. Effective as of July 1, 1989, Smith
Corona Corporation and two of its subsidiaries, namely, SCM
Office Supplies, Inc. and Histacount Corporation, each adopted
separate but identical defined contribution plans for their
respective employees entitled respectively, Smith Corona
Corporation Retirement Savings and Investment Plan ("Plan"), SCM
Office Supplies, Inc. Retirement Savings and Investment Plan and
Histacount Corporation Retirement Savings and Investment Plan.
Effective also as of January 1, 1989, Hulse Manufacturing Company
adopted the Plan as a participating employer. The assets and
liabilities of the employees of Smith Corona Corporation and its
subsidiaries were "spun-off" from the Prior Plan and transferred
to the three respective plans. The "spin-off" was accomplished
pursuant to Section 414(l) of the Internal Revenue Code of 1986,
as amended.
Effective January 1, 1992, the SCM Office Supplies,
Inc. Retirement Savings and Investment Plan was merged with and
into the Plan and the Plan was amended and restated as of such
date. On July 5, 1994, all the assets of SCM Office Supplies,
Inc. were sold and all of the employees of SCM Office Supplies,
Inc. were terminated.
On November 4, 1994, all of the assets of Histacount
Corporation were sold and all employees of Histacount Corporation
were terminated. Effective December 31, 1996, the Histacount
Corporation Retirement Savings and Investment Plan was merged
with and into the Plan. The Plan was again amended and restated
effective January 1, 1997. The Trustee for the Plan is Bankers
Trust Company under a trust agreement established as of July 1,
1989.
The current principal purpose of the Plan is to
encourage employees to save for retirement by offering matching
Employer Contributions and to provide them with a convenient way
to save for retirement on a regular and tax effective basis.
Provisions of this Plan are only applicable to
employees in the employment of a participating employer and who
have an Hour of Service on or after January 1, 1997. Any
employee who was covered under the Prior Plan or the Plan and who
retired or terminated employment prior to January 1, 1997 shall
be entitled to benefits as determined by the Prior Plan or Plan,
as in effect at the retirement or termination date.
ARTICLE I
Definitions
As used herein, unless otherwise defined or required by
the context, the following words and phrases shall have the
meanings indicated. Some of the words and phrases used in the
Plan are not defined in this Article I, but, for convenience are
defined as they are introduced into the text.
1.1 "Account" means a Member's Employee Contributions
Account, Compensation Deferral Contribution Account, Rollover
Contribution Account, and Employer Contribution Account, or any
such account or subaccount thereof, as the context requires.
1.2 "Affiliate" means any company which is related to
the Employer as a member of a controlled group of corporations in
accordance with Section 414(b) of the Code, as a trade or
business under common control in accordance with Section 414(c)
of the Code or members of an affiliated service group as defined
under Section 414(m) of the Code and any other entity required to
be aggregated with the Employer pursuant to Section 414(o) of the
Code.
1.3 "Appropriate Form" means the form prescribed by
the Committee for a particular purpose.
1.4 "Basic Contributions" means Compensation Deferral
Contributions that are eligible for matching by Employer
Contributions in accordance with Section 4.1 (Amount of Employer
Contributions).
1.5 "Basic Contributions Subaccount" means the
separate subaccount in the Compensation Deferral Contribution
Account maintained for a Member to record such Member's share of
the Trust attributable to Basic Contributions.
1.6 "Beneficiary" means the person or persons
designated by the Plan or by a Member under Section 2.5
(Beneficiary Designation) to receive benefits payable under the
Plan as a result of the Member's death.
1.7 "Board" or "Board of Directors" means the Board of
Directors of Smith Corona Corporation or any successor thereto.
1.8 "Code" means the Internal Revenue Code of 1986, as
amended from time to time and references to sections thereof
shall be deemed to include any such sections as amended, modified
or renumbered.
1.9 "Committee" means the Benefits Administration
Committee of Smith Corona Corporation appointed in accordance
with Section 10.3 (Appointment of the Committee).
1.10 "Compensation" means with respect to a Plan Year,
the sum of the amount reported by the Employer to the Internal
Revenue Service on Form W-2 as the Member's compensation for such
calendar year and the amount of any Compensation Deferral
Contributions made on such Member's behalf to the Plan and the
amount contributed by the Employer pursuant to a salary reduction
agreement which is not included in a Member's gross income under
Section 125 of the Code; but exclusive of termination or
severance pay, prizes, awards, grievance settlements, overseas
cost of living allowances, relocation allowances, mortgage
assistance, executive perquisites, stock options, and such other
extraordinary items of remuneration as the Committee shall
determine from time to time pursuant to such uniform and
nondiscriminatory rules as it shall adopt. Compensation of each
Employee taken into account under the Plan for any Plan Year
shall not exceed $160,000 as thereafter adjusted for inflation in
accordance with Section 415(d) of the Code. If the Plan
determines Compensation for a Plan Year less than 12 calendar
months, then the limitation shall be equal to the annual
compensation limitation determined by multiplying the limitation
by the ratio obtained by dividing the number of full months in
such Plan Year by 12.
1.11 "Compensation Deferral Contributions" means
contributions made by the Employer pursuant to an election by the
Member to reduce the cash compensation otherwise currently
payable to such Member by an equivalent amount, in accordance
with the provisions of Section 3.1 (Compensation Deferral
Contributions).
1.12 "Compensation Deferral Contributions Account"
means the separate account maintained for a Member to record such
Member's share of the Trust Fund attributable to Compensation
Deferral Contributions made on such Member's behalf.
1.13 "Effective Date" means July 1, 1989.
1.14 "Eligible Employee" means an employee who (i) has
attained age 21 and (ii) has completed at least 90 days of
employment with the Employer measured from his date of hire as a
full-time Employee excluding an individual who is covered by a
collective bargaining agreement between the Employer and any
union unless participation by such Employee in the Plan has been
agreed to by the parties to such agreement and also excluding any
Employee who is a nonresident alien with no earned income from
the Employer which constitutes income from sources within the
United States.
1.15 "Employee" means a person (but not including a
person acting only as a director) who is a common law employee
employed by the Employer and excluding any "leased employee"
within the meaning of Section 414(n)(2) of the Code.
1.16 "Employee Contributions" means after tax
contributions that were made by a Member under the Prior Plan
prior to January 1, 1989 and were transferred to this Plan.
1.17 "Employee Contributions Account" means the
separate account maintained for a Member to record such Member's
share of the Trust Fund attributable to the Member's Employee
Contributions. The Employee Contributions Account of each Member
will consist of a subaccount for basic Employee Contributions
that were eligible for matching by Employer Contributions and a
subaccount for supplemental Employee contributions that were not
eligible for matching by Employer Contributions.
1.18 "Employer" means Smith Corona Corporation and
with respect to a participating subsidiary who adopts the Plan
pursuant to Section 13.7, such subsidiary, where appropriate.
1.19 "Employer Contributions" means the Employer
contributions made to the Trust Fund pursuant to Article IV
(Employer Contributions).
1.20 "Employer Contribution Account" means the
separate Account maintained for a Member to record such Member's
share of the Trust Fund attributable to Employer Contributions
made on such Member's behalf.
1.21 "Enrollment Date" means the first day of any
calendar month.
1.22 "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to
time and references to sections thereof shall be deemed to
include any such sections, as amended, modified or renumbered.
1.23 "Highly Compensated Employee" means any Employee
who is a 5% owner (as defined in Section 416(i)(1) of the Code),
at any time during the Plan Year or the preceding Plan Year and
any Employee who received Compensation for the preceding Plan
Year in excess of $80,000 (adjusted for increases in the cost-of-living
in accordance with Section 415(d) of the Code) and if the
Employer elects, also in the Top Paid Group (as defined in
Section 414(q)(3) of the Code).
1.24 "Hour of Service" means each hour for which an
Employee is paid, or entitled to payment, or receives earned
income from an Employer or an Affiliate:
(i) for performance of duties;
(ii) on account of a period of time during which
no duties were performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, jury duty, military duty or authorized
Leave of Absence, provided that, except in the case of an
Authorized Leave of Absence, no more than 501 Hours of
Service shall be credited for any single continuous period
during which an Employee performs no duty, and provided that
no Hours of Service shall be credited for periods of time in
respect of which an Employee receives severance pay or for
payments made or due under a plan maintained solely for the
purpose of complying with applicable workers' compensation,
unemployment compensation or disability insurance laws, or
for reimbursement of medical expenses; and
(iii) for which back pay, irrespective of
mitigation of damages, is awarded or agreed to by the
Employer; provided that Hours of Service credited under (i)
or (ii) shall not be credited under (iii).
Hours of Service credited to an Employee for the
performance of duties will be credited to the computation period
in which the duties are performed. The determination of Hours of
Service for reasons other than the performance of duties shall be
calculated and credited in accordance with the provisions of
Labor Department Regulations Section 2530.200b-2(b) and (c), and
Hours of Service shall be credited to the computation periods to
which the award or agreement pertains. Except in the case of an
authorized Leave of Absence, not more than 501 Hours of Service
shall be credited for any continuous period during which an
Employee performs no duty or, in the case of service required to
be credited for payments of back pay awarded or agreed to, for a
period during which an employee did not or would not have
performed duties.
To the extent not credited above, for periods of an
authorized Leave of Absence of an Employee shall be credited with
a number of Hours of Service for each week of such authorized
Leave of Absence equal to the Employee's weekly average number of
Hours of Service scheduled for the six-week period immediately
preceding such authorized Leave of Absence.
1.25 "Initial Enrollment Date" means the earliest date
for Eligible Employees to apply to become Members of the Plan.
1.26 "Investment Fund" means any investment option
approved by the Committee pursuant to Section 7.1 (Investment of
Accounts).
1.27 "Investment Manager" means the individual and/or
other entity appointed in accordance with Section 11.3
(Investment Manager) who has acknowledged in writing that such
individual is a fiduciary with respect to the Plan and who is:
(a) registered as an investment adviser under the
Investment Advisers Act of 1940, or
(b) a bank, as defined in such Act, or
(c) an insurance company qualified to manage,
assign or dispose of assets of pension plans.
1.28 "Leave of Absence" means an absence or
interruption of service approved by the Committee under uniform
and nondiscriminatory rules and procedures and any absence
pursuant to the Family and Medical Leave Act of 1993. Members on
leave of absence for service in the uniformed services of the
United States, however, shall be deemed to have been on a Leave
of Absence, provided they return to service with an Employer
within the required time limitations set forth in the Uniformed
Services Employment and Reemployment Rights Act of 1994.
1.29 "Member" means an Eligible Employee who has
become a member of the Plan in accordance with Article II
(Eligibility and Membership). Each Member shall continue to be
such until the later of the date such Member ceases to be an
Eligible Employee or such Member's Accounts have been completely
distributed.
1.30 "Parental Leave" means a period not in excess of
two (2) years commencing after December 31, 1984 during which an
individual is absent from work for any period:
(1) by reason of the pregnancy of the individual,
(2) by reason of the birth of a child of the
individual,
(3) by reason of the placement of a child with
the individual in connection with the adoption of such child
by such individual, or
(4) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
An absence from work shall not be a Parental Leave unless the
Employee furnishes the Committee such timely information as may
reasonably be required to establish that the absence from work
was for one of the reasons specified in this Section 1.30 and the
number of days for which there was such an absence. Nothing
contained herein shall be construed to establish an Employer
policy of treating a Parental Leave as a Leave of Absence.
1.31 "Plan" means the Smith Corona Corporation
Retirement Savings and Investment Plan as set forth herein or as
amended from time to time and in accordance with Section
401(a)(27)(B) is designated a profit-sharing plan.
1.32 "Plan Year" means the calendar year except the
first Plan Year means the period between July 1, 1989 and
December 31, 1989.
1.33 "Required Beginning Date" means April 1 of the
calendar year following the later of (a) the Plan Year in which
the Member attains the age of 70-1/2 years or (b) the calendar
year in which he retires.
1.34 "Retirement Age" means the date such Member
attains age 65.
1.35 "Rollover Contribution" means an amount which is
transferred from another plan to this Plan, in accordance with
the provisions of Section 2.7 (Rollover Contributions From Other
Plans).
1.36 "Rollover Contribution Account" means the
separate Account maintained for a Member to record such Member's
share of the Trust Fund attributable to any Rollover
Contributions made to the Plan on his behalf.
1.37 "Service" means the period of employment
(including a Leave of Absence) beginning on the first day the
Eligible Employee performs duties for the Employer or an
Affiliate and ending on the day of quit, retirement, discharge or
death, two years after the commencement of absence on account of
Parental Leave, or one year after an absence for any other
reason. All prior periods of employment with the Employer or an
Affiliate, and breaks in employment of less than one year shall
be included in Service. If a break in employment of not more
than two years is on account of Parental Leave not more than one
year of Service shall be credited to an Eligible Employee for a
period of Parental Leave. Service for purposes of vesting under
Section 6.1 shall be measured in full years with a fraction of a
year equal to 6 months or more treated as a full year and a
fraction of a year equal to less than 6 months disregarded.
1.38 "Specific Involuntary Termination" means a
termination by the Employer without cause following written
notice from the Employer to the Member advising that the Member's
position is being eliminated in the immediate future without
cause or a resignation on account of (i) a material reduction in
position or compensation, or (ii) a required geographic
relocation of more than 50 miles.
1.39 "Supplemental Contributions" means Compensation
Deferral Contributions that are not eligible for matching by
Employer Contributions in accordance with Section 4.1 (Amount of
Employer Contributions).
1.40 "Supplemental Contributions Subaccount" means the
separate subaccount in a Compensation Deferral Contributions
Account maintained to record a Member's share of the Trust Fund
attributable to Supplemental Contributions.
1.41 "Suspense Account" means the separate account
maintained for a Member who had monies credited to such account
pursuant to Section 4.6 (Limitation on Annual Additions),
reflecting the current dollar value of such credit.
1.42 "Total and Permanent Disability" means permanent
incapacity which results in a Member being unable to engage in
regular employment or occupation by reason of any medically
demonstrable physical or mental condition acceptable to the
Committee on a nondiscriminatory basis and which would entitle
the Member to benefits under Employer's long-term disability
plan, if any, or to Social Security disability benefits as
evidenced by a disability award letter. However, no Member shall
be deemed to be disabled if such incapacity (a) resulted from or
consists of habitual drunkenness or addiction to narcotics, or
(b) was incurred, suffered or occurred while the Member was
engaged in, or resulted from having engaged in, a criminal
enterprise, or (c) was intentionally self-inflicted, or (d) arose
out of service in the armed forces of any country.
1.43 "Trustee" means the corporate trustee appointed
from time to time by the Company to administer the Trust Fund in
accordance with Section 11.2 (Trustee).
1.44 "Trust Fund" means the trust fund established in
accordance with Section 11.1 (Trust Fund) from which benefits
provided under this Plan will be paid.
1.45 "Valuation Date" means the last business day of
each calendar month on which the New York Stock Exchange is open
for trading.
1.46 "Use of Masculine Pronoun". The use of the
masculine pronoun shall include the feminine and the singular
shall include the plural.
ARTICLE II
Eligibility and Membership
2.1 Members on the Restatement Date. Each person who
was a Member of the Plan on December 31, 1996 shall continue as a
Member of the Plan on January 1, 1997.
2.2 Eligible Employees on and after the January 1,
1997. On and after January 1, 1997 an Eligible Employee may
elect to become a Member on the Initial Enrollment Date or any
Enrollment Date thereafter. Notwithstanding the foregoing, a
former Eligible Employee who is reemployed as an Eligible
Employee following a separation from Service, shall be eligible
to become a Member of the Plan upon reemployment. Such
reemployed Eligible Employee may rejoin the Plan on an Enrollment
Date effective as of the start of first full payroll period after
his re-enrollment. If a former Employee with at least 90 days of
employment with the Employer, separates from Service prior to
attaining age 21 and is reemployed as an Employee before the
greater of (a) a period of five consecutive twelve-month periods
starting with his separation of Service or (b) the period of
Service prior to his separation, shall be eligible to become a
Member of the Plan on the later of his attainment of age 21 or
his reemployment date. Such reemployed Employee may join the
Plan on an Enrollment Date effective as of the start of the first
full payroll period after his re-enrollment. Each other former
Employee who separates from Service prior to becoming an Eligible
Employee, shall be treated as a new Employee upon reemployment.
2.3 Completion of Appropriate Form. In order to
become a Member on any Enrollment Date, an Eligible Employee must
complete and return the Appropriate Form to the Committee at
least 30 days (or such other period as the Committee may
prescribe) prior to that Enrollment Date.
2.4 Elections Upon Becoming a Member. The Eligible
Employee, in completing the Appropriate Form specified in
Section 2.3, shall (i) authorize Employer to reduce current
compensation for Compensation Deferral Contributions pursuant to
Section 3.1 (Compensation Deferral Contributions), (ii) make an
investment election from among those options approved by the
Committee under Section 7.1 (Investment of Accounts), and (iii)
designate a Beneficiary in accordance with Section 2.5
(Beneficiary Designation). Any such payroll authorization,
investment election or Beneficiary Designation shall remain in
effect until changed by notice to the Committee on the
Appropriate Form, subject to the provisions of the Plan.
2.5 Beneficiary Designation. Each Member shall
designate a Beneficiary on the Appropriate Form provided by the
Committee. The designated Beneficiary may be an individual,
estate or trust; however, if the Member is married at the time of
such Member's death, such Member's surviving spouse shall
automatically be such Member's sole Beneficiary unless the spouse
has consented in writing in accordance with Section 9.9 (Spousal
Consent) to a designation of a different Beneficiary. If more
than one individual or trust is named, the Member shall indicate
the shares and/or precedence of each individual or trust so
named. Any Beneficiary so designated may be changed by the
Member at any time (subject to his spouse's consent, if
applicable) by signing and filing the Appropriate Form with the
Committee.
In the event that no Beneficiary had been designated or
that no designated Beneficiary survives the Member, the following
Beneficiaries (if then living) shall be deemed to have been
designated in the following priority: (1) spouse, (2) children,
including adopted children and stepchildren, in equal shares, (3)
parents, in equal shares, of the Member's surviving parent, if
only one parent survives, and (4) Member's estate.
2.6 Transfers to or from Non-Covered Status. If a
Member ceases to meet the definition of Eligible Employee as set
forth in Section 1.14 (Eligible Employee) but continues to be an
Employee or an employee of an Affiliate, such Member's right to
make or have contributions made on such Member's behalf to the
Plan shall be suspended. If, during the period of suspension, a
Member's employment with the Employer or an Affiliate terminates
for any reason, there shall be a distribution of such Member's
Accounts in accordance with the provisions of Article IX
(Distribution Upon Termination of Employment). If and when the
suspended Member again becomes an Eligible Employee, such Member
may resume having Compensation Deferral Contributions made on
such Member's behalf as of any payroll date thereafter by giving
written notice to the Committee on the Appropriate Form not less
than 30 days (or such other period as the Committee may
prescribe) prior to such payroll date.
2.7 Rollover Contributions From Other Plans. An
Eligible Employee or an individual who meets the definition of
Eligible Employee in Section 1.14 except for the age or service
requirements, who is in receipt of a distribution of cash which
is eligible to be "rolled over" to a qualified plan in accordance
with applicable Code sections may, in accordance with and subject
to such rules and procedures approved by the Committee, transfer
all or part of such distribution into the Plan; provided, that
the transfer is in conformity with requirements set forth in the
Code.
Upon approval by the Committee, the amount transferred
to the Plan shall be deposited in the Trust Fund in cash and
shall be credited to a Rollover Contribution Account. For
purposes of this Section, Rollover Contributions shall include,
on and after January 1, 1993, optional direct rollover transfers
of all or a portion of an eligible rollover distribution as
provided for in Section 401(a)(31) of the Code.
If a Rollover Contribution is made on behalf of an
individual who has not yet become a Member, such individual shall
be deemed a Member upon the establishment of the Rollover
Contribution Account; however, participation in the Plan shall be
limited to the Rollover Contribution Account until the other
requirements for membership under this Article II are fulfilled.
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. Each Member
who is an Eligible Employee may elect to have the Employer make
Compensation Deferral Contributions not to exceed $9,500 per year
(subject to adjustment for inflation in accordance with Section
415(d) of the Code) to the Plan on such Member's behalf to be
credited to such Member's Compensation Deferral Contributions
Account, in which case the cash compensation otherwise payable by
the Employer to the Member shall be reduced by an amount equal to
the Compensation Deferral Contributions so made. Subject to the
limitations prescribed in Section 3.4, the amount of Compensation
Deferral Contributions in any payroll period shall be in whole
percentages from 2% to 12% of the Member's Compensation as the
Member shall designate (or such greater or lesser percentages as
the Committee may from time to time prescribe for the Plan). If
the Compensation Deferral Contributions of a Member exceeds the
annual dollar limit of this Section 3.1 applicable for a Plan
Year, the excess amount and the income, if any, allocable thereto
shall be distributed to the Member not later than the April 15
following the close of the taxable year of the Member.
3.2 Changes and Suspension of Contributions. Subject
to Section 3.1, Compensation Deferral Contributions made on a
Member's behalf may be increased or decreased by giving 30 days'
written notice to the Committee on the Appropriate Form,
effective the next following Enrollment Date. Compensation
Deferral Contributions may be suspended effective at the
beginning of the next payroll period, by giving 10 days' written
notice to the Committee. A Member who has suspended Compensation
Deferral Contributions may resume having such contributions made
on his or her behalf commencing on any subsequent Enrollment Date
by giving 30 days' written notice to the Committee (or such
shorter notice period as the Committee may from time to time
permit) on the Appropriate Form.
3.3 Transfer of Contributions to Trustee.
Contributions made under this Article III will be transferred to
the Trustee as soon as reasonably possible following the month in
which the Member's cash compensation is reduced; provided that
all Compensation Deferral Contributions for a Plan Year shall be
transferred to the Trustee not later than 15 business days after
the close of the month in which such amounts were deducted and
withheld.
3.4 Limitation on Compensation Deferral Contributions.
Compensation Deferral Contributions for any Plan Year shall be
subject to the actual deferral percentage limitations of Section
401(k)(3) of the Code. The Committee may take any and all action
it deems necessary to comply with the actual deferral percentage
limitations of Section 401(k)(3) of the Code with respect to any
Plan Year including limiting the percentage or amount of
Compensation Deferral Contributions elected by any or all Members
who are Highly Compensated Employees and including actions
permitted by Sections 401(k)(8) and 402(g)(2)(A)(i) of the Code
and the regulations thereunder.
ARTICLE IV
Employer Contributions
4.1 Amount of Employer Contributions. The Employer
shall make contributions to the Plan, with respect to each
payroll period on behalf of each Member who is an Eligible
Employee, equal to 50% (or such greater percentage, not exceeding
100%, as the Board may from time to time authorize) of that
portion of the Member's Compensation Deferral Contributions which
do not exceed 6% (or such other percentage as the Board may from
time to time permit) of Compensation in such payroll period. The
Board of Directors may, in its discretion, temporarily
discontinue Employer Contributions with respect to Member's
Compensation Deferral Contributions (which are Basic
Contributions) for Compensation not yet earned on the date such
Employer Contributions are temporarily discontinued. The Board
of Directors may also, in its discretion, authorize to be made as
of the close of a Plan Year a special Employer Contribution with
respect to some or all Members to be a "qualified nonelective
contribution" as defined in Section 401(m)(4) of the Code and
applicable regulations.
4.2 Limitations on Matching Contributions. Matching
Employer Contributions for a Plan Year in respect of a Member who
is a Highly Compensated Employee shall be subject to the actual
contributions percentage limitations of Section 401(m)(2) of the
Code and may be reduced to the extent necessary, as determined by
the Committee, to comply with the contributions percentage
requirements of Section 401(m)(2) of the Code with respect to any
Plan Year including the prohibition on the multiple use of the
alternative limitation under Treasury Regulation Section
1.401(m)-2. Moreover, the Committee may take any action
permitted by Section 401(m)(6) of the Code and the regulations
thereunder to comply with the contributions percentage
requirements of Section 401(m)(2) of the Code and may take any
corrective action permitted by Treasury Regulation Section
1.401(m)-2(c).
4.3 Treatment of Forfeitures. Any amounts forfeited
in accordance with Sections 6.4 (Forfeitures) and 13.6 (Unclaimed
Amounts) shall be applied as a credit towards the amount of
Employer Contributions otherwise required under Section 4.1.
However, if pursuant to Section 4.1, Employer Contributions are
temporarily discontinued, for Plan Years following the Plan Year
in which such temporary discontinuance occurs, any such forfeited
amounts in excess of the amounts required to restore forfeited
amounts to the Employer Contribution Accounts of Members who are
reemployed in accordance with Section 6.4 shall be allocated as
of the last day of the Plan Year to Members' Employer
Contribution Accounts in an amount equal to the amount of such
forfeited amounts available for allocation multiplied by a
fraction the numerator of which is the Members' Compensation
Deferral Contributions for the Plan Year not in excess of six
percent of such Member's Compensation and the denominator of
which is the aggregate of all Members' Compensation Deferral
Contributions not in excess of six percent of all such Members'
Compensation.
4.4 Transfer of Contributions to Trustee. Employer
Contributions under this Article IV with respect to each payroll
period shall be paid to the Trustee as soon as practicable after
the close of the month in which such payroll period ends (but in
no event later than 15 business days after the last day of such
month) and such Employer Contributions (inclusive of the credit
for forfeitures as provided in Section 4.3) shall be credited as
of the last day of such month to each Member's Employer
Contribution Account.
4.5 Contributions After Certain Leave of Absences.
Notwithstanding any Plan provision to the contrary, a Member who
returns to service with an Employer on or after December 12, 1994
under the Uniformed Services Employment and Reemployment Rights
Act of 1994 following a Leave of Absence shall be eligible to
make additional Compensation Deferral Contributions with respect
to the Plan Years (or portions thereof) comprehended by such
Leave of Absence, provided that, such Contributions are made
during a period which begins on the Member's reemployment date
and ends on the date which is the earlier of (a) five years
therefrom or (b) the date after reemployment which is equal to
three times the length of such Leave of Absence. The maximum
amount of such Compensation Deferral Contributions shall not
exceed the amount he would have been permitted to make under the
limitations imposed under this Article IV had he remained
employed during such Leave of Absence. Such Member shall also be
entitled to receive and have credited to his Account matching
Employer Contributions for such Leave of Absence to the extent he
actually makes Compensation Deferral Contributions upon which
allocation of such matching Employer Contributions are
contingent. For purposes of computing the amount of Compensation
Deferral Contributions and matching Employer Contributions, a
Member's Compensation during such Leave of Absence shall be
deemed to be equal to the rate of Compensation he would have
earned during such Leave of Absence or, if this is uncertain, his
average Compensation during the 12-month period immediately
preceding such Leave of Absence (or, if shorter, the portion of
the year preceding such Leave of Absence). With respect to any
Contributions made under this Section, (i) no earnings shall be
credited for any period before such Contributions are actually
made and (ii) such Contributions shall not be subject to any
otherwise applicable limitation under Section 402(g), 401(a),
401(k), 401(m), 404(a) or 415 of the Code for the Plan Year(s)
such Contributions are actually made.
4.6 Limitation of Annual Additions.
(a) Notwithstanding anything herein to the contrary,
in no event shall the Annual Additions (as hereinafter defined)
with respect to any Member in any Plan Year exceed the Maximum
Annual Addition. A Member's "Maximum Annual Additions" means the
lesser of (i) 25% of the Member's compensation within the meaning
of Section 415(c)(3) of the Code or (ii) $30,000.
(b) For purposes of this Section 4.5 the term "Annual
Additions" means the sum for any Plan year of:
(i) Compensation Deferral Contributions made in
accordance with Section 3.1 (Compensation Deferral
Contributions).
(ii) Employer Contributions including forfeitures
as applied in accordance with Section 4.1 (Amount of
Employer Contributions) and Section 4.3 (Treatment of
Forfeitures).
(iii) The amount of annual additions (as defined in
Section 415(c)(2) of the Code) under other plans, if any, of
the Employer or Affiliate including (a) qualified defined
contribution plans, (b) qualified defined benefit plans with
individual medical benefit accounts (as defined in Section
415(l) of the Code) and (c) welfare benefit plans with
post-retirement medical benefits for key employees (as defined in
Section 419A(d)(2) of the Code).
(c) If the Member's Annual Additions exceed the
Maximum Annual Additions limitations in accordance with this
Section 4.6, such amounts shall be handled as provided in
Section 4.6(f).
(d) Combined Fraction.
(1) Notwithstanding the foregoing, if a Member is
a participant in any qualified defined benefit plan
maintained by an Employer or an Affiliate, the sum of the
"Defined Benefit Plan Fraction" (as defined below) and the
"Defined Contribution Plan Fraction" (as defined below) for
such Member shall not exceed 1.0 (called "Combined
Fraction"). If for any Plan Year the Combined Fraction of a
Member exceeds 1.0 after application of provisions for
limitation of benefits under all such qualified defined
benefit plans, the Maximum Annual Additions of such Member
shall be reduced as provided in Section 4.5(c) to the extent
necessary to reduce the Combined Fraction of such Member
to 1.0.
(2) The "Defined Benefit Plan Fraction"
applicable to a Member for any Plan Year is a fraction, the
numerator of which is the sum of the Projected Annual
Benefit of the Member under all of the qualified defined
benefit plans maintained by the Employer or an Affiliate
(whether or not terminated) in which such Member
participates (determined as of the close of the Plan Year)
and the denominator of which is the lesser of (i) the
product of 1.25 multiplied by the maximum dollar limitation
on a Member's Projected Annual Benefit under Sections 415(b)
and (d) of the Code, or (ii) 140 percent of the Member's
highest covered compensation, including any adjustments
under Section 415(b) of the Code. Notwithstanding the
above, if the member was a participant as of the first day
of the first Plan Year after December 31, 1986, in one or
more defined benefit plans maintained by the Employer or an
Affiliate which were in existence on May 6, 1986, the
denominator of the fraction will not be less than 125
percent of the sum of the annual benefits under such plans
which the Member 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 benefits plans individually and in the
aggregate satisfied the requirements of Section 415 of the
Code for all limitation years beginning before January 1,
1987.
(3) The "Defined Contribution Plan Fraction"
applicable to a Member for any Plan Year is a fraction, the
numerator of which is the sum of the annual additions to the
Member's Account under all the defined contribution plans
(whether or not terminated) maintained by the Employer or an
Affiliate for the current and all prior Plan Years
(including the annual additions attributable to a Member's
nondeductible employee contributions to all defined benefit
plans, whether or not terminated, maintained by the Employer
or an Affiliate, and the annual additions attributable to
all welfare benefit funds, as defined in Section 419(e) of
the Code, and individual medical accounts, as defined in
Section 415(1)(2) of the Code, maintained by the Employer or
an Affiliate), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior
Plan Years of Service with the Employer or an Affiliate
(regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount
in any limitation year is the lesser of 125 percent of the
dollar limitation determined under Sections 415(b) and (d)
of the Code in effect under Section 415(c)(1)(A) of the Code
or 35 percent of the Member's Compensation for such year.
(e) Definitions.
(1) "Highest Average Compensation" means the
average of a Member's high three consecutive Plan Years
(determined as of the close of the Plan Year) of employment
with the Employer (or the actual number of years of
employment for those Members) who are employed for less than
three consecutive years with the Employer).
(2) "Projected Annual Benefit" means the annual
benefit a Member would receive from employer contributions
under a defined benefit plan, adjusted, in the case of any
benefit payable in a form other than a single life annuity
or a qualified joint and survivor annuity, to the actuarial
equivalent of a single life annuity, assuming (i) the Member
continues employment until reaching the plan's normal
retirement age (or the Member's current age, if later),
(ii) compensation remains unchanged and (iii) all other
relevant factors used to determine benefits under the plan
remain constant in the future.
(f) In the event that, notwithstanding the foregoing
provisions of this Section 4.6, the limitations with respect to
Annual Additions prescribed hereunder are exceeded with respect
to any Member and such excess arises as a consequence of
reasonable error in estimating a Member's compensation or such
other circumstances as the Secretary of Treasury shall permit,
the Employer Contribution portion including Compensation Deferral
Contributions, if any, of such excess shall be held in a Suspense
Account and, if such Member remains a Member, shall be used to
reduce Employer Contributions for such Member for the succeeding
Plan Years, and, if such Member ceases participating in the Plan,
shall be used to reduce Employer Contributions for all Members in
the Plan Year of cessation and succeeding Plan Years, as
necessary.
(g) For purposes of this Section 4.6, the standard of
control for determining if a company is an Affiliate under
Section 414(b) and 414(c) of the Internal Revenue Code shall be
deemed to be "more than 50%" rather than "at least 30%."
(h) For all Plan Years beginning on and after
January 1, 2000, Sections 4.6(d), (e), (f) and (g) shall no
longer apply and shall be of no force or effect.
ARTICLE V
Accounts
5.1 Maintenance of Accounts. For each Member the
Committee shall, where applicable, maintain a separate
Compensation Deferral Contributions Account (with a Basic
Contributions Subaccount and a Supplemental Contributions
Subaccount), an Employer Contribution Account and a Rollover
Contribution Account. For Employee Contributions made prior to
January 1, 1989 to the Prior Plan which were not Compensation
Deferral Contribution Accounts, the Committee shall continue to
maintain a separate Employee Contributions Account consisting of
the Basic Employee Contributions Subaccount and the Supplemental
Employee Contributions Subaccount under the Prior Plan.
5.2 Valuations. As of each Valuation Date, the
Committee shall cause to be adjusted the Employee Contributions
Account, if any, (including each subaccount thereunder), the
Compensation Deferral Contributions Account (including each
subaccount thereunder) the Employer Contribution Account and the
Rollover Contribution Account for each Member to reflect his
share of contributions (including for this purpose contributions
made after such Valuation Date but credited as of such Valuation
Date), amounts of principal and interest paid to the Plan with
respect to a loan made to such Member pursuant to Section 8.5,
withdrawals, distributions, forfeitures, income, expenses payable
from the Trust Fund and any increase or decrease in the value of
Trust Fund assets since the preceding Valuation Date. Each
separate account maintained for each loan made to a Member
pursuant to Section 8.5 shall be valued as of each Valuation Date
by adjusting the balance of the loan for the payment principal
thereunder.
ARTICLE VI
Vesting of Accounts
6.1 Employer Contribution Account. A Member's entire
Employer Contribution Account shall be vested when the Member has
completed at least five years of Service. If a Member separates
from Service before completing five years of Service, such Member
shall be deemed to have received an immediate constructive cash-out
distribution of his entire nonvested Employer Contribution
Account at separation equal to zero dollars.
6.2 Other Accounts. Interests in Rollover
Contribution Accounts, Employee Contributions Accounts and
Compensation Deferral Contributions Accounts shall be fully
vested at all times.
6.3 Earlier Vesting in Employer Contribution Account.
Notwithstanding the foregoing, a Member's interest in his
Employer Contribution Account shall be fully vested (i) on the
date of termination of employment by reason of death, Total and
Permanent Disability, or Specific Involuntary Termination (ii)
when and if this Plan shall at any time be terminated for any
reason, (iii) upon the complete discontinuance of contributions
by the Employer hereunder, (iv) upon partial termination of this
Plan if such Member is a member affected by such partial
termination or (v) on the date a Member reaches Retirement Age.
6.4 Forfeitures. A Member's Employer Contribution
Account which is not vested in accordance with this Article VI at
the time of Member's separation from Service shall be forfeited
as of the last day of the Plan Year in which the Member has a
separation from Service. However, if a Member who has separated
from Service is reemployed before the end of a period of five
consecutive Plan Years beginning with the Plan Year in which the
Member has a separation from Service and during which the Member
is not an Employee on the last day of each Plan Year, any
forfeited amounts shall be restored to the Member's Employer
Contribution Account without the necessity of the re-employed
Member to repay the previous distribution. For purposes of the
preceding sentence, any Plan Year in which a Member is absent
from work on the last day of the Plan Year by reason of a
Parental Leave shall not be counted as one of the Plan Years in
such a period of five consecutive Plan Years and the Plan Year
immediately following a Plan Year in which such Member is absent
from work on the last day of the Plan Year by reason of Parental
Leave shall be deemed to be consecutive.
Amounts required to be restored to the Employer Contri-
bution Accounts of a Member shall be reinstated, to the extent
not contributed by an Employer, out of amounts forfeited under
this Section 6.4 or Section 13.6 (Unclaimed Amounts) for the Plan
Year.
A Member who separates from Service shall have his
prior Service restored for purposes of vesting when he is
reemployed as an Employee if (a) he was vested when he separated
from Service or (b) he was not vested when he separated from
Service, but is reemployed as an Employee before the greater of
(i) a period of five consecutive 12-month periods starting with
his separation from Service or (ii) the period of Service prior
to his separation.
ARTICLE VII
Investment of Accounts
7.1 Investment of Accounts.
Upon becoming a Member, the Member shall direct that
Compensation Deferral Contributions and Rollover Contributions be
invested in any one or more of the Investment Funds approved by
the Committee in increments of at least 25%. The Committee
reserves the right to add, delete or replace any Investment Fund
under the Plan.
The Employer, Committee or Trustee doesn't guarantee
the rate of return on any of the Investment Funds. The actual
rates of return will vary with the investment performance of the
Investment Fund(s) chosen by Members.
7.2 Redirection of Future Contributions. A Member's
investment direction under Section 7.1 may be changed once each
calendar quarter. To make an investment direction change, the
Member must give written notice to the Committee on the
Appropriate Form on or before, but not later than, the last
business day of the month and the change will be effective as of
the first day of the month following the timely submission of the
Appropriate Form. Such a change in direction shall be as to
future Compensation Deferral Contributions and future Employer
Contributions only and shall not be effective as to amounts
previously contributed or invested. The Appropriate Form, once
submitted to the Committee, may not be revoked. The Committee
reserves the right to allow redirection of future contributions
by use of an interactive telephone system.
7.3 Reinvestment of Prior Contributions.
(a) A Member may, by giving written notice to the
Committee on the Appropriate Form, on or before, but not later
than, the last business day of a month, direct that 25%, 50%, 75%
or 100% of the total value in any Investment Fund of the Member's
Rollover Contribution Account, if any, Employee Contributions
Account and Employer Contributions Account, if any, Compensation
Deferral Contributions Account be transferred from such
Investment Fund to any other Investment Fund (in increments of at
least 25%) once each calendar quarter. All of a Member's
Accounts shall be treated as one for reinvestment purposes. The
value of any Account or portion thereof to be reinvested shall be
determined on the Valuation Date of the month of transfer which
shall be the month in which a timely submission of the
Appropriate Form is made. The Appropriate Form, once submitted
to the Committee, may not be revoked. The Committee reserves the
right to all reinvestment of prior contributions by use of an
interactive telephone system.
(b) The Committee may, in its sole discretion,
impose, at any time or from time to time, such restrictions on
the transfers of monies from one Investment Fund to another as it
deems necessary or appropriate.
7.4 Statements of Accounts. Each Member shall be fur-
nished a quarterly statement of accounts. A like statement shall
be furnished to a Member upon any distribution being made under
the Plan.
7.5 Crediting of Contribution Accounts. Interests in
each of the Investment Funds shall be credited to each Member's
Accounts as units of value determined separately for each
Investment Fund, as follows:
(a) the initial value of a unit in each Investment
Fund shall be one dollar,
(b) the unit of value of each Investment Fund shall be
redetermined on each Valuation Date by dividing the then
fair market value of all of the assets of such Investment
Fund by the number of units therein then outstanding.
Amounts held as a result of forfeiture shall not be included
in the value of the Smith Corona Corporation Common Stock
Fund in determining the unit of value; and
(c) current Compensation Deferral Contributions,
Employer Contributions and Rollover Contributions will be
credited to the Member's Accounts as units of value, the
number of which is determined by dividing the dollar amount
of the contribution by the then current unit of value.
If a Suspense Account credited in accordance with
Section 4.6(f) is in existence on a Valuation Date, the number of
units of value in the Suspense Account shall be adjusted as of
each Valuation Date so that such an account does not participate
in the Trust's investment gains or losses. To the extent a
Member's Compensation Deferral Contributions Account is invested
pursuant to Section 8.5 in a loan to the Member, the Member's
Accounts shall be credited and charged directly with income,
gains, losses and expenses attributable to such loan as of each
Valuation Date and the value of such Account will be adjusted
through the date of a distribution to reflect the value of such
direct investments on the distribution date. The Member's loan
principal and interest payments (i) shall be credited to the
Member's Compensation Deferral Contributions Account or Employee
Contributions Account, as appropriate, as units of value, the
number of which is determined as of the Valuation Date coinciding
with or next following the date of such payment by dividing the
dollar amount of the payment by the then current unit of value
and (ii) shall be invested in accordance with the Member's
investment directions for future Compensation Deferral Contri-
butions pursuant to Section 7.2.
7.6 Correction of Error. In the event of an error in
the adjustment of a Member's Account, the Committee, in its sole
discretion, may correct such error by either crediting or
charging the adjustment required to make such correction to or
against forfeitures for the Plan Year or to or against income as
an expense of the Trust for the Plan Year in which the correction
is made, or if the Employer contributes an amount to correct any
such error, from such amount. Except as provided in this
Section, the Accounts of other Members shall not be readjusted on
account of such error.
ARTICLE VIII
Withdrawals and Loans During Employment
8.1 Withdrawal Options.
(a) Age 59-1/2. After a Member's attainment of age
59-1/2, a Member may make, in any twelve-month period, one
withdrawal of all or any portion of the value of the Member's
Compensation Deferral Contributions Account, Employee
Contributions Account, if any, Rollover Contribution Account, if
any, and the vested portion of his Employer Contribution Account
by filing the Appropriate Form with the Committee. Such a
withdrawal can be made for any reason. Unless waived by the
Committee, withdrawal by a Member who is married must be
consented to in writing by the Member's spouse.
(b) Hardships. In the event of Hardship (as defined
in Section 8.2), a Member may, by filing the Appropriate Form
with the Committee, elect to withdraw all or such portion of the
Member's Rollover Contribution Account, if any, as is needed on
account of such Hardship. Also, in the event of Hardship, a
Member who (i) has not yet attained age 59-1/2, (ii) has
withdrawn all funds to the maximum extent permitted under the
Plan, and (iii) is not eligible to make a loan under Section 8.5
may, by filing the Appropriate Form with the Committee, elect to
withdraw all or such portion of the Member's Compensation
Deferral Contributions Account (excluding earnings and
appreciation after December 31, 1988 attributable thereto) as is
needed on account of such Hardships. Unless waived by the
Committee, a hardship withdrawal by a Member who is married must
be consented to in writing by the Member's spouse.
(c) Employee Contributions Account. A Member may
withdraw, once in any twelve-month period, all or any portion of
the Member's Employee Contributions Account, if any, (excluding
earnings or appreciation attributable thereto) by filing the
Appropriate Form with the Committee. Such a withdrawal can be
made for any reason. Unless waived by the Committee, withdrawal
from a Member's Employee Contributions Account by a Member who is
married must be consented to in writing by the Member's spouse.
(d) No Other Withdrawals. Prior to a Member's
employment termination, no other withdrawals from the Member's
Account may be made.
8.2 Hardship Withdrawals.
(a) Frequency. Hardship withdrawals for any reason
other than payment of tuition and related educational fees may be
made only once in any twelve-month period.
(b) Verification of Need. Each request for a hardship
withdrawal must be accompanied by a statement signed by the
Member attesting that the financial need cannot be relieved,
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of the Member's assets
(including those assets of the Member's spouse and minor
children that are reasonably available to the Member) to the
extent such liquidation will not itself cause immediate and
heavy financial need,
(iii) By ceasing Compensation Deferral
Contributions under the Plan, or
(iv) By other distribution or nontaxable (at the
time of the loan) loans from any plan maintained by the
Employer or any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
In the absence of contrary knowledge, the Committee
shall be entitled to rely on the Member's statement of need
without inquiry into the Member's financial circumstances or the
veracity of such statement.
(c) Determination of Hardship.
A withdrawal will be deemed to be a hardship
withdrawal if made on account of:
(i) Medical expenses incurred by the Member, the
Member's spouse, or any dependent of the Member,
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Member,
(iii) Payment of tuition and related educational
fees for the next 12 months of post-secondary education for
the Member, the Member's spouse or any dependent of the
Member.
(iv) The need to prevent the eviction of the
Member from the Member's principal residence or foreclosure
on the mortgage of the Member's principal residence,
(v) Such other immediate and heavy financial need
as the Commissioner of Internal Revenue may from time to
time publish by revenue rulings, notices and other documents
of general applicability, or
(vi) Any other immediate and heavy financial need
as determined on the basis of all relevant facts and
circumstances by the Committee in an objective and
nondiscriminatory manner in accordance with the requirements
of the Code and the applicable regulations and in accordance
with the following standards and principles:
(A) the need shall be due to an extra-
ordinary emergency,
(B) the need shall be heavy,
(C) the need shall be immediate,
(D) the need shall be for reasons of
hardship as commonly understood such as financial
expenses and not for entertainment or pleasure, and
(E) the need shall not fail to qualify as
immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred.
8.3 Values. All withdrawals under Section 8.1 shall
be based on the values of Accounts as of the Valuation Date
coinciding with or next following the filing of the Appropriate
Form or the date of approval of the application by the Committee,
if later. Any withdrawal from an Account (or Subaccount thereof)
under Section 8.1 shall be charged proportionately against each
Investment Fund described in Article VII (Investment of Accounts)
in which such Account (or Subaccount thereof) is invested.
8.4 Payment of Withdrawals. Any amount withdrawn
under Section 8.1 shall be paid to a Member in a lump sum in
cash, as soon as practicable after the Valuation Date as of which
the withdrawal election is effective except that any withdrawal
other than for Hardship which involves Employer Securities shall
include whole numbers of Employer Securities unless the Member
requests otherwise and the Committee approves such request.
8.5 Loans. A Member may borrow for any purpose either
from his Compensation Deferral Contributions Account or from his
Employee Contributions Account (but not both and loans from
different accounts may not be outstanding at the same time) once
in any three-year period an amount which shall be not less than
$1,000 nor more than 50% of the account in question (but not in
excess of $50,000).
For the purposes of the foregoing, the highest
outstanding balance of an existing loan (from the Plan and any
other qualified plans of the Employer or Affiliate) during the
one year period ending on the day before the date of the loan
shall be aggregated with any additional funds being borrowed in
order to calculate a Member's borrowing limit. Transactions for
additional funds shall be booked and documented at the then
current interest rates as a new loan in the aggregate sum of the
balance of the old loan and the newly borrowed money and the old
loan shall be canceled.
All loans shall be made pursuant to such other
procedures and terms as shall be adopted by the Committee,
subject to the following:
(a) A loan shall be repayable within five years from
the date of borrowing upon such terms as determined by the
Committee; provided, however, that if the proceeds of such
loan were applied toward the acquisition of any dwelling
unit used as a principal residence of the Member, the term
of such loan may exceed five years as determined by the
Committee.
The Committee may in its absolute discretion grant such
loan in accordance with such uniform and nondiscriminatory
rules as it may from time to time establish. Any such loan
shall be made at one percent above a then prevailing prime
rate of interest charged by a commerical bank selected by
the Committee and on such terms of repayment (in level
amortized payments not less frequent than monthly) and
subject to such rules and restrictions as the Committee
shall determine, provided that any such loans shall be
available to all Members on a reasonably equivalent basis.
The Committee may require repayment of a loan by payroll
deduction and repayments will be invested in accordance with
the investment direction in effect for such Member.
All Member loans shall be secured by 50% of the balance
of the account from which the loan is made and shall be
charged proportionately against the Investment Fund in which
the funds borrowed are invested. To the extent a loan is
unpaid, it shall be deducted from the amount payable to such
Member or such Member's beneficiary at the time of
distribution of the entire Account. A Member who terminates
employment with an outstanding loan who elects not to have
an immediate distribution under Section 9.2, may continue to
repay the loan directly over the remaining loan term. Any
loan made to a married Member under this Section 8.5 shall
be made by a check payable jointly to the Member and the
Member's spouse unless the spouse has consented in writing
in accordance with Section 9.9 (Spousal Consent) to the
payment of the proceeds of such loan to the Member alone.
If a married Member who has elected an annuity form of
distribution under Section 9.3 applies for a loan under this
Section 8.5, the Member's spouse must consent in writing to
the loan in accordance with Section 9.9;
(b) In the event that a Member fails to repay a loan
according to its terms and foreclosure occurs, the Plan may
foreclose on the portion of the Member's Account for which a
distributable event has occurred. In the event of
foreclosure, a distributable event shall be deemed to occur
immediately following the next Valuation Date for any
portion of a Member's Compensation Deferral Contributions
Account or Employee Contributions Account, if any, with
respect to which the Member or the Member's Beneficiary
would be permitted in accordance with Sections 8.1 or 9.1 to
elect an immediate distribution;
(c) The note representing the loan (and other loans to
the same Member) will be segregated in a separate fund held
by the Trustee as a separate earmarked investment solely for
the Account of the Member. A Member's payments to the Trust
of principal and interest on a note held in such a
segregated fund shall be invested by the Trustee as elected
by the Member in accordance with the Member's investment
directions for future Compensation Deferral Contributions in
accordance with Section 7.2, as soon as reasonably
practical.
(d) Loan applications may be obtained from the
Committee at any time by any Member. Completed applications
may be submitted to the Committee or its designee at any
time.
8.6 Loan Proceeds Value. All loans under Section 8.5
shall be based on the values of Accounts as of the Valuation Date
coinciding with or next following the date of approval of the
loan application by the Committee. The loan proceeds from an
Account (or Subaccount thereof) under Section 8.5 shall be
charged proportionately against each Investment Fund described in
Article VII (Investment of Accounts) in which such Account (or
Subaccount thereof) is invested.
ARTICLE IX
Distribution
9.1 Amount of Distribution. The Member or the
Member's Beneficiary, as the case may be, shall be entitled to
receive a distribution of the vested value of the Member's
Account upon:
(a) the Member's termination of employment, death or
Total and Permanent Disability, or
(b) termination of the Plan without establishment of a
successor plan, or
(c) the disposition of substantially all of the assets
of the Employer to an acquiring corporation which continues
the employment of the Member.
(d) the disposition by the Employer of its interest in
subsidiary participating in the Plan to an acquiring
corporation which continues the employment of the Member.
The vested value of the Member's Account shall be
determined in accordance with Article VI (Vesting of Accounts) as
of the Valuation Date coinciding with or next following such
event except that, in the case of the Member's Total and
Permanent Disability, the vested value of the Member's Account
shall be determined as of the Valuation Date coinciding with or
next following the date the Committee determines that the Member
has a Total and Permanent Disability. If a Member dies prior to
commencement of the distribution of the vested value of his
Account, distribution shall be paid to the Member's Beneficiary
(a) if payment is to be made in lump sum as a normal form of
distribution under Section 9.2, the entire distribution must be
paid within five years after the Member's death or (b) if payment
is to be made in an alternative form of distribution under
Section 9.3, the installments or annuity must commence within one
year of the Member's death if the Beneficiary is other than the
Member's surviving spouse or no earlier than the Member's
Required Beginning Date if the Beneficiary is the Member's
surviving spouse and be payable over a period not to exceed the
Beneficiary's life or a period not in excess of the Beneficiary's
life expectancy. If a Member dies after the distribution of his
benefits has commenced, the remaining portion of his distribution
will be distributed to the Member's Beneficiary at least as
rapidly as under the method of distribution being used at the
date of Member's death.
9.2 Normal Form of Distribution. Unless otherwise elected
in accordance with Section 9.3 and subject to Section 9.7,
distributions shall be made by the Trustee as soon as practicable
after the Valuation Date coinciding with or next following the event
giving rise to the distribution in a single lump sum in cash except
that (a) unless the Member elects otherwise Employer Securities held
in the Member's Accounts shall be distributed in kind and (b) in the
discretion of the Committee, a note with respect to a Member's loan
from such Member's Compensation Deferral Account or Employee
Contributions Account may be distributed in kind. If the amount
distributable from the Member's Accounts is in excess of $3,500, the
Member's consent to such immediate distribution shall be required, but
a distribution of up to $3,500 shall not require such consent. In the
absence of such consent where required, the amount otherwise
distributable to the Member shall remain in the Member's Accounts
until the Valuation Date coinciding with or next following the date on
which the Member reaches age 70 or his death, if earlier, when,
without the necessity of any consent (other than spousal consent under
Section 9.9, if applicable), his entire interest in the Plan shall be
distributed. A Member who has terminated employment and declined to
consent to an immediate distribution may, prior to attaining age 70,
elect to receive the distribution of his entire interest in the Plan
as of the Valuation Date immediately following the filing of such
election. In addition, the Committee may, in its discretion, approve
a request filed by such a Member seeking a partial distribution from
his Accounts provided the Member is also receiving, or has received, a
retirement benefit from a defined benefit qualified plan sponsored by
his Employer. A partial distribution request (1) must be for a
minimum of $1,000, (2) cannot be approved if the Member's balance in
his Accounts will fall below $3,500 as a result of such partial
distribution and (3) may not be filed more than once in any calendar
year. While a Member's Accounts remain in the Plan after his
termination of employment, such Member shall have the right to
transfer the investment of his Account pursuant to the terms of
Sections 7.3 and 7.4 of the Plan. However, such a Member may not
borrow from his Accounts under Section 8.5 of the Plan.
9.3 Alternate Form of Distribution. A Member (or a
Member's Beneficiary in the event of the Member's death) may request
to have the value of the Member's Accounts distributed in a manner
other than in accordance with Section 9.2.
Such alternate form of payment shall be limited to the form
described in Section 9.8 (Annuities) or periodic installments
commencing as soon as practicable after the Member's death or at such
other time as the Member or the Member's Beneficiary, as the case may
be, shall elect in accordance with the Plan over a fixed period not to
exceed the lesser of ten years or the life expectancy of the Member or
Beneficiary as applicable, at the time payments commence.
9.4 Identity of Payee. The determination of the Committee
as to the identity of the proper payee of any benefit under the Plan
and the amount of such benefit properly payable shall be conclusive,
and payment in accordance with such determination shall constitute a
complete discharge of all obligations on account of such benefit.
9.5 Non-alienation of Benefits.
(a) No benefit payable at any time under this Plan shall be
subject in any manner to alienation, sale, transfer, assignment,
pledge, attachment, or other legal processes, or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign, pledge or
otherwise encumber any such benefits, whether currently or thereafter
payable, shall be void. No benefit, nor any fund which may be
established for the payment of such benefits, shall, in any manner, be
liable for or subject to the debts or liabilities including bankruptcy
of any person entitled to such benefits. If any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge or otherwise
encumber benefits to which such person may become entitled under this
Plan.
(b) Notwithstanding Section 9.5(a), the Trustee
(i) shall comply with an order entered on or after
January 1, 1985, determined by the Committee to be a Qualified
Domestic Relations Order as provided in Section 9.6,
(ii) shall comply with a domestic relations order
entered before January 1, 1985, if benefits are already
being paid under such order, and
(iii) may treat an order entered before January 1,
1985, as a Qualified Domestic Relations Order even if it
does not meet the requirements of Section 9.6.
9.6 Qualified Domestic Relations Order.
(a) "Qualified Domestic Relations Order" means any
judgment, decree, or order (including approval of a property
settlement agreement):
(i) which is made pursuant to a state domestic
relations law (including a community property law),
(ii) which relates to the provision of child
support, alimony payments, or marital property rights to a
spouse, former spouse, child, or other dependent of a
Member,
(iii) which creates or recognizes the existence of
an alternate payee's right to receive all or a portion of
the Member's Accounts under the Plan, and
(iv) with respect to which the requirements of
paragraphs (b) and (c) are met.
(b) A domestic relations order can be a Qualified
Domestic Relations Order only if such order clearly specifies:
(i) the name and the last known mailing address,
if any, of the Member and the name and mailing address or
each alternate payee covered by the order,
(ii) the amount or percentage of the Member's
Accounts to be paid by the Plan to each such alternate
payee, or the manner in which such amount or percentage is
to be determined,
(iii) the number of payments or period to which
such order applies, and
(iv) each Plan to which such order applies.
(c) A domestic relations order can be a Qualified Do-
mestic Relations Order only if such order does not:
(i) require the Plan to provide any type or form
of benefit, or any option not otherwise provided under the
Plan,
(ii) require the Plan to provide increased
benefits (determined on the basis of actuarial value), or
(iii) require the payment of benefits to an
alternate payee which are required to be paid to another
alternate payee under another order previously determined to
be a Qualified Domestic Relations Order.
(d) In the case of any payment before a Member has had
a termination of employment, a domestic relations order shall not
be treated as failing to meet the requirements of Section
9.6(b)(i) solely because such order requires that payment of
benefits be made to an alternate payee:
(i) on the earlier of (a) the date on which the
Member is entitled to a distribution under the Plan, (b) the
later of (I) the date the Member attains age 50 or (II) the
earliest date on which the Member could begin receiving
benefits under the Plan if the Member separated from Service
or (c) upon application of the alternate payee within a
specified period of time after entry of the domestic
relations order as provided in such order,
(ii) as if the Member had retired on the date on
which such payment is to begin under such order (but taking
into account only the present value of the benefits actually
accrued and not taking into account the present value of any
Employer subsidy for early retirement), and
(iii) in any form in which such benefits may be
paid under the Plan to the Member (other than in the form of
a Qualified Joint and Survivor Annuity with respect to the
alternate payee and his or her subsequent spouse).
(e) To the extent provided in any Qualified Domestic
Relations Order, the former spouse of a Member shall be treated
as the surviving spouse of such Member for purposes of being the
Beneficiary of 100% of the Member's vested Account and providing
for a valid consent in accordance with Section 9.9.
9.7 Commencement of Benefits. Unless a Member elects
otherwise, the payment of benefits under the Plan shall begin no
later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Member attains his Retirement Age;
(b) the 10th anniversary of the date the Member's
participation in the Plan occurs;
(c) the Member's employment with the Employer or an
Affiliate is terminated;
provided that no benefits shall be distributed unless the Member
has filed a claim for benefits until the Valuation Date
immediately proceeding the Required Beginning Date and further
provided that all benefits shall be distributed to the Member no
later than the Member's Required Beginning Date.
9.8 Annuities. Subject to subsections (a) and (b)
hereof, if the form of distribution is to be an annuity contract,
it may be in such form and with such provisions as the Member or
the Member's Beneficiary, as the case may be, may elect which are
available for purchase from an insurance company including, but
not limited to, a full cash refund life annuity, an annuity with
income for life or an annuity with income for a period certain
(payable at least annually). Such distribution is to be provided
through the purchase from an insurance company and distribution
from the Trust Fund of a nontransferable annuity contract;
provided the benefit under such annuity contract cannot be paid
to anyone other than the Member prior to the Member's death, and
if a joint and survivor annuity is provided, unless such joint
annuitant shall be the Member's spouse, the actuarial value of
the Member's benefits, as of the date benefit payments commence,
shall be more than 50 percent (50%) of the Member's vested
Accounts.
(a) Limitations on Participant Elections.
Notwithstanding any elections of an annuity form of payment made
by a Member, benefit payments shall be made over a period not in
excess of the life of the Member or the lives of the Member and
the Member's Beneficiary or the Member's life expectancy or the
joint and last survivor life expectancy of the Member and the
Member's Beneficiary and otherwise meet the requirements of
Section 401(a)(9) of the Code.
(b) Qualified Joint and Survivor Annuities. Not-
withstanding the foregoing provisions of this Section 9.8, in the
case of a Member who has elected to receive an annuity form of
benefit, distribution shall be in the form of a Qualified Joint
and Survivor Annuity, unless the Member with the Member's
spouse's consent as provided in Section 9.9 elects to receive a
different form of annuity. The term "Qualified Joint and
Survivor Annuity" means an annuity payable to the Member for life
and, if the Member's spouse survives the Member, a survivor an-
nuity payable to the spouse for life in an amount equal to 50
percent (50%) of the annuity payable to the Member.
If the Member who has elected to receive an annuity
form of benefit is not married, subject to Section 9.6 (Qualified
Domestic Relations Order), the annuity shall be paid in the form
of a single life annuity unless the Member waives the single life
annuity. The amount of the benefits payable under a Qualified
Joint and Survivor Annuity shall be the amount which can be
purchased from an insurance company with the Member's Accounts.
(c) A Member who elects to receive benefits in the
form of a life annuity and to whom benefits would be payable in
the form of a Qualified Joint and Survivor Annuity pursuant to
this Section 9.8 shall have the right to waive a Qualified Joint
and Survivor Annuity (such waiver shall be consented to by the
Member's spouse in writing in accordance with Section 9.9) by
delivering written notice to the Committee, at any time within
the 90-day period prior to the annuity starting date, to receive
a different form of annuity. If a Member elects to receive bene-
fits in the form of an annuity, the Committee shall within a
reasonable period of time (no less than 30 days and no more than
90 days before the annuity starting date) provide the Member, by
personal delivery or first class mail, with a written explanation
of:
(1) the terms and conditions of the Qualified
Joint and Survivor Annuity;
(2) the Member's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor
Annuity;
(3) the rights of the Member's spouse to consent
to the Member's election to waive the Qualified Joint and
Survivor Annuity and the effect of consenting to such
waiver; and
(4) the Member's right to make, and the effect
of, a revocation of an election to waive the Qualified Joint
and Survivor Annuity.
Any election made by a Member pursuant to Sections
9.8(b) and 9.8(c) may be revoked by such Member by delivering
written notice to the Committee at any time prior to the Member's
annuity starting date and, once revoked, may be made again at any
time by delivering written notice to the Committee prior to the
Member's annuity starting date.
9.9 Spousal Consent. A valid spousal consent to the
Member's naming of a Beneficiary other than the Member's spouse
or to the Member's waiver of a Qualified Joint and Survivor
Annuity as defined in Section 9.8(b) shall be designated:
(a) in a writing acknowledging the effect of the
consent;
(b) witnessed by a notary public or Plan
representative; and
(c) effective only for the spouse who exercises the
consent;
provided that, notwithstanding the provisions of this Article IX,
the consent of a Member's spouse shall not be required if it is
established to the satisfaction of the Plan Administrator that
such consent may not be obtained because there is no spouse,
because the spouse cannot be located, there is a legal
separation, the Member proves abandonment by his spouse as
evidenced by a court order or because of such other circumstances
as the Secretary of the Treasury may by regulations prescribe.
9.10 Lump Sum Payment without Election. Notwith-
standing any other provision of this Article IX, if a Member or a
Beneficiary is entitled to a distribution and if the vested value
of a Member's Account or the vested value of the Beneficiary's
share of the Member's Account before benefits are paid or
commence to be paid hereunder does not exceed $3,500, the
Committee may in accordance with uniform and nondiscriminatory
rules direct the immediate distribution of such benefit to the
person entitled thereto regardless of any election or consent of
the Member, the Member's spouse or other Beneficiary.
9.11 Direct Rollover Election. Notwithstanding any
provision of the Plan to the contrary, if (i) a Member, (ii) a
Beneficiary who is a Member's spouse, or (iii) a Member's spouse
or former spouse who is an alternate payee under a qualified
domestic relations order becomes entitled to a Plan distribution
which qualifies as an eligible rollover distribution as defined
in Section 402(c)(4) of the Code, such individual may elect to
have all or a portion of such distribution transferred directly
to a designated eligible retirement plan as defined in Section
402(c)(8)(B) of the Code, provided that such retirement plan to
which such transfer is to be made accepts such transfer. The
Committee may establish reasonable rules and procedures regarding
direct rollover distributions permitted hereunder. A direct
rollover may be made less than 30 days after the distributee is
informed of his right to elect such a distribution, provided
that, the Committee clearly informs the distributee that he has
the right to a period of at least 30 days after being so notified
to make such election and the distributee affirmatively elects
such direct rollover.
ARTICLE X
Administration of the Plan
10.1 Plan Administrator. The Committee shall be the
Plan Administrator:
(a) The Committee shall administer, enforce and
interpret the Plan and the trust agreement established hereunder
and shall have the powers necessary thereto, including, but not
by way of limitation, the powers to exercise its responsibilities
in accordance with Sections 1.3 (Appropriate Form), 1.10
(Compensation), 1.22 (Enrollment Date), 1.29 (Leave of Absence),
1.45 (Total and Permanent Disability), Article II (Eligibility
and Membership), 3.1 (Compensation Deferral Contributions), 3.2
(Changes and Suspension of Contributions), 3.4 (Limitation on
Compensation Deferral Contributions), 5.2 (Maintenance of
Accounts), 5.3 (Valuations), Article VII (Investment of
Accounts), Article VIII (Withdrawals and Loans During
Employment), 11.6 (Disbursement of Funds), Article XIII
(Miscellaneous), and the remainder of this Article X, and
(b) Authority to hold the funds of the Plan shall be
delegated to the Trustee in accordance with Section 11.2
(Trustee), and
(c) Authority to direct the investment of the Plan's
funds shall be delegated to an Investment Manager in accordance
with Section 11.3 (Investment Manager).
With respect to all other responsibilities of the Plan
Administrator the Committee shall act through its duly authorized
officers and agents.
10.2 Board of Directors. With respect to Sections 4.1
(Amount of Employer Contributions), 10.8 (Personal Liability) and
12.2 (Suspension or Termination) the Employer shall act only by
or pursuant to a resolution of the Board of Directors.
10.3 Appointment of the Committee. The Committee
shall be the Benefits Administration Committee of Smith Corona
Corporation.
10.4 Compensation Expenses. All proper expenses
incurred by the Committee, the Employer or the Trustee for
accounting, legal and other professional, consulting or technical
services required for the administration of the Plan, shall be
paid by the Trustee out of the Trust Fund unless paid voluntarily
by the Employer.
10.5 Committee Actions, Agents. The Committee may
appoint such agents, who need not be members of the Committee, as
it may deem necessary for the effective performance of its duties
and may delegate to such agents such powers and duties as the
Committee may deem expedient or appropriate.
Any action of the Committee, including but not by way
of limitation, instructions to the Trustee, shall be evidenced by
the signature of a member who has been so authorized by the
Committee to sign for it, and the Trustee shall be fully
protected in acting thereon. A certificate of the secretary or
an assistant secretary of the Committee setting forth the name of
the members thereof shall be sufficient evidence at all times as
to the persons then constituting the Committee.
10.6 Committee Meetings. The Committee shall hold
meetings upon such notice, at such time and place as they may
determine. The Committee shall act by a majority of its members
at the time in office and such action may be taken from time to
time by a vote at a meeting or in writing without a meeting. A
majority of the members of the Committee at the time in office
shall constitute a quorum for transaction of business.
10.7 Authority and Duties of the Committee. The
Committee may from time to time establish rules for the
administration of the Plan. The Committee shall have the
exclusive right to interpret the Plan and to decide any matters
arising thereunder in connection with the administration of the
Plan. It shall endeavor to act by general rules so as not to
discriminate in favor of any person. Its decisions and the
records of the Committee shall be conclusive and binding upon the
Employer, Members and all other persons having an interest under
the Plan. No member of the Committee shall be disqualified from
exercising the powers and discretions herein conferred by reason
of the fact that the exercise of any such power or discretion may
affect the payment of benefits to such member under the Plan;
however, no member may vote on a matter relating exclusively to
such member. To the extent that it is administratively feasible,
the period of notice required for Members' elections to commence,
change or suspend contributions hereunder or to make or change
investment elections for either future contributions or existing
accounts may be relaxed, reduced or eliminated by the Committee
in accordance with uniform and non-discriminatory rules.
The Committee shall keep or cause to be kept all
records and other data as may be necessary for the administration
of the Plan.
10.8 Personal Liability. To the extent not contrary
to the provisions of ERISA, no member of the Committee, officer,
director or employee of an Employer shall be personally liable
for acts done in good faith hereunder unless resulting from such
member's own negligence or willful misconduct. Each such member
of the Committee, officer and director shall be indemnified by
the Employer against expenses reasonably incurred by such member
in connection with any action to which he may be a party by
reason of such member's responsibilities hereunder, except in
relation to matters as to which such member shall be adjudged in
such action to be liable for negligence or misconduct in the
performance of such member's duty. However, nothing in this Plan
shall be deemed to relieve any person who is a fiduciary under
the Plan for purposes of ERISA from any responsibility or
liability which such statute shall impose upon such member.
10.9 Dealings between the Committee and Individual
Members. Any notice required to be given to, or any document
required to be filed with, the Committee will be properly given
or filed if mailed by registered or certified mail, postage
prepaid, or delivered to the Chairman of the Benefits
Administration Committee, c/o Smith Corona Corporation, 839
Route 13 South, Cortland, NY 13045, or to such other place as
the Committee may hereafter from time to time designate.
The Committee shall make available to such Member for
examination upon reasonable request in advance, such of its
records as pertain to the benefits to which such Member shall be
entitled under the Plan.
10.10 Information To Be Supplied by the Employer. The
Employer shall provide the Committee or its delegate with such
information as it shall from time to time need in the discharge
of its duties.
10.11 Records. The regularly kept records of the
Committee and the Employer shall be conclusive evidence of the
Service of an Employee, the Employee's Compensation, age, marital
status, status as an Employee, and all other matters contained
therein applicable to this Plan; provided that an Employee may
request a correction in the record of age or any other disputed
fact at any time prior to retirement. Such correction shall be
made if within 90 days after such request the Employee furnishes
the Committee in support thereof documentary proof of age or the
other disputed fact satisfactory to the Committee.
10.12 Fiduciary Capacity. Any person or group of
persons may serve in more than one fiduciary capacity with
respect to the Plan.
10.13 Fiduciary Responsibility. If a Plan fiduciary
acts in accordance with ERISA, Title I, Subtitle 8, Part 4,
(a) in determining that a Member's spouse has con-
sented to the naming of a Beneficiary other than the spouse or
that the consent of the Member's spouse may not be obtained
because there is no spouse, the spouse cannot be located or other
circumstances prescribed by the Secretary of the Treasury by
regulations, then to the extent of payments made pursuant to such
consent, revocation or determination, the Plan and its fiduci-
aries shall have no further liability; or
(b) in treating a domestic relations order as being
(or not being) a Qualified Domestic Relations Order, or, during
any period in which the issue of whether a domestic relations
order is a Qualified Domestic Relations Order is being determined
(by the Committee, by a court of competent jurisdiction, or
otherwise), in segregating in a separate account in the Plan or
in an escrow account the amounts which would have been payable to
the alternate payee during such period if the order had been
determined to be a Qualified Domestic Relations Order in paying
the amounts segregated or held in escrow by the person entitled
thereto if within 18 months the domestic relations order (or a
modification thereof) is determined to be a Qualified Domestic
Relations Order, in paying such amounts to the person entitled
thereto if there had been no order if within 18 months the
domestic relations order is determined not to be qualified or if
the issue is not resolved within 18 months and in prospectively
applying a domestic relations order which is determined to be
qualified after the close of the 18 month period, then the
obligation of the Plan and its fiduciaries or the Member and each
alternate payee shall be discharged to the extent of any payment
made pursuant to such acts.
10.14 Claim Procedure.
(a) Each Member or Beneficiary ("Claimant") may submit
application for benefits ("Claim") to the Committee (or to such
other person as may be designated by the Committee) in writing in
such form as is provided or approved by the Committee. A
Claimant shall have no right to seek review of a denial of
benefits, or to bring any action in any court to enforce a Claim
prior to filing a Claim and exhausting all rights to review in
accordance with this Section.
When a Claim has been filed properly, such Claim shall
be evaluated and the Claimant shall be notified of the approval
or the denial of the Claim within ninety (90) days after the
receipt of such Claim unless special circumstances require an
extension of time for processing the claim. If such an extension
of time for processing is required, written notice of the
extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period, which notice
shall specify the special circumstances requiring an extension
and the date by which a final decision will be reached (which
date shall not be later than one hundred and eighty (180) days
after the date on which the Claim was filed). Claimant shall be
given a written notice in which the Claimant shall be advised as
to whether the Claim is granted or denied, in whole or in part.
If a Claim is denied, in whole or in part, the notice shall
contain (1) the specific reasons for the denial, (2) references
to pertinent Plan provisions upon which the denial is based, (3)
a description of any additional material or information necessary
to perfect the Claim and an explanation of why such material or
information is necessary, and (4) the Claimant's rights to seek
review of the denial.
(b) If a Claim is denied, in whole or in part, the
Claimant shall have the right to (i) request that the Committee
(or such other person as shall be designated in writing by the
Committee) review the denial, (ii) review pertinent documents,
and (iii) submit issues and comments in writing, provided that
the Claimant files a written request for review with the
Committee within sixty (60) days after the date on which the
Claimant received written notification of the denial. Within
sixty (60) days after a request for review is received, the
review shall be made and the Claimant shall be advised in writing
of the decision on review, unless special circumstances require
an extension of time for processing the review, in which case the
Claimant shall be given a written notification within such
initial sixty (60) day period specifying the reasons for the
extension and when such review shall be completed (within one
hundred and twenty (120) days after the date on which the request
for review was filed). The decision on review shall be forwarded
to the Claimant in writing and shall include specific reasons for
the decision and references to Plan provisions upon which the
decision is based. A decision on review shall be final and
binding on all persons for all purposes. If a Claimant shall
fail to file a request for review in accordance with the
procedures herein outlined, such Claimant shall have no rights to
review and shall have no right to bring action in any court and
the denial of the Claim shall become final and binding on all
persons for all purposes.
10.15 Lawsuits. Any lawsuit involving a Claim brought
by a Claimant must be commenced before the expiration of three
(3) years from the event giving rise to the Claim or, if later,
the date of receipt of notice of claim denial under Section
10.14(b). If such suit, no matter what jurisdiction it is
brought in, is not commenced within such time limit, it shall be
barred.
ARTICLE XI
Operation of the Trust Fund
11.1 Trust Fund. All assets of the Plan shall be held
in trust as a Trust Fund for the exclusive benefit of Members and
their Beneficiaries, and no part of the corpus or income shall be
used for or diverted to any other purpose. No person shall have
any interest in or right to any part of the Trust Fund, except to
the extent provided in the Plan.
11.2 Trustee. All contributions to the Plan shall be
paid to a Trustee or Trustees which shall be appointed from time
to time by the Board of Directors or the Employer by appropriate
instrument with such powers in the Trustee as to control and
disbursement of the funds as the Employer shall approve and as
shall be in accordance with the Plan. The Employer may remove
any Trustee at any time, upon reasonable notice and upon such
removal or upon the resignation of any Trustee the Employer shall
designate a successor Trustee.
11.3 Investment Manager. In accordance with the terms
of the trust agreement, the Board of Directors or the Employer
may appoint one or more Investment Managers (individuals and/or
other entities), who may include the Trustee and who are
collectively referred to herein as the Investment Manager, to
direct the investment and reinvestment of part or all of the
Plan's funds. The Employer may change the appointment of the
Investment Manager from time to time.
11.4 Disbursement of Funds. The funds held by the
Trustee shall be applied, in the manner determined by the
Committee, to the payment of benefits to such persons as are
entitled thereto in accordance with the Plan.
The Committee shall determine the manner in which the
funds of the Plan shall be disbursed in accordance with the Plan,
including the form of voucher or warrant to be used in
authorizing disbursements and the qualification of persons
authorized to approve and sign the same and any other matters
incident to the disbursement of such funds.
All charges of the record keeper, of the Trustee and of
the Investment Manager shall be paid by the Trust unless paid by
the Employer.
11.5 Exclusive Benefit of Members. All contributions
under the Plan shall be paid to the Trustee and deposited in the
Trust Fund and shall be held, managed and distributed solely in
the interest of the Members and Beneficiaries for the exclusive
purpose of (1) providing benefits to Members and Beneficiaries
and (2) defraying reasonable administrative expenses of the Plan
and the Trust, to the extent such expenses are not paid by the
Employer provided that:
(a) if the Plan is denied initial qualification under
Section 401(a) of the Code, contributions conditioned upon
the continued qualification of the Plan shall be returned to
the Employer making such contributions within one year of
the denial of qualification;
(b) if, and to the extent, deduction for a
contribution under Section 404 of the Code is disallowed,
contributions conditioned upon deductibility shall be
returned to the Employer within one year after the
disallowance of the deduction; and
(c) if, and to the extent, contribution is made
through mistake of fact, such contribution shall be returned
to the Employer within one year of the payment of the
contribution.
For purposes of subsection (b) of this Section 11.5, all Employer
Contributions shall be deemed conditioned upon deductibility
under Section 404 of the Code when made.
ARTICLE XII
Amendment, Termination and Merger
12.1 Right to Amend. The Employer reserves the right
at any time, and from time to time, to modify or amend in whole
or in part the provisions of the Plan, but no such amendment
shall divest any Member of any amount previously credited to a
Member's Accounts or, except to the extent permitted by the
Secretary of the Treasury by regulation, shall eliminate with
respect to a Member's Account balance at the time of such
amendment an optional form of benefit, and further provided that
no part of the assets of the Trust Fund shall, by reason of any
modification or amendment, be used for or diverted to, purposes
other than for the exclusive benefit of Members and their
Beneficiaries, under the Plan. Any amendment or modification of
the Plan may be made by the Board of Directors of the Employer or
its delegate such as the Committee, except that any amendment
which substantially increases the cost of the Plan to the
Employer must be approved by the Board of Directors.
12.2 Suspension or Termination. The Employer may at
any time temporarily suspend Employer Contributions and
Compensation Deferral Contributions in whole or in part. Such
suspension of Employer Contributions and/or Compensation Deferral
Contributions shall not, in itself, constitute a Plan
termination. The Employer may at any time completely discontinue
contributions or terminate the Plan by filing with the Committee
a certified copy of the resolution of its board of directors
authorizing such action.
If the Plan is terminated, no further contributions
shall be made by the Employer and subject to Section 9.1 and
Section 401(k)(10) of the Code, the Account of each Member shall
be applied for the Member's (or the Member's Beneficiary's)
benefit by payment in cash or in kind. Alternatively, if the
Plan is frozen, no further contributions shall be made by the
Employer but the Plan shall continue in full force and effect and
the Trust Fund shall continue in accordance with the trust
instrument until all funds in the Trust are distributed in
accordance with the Plan.
12.3 Merger, Consolidation or Transfer. In the case
of any merger, or consolidation with, or transfer of assets or
liabilities to any other plan, each Member in the Plan would (if
the Plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater
than the benefit such Member would have been entitled to receive
immediately before the merger consolidation, or transfer (if the
Plan had then terminated).
ARTICLE XIII
Miscellaneous
13.1 Uniform Administration. Whenever, in the
administration of the Plan, any action is required by the
Employer or the Committee, including, but not by way of
limitation, action with respect to eligibility or classification
of employees, contributions or benefits, such action shall be
uniform in nature as applied to all persons similarly situated
and no such action shall be taken which will discriminate in
favor of Members who are officers or significant shareholders or
Highly Compensated Employees of the Employer or persons whose
principal duties consist of supervising the work of other
Employees.
13.2 Payment Due an Incompetent. If the Committee
determines that any person to whom a payment is due hereunder is
incompetent by reason of physical or mental disability, the
Committee shall have power to cause the payments becoming due to
such person to be made to another for the benefit of the
incompetent, without responsibility of the Committee or the
Trustee to see to the application of such payment. Payments made
in accordance with such power shall operate as a complete
discharge of all obligations on account of such payment of the
Committee, the Trustee and the Trust Fund. The Committee shall
not be under any responsibility to assure that any such payment
is used for the benefit of the person to whom it was due.
13.3 Source of Payments. All benefits under the Plan
shall be paid or provided solely from the Trust Fund and the
Employer assumes no liability or responsibility therefor, except
to the extent required by law.
13.4 Plan Not a Contract of Employment. Nothing
herein contained shall be deemed to give any Employee, Eligible
Employee or Member the right to be retained in the employ of the
Employer or to interfere with the right of the Employer to
discharge any Employee, Eligible Employee or Member at any time
for any reason.
13.5 Applicable Law. Except to the extent governed by
Federal law, including ERISA, the Plan shall be administered and
interpreted in accordance with the laws of the State of New York
(other than the principles of conflicts of laws of such State).
13.6 Unclaimed Amounts. It shall be the duty and re-
sponsibility of a Member or a Beneficiary to keep the Committee
apprised of such Member's whereabouts and of such Member's
current mailing address. Unclaimed amounts shall consist of the
amounts of the Accounts of a retired, deceased or terminated
Member which cannot be distributed because of the Committee's
inability, after a reasonable search (including utilizing the
services of the Internal Revenue Service pursuant to Revenue
Procedure 94-22), to locate a Member or a Member's Beneficiary
within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts for a Plan Year shall be
forfeitures for the Plan Year in which such two-year period shall
end. Such Forfeitures shall be treated as provided in Section
4.3
If an unclaimed amount is subsequently properly claimed
by the Member or the Member's Beneficiary ("Reclaimed Amount")
and unless the Employer, in its discretion, makes a contribution
to the Plan for such year in an amount sufficient to pay such
Reclaimed Amount to the extent that the Reclaimed Amount
originated as an unclaimed amount, it shall be charged against
forfeitures for the Plan Year and, to the extent such forfeitures
are not sufficient, shall charged against income as an expense of
the Trust Fund.
13.7 Adoption of Plan by Subsidiary. Any corporation
of which the Employer owns directly or indirectly at least 50% of
the outstanding common stock may adopt the Plan as to its
eligible employees with the consent of the Board of Directors of
the Employer. Likewise, any such subsidiary which maintains a
qualified plan with a qualified cash or deferred arrangement may,
with the consent of the Board of Directors of the Employer, merge
such plan with and into the Plan.
ARTICLE XIV
Top Heavy Provisions
14.1 Application. The definitions in Section 14.2
shall apply under this Article XIV and the special rules in
Section 14.3 shall apply in accordance with Code Section 416,
notwithstanding any other provisions of the Plan, for any Plan
Year in which the Plan is a Top Heavy Plan and for such other
Plan Years as may be specified herein. This Article XIV shall
have no effect on the amount of, or eligibility for, benefits
under the Plan of a Member unless and until the Plan becomes a
Top Heavy Plan.
14.2 Special Top Heavy Definitions. The following
special definitions shall apply under this Article XIV.
(a) "Aggregate Employer Contributions" means the sum
of all Employer Contributions including forfeitures under this
Plan allocated for a Member to the Plan and employer
contributions and forfeitures allocated for the Member to all
Related Defined Contribution Plans in the Aggregation Group;
provided, however, that for Plan Years beginning before
January 1, 1985, Compensation Deferral Contributions under this
Plan and employer contributions attributable to compensation
reduction or similar arrangement under Related Defined
Contribution Plans shall not be included in Aggregate Employer
Contributions.
(b) "Aggregation Group" means the group of plans in a
Mandatory Aggregation Group, if any, that includes the Plan,
unless inclusion of Related Plans in the Permissive Aggregation
Group in the Aggregation Group would prevent the Plan from being
a Top Heavy Plan, in which case "Aggregation Group" means the
group of plans consisting of the Plan and each other Related Plan
in a Permissive Aggregation Group with the Plan.
(1) "Mandatory Aggregation Group" means each plan
(considering the Plan and Related Plans) that, during the
Plan Year that contains the Determination Date or any of the
four preceding Plan Years,
(A) had a Member who was a Key Employee, or
(B) was necessary to be considered with a
plan in which a Key Employee participated in order to
enable the plan in which the Key Employee participated
to meet the requirements of Section 401(a)(4) and
Section 410(b) of the Code.
If the Plan is not described in (A) or (B)
above, it shall not be part of a Mandatory Aggregation
Group.
(2) "Permissive Aggregation Group" means the
group of plans consisting of (A) the plans, if any, in a
Mandatory Aggregation Group with the Plan, and (B) any other
Related Plan, that, when considered as a part of the
Aggregation Group, does not cause the Aggregation Group to
fail to satisfy the requirements of Section 401(a)(4) and
Section 410(b) of the Code. A Related Plan in (B) of the
preceding sentence may include a simplified employee pension
plan, as defined in Code Section 408(k), and a collectively
bargained plan, if, when considered as a part of the
Aggregation Group, such plan does not cause the Aggregation
Group to fail to satisfy the requirements of Section
401(a)(4) and Section 410(b) of the Code considering, if the
plan is a multiemployer plan as described in Code Section
414(f) or a multiple employer plan as described in Code
Section 413(c), benefits under the plan only to the extent
provided to Employees of the employer because of service
with the Employer, and, if the plan is a simplified employee
pension plan, only the employer's contribution to the plan.
(c) "Determination Date" means, with respect to a Plan
Year, the last day of the preceding Plan Year or, in the case of
the first Plan Year, the last day of such Plan Year. If the Plan
is aggregated with other plans in the Aggregation Group, the
Determination Date for each other plan shall be, with respect to
any Plan Year, the Determination Date for each such other plan
which falls in the same calendar year as the Determination Date
for the Plan.
(d) "Key Employee" means, for the Plan Year containing
the Determination Date, any person or the beneficiary of any
person who is an Employee or former Employee of an Employer or an
Affiliate as determined under Code Section 416(i) and who, at any
time during the Plan Year containing the Determination Date or
any of the four (4) preceding Plan Years (the "Measurement
Period") is a person described in paragraph (1), (2), (3) or (4),
subject to paragraph (5).
(1) An officer of the Employer or an Affiliate
who in any Measurement Period is an officer during the Plan
Year and has annual Compensation for the Plan Year in an
amount greater than fifty percent (50%) of the amount in
effect under Section 415(b)(1)(A) of the Code for the
calendar year in which such Plan Year ends ($30,000 in 1989
adjusted in subsequent years as determined in accordance
with regulations prescribed by the Secretary of the Treasury
or his delegate pursuant to the provisions of Section 415(d)
of the Code).
No more than a total of fifty (50) persons (or, if
lesser, the greater of three (3) persons or ten percent
(10%) of all persons or beneficiaries of persons who are
Employees or former Employees) shall be treated as Key
Employees under this paragraph (1) for any Measurement
Period. In the case of an Employer or an Affiliate which is
not a corporation (I) in any Measurement Period, in the case
of a Plan Year beginning on or before February 28, 1985, no
persons shall be treated as Key Employees under this
paragraph (1); and (II) in any Measurement Period, in the
case of a Plan Year beginning after February 28, 1985, the
term "officer" as used in this subsection (d) shall include
administrative executives as described in Treas. Reg.
Section 1.416-1(T-13).
(2) One (1) of the ten (10) persons who, during a
Plan Year in the Measurement Period:
(A) have annual Compensation from the
Employer or Affiliate for such Plan Year greater than
the amount in effect under Section 415(c)(1)(A) of the
Code for the calendar year in which such Plan Year ends
($30,000 in 1984, adjusted in subsequent years as
determined in accordance with regulations prescribed by
the Secretary of the Treasury or his delegate pursuant
to the provisions of Section 415(d) of the Code); and
(B) own (or are considered as owning within
the meaning of Code Section 318) in such Plan Year, the
largest percentage interests in the Employer or
Affiliate, in such Plan Year, provided that no person
shall be treated as a Key Employee under this paragraph
unless he owns more than one-half of one percent (0.5%)
interest in the Employer or Affiliate.
No more than a total of ten (10) persons or
beneficiaries of persons who are Employees or former
Employees shall be treated as Key Employees under this
paragraph (2) for any Measurement Period.
(3) A person who, for a Plan Year in the
Measurement Period, is a more than five percent (5%) owner
(or is considered as owning more than five percent (5%)
within the meaning of Code Section 318) of the Employer or
Affiliate.
(4) A person who, for a Plan Year in the
Measurement Period, is a more than one percent (1%) owner
(or is considered as owning more than one percent (1%)
within the meaning of Code Section 318) of the Employer or
an Affiliate and has an annual Compensation for such Plan
Year of more than $150,000.
(5) If the number of persons who meet the
requirements to be treated as Key Employees under paragraph
(1) or (2) exceed the limitation on the number of Key
Employees to be counted under paragraph (1) or (2), those
persons with the highest annual Compensation in a Plan Year
in the Measurement Period for which the requirements are met
and who are within the limitation on the number of Key
Employees will be treated as Key Employees.
If the requirements of paragraph (1) or (2) are met by
a person in more than one (1) Plan Year in the Measurement
Period, each person will be counted only once under paragraph (1)
or (2):
(C) under paragraph (1), the Plan Year in
the Measurement Period in which a person who was an
officer and had the highest annual Compensation shall
be used to determine whether the person will be treated
as a Key Employee under the preceding sentence;
(D) under paragraph (2), the Plan Year in
the Measurement Period in which the ownership
percentage interest is the greatest shall be used to
determine whether the person will be treated as a Key
Employee under the preceding sentence.
Notwithstanding the above provisions of paragraph (5),
a person may be counted in determining the limitation under both
paragraphs (1) and (2). In determining the sum of the Present
Value of Accrued Benefits for Key Employees under subsection (f)
of this Section, the Present Value of Accrued Benefits for any
person shall be counted only once. For purposes of determining
ownership in the Employer or Affiliate under paragraphs (2), (3)
and (4), the aggregation rules of Sections 414(b), (c) and (m) of
the Code shall not apply.
(e) "Non-Key Employee" means for the Plan Year
containing the Determination Date a person or the beneficiary of
a person who had an account balance in the Plan or an account
balance in any Related Plan in the Aggregation Group during the
Plan Year containing the Determination Date or any of the four
(4) preceding Plan Years and who is not a Key Employee.
(f) "Present Value of Accrued Benefits" means, for any
Plan Year, an amount equal to the sum of (1), (2) and (3) for
each person, who in the Plan Year containing the Determination
Date, was a Key Employee or a Non-Key Employee.
(1) Subject to (4) below, the value of a Member's
Accounts under the Plan (including his Compensation Deferral
Contributions) and each Related Defined Contribution Plan in
the Aggregation Group, determined as of the Valuation Date
coincident with or immediately preceding the Determination
Date, adjusted for contributions due as of the Determination
Date, as follows:
(A) in the case of a plan not subject to the
minimum funding requirements of Section 412 of the
Code, by including the amount of any contributions
actually made after the Valuation Date but on or before
the Determination Date, and, in the first plan year of
a plan, by including contributions made after the
Determination Date that are allocated as of a date in
that first plan year; and
(B) in the case of a plan that is subject to
the minimum funding requirements, by including the
amount of any contributions that would be allocated as
of a date not later than the Determination Date, plus
adjustments to those amounts as required under
applicable rulings, even though those amounts are not
yet required to be contributed or allocated (e.g.,
because they have been waived) and by including the
amount of any contributions actually made (or due to be
made) after the Valuation Date but before the
expiration of the extended payment period in Section
412(c)(10) of the Code.
For purposes of this paragraph (1), the Valuation Date is
the most recent Valuation Date within a 12-month period
ending on the Determination Date.
(2) Subject to (4) below, the sum of the
actuarial present values of a person's accrued benefits
under each Related Defined Benefit Plan in the Aggregation
Group, expressed as a benefit commencing at normal
retirement date (or the person's attained age, if later)
determined based on the following actuarial assumptions:
(A) Interest rate of 5% compounded; and
(B) 80% of the rates underlying the 1984
Unisex Pension Mortality Table, adjusted by applying a
3-year age setback for the Member's spouse, where
applicable;
and determined in accordance with Code Section 416(g).
The present value of an accrued benefit for any person
who is employed by an Employer maintaining a plan on the
Determination Date is determined as of the most recent valuation
date which is within a 12-month period ending on the Deter-
mination Date, provided however that:
(C) for the first plan year of the plan, the
present value for an Employee is determined as if the
Employee had a termination of employment (1) on the
Determination Date or (2) on such Valuation Date but taking
into account the estimated accrued benefits as of the
Determination Date; and
(D) for the second and subsequent plan years of
the plan, the accrued benefit taken into account for an
employee is not less than the accrued benefit taken into
account for the first plan year unless the difference is
attributable to using an estimate of the accrued benefit as
of the Determination Date for the first plan year and using
the actual accrued benefit as of the Determination for the
second plan year.
For purposes of this paragraph (2), the Valuation Date
is the valuation date used by the plan for computing plan costs
for minimum funding, regardless of whether a valuation is
performed that year.
If the plan provides for a nonproportional subsidy as
described in Treasury Regulations Section 1.416-1(T-26), the
present value of accrued benefits shall be determined by taking
into account the value of nonproportional subsidized early
retirement benefits and nonproportional subsidized benefit
options.
(3) Subject to (4) below, the aggregate value of
amounts distributed from the Plan and each Related Plan in the
Aggregation Group during the Plan Year that includes the
Determination Date or any of the four preceding Plan Years
including amounts distributed under a termination plan which, if
it had not been terminated, would have been in the Aggregation
Group.
(4) The following rules shall apply in determining the
Present Value of Accrued Benefits:
(A) Amounts attributable to qualified voluntary
employee contributions, as defined in Section 219(e) of
the Code, shall be excluded;
(B) In computing the Present Value of Accrued
Benefits with respect to rollovers or plan-to-plan
transfers, the following rules shall be applied to
determine whether amounts which have been distributed
during the five (5) year period ending on the
Determination Date from or accepted into this Plan or
any plan in the Aggregation Group shall be included in
determining the Present Value of Accrued Benefits:
(i) Unrelated Transfers accepted into the
Plan or any plan in the Aggregation Group after
December 31, 1983 shall not be included.
(ii) Unrelated Transfers accepted on or
before December 31, 1983 and all Related Transfers
accepted at any time into the Plan or any plan in
the Aggregation Group shall be included.
(iii) Unrelated Transfers made from the Plan
or any plan in the Aggregation Group shall be
included.
(iv) Related Transfers made from the Plan or
any plan in the Aggregation Group shall not be
included by the transferror plan (but shall be
counted by the accepting plan).
The accrued benefit of any individual who has not
performed services for an Employer maintaining the Plan (or a
business with which the Employer is an Affiliate) at any time
during the five (5) year period ending on the Determination Date
shall be excluded in computing the Present Value of Accrued
Benefits.
(g) "Related Plan" means any other defined benefit
plan or a defined contribution plan (as defined in Section 415(k)
of the Code) maintained by an Employer or other Affiliate,
respectively called a "Related Defined Benefit Plan" and a
"Related Defined Contribution Plan".
(h) "Related Transfer" means a rollover or a plan-to-plan
transfer which is either not initiated by the Employee or is
made between plans each of which is maintained by an Employer or
an Affiliate.
(i) A "Top Heavy Aggregation Group" means the
Aggregation Group in any Plan Year for which, as of the
Determination Date, the sum of the Present Values of Accrued
Benefits for Key Employees under all plans in the Aggregation
Group exceeds sixty percent (60%) of the sum of the Present
Values of Accrued Benefits for all Employees under all plans in
the Aggregation Group; provided that, for purposes of determining
the sum of Present Values of Accrued Benefits for all Employees,
there shall be excluded the Present Values of Accrued Benefits of
any Non-Key Employee who was a Key Employee for any Plan Year
preceding the Plan Year that contains the Determination Date.
For purposes of applying the special rules herein with respect to
a Super Top Heavy Plan, a Top Heavy Aggregation Group will also
constitute a "Super Top Heavy Aggregation Group" if in any Plan
Year as of the Determination Date, the sum of the Present Values
of Accrued Benefits for Key Employees under all plans in the
Aggregation Group exceeds ninety percent (90%) of the sum of the
Present Values of Accrued Benefits for all employees under all
plans in the Aggregation Group.
(j) "Top Heavy Plan" means the Plan in any Plan Year
in which it is a member of a Top Heavy Aggregation Group,
including a Top Heavy Aggregation Group consisting solely of the
Plan. For purposes of applying the rules herein with respect to
a Super Top Heavy Plan, a Top Heavy Plan will also constitute a
"Super Top Heavy Plan" if the Plan in any Plan Year is a member
of a Super Top Heavy Aggregation Group consisting solely of the
Plan.
(k) "Unrelated Transfer" means a rollover or a plan-to-plan transfer
which is initiated by the Employee and (a) made
from a plan maintained by an Affiliate to a plan maintained by an
Employer which is not an Affiliate or (b) made to a plan
maintained by an Affiliate from a plan maintained by an Employer
which is not an Affiliate.
14.3 Special Top Heavy Provisions. For each Plan Year
in which the Plan is a Top Heavy Plan, the following rules shall
apply, except that the special provisions of this Section 14.3
shall not apply with respect to any Employee who is covered by a
collective bargaining agreement between Employee representatives
and one or more Employers unless participation by such Employee
in the Plan has been agreed to by the parties to such agreement.
(a) Minimum Employer Contributions.
(1) In any Plan Year in which the Plan is a Top
Heavy Plan, the Employer shall make additional Employer
Contributions to the Plan as necessary for each Member who
is employed on the last day of the Plan Year and who is a
Non-Key Employee to bring the amount of each Member's
Aggregate Employer Contributions for the Plan Year up to at
least three percent (3%) of each Member's Compensation, or
if the Plan is not required to be included in an aggregation
group in order to permit a defined benefit plan in the
Aggregation Group to satisfy the requirements of Section
401(a)(4) or Section 410(b) of the Code, such lesser amount
as is equal to the largest percentage of a Key Employee's
Compensation (as limited in accordance with Section 14.3(c))
allocated to the Key Employee as Aggregate Employer
Contributions. Compensation Deferral Contributions may not
be treated as Employer Contributions for purposes of
satisfying the Non-Key Employee's minimum contribution
requirement set forth in this subparagraph (1).
(2) Notwithstanding Section 14.3(a)(1), if there
is a Related Defined Benefit Plan in the Aggregation Group,
if a Non-Key Employee participates in both the Plan and a
Related Defined Benefit Plan and
(A) if the Related Defined Benefit Plan
provides the minimum benefit required under Code
Section 416(c)(1) for the Non-Key Employee, then no
minimum Employer Contribution shall be required under
this Section 14.3(a),
(B) if the Related Defined Benefit Plan does
not provide the minimum benefit required under Code
Section 416(c)(1) for the Non-Key Employee, then the
minimum Aggregate Employer Contribution under this
Section 14.3(a) shall be five percent (5%) of such
Non-Key Employee's Compensation.
(3) For purposes of determining whether a Non-Key
Employee is a Member entitled to have minimum Employee
Contributions made for such Member, a Non-Key Employee will
be treated as a Member even if he is not otherwise a Member
(or accrues no benefit) under the Plan because:
(A) such Member has failed to complete the
requisite number of Hours of Service (if any) after
becoming a Member in the Plan,
(B) such Member is excluded from
participation in the Plan (or accrues no benefit)
merely because his Compensation is less than a stated
amount, or
(C) such Member is excluded from parti-
cipation in the Plan (or accrues no benefit) merely
because of a failure to make mandatory employee
contributions or, if the Plan is a Plan described in
Section 401(k) of the Code, because of a failure to
make elective (401(k)) contributions.
(b) Vesting. For each Plan Year and for each Plan
Year thereafter, in which the Plan is a Top Heavy Plan, the
vesting schedule under the Plan shall be three (3) year cliff
vesting under which each Member shall be zero percent vested in
the Employer Contribution Account until such Member has three (3)
years of Service (including Service prior to when the Plan is a
Top-Heavy Plan) after which a Member shall be 100% vested in such
Account; provided that this vesting schedule shall not apply to
the accrued benefit of any Member who does not have an Hour of
Service in or after a Plan Year in which the Plan is Top Heavy.
(c) Compensation. For each Plan Year in which the
Plan is a Top Heavy Plan, Compensation taken into account under
the Plan shall not exceed $200,000 (as at 1984, adjusted in
subsequent years for the cost of living adjustments determined in
accordance with regulations prescribed by the Secretary of the
Treasury or his delegate pursuant to the provisions of Section
416(d)(2) of the Code).
(d) Top Heavy Limitations.
(1) In computing the limitations under Sect-
ion 4.5 hereof, if the Plan is a Top Heavy Plan and is not a
Super Top Heavy Plan, the special rules of Section 416(h) of
the Code shall be applied in accordance with applicable
regulations and rulings so that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which "1.25"
would have been used, "1.00" shall be substituted and
(B) in determining the numerator of the
transition fraction described in Section 415(e)(6)(B)
of the Code by substituting $41,500 for $51,875
unless the special requirements of Section 416(h)(2) of the
Internal Revenue Code have been satisfied.
(2) In computing the limitations under
Section 4.5 thereof, if the Plan is a Super Top Heavy Plan,
the special rules of Section 416(h) of the Code shall be
applied in accordance with applicable regulations and
rulings so that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which "1.25"
would have been used, "1.00" shall be substituted and
(B) in determining the numerator of the
transitional fraction described in Section 415(e)(6)(B)
of the Code, $41,500 shall be substituted for $51,875.
(e) Transition Rule for a Top Heavy Plan. Notwith-
standing the provisions of Sections 14.3(d), for each Plan Year
in which the Plan is a Top Heavy Plan and in which the Plan does
not meet the special requirements of Section 416(h)(2) of the
Code in order to use 1.25 in the denominator of the Defined
Contribution Plan Fraction and the Defined Benefit Plan Fraction,
if an Employee was a participant in one or more defined benefit
plans and in one or more defined contribution plans maintained by
an Employer or an Affiliate before the plans became Top Heavy
Plans and if such Member's Combined Fraction exceeds 1.00 because
of accruals and additions that were made before the plans became
Top Heavy Plans, a factor equal to the lesser of 1.25 or such
lesser amount (but not less than 1.00) as shall be needed to make
the Employee's Combined Fraction equal to 1.00 shall be used in
the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction if there are no further
accruals or annual additions under any Top Heavy Plans until the
Member's Combined Fraction is not greater than 1.00 when a factor
of 1.00 is used in the denominators of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction. Any
provisions herein to the contrary notwithstanding, if the Plan is
a Top Heavy Plan and the Plan does not meet the special re-
quirements of Section 416(h)(2) of the Code, in order to use 1.25
in the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction, there shall be no further
Annual Additions for a Member whose Combined Fraction is greater
than 1.00 when a factor of 1.00 is used in the denominator of the
Defined Benefit Plan Fraction Plan and the Defined Contribution
Plan Fraction, until such time as the Member's Combined Fraction
is not greater than 1.00.
(f) Transition Rule for a Super Top Heavy Plan.
Notwithstanding the provisions of Sections 14.3(d) and 14.3(e),
for each Plan Year in which the Plan is a Super Top Heavy Plan,
(1) if an Employee was a participant in one or more defined
benefit plans and in one or more defined contribution plans
maintained by an Employer or an Affiliate before the plans became
Super Top Heavy Plans, and (2) if such Member's Combined Fraction
exceeds 1.00 because of accruals and additions that were made
before the plans became Super top Heavy Plans the Combined
Fraction as then computed did not exceed 1.00, then a factor
equal to the lesser of 1.25 or such lesser amount (but not less
than 1.00) as shall be needed to make the Employee's Combined
Fraction equal to 1.00 shall be used in the denominator of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction if there are no further accruals or Annual Additions
under any Super Top Heavy Plans until the Member's Combined
Fraction is not greater than 1.00 when a factor of 1.00 is used
in the denominators of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction. Any provisions herein to the
contrary notwithstanding, if the Plan is a Super Top Heavy Plan,
there shall be no further Annual Additions for a Member whose
Combined Fraction is greater than 1.00 when a factor of 1.00 is
used in the denominator of the Defined Benefit Plan Fraction and
the Defined Contribution Plan Fraction until the Member's
Combined Fraction is not greater than 1.00.
(g) Terminated Plan. If the Plan becomes a Top Heavy
Plan after it has formally been terminated, has
ceased crediting for benefit accruals and vesting and had been or
is distributing all plan assets to Members and their
beneficiaries as soon as administratively feasible, or if a
terminated plan has distributed all benefits of Members and their
beneficiaries, the provisions of Section 14.3 shall not apply to
the Plan.
(h) Frozen Plans. If the Plan becomes a Top Heavy
Plan after contributions have ceased under the Plan but all
assets have not been distributed to Members or their
beneficiaries, the provisions of Section 14.3 shall apply to the
Plan.
14.4 Effect of Change in Applicable Legislation or
Regulation. In the event that Congress should provide by statute
or the Secretary of the Treasury should provide by regulation a
ruling, that the provisions of this Article XIV are no longer
necessary for the Plan to meet the requirements of Section 401(a)
or other applicable provisions of the Code, such limitations
shall become void and shall no longer apply, without the
necessity of further amendment to the Plan.
__________________________________________________________
SMITH CORONA CORPORATION
RETIREMENT SAVINGS AND INVESTMENT PLAN
Adopted Effective July 1, 1989
Amended and Restated Effective January 1, 1997
__________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1 "Account" . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . 1
1.3 "Appropriate Form". . . . . . . . . . . . . . . . . . 1
1.4 "Basic Contributions" . . . . . . . . . . . . . . . . 1
1.5 "Basic Contributions Subaccount". . . . . . . . . . . 1
1.6 "Beneficiary" . . . . . . . . . . . . . . . . . . . . 1
1.7 "Board" or "Board of Directors" . . . . . . . . . . . 1
1.8 "Code". . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 "Committee" . . . . . . . . . . . . . . . . . . . . . 2
1.10 "Compensation" . . . . . . . . . . . . . . . . . . . 2
1.11 "Compensation Deferral Contributions". . . . . . . . 2
1.12 "Compensation Deferral Contributions Account". . . . 2
1.13 "Effective Date" . . . . . . . . . . . . . . . . . . 2
1.14 "Eligible Employee". . . . . . . . . . . . . . . . . 2
1.15 "Employee" . . . . . . . . . . . . . . . . . . . . . 3
1.16 "Employee Contributions" . . . . . . . . . . . . . . 3
1.17 "Employee Contributions Account" . . . . . . . . . . 3
1.18 "Employer" . . . . . . . . . . . . . . . . . . . . . 3
1.19 "Employer Contributions" . . . . . . . . . . . . . . 3
1.20 "Employer Contribution Account". . . . . . . . . . . 3
1.21 "Enrollment Date". . . . . . . . . . . . . . . . . . 3
1.22 "ERISA". . . . . . . . . . . . . . . . . . . . . . . 3
1.23 "Highly Compensated Employee". . . . . . . . . . . . 3
1.24 "Hour of Service". . . . . . . . . . . . . . . . . . 3
1.25 "Initial Enrollment Date". . . . . . . . . . . . . . 4
1.26 "Investment Fund". . . . . . . . . . . . . . . . . . 4
1.27 "Investment Manager" . . . . . . . . . . . . . . . . 4
1.28 "Leave of Absence" . . . . . . . . . . . . . . . . . 5
1.29 "Member" . . . . . . . . . . . . . . . . . . . . . . 5
1.30 "Parental Leave" . . . . . . . . . . . . . . . . . . 5
1.31 "Plan" . . . . . . . . . . . . . . . . . . . . . . . 5
1.32 "Plan Year". . . . . . . . . . . . . . . . . . . . . 6
1.33 "Required Beginning Date". . . . . . . . . . . . . . 6
1.34 "Retirement Age" . . . . . . . . . . . . . . . . . . 6
1.35 "Rollover Contribution". . . . . . . . . . . . . . . 6
1.36 "Rollover Contribution Account". . . . . . . . . . . 6
1.37 "Service". . . . . . . . . . . . . . . . . . . . . . 6
1.38 "Specific Involuntary Termination" . . . . . . . . . 6
1.39 "Supplemental Contributions" . . . . . . . . . . . . 6
1.40 "Supplemental Contributions Subaccount". . . . . . . 7
1.41 "Suspense Account" . . . . . . . . . . . . . . . . . 7
1.42 "Total and Permanent Disability" . . . . . . . . . . 7
1.43 "Trustee". . . . . . . . . . . . . . . . . . . . . . 7
1.44 "Trust Fund" . . . . . . . . . . . . . . . . . . . . 7
1.45 "Valuation Date" . . . . . . . . . . . . . . . . . . 7
1.46 "Use of Masculine Pronoun".. . . . . . . . . . . . . 7
ARTICLE II
Eligibility and Membership
2.1 Members on the Restatement Date . . . . . . . . . . . 7
2.2 Eligible Employees on and after the January 1,
1997. . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Completion of Appropriate Form. . . . . . . . . . . . 8
2.4 Elections Upon Becoming a Member. . . . . . . . . . . 8
2.5 Beneficiary Designation . . . . . . . . . . . . . . . 8
2.6 Transfers to or from Non-Covered Status . . . . . . . 9
2.7 Rollover Contributions From Other Plans . . . . . . . 9
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions . . . . . . . . 10
3.2 Changes and Suspension of Contributions . . . . . . 10
3.3 Transfer of Contributions to Trustee. . . . . . . . 10
3.4 Limitation on Compensation Deferral Contributions . 10
ARTICLE IV
Employer Contributions
4.1 Amount of Employer Contributions. . . . . . . . . . 11
4.2 Limitations on Matching Contributions . . . . . . . 11
4.3 Treatment of Forfeitures. . . . . . . . . . . . . . 11
4.4 Transfer of Contributions to Trustee. . . . . . . . 12
4.5 Contributions After Certain Leave of Absences . . . 12
4.6 Limitation of Annual Additions. . . . . . . . . . . 13
ARTICLE V
Accounts
5.1 Maintenance of Accounts . . . . . . . . . . . . . . 16
5.2 Valuations. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI
Vesting of Accounts
6.1 Employer Contribution Account . . . . . . . . . . . 16
6.2 Other Accounts. . . . . . . . . . . . . . . . . . . 16
6.3 Earlier Vesting in Employer Contribution Account. . 17
6.4 Forfeitures . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII
Investment of Accounts
7.1 Investment of Accounts. . . . . . . . . . . . . . . 18
7.2 Redirection of Future Contributions . . . . . . . . 18
7.3 Reinvestment of Prior Contributions . . . . . . . . 18
7.4 Statements of Accounts. . . . . . . . . . . . . . . 19
7.5 Crediting of Contribution Accounts. . . . . . . . . 19
7.6 Correction of Error . . . . . . . . . . . . . . . . 20
ARTICLE VIII
Withdrawals and Loans During Employment
8.1 Withdrawal Options. . . . . . . . . . . . . . . . . 20
8.2 Hardship Withdrawals. . . . . . . . . . . . . . . . 21
8.3 Values. . . . . . . . . . . . . . . . . . . . . . . 22
8.4 Payment of Withdrawals. . . . . . . . . . . . . . . 22
8.5 Loans . . . . . . . . . . . . . . . . . . . . . . . 22
8.6 Loan Proceeds Value . . . . . . . . . . . . . . . . 24
ARTICLE IX
Distribution
9.1 Amount of Distribution . . . . . . . . . . . . . . 24
9.2 Normal Form of Distribution. . . . . . . . . . . . 25
9.3 Alternate Form of Distribution . . . . . . . . . . 26
9.4 Identity of Payee. . . . . . . . . . . . . . . . . 26
9.5 Non-alienation of Benefits . . . . . . . . . . . . 26
9.6 Qualified Domestic Relations Order . . . . . . . . 27
9.7 Commencement of Benefits . . . . . . . . . . . . . 29
9.8 Annuities. . . . . . . . . . . . . . . . . . . . . 29
9.9 Spousal Consent. . . . . . . . . . . . . . . . . . 31
9.10 Lump Sum Payment without Election. . . . . . . . . 31
9.11 Direct Rollover Election . . . . . . . . . . . . . 31
ARTICLE X
Administration of the Plan
10.1 Plan Administrator. . . . . . . . . . . . . . . . 32
10.2 Board of Directors. . . . . . . . . . . . . . . . 32
10.3 Appointment of the Committee. . . . . . . . . . . 32
10.4 Compensation Expenses . . . . . . . . . . . . . . 32
10.5 Committee Actions, Agents . . . . . . . . . . . . 33
10.6 Committee Meetings. . . . . . . . . . . . . . . . 33
10.7 Authority and Duties of the Committee . . . . . . 33
10.8 Personal Liability. . . . . . . . . . . . . . . . 33
10.9 Dealings between the Committee and Individual
Members . . . . . . . . . . . . . . . . . . . . . 34
10.10 Information To Be Supplied by the Employer. . . . 34
10.11 Records . . . . . . . . . . . . . . . . . . . . . 34
10.12 Fiduciary Capacity. . . . . . . . . . . . . . . . 34
10.13 Fiduciary Responsibility. . . . . . . . . . . . . 34
10.14 Claim Procedure . . . . . . . . . . . . . . . . . 35
10.15 Lawsuits. . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XI
Operation of the Trust Fund
11.1 Trust Fund . . . . . . . . . . . . . . . . . . . . 36
11.2 Trustee. . . . . . . . . . . . . . . . . . . . . . 37
11.3 Investment Manager . . . . . . . . . . . . . . . . 37
11.4 Disbursement of Funds. . . . . . . . . . . . . . . 37
11.5 Exclusive Benefit of Members . . . . . . . . . . . 37
ARTICLE XII
Amendment, Termination and Merger
12.1 Right to Amend . . . . . . . . . . . . . . . . . . 38
12.2 Suspension or Termination. . . . . . . . . . . . . 38
12.3 Merger, Consolidation or Transfer. . . . . . . . . 39
ARTICLE XIII
Miscellaneous
13.1 Uniform Administration . . . . . . . . . . . . . . 39
13.2 Payment Due an Incompetent . . . . . . . . . . . . 39
13.3 Source of Payments . . . . . . . . . . . . . . . . 39
13.4 Plan Not a Contract of Employment. . . . . . . . . 39
13.5 Applicable Law . . . . . . . . . . . . . . . . . . 40
13.6 Unclaimed Amounts. . . . . . . . . . . . . . . . . 40
13.7 Adoption of Plan by Subsidiary . . . . . . . . . . 40
ARTICLE XIV
Top Heavy Provisions
14.1 Application. . . . . . . . . . . . . . . . . . . . 40
14.2 Special Top Heavy Definitions. . . . . . . . . . . 41
14.3 Special Top Heavy Provisions . . . . . . . . . . . 48
14.4 Effect of Change in Applicable Legislation or
Regulation . . . . . . . . . . . . . . . . . . . . 51
Dates Referenced Herein and Documents Incorporated by Reference
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