REVLON EMPLOYEES' SAVINGS, INVESTMENT AND PROFIT SHARING PLAN
Amended and Restated
Effective as of January 1, 1997
July 1997 Edition
TABLE OF CONTENTS PAGE
ARTICLE 1 Definitions 1
ARTICLE 2 Participation 15
ARTICLE 3 Basic and Matching Contributions 20
ARTICLE 4 Accounts and Designation of Investment Funds 25
ARTICLE 5 Vesting 35
ARTICLE 6 Normal Withdrawals During Employment 38
ARTICLE 7 Withdrawals for Hardship 41
ARTICLE 8 Distributions on Termination of Employment 44
ARTICLE 9 Payment of Benefits 46
ARTICLE 10 Beneficiary Designation 52
ARTICLE 11 Administration 55
ARTICLE 12 Trust Agreement 62
ARTICLE 13 Amendment or Merger 63
ARTICLE 14 Termination of the Plan 65
ARTICLE 15 Miscellaneous 67
ARTICLE 16 Leased Employees 73
ARTICLE 17 Limitation on Maximum Benefits 75
and Contributions Under All Plans
ARTICLE 18 "Top Heavy" Provisions, Etc. 77
ARTICLE 19 Termination, etc. Prior to Amendment 84
ARTICLE 20 401(k) Deferral and 401(m) Contributions Tests 85
ARTICLE 21 Rollover Contributions 90
ARTICLE 22 Direct Rollover 92
ARTICLE 23 Profit Sharing 94
SCHEDULE A Schedule of Employees 99
SCHEDULE B Profit Sharing Employers 100
Participant Loan Program 101
REVLON EMPLOYEES' SAVINGS. INVESTMENT AND PROFIT SHARING PLAN
PREAMBLE
Effective February 1, 1969, a predecessor of Revlon, Inc., a
Delaware corporation, adopted the Revlon, Inc. Employees' Stock Purchase Plan.
Such Plan was subsequently amended from time to time.
Since 1983, Revlon, Inc. and its predecessor maintained the Revlon
PAYSOP (the "PAYSOP"), a tax credit employee stock ownership plan of benefits
administered in connection with the Plan, for the benefit of certain of its
employees and those of its adopting affiliates. The Tax Reform Act of 1986
eliminated the payroll based tax credit for contributions to tax credit
employee stock ownership plans, and, effective July 6, 1987: (i) the PAYSOP
provisions of the Plan were consolidated into a separate stock bonus plan of
benefits, and the PAYSOP plan was terminated as of that date; and (ii) each
affected participant's PAYSOP Account balance was either distributed to him or
transferred in cash to the Plan.
An amendment effective December 31, 1983 changed the name of the
Plan to the "Revlon Employees' Savings and Investment Plan" and the Plan
sponsor was subsequently changed, effective July 1, 1992, to Revlon Consumer
Products Corporation (the "Company").
The Plan is a profit-sharing plan which contains a cash or deferred
arrangement described in section 401(k) of the Internal Revenue Code of 1986,
as amended.
The Plan was amended and restated, generally effective January 1,
1989.
Generally effective January 1, 1996 the Plan was further amended
and restated, generally for the purposes of:
(i) providing that future employer matching contributions shall be
invested (and may be made) in shares of the common stock of Revlon, Inc. (a
Delaware corporation and the Company's parent), effective upon the completion
of an initial public offering by Revlon, Inc. in 1996;
(ii) changing the minimum service required for plan participation,
generally effective January 1, 1996; and
(iii) updating the list of participating employers effective
January 1, 1996.
Effective January 1, 1997, the Plan is renamed the Revlon
Employees' Savings, Investment and Profit Sharing Plan and hereby further
amended and restated, generally for the purposes of:
(i) effective January 1, 1997, providing for profit sharing
contributions by the employer to be invested in shares of the common stock of
Revlon, Inc. (a Delaware corporation and the Company's parent) to a select
group of employees who are not otherwise eligible to participate in any sales
or management incentive compensation plan of a Profit Sharing Employer; and
(ii) effective January 1, 1998, eliminating the requirement that employees
attaining age 70 1/2 must commence receipt of required minimum distributions
while actively employed.
ARTICLE 1
Definitions
When used in the Plan, the following terms shall have the
designated meanings, unless a different meaning is clearly required by the
context:
1.1 Accounts. A Participant's Basic Account, Pre-IPO Matching
Contributions Account, Post-IPO Matching Contributions Account, Segregated
Account or Profit Sharing Contributions Account or the aggregate thereof as the
context may indicate.
1.2 Affiliate. Any business entity, other than an Employer, whether
or not incorporated, which at the time of reference controls, is controlled by
or is under common control with an Employer (within the meaning of section
414(b) or 414(c) of the Code or, effective January 1, 1980, section 414(m)(2)
of the Code, or as effective December 31, 1983, section 414(m)(5) of the Code,
or as effective July 18, 1984, section 414(o) of the Code, and, for purposes of
applying Article 17 of the Plan, section 415(h) of the Code). In accordance
with rules which the Administrative Committee may adopt from time to time, the
term "Affiliate" may also include any joint venture or other business
organization with which the Company is affiliated, or in which it has an
interest or with which it has business dealings, either for all purposes of the
Plan or for such limited purposes as the Administrative Committee may specify
in such rules, and subject to such conditions and limitations (if any) as the
Committee may specify in such rules.
1.3 Appropriate Form. A form prescribed by the Committee for a
particular purpose specified in the Plan.
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1.4 Basic Account. The aggregate of a Participant's Pre-Tax
Contributions Account, his Post-Tax Contributions Account and any amounts
attributable to prior participation in the tax credit employee stock ownership
plan maintained within the same Plan document until its termination on July 6,
1987.
1.5 Basic Contributions. Contributions made by an Employer or
Participant in accordance with the provisions of Section 3.1 and/or 3.2,
respectively.
1.6 Beneficiary. The person or persons entitled to benefits under
the Plan following a Participant's death, pursuant to Article 10.
1.7 Break in Service. A Severance Period of not less than twelve
(12) consecutive months. In the case of an individual who is absent from work
for maternity or paternity reasons (whether or not the employment relationship
has terminated) (or for any other reason which entitles such individual to a
FMLA leave (as described below)), the first twelve (12) consecutive months of
such absence (or such lesser period of the FMLA leave) shall not be included in
a Break in Service, but only to the extent required by applicable law. For
purposes of this Section 1.7, an absence from work for maternity or paternity
reasons means a cessation of active employment after 1984 which commences and
continues (a) by reason of the pregnancy of the individual, (b) by reason of
the birth of a child of the individual, (c) by reason of the placement of a
child with the individual in connection with the adoption of such child by such
individual, or (d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
For purposes of this Section 1.7, an absence from work for a FMLA
leave means a cessation of active employment (and continuous absence from such
employment) commencing on or after August 5, 1993, for a leave of absence for
one or more of the
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following reasons: (a) because of the birth of a son or daughter of the
individual and in order to care for such son or daughter; (b) because of the
placement of a son or daughter with the individual for adoption or foster care;
(c) in order to care for the spouse, or a son, daughter, or parent of the
individual, if such spouse, son, daughter, or parent has a serious health
condition, or (d) because of a serious health condition that makes the
individual unable to perform the functions of the position of such individual,
in each case (a) through (d) which entitles the individual to be granted a
leave of absence under the provisions of the Family and Medical Leave Act of
1993, as it may be amended from time to time, and the regulations promulgated
thereunder.
Nothing in this Section 1.7 shall be construed to grant an employee
any right to a leave of absence for any reason.
1.8 Board of Directors. The Board of Directors of the Company, or
any duly authorized committee thereof.
1.9 Committee. The Administrative Committee or the Investment
Committee, as the context may indicate, provided for in Article 11.
1.10 Company Stock. The Class A common stock of Revlon, Inc., par
value $.01 per share.
1.11 Compensation. As used herein, the term Compensation shall
mean;
1.11.1 The amount paid by an Employer as straight time salary
or other regular straight time remuneration, for services performed as an
Eligible Employee, determined before giving effect to (a) any
Participation Agreement under this Plan or (b) any similar agreement
under any plan described in section 125 of the Code, but not including:
(i) deferred compensation, bonuses, overtime
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pay, contributions under the Plan or any other program of fringe
benefits, or other additional remuneration; (ii) any remuneration for
services performed while an Employee who is employed primarily to render
services within the jurisdiction of a union and with respect to which
compensation, hours of work or conditions of employment are determined by
collective bargaining with such union; provided, however, that any such
remuneration not otherwise excluded from Compensation by the provisions
of this Section 1.11 shall be treated as Compensation if, and to the
extent, that the applicable collective bargaining agreement expressly so
provides.
1.11.2 For purposes of Section 20.4, Compensation shall
include Pre-Tax Contributions.
1.11.3 In no event shall the Plan take into account
Compensation in excess of $200,000 for Plan Years beginning after 1988,
or in excess of $150,000 for Plan Years beginning after 1993, each as
adjusted under sections 401(a)(17) and 415(d) of the Code, for any
Employee in any Plan Year. For purposes of applying the $200,000 and
$150,000 limitations, the Compensation of certain Employees shall include
the Compensation of any family member, as prescribed by section
414(q)(6), except that in applying such rules, the term "family" shall
include only the Spouse and any lineal descendants of an Employee who
have not attained age 19 before the close of the Plan Year.
1.12 Disability. Total inability of a Participant to perform the
customary duties of his employment, which is expected to be permanent or of
long-continued
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duration, as determined by the Administrative Committee on the basis of medical
evidence satisfactory to it.
1.13 Eligible Employee. Except as may otherwise be provided in
Article 23, any Employee of an Employer who meets all of the following
requirements:
1.13.1 He is at least twenty-one (21) years of age;
1.13.2 He is employed in a division, subdivision, plant,
location or other identifiable group of Employees to which his Employer
has extended the Plan; provided, however, that in determining the
divisions, subdivisions, plants, locations or groups of Employees to
which the Plan shall be extended, the Employer shall not discriminate in
favor of Highly Compensated Employees so as to prevent the Plan from
qualifying under section 401(a) of the Code.
1.13.3 If: (i) he is employed primarily to render services
within the jurisdiction of a union, (ii) his compensation, hours of work
or conditions of employment are determined by collective bargaining with
such union, and (iii) an applicable collective bargaining agreement
expressly provides that he shall be eligible to participate in the Plan,
then he shall be entitled to participate in the Plan only to the extent
and on the terms and conditions specified in such collective bargaining
agreement; and
1.13.4 He is not a nonresident alien.
1.13.5 He is not an employee with the job title (i) "direct
pay beauty advisor," or (ii) "field merchandiser" (unless he was
otherwise a Participant in the Plan as of January 1, 1994).
1.14 Employee. An employee of an Employer or Affiliate.
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1.15 Employer. The Company and its subsidiaries and affiliates
listed on Schedule A attached hereto and any other corporation, partnership or
other entity which has adopted the Plan with the approval of the Board of
Directors.
1.16 Employer Contributions. Pre-Tax Contributions and Matching
Contributions.
1.17 Employment Date. The first day on which an Employee is
credited with an Hour of Service with an Employer or an Affiliate.
1.18 Entry Date. Each January 1, April 1, July 1, and October 1;
and any other date established as an "Entry Date" by the Administrative
Committee with respect to Eligible Employees generally, or such specified group
of Eligible Employees as the Administrative Committee may prescribe in its
discretion.
1.19 ERISA. The Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.20 Highly Compensated Employee. A "highly compensated employee"
as the term is defined in section 414(q) of the Code and the Treasury
Regulations thereunder.
1.21 Hour of Service. Subject to the equivalency rules of Section
2.1.4, an Employee is credited with an Hour of Service pursuant to the
following rules, determined without duplication:
(i) Each hour for which an Employee is paid, or entitled to
payment, by an Employer, for the performance of duties for the Employer;
(ii) Each hour for which an Employee is paid, or entitled to
payment [IF APPROVED LEAVE OF ABSENCE WE DON'T CARE IF THEY GET PAID], by an
Employer on account of a period of time during which no duties are performed
due to vacation, holiday, illness,
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incapacity (including disability), layoff, jury duty, military duty or leave of
absence. No more than 501 Hours of Service will be credited under this
paragraph for any single continuous period (whether or not such period occurs
in a single computation period). Hours of Service under this paragraph will be
calculated and credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this reference;
(iii) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer. These hours will be
credited to the Employee for the Year of Service or Plan Years to which the
award or agreement pertains rather than the Year of Service or Plan Year in
which the award, agreement or payment is made;
(iv) In addition to service with an Affiliate, Hours of Service
will also be credited for any individual considered an employee for purposes of
this Plan under section 414(n) of the Code;
1.22 Investment Fund. A portion of the Trust Fund which is
separately invested, as provided in Section 4.4.
1.23 Matched Contributions. (a) For periods prior to January 1,
1984, "Employee Contributions" (as that term was defined in the Plan
immediately prior to January 1, 1984) and (b) for periods on or after January
1, 1984, the aggregate Pre-Tax Contributions and Post-Tax Contributions to a
Participant's Basic Account for any month not in excess of six percent (6%) of
the Participant's Compensation for that month.
1.24 Matching Contributions. (a) "Employer Contributions" (as that
term was defined in the Plan immediately prior to January 1, 1984) made under
the Plan for periods prior to January 1, 1984 and (b) contributions made by an
Employer under Section
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3.6 of this Plan for months ending after December 31, 1983, based on the amount
of Matched Contributions made for or by the Participant for any such month.
1.25 Matching Contributions Account. A separate account maintained
for each Participant which reflects his share of the Trust Fund attributable to
Matching Contributions. The Matching Contributions Account shall consist of two
sub-accounts: the Pre-IPO Matching Contributions Account and the Post-IPO
Matching Contributions Account.
1.26 `96 IPO. The date of the 1996 initial public offering of the
Class A common stock of Revlon, Inc., which for purposes of this Plan shall be
deemed to be March 1, 1996.
1.27 Normal Retirement Age. A Participant's sixty-fifth (65th)
birthday.
1.28 Participant. Any present Eligible Employee who has become a
Participant in this Plan in accordance with Article 2 or Article 23, and any
former Eligible Employee who (or whose Beneficiary) has an undistributed
Account under the Plan.
1.29 Participation Agreement. An agreement by an Eligible Employee
in an Appropriate Form (a) to reduce his cash base pay in order to share in
Pre-Tax Contributions under the Plan, as provided in Section 3.1, and/or (b) to
make Post-Tax Contributions to the Plan, in accordance with the provisions of
Section 3.2.
1.30 Plan. The Revlon Employees' Savings, Investment and Profit
Sharing Plan.
1.31 Plan Year. January 1 through December 31.
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1.32 Post-IPO Matching Contributions. Matching Contributions which
are attributable to payroll periods ending on or after the first day of the
calendar month coincident with or next following the date of the `96 IPO.
1.33 Post-IPO Matching Contributions Account. A separate
sub-account maintained for each Participant which reflects his share of the
Trust Fund attributable to Post-IPO Matching Contributions made on behalf of
such Participant.
1.34 Post-Tax Contributions. Basic Contributions made by a
Participant in accordance with the provisions of Section 3.2.
1.35 Post-Tax Contributions Account. A subaccount of a
Participant's Basic Account which reflects his share of the Trust Fund
attributable to his (a) Post-Tax Contributions and (b) Employee Contributions
(as that term was defined in the Plan immediately prior to January l, 1984) for
periods prior to 1984.
1.36 Pre-IPO Matching Contributions. Matching Contributions which
are attributable to payroll periods ending before the first day of the calendar
month coincident with or next following the date of the `96 IPO.
1.37 Pre-IPO Matching Contributions Account. A separate sub-account
maintained for each Participant which reflects his share of the Trust Fund
attributable to Pre-IPO Matching Contributions made on behalf of such
Participant.
1.38 Pre-Tax Contributions. Basic Contributions made by an Employer
for the benefit of a Participant in accordance with the provisions of Section
3.1.
1.39 Pre-Tax Contributions Account. A sub-account of a
Participant's Basic Account which reflects his share of the Trust Fund
attributable to his Pre-Tax Contributions.
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1.40 Profit Sharing Contributions. For Plan Years beginning on and
after January 1, 1997, contributions made by a Profit Sharing Employer under
section 23.2 of this Plan.
1.41 Profit Sharing Contributions Account. A separate account
maintained for each Participant eligible under Article 23 of this Plan which
reflects his share of the Trust Fund attributable to Profit Sharing
Contributions.
1.42 Profit Sharing Employers. The Company and its subsidiaries and
affiliates listed on Schedule B of this Plan which indicates the group of
Employers initially eligible to make Profit Sharing Contributions and any other
corporation, partnership or other entity which has elected to become a Profit
Sharing Employer with the approval of the Board of Directors..
1.43 Reemployment Date. The date on which an employee first
completes an Hour of Service after a Termination of Employment.
1.44 Savings Fund. The Investment Fund described in Section 4.3.1.
1.45 Segregated Account. A separate account maintained for a
Participant which reflects his share of the Trust Fund attributable to his
prior participation in another plan from which assets were transferred to this
Plan.
1.46 Service. Subject to Sections 2.2 and 5.3, the aggregate of the
following:
1.46.1 Each period from an employee's Employment Date (or
Reemployment Date) to his next Termination of Employment, and
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1.46.2 If any employee shall perform an Hour of Service
within twelve (12) months of his Termination of Employment, the period
from such Termination of Employment to such Hour of Service.
Service shall be measured in whole years and fractions of a year in
months. Any fraction of a month remaining shall be rounded up to the nearest
whole month.
1.47 Severance Period. Each period from an employee's Termination
of Employment to his next Reemployment Date.
1.48 Spouse. A Participant's legal spouse. A former spouse will be
treated as the Participant's spouse to the extent provided in a qualified
domestic relations order (as defined in section 414(p) of the Code).
1.49 Spousal Consent. A written consent, on the Appropriate Form,
by a Participant's Spouse to an election, Beneficiary designation or similar
action by the Participant which meets the requirements of section 417(a)(2) of
the Code. If the Committee is satisfied that such Spousal Consent cannot be
obtained because the Spouse cannot be located, or because of other
circumstances which may be permitted under applicable law, Spousal Consent
shall be deemed to have been given. Any consent or deemed consent with respect
to a Spouse shall be effective only with respect to such Spouse. A consent that
permits designations by the Participant without any requirement of further
consent by such Spouse must acknowledge that the Spouse has the right to limit
consent to a specific beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to relinquish either or both
of such rights. A revocation of a prior waiver may be made by a Participant
without the consent of the Spouse at any time before the commencement of
benefits.
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1.50 Supplemental Investment Fund. The Investment Fund or Funds
described in Section 4.4.2.
1.51 Taxable Year. A taxable year of an Employer (or its
predecessor) applicable for Federal income tax purposes.
1.52 Termination of Employment. An Employee's ceasing to be
employed by an Employer or Affiliate for any reason (including, without
limitation, death, disability, quit, discharge, layoff, retirement, resignation
or entrance into military service); provided, however, that:
1.52.1 If an Employee is transferred to employment with
another Employer or Affiliate or a series of Employers or Affiliates, he
shall not be deemed to have terminated employment for purposes of the
Plan until such time as he is employed neither by any Employer nor by any
Affiliate.
1.52.2 If an Employee leaves employment with an Employer or
Affiliate to enter into military service with the Armed Forces of the
United States, he shall not be deemed to have terminated employment if
(a) the Employee has reemployment rights under applicable law throughout
the entire period of such service, (b) upon discharge from such service
he retains such reemployment rights (determined after taking into account
the terms of such discharge), and (c) he returns to the employ of an
Employer or Affiliate within ninety (90) days after the date of his
completion of such service (or within such longer period during which his
reemployment rights are protected by law). If the requirements of this
Section 1.49 are not met he shall be deemed to have terminated employment
as of his last day of employment prior to the date of entry into such
service.
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References in the Plan to an individual's Termination of
Employment, termination or being terminated shall have the meaning ascribed to
Termination of Employment as provided in this Section 1.49. For purposes of
applying the provisions of Section 9.2.4, a Participant shall not be deemed to
have terminated employment unless he has incurred a "separation from service"
within the meaning of section 401(k) of the Code.
1.53 Trust Agreement. The trust agreement or agreements referred
to in Article 12.
1.54 Trust Fund. All of the assets at any time held under the Plan
by the Trustee as provided for in Article 12.
1.55 Trustee. The corporation or corporations, individual,
individuals, or combination thereof which may at any time be acting as trustee
or trustees under the Trust Agreement.
1.56 Unmatched Contributions. With respect to any monthly Pre-Tax
Contributions made by an Employer for the benefit of a Participant and/or
Post-Tax Contributions made by a Participant, which when aggregated are in
excess of six percent (6%) of the Participants' Compensation for such month.
1.57 Valuation Date. The last day of a calendar month, or any other
date or dates so designated by the Administrative Committee in a uniform and
nondiscriminatory manner. Effective July 1, 1993, the plan administration was
simplified and enhanced by allowing investment in Investment Funds comprised of
publicly traded mutual funds that allow for daily valuations and withdrawals.
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1.58 Value. Except as otherwise expressly set forth in the Plan, as
of any date, the value of a Participant's interest in any Investment Fund shall
be determined on a reasonable and consistent basis by the Administrative
Committee or its agent designated for the determination of the value of such
interest.
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ARTICLE 2
Participation
2.1 Participation Rules Effective January 1. 1996.
2.1.1 Continuing Participation. An individual who was a
Participant in the Plan on December 31, 1995 shall continue as a
Participant in the Plan if he still has an undistributed Account as of
such date.
2.1.2 Participation Based on Eligible Employment After 1995.
An Employee who was not a Participant in the Plan on December 31, 1995
may elect to become a Participant on any Entry Date coincident with or
next following the day on which he meets both of the following
requirements: (i) he has completed at least one Year of Service, and (ii)
he is an Eligible Employee. For these purposes, an Eligible Employee
shall be deemed to have completed a Year of Service if he is credited
with 1,000 Hours of Service during the twelve month period starting on
his Employment Date or during any Plan Year which begins after his
Employment Date.
Effective for Plan Years beginning on and after January 1,
1997 an Employee may also become a Participant if he meets the
eligibility requirements of Article 23, but only for purposes of being
eligible to receive Profit Sharing Contributions.
2.1.3 Special Transition Rule. If an Employee was actively
employed on December 31, 1995 and would be prevented from becoming a
Participant in 1996 because of the foregoing one Year of Service
requirement, he or she may nevertheless elect to become a Participant on
any Entry Date in 1996 if
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he or she has both completed at least five-hundred (500) Hours of Service
within any six month consecutive period ending on such Entry Date and is
employed as an Eligible Employee on such Entry Date. Effective January 1,
1997, the service requirement set forth in Section 2.1.2 shall apply to
each Employee unless the individual had theretofore satisfied the
requirements for participation under this Section 2.1.3.
2.1.4 Determination of Hours of Service. Hours of Service
shall be determined in accordance with Section 1.21; provided, however,
that in determining the Hours of Service to be credited to an Employee an
Employer may either actually count the Hours of Service to be credited to
each of its Employees or such Employer may apply the following
equivalency method:
2.1.4.1 Salaried Employees. Any salaried Employee who would
be required to be credited with at least one Hour of Service in any month
shall be credited with one-hundred ninety (190) hours for such month.
2.1.4.2 Hourly Paid Employees. In the case of hourly paid
Employees the Employer shall determine the number of Hours of Service by
dividing the Employee's total earnings for the applicable 12-month
computation period by his lowest hourly rate of pay during the relevant
computation period, provided, however, that for any such Employee for
whom the method specified in this subsection 2.1.4.2 is applied eight
hundred seventy (870) Hours of Service shall be deemed to be the
equivalent of one thousand (1,000) Hours of Service.
2.2 Re-Employment. If a Participant or other Employee who has
terminated employment shall be rehired as an Eligible Employee, he shall be
eligible to
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commence or resume participation under the Plan on the later of (a) the date of
rehire or (b) the first Entry Date on which he could have become a Participant
if his prior employment by the Employer or Affiliate had been in a position
eligible for participation in the Plan.
2.3 Transfer to Eligible Employment. If an Employee transfers to
employment as an Eligible Employee from employment with an Affiliate or from
employment with an Employer other than as an Eligible Employee, he shall become
a Participant on the later of (a) the date of transfer or (b) the first Entry
Date on which he could have become a Participant if his prior employment by the
Employer or Affiliate had been in a position eligible for participation in the
Plan.
Notwithstanding the foregoing, an Employee who transfers to
employment as an Eligible Employee from employment with an Affiliate shall
become eligible to receive a Profit Sharing Contribution upon satisfying the
eligibility requirements of Article 23 of this Plan.
2.4 Completion of Participation Agreement. Except as otherwise
provided herein, in order to receive the benefit of Pre-Tax Contributions or to
make Post-Tax Contributions a Participant must complete and return the
Participation Agreement to the Administrative Committee not later than the
fifteenth (15th) day of the month prior to such date (or within such other
period as the Administrative Committee may prescribe). If a rehired Eligible
Employee, or an Eligible Employee transferred from ineligible employment,
commences or resumes participation on his date of rehire (or date of transfer
to employment as an Eligible Employee) pursuant to clause (a) of Section 2.2
(or of Section 2.3), he shall become eligible to share in or make contributions
under Article 3
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effective as of the first day of the first month following his rehire or
transfer, upon execution and filing of an appropriate Participation Agreement
at least fifteen (15) days prior to such "first day" (or within such other
period as the Administrative Committee may prescribe). If a Participant fails
to complete and return a Participation Agreement within the required time set
forth above, he may begin to share in or make contributions under Section 3.1
of Article 3 as of any subsequent Entry Date as of which he is an Eligible
Employee, by completing and returning such a Participation Agreement to the
Administrative Committee not later than the fifteenth (15th) day of the month
prior to such Entry Date (or within such other period as the Administrative
Committee may prescribe).
2.5 Suspension on Transfer to Ineligible Employment. If a
Participant ceases to be an Eligible Employee but continues in the employ of an
Employer or Affiliate, his Participation Agreement shall be suspended. No Basic
or Matching Contributions shall be made for a Participant with respect to the
period of such suspension. If and when the suspended Participant again becomes
an Eligible Employee, he may execute a new Participation Agreement, to be
effective as provided in Section 2.4.
2.6 Transfers Between Employers. If a Participant transfers from
employment as an Eligible Employee with one Employer to employment as an
Eligible Employee with another Employer, his Participation Agreement shall be
deemed to apply to his second Employer in the same manner as it applied to the
prior Employer.
2.7 Right of Discharge Reserved. The establishment of the Plan
shall not be construed to confer upon a Participant any legal right to be
retained in the employ of any Employer or Affiliate, or to give any Employee,
Spouse, Beneficiary or estate of any Employee, or any other person any right to
any share of the Trust Fund or payment
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whatsoever, except to the extent of the benefits provided for hereunder. All
Employees shall remain subject to discharge to the same extent as if the Plan
had never been adopted and may be treated without regard to the effect such
treatment might have upon them under the Plan. Nothing in the Plan shall be
deemed to be an agreement, consideration, inducement or condition of
employment.
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ARTICLE 3
Basic and Matching Contributions
Basic Contributions and Matching Contributions shall be made in
accordance with the following provisions of this Article 3:
3.1 Pre-Tax Contributions. In order to share in contributions under
this Section 3.1, a Participant must complete the Participation Agreement
referred to in Section 1.27 and elect to reduce the cash Compensation otherwise
payable to him in any month by 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%,
12%, 13%, 14%, 15%, or 16%, whichever he shall specify in such Participation
Agreement; provided, however, that for any Plan Year the Administrative
Committee may, for any subsequent Plan Year, establish a maximum percentage of
16% or some lesser percentage, but not less than 6%; and provided, further,
that the Administrative Committee may allow all Participants, or one or more
selected groups of Participants, to elect to reduce the cash Compensation
otherwise payable to each of them by a specified dollar amount rather than a
specified percentage of Compensation. No Participant shall be permitted to make
Pre-Tax contributions in any taxable year in excess of limitations provided
under section 402(g) of the Code, as adjusted under section 415(d) of the Code.
The Participant's Employer shall contribute to the Plan, during or as soon as
reasonably practicable after the close of each month, an amount equal to the
elected reduction in the Participant's cash Compensation for that month as
Pre-Tax Contributions to the Pre-Tax Contribution Account of his Basic Account.
3.2 Post-Tax Contributions. In lieu of or in addition to any
reduction in cash Compensation agreed to in accordance with the provisions of
Section 3.1, a
20
Participant may elect in his Participation Agreement to contribute 1%, 2%, 3%,
4%, 5% or 6% of his Compensation for any month to the Plan; provided, however,
for any Plan Year the Administrative Committee may establish a maximum
percentage of up to 16% or some lesser percentage but not less than 6%; and
provided, further, that the Administrative Committee may allow all
Participants, or one or more selected groups of Participants, to elect to
reduce the cash Compensation otherwise payable to each of them by a specified
dollar amount rather than a specified percentage of Compensation.
3.3 Limit on Aggregate Pre-Tax And Post-Tax Contributions. In no
case shall the total amount of Pre-Tax Contributions made pursuant to Section
3.1 and Post-Tax Contributions made pursuant to Section 3.2 exceed an amount,
to be determined by the Administrative Committee but not more than 16% of the
Participant's Compensation for that month.
3.4 Voluntary Suspension. A Participant may voluntarily suspend
either his Pre-Tax Contributions, Post-Tax Contributions or both, effective as
of the first day of the next scheduled payroll period for such Participant, by
filing the Appropriate Form with the Administrative Committee at least fifteen
(15) days prior to the first day of that month (or within such other period as
the Administrative Committee may prescribe). No Basic or Matching Contributions
will be made for or by a Participant with respect to any period for which his
Participation Agreement has been so suspended. An Eligible Employee may
reinstate his Participation Agreement as of any Entry Date after the month in
which his suspension of such agreement became effective, by filing the
Appropriate Form with the Administrative Committee at least fifteen (15) days
before such Entry Date (or within such other period as the Committee may
prescribe).
21
3.5 Change in Contribution Rate. A Participant who has a
Participation Agreement in effect may increase or decrease the amount of his
Pre-Tax and/or Post-Tax Contributions within the limits specified in Sections
3.1, 3.2 and 3.3, effective as of any Entry Date by filing the Appropriate Form
with the Administrative Committee not later than the fifteenth (15th) day of
the month prior to such Entry Date (or within such other period as the
Administrative Committee may prescribe).
3.6 Matching Contributions--Amount. Each Participant's Employer
shall make a contribution to the Plan for each calendar month, on behalf of
each Participant who has a Participation Agreement in effect for such month, in
cash if the contribution is a Pre-IPO Matching Contribution or in cash or
Company Stock if the contribution is a Post-IPO Matching Contribution. The
amount shall be, or in the case of shares shall have a fair market value
(determined as of the last day of such month) equal to, one-half (1/2) of the
Matched Contributions made by or for the benefit of such Participant for such
month, less an allocable portion of any amount forfeited pursuant to Section
5.4 then to be applied to reduce the Employer's contributions. Shares of
Company Stock contributed to the Plan may be treasury shares, authorized but
unissued shares, or any combination of the foregoing. The Company is authorized
to contribute shares of Company Stock to the Plan on behalf of any other
Employer, and to the extent that the Company makes any such contribution, such
Employer shall reimburse the Company for the value thereof.
3.7 Matching Contributions--Payment. The contributions required for
any month under Section 5.3 shall be paid to the Trustee after the first day of
such month, but in no case later than as soon as reasonably practicable after
the close of such month.
22
3.8 Limit on Contributions. Notwithstanding any other provision in
this Plan to the contrary, all contributions for any Plan Year on behalf of a
Participant who is a Highly Compensated Employee shall be reduced if and to the
extent necessary in order that the requirements of Article 17 and Sections 20.2
and 20.6 are met.
3.9 Determination by Administrative Committee. If the
Administrative Committee shall conclude that a reduction in the Pre-Tax
Contributions made for any Participant is or may be necessary or advisable in
order to comply with the limitations of Section 3.8 for any Plan Year, the
maximum percentage allowable for Pre-Tax Contributions under Section 3.1 shall
be reduced in accordance with the direction of the Administrative Committee,
and the Committee may, in its sole discretion, take the following action:
3.9.1 The Committee may direct that the Participation
Agreement of each Participant affected by such determination be modified
accordingly, with respect to Pre-Tax Contributions not yet paid into the
Plan, so as to (i) reduce the elected percentage (or dollar amount, if
applicable) of payroll reduction and (ii) to recharacterize the
Participant's election in accordance with Section 3.1.
3.9.2 The Committee shall notify each affected Participant
and his Employer of any such reduction or recharacterization. Any such
reduction or recharacterization may apply either to all Participants, to
a relevant group of Participants or to individual Participants determined
by the Committee, whichever the Administrative Committee shall determine
in its sole discretion. If amounts are not paid into the Plan as Pre-Tax
Contributions or Post-Tax Contributions in accordance with any
determination pursuant to this Section 3.9, such amounts
23
shall instead be distributed to the affected Participant in accordance
with Article 20.
3.10 Contributions May Not Exceed Amount Deductible. In no event
shall Employer Contributions under this Article 3 or under Article 23 for any
taxable year of an Employer exceed the maximum amount (including amounts
carried forward) deductible for that taxable year under section 404(a)(3) of
the Code. In the case of an Employer that is a joint venture between two or
more corporations or other entities, the limitation under this Section 3.10
shall be determined by reference to the applicable deductible limit of each
corporation or other entity which is entitled to deduct its distributable share
of such contributions for Federal income tax purposes.
3.11 Contributions Conditioned on Deductibility. Notwithstanding
any other provision of the Plan, each contribution by an Employer under this
Article 3 and Article 23 is conditioned on the deductibility of such
contribution under section 404 of the Code, and on the initial qualification of
the Plan under section 401(a) of the Code.
3.12 Adjustment of Contributions Based on Limit on Annual
Additions. Notwithstanding any of the foregoing provisions to the contrary, a
Participant may, at such time and in such manner as the Administrative
Committee may prescribe, suspend or change the amount of reduction in his cash
Compensation or the amount of his Post-Tax Contributions provided for under any
applicable Participation Agreement in order to avoid an allocation of
contributions to his Account which would violate the limitations of Article 17.
24
ARTICLE 4
Accounts and Designation of Investment Funds
4.1 Basic Account. A Basic Account shall be maintained for each
Participant in which shall be entered to separate subaccounts: (a) the amount
of Pre-Tax Contributions made by his Employer as a result of his election to
reduce his cash Compensation as described in Section 3.1 and (b) the amount of
Post-Tax Contributions made by the Participant for periods after 1983 in
accordance with the provisions of Section 3.2 and his Employee Contributions
(as that term was defined in the Plan immediately prior to January 1, 1984) for
periods prior to 1984.
4.2 Pre-IPO Matching Contributions Account. A Pre-IPO Matching
Contributions Account shall be maintained for each Participant in which shall
be entered the amount of Pre-IPO Matching Contributions made for his benefit
under Section 3.6.
4.3 Post-IPO Matching Contributions Account. A Post-IPO Matching
Contributions Account shall be maintained for each Participant in which shall
be entered the amount of Post-IPO Matching Contributions made for his benefit
under Section 3.6.
4.4 Profit Sharing Contributions Account. A Profit Sharing
Contributions Account shall be maintained for each Participant under Article 23
of this Plan in which shall be entered the amount of Profit Sharing
Contributions made for his benefit pursuant to Article 23.
4.5 Investment Funds. The Investment Committee shall direct that
the Trust Fund be subdivided into three or more Investment Funds which shall be
separately invested, which shall include but need not be limited to the
following:
25
4.5.1 Savings Fund. A Savings Fund which shall be invested
and reinvested in interest-bearing and/or similar securities, which may
include bonds, short and medium term notes, or other obligations,
certificates of deposit, commercial paper, or part interests therein,
obligations issued or guaranteed as to interest and principal by the
United States Government or any instrumentality or agency thereof, a
guaranteed investment contract or contracts between the Trustee and an
insurance company or companies containing such terms and conditions with
respect to payment of principal and interest as shall be agreed upon by
the parties to such contract or contracts, and/or any common, collective
or commingled trust fund which is invested virtually exclusively in
property of the kind specified in this Section 4.5.1. In the discretion
of the Investment Committee, the Savings Fund shall be subdivided into
such two or more sub-funds as the Investment Committee shall specify,
each to be separately invested in property of the kind described in this
Section 4.5.1 having such characteristics as the Investment Committee
shall specify. Except as the Investment Committee shall otherwise direct
each such sub-fund shall not constitute a separate Investment Fund for
purposes of this Plan.
4.5.2 Supplemental Investment Fund. One or more Supplemental
Investment Funds which shall be invested and reinvested principally in
securities or other property, real or personal, directly or through the
medium of any insurance company, separate account, any mutual fund or
family of mutual funds, or any common, collective or commingled trust
fund which is invested principally in property of any kind. In the
discretion of the Investment Committee, any Supplemental Investment Fund
shall be subdivided into such two or more subfunds
26
as the Investment Committee shall specify, each to be separately invested
as the Investment Committee shall specify. Except as the Investment
Committee shall otherwise direct each such sub-fund shall constitute a
separate Investment Fund for purposes of this Plan.
4.5.3 Company Stock Fund. Company Stock Fund invested solely
in Company Stock as more fully described in the Trust Agreement, except
that pending investment or to the extent necessary to effect
distributions (or to meet other administrative requirements of the Plan),
amounts held in the Company Stock Fund may be held in cash or such other
short term investments as the Investment Committee deems suitable.
Notwithstanding any other provision of the Plan, the Post-IPO Matching
Contribution Account and the Profit Sharing Contributions Accounts are
the only Plan Accounts that may be invested in the Company Stock Fund.
4.6 Direction as to Basic Contributions. A Participant may, by
giving notice on the Appropriate Form or as the Administrative Committee may
otherwise prescribe and within such time as the Administrative Committee may
prescribe, designate the proportion of the future Basic Contributions made for
his behalf for periods from and after January 1, 1984, which shall be allocated
to and invested in any Investment Fund (other than the Company Stock Fund),
provided, however, that the percentage of such contributions to be invested in
any such Fund shall be either 10%, 20%, 30%, 40%, 50%, 60%, 70%, 80%, 90% or
100% thereof; provided, further, however, that from and after July 1, 1993,
such percentage shall be any whole percentage as approved by the Administrative
Committee and designated by the Participant. Such designation shall apply
27
equally to his Matched Contributions and Unmatched Contributions, if any. Any
election under this Section 4.5 shall continue in effect until changed by a new
designation. A Participant may change his election as of any Entry Date, by
filing a new designation on the Appropriate Form with the Administrative
Committee or as the Administrative Committee may otherwise prescribe not later
than the fifteenth (15th) day of the month prior to such date or within such
other period as the Administrative Committee may prescribe. The Administrative
Committee may refuse to accept any Participation Agreement that is deficient in
respect of any election as to the designation of the investment of Basic
Contributions; or, the Administrative Committee may accept such deficient form
provided, however, that in such case all of the Participant's Basic
Contributions shall be deemed to have been designated by the Participant for
investment in the Savings Fund.
4.7 Matching Contributions.
4.7.1 General Rule. All Pre-IPO Matching Contributions shall
be invested in the same Investment Funds (and in the same proportions)
which the Participant has designated under Section 4.6 with respect to
his Basic Contributions, together with all dividends and other
distributions resulting from such investments. All Post-IPO Matching
Contributions shall be invested in the Company Stock Fund, without regard
to the investment direction of the Participant, together with all
dividends and other distributions resulting from such investments.
4.7.2 Special Rule for Post-IPO Matching Contributions and
Profit Sharing Contributions. If the Investment Committee determines that
legal or
28
contractual restrictions and/or blockage and/or other market
considerations would make the Plan's acquisition or sale of Company Stock
from or to the public markets illegal, impracticable or inadvisable, the
Investment Committee shall direct the Trustee to suspend all future
acquisitions of Company Stock in the Company Stock Fund until further
notice. Subsequent Matching and Profit Sharing Contributions shall be
received in the Company Stock Fund nevertheless, and shall be invested in
cash or such other short term investments as the Investment Committee
deems appropriate, pending the determination contemplated in the next
sentence. The Investment Committee shall promptly determine whether
further investments in Company Stock can be safely resumed or if such
further investments should be suspended indefinitely. If the Investment
Committee directs indefinite suspension, all future Matching and Profit
Sharing Contributions made on a Participant's behalf, and all prior
contributions then held on the Participant's behalf in cash or short term
investments pursuant to this subsection, together with all dividends and
other distributions resulting from such investments, shall be allocated
to and invested in the same Investment Funds (and in the same
proportions) which the Participant has designated under Section 4.5 with
respect to his Basic Contributions.
4.7.3 Redesignation of Amounts in Company Stock Fund. A
Participant who has attained age 65 or has attained age 55 and has 10
years of Service, may, by giving notice on the Appropriate Form to the
Administrative Committee, or as the Administrative Committee may
otherwise prescribe, direct the Trustee to transfer all or a portion of
his interest in the Company Stock Fund
29
to any other Investment Fund and to have the amount transferred invested,
in the future, only in Investment Funds other than the Company Stock
Fund. A Participant shall be permitted to make only two elections under
this Section 4.6.3, each of which shall be irrevocable.
4.8 Reallocation Permitted. A Participant may elect to reallocate
the investment of his Accounts (other than his Post-IPO Matching and Profit
Sharing Contributions Accounts) among the Investment Funds (other than the
Company Stock Fund); provided, however, that reallocation among the Investment
Funds shall only be made in increments of 10% of the value of the Participant's
aggregate Accounts, or any other increments that the Administrative Committee
in its sole discretion shall prescribe. Each Participant may reallocate his
Accounts as of the end of any month, or on a more frequent basis as the
Administrative Committee shall prescribe, based on the balance of such
Participant's Accounts as of the end of such month (or such other date), as
determined after giving effect to all other adjustments made to such Account as
of that date. Any such reallocation shall be effected in such manner permitted
by the Administrative Committee not later than the fifteenth (15th) day of such
month (or within such other period as the Administrative Committee shall
prescribe). Each Participant shall be permitted to make such changes as
frequently as the Administrative Committee in its sole discretion shall
prescribe, and shall be permitted to make at least one such change in any
three-month period.
4.9 Account Adjustments.
4.9.1 Subject to the provisions of Section 4.9.2, as of each
Valuation Date the Administrative Committee shall adjust appropriately
each
30
Participant's Accounts to reflect, with respect to each Investment Fund
in which each such Account is invested, (i) his proportionate share
(based on the prior value of his Account in the applicable Investment
Fund) of income, expenses (if any) payable from the Trust Fund, and any
increase or decrease in the fair market value of Trust Fund assets since
the preceding Valuation Date, (ii) any contributions made on his behalf,
including for this purpose contributions made after such Valuation Date
but credited as of such Valuation Date, (iii) forfeiture allocations in
lieu of Matching Contributions, (iv) withdrawals, (v) distributions and
(vi) transfers between Investment Funds. For this purpose:
4.9.1.1 Allocation of Basic Contributions. Basic
Contributions for the benefit of a Participant made during any month
shall be credited to his Basic Account as of the day immediately
following the date on which such contribution was made.
4.9.1.2 Allocation of Matching Contributions. Matching
Contributions (and forfeitures in lieu thereof) made on behalf of a
Participant made during any month shall be credited to his Pre-IPO
Matching Contributions Account or Post-IPO Matching Contributions
Account, pursuant to Sections 4.2 and 4.3 hereof, as of the day
immediately following the date on which such contribution was made.
4.9.1.3 Adjustment for Withdrawals. Withdrawals from a
Participant's Accounts shall be charged against his Basic, Matching and
Profit Sharing Contributions and Segregated Accounts as of the date on
which such withdrawal is effective pursuant to Article 7 or 8.
31
4.9.2 Notwithstanding any other provision of the Plan, to the
extent that Participants' Accounts are invested in mutual funds or other assets
for which daily pricing is available ("Daily Pricing Media"), all amounts
contributed to the Trust Fund will be invested at the time of their actual
receipt by the Daily Pricing Media, and the balance of each Account shall
reflect the results of such daily pricing from the time of actual receipt until
the time of distribution. Participant investment elections and changes made
pursuant to the Plan shall be effective upon receipt by the Daily Pricing
Media, and Basic Contributions and Matching Contributions (and forfeitures in
lieu thereof) made on behalf of a Participant to the extent invested in Daily
Pricing Media shall be credited to such Participant's Basic Contributions or
Matching Contributions Account, as appropriate, on the business day such
contributions are so invested. References elsewhere in the Plan to the
investment of contributions "as of" a date other than that described in this
Section 4.9.2 shall apply only to the extent, if any, that assets of the Trust
Fund are not invested in Daily Pricing Media.
4.10 Unit Accounting for the Company Stock Fund. The Committee may,
for administrative purposes, establish unit values for the Company Stock Fund
(or any portion thereof) and maintain the accounts setting forth each
Participant's interest in the Company Stock Fund (or portion thereof), in terms
of such units, all in accordance with such rules and procedures as such
Committee shall deem to be fair, equitable and administratively practicable. In
the event that unit accounting is thus established for the Company Stock Fund
(or portion thereof), the value of a Participant's interest in the Company
Stock Fund (or portion thereof) at any time shall be an amount equal to the
then
32
value of a unit in such Company Stock Fund (or portion thereof) multiplied by
the number of units then credited to the Participant.
4.11 Correction of Error. The Administrative Committee may adjust
the Accounts of any or all Participants and Beneficiaries in order to correct
errors or rectify omissions, in such manner as such Committee believes will
best result in the efficient administration of the Plan on an equitable and
nondiscriminatory basis.
4.12 Allocation Shall Not Vest Title. The fact that allocation is
made and amounts are credited to an Account of a Participant shall not vest in
such Participant any right, title or interest in or to any assets except at the
time or times and upon the terms and conditions expressly set forth in this
Plan, nor shall the Trustee be required to segregate physically the assets of
the Trust Fund by reason thereof.
4.13 Statement of Accounts. At least twice within each calendar
year, the Administrative Committee shall distribute to each Participant a
statement showing the balance in each of his Accounts. Such statement may be
distributed, in the discretion of the Administrative Committee, in connection
with or as a part of a general statement of employee benefits given to
Employees on a regular or periodic basis.
4.14 Special Rules for the Company Stock Fund. All cash
contributions, cash dividends and other cash increments of any kind received by
the Trustee in the Company Stock Fund from time to time shall be applied as
soon as reasonably practicable to the purchase of shares of Company Stock.
Pending any such investment in Company Stock, the Trustee may make temporary
investments in short-term fixed income obligations. Any net income realized
from such temporary investments shall be applied to
33
the purchase of Company Stock to be allocated among Participant's Accounts in
the same manner as the assets temporarily applied to such investments.
34
ARTICLE 5
Vesting
5.1 Vesting.
5.1.1 Matching Contributions. A Participant's entire Matching
Contributions Account shall be fully vested on the earliest of (a) Normal
Retirement Age, (b) Termination of Employment on account of Disability,
or (c) death. Prior to the occurrence of any of the foregoing events, a
Participant shall be vested in his Matching Contribution Account as
follows:
With respect to Matching Contributions made for any Plan Year
commencing on or after January 1, 1976 (and dividends and other
increments derived directly or indirectly therefrom), at the rate of one
third for each January l following the close of such Plan Year and
occurring on or before such Participant's Termination of Employment;
provided, that effective January 1, 1989, all such Matching Contributions
shall be vested one hundred (100) percent after the Participant completes
five (5) years of Service.
In the case of a Participant who has five (5) or more
consecutive 1year Breaks in Service all Service after such Breaks in
Service will be disregarded for the purpose of vesting the Matching
Contributions Account balance that accrued before such Breaks in Service.
Such Participant's pre-Break Service will count in vesting his post-Break
Matching Contributions Account balance only if either:
(i) such Participant has any nonforfeitable interest in such
account balance at the time of Termination of Employment; or
35
(ii) upon returning to Service the number of consecutive
1-year Breaks in Service is less than the number of years of Service.
5.1.2 Basic Account and Segregated Account. A Participant's
interest in his Basic Account and Segregated Account shall at all times
be fully vested, and shall not be subject to forfeiture pursuant to any
provision of this Plan.
5.2 Forfeiture of Non-Vested Account Balances upon Termination of
Employment. If, upon Termination of Employment, a Participant's vested Account
balance is less than or equal to $3,500 (or such other amount prescribed by
applicable law), the Participant shall receive a distribution of the vested
portion of such Accounts as set forth in Article 9, and the non-vested portion
will be treated as a forfeiture. If on Termination of Employment the balance of
the Participant's vested Accounts is greater than $3,500 (or such other amount
prescribed by applicable law), and the Participant elects to receive the
balance of his vested Accounts, the non-vested portion will be treated as a
forfeiture under Section 5.4. For purposes of this Section 5.2 if the value of
a Participant's vested Account balance is zero, the Participant shall be deemed
to have received a distribution of such vested account balance upon Termination
of Employment.
5.3 Reinstatement of Forfeited Balances. If subsequent to the
Termination of Employment of a Participant such Participant is rehired by an
Employer or any Affiliate prior to the end of the Plan Year in which his
employment was terminated or prior to the time when such Participant has
incurred 5 or more consecutive 1-year Breaks in Service pursuant to Sections
5.1 or 23.7, any non-vested balance in such Participant's Matching
Contributions or Profit Sharing Contributions Account, as the case may be,
shall be restored to him as follows:
36
5.3.1 If not previously forfeited, such non-vested balance
shall not be forfeited, except as may be otherwise provided for in the
event of his subsequent Termination of Employment or pursuant to Section
9.3 hereof.
5.3.2 If previously forfeited, such balance shall be restored
out of contributions for the month of rehire made by the Employer
formerly employing such Participant, and such Employer shall make
Matching and Profit Sharing Contributions for such month in amounts
sufficient to effect such restoration.
5.4 Application of Forfeitures. All forfeitures for a Plan Year
shall be applied, first to reduce future Matching Contributions and then, if
any forfeitures remain, allocated as if they were Profit Sharing Contributions
made for such Plan Year.
37
ARTICLE 6
Normal Withdrawals During Employment
6.1 Withdrawal Options. No more frequently than the Administrative
Committee may allow, and subject to such procedures as the Administrative
Committee may prescribe, a Participant who is an Employee may elect, with the
approval of the Administrative Committee, by filing the appropriate form as
directed by the Administrative Committee, to withdraw (a) all or any portion of
his Post-Tax Contribution Account, (b) if the maximum withdrawal permitted
under clause (a) has been made, all or any portion of his vested Pre-IPO
Matching Contributions Account and (c) if the maximum withdrawal under clause
(b) has been made, all or any portion of his vested Post-IPO Matching
Contributions Account which have been in the Plan for three (3) consecutive
January 1sts, (d) if the maximum withdrawal under clause (c) has been made, all
or any portion of his Segregated Account, and (e) if the maximum withdrawal
under clause (d) has been made, all or any portion of his vested Profit Sharing
Contributions Account which has been in the Plan for at least two (2)
consecutive January 1sts.
6.2 Values. The amount withdrawn pursuant to Section 6.1 shall be
based on the Value of the Participant's Accounts as of the Valuation Date on
which the Appropriate Form filed by the Participant was received by the
Administrative Committee or its designee for a withdrawal effective prior to
July 1, 1993, and shall be based on the Value of the Participant's Accounts as
of the withdrawal date for a withdrawal effective on or after July 1, 1993.
6.3 No Replacement of Withdrawn Amounts. A Participant may not
replace any amounts withdrawn hereunder.
38
6.4 Payment of Withdrawals. Any amounts withdrawn pursuant to this
Article 6 shall be paid or distributed as soon as administratively practicable
after the Valuation Date as of which the withdrawal election is effective.
Except as the Administrative Committee shall otherwise direct, all withdrawals
shall be paid in cash.
6.5 Accounts to Which Withdrawals to be Charged. Any withdrawals
under this Article 6 shall be charged first to a Participant's Post-Tax
Contributions Account and then, after such Account has been exhausted, to his
Pre-IPO Matching Contributions Account, then, after such Account has been
exhausted, to his Post-IPO Matching Contributions Account, then, after such
Account has been exhausted, to his Segregated Account and finally, the vested
portion of his Profit Sharing Contributions Account. No withdrawals may be made
under this Article from a Participant's Pre-Tax Contributions Account.
6.6 Values and Allocation Among Investment Funds. All withdrawals
pursuant to this Article 6 shall be based upon the value of the relevant
Account(s) on the Valuation Date as of which the withdrawal is effective. If
the Participant's Basic Account and Pre-IPO Matching Contributions Account are
invested in more than one Investment Fund, such withdrawal shall be allocated
pro rata among such Funds unless the Administrative Committee shall otherwise
direct. Any amounts withdrawn pursuant to this Article 6 shall be paid to a
Participant in cash as soon as administratively practicable after the Valuation
Date as of which such withdrawal is effective.
6.7 Participant Loans. The Administrative Committee may instruct
the Trustee to make one or more loans to a Participant from the Trust Fund, in
accordance
39
with the terms and conditions of a participant loan program established by such
Committee for the Plan and as may be modified by such Committee from time to
time.
40
ARTICLE 7
Withdrawals for Hardship
7.1 Definition of Hardship. Upon the occurrence of hardship a
Participant who is an Employee may withdraw, effective as of such Valuation
Date as the Administrative Committee shall designate, amounts from his Post-Tax
Contributions Account, the vested portion of his Pre-IPO Matching Contributions
Account and Post-IPO Matching Contributions Account, his Segregated Account,
his Pre-Tax Contributions Account and the vested portion of his Profit Sharing
Contributions Account. For purposes of this Article 7, the term "hardship"
shall mean immediate and substantial financial need arising out of any one or
more of the following:
7.1.1 Expenses or debts incurred or assumed by a Participant,
and not covered by insurance, arising out of an accident to or the death,
illness, disability, or other medical or dental needs of a Participant,
his dependent, or a member of his family,
7.1.2 Sudden and unexpected losses, not covered by insurance,
through casualty, theft or a judgment against Participant or a dependent;
7.1.3 Expenses of education of a Participant, his dependent,
or of a member of his family;
7.1.4 Severe curtailment of income of a Participant due to
reasons beyond his control;
7.1.5 Substantial expenditures required in connection with
a Participant's primary residence; or
41
7.1.6 Any other emergency condition in the financial affairs
of a Participant.
Distribution pursuant to this Section 7.1 shall be made from and
charged to, first, his Post-Tax Contributions Account, second, his Segregated
Account, third, his Pre-IPO Matching Contributions Account, fourth, his
Post-IPO Matching Contributions Account, fifth, his Pre-Tax Contributions
Account, and last, his Profit Sharing Contributions Account except as the
Administrative Committee shall otherwise direct. The withdrawal request shall
be made on the Appropriate Form within such time as the Administrative
Committee may prescribe.
7.2 Distribution Deemed Necessary to Satisfy Financial Need. A
distribution pursuant to this Article 7 shall be deemed necessary to satisfy an
immediate and heavy financial need of an Employee if both of the following
requirements are satisfied:
7.2.1 The distribution is not in excess of the amount of the
immediate and heavy financial need of the Employee (after taking into
account the Employee's other reasonably available resources, based on
such representations or other information as the Administrative Committee
may, in its discretion, request); and
7.2.2 The Employee has obtained all distributions, and all
nontaxable loans currently available under all employee benefit plans
maintained by the Employer, including under this Plan in accordance with
Section 6.7 and the participant loan program thereunder.
42
7.3 Values and Allocation Among Investment Funds. All withdrawals
pursuant to this Article 7 shall be based upon the value of the relevant
Account(s) on the Valuation Date as of which the Administrative Committee
directs the withdrawal to be effective. If the Participant's Basic Account is
invested in more than one Investment Fund, such withdrawal shall be allocated
pro rata among such Funds unless the Administrative Committee shall otherwise
direct. Any amounts withdrawn pursuant to this Article 7 shall be paid to a
Participant in cash (except as the Administrative Committee shall otherwise
direct), as soon as administratively practicable after the Valuation Date as of
which such withdrawal is effective.
7.4 Post-1988 Earnings on Pre-Tax Contributions. Notwithstanding
anything to the contrary in this Article 7, post-1988 earnings on Pre-Tax
Contributions may not be withdrawn on account of financial hardship.
43
ARTICLE 8
Distributions on Termination of Employment
8.1 Distribution on Termination of Employment. Upon a Participant's
Termination of Employment, the entire balance of his vested Accounts shall be
distributed to him or, if he dies prior to distribution, to his Beneficiary.
Such distribution shall be made in accordance with the provisions of Article 9.
Any portion of a Participant's Accounts in which he does not have a vested
interest, in accordance with Section 5.1, at the time of Termination of
Employment shall be forfeited as provided in Section 5.2 and shall be applied
to reduce future Matching and Profit Sharing Contributions.
Notwithstanding the foregoing, a Participant may elect to take
periodic distributions. Such distributions shall be paid not more frequently
than quarterly. The distribution period shall be limited by the requirements of
Plan Section 9.2. Any installments remaining at the Participant's death shall
be paid to the Participant's Beneficiary in accordance with the installment
schedule.
8.2 Valuation. The balance of a Participant's vested Accounts for
purposes of Section 8.1 shall be determined as of the Valuation Date coincident
with or next following the date of his Termination of Employment for a
determination made prior to July 1, 1993, and shall be determined as of the
date of sale of Company Stock, if in fact sold, for a determination made on or
after July 1, 1993.
8.3 Delay of Distributions or Withdrawals.
(a) Notwithstanding any other provision of this Plan, the
Administrative Committee may, in its discretion, defer the making of all or any
part of a distribution or withdrawal to which any person may otherwise be
entitled under this Plan until receipt of a
44
favorable determination letter with respect to the qualification of the Plan
under sections 401(a) of the Code.
(b) Notwithstanding the provisions of Section 8.1, the
Administrative Committee shall not be required to make the distributions
otherwise required under this Article 8 until after filing of the Appropriate
Form by the Participant (or his Beneficiary) with the Administrative Committee;
provided, that the Administration Committee may, in its sole discretion, waive
such filing requirement and proceed to make distribution accordingly.
8.4 30-Day Notice Requirement; Waiver.
8.4.1 30-Day Notice Requirement. Subject to Section 8.4.2, a
distribution under the Plan may not commence less than 30 days after notice (if
applicable) is given to the Participant (or his Beneficiary, if applicable)
pursuant to Section 1.41 l(a)-1 l(c) of the Income Tax Regulations.
8.4.2 Waiver. If a distribution is one to which sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence less than 30
days after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(i) the Administrative Committee clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
45
ARTICLE 9
Payment of Benefits
9.1 In General. Subject to Section 9.5, distribution required upon
Termination of Employment for any reason shall be made promptly following
Termination of Employment by one or more payments within a single Plan Year;
provided that contributions with respect to the Plan Year in which his
employment terminates may be paid in a later year. All Accounts other than
amounts in the Post-IPO Matching and Profit Sharing Contributions Accounts
shall be distributed in cash based on their Value as of the date of sale of
Company Stock, if in fact sold, pursuant to Section 8.2. Amounts in the
Post-IPO Matching and Profit Sharing Contributions Accounts may be distributed
in cash or stock, determined as follows: If the Participant's combined Post-IPO
Matching and Profit Sharing Contributions Accounts is credited with 100 or more
shares of Company Stock, the distribution from such Account for whole shares
shall be made in Company Stock. Payment of partial shares from such Accounts
shall be made in cash. If the Participant's combined Post-IPO Matching and
Profit Sharing Contributions Account is credited with fewer than l00 shares of
Company Stock, the distribution from such Account shall be made entirely in
cash.
9.2 Time of Commencement of Benefits. Notwithstanding any other
provision of the Plan, the following provisions of this Section 9.2 shall be
applicable to all benefit payments:
9.2.1 In General. All distributions under this Plan will be
effected so as to comply with section 401(a)(9) of the Code and the
regulations thereunder, which are hereby incorporated fully by reference.
The aggregate Account balance
46
of a Participant must be distributed or begin to be distributed no later
than the Participant's required beginning date. The required beginning
date for a Participant shall be determined as follows:
(a) General Rule. For Plan Years beginning after December 31,
1987 and prior to January 1, 1998, the required beginning date of a
Participant is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70 1/2. For plan years
beginning on and after January 1, 1998, a Participant (other than a 5%
Owner) may elect to begin to receive distributions of all or part of his
Accounts as of the first day of any month on or after the first day of
April of the calendar year in which the Participant attains age 70 1/2,
but in no event shall a Participant be permitted to defer beginning to
receive distributions to a date later than the first day of April
following the calendar year in which he terminates employment with the
Employer.
(b) Transitional Rule. The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (i) or (ii) below:
(i) Non-5-percent Owners. The required beginning date of a
Participant who is not a "5-percent owner" (as defined in (c) below) is
the first day of April of the calendar year following the calendar year
in which the later of retirement or attainment of age 70 1/2 occurs.
(ii) 5-percent Owners. The required beginning date of a
Participant who is a 5-percent owner during any year beginning after
December 31, 1979, is the first day of April following the later of:
47
(1) the calendar year in which the Participant attains age
70 1/2, or
(2) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a 5-percent owner, or
the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
(c) 5-percent Owner. A Participant is treated as a 5-percent
owner for purposes of this Section if such Participant is a 5-percent
owner as defined in section 416(i) of the Code (determined in accordance
with section 416 but without regard to whether the Plan is top-heavy) at
any time during the Plan Year ending with or within the calendar year in
which such owner attains age 66 / or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even if the
Participant ceases to be 5-percent owner in a subsequent year.
9.2.2 Benefit Commencement Date. Except if otherwise elected
by a Participant, the Participant's benefits will commence no later than
the 60th day after the close of the Plan Year in which the latest of the
following occurs: (a) the attainment by the Participant of Normal
Retirement Age; or (b) the tenth anniversary of the year in which the
Participant commenced participation in the Plan; or (c) the Participant's
most recent Termination of Employment.
48
9.2.3 Retroactive Payments. If the amount of a payment
required to commence on the date determined under Section 9.2.1 or 9.2.2
cannot be ascertained by such date, or if it is not possible to make such
payment on such date because the Administrative Committee has been unable
to locate the Participant, Beneficiary or Spouse after making reasonable
efforts to do so, or if the Appropriate Form has not been filed by the
Participant, Beneficiary or Spouse with the Administrative Committee, a
payment retroactive to such date may be made no later than sixty (60)
days after the earliest date on which the amount of such payment can be
ascertained under the Plan or the date on which the Participant,
Beneficiary or Spouse is located (whichever is applicable).
9.2.4 Pre-Tax Contributions. Notwithstanding any other
provision of this Plan, Pre-Tax Contributions are distributable only in
the event that one of the following events occurs: (i) the Employee's
death, Disability or Termination of Employment, (ii) the Employee's
attainment of age 59 1/2, (iii) a distribution on account of hardship as
defined in Article 7, (iv) a distribution on account of Excess Elective
Deferrals, as defined in Section 20.3, (v) termination of the Plan
without establishment of a successor plan (within the meaning of section
401(k)(10) of the Code and the regulations thereunder), or (vi) one of
the other events specified in section 401(k)(10) of the Code.
9.3 Inability to Locate Distributee. Notwithstanding any other
provision of the Plan, if the Administrative Committee cannot locate any person
to whom a payment is due under the Plan and no other payee has become entitled
thereto pursuant to any provision of the Plan, the benefit in respect of which
such payment is to be made shall be
49
forfeited at such time as the Committee shall determine in its sole discretion
(but in all events prior to the time such benefit would otherwise escheat under
any applicable state law); provided, however, that any benefit so forfeited
shall be reinstated if such person subsequently makes a valid claim for such
benefit and shall be paid out of any forfeited amounts and, if and to the
extent necessary, out of other Employer contributions made for this purpose.
9.4 Distribution to Beneficiary. Distribution to a Participant's
Beneficiary in accordance with the provisions of this Article 9 shall be made
as soon as administratively practicable after the Participant's death, except
as otherwise provided in the following provisions of this Section 9.4.
Notwithstanding anything in Section 9.1 to the contrary:
9.4.1 A Participant may elect to cause any distribution due
to his Beneficiary to be made over a period of two or more calendar years
(provided, that such period shall end not later than the fifth
anniversary of the Participant's death), in such manner as the
Participant shall designate in such election.
9.4.2 If no election by a Participant becomes effective under
Section 9.4.1, his Beneficiary may make such an election.
9.5 Limitation on Distribution. Notwithstanding any other provision
of this Plan, but subject to Article 14, if a Participant's employment
terminates and his vested interest under the Plan exceeds $3,500 as calculated
under section 41l (a) (11) of the Code (or such other amount prescribed by
applicable law), such vested interest shall not be "immediately distributed"
(within the meaning of section 411 (a) (11) of the Code) without his written
consent, except as otherwise permitted by law.
50
9.6 Benefits Deemed Offered. Notwithstanding any other provision of
this Article 9 any optional form of benefit, form of distribution or joint and
survivor annuity required to be offered in this Plan to meet the requirements
of sections 411(d)(6), 401(a)(11) or 417 of the Code is deemed offered to those
Participants to whom such requirements apply.
9.7 GCM 39824 Clarification. It is the intention of this Plan not
to make distributions to any individual whose employment with an Employer (or
an Affiliate) has terminated unless a "severance of employment" has occurred,
in accordance with GCM 39824 (Aug. 15, 1990).
51
ARTICLE 10
Beneficiary Designation
10. 1 Beneficiary.
10.1.1 Designation of Beneficiary. Notwithstanding any other
provision of this Plan, but subject to the further provisions of this
Section 10.1. each Participant may designate, at such time and in such
manner as the Administrative Committee shall prescribe, a Beneficiary or
Beneficiaries (who may be any one or more members of his family or any
other persons, executor, administrator, any trust, foundation or other
entity) to receive any benefits distributable hereunder after the death
of the Participant as provided herein. Such designation of a Beneficiary
or Beneficiaries shall not be effective for any purpose unless and until
it has been filed by the Participant with the Administrative Committee,
provided, however, that a designation mailed by the Participant to the
Committee prior to death and received by it after his death shall take
effect upon such receipt, but prospectively only and without prejudice to
any payor or payee on account of any payments made before receipt by the
Committee.
10.1.2 Spouse as Presumptive Beneficiary. Notwithstanding
Section 10.1.1, a Participant's sole Beneficiary shall be his surviving
Spouse (if the Participant has a surviving Spouse) unless the Participant
has designated another Beneficiary with Spousal Consent.
10.1.3 Change of Beneficiary. A Participant may, from time to
time in such manner as the Administrative Committee shall prescribe,
revoke any prior designation of Beneficiary (without Spousal Consent) and
make a new designation
52
of Beneficiary; provided that any such new designation which has the
effect of naming a person other than the Participant's surviving Spouse
as sole Beneficiary is subject to the Spousal Consent requirement of
Section 10.1.2.
10.1.4 Failure to Designate. If a Participant has failed to
designate effectively a Beneficiary to receive the Participant's death
benefits under the Plan, or if a Beneficiary previously designated has
predeceased the Participant and no alternative designation has become
effective, such benefits shall be distributed to the Participant's
surviving Spouse, if any, or if no Spouse survives the Participant, to
the Participant's estate.
10.1.5 Proof of Death. The Administrative Committee may, as a
condition precedent to making payment to any Beneficiary, require that a
death certificate, burial certificate or other evidence of death
acceptable to it be furnished.
10.1.6 Discharge of Liability. If distribution in respect of
a Participant is made under this Plan in a form, or to a person
reasonably believed by the Administrative Committee or its delegate to be
proper (taking into account any document purporting to be a valid consent
of the Participant's Spouse, or any representation by the Participant
that he is not married or any election or revocation with respect to form
of payment or designation of Beneficiary), the Plan shall have no further
liability with respect to the Participant (or his Spouse or Beneficiary)
to the extent of such distribution.
10.1.7 Effective Date. The provisions of this amended Section
10.1 shall apply with respect to any Participant who dies on or after
January l, 1985.
53
With respect to a Participant who (a) dies in the period August 23 -
December 31, 1984 (inclusive) and (b) had at least one paid hour of
service or at least one hour of paid leave in such period: (i) the
provisions of amended Section 10.1 shall apply with respect to one-half
of his Account balance; (ii) the provisions of Section 10.1 as in effect
on August 22, 1984 shall apply with respect to the other one-half of his
Account balance; and (iii) any distribution to be made to his surviving
Spouse (whether by reason of this sentence or otherwise) shall,
notwithstanding any other provision of the Plan, be made by applying the
amount distributable to such surviving Spouse to the purchase of an
annuity contract which will provide lifetime income to such surviving
Spouse, unless the surviving Spouse consents to another form of
distribution or unless the amount to be distributed is $3,500 (or such
other amount prescribed by applicable law) or less (in either of which
events distribution to the surviving Spouse shall be made in accordance
with the otherwise applicable provisions of the Plan).
10.2 Common Disaster. If a Participant and any of his Spouse or
Beneficiary shall die in a manner such that there is no sufficient evidence (as
determined by the Administrative Committee, without regard to any presumption
of law otherwise applicable) that the persons have died otherwise than through
a common disaster or if a Participant's Beneficiary (other than his Spouse)
died within five days after the Participant, it shall be presumed for all
purposes of the Plan that the Participant died last.
54
ARTICLE 11
Administration
11.1 Appointment of Committees.
11.1.1 There are hereby created an Administrative Committee
and an Investment Committee, each of which shall consist of not less than
three members to be appointed by the Board of Directors of the Company.
Each member of a Committee may resign, or may be removed at any time by
the Board of Directors of the Company (with or without cause), and, in
the event of the removal, death or resignation of any member, his
successor shall be appointed by such Board. In the event that a vacancy
or vacancies shall occur on a Committee, the remaining member or members
shall act as the Committee until the Board of Directors of the Company
fills such vacancy or vacancies. The members of each Committee shall
serve without compensation for their services as such members.
11.1.2 No person shall be ineligible to be a member of a
Committee because he is, was or may become entitled to benefits under the
Plan or because he is a director and/or officer of an Employer or
Affiliate; provided, that no member of a Committee shall participate in
any determination by the Committee relating specifically to his own
benefits under the Plan.
11.1.3 The members of each Committee shall serve without bond
except to the extent required by applicable law.
11.2 Powers and Authority; Action Conclusive. Except as otherwise
expressly provided in the Plan or in the Trust Agreement, or by the Board of
Directors of the Company:
55
11.2.1 The Administrative Committee shall be responsible for
the administration of the Plan and shall have the exclusive right,
responsibility and authority with respect to the construction,
interpretation, application or administration of the Plan and eligibility
for Plan benefits except for those matters which are the responsibility
of the Investment Committee.
11.2.2 The Investment Committee shall be responsible for
making appropriate provision for the investment and reinvestment of the
Trust Fund and shall have the exclusive right, responsibility and
authority with respect thereto.
11.2.3 Each Committee shall have all powers necessary or
helpful for the carrying out of its responsibilities, and the decisions
or actions of such Committee in good faith in respect of any matter
hereunder shall be final, conclusive and binding upon all parties
concerned, including, without limitation, any and all Employees,
Participants, Spouses, Beneficiaries, heirs, distributees, estates,
executors, administrators and assignees. Any determination made by a
Committee shall be given deference in the event it is subject to judicial
review and shall be overturned only if it is arbitrary and capricious.
11.2.4 Each Committee may delegate to one or more of its
members the right to act on its behalf in any one or more matters
connected with the administration of the Plan.
11.2.5 Without limiting the generality of the foregoing, the
Administrative Committee shall have the power:
11.2.5.1 To make rules and regulations for the administration
of the Plan which are not inconsistent with the terms and provisions of
the Plan;
56
11.2.5.2 To construe all terms, provisions, conditions and
limitations of the Plan, or determine eligibility for benefits;
11.2.5.3 To determine all questions arising out of or in
connection with the provisions of the Plan or its administration in any
and all cases in which the Administrative Committee deems such a
determination advisable, including, without limitation, the power to
resolve ambiguities, to rectify errors, and to supply omissions;
11.2.5.4 To establish procedures for determining the validity
of any qualified domestic relations order and for complying with any such
valid order.
The foregoing list of powers is not intended to be either
complete or exclusive, and each Committee shall, in addition, have such
powers as it may determine to be necessary for the performance of its
duties under the Plan and the Trust Agreement.
11.3 Liability Limited and Indemnification. Except as otherwise
provided by law, no person who is a member of a Committee or who is an
employee, officer director of an Employer or Affiliate, shall incur any
liability whatsoever on account of any matter connected with or related to the
Plan or the administration of the Plan, unless such person shall have acted in
bad faith, or have willfully neglected his duties, in respect of the Plan. The
Company shall indemnify and save each such person harmless against any and all
loss, liability, claim, damage, cost and expense which may arise by reason of,
or be based upon, any matter connected with or related to the Plan or the
administration of the Plan (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or
57
in settlement of any such claim whatsoever) to the fullest extent permitted
under the Certificate of Incorporation and By-laws of the Company.
11.4 Quorum and Voting: Procedures. A majority of the members of a
Committee at the time in office shall constitute a quorum for the transaction
of business. Each Committee shall select from among its members a Chairman, and
shall appoint (from its members or otherwise) a Secretary. Each Committee may
act by vote or consent of the majority of its members then in office and may
establish its own procedures. Each Committee may authorize any one or more of
its members or the Secretary of the Committee to sign and deliver any
instrument, certificate or other paper or document on its behalf.
11.5 Subcommittees, Counsel and Agents. Each Committee may appoint
from its members such subcommittees (of one or more such members), with such
powers, as such Committee shall determine. Each Committee may employ such
counsel (including legal counsel, who may be counsel for an Employer or
Affiliate) and agents and such clerical and other services as it may require in
carrying out the provisions of the Plan, and may charge the fees, charges and
costs resulting from such employment as an expense to the Company. Unless
otherwise required by law, persons employed by a Committee as counsel, or as
its agents or otherwise, may include members of either Committee, or of the
Board or Boards of Directors of an Employer or Affiliate, or firms with which
members of either Committee or Board or Boards of Directors of any Employer or
Affiliate are associated as partners, employees or otherwise. Persons serving
on a Committee or on any such subcommittee shall be fully protected in acting
or refraining from acting in accordance with the advice of legal or other
counsel.
58
11.6 Reliance on Information. The members of each Committee and any
Employer and Affiliate and their respective officers, directors and employees,
shall be entitled to rely upon all tables, valuations, certificates, opinions
and reports furnished by any actuary, accountant, trustee, insurance company,
counsel, physician or other expert who shall be engaged by either Committee, an
Employer or Affiliate, members of each Committee and any Employer and Affiliate
and their respective officers, directors and employees, shall be fully
protected in respect of any action taken or suffered by them in good faith in
reliance thereon, and all action so taken or suffered shall be conclusive upon
all persons affected thereby.
11.7 Instructions to Trustee. The Administrative Committee shall
provide appropriate written instructions in accordance with the Trust Agreement
to enable the Trustee to make the distributions provided for in the Plan.
11.8 Fiduciaries. The provisions of this Section 11.8 shall apply
notwithstanding any contrary provisions of the Plan or of the Trust Agreement.
11.8.1 Named Fiduciaries. The named fiduciaries under the
Plan shall be (a) the Administrative Committee, which shall have
authority to control and manage the operation and administration of the
Plan, except with respect to those matters which under the Plan or the
Trust Agreement are the responsibility, or subject to the authority, of
the Investment Committee, and (b) the Investment Committee, which shall
be the named fiduciary with respect to control or management of the
assets of the Plan.
11.8.2 Allocation of Fiduciary and Other Responsibilities.
Each Committee shall have the right, which shall be exercised in
accordance with the
59
procedures set forth in the Plan or in the Trust Agreement for action by
such Committee, to allocate responsibilities (fiduciary or otherwise)
among it and the other Committee, and each Committee shall have the right
to designate persons other than such Committees to carry out
responsibilities (fiduciary or otherwise) under the Plan.
11.8.3 Funding Policy. The funding policy and method for this
Plan shall consist of the making of contributions, the making of
investments and reinvestments in respect thereof, and the making of
withdrawals and distributions, as provided in the provisions of the Plan.
11.8.4 Service in Multiple Capacities. Any person or group of
persons may serve in more than one fiduciary capacity with respect to the
Plan.
11.8.5 Advisers. Each Committee, and any fiduciary designated
by a Committee pursuant to Section 11.8.2 above to whom such power is
granted by a Committee, may employ one or more persons to render advice
with regard to any responsibility such fiduciary has under the Plan.
11.8.6 Investment Manager. The Investment Committee may
appoint an investment manager or managers, as defined in ERISA, to manage
(including the power to acquire, invest and dispose of) any assets of the
Plan.
11.8.7 Limitation of Liability. Except to the extent
otherwise provided by law, if any duty or responsibility of a named
fiduciary has been allocated or delegated to any other person in
accordance with any provision of this Plan or of the Trust Agreement,
then such named fiduciary shall not be liable for any act or omission of
such person in carrying out such duty or responsibility.
60
11.9 Genuineness of Documents. Each Committee, and any Employer and
Affiliate and their respective officers, directors and employees, shall be
entitled to rely upon any notice, request, consent, letter, telegram or other
paper or document believed by them or any of them to be genuine, and to have
been signed or sent by the proper person, and shall be fully protected in
respect of any action taken or suffered by them in good faith in reliance
thereon.
11.10 Proper Proof. In any case in which an Employer or any
Committee shall be required under the Plan to take action upon the occurrence
of any event, they shall be under no obligation to take such action unless and
until proper and satisfactory evidence of such occurrence shall have been
received by them.
11.11 Claims Procedure. The Administrative Committee shall
establish a claims procedure in accordance with applicable law and shall afford
a reasonable opportunity to any Participant whose claim for benefits has been
denied for a full and fair review of the decision denying such claim.
11.12 Filing with Committee. For all purposes of this Plan, the
date on which an Appropriate Form, Participation Agreement, or any other
document is deemed to be returned to or filed with the Administrative Committee
shall be the date on which such Appropriate Form, Participation Agreement or
other document is actually received by the Administrative Committee or its
designated agent.
11.13 Plan Administrator. The Company shall be the administrator
of the Plan, as defined in section 3(16)(A) of ERISA.
61
ARTICLE 12
Trust Agreement
12.1 Trust Agreement. As part of the Plan, the Company shall enter
into a Trust Agreement or agreements under which the Trustee shall receive the
contributions of the Employers and Participants to the Trust Fund and shall
hold. invest and distribute the Trust Fund in accordance with the terms and
provisions of the Trust Agreement. Any and all rights or benefits which may
accrue to any person under the Plan shall be subject to all the terms and
provisions of the Trust Agreement.
12.2 Investment in Interest-Bearing Deposits. If the Trustee shall
be a bank or similar financial institution supervised by the United States or
any State thereof, the Investment Committee, in its discretion, may authorize
the Trustee to invest all or a part of the Plan's assets in deposits which bear
a reasonable interest rate in such bank or financial institution.
12.3 Company as Agent. The Company is hereby authorized to act as
agent for all other Employers in dealings with the Trustee under the Plan.
62
ARTICLE 13
Amendment or Merger
13.1 Right Reserved. Subject to the further provisions of this
Article 13 the Company may, by resolution of the Board of Directors, amend the
Plan in whole or in part at any time or from time to time, by resolution of the
Company's Board of Directors or action by its Executive Committee. Any such
amendment shall be evidenced in writing. No amendment shall divest any
Participant of any amount credited to him under the Plan except as provided in
Section 13.2 or as otherwise permitted by law. No amendment shall vest in an
Employer, directly or indirectly, any interest in or ownership or control of
any part of the Trust Fund.
13.2 Amendments Required for Qualification etc. All provisions of
the Plan and all benefits and rights granted under the Plan are subject to any
amendments, modifications or alterations that may be necessary or advisable
from time to time to qualify the Plan under the Code, to continue the Plan as
so qualified, or to comply with any other provision of law. Accordingly,
notwithstanding any other provision of the Plan, the Company may, by resolution
of the Board of Directors, amend, modify or alter the Plan with retroactive
effect in any respect or manner necessary or advisable to qualify the Plan
under the Code or to continue the Plan as so qualified, or to comply with any
other provision of applicable law.
13.3 Contributions Following Amendment. If the Plan is amended in
any respect, no Employer shall have any liability or obligation to make any
contribution or payment to the Trust Fund except in such manner and amounts as
may be specifically provided for in the Plan as so amended.
63
13.4 Merger. Subject to the provisions of this Section 13.4, the
Plan may be amended to provide for the merger of the Plan, in whole or in part,
or a transfer of all or a part of its assets, to any other qualified plan
within the meaning of section 401(a) or 403(a) of the Code, including such a
merger or transfer in lieu of a distribution which might otherwise be required
under the Plan. The Plan shall not be merged or consolidated with, nor may its
assets or liabilities be transferred to, any other plan in whole or in part,
unless each Participant would be entitled to a benefit immediately after the
merger, consolidation or transfer (if such other plan then terminated) which is
equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
been terminated).
64
ARTICLE 14
Termination of the Plan
14.1 Right Reserved. The Company reserves the right at any time, by
resolution of its Board of Directors, to terminate the Plan, in whole or in
part, by resolution of the Company's Board of Directors or action by its
Executive Committee. Any such termination shall be evidenced in writing. If the
Plan is terminated, no Employer shall have any liability or obligation to make
any contribution or payment to the Trust Fund with respect to any period after
the date of such termination. Any such termination shall be evidenced in
writing.
14.2 Vesting Upon Termination. Upon the termination or partial
termination of the Plan (within the meaning of section 41l (d) (3) of the Code)
or the complete discontinuance of all contributions under the Plan, the rights
of all affected employees to their Accounts as of the date of such termination
or partial termination shall be nonforfeitable.
14.3 Termination of Trust. If the Plan is terminated pursuant to
Section 14.1 and the Board of Directors determines that the Trust Fund shall be
terminated, the Trust Fund shall be revalued as if the termination date were a
Valuation Date, and the current value of all Accounts shall be distributed in
accordance with Articles 8 and 9, as if such Plan termination were a
Termination of Employment; provided, however, that the value of such Accounts
shall be adjusted to reflect the expenses of termination to the extent such
expenses are not paid by the Company. Until all Accounts are fully distributed,
any Accounts held in the Trust Fund shall continue to be adjusted in accordance
with Article 4, and to reflect the expenses of termination.
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14.4 Continuation of Trust. If the Plan is terminated by the Board
of Directors but the Board of Directors determines that the Trust Fund shall be
continued, no further contributions shall be made by the Employers, but the
Trust Fund shall be administered as though the Plan were otherwise in full
force and effect. If the Trust Fund is subsequently terminated, the provisions
of Section 14.3 shall then apply.
14.5 Withdrawal of Subsidiary Affiliate. The withdrawal of an
Affiliate as an Employer by reason of a sale or other disposition of the stock
or assets of such Affiliate shall not be deemed a complete or partial
termination or a complete discontinuance of contributions if following such
sale or disposition the successor to such Employer adopts or maintains a
comparable plan.
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ARTICLE 15
Miscellaneous
15.1 Payment to a Minor or Incompetent. If any amount is payable
hereunder to a minor or other legally incompetent person, such amount may be
paid in any one or more of the following ways, as the Administrative Committee
in its sole discretion shall determine:
15.1.1 To the legal representative of such minor or other
incompetent person, if the Administrative Committee has been notified of
the appointment of such representative; or
15.1.2 To a parent or guardian of such minor or other
incompetent person, or to the person with whom such minor or other
incompetent person resides; or
15.1.3 To a custodian for such minor under the Uniform Gifts
to Minors Act (or similar statute) of any jurisdiction; or
15.1.4 If none, directly to such minor or other incompetent
person. Payment to any person in accordance with the foregoing provisions
of this Section 15.1 shall, to that extent, discharge all Employers, the
members of the Administrative Committee, the Trustee and any person or
corporation making such payment pursuant to the direction of the
Administrative Committee, and none of the foregoing shall be required to
see to the proper application of any such payment to such person pursuant
to the provisions of this Section 15.1. Without in any manner limiting or
qualifying the provisions of this Section 15.1, if any amount is payable
hereunder to a minor or any other legally incompetent person, the
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Administrative Committee may in its discretion institute the procedures
which are available to it under Section 15.2.
15.2 Doubt as to Right to Payment. If at any time any doubt exists
as to the right of any person to any payment under the Plan or as to the amount
or time of such payment (including, without limitation, any case of doubt as to
identity and any case in which any notice has been received from any other
person claiming any interest in amounts payable under the Plan or a claim for
other persons may exist by reason of community property or similar laws), the
Administrative Committee shall be entitled, in its discretion, to direct the
Trustee to hold such sum as a segregated amount in trust until such right or
amount or time is determined or an order of a court of competent jurisdiction
is obtained, to pay such sum into court in accordance with appropriate rules of
law in such case then provided, or to make payment only upon receipt of a bond
or similar indemnification (in such amount and in such form as is satisfactory
to the Administrative Committee).
15.3 Spendthrift Clause. Except as may be other-wise required by
law, or provided by this Plan, no benefit or payment under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, whether voluntary or involuntary, and no attempt
so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
the same shall be valid, nor shall any such benefit or payment be in any way
liable for or subject to the debts, contracts, liabilities, engagements or
torts of any person entitled to such benefit or payment, or subject to
attachment, garnishment, levy, execution or other legal or equitable process.
Notwithstanding the foregoing, benefits under the Plan shall be subject to the
provisions of a qualified domestic relations order.
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15.4 Voting and Disposition of Company Stock. Each Participant
shall have the right to direct the Trustee as to the manner in which to vote
and to exercise tender, exchange offer or similar rights as to any shares of
Company Stock allocated to his Post-IPO Matching Contributions Account. The
Company shall furnish the Trustee and the Participants with notices and
information statements when voting, tender or such other rights are to be
exercised, in such time and manner as may be required by applicable law and the
Certificate of Incorporation and By-laws of Revlon, Inc. Such statements shall
be substantially the same for Participants as for holders of Company Stock in
general. The Trustee shall vote, tender or exercise such rights with respect to
such Company Stock in accordance with the direction of the Participant. If no
direction is received from the Participant by the Trustee within an
administratively practicable time prior to the date on which action is
required, the Trustee shall take action with respect to those shares in
accordance with the direction of the Investment Committee.
15.5 Additional Action. Notwithstanding any other provision of the
Plan or the Trust Agreement, the Investment Committee shall be the sole named
fiduciary with respect to the control and management of the Company Stock Fund,
except as provided in Section 15.4; and the Trustee shall have no authority or
responsibility with respect to such control or management. Without limiting the
generality of the foregoing, if for any reason the provisions of Section 15.4
can no longer be validly applied, the Investment Committee shall direct the
Trustee with respect to all matters and all actions affecting the assets of the
Company Stock Fund.
15.6 Benefits Payable Only from Trust Fund. All benefits under the
Plan shall be paid or provided for solely from the Trust Fund, and neither the
Employers, their
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directors or employees nor any member of any Committee shall have any liability
or responsibility therefor. Except as otherwise provided by law, no Employer
assumes any obligations under the Plan except those specifically set forth in
the Plan.
15.7 Estoppel of Participants and Their Beneficiaries. The
Employers, the Committees and Trustee may rely upon any certificate, statement
or other representation made to them by any Employee, Participant, Spouse, or
Beneficiary with respect to age, length of service, leave of absence, date of
cessation of employment or other fact required to be determined under any of
the provisions of the Plan and shall not be liable on account of the payment of
any moneys or the doing of any act in reliance upon any such certificate,
statement or other representation. Any such certificate, statement or other
representation made by an Employee, Participant or Spouse of a Participant or
Employee shall be conclusively binding upon such Employee, Participant and
Spouse and the Beneficiary of such Participant; and such Employee, Participant,
Spouse or Beneficiary shall thereafter and forever be estopped for disputing
the truth and correctness of such certificate, statement or other
representation. Any such certificate, statement or other representation made by
a Participant's Beneficiary shall be conclusively binding upon such
Beneficiary, and such Beneficiary shall thereafter and forever be estopped from
disputing the truth and correctness of such certificate, statement or other
representation.
15.8 Plan to Be Available for Inspection. A copy of the Plan and of
all amendments thereto, if any, shall be available for inspection at all
reasonable times by Eligible Employees and Participants at the office of the
Company and at such other locations (if any) as may be required by law.
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15.9 No Diversion of Trust Fund. At no time prior to the
satisfaction of all liabilities with respect to Participants and their Spouses
and Beneficiaries under the Plan shall any part of the Trust Fund be (within
the taxable year or thereafter) used for or diverted to purposes other than the
exclusive benefit of the Participants and their Spouses and Beneficiaries or
the payment of the expenses of the administration of the Plan and of the Trust;
provided, however, that:
15.9.1 A contribution that is made by an Employer by a
mistake of fact shall be returned to such Employer upon its request
within one year after the payment of the contribution;
15.9.2 A contribution that is conditioned upon its
deductibility under section 404 of the Code shall be returned to the
contributing Employer upon its request, to the extent that the
contribution is disallowed as a deduction, within one year after such
disallowance; and
15.9.3 A contribution that is conditioned on initial
qualification of the Plan under section 401 of the Code may, if the Plan
does not qualify, be returned (along with any earnings thereon) to the
contributing Employer within one year after the date of denial of
qualification of the Plan.
15.10 Limitation of Liability. Subject to Section 11.3, no
liability shall attach to or be incurred by any stockholder, officer or
director of an Employer or any Affiliate under or by reason of the terms,
conditions and provisions contained in the Plan or in the Trust Agreement or
for the acts or decisions taken or made thereunder or in connection therewith;
and as a condition precedent to his participation in the Plan or the receipt of
benefits thereunder, or both, such liability, if any, is expressly waived and
71
released by each Participant, Spouse or Beneficiary, and by any and all persons
claiming under or through such persons, such waiver and release to be
conclusively evidenced by any act or participation in or the acceptance of
benefits or the making of elections under the Plan.
15.11 Usage. Whenever applicable the masculine gender, when used in
the Plan, shall include the feminine gender, and the singular shall include the
plural.
15.12 Separability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provision of the Plan, and the Plan shall be construed and enforced as if such
provision had not been included herein.
15.13 Captions. The captions contained herein and in the table of
contents prefixed thereto are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or intent
of the Plan, and they shall not in any way affect the Plan or the construction
of any provision thereof.
15.14 Statutory References. References in this Plan to a section or
other provision of the Code or ERISA shall be deemed to refer to such section
or provision as it may be amended from time to time, or to equivalent
provisions of subsequent law.
15.15 Name. The Revlon Employees' Savings, Investment and Profit
Sharing Plan.
15.16 Governing Law. This Plan shall be governed in all respects
under the laws of the State of New York (without regard to its laws on conflict
of laws) to the extent not governed by ERISA.
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ARTICLE 16
Leased Employees
16.1 Definitions. For purposes of this Article 16, the term "Leased
Employee" means any person performing services for an Employer or Affiliate
(hereinafter referred to as the "Recipient") pursuant to an Agreement between
the Recipient and any other person (hereinafter referred to as the "Leasing
Organization"), who has performed such services for the Recipient (including
persons related to the Recipient within the meaning of section 414(n)(6)(A) of
the Code) on a substantially full-time basis for a period of at least one
year, if such services are of a type historically performed by employees in the
business field of the Recipient. For this purpose, a person is considered to
have performed services on a substantially full-time basis for a period of at
least one year if: (1) during any consecutive 12-month period such person has
performed at least 1,500 hours of service for the Recipient, or (2) during any
consecutive 12-month period such person performs services for the Recipient for
a number of hours of service at least equal to seventy-five percent (75%) of
the average number of hours that are customarily performed by an employee of
that Recipient in the particular position.
16.2 Treatment of Leased Employees. For purposes of this Plan, a
Leased Employee's service for the Recipient (including Service during the one
year period referred to in Section 16.1 and Service prior to the effective date
of this Article 16) is to be taken into account in determining compliance with
the Service requirements of the Plan relating to participation and vesting.
However, the Leased Employee shall not be entitled to share in contributions
(or forfeitures applied in lieu thereof) under the Plan with respect to any
Service or Compensation attributable to the period during which he is a Leased
73
Employee, and shall not be eligible to become a Participant eligible to receive
contributions under the Plan unless and except to the extent that he shall at
some time, either before or after his Service as a Leased Employee, qualify as
an Eligible Employee without regard to the provisions of this Article 16.
16.3 Exception for Employees Covered by Plans of Leasing
Organization. Section 16.2 shall not apply to any Leased Employee if: (i) such
employee is covered by a money purchase pension plan of the Leasing
Organization which provides (a) a nonintegrated employer contribution rate of
at least ten percent (10%) of compensation, as defined in section 415(c) of the
Code, but including amounts contributed by the Recipient pursuant to a salary
reduction agreement which are excludable from the Leased Employee's gross
income under sections 125, 402(e)(3), section 402(h) or 403(b) of the Code, (b)
immediate participation, and (c) full and immediate vesting; and (ii) Leased
Employees do not constitute more than twenty (20) percent of the Recipient's
work force who are not Highly Compensated Employees.
16.4 Effective Date. The provisions of this Article 16 are
effective as of January 1, 1984, and no individual shall be eligible to become
a Participant or accrue benefits under this Plan for any period prior thereto
by reason of anything in this Article 16.
16.5 Construction. The purpose of this Article 16 is to comply with
the provisions of section 414(n) of the Code. All provisions of this Article
shall be construed consistently therewith, and, without limiting the generality
of the foregoing, no individual shall be treated as a Leased Employee except as
required under such Code section.
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ARTICLE 17
Limitation on Maximum Benefits and
Contributions Under All Plans
17.1 Section 415 Limitations. Effective January 1, 1984, and
notwithstanding any other contrary provisions of this Plan, the "annual
additions" which may be credited to any Participant's accounts for any
"limitation year" will not exceed the permissible limitations of section 415 of
the Code. For purposes of applying such limits, section 415 of the Code and
Treasury regulations thereunder are incorporated herein by reference. It is
intended that any limitation imposed by said section 415 of the Code on the
allocation of contributions and forfeitures to a Participant under this Plan
shall be implemented in accordance with the provisions of this Article 17. The
provisions of this Article 17 shall apply notwithstanding any other contrary
provisions in this Plan.
17.2 Coverage by Defined Benefit Plan.
17.2.1 Reductions in benefits under this Article 17 arising
by reason of a Participant's participation in multiple plans shall,
except as any other such plan may otherwise expressly provide, be
effected as follows: (a) benefits and annual additions under continuing
plans shall be reduced before benefits under any terminated plan, (b)
benefits under defined benefit plans shall be reduced before any
reduction in annual additions under defined contribution plans, and (c)
annual additions under continuing defined contribution plans shall be
reduced in the reverse order in which such annual additions would
otherwise be allocated; provided, that benefits under multiemployer plans
shall be reduced last. Any
75
resulting required reductions under this Plan shall be made first to
Unmatched Contributions, and second, on a pro rata basis, to Matched
Contributions, and the Matching Contribution relating thereto.
17.2.2 In computing the denominator of the "defined
contribution plan fraction" as defined in section 415(e) of the Code for
any year ending after 1982, the Administrative Committee may elect to
determine the portion of such denominator which relates to 1982 and prior
years under the method described in section 415(e)(6) of the Code in lieu
of the method described above. Such election may be made at such time and
in such manner as may be provided in applicable Treasury regulations.
17.2.3 In the case of a Participant who would have fewer than
ten (10) Years of Service (including service in the year with respect to
which any determination under this Section 17.2.3 is made) with an
Employer and all Affiliates at the time his retirement pension starts,
the 1.25 and 1.40 limitations referred to in sections 415(e)(2)-(3) of
the Code shall be reduced proportionately.
17.3 Limitation Year. All determinations under this Article 17
shall be made by reference to the calendar year.
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ARTICLE 18
"Top Heavy" Provisions, Etc.
18.1 Determination of "Top Heavy" Status
18.1.1 For purposes of this Article 18, "Applicable Plans"
shall include (i) each plan of an Employer or Affiliate in which a Key
Employee (as defined in Section 18.1.2 for this Plan, and as defined in
section 416(i) of the Code for each other Applicable Plan) is a
Participant and (ii) each other plan of an Employer or Affiliate which
enables any plan in clause (i) of this sentence to meet the requirements
of section 401(a)(4) or 410 of the Code. Any plan not required to be
included under the preceding sentence also may be included, at the option
of the Company, provided that the requirements of section 401 (a)(4) and
410 of the Code continue to be met for the group of Applicable Plans
after such inclusion.
18.1.2 For purposes of this Article 18, "Key Employee" shall
mean an employee of an Employer or Affiliate who, at any time during a
given Plan Year or any of the four (4) preceding Plan Years, is one or
more of the following:
(A) An officer of an Employer or Affiliate having annual
compensation greater than fifty percent (50%) of the dollar amount
described in section 415(b)(1)(A) of the Code for any such Plan Year;
provided, that the number of employees treated as officers shall be no
more than fifty (50) employees or, if fewer, the greater of three (3)
employees or ten percent (10%) of the employees (including "Leased
Employees" as defined in Article 16). For purposes of this subsection,
employees described in section 414(q)(8) of the Code shall be excluded.
77
(B) One of the ten (10) employees (A) having annual
compensation from an Employer or Affiliate of more than the limitation in
effect under section 415(c)(1)(A), and (B) owning (or considered as
owning, within the meaning of section 318 of the Code applied by
substituting five percent (5%) for fifty percent (50%) in section
318(a)(2)(C) the largest interests in an Employer or Affiliate. If two
employees have the same interest in an Employer or Affiliate, the
employee having greater annual compensation from the Employer or
Affiliate shall be treated as having a larger interest.
(C) A person owning (or considered as owning, within the
meaning of section 318 applied by substituting five percent (5%) for
fifty percent (50%) in section 318(a)(2)(C)), more than five percent (5%)
of the outstanding stock of an Employer or Affiliate that is a
corporation, or stock possessing more than five percent (5%) of the total
combined voting power of all stock of an Employer or Affiliate (or having
more than five percent (5%) of the capital or profits interest in any
Employer or Affiliate that is not a corporation, determined under similar
principles).
(D) A one-percent (1%) owner of an Employer or Affiliate
having aggregate annual compensation from all Employers or Affiliates of
more than $150,000. "One-percent owner" means any person who would be
described in paragraph (iii) of this Section 18.1.2 if "one percent (1%)"
were substituted for "five percent (5%)" in each place where it appears
in paragraph (iii), except that such substitution shall not be made in
applying section 318(a)(2) of the Code.
78
18.1.3 For the purposes of this Article 18, "annual
compensation" means compensation as defined in section 415(c)(3) of the
Code, but including amounts contributed by an Employer or an Affiliate
pursuant to a salary reduction agreement which are excludable from the
employee's gross income under sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
18.1.4 In any Plan Year starting after 1983 or thereafter
during which the sum, for all Key Employees (as defined in Section 18.1.2
for this Plan and as defined in section 416(i) of the Code for each other
Applicable Plan) if the present value of the cumulative accrued benefits
under all Applicable Plans which are defined benefit plans (determined
based on the actuarial assumptions set forth in the "top heavy"
provisions of such plans) and the aggregate of the accounts under all
Applicable Plans which are defined contribution plans, exceeds sixty
percent (60%) of a similar sum determined for all participants in such
plans (but excluding participants who are former Key Employees), the Plan
shall be deemed "Top Heavy."
18.1.5 For the first Plan Year, the determination as to
whether this Plan is "Top Heavy" shall be made on the last day of such
Plan Year, and for each succeeding Plan Year the determination as to
whether this Plan is "Top Heavy" shall be made on the last day of the
preceding Plan Year (the "Determination Date"); and other plans shall be
included in determining whether this Plan is "Top Heavy" based on the
determination date for each such plan which occurs in the same calendar
year as such determination date for this Plan.
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18.1.6 A Participant's Accounts under this Plan as of any
determination date shall be determined without regard to amounts
allocated as of that date based on contributions made after such date.
18.1.7 Subject to Section 18.1.8, distributions from the Plan
or any other Applicable Plan during the 5-year period ending on the
applicable Determination Date shall be taken into account in determining
whether the Plan is "Top Heavy."
18.1.8 For Plan Years beginning on or after January 1, 1985,
any accrued benefit shall not be taken into account with respect to any
individual who has not performed any service at any time during the
5-year period ending on the applicable Determination Date for an Employer
or Affiliate maintaining this Plan or any other Applicable Plan.
18.1.9 Amounts attributable to rollover contributions or
similar transfers to this Plan or any other Applicable Plan shall not be
taken into account except to the extent provided in applicable
regulations.
18.1.10 The terms "Key Employee" and "Participant" include
their beneficiaries.
18.2 Provisions Applicable in "Top Heavy" Years. For any Plan Year
in which the Plan is deemed to be "Top Heavy," the following provisions shall
apply:
18.2.1 The amount of Employer contributions and forfeitures
which shall be allocated to the account of any active Participant who (i)
is employed by an Employer or Affiliate on the last date of the Plan Year
and (ii) is not a Key Employee shall be (x) at least three percent (3%)
of such Participant's
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compensation (as defined in section 415 of the Code) for such Plan Year,
or, (y) if less, an amount equal to such compensation multiplied by the
highest contribution rate for any Key Employee. For purposes of this
Section 18.2.1, the contribution rate for each individual Key Employee
shall be determined by dividing the contributions and forfeitures
allocated to such Key Employee's account, including amounts allocated
under defined contribution plans required to be aggregated with this Plan
to determine whether it is "Top Heavy;" provided, however, that clause
(y) above does not apply if any such plan enables a defined benefit plan
required to be so aggregated to meet the requirements of section
401(a)(4) or 410 of the Code. The minimum allocation provisions of this
Section 18.2.1 shall, to the extent necessary or appropriate, be deemed
satisfied in whole or in part by benefits to the Participant provided
under any other plan maintained by an Employer or Affiliate (whether or
not an Applicable Plan).
18.2.2 For purposes of complying with the provisions of
section 415(e) of the Code, the 1.25 under section 415(e) is reduced to
1.00 unless the following conditions are met:
(i) the percentage described in Section 18.1.4 does not
exceed ninety percent (90%), and
(ii) "four percent (4%)" is substituted for "three percent
(3%)" in Section 18.2.1.
Notwithstanding any other provisions of this Plan, if the sum
of the fractions described in sections 415(e)(2) and (3) of the Code as
applied to this Plan, calculated by substituting "100%" for "125%" in
each such section, for any
81
Participant exceeds 100% for the last Plan Year before the Plan becomes
"Top Heavy," such fractions shall be adjusted, in accordance with
applicable regulations, so that their sum does not exceed 100% for such
Plan Year.
18.2.3 Six-Year Graded Vesting. Any Participant who has at
least one Hour of Service after the Plan becomes "Top Heavy" shall be
vested in his Matching Contributions Account on a basis at least as
favorable as is provided under the following schedule:
Years of Employment Percentage Vested
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
In any Plan Year in which the Plan is not deemed to be "Top
Heavy," the minimum vested percentage shall be no less than that which
was determined as of the last day of the last Plan Year in which the Plan
was deemed to be "Top Heavy."
18.2.4 The provisions of Sections 18.2.1 and 18.2.2 shall not
apply to any employee included in a unit of employees covered by a
collective bargaining agreement if retirement benefits were the subject
of good faith bargaining.
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18.3 Inapplicability in the Event of Change in Law. In the event
that any provision of this Article 18 is no longer required to qualify this
Plan under the Code, then such provision shall thereupon be void without the
necessity of further amendment of the Plan.
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ARTICLE 19
Termination, etc. Prior to Amendment
Notwithstanding any other provision of this Plan, but subject to
any provision hereof which has an express effective date earlier than January
1, 1997, the benefits (if any) payable in respect of any Participant in the
Plan who retired, terminated employment or died prior to January 1, 1997 shall
be determined under the applicable provisions of the Plan as in effect at the
relevant time or times prior to such date. Any such individual shall be a
Participant under this Plan solely with respect to such benefits, unless he
shall again become a Participant pursuant to the provisions of Article 2
hereof.
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ARTICLE 20
401(k) Deferral and 401(m) Contributions Tests
20.1 Definitions. For the purposes of this Article the following
words shall have the following meanings:
20.1.1 "Elective Deferrals" means elective deferrals within
the meaning of section 402(g)(3) of the Code.
20.1.2 "Excess Aggregate Contributions" means excess
aggregate contributions within the meaning of section 401 (m)(6)(B) of
the Code.
20.1.3 "Excess Contributions" means excess contributions
within the meaning of section 401(k)(8)(B) of the Code.
20.1.4 "Excess Elective Deferrals" means those Elective
Deferrals that are includible in a Participant's gross income under
section 402(g) of the Code to the extent such Participant's Elective
Deferrals for a taxable year exceed the dollar limitation under such Code
section.
20.2 Maximum Amount of Elective Deferrals. Notwithstanding anything
to the contrary herein, the amount of Elective Deferrals made with respect to
any individual during a calendar year under the Plan and all other plans,
contracts or arrangements of an Employer or an Affiliate may not exceed the
amount of the limitation in effect under section 402(g)(1) of the Code for
taxable years beginning in such calendar year. Such limit shall not apply to
any such Elective Deferrals made which are amounts attributable to service
performed by such Participant prior to January 1, 1987.
20.3 Distribution of Excess Elective Deferrals. A Participant may
assign to the Plan any Excess Elective Deferrals made during a taxable year of
the Participant by
85
notifying the Committee on or before March 1 following the close of such
taxable year of the amount of the Excess Elective Deferrals to be assigned to
the Plan. A Participant is deemed to notify the Administrative Committee of any
Excess Elective Deferrals that arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of his Employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals,
plus any income and minus any loss allocable thereto, shall be distributed no
later than April 15 following such taxable year to any Participant to whose
account Excess Elective Deferrals were assigned for the preceding year and who
claims Excess Elective Deferrals for such taxable year. Excess Elective
Deferrals shall be treated as annual additions under the Plan, unless such
amounts are distributed no later than the first April 15 following the close of
the Participant's taxable year.
20.4 Actual Deferral Percentage Test. Pre-Tax Contributions
hereunder shall not exceed the limits set forth in section 401(k)(3) of the
Code. For purposes of applying such limits, section 401(k) of the Code and the
Treasury regulations thereunder are incorporated herein by reference.
20.5 Distribution of Excess Contributions: Recharacterization.
20.5.1 Notwithstanding any other provision of the Plan,
Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of any Plan Year
beginning after December 31, 1987 to Participants to whose Accounts
Pre-Tax Contributions were allocated for the preceding Plan Year. The
Excess Contributions shall be adjusted for income or loss up to the date
of distribution. The income or loss allocable to Excess Contributions
shall be determined by multiplying the income or loss
86
allocable to the Participant's Pre-Tax Contributions for the Plan Year by
a fraction, the numerator of which is the Excess Contribution on behalf
of the Participant for the preceding Plan Year and the denominator of
which is the sum of the Participant's account balances attributable to
Pre-Tax Contributions on the last day of the preceding Plan Year. Amounts
distributed under this Section 20.5.1 shall be made from the
Participant's Pre-Tax Contribution Accounts in proportion to the
Participant's Pre-Tax Contributions for the Plan Year.
20.5.2 A Participant may treat his Excess Contributions as an
amount distributed to the Participant and then contributed by the
Participant to the Plan as Post-Tax Contributions. Such recharacterized
amounts will remain nonforfeitable and subject to the same distribution
requirements as Pre-Tax Contributions. Amounts may not be recharacterized
by a Highly Compensated Employee to the extent that such amount in
combination with other Post-Tax Contributions and Matching Contributions
made by or with respect to that Employee would exceed any limit under
Section 20.6 or section 402(g) of the Code. Recharacterization must occur
no later than two and one-half months after the last day of the Plan Year
in which the Excess Contributions arose and is deemed to occur no earlier
than the date the last Highly Compensated Employee is informed in writing
of the amount which may be recharacterized and the consequences thereof.
20.6 Actual Contributions Percentage Test.
20.6.1 Matching Contributions and Post-Tax Contributions
hereunder shall not exceed the limits set forth in section 401 (m) of the
Code. For
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purposes of applying such limits, section 401(m) of the Code and the
regulations thereunder are incorporated herein by reference.
20.6.2 Contributions made by or on behalf of Highly
Compensated Employees shall not exceed the limits imposed upon multiple
use of the alternative limitation by section 401(m)(9) of the Code. For
this purpose, section 401(m)(9) of the Code and Treasury regulation
section 401(m)-2(b) are incorporated herein by reference. If one or more
Highly Compensated Employees' contributions exceed the multiple use
limit, then the actual contribution ratio ("ACR") of Highly Compensated
Employees shall be reduced (starting with such Highly Compensated
Employee whose ACR is the highest) so that the limit is not exceeded. The
amount of any such reduction shall be treated as an Excess Aggregate
Contribution. The actual deferral ratio ("ADR") and ACR of Highly
Compensated Employees shall be determined hereunder after any adjustments
required to pass the tests described in Sections 20.4 and 20.6.1.
Multiple use shall not occur if the actual deferral percentage ("ADP")
and the actual contributions percentage ("ACP") (as such terms are
defined in the regulations under sections 401(k) and 401(m) of the Code,
respectively) of Highly Compensated Employees is not greater than 125
percent of the ADP and ACP of Employees who are not Highly Compensated
Employees.
20.7 Distribution of Excess Aggregate Contributions.
Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable, distributed no later than the
last day of each Plan Year beginning after December 31, 1987, to
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Participants to whose accounts Post-Tax or Matching Contributions were
allocated for the preceding Plan Year. The Excess Aggregate Contributions shall
be adjusted for income or loss. The income or loss allocable to Excess
Aggregate Contributions shall be determined by multiplying the income or loss
allocable to the Participant's Post-Tax and Matching Contributions for the Plan
Year by a fraction, the numerator of which is the Excess Aggregate
Contributions on behalf of the Participant for the preceding Plan Year and the
denominator of which is the sum of the Participant's account balance
attributable to Post-Tax and Matching Contributions, and any other employee and
matching contributions within the meaning of section 401 (m) of the Code, on
the last day of the preceding Plan Year. Excess Aggregate Contributions shall
be distributed from the Participant's Post-Tax Contribution Account, and
forfeited if otherwise forfeitable under the terms of the Plan (or, if not
forfeitable, distributed) from the Participant's Matching Contribution Accounts
in proportion to the Participant's Post-Tax and Matching Contributions for the
Plan Year. The determination of the Excess Aggregate Contributions shall be
made after first determining the Excess Elective Deferrals and then determining
the Excess Contributions.
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ARTICLE 21
Rollover Contributions
21.1 Rollover Contributions. This Article applies to rollover
contributions made by a Participant to the Plan. The Administrative Committee
may authorize, in its sole discretion, a Participant to contribute any portion
of an "eligible rollover contribution" from another "eligible retirement plan"
(as such terms are defined in Article 22) on the Appropriate Form and in such
manner as the Administrative Committee may prescribe.
21.2 Rollover Account. Any such contribution by a Participant (and
any earnings, losses and expenses attributable thereto) shall be credited to a
separate "Rollover Account" on behalf of such Participant which reflects his
share of the Trust Fund attributable to such rollover contributions.
21.3 Investment Elections. A Participant may, by giving notice on
the Appropriate Form and within such time as the Administrative Committee may
prescribe designate the proportion of his Rollover Account, in any whole
percentage, which shall be allocated to and invested in any Investment Fund.
Any such election shall continue in effect until changed by a new designation
in accordance with the same procedures then in effect for any change in a
Participant's election as to Basic Contributions under Section 4.4, and may be
reallocated by the Participant in accordance with the provisions of Section
4.6.
21.4 Vesting: Withdrawals: Loans. Amounts in each Rollover Account
shall at all times be fully vested and shall not be subject to forfeiture
pursuant to any provision of this Plan. A Participant may withdraw the entire
balance of his Rollover Account in accordance with the provisions of Articles 6
and 7 as applicable to a
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Participant's Post-Tax Contribution Account. Amounts in a Participant's
Rollover Account shall be taken into account for all purposes of any loan made
to the Participant in accordance with Section 6.7 and the participant loan
program established thereunder.
21.5 Implementation and Suspension. Implementation of this Article
shall be delayed until such date, not earlier than January 1, 1995, as the
Administrative Committee, in its sole discretion, shall determine. In addition,
the Administrative Committee may suspend the authorization contained in this
Article as to future rollover contributions, provided, however that any such
suspension shall not affect any Participant rollover contribution to the Plan
made prior to such suspension date.
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ARTICLE 22
Direct Rollover
22.1 This Article applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article, a distributee may
elect, at the time and in the manner prescribed by the Administrative
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
22.2 Definitions.
22.2.1 Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the
unencumbered cash balance to the credit of the distributee, except that
an eligible rollover distribution does not include: any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributed or the joint lives (or joint life expectancies) of the
distributed and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
22.2.2 Eligible Retirement Plan. An eligible retirement plan
is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of the
Code, an annuity plan
92
described in section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
22.2.3 Distributee. A distributed includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or former
spouse who is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
22.2.4 Direct Rollover. A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
93
ARTICLE 23
Profit Sharing
Profit Sharing Contributions shall be made in accordance with the provisions of
this Article 23:
23.1 Eligibility. In order to be eligible to receive a Profit
Sharing Contribution for a Plan Year under this Section 23.1 an Employee must
be an Eligible Employee, except that the Employee must be at least 18 years of
age and actively employed by a Profit Sharing Employer at the beginning of a
Plan Year. In addition, the Eligible Employee must: (1) not be covered by a
collective bargaining agreement unless the applicable collective bargaining
agreement expressly provides that he shall be eligible to participate in the
Plan; (2) not participate in any other sales or management incentive program
offered by a Profit Sharing Employer during a Plan year, subject to the
provisions of the following paragraph; (3) complete at least 1,000 Hours of
Service during a Plan Year; and (4) be actively employed by the Profit Sharing
Employer on the date in the succeeding Plan Year on which Profit Sharing
Contributions are made for the preceding Plan Year. The provisions of
subparagraphs (2) and (3) shall apply to contributions made during a Plan Year
or with respect to the Plan Year for which such contributions are made.An
Employee who meets the eligibility requirements set forth in the preceding
paragraph but for the fact that such employee is promoted or transferred after
March 31 of a Plan Year to a position or salary grade which is ineligible to
receive a Profit Sharing Contribution shall be eligible to receive a Profit
Sharing Contribution, for such Plan Year based on the period of time during
such Plan Year for which he was eligible and based on his Compensation earned
during such period of eligibility. An Employee who
94
meets the eligibility requirements set forth in the preceding
paragraph but who takes an approved leave of absence during a Plan Year shall
be eligible to receive a Profit Sharing Contribution for such Plan Year based
on his period of active employment as an eligible employee under this Article
23.
Only Employees of Profit Sharing Employers who are Eligible
Employees and who meet the criteria set forth in Section 23.1 shall be eligible
to receive a Profit Sharing Contribution under this Article 23. Notwithstanding
the foregoing, however, Eligible Employees who are Highly Compensated Employees
shall not be eligible to receive a Profit Sharing Contribution for a Plan Year
if such receipt would result in the Plan's violation of Code Section 410(b).
23.2 Profit Sharing Contributions--Amount. The amount of Profit
Sharing Contributions (if any) for a Plan Year shall be based upon the
achievement (or failure thereof) of financial objectives of the Profit Sharing
Employer, which objectives shall be established by the Profit Sharing
Employer's authorized officers at the beginning of each Plan Year (or as soon
as practicable thereafter).
In its discretion, a Profit Sharing Employer may elect not to
establish Profit Sharing objectives for a Plan Year, in which event such Profit
Sharing Employer shall have no obligation to make Profit Sharing Contributions
for any such Plan Year.
23.3 Profit Sharing Contributions--Payment. Profit Sharing
Contributions for a Plan Year (if any) shall be paid to the Trustee as soon as
practicable after the Employer has determined the degree to which the financial
objectives for such Plan Year have been achieved.
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23.4 Form of Profit Sharing Contributions. Profit Sharing
Contributions shall be made only in the form of Company Stock, or in cash which
is used by the Trustee to purchase shares of Company Stock, as more fully
described in the Trust Agreement. All Profit Sharing Contributions shall be
invested in the Company Stock Fund, without regard to the investment direction
of a Participant, together with all dividends and other distributions resulting
from such investments.
23.5 Allocation of Profit Sharing Contributions. Profit Sharing
Contributions (and forfeitures in lieu thereof) made on behalf of a Participant
made during any month shall be credited to his Profit Sharing Contributions
Account as of the day immediately following the date on which such
contributions were made.
23.6 Vesting. A Participant's entire Profit Sharing Contributions
Account shall be fully vested on the earliest of (a) Normal Retirement Age, (b)
Termination of Employment on account of Disability, or (c) death. Prior to the
occurrence of any of the foregoing events, a Participant shall be vested in his
Profit Sharing Contributions Account as follows:
With respect to Profit Sharing Contributions made for any Plan Year
(and dividends and other increments derived directly or indirectly therefrom),
at the rate of one third on the date a Profit Sharing Contribution is made and
one third on each of the two immediately succeeding January lst following the
Plan Year in which such Profit Sharing Contribution is made occurring on or
before such Participant's Termination of Employment; provided, that all such
Profit Sharing Contributions shall be vested one hundred (100) percent after
the Participant completes five (5) years of Service.
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In the case of a Participant who has five (5) or more consecutive 1
year Breaks in Service, all Service after such Breaks in Service will be
disregarded for the purpose of vesting the Profit Sharing Contributions Account
balance that accrued before such Breaks in Service. Such Participant's
pre-Break Service will count in vesting his post-Break Profit Sharing
Contributions Account balance only if either:
(i) such Participant has any nonforfeitable interest in such
account balance at the time of Termination of Employment; or
(ii) upon returning to Service the number of consecutive 1-year
Breaks in Service is less than the number of years of Service.
97
IN WITNESS WHEREOF, and as evidence of the adoption of this amended
and restated Plan, the Company has caused this instrument to be executed by its
duly authorized officer this 15th day of October, 1997.
REVLON CONSUMER PRODUCTS CORPORATION
By: /s/ Ronald H. Dunbar
---------------------------------
98
SCHEDULE A
As of January 1, 1997
REVLON EMPLOYEES' SAVINGS, INVESTMENT AND PROFIT SHARING PLAN
SCHEDULE OF EMPLOYERS
American Crew, Inc.
Amerinail, Inc.
Applied Science & Technologies Inc.
Creative Nail Design, Inc.
General Wig Manufacturers, Inc.
North American Revsale Inc. (except direct pay beauty advisors and those
field merchandisers who are not participants on January 1, 1994)
Prestige Fragrance & Cosmetics, Inc.
Realistic/Roux Professional Products Inc.
Revlon Consumer Corp.
Revlon Consumer Products Corporation
Revlon Government Sales, Inc.
Revlon, Inc.
Revlon Receivable Subsidiary, Inc.
RIROS Corporation
Roux Laboratories, Inc.
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SCHEDULE B
As of January 1, 1997
Profit Sharing Employers
Applied Science & Technologies Inc. January 1, 1997
Realistic/Roux Professional Products Inc. January 1, 1997
Revlon Consumer Corp. January 1, 1997
Revlon Consumer Products Corporation January 1, 1997
Revlon Government Sales, Inc. January 1, 1997
Revlon, Inc. January 1, 1997
RIROS Corporation January 1, 1997
Roux Laboratories, Inc. January 1, 1997
100
REVLON EMPLOYEES' SAVINGS, INVESTMENT AND PROFIT SHARING PLAN
Participant Loan Program
1. Participant Loans Authorized. Upon the application of a Participant at
any time prior to the Participant's termination of employment, the
Administrative Committee may, in its sole discretion, instruct the Trustee to
make one or more loans to such Participant from the Trust Fund, effective as
soon as practicable after the Administrative Committee shall receive such
application (or in accordance with such other procedures as the Administrative
Committee may prescribe); provided that such loan meets the requirements of
this Program. Loans made pursuant to this Program and payments thereof,
including loan expenses, as described below, shall be appropriately charged and
credited against first, the Participant's Basic Account, second, his Pre-IPO
Matching Contributions Account, third, the vested portion of his Post-IPO
Matching Contributions Account and fourth, the vested portion of his Profit
Sharing Contributions Account. The loan request shall be made on an Appropriate
Form and within such time and pursuant to such manner as the Administrative
Committee may prescribe. The Administrative Committee shall notify the
Participant in writing within a reasonable time of the approval or denial of
such loan request. If a Participant obtains a loan under this Program, his
status as a Participant in the Plan and his rights with respect to his Plan
benefits shall not be affected, except to the extent that the Participant has
assigned his interests in his Accounts pursuant to Section 2. A Participant
taking a loan pursuant to this Program shall not be eligible to take another
such loan more than once within any full twelve (12) calendar month period
101
following the date that such loan is approved; provided, however, that the
Administrative Committee may adopt rules permitting more frequent loans, for
example, where the Participant certifies in writing to the Administrative
Committee that the loan proceeds are to be used to acquire a dwelling unit
which, within a reasonable period of time, is to be used as the principal
residence of such Participant. A Participant shall not be eligible to have more
than two loans under this Program outstanding at any time. All loans shall be
granted according to rules applicable to all participants on a uniform and
nondiscriminatory basis.
2. Loan Requirements. A loan shall not be made to a Participant pursuant
to Section 1 unless such loan meets all of the following requirements:
2.1 Amount. Such loan must be in an amount that is not less than
one thousand dollars ($1,000), and not more than the lesser of (a) fifty
thousand dollars ($50,000), or (b) fifty percent (50%) of the sum of the
Participant's Basic Account and vested Pre-IPO Matching Contributions Account
and Post-IPO Matching Contributions Account and vested Profit Sharing
Contributions Account at the time of the loan. In determining the maximum
amount of a loan under this Section 2.1, there shall be added to any loan
amount requested, the excess (if any) of the highest outstanding balance of
loans during the one-year period ending on the day before the date on which
such loan is made over the outstanding balance on that date of all loans made
to the Participant from this Plan and from all other "qualified employer plans"
(as described in section 72(p)(4) of the Code) which are maintained by the
Company or any Employer or Affiliate referred to in section 72(p)(2)(D) of the
Code. If any outstanding balance of a loan (other than a loan made under this
Program) is required to be taken into account under the preceding
102
sentence, the value of the Participant's vested interest under the plan from
which such loan was made shall also be taken into account under clause (b) of
the first sentence of this Section 2.1.
2.2 Adequate Security. Such loan must be adequately secured by an
amount equal to fifty percent (50%) of the present value of the Participant's
vested interest in the Plan at the time of the loan and such other or
additional security as the Administrative Committee may in its sole discretion
require. The loan shall be secured first by amounts in the Participant's Basic
Account, second, by his Pre-IPO Matching Contributions Account, third, by his
Post-IPO Matching Contributions Account and fourth, by his Profit Sharing
Contributions Account.
2.3 Interest. Such loan must bear interest, payable at annual
intervals (or more frequent intervals, if the Administrative Committee so
requires), at a reasonable rate as determined by the Investment Committee from
time to time in a nondiscriminatory manner for such loans entered into for the
relevant period and shall otherwise conform to the repayment terms set forth in
this Program.
2.4 Repayment Terms. The principal amount of any loan made pursuant
to this Program must be payable upon the earlier of the following dates: (a)
the expiration of a fixed term to be determined by the Administrative Committee
but not to exceed five (5) years from the date of the loan, unless the
Participant certifies in writing to the Administrative Committee that the loan
proceeds are to be used to acquire a dwelling unit which, within a reasonable
period of time, is to be used as the principal residence of such Participant,
in which case, the loan shall be repaid over a period not to exceed ten years
from the date of such loan; and (b) the date on which distribution is made or
otherwise
103
commences following the Participant's Termination of Employment. Such repayment
shall be made in substantially level installments of principal and interest
which the Participant shall authorize to be paid, to the extent practicable, by
payroll deductions, which payroll deductions shall not exceed 15% of the
Participant's salary per pay period. Notwithstanding the foregoing, a
Participant shall have the right to repay all of such principal and/or interest
amount without penalty at any time. In the event of default, foreclosure on the
note and attachment of security will not occur until a distributable event
occurs in the Plan.
2.5 Promissory Note and Loan Agreement. A loan granted pursuant to
this Program shall be evidenced by a promissory note as contained in an
Appropriate Form executed by the Participant and containing such terms and
provisions as the Committees shall determine. Such loan must also be made
pursuant to a loan agreement executed by the Participant on an Appropriate Form
containing such terms and provisions as the Committees shall determine. The
occurrence of any event of default under the loan note shall entitle the
Trustee of the Plan to reduce the balance of the Participant's Accounts up to
the amount of the Plan's security interest therein. The loan note shall be an
asset solely of the borrowing Participant's Accounts and interest on the loan
shall be credited to his Accounts.
3. Loan Expenses. Any fees, taxes, charges or other expenses (including
without limitation any asset liquidation charge or similar extraordinary
expense) incurred in connection with a loan shall be charged against the
Accounts of the Participant obtaining such loan.
104
4. Loan Fund. Prior to receiving the proceeds of a loan, the Participant
shall direct that funds in an amount equal to the loan amount be transferred
from the Participant's Accounts in which it is invested, in a proportion
elected by the Participant, to a special loan fund established by the
Investment Committee (consisting solely of that Participant's loans)
established for purposes of disbursing the loan amount to the Participant. Any
such transfer shall be disregarded for purposes of any transfer limitations
under Program of the Plan.
5. Source of Funds. Any Participant who enters into an agreement to
effect a Participant loan shall be deemed to have redesignated his existing
Accounts balances in a manner similar to that provided for in Section 5.6 of
the Plan, so that an amount equal to the initial amount of any such Participant
loan is invested in the Participant's loan fund immediately coincident with the
effective date of such Participant loan. Amounts redesignated in accordance
with the preceding sentence shall be charged against each Investment Fund (to
the extent available) that the Participant's Accounts are then invested in on a
pro rata basis, except as the Participant may otherwise direct.
6. Reallocation to Other Investment Funds. Payments of principal and
interest on a Participant's loan shall be initially deposited in the
Participant's loan fund for allocation to such Participant's Accounts and shall
be reallocated as soon as administratively practicable following such deposit
to such other Investment Fund or Funds as the Participant shall have then
designated for investment of his Basic Account in accordance with the
provisions of Section 5.4 of the Plan or as otherwise directed by the
Participant.
7. Suspension. Notwithstanding any other provision of this Plan, the
Administrative Committee may suspend the authorization contained in this
Program as to
105
future Participant loans, provided, however that any such suspension shall not
affect any Participant loan then outstanding.
8. Compliance with Applicable Laws. The Committees shall take actions as
they, upon the advice of counsel, may deem appropriate in order to assure full
compliance with all applicable laws and regulations relating to Participant
loans and the granting and repayment thereof.
9. Loans Available on Nondiscriminatory Basis.
(a) All loans made pursuant to this Program shall be made available
to all Participants on a reasonably equivalent, nondiscriminatory basis.
(b) Notwithstanding the preceding provisions of this Program, loans
may be made to a Participant who is, at the time of the loan, both a former
employee and a "party in interest" as defined in section 3(14) of ERISA with
respect to the Plan. In the case of any such loan, the preceding provisions of
this Program dealing with payment by payroll deduction and acceleration on
termination of employment shall not be applicable. The provisions of this
Section 9(b) shall apply only if and to the extent required by ERISA section
408 or Code section 4975.
(c) Loans shall not be made available to highly compensated
employees (as defined in Code section 414(q)) in an amount greater than the
amount made available to other employees.
Employees' Savings, Investment and Profit Sharing Plan - Revlon Inc.
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