As filed with the Securities and Exchange Commission on March 22, 1999
Registration No. 333-
=================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
COMPX INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 57-0981653
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
Two Greenspoint Plaza
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
(Address of principal (Zip Code)
executive offices)
--------------------
THE 401(K) PLAN OF THE FORT LOCK CORPORATION
(Full title of the plan)
--------------------
Andrew Louis, Esq.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
(972) 233-1700
(Name, address and telephone number
including area code of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
-----------------------------------------------------------------
Proposed
maximum
offering Proposed
Title of price maximum
securities Amount per aggregate
offering Amount of
registered (1) registered (2) price (2) fee (2)
- ---------------- ---------- -------- --------- ------------
Class A common
stock, par value
$0.01 per share 500,000 $14.5625 $7,281,250 $2,024
-----------------------------------------------------------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to The 401(k) Plan of the Fort
Lock Corporation, as amended and restated effective February 1, 1999.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act and based on the average
of the highest and lowest selling price per share of class A common stock
of the registrant on the New York Stock Exchange, Inc. on March 18, 1999.
=================================================================
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
The information required by Part I of Form S-8 to be contained in the
Section 10(a) prospectus is omitted from this registration statement in
accordance with Rule 428 under the Securities Act and the introductory Note to
Part I of Form S-8.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The registrant and the 401(k) plan hereby incorporate by reference in this
registration statement the following documents previously filed by the
registrant with the Securities and Exchange Commission:
(1) the registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;
(2) the description of the class A common stock of the registrant set
forth in the registration statement on Form 8-A, filed with the SEC on
February 25, 1998, including any amendment or report filed for the purpose
of updating such description; and
(3) all documents filed by the registrant or the 401(k) plan with the
SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date of this
registration statement shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of the filing of such
documents until such time as there shall have been filed a post-effective
amendment that indicates that all securities offered hereby have been sold
or that deregisters all securities remaining unsold at the time of such
amendment.
Item 6. Indemnification of Directors and Officers.
Section 102(b)(7) of the Delaware General Corporate Law permits a Delaware
corporation to limit the personal liability of its directors in accordance with
the provisions set forth therein.
Article nine of the restated certificate of incorporation of the registrant
provides as follows:
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing
clause shall not apply to any liability of a director (i) for any
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL or (iv) for any transaction from
which the director derived an improper personal benefit. Any repeal
or modification of this Article Nine by the stockholders of the
Corporation shall not adversely affect an right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
Section 145 of the Delaware corporate law contains provisions that permit
Delaware corporations to indemnify directors, officers, employees or agents
against expenses (including attorneys fees), judgments, fines and amounts
actually and reasonably incurred in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the person's position with the corporation or by
reason of the person's position with any other enterprise (including
corporations, partnerships, joint ventures and trusts) for which he or she
serves at the request of the corporation; provided, that, the person acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the corporation's best interest and, in the case of a criminal
proceeding, the person had no reasonable cause to believe that his or her
conduct was unlawful. In the case of actions or suits by or in the right of the
corporation, a person will not be indemnified if he or she is found liable to
the corporation unless the Court of Chancery, or the court in which the action
is brought, determines that the person is entitled to indemnification, despite
the finding of liability, in view of all of the circumstances of the case.
Indemnification as described above will only be granted in specified cases upon
a determination that the indemnification is proper in the circumstances because
the indemnified person has met the applicable standard of conduct. This
determination is made by:
(1) a majority vote of the directors who are not parties to the
proceeding, even though less than a quorum;
(2) independent legal counsel in a written opinion, if there are no such
directors or if the directors so direct; or
(3) the stockholders of the corporation.
Notwithstanding the foregoing, to the extent that a director, officer,
employee or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) or (b) of section 145, or in defense of any claim, issue or
matter therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
with his or her defense.
Article six of the restated certificate of incorporation of the registrant
provides as follows:
The Corporation shall, to the fullest extent permitted by
law, including Section 145 of the DGCL, as the same may be amended
and supplemented, indemnify any and all officers and directors
whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities, or other matters
referred to in or covered by said Section, and the indemnification
provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee, trustee, fiduciary or agent and shall inure to the
benefit of the heirs, executors, and administrators of such a
person.
The bylaws of the registrant generally provide for indemnification of its
directors and officers to the fullest extent permitted by the Delaware corporate
law, except that any determination of indemnification shall be made by:
(1) a majority vote of a quorum consisting of directors who are not
parties to the proceeding;
(2) independent legal counsel in a written opinion, if the quorum is not
obtainable, or even if obtainable, if a quorum of disinterested
directors so directs; or
(3) the stockholders of the corporation.
An underwriting agreement dated March 5, 1998 between the registrant and
certain underwriters and relating to the registrant's initial public offering of
class A common stock obligates such underwriters to indemnify the registrant and
the registrant's officers and directors against certain liabilities under the
Securities Act.
Item 8. Exhibits.
(a) Exhibits.
The following documents are filed as a part of this registration statement.
Exhibit Description of Exhibit
- --------- -----------------------------------------------------
4.1 Restated certificate of incorporation of the
registrant (incorporated by reference to Exhibit 3.1
to the registrant's Registration Statement on Form S-
1, File No. 333-42643, filed with the SEC).
4.2 Bylaws of the registrant (incorporated by reference
to Exhibit 3.2 to the registrant's Registration
Statement on Form S-1, File No. 333-42643, filed with
the SEC).
5.1* Opinion of Andrew Louis, Esq.
23.1* Consent of PricewaterhouseCoopers LLP
23.2* Consent of Andrew Louis, Esq. (included in his
opinion filed as Exhibit 5.1).
24.1* Power of Attorney (see the initial signature page of
this registration statement).
99.1* The 401(k) Plan of the Fort Lock Corporation (as
amended and restated effective February 1, 1999)
- ----------
* Filed Herewith.
In accordance with Item 8 of Form S-8, the registrant undertakes to submit
the 401(k) plan and any substantive amendment thereto to the Internal Revenue
Service in a timely manner and will make all changes required by the Internal
Revenue Service in order to qualify the 401(k) plan under Section 401(a) and
401(k) of the Internal Revenue Code of 1986, as amended.
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Dallas, state of Texas, on March 22, 1999:
COMPX INTERNATIONAL INC.
By: /s/ A. Andrew R. Louis
---------------------------
A. Andrew R. Louis
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints J. Mark Hollingsworth and A. Andrew R.
Louis, and each of them, his true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same
with all exhibits, thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated:
Signature Title Date
- -------------------------- --------------------- --------------
/s/ Joseph S. Compofelice Chairman of the March 22, 1999
- -------------------------- Board, President and
Joseph S. Compofelice Chief Executive
Officer (Principal
Executive Officer)
/s/ David A. Bowers Vice President and March 22, 1999
- -------------------------- President of CompX
David A. Bowers Security Products and
Director
/s/ John A. Miller Vice President, Chief March 22, 1999
- -------------------------- Financial Officer and
John A. Miller Treasurer (Principal
Financial Officer)
/s/ Todd W. Strange Vice President and March 22, 1999
- -------------------------- Controller (Principal
Todd W. Strange Accounting Officer)
/s/ Paul M. Bass, Jr. Director March 22, 1999
- --------------------------
Paul M. Bass, Jr.
/s/ Edward J. Hardin Director March 22, 1999
- --------------------------
Edward J. Hardin
/s/ Ann Manix Director March 22, 1999
- --------------------------
Ann Manix
/s/ Glenn R. Simmons Director March 22, 1999
- --------------------------
Glenn R. Simmons
/s/ Robert W. Singer Director March 22, 1999
- --------------------------
Robert W. Singer
Pursuant to the requirements of the Securities Act, the plan committee of
The 401(k) Plan of the Fort Lock Corporation, as amended and restated effective
February 1, 1999, has duly caused this registration statement to be signed on
its behalf by the undersigned thereunto duly authorized, in the city of River
Grove, state of Illinois, on March 22, 1999.
The 401(k) Plan of the Fort Lock Corporation
By: Plan Committee of The 401(k) Plan of the
Fort Lock Corporation
/s/ Jay A. Fine
-----------------------
Jay A. Fine
/s/ Julie L. Raske
-----------------------
Julie L. Raske
INDEX TO EXHIBITS
Exhibit Description of Exhibit
- --------- -----------------------------------------------------
4.1 Restated certificate of incorporation of the
registrant (incorporated by reference to Exhibit 3.1
to the registrant's Registration Statement on Form S-
1, File No. 333-42643, filed with the SEC).
4.2 Bylaws of the registrant (incorporated by reference
to Exhibit 3.2 to the registrant's Registration
Statement on Form S-1, File No. 333-42643, filed with
the SEC).
5.1* Opinion of Andrew Louis, Esq.
23.1* Consent of PricewaterhouseCoopers LLP
23.2* Consent of Andrew Louis, Esq. (included in his
opinion filed as Exhibit 5.1).
24.1* Power of Attorney (see the initial signature page of
this registration statement).
99.1* The 401(k) Plan of the Fort Lock Corporation (as
amended and restated effective February 1, 1999)
- ----------
* Filed Herewith.
COMPX INTERNATIONAL INC.
----------
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
----------
Telephone: (972) 233-1700
Telephone Facsimile: (972) 239-0142
Andrew Louis
Secretary and
Associate General Counsel
(972) 450-4243
March 22, 1999
The Board of Directors of CompX International Inc.
Two Greenspoint Plaza
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
Re: Registration Statement on Form S-8 Relating to Plan Interests Offered
under The 401(k) Plan of the Fort Lock Corporation and 500,000 Shares
of Class A Common Stock of CompX International Inc. Offered as an
Investment Option under the Same Plan
Ladies and Gentlemen:
I have acted as secretary and associate general counsel for CompX
International Inc., a Delaware corporation (the "Company"), in connection with
the preparation of the Company's Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission on March 22, 1999 under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the offer of interests under The 401(k) Plan of
the Fort Lock Corporation, as amended and restated effective February 1, 1999
(the "Plan"), and 500,000 shares (the "Shares") of the Company's class A common
stock, par value $0.01 per share (the "Class A Common Stock"), offered as an
investment option under the Plan.
A. Basis of Opinions
As the basis for the opinions expressed in this letter, I have examined and
considered originals, or copies certified or otherwise identified to my
satisfaction, of such documents, corporate records, and instruments as I have
deemed necessary or appropriate for the expression of such opinions, including,
without limitation, the following:
(1) the restated certificate of incorporation and bylaws of the Company,
both as amended to date;
(2) the minutes and records of the corporate proceedings of the Company
with respect to the establishment of the Plan and related matters; and
(3) the Plan.
B. Opinions
Based upon the foregoing, having regard for such legal considerations as I
have deemed relevant, and subject to the comments, assumptions, limitations,
qualifications and exceptions set forth in Section C, I hold the opinions set
forth below:
(1) The issuance of any Shares under the Plan out of the Company's
authorized but unissued shares of Class A Common Stock ("Originally
Issued Shares") has been duly authorized; and
(2) Any Originally Issued Shares, when issued, will be validly issued,
fully paid and nonassessable.
C. Comments, Assumptions, Limitations, Qualifications and Exceptions
The opinions expressed in Section B above are based upon and subject to the
further comments, assumptions, limitations, qualifications and exceptions as set
forth below.
(1) I have assumed, without investigation, the genuineness of all
signatures and the authenticity of all documents submitted to me as
originals, the conformity to authentic originals of all documents
submitted to me as copies and the veracity of all such documents.
(2) I have assumed that (a) any Originally Issued Shares will be issued in
accordance with the terms of the Plan; (b) the Company maintains an
adequate number of authorized but unissued shares of Class A Common
Stock available for the issuance of any Originally Issued Shares; and
(c) the consideration actually received by the Company (or the
increase in the Company's capital on the books of the Company, if
applicable) for each Originally Issued Share is proper consideration
for, and equal to or exceeds the par value of, each such Originally
Issued Share.
(3) The law covered by the opinions expressed in this letter is limited to
the federal law of the United States, the Delaware General Corporation
Law, as amended, and the law of the state of Texas.
(4) I am the secretary and associate general counsel of the Company and I
am an employee of Valhi, Inc., a Delaware corporation, an indirect
parent corporation of the Company.
(5) Except as set forth in subsection C.6 below, the opinions set forth
herein are expressed solely for your benefit, and no other party shall
be entitled to rely on my opinions without my prior express written
consent. Except as set forth in subsection C.6 below or without my
prior express written consent, this opinion letter may not be quoted
in whole or in part or otherwise referred to in any document or report
and may not be furnished to any person or entity.
(6) I consent to the filing of this letter as an exhibit to the
Registration Statement and to reference to my opinions included in or
made a part of the Registration Statement. In giving this consent, I
do not admit that I come within the category of a person whose consent
is required under Section 7 of the Securities Act or the rules and
regulations promulgated thereunder.
Respectfully submitted,
/s/ Andrew Louis
--------------------------------
Andrew Louis, Esq.
Secretary and Associate General Counsel of
CompX International Inc.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in CompX International Inc.'s
Registration Statement on Form S-8 pertaining to The 401(K) Plan of Fort Lock
Corporation of our reports dated February 19, 1999 with respect to the
consolidated financial statements and financial statement schedules of CompX
International Inc. and Subsidiaries included in its Annual Report on Form 10-K
(File No. 1-13905) for the year ended December 31, 1998.
PricewaterhouseCoopers LLP
Dallas, Texas
March 22, 1999
The 401(k) Plan
of the
Fort Lock Corporation
(As amended and restated effective February 1, 1999)
CERTIFICATE
I, J. Mark Hollingsworth, Assistant Secretary of Fort Lock Corporation
hereby certify that the attached document is a correct copy of The 401(k) Plan
of the Fort Lock Corporation as amended and restated effective February 1, 1999,
and as in effect on the date hereof.
Dated this day of , 1999.
-------- -----------------------------
By
--------------------------------
J. Mark Hollingsworth
Assistant Secretary
(Corporate Seal)
TABLE OF CONTENTS
TABLE OF
CONTENTS
ARTICLE 1. INTRODUCTION
Section 1.1. History, Purpose of the Plan, Effective Date
Section 1.2. Plan Administrator; Plan Year
Section 1.3. The Trust
Section 1.4. The Employers
Section 1.5. Company Stock
ARTICLE 2. PARTICIPATION
Section 2.1. Participation
Section 2.2. Eligibility Service
Section 2.3. Hours of Service
Section 2.4. Leave of Absence
Section 2.5. Notice of Participation
ARTICLE 3. EMPLOYERS' CONTRIBUTIONS
Section 3.1. Employers' Contributions
Section 3.2. Calculation of Employers' Contributions
Section 3.3. Verification of Employers' Contributions
Section 3.4. Contribution Percentage Test Limitation on
Employer Matching Contributions
ARTICLE 4. SALARY DEFERRAL CONTRIBUTIONS
Section 4.1. Salary Deferral Contributions
Section 4.2. Actual Deferral Percentage Test Limitation on
Salary Deferral Contributions
Section 4.3. Variation, Discontinuance and Resumption of
Contributions
Section 4.4. Earnings
Section 4.5. Rollover Contributions
Section 4.6. Transferred Benefits
Section 4.7. Restricted Participation with Respect to
Rollover Contributions and Transferred
Benefits
ARTICLE 5. PLAN ACCOUNTING AND INVESTMENT FUNDS
Section 5.1. Participation Account Balances
Section 5.2. Accounting Dates
Section 5.3. Date of Crediting Contributions and
Remainders
Section 5.4. Investment Funds
Section 5.5. Investment Elections
Section 5.6. Adjustments of Participants' Accounts
Section 5.7. Statement of Accounts
Section 5.8. Investments in Employer Securities
Section 5.9. Allocation of Employer Securities
Section 5.10. Additional Accounting Rules For Employer
Securities
Section 5.11. Voting of Employer Securities
ARTICLE 6. DISTRIBUTION OF ACCOUNT BALANCES
Section 6.1. Retirement, Death or Disability
Section 6.2. Resignation or Dismissal
Section 6.3. Remainders
Section 6.4. Method of Benefit Payment
Section 6.5. Selection of Time and Manner of Benefit
Payment
Section 6.6. Designated Beneficiaries
Section 6.7. Payment to Substitute Beneficiaries
Section 6.8. Payment with Respect to Incapacitated
Participants or Beneficiaries
Section 6.9. Final Court Orders
Section 6.10. Rollover Distributions
ARTICLE 7. WITHDRAWALS DURING EMPLOYMENT
Section 7.1. Withdrawal from Salary Deferral Contribution
Account
Section 7.2. Loans to Participants
Section 7.3. Other Withdrawals
ARTICLE 8. REHIRED EMPLOYEE OR PARTICIPANT
Section 8.1. Rehired Employee or Participant
ARTICLE 9. MAXIMUM CONTRIBUTIONS
Section 9.1. Contribution Limitations
Section 9.2. Participant Covered by Defined Contribution
Plan Only
Section 9.3. Participant Covered by Defined Contribution
Plan and Defined Benefit Plan
ARTICLE 10. PLAN ADMINISTRATOR
Section 10.1. Plan Administrator's Duties
Section 10.2. Action by Plan Administrator
Section 10.3. Information Required for Plan Administration
Section 10.4. Decision of Plan Administrator Final
Section 10.5. Review of Benefit Determinations
Section 10.6. Uniform Rules
Section 10.7. Plan Administrator's Expenses
Section 10.8. Interested Plan Administrator
Section 10.9. Resignation or Removal of Plan Administrative
Committee Members
Section 10.10. Indemnification
ARTICLE 11. RELATING TO THE EMPLOYERS
Section 11.1. Action by Employers
Section 11.2. Additional Employers; the Fort Lock Companies
Section 11.3. Restrictions on Reversions
ARTICLE 12. AMENDMENT, TERMINATION OR PLAN MERGER
Section 12.1. Amendment
Section 12.2. Termination
Section 12.3. Plan Merger
Section 12.4. Continuation by a Successor or Purchaser
Section 12.5. Notice to Participants of Amendments,
Terminations or Plan Mergers
Section 12.6. Vesting and Distribution on Termination
ARTICLE 13. GENERAL PROVISIONS
Section 13.1. Examination of Plan Documents
Section 13.2. Notices
Section 13.3. Nonalienation of Plan Benefits
Section 13.4. No Employment or Benefit Guarantee
Section 13.5. Litigation
Section 13.6. Successors
Section 13.7. Adequacy of Evidence
Section 13.8. Gender and Number
Section 13.9. Waiver of Notice
Section 13.10. Applicable Law
Section 13.11. Severability
Section 13.12. Fiduciary Responsibilities
Section 13.13. Highly Compensated Employees
Section 13.14. Supplements
Section 13.15. Leased Employees
Section 13.16. Transfers Upon Sale of a Business Unit
Section 13.17. Uniformed Services Employment Rights
Section 13.18. Application of Earnings Limitations
Section 13.19. Telephonic and Electronic Signatures
ARTICLE 14. TOP-HEAVY PLAN RULES
Section 14.1. Key Employees
Section 14.2. Top-Heavy Determinations
Section 14.3. Aggregation of Plans
Section 14.4. Top-Heavy Rules
Section 14.5. Top-Heavy Vesting Schedule
INDEX DEFINITION OF TERMS
SUPPLEMENT A
The 401(k) Plan of the Fort Lock Corporation
ARTICLE 1.
INTRODUCTION
1.1. History, Purpose of the Plan; Effective Date. The 401(k) Plan of the
Fort Lock Corporation (the "plan") as established effective as of January 1,
1994, is hereby amended and completely restated effective February 1, 1999 (the
"effective date") by Fort Lock Corporation (the "company"). The purpose of the
plan is to enable eligible employees of the company and eligible employees of
the company's subsidiaries and other related companies which adopt the plan with
the company's consent to accumulate funds and share in the profits of such
adopting employers, and thereby assist such employees in providing for their
future security, and to assist in providing plan participants with retirement
benefits.
1.2. Plan Administrator; Plan Year. The plan is administered by a plan
committee whose members shall be appointed by the company (the "plan
administrator"). The duties and responsibilities of the plan administrator are
described in Article 10 of the plan. The plan is administered on the basis of a
plan year which begins each year on January 1 and ends on the next following
December 31.
1.3. The Trust. The assets of the plan are held and invested by one or
more trustees (the "trustee") and may be held and invested by one or more
investment managers or insurance institutions acting and appointed for such
purposes in accordance with one or more trust agreements (the "trust") which
implement and form a part of the plan. Reference to the trust fund shall
include all assets including any insurance policies held by the trustee,
investment managers, and insurance institutions in accordance with the trust and
this plan.
1.4. The Employers. As of the effective date, the plan has been adopted by
the company. With the consent of the company, the plan may be adopted in
accordance with the provisions of section 11.2 by any subsidiary of the company
or any other related company for the benefit of its eligible employees. The
company and its subsidiaries and related companies that adopt the plan are
referred to herein collectively as the "employers" and individually as an
"employer".
1.5. Company Stock. "Company stock" shall mean common stock issued by the
company (or by a corporation which is a member of the same controlled group of
corporations of which the company is a member) which is readily tradable on an
established securities market. For purposes of this section 1.5 controlled
group of corporations has the meaning given to such term by Section 1563(a) of
the Internal Revenue Code (as amended) (the "Code") (determined without regard
to subsections (a)(4) and (e)(3)(c) of Section 1563).
ARTICLE 2.
PARTICIPATION
2.1. Participation. Each employee of an employer will become a participant
in the plan as of the effective date or any January 1, April 1, July 1 or
October 1 thereafter if he meets all of the following requirements:
(a) He is a "covered employee" (as defined below);
(b) He has completed one year of eligibility service (as defined in
section 2.2);
(c) He has attained age 20 years; and
(d) He has filed a written election to participate in the plan
effective as of such date with the plan administrator on such forms, in
such manner and at such time as the plan administrator shall require, which
forms shall evidence such employee's agreement (until subsequently modified
by him in accordance with section 4.3) to have contributions made on his
behalf as provided in section 4.1 of the plan and his authorization of his
employer to reduce his compensation accordingly.
For purposes of the plan, a covered employee shall mean any employee of an
employer to whom the plan has been and continues to be extended, excluding (i)
any employee who is included in a unit of employees covered by a negotiated
bargaining agreement which does not provide for his participation in the plan,
(ii) any non-resident alien and any resident alien who has been transferred to
the U.S. on a temporary basis, unless specifically included by the plan
administrator, (iii) any leased employee (as defined in Section 414(n)(2) of the
Code), (iv) any independent consultant or contract employee (that is, a person
who is engaged, whether pursuant to a written contract or otherwise and
regardless of how designated, for the duration of a project or for a period of
time pursuant to terms or under conditions under which the person is not
entitled to the benefits under this plan available to covered employees), (v)
any independent contractor, and (vi) any person classified by an employer in its
sole discretion as a leased employee, independent consultant, contract employee
or independent contractor, regardless of whether such person is subsequently
determined by a government agency or court to be other than as classified by the
employer. Subject to the provisions of then next preceding sentence, as of the
effective date the company has extended the plan to all of its employees not
covered by negotiated bargaining agreements. During a period of employment with
the employer while a participant is making contributions to the plan as
described in section 4.1, a participant shall be deemed for all purposes of the
plan to be an "active participant." During all other periods of participation a
participant shall be considered an "inactive participant." Except as provided in
section 3.2, only active participants are entitled to share in employer
contributions or make participant contributions. Beneficiaries of deceased
participants will be treated as inactive participants for purposes of the plan
although such beneficiaries may not designate additional beneficiaries.
2.2. Eligibility Service. An employee of an employer shall be credited
with one year of eligibility service if he completes 1,000 or more hours of
service (as defined in section 2.3) in the twelve consecutive month period
commencing on the date his employment with the Fort Lock Companies (as defined
in section 11.2) commenced or if such employee does not complete 1000 hours of
service during such period, he shall be credited with one year of eligibility
service if he completes 1000 hours of service during any plan year following
such date.
2.3. Hours of Service. With respect to any employee of the Fort Lock
Companies, the term "hour of service" means:
(a) Each hour for which an employee is directly or indirectly
compensated or entitled to be compensated for his performance of duties for
any Fort Lock Company as an employee (with each overtime hour being taken
into account as if it were a normal work hour);
(b) Each hour for which an employee is directly or indirectly
compensated or entitled to be compensated by a Fort Lock Company with
respect to a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacitation (including disability), layoff,
military duty or leave of absence (as defined in section 2.4); provided,
however, that not more than 501 hours of service shall be credited to an
employee on account of any single continuous period during which he
performs no duties and an employee shall not be credited with hours of
service for any period during which the employee performs no duties (i) if
the employee's compensation for such period is in the form of payments made
or due under a plan maintained solely for the purpose of complying with
applicable worker's compensation, unemployment compensation or state
disability insurance laws, (ii) if the employee's compensation for such
period constitutes reimbursement for medical or medically related expenses
incurred by the employee, or (iii) if the compensation for such period is
paid to the employee while on maternity or paternity leave of absence (as
described in subsection 2.4(b) below) or a leave of absence under the
Family and Medical Leave Act of 1993, provided credit for such period is
granted in accordance with subsections (c) and (d) below; and
(c) Each other hour required by federal law to be counted as an "hour
of service," including each such hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by a Fort Lock
Company; provided, however, that not more than 501 hours of service shall
be credited for payments of back pay, to the extent that such back pay is
awarded for a period of time during which the employee did not or would not
have performed duties as an employee; and
(d) Each hour for which an employee is on a maternity or paternity
leave of absence in accordance with subsection 2.4(b), but only for
purposes of preventing the employee from incurring a one-year break in
service and only if the employee timely furnishes to the plan administrator
such information as it may reasonably require to establish that his absence
from work was due to a maternity or paternity leave of absence as defined
in subsection 2.4(b) and the number of days for which there was an absence;
provided, however, that not more than 501 hours of service shall be
credited by reason of a maternity or paternity leave of absence.
Compensated hours described in subsection (b) above shall be determined by
multiplying the number of scheduled work days during the applicable period for
which the employee is compensated by the number of hours in the average
scheduled work day (based on the scheduled work week for his job classification
then in effect, provided, however, that in the case of an employee without a
regular work schedule, such hours shall be computed on the basis of a 40 hour
work week). Hours described in subsection (d) next above for employees on
maternity or paternity leave of absence shall be determined in the same manner
as compensated hours described in subsection (b) next above. In determining
hours of service, hours shall be credited for the period in which such duties
were performed (regardless of when payment is due) or for which such
compensation was paid and for this purpose the rules for crediting hours of
service set forth in Section 2530.200b-2 of the Department of Labor regulations
are hereby incorporated by reference; provided that hours of service credited
under subsection (d) next above for a maternity or paternity leave of absence
shall be credited to the year in which such leave begins if such hours are
required to prevent a one-year break in service from occurring in such year, or
if not so required in that year, such hours shall be credited in the immediately
following year. In construing the foregoing provisions of this section,
ambiguities shall be resolved in favor of crediting employees with hours of
service.
2.4. Leave of Absence. A "leave of absence" as used in the plan means:
(a) A leave of absence required by law or granted by a Fort Lock
Company on account of service in military or governmental branches
described in any applicable statute granting reemployment rights to
employees who enter such branches, or any other military or governmental
branch designated by the company;
(b) A leave of absence for any period the employee is absent
from work by reason of the employee's pregnancy, the birth of the child of
the employee, the placement of a child with the employee in connection with
the adoption of the child by the employee or the caring for the child for a
period beginning immediately after such birth or placement; and
(c) A leave of absence that qualifies as a leave under the
Family and Medical Leave Act of 1993 and any other absence from active
employment with a Fort Lock Company that is approved by such Fort Lock
Company and not treated by it as a termination of employment.
Leaves of absence granted by a Fort Lock Company will be governed by rules
uniformly applied to all employees of that Fort Lock Company similarly situated.
2.5. Notice of Participation. Each employee will be notified of the date
he becomes a plan participant, and each participant and other person receiving
benefits under the plan will be furnished with a copy of a summary plan
description.
ARTICLE 3.
EMPLOYERS' CONTRIBUTIONS
3.1. Employers' Contributions. Subject to the conditions and limitations
of this Article 3, Article 5 and Article 9, for each plan year each employer
will make a contribution under the plan on behalf of participants in an amount
as is determined in accordance with section 3.2 below. Such contributions shall
be definitely determined prior to the end of the plan year to which they pertain
or as soon thereafter as practicable. In any event employer contributions shall
be determined and shall be paid to the trustee no later than the time for filing
the employer's federal income tax return, including any extensions of time
thereof, for its fiscal year coinciding with such plan year, including any
extensions of such time period. Plan participants shall be informed of the
amount of the employer's contribution each year or the manner in which such
contribution will be determined by such means of communication as the employer
may deem appropriate. In no event will the employer's contribution for any plan
year exceed the amount deductible by the employer for federal income tax
purposes for the taxable year of the employer during which such plan year ends
except to the extent that such contribution is deductible for such purposes for
the taxable year of the employer during which such plan year begins.
3.2. Calculation of Employers' Contributions. The employers' contributions
for a plan year shall equal the sum of the amounts described in subsections (a)
and (b) below:
(a) For each plan year the employers will contribute to the plan
under subparagraphs (i) and (ii) below such amounts, if any, as shall be
determined by resolution of its Board of Directors. Any such resolution
shall specify the respective amounts of the contributions under such
subparagraphs (i) and (ii) or a definite basis or formula by which the
contributions can be determined within a reasonable time after the end of
that plan year. Except for any matching contributions which are made for
each pay period during a year, the employers' contributions shall be
allocated only to the accounts of participants who remain employed by the
Fort Lock Companies at the end of such year and have completed 1000 hours
of service during such year, or who have retired after attaining age 65
years, become totally and permanently disabled or died during such year.
(i) The employers' matching contributions for a year, if any, as
determined by the company's Board of Directors, shall be allocated pro
rata to active participants' accounts as of the last day of the plan
year for which they are made (or the last day of each pay period in
such year if a resolution establishing the matching contribution
percentage amount provides for the payment of matching contributions
for each pay period) based upon each active participant's salary
deferral contributions (as defined in section 4.1 below) up to the
matching level specified in the resolution providing for such matching
contribution; and
(ii) The employers' profit sharing contributions for a year, if
any, as determined by the company's Board of Directors, shall be
allocated pro rata to active participants' and inactive participants'
accounts as of the last day of the plan year for which they are made
based upon each such participant's earnings for such year.
The employer's matching contributions described in subparagraph
3.2(a)(i) above and the employer's profit sharing contributions described in
subparagraph 3.2(a)(ii) above may be made in cash or company stock or both, as
determined by the company's Board of Directors. Notwithstanding the foregoing,
the company's contribution provided for under subparagraph (i) above for each
plan year shall be allocated pro rata to active participants' accounts as of the
last day of the plan year for which they are made based upon each active
participant's salary deferral contributions from the company which do not exceed
six percent of the participant's earnings for such year from the company (such
salary deferral contributions up to six percent of earnings are referred to
herein as the participant's "basic contributions"). The company's contribution
with respect to each active participant employed by it for a plan year shall be
an amount equal to the lesser of 100 percent of the participant's basic
contributions for the year, or that percentage of the participant's basic
contributions for the year equal to the percentage, not in excess of 100
percent, obtained by dividing an amount equal to five percent of the company's
adjusted before-tax current profits, if any, for the year by the aggregate of
the basic contributions of all participants employed by the company for the
year. The adjusted before-tax current profits of the company for a year shall
mean the before-tax current profits, if any, of the company for the year, as
determined by the company's Board of Directors without regard to any charges for
interest expense, and without regard to any dividends received from any
subsidiary of the company, but with regard to any amounts reasonably accrued and
expensed for contributions to this plan for such year. For the plan year
beginning January 1, 1999 only, the company's matching contribution shall be the
greater of the matching contribution amount determined under this Section 3.2(a)
or the matching contribution amount determined by the company prior to the
beginning of the plan year beginning January 1, 1999.
(a) For each pay period of an employer which ends during a plan year,
each employer will contribute to the plan the salary deferral
contributions, if any, elected in accordance with section 4.1 by each
active participant employed by it for that pay period.
Each employer's contributions under the plan to be made in accordance with
subsection 3.2(b) for any pay period shall be paid to the trust fund (as
described in section 1.3) implementing the plan, without interest, as soon as
practicable after the end of that pay period, but in any event within 15
business days after the end of the month in which such salary deferred
contributions are withheld from the employee's pay.
3.3. Verification of Employers' Contributions. The certificate of an
independent accountant selected by the company as to the correctness of any
amounts or calculations relating to the employers' contributions under the plan
for any plan year shall be conclusive on all persons.
3.4. Contribution Percentage Test Limitation on Employer Matching
Contributions. In addition to being subject to the deduction limitation set
forth in section 3.1 above, and the contribution limitations set forth in
sections 9.2 and 9.3, employer contributions under subsection 3.2(a) other than
under subsection 3.2(a)(ii) ("employer matching contributions"), unless subject
to the nondiscrimination requirements of Section 401(k) of the Code as a
"qualified nonelective contribution", as defined therein, shall be subject to
the nondiscrimination limitations of Section 401(m) of the Code and the
regulations thereunder which are hereby incorporated by reference. Employer
matching contributions shall be adjusted each plan year by the plan
administrator as provided below in this section, by making the least adjustment
necessary, so that either:
(a) The contribution percentage (as described below) for the group of
eligible highly compensated employees (as defined in section 13.13 below)
shall not exceed 125 percent of the contribution percentage for all other
eligible employees for the preceding plan year; or
(b) The contribution percentage for the group of eligible highly
compensated employees shall not exceed the contribution percentage for all
other eligible employees for the preceding plan year by more than two
percentage points, and the contribution percentage for eligible highly
compensated employees shall not exceed 200 percent of the contribution
percentage for all other eligible employees.
The "contribution percentage" for a specified group of eligible employees for
any plan year shall be the average of the ratios (computed separately, to the
nearest one-hundredth of one percent, for each eligible employee in such group)
of employer matching contributions for each eligible employee in such group for
such plan year to the eligible employee's compensation (as defined in Section
414(s) of the Code, as modified by Section 414(s)(2) thereof) for such plan
year. A matching contribution will be taken into account for a given plan year
only if (i) it is made on account of the employee's salary deferral
contributions for that plan year, (ii) it is allocated to the participant's
account during that plan year and (iii) it is paid to the trust by the due date
for the contribution to qualify for a tax deduction on the employer's federal
tax return. A matching contribution that does not meet the foregoing
requirements will not be tested under Section 401(m) of the Code but must
separately satisfy Section 401(a)(4) of the Code for the plan year of allocation
as if it were the only employer allocation for that plan year. Contributions
allocated to the accounts of eligible participants under section 4.1 ("salary
deferral contributions") during such plan year which meet the vesting
requirements and withdrawal restrictions of Sections 401(k)(2)(B) and (C) of the
Code may be taken into account in satisfying either subsection 3.4(a) or (b)
above, provided that the salary deferral contributions satisfy the requirements
of Section 401(k)(3) of the Code both with and without the inclusion of
contributions used to satisfy the requirements of this section. Salary deferral
contributions cannot be used to satisfy the requirements of this section if the
effect is to increase the difference between the actual contribution percentage
of highly compensated eligible employees and that of other eligible employees.
Salary deferral contributions which are used to satisfy this section cannot be
taken into account to satisfy the requirements of section 4.2. An adjustment
shall be made hereunder only if neither subsection (a) nor (b) above is
satisfied. If any adjustment for a plan year is required hereunder, the excess
for such plan year of the aggregate amount of employer matching contributions
over the maximum amount of such contributions permitted under the limitations of
this section 3.4 (determined first by reducing aggregate contributions made on
behalf of highly compensated employees on the basis of the amount of
contributions on behalf of, or by, each such employee), the nonvested portion of
such excess employer contributions shall be forfeited by the highly compensated
employee or employees, as applicable, and such amount or amounts shall be
reallocated among the remaining active participants in the plan whose
contributions were not reduced pursuant to this section 3.4 in the same manner
in which employer contributions under subsection 3.2(a) were allocated for such
plan year. The vested portion of any such excess employer matching
contributions shall be distributed to the highly compensated employee or
employees, along with any income (or loss) allocable thereto. Allocable income
will include allocable income for the plan year and may include the period
between the end of the plan year and the date of distribution of any excess
contributions. Income allocable to excess contributions is determined by
multiplying the total income attributable to employer matching contributions for
the applicable period by a fraction, the numerator of which is the amount of the
participant's excess contributions and the denominator which is the
participant's employer contribution account balances as of the date of
distribution minus income allocable to such account for the applicable period
plus any losses allocated to the account for the applicable period. The
distribution of such excess aggregate contributions will be made on the basis of
the respective portions of such amounts that are attributable to each highly
compensated employee. Such corrective distribution shall be accomplished as
soon as practicable following the determination of excess contributions, but in
any event by the end of the plan year following the plan year with respect to
which such contributions were made. If the company maintains two or more plans
that are treated as a single plan for purposes of Sections 401(a)(4) or 410(b)
of the Code, all employer matching contributions are to be treated as made under
the same plan for purposes of Sections 401(a)(4), 410(b) and 401(m) of the Code.
The applicable restrictions on the multiple use of the alternative limitation
under subsection 3.4(b) above and under subsection 4.2(b) shall apply in
accordance with the regulations under Section 401(m)(9)(A) of the Code to
appropriately limit the contribution percentage for highly compensated employees
under this section and the actual deferral percentage for highly compensated
employees under section 4.2. In applying such restrictions, the contribution
percentage and actual deferral percentage otherwise applicable for the group of
highly compensated employees shall be reduced first by reducing the actual
deferral percentage as necessary to the highest matching level for the year and
then by ratably reducing the contribution percentage and actual deferral
percentage until the resulting contribution percentage and actual deferral
percentage are in compliance with such restrictions.
ARTICLE 4.
SALARY DEFERRAL CONTRIBUTIONS
4.1. Salary Deferral Contributions. Each active participant may elect to
defer receipt of his compensation in an amount equal to not less than one
percent (1%) nor more than fifteen percent (15%) (or such lower maximum
percentage as determined by the plan administrator for any plan year) of his
earnings for such plan year, in one percent increments, and his employer shall,
in accordance with subsection 3.2(b), contribute the amount of such salary
deferral to the plan as a salary deferral contribution; provided, that a
participant's aggregate salary deferral contributions to this plan may not
exceed $10,000 (or such other maximum amount as may be permitted from time to
time by the Secretary of Treasury or his delegate or by law) or such lesser
amount as may be determined by the plan administrator in order to comply with
section 4.2 below, in any calendar year. The salary deferral contributions made
on behalf of a participant and the earnings thereon shall be fully vested and
nonforfeitable at all times. Each participant shall initially elect his rate of
salary deferral pursuant to the participant's written election described in
subsection 2.1(d) which election shall be effective as of the first day of any
calendar quarter which commences at least 30 days following receipt by the plan
administrator of such election.
4.2. Actual Deferral Percentage Test Limitation on Salary Deferral
Contributions. In addition to being subject to the contribution limitations of
sections 9.2 and 9.3, salary deferral contributions which may be made by a
participant for each plan year with respect to the participant's earnings
payable during such year (or payable with respect to such year and within two
and one half months after the end of such year) and which are allocated to the
participant's accounts as of a date within such plan year, shall be subject to
the nondiscrimination limitations of Section 401(k) of the Code and the
regulations thereunder which are hereby incorporated by reference. For this
purpose, such salary deferral contributions elected under section 4.1 shall be
adjusted each plan year by the plan administrator as provided below in this
section, by making the least adjustment necessary, so that either:
(a) The actual deferral percentage (as described below) for the group
of eligible highly compensated employees (as described below) for a plan
year shall not exceed 125 percent of the actual deferral percentage for all
other eligible employees (as described below) for the preceding plan year;
or
(b) The actual deferral percentage for the group of highly
compensated employees for a plan year shall not exceed the actual deferral
percentage for all other eligible employees for the preceding plan year by
more than two percentage points, and the actual deferral percentage for
highly eligible compensated employees shall not exceed 200 percent of the
actual deferral percentage for all other eligible employees.
The "actual deferral percentage" for a specified group of eligible employees for
any plan year shall be the average of the ratios (computed separately for each
eligible employee in such group) of the salary deferral contributions (and any
other employer contributions which meet the withdrawal restrictions and vesting
requirements of Sections 401(k)(2)(B) and (C) of the Code) for each eligible
employee in such group for such plan year to the employee's compensation (as
defined in Section 414(s) of the Code) earned while eligible to participate in
the plan for such plan year. An employee shall be considered an "eligible
highly compensated employee" for any plan year in which he is a "highly
compensated employee" within the meaning of Section 414(q) of the Code, and an
employee shall be considered an "eligible employee" for any plan year in which
he meets the requirements of subsections 2.1(a), (b) and (c). An adjustment
shall be made hereunder only if neither subsection (a) nor (b) above is
satisfied. If any adjustment is required hereunder the maximum amount of salary
deferral contributions that may be elected by each eligible highly compensated
participant shall be reduced on the basis of the amount of contributions on
behalf of, or by, each such employee which will cause either subsection (a) or
(b) above to be satisfied. The amount by which a participant's salary deferral
contributions are reduced hereunder shall be paid to such participant (along
with any income allocable thereto) as soon as practicable following such
determination, but in any event by the end of following plan year with respect
to which such salary deferral contributions were made. No matching employers'
contribution allocable with respect to a participant's salary deferral
contributions shall be allocated to the participant with respect to salary
deferral contributions which are reduced hereunder and paid to the participant,
and any such employers' matching contributions which have been made to the plan
shall instead be used to reduce employer contributions. For purposes of
determining who is an eligible highly compensated employee for any given
determination period, the company may elect to make the calendar year
calculation election within the meaning of Treas. Reg. Section 1.414(q)-IT Q&A
14(a)(3)(b) by giving notice to the plan administrator; provided, however, such
election must apply to all plans, entities and arrangements of the company and
members included in its controlled group for purposes of determining who is a
highly compensated employee under Section 414(q) of the Code. In applying the
provisions of this section, if this plan is aggregated with another plan for
purposes of complying with the nondiscrimination and coverage requirements of
Sections 401(a)(4) or 410(b) of the Code, all elective contributions that are
made under all such plans which are aggregated shall be treated as made under a
single plan and the aggregated plans must satisfy Sections 401(a)(4) and 410(b)
of the Code as if they were a single plan for the purposes of such Sections.
The amount of excess contributions to be recharacterized under section 3.4 or to
be distributed under this section 4.2 shall be reduced by the excess deferrals
distributed under section 4.1, and a recipient who is to be repaid any amount
hereunder who participates in more than one plan may select the plan or plans
from which such amounts are to be repaid.
4.3. Variation, Discontinuance and Resumption of Contributions. Effective
as of the first day of any calendar quarter which commences at least 30 days
following receipt by the plan administrator of an election form satisfactory to
the plan administrator for this purpose, a participant eligible to make salary
deferral contributions may revise the rate that such contributions are made by
payroll deduction. A participant may elect to discontinue making all such
contributions as of any regularly scheduled payday by filing an election form
with the plan administrator at least ten regularly scheduled work days prior to
such payday. A participant who has discontinued making contributions hereunder
may resume making such contributions by filing an election form with the plan
administrator at least 30 days prior to the first day of any calendar quarter as
of which date such contributions shall resume; provided that a participant may
not resume making salary deferral contributions for one year following the date
of discontinuance of such contributions. Any elections made in accordance with
this section shall be made on a form provided by the plan administrator for such
purposes and shall be signed by the participant. Notwithstanding any other
provisions hereof, participants who are absent from employment due to service
which is protected under the Uniformed Services Employment and Reemployment
Rights Act and who are reemployed may make salary reduction contributions as
permitted under such act and the employers shall make contributions on behalf of
such participants in accordance with such act.
4.4. Earnings. For purposes of the plan, a participant's "earnings" means
his total compensation for services rendered to the employers as a covered
employee not in excess of $160,000 (or such other maximum amount as may be
permitted pursuant to Section 401(a)(17) of the Code or from time to time by the
Secretary of the Treasury or his delegate or by law) for a plan year, including
overtime and bonuses but excluding:
(a) Any noncash compensation and any amounts contributed by the
employers for the participant's benefit to, or paid to the participant
under, this plan or any other profit sharing, pension, stock bonus or other
retirement or benefit plan maintained by the employers; provided that any
salary reduction amounts elected by the participant and credited on his
behalf to a cafeteria plan (as defined in Section 125(c) of the Code) or a
qualified cash or deferred arrangement (as defined in Section 401(k)(2) of
the Code) shall be included in his earnings;
(b) Any reimbursements for travel expenses, relocation allowances,
educational assistance allowances or other special allowances and awards;
(c) Any income realized for federal income tax purposes as a result
of (i) group life insurance, (ii) the grant or exercise of an option or
options to acquire shares of stock of any Fort Lock Company, the receipt of
a cash appreciation payment in lieu of the exercise of such an option or
options, the disposition of shares acquired on exercise of such an option,
or (iii) the transfer of restricted shares of stock or restricted property
of a Fort Lock Company, or the removal of any such restrictions;
(d) Any compensation received while on a leave of absence from active
work or following termination of employment, and any severance pay or
unused vacation pay paid as a result of the participant's termination of
employment; and
(e) Any compensation paid or payable to the participant, or to any
governmental body or agency on account of the participant, under the terms
of any state, federal or foreign law requiring the payment of such
compensation because of the participant's voluntary or involuntary
termination of employment with any Fort Lock Company.
4.5. Rollover Contributions. The plan administrator may permit any covered
employee to make a qualifying rollover contribution to the plan in accordance
with uniform and nondiscriminatory rules. A "qualifying rollover contribution"
means the contribution to the plan by an employee of (i) a portion or all of an
eligible rollover distribution (as defined in Section 402(c)(4) of the Code),
excluding any employee contributions, or (ii) a rollover contribution (as
defined in Section 408(d)(3) of the Code). A qualifying rollover contribution
to be made by a covered employee must be made to the trust, in care of the plan
administrator, by not later than the sixtieth day following the day upon which
the employee received the rollover distribution or rollover contribution with
respect to which the qualifying rollover contribution is to be made. The plan
administrator shall refuse to permit the contribution to the plan pursuant to
subsection (a) next above of property other than money (and shall require
instead that the property be sold and the proceeds contributed). If an employee
makes a qualifying rollover contribution on a date other than an accounting date
(as defined in section 5.2), a segregated account shall be established on such
date on his behalf until the next accounting date under the plan to reflect the
income, losses, appreciation and depreciation attributable thereto until such
accounting date. A participant's qualifying rollover contribution (as adjusted
to reflect the investment experience of a segregated account, if initially
credited to a segregated account) shall be credited to the participant's
rollover account (as defined in subsection 5.1(c)) as of the accounting date
coincident with or next following the date the contribution is made.
4.6. Transferred Benefits. If a covered employee had previously
participated in any other qualified pension, profit sharing, stock bonus or
other retirement or employee benefit plan and such other plan permits the
transfer to this plan of the vested portion of the covered employee's benefits
under such other plan, and if so directed by the plan administrator in its
discretion, the trustee shall accept a transfer of cash to this plan equal to
the vested benefits of such employee under such other plan which are being
transferred to this plan. Similarly, if a covered employee becomes a
participant in any other qualified pension, profit sharing, stock bonus or other
retirement plan maintained by the employers or by another member of the
controlled group of corporations containing the employers, and such other plan
permits the transfer to it by this plan of the vested portion of the covered
employee's benefits hereunder, the plan administrator in its discretion may
direct a transfer to such other plan of an amount equal to the vested benefits
of such employee under this plan subject to the applicable requirements of
Section 411(d)(6) of the Code. No amounts shall be transferred to this plan
from any other plan if the accrued benefit payable to the employee under such
other plan must be provided in the form of a qualified joint and survivor
annuity or if a qualified pre-retirement survivor annuity must be provided to
the surviving spouse of such employee with respect to such accrued benefit. If
the date on which such transfer is received by the trustee is not an accounting
date, a segregated account shall be established on such date on behalf of the
covered employee until the next accounting date under the plan to reflect the
income, losses, appreciation and depreciation attributable thereto until such
accounting date. The participants transferred benefits (as adjusted to reflect
the investment experience of a segregated account, if initially credited to a
segregated account) shall be credited to his rollover account as of the
accounting date coincident with or next following the date the transfer is made.
4.7. Restricted Participation with Respect to Rollover Contributions and
Transferred Benefits. For purposes of the plan, a participant with respect to
whom a qualifying rollover contribution or a transfer of benefits is made in
accordance with section 4.5 or 4.6, respectively, shall not be eligible to make
salary deferral contributions or have employer contributions made on his behalf
before becoming a participant for all purposes of the plan in accordance with
section 2.1.
ARTICLE 5.
PLAN ACCOUNTING AND INVESTMENT FUNDS
5.1. Participant Account Balances. The plan administrator will establish
and maintain the following separate accounts with respect to plan participants:
(a) Salary Deferral Contribution Account. A "salary deferral
contribution account" shall be maintained on behalf of each participant
which will reflect the amount of salary deferral contributions made on the
participant's behalf and the income, losses, expenses, appreciation and
depreciation attributable thereto.
(b) Employer Contribution Account. An "employer contribution
account" shall be maintained on behalf of each participant which will
reflect the portion of the employer contributions (exclusive of salary
deferral contributions) and any remainders which are allocated for his
benefit and the income, losses, expenses, appreciation and depreciation
attributable thereto.
(c) Rollover Account. A "rollover account" will be maintained in the
name of each participant with respect to whom a rollover contribution or
transfer of benefits (as described in sections 4.5 and 4.6) is made which
will reflect the portions of his rollover contributions and transferred
benefits from another plan, and the income, losses, expenses, appreciation
and depreciation attributable thereto.
(d) Voluntary Contribution Account. A "voluntary contribution
account" shall be maintained for each participant to record the amount of
nondeductible contributions made pursuant to any prior plan and the income,
losses, expenses, appreciation and depreciation attributable thereto.
The maintenance of separate account balances shall not require physical
segregation of plan assets with respect to each account balance. The accounts
maintained hereunder represent the participants' interests in the plan and trust
and are intended as bookkeeping account records to assist the plan administrator
and the trustee in the administration of this plan. The plan administrator may
maintain such other accounts in the name of participants as it considers
desirable. Any reference to a participant's "accounts" or "account balances"
shall refer to all of the accounts maintained in the participant's name under
the plan.
5.2. Accounting Dates. An "accounting date" is each March 31, June 30,
September 30, and December 31, or such other dates not less frequently than
quarterly selected by the plan administrator (including daily dates); the date
of any termination or partial termination of the plan, the date of any merger or
consolidation of this plan with any other plan, and any other date selected by
the plan administrator or the trustee as an "interim accounting date" as of
which all account balances shall be adjusted in accordance with section 5.7.
The period commencing immediately after an accounting date and ending on the
next accounting date is sometimes referred to herein as an "accounting period".
5.3. Date of Crediting Contributions and Remainders. All contributions
made for any pay period ending during an accounting period will be considered to
have been made in cash and will be credited to the proper participants' accounts
on the accounting date which ends that accounting period, regardless of when
such contributions are actually paid to the trust fund; provided that if the
trustee or an investment manager with respect to an investment fund maintains
participants' accounts and credits contributions received more frequently than
as of the last day of each accounting period, contributions invested in that
investment fund will be considered made and will be credited as provided in
accordance with the accounting rules in effect with respect to that investment
fund. All contributions made in accordance with subsection 3.2(a) for an entire
plan year will be considered to have been made in cash and will be credited to
the proper participants' accounts as of the last day of that year, but shall not
be considered invested until the end of the accounting period during which paid
to the trust fund. Remainders are allocated as a part of employer contributions
as provided in section 6.3.
5.4. Investment Funds. From time to time the plan administrator may cause
the trustee or an investment manager to establish one or more investment funds
for the investment and reinvestment of plan assets. Investment funds may
include a fund consisting of "employer securities" issued by the company
(consisting of company stock, as defined in Section 1.5 above). The continued
availability of any investment fund is necessarily conditioned upon the terms
and conditions of investment management agreements and other investment
arrangements. While the plan administrator may arrange with the trustee and
investment managers for the establishment of investment funds, the continued
availability of these funds cannot be assured, nor is it possible to assure that
the arrangements or the investment funds managed by a particular investment
manager or by the trustee will continue to be available on the same or similar
terms. Participants will be informed from time to time of the availability of
investment funds as they are established or superseded. Any investment fund may
be partially or entirely invested in any common, commingled or collective trust
fund, pooled investment fund or mutual fund which is invested in property of the
kind specified for that investment fund.
5.5. Investment Elections. Except where plan administration requires a
shorter or longer period (such as when changes in plan trustees, custodians,
investment managers, etc., occur), as of each accounting date each participant
may elect, by giving written notice or authorized telephonic voice response, or
other electronic means authorized by the plan administrator (e.g. Internet) to
the plan administrator at least 30 days (or such other period as the plan
administrator requires) in advance, in accordance with uniform rules established
by the plan administrator to have his account balances as of that date (after
all adjustments as of that date have been made) and future contributions made by
him or on his behalf (prior to any subsequent election he may make) invested in
accordance with his election entirely in one of the investment funds or
partially in each of two or more of the investment funds. During any period for
which a participant has not made the above election, he will be considered to
have elected to have his account balances or his future contributions, or both,
as the case may be, invested entirely in a fund as the administrator may deem
appropriate. The plan administrator shall from time to time notify each trustee
or insurance company with custody of an investment fund of the aggregate amounts
to be invested in each investment fund in accordance with participants'
elections. All investment elections shall be in writing on forms, or
communicated through authorized telephonic voice response or other electronic
means (e.g. Internet), as prescribed by the plan administrator. Completion of
any investment election by a participant, whether in writing, or communicated by
telephonic voice response or other electronic means (e.g., Internet), shall
constitute an agreement by such participant to assume responsibility for the
risks of investment of the participant's accounts in accordance with such
investment election, it being expressly understood that all of the investment
funds involve some measure of investment risk including the risk of diminution
or loss of the principal amount of any investment. To the maximum extent
permissible under applicable law, all fiduciary responsibility with respect to
the allocation of a participant's accounts between the various funds shall be
considered to be delegated to the participant who directs the investment of his
or her contributions and accounts.
5.6. Adjustment of Participants' Accounts. As of each accounting date, the
plan administrator shall appropriately adjust the account balances of plan
participants to reflect payments and withdrawals of benefits, adjustments in the
market values of the investment funds and contributions made on behalf of
participants in accordance with the accounting rules established with respect to
each investment fund on a uniform and nondiscriminatory basis. In lieu of
making certain adjustments as of each accounting date, certain adjustments may
be made on a more frequent basis or on a difference date in accordance with the
accounting rules of the investment funds that credit deposits and withdrawals
and increases and decreases in their net worth more frequently or on a different
date. It is initially anticipated that the investment funds will account for
investments therein, distributions therefrom and gains and losses thereon on a
daily basis. Until applied to reduce employer contributions in accordance with
section 6.3, forfeitures will be treated the same as participants' employer
contribution accounts and will be adjusted as provided above.
5.7. Statement of Accounts. As soon as practicable after the last day of
each plan year, and at such other times as the plan administrator considers
desirable, each participant will be furnished with a statement reflecting the
condition of his accounts as of that date. No participant, except a member of
the plan administrative committee, shall have the right to inspect the records
reflecting the accounts of any other participant.
5.8. Investments in Employer Securities. If an employer securities
investment fund is established as provided in section 5.5 above, participants
may elect to have a portion or all of their accounts invested by the trustee in
such fund. For this purpose it is intended that the plan be considered an
"eligible individual account plan" which explicitly provides for the acquisition
and holding of "qualifying employer securities" (as those terms are defined in
Sections 407(d)(3) and 407(d)(5) of the Employee Retirement Income Security Act
of 1974, as amended) and that the trustee may invest up to 100 percent of the
trust fund held by it in employer securities, in accordance with the provision
of the plan. Employer securities may be acquired by the trustee though
purchases on the open market, private purchases, purchases from the employers
(including purchases from the company of treasury shares or authorized but
unissued shares), contributions in kind by the employers, or otherwise. Except
as respects employer securities purchased on the open market, no purchase of
company shares shall be made at a price in excess of the closing price on the
New York Stock Exchange or, if not traded on the New York Stock Exchange, any
other applicable exchange, for employer securities on the business day on which
employer securities were last traded next preceding the date of purchase.
5.9. Allocation of Employer Securities. Employer Securities purchased on
behalf of participants shall be credited to their accounts, and their accounts
shall be charged therefor, on the basis of the actual purchase price paid for
such securities on behalf of respective participants. In applying the
provisions of the next preceding sentence, any employer securities which have
been contributed by the employers as a part of the employers' contribution shall
be deemed to have been purchased by the trustee on behalf of participants for an
amount equal to the fair market value of such securities when they were
contributed.
5.10. Additional Accounting Rules For Employer Securities.. The
following additional accounting rules apply regarding employer securities:
(a) Uncredited cash dividends or interest attributable to employer
securities previously allocated to a participant's accounts shall be
credited to the participant's accounts.
(b) Uncredited whole and fractional employer securities resulting
from stock dividends or split-ups attributable to employer securities
previously allocated to a participant's accounts shall be credited to such
accounts.
(c) If rights or warrants are issued with respect to any employer
securities held by the trustee, such rights or warrants shall be
appropriately reflected in participants' accounts in accordance with rules
established by the plan administrator and uniformly applied until sold or
exercised by the trustee and the proceeds appropriately reflected as
directed by the plan administrator.
5.11. Voting of Employer Securities. The plan administrator shall
furnish to each participant who has employer securities credited to the
participant's accounts notice of the date and purpose of each meeting of the
stockholders of the company at which employer securities are entitled to be
voted. The plan administrator shall request from each such participant
instructions as to the voting at that meeting of employer securities credited to
the participant's accounts. If the participant furnishes such instructions
within the time specified in the notification given to the participant, the
trustee shall vote such employer securities in accordance with the participant's
instructions. All employer securities credited to accounts as to which the
trustee does not receive voting instructions as specified above and all
unallocated employer securities held by the trustee shall be voted by the plan
administrator. Similarly, the plan administrator shall furnish to each
participant who has employer securities credited to the participant's accounts
notice of any tender offer for, or a request or invitation for tenders of,
employer securities made to the trustee. The plan administrator shall request
from each such participant instructions as to the tendering of employer
securities credited to the participant's accounts and for this purpose the
participants shall be provided with a reasonable period of time in which they
may consider any such tender offer for, or request or invitation for tenders of
employer securities. The trustee shall tender the employer securities as to
which the trustee has received instructions to tender from participants within
the time specified. Employer securities credited to accounts as to which the
trustee has not received instructions from participants shall not be tendered.
As to all unallocated employer securities held by the trustee, the plan
administrator shall instruct the trustee as to the number (if any) of employer
securities to be tendered.
ARTICLE 6.
DISTRIBUTION OF ACCOUNT BALANCES
6.1. Retirement, Death or Disability. If a participant's employment with
the Fort Lock Companies is terminated by reason of his death, retirement after
he has attained 65 years of age, or permanent disability, the balance in his
accounts as at the accounting date coincident with or next following his
termination date (after all adjustments required under the plan as of that date
have been made, but subject to any further adjustments required under the plan
prior to complete distribution of the participant's accounts) shall be fully
vested and nonforfeitable and shall be distributable to the participant or, in
the event of the participant's death, to his beneficiary, in accordance with
section 6.4. "Permanent disability" means a disability caused by bodily injury,
disease, or mental condition which prevents the participant from engaging in his
usual and customary employment with the employers and in the opinion of a
licensed physician selected by the plan administrator, is likely to persist for
the balance of the participant's life. A participant shall have a fully vested
and nonforfeitable interest in all his accounts on the date he attains age 65.
6.2. Resignation or Dismissal. If a participant resigns or is dismissed
from the employ of the Fort Lock Companies before his retirement at or after age
65, permanent disability, or death, the balance in his salary deferral
contribution account, rollover account and voluntary contribution account as of
the accounting date coincident with or immediately preceding his termination
date (after all adjustments required under the plan as of that date have been
made, but subject to any further adjustments required under the plan prior to
complete distribution of the participant's accounts), along with any
contributions made by him previously but not credited to an appropriate account,
shall be fully vested and nonforfeitable and shall be distributed to or for the
benefit of the participant in accordance with section 6.4. The portion of a
participant's employer contribution account which is vested and nonforfeitable
in accordance with the vesting schedule set forth below based upon the balance
of such account as of the accounting date coincident with or immediately
preceding the participant's employment termination date (after adjustments
required under the plan as of that date have been made) will be distributable to
or for the benefit of the participant in accordance with section 6.4. The
employer contribution account balance of a participant to whom this section
applies will be reduced to the vested percentage thereof determined in
accordance with the following vesting schedule:
Number of Years of Portion of Account You
Vesting Service Earned Are Entitled To
----------------------------- --------------------------
Less than 1 year 0%
More than 1 year, less than 2 20%
More than 2 years, less than 3 40%
More than 3 years, less than 4 60%
More than 4 years, less than 5 80%
More than 5 years 100%
The employer contribution account balance of a participant who resigns or
is dismissed before completing five or more years of vesting service will become
a remainder pursuant to section 6.3. For purposes of this Article, an employee
shall be credited with a "year of vesting service" for every plan year in which
he has completed 1000 or more hours of service (as defined in section 2.3) with
the Fort Lock Companies.
6.3. Remainders. If a participant resigns or is dismissed from employment
with all of the Fort Lock Companies before the participant is fully vested in
his or her employer contributions account under the plan, the nonvested portion
of the participant's employer contribution account shall be a "remainder". A
remainder shall be treated the same as other participants' accounts (subject to
adjustment under section 5.6 above) until the participant with respect to whom
the remainder arose incurs five consecutive one year breaks in service, at which
time the remainder shall be used to reduce the employer contribution. A "one
year break in service" shall occur on the last day of any plan year in which a
terminated employee or participant does not complete more than 500 hours of
service. If the participant with respect to whom the remainder arose is
reemployed by the Fort Lock companies before the participant incurs five
consecutive one year breaks in service, the remainder shall remain credited to
the participant's employer contribution accounts subject to the provisions
hereof. If such participant subsequently terminates from the employ of the Fort
Lock Companies and the participant is not then fully vested in the participant's
employer contribution account, the amount to be distributed from such account
will be determined in accordance with the following:
(a) First, the amount of the distribution, if any, previously
received by the participant from the participant's employer contributions
account because of the participant's prior resignation or dismissal shall
be added to the balance in such account.
(b) Next, the amount determined under subsection (a) above shall be
multiplied by the vesting percentage applicable to the participant at the
participant's subsequent termination of employment.
(c) Finally, the amount determined under subsection (b) above shall
be reduced by the amount of the distribution previously received by the
participant from the participant's employer contributions account because
of the participant's prior termination of employment.
The remaining portion of the participant's employer contributions account will
be treated as a remainder, subject to the provisions of this section.
6.4. Method of Benefit Payment. A participant's account balances which are
distributable under section 6.1 or 6.2 shall be paid to or for the benefit of
the participant or his beneficiary by (i) payment in a lump sum, (ii) payment in
a series of substantially equal quarterly or annual installments over a period
of time not exceeding the lesser of 30 years or the life expectancy of the
participant (or, if the participant has designated a beneficiary who is an
individual, the joint life and last survivor expectancy of the participant and
his designated beneficiary, as determined by the plan administrator in
accordance with actuarial tables adopted by it for this purpose), (iii) for
participants who were eligible to participate in the plan on or before January
31, 1999 and who had an account balance on January 31, 1999 (as listed in
Supplement A to this plan) a deferred annuity in accordance with the rules of
the plan as in effect immediately prior to the effective date, which rules are
hereby incorporated by reference, or (iv) a combination of (i), (ii), or (iii)
above. Payment may be made in cash or property, or partly in each, provided
that property is distributed at its fair market value as of the date of
distribution as determined by the trustees. Notwithstanding the foregoing, if
distribution of a participant's accounts has not commenced prior to his death
the participant's accounts shall be distributed within five years of the date of
his death or as follows:
(a) If the participant's accounts are payable to or for the benefit
of a designated beneficiary who is an individual and such accounts are
distributed over a period beginning not later than one year after the date
of the participant's death (or such later date as the Secretary of the
Treasury may by regulations prescribe), then such accounts may be
distributed to such designated beneficiary over a period not exceeding the
lesser of 30 years or the beneficiary's life expectancy.
(b) If the participant's designated beneficiary is his surviving
spouse, distribution of the participant's accounts to such surviving spouse
need not begin until the date the participant would have attained age 70
1/2 years. If the surviving spouse dies before distributions to such
spouse begin, distribution of the participant's accounts pursuant to this
section 6.4 shall be made as if the surviving spouse were the employee.
If distribution of a participant's accounts has commenced prior to his death,
the remaining vested interest in his accounts will be distributed at least as
rapidly as under the method of distribution being used as of the date of the
participant's death.
6.5. Selection of Time and Manner of Benefit Payment. A participant may
elect the method of distribution of his benefits and, if he so desires, may
direct how his benefits are to be paid to his beneficiary. The plan
administrator shall select the method of distributing a participant's benefits
to him or his beneficiary if the participant has not filed a direction with the
plan administrator. Unless the participant elects to defer payment, payment of
a participant's benefits normally will be made within a reasonable period of
time after a participant's termination of employment, but not later than 60 days
after the end of the plan year in which occurs the later of the participant's
termination of employment or his attainment of age 65 years; provided that
payment of each participant's account balances must commence no later than April
1 of the calendar year following the calendar year in which he attains age 70
1/2 years or, if later, for a participant who is not a 5-percent owner, the year
in which the participant retires (the "required beginning date"). All
distributions of benefits hereunder shall satisfy the minimum distribution
requirements of Section 401(a)(9) of the Code and the regulations promulgated
thereunder, which provisions are hereby incorporated by reference. If a
participant's vested account balances exceeds $5,000, no amount shall be
distributable to the participant prior to the date he attains age 65 years,
without his consent. The plan administrator may distribute a participant's
account balance in a lump sum without the participant's consent before the
commencement of the distribution of benefits if either the vested portion of the
participant's accounts is not greater than $5,000 or distribution commences
after the participant attains age 65 years. If written consent of the
participant to a distribution is required, such consent must be filed with the
plan administrator not more than 90 days before the date of such distribution.
6.6. Designated Beneficiaries. A participant may from time to time
designate a beneficiary or beneficiaries to whom the participant's benefits will
be distributed in the event of the participant's death prior to complete payment
of his benefits under the plan. A participant may designate contingent or
successive beneficiaries and may name individuals, legal persons or entities,
trusts, estates, trustees or other legal representatives as beneficiaries.
Notwithstanding the foregoing or any beneficiary designation filed by a
participant, if a participant is married at the date of his death, the
participant's surviving spouse will be his designated beneficiary for all
purposes of the plan unless the surviving spouse consents in writing to the
participant's designation of another beneficiary. Beneficiary designations must
be completed and filed with the plan administrator during the participant's
lifetime. A beneficiary designation properly completed and filed will cancel
all such designations filed earlier. The consent of a surviving spouse to the
participant's designation of another beneficiary must be in writing, must
acknowledge the effect of such designation, and must be witnessed by a plan
representative or a notary public. In addition, such designation of another
beneficiary may not be changed without further spousal consent unless the
consent of the spouse expressly permits further designations without any
requirement of further consent.
6.7. Payment to Substitute Beneficiaries. If benefits remain to be paid
with respect to a plan participant at a time when the plan administrator is
unable to locate the participant, or his beneficiary or beneficiaries designated
in accordance with section 6.6, or following the death of the participant and
such beneficiaries, and if the participant failed to designate one or more other
beneficiaries in the manner described in section 6.6, then the plan
administrator may cause the benefits for such participant to be distributed or
paid to the person or persons who can be located and agree to accept such
amounts within the applicable priority classification set forth below.
Participants and designated beneficiaries are required to maintain a current
post office address on file with the plan administrator by notifying the plan
administrator of such address in care of the employer. A substitute beneficiary
will not be determined under this section with respect to a missing participant
or missing designated beneficiary unless the participant or designated
beneficiaries, as the case may be, have failed to claim the participant's
account balances or notify the plan administrator of their whereabouts within
three years after the plan administrator notifies such participant or
beneficiaries at their last post office addresses filed with the plan
administrator. Such notice shall describe the amounts to which the participant
or the beneficiaries are entitled and shall describe the substitution procedures
of this section. In disposing of a participant's benefits in accordance with
this section, the plan administrator shall cause the participant's benefits to
be distributed in accordance with the following priority classifications:
(a) First Priority. A participant's benefits, in the case of a
missing plan participant, will first be distributed to the participant's
designated beneficiary or beneficiaries.
(b) Second Priority. A participant's benefits will next be
distributed or paid to the participant's spouse if the whereabouts of such
spouse is known.
(c) Third Priority. The participant's benefits will next be applied
by the payment of the participant's account balances to one or more of the
participant's relatives by blood, marriage or adoption in such proportions
as the plan administrator decides.
(d) Fourth Priority. After unsuccessful attempts have been made by
the plan administrator to locate persons described in the priority
categories set forth above, the benefits of the participant or of any
beneficiary will be disposed of in any manner permitted by law which the
plan administrator considers to be fair and equitable.
Notwithstanding the foregoing, if a participant's benefits cannot be paid as
provided above they shall be forfeited by allocating such benefits to the other
participants, but such benefits nevertheless will be reinstated if a claim is
made by the participant or beneficiary.
6.8. Payment With Respect to Incapacitated Participants or Beneficiaries.
If any person entitled to benefits under the plan is under a legal disability or
in the plan administrator's opinion is incapacitated in any way so as to be
unable to manage his financial affairs, the plan administrator may direct the
payment of such benefits to such person's legal representative or to a relative
or friend of such person for such person's benefit, or the plan administrator
may direct the application of such benefits to the benefit of such person.
Payments made in accordance with this section shall discharge all liabilities
for such payments under the plan.
6.9. Final Court Orders. Notwithstanding the other provisions of this
Article 6, if the trustee is required by a final court order to distribute the
benefits of a participant other than in the manner required under the plan, then
the trustee shall cause the participant's benefits to be distributed in a manner
consistent with such final court order. The trustee shall not be required to
comply with the requirements of a final court order in an action in which the
trustee, the plan administrator, the plan or the trust was not a party, except
to the extent such order is a qualified domestic relations order (as defined in
Section 414(p) of the Code).
6.10. Rollover Distributions. Notwithstanding any provision of the
plan to the contrary that would otherwise limit a distributee's election under
this section 6.10, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. For purposes hereof:
(a) An "eligible rollover distribution" is any distribution of all or
any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include (i) any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annual) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more, (ii) any distribution to the extent
such distribution is required under Section 401(a)(9) of the Internal
Revenue Code, and (iii) 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).
(b) An "eligible retirement plan" is an individual retirement account
described in Section 408(a) of the Internal Revenue Code, an individual
retirement annuity described in Section 408(b) of the Internal Revenue
Code, an annuity plan described in Section 403(a) of the Internal Revenue
Code, or a qualified trust described in Section 401(a) of the Internal
Revenue 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.
(c) A "distributee" 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 Internal Revenue Code, are distributees with regard
to the interest of the spouse or former spouse.
(d) A "direct rollover" is a payment by the plan to the eligible
retirement plan specified by the distributee.
ARTICLE 7.
WITHDRAWALS DURING EMPLOYMENT
7.1. Withdrawal From Salary Deferral Contribution Account. A participant
other than a former employee or beneficiary, who is experiencing a financial
hardship may request a withdrawal of all or any portion of the sum of the
contributions credited to such participant's salary deferral contribution
account (excluding earnings earned thereon during any plan year ending after
June 30, 1989), subject to the following:
(a) Each request for financial hardship must describe the hardship
for which the withdrawal is requested.
(b) A withdrawal shall be considered on account of financial hardship
if it is necessary in light of the participant's immediate and heavy
financial need as described in (i) below and it is necessary to satisfy
such financial need, as described in (ii) below.
(i) A withdrawal will be on account of immediate and heavy
financial need only if it is on account of (A) unreimbursed medical
expenses incurred by the participant or the participant's spouse or
dependents; (B) purchase (excluding mortgage payments) of a principal
residence for the participant; (C) post-secondary education tuition
for the next 12-months of post-secondary education for the employee,
the employee's spouse, children or dependents; (D) the need to prevent
the eviction of the participant from the participant's principal
residence or the foreclosure on the mortgage of the participant's
principal residence; or (E) such other purpose deemed by the
Commissioner of the Internal Revenue Service to constitute immediate
and heavy financial need.
(ii) A withdrawal will be necessary to satisfy the financial need
described in (i) above only if (A) the withdrawal does not exceed the
amount necessary to meet such financial needs; and (B) the participant
has obtained all distributions, other than hardship withdrawals, and
all nontaxable loans currently available under all plans maintained by
the Fort Lock Companies.
(c) In the event that the plan administrator grants a participant's
request for a hardship withdrawal, such participant shall not be permitted
to make salary deferral contributions under the plan until the first day of
the first plan year quarter coincident with or next following the date
which is twelve months from the date of withdrawal.
(d) Notwithstanding the provisions of section 4.1, the aggregate
salary reduction contributions to the plan and to any other plan maintained
by a Fort Lock Company for the calendar year immediately following the
calendar year in which the participant receives the hardship withdrawal
shall not exceed the excess of (i) the maximum amount specified in section
4.1 for such year over (ii) the amount of such participant's salary
reduction contributions to this plan and to any other plan maintained by
the Fort Lock Companies in the calendar year in which the participant
received the hardship withdrawal.
All withdrawals under this section shall be made as of an accounting date. A
request for a withdrawal must be filed with the plan administrator on a form
provided by the plan administrator at least 30 days in advance (or by such other
date as the plan administrator may require). The minimum withdrawal shall be
the lesser of $500 or the participant's aggregate account balances from which
the withdrawal may be made. The plan administrator may establish uniform and
nondiscriminatory rules or guidelines for responding to such requests as it
considers appropriate. Withdrawals under this section 7.1 may not be made more
frequently than once in any twelve consecutive month period.
7.2. Loans to Participants. While it is the primary purpose of the plan to
provide funds for participants when they leave the employer, it is recognized
under some circumstances it would be in the best interests of participants to
permit loans to be made to them. Accordingly, the plan administrator may direct
that a loan be made to a participant for such substantial purposes as the plan
administrator in its discretion may approve in accordance with uniform and
nondiscriminatory rules, subject to the following:
(a) Each request for a loan under this section must be by written
application to the plan administrator supported by such evidence as it may
request. No loan will be made to a participant unless the plan
administrator believes the loan is reasonably necessary for the purpose
intended. No loan shall be made to any participant who is a shareholder-
employee. A shareholder-employee means an employee who owns (or is
considered as owning within the meaning of Section 318(a)(i) of the
Internal Revenue Code) more than 5 percent of the outstanding stock of the
company during any year in which the company elected to be taxed as a small
business corporation under the Internal Revenue Code.
(b) Each loan must be evidenced by a note in a form furnished by the
plan administrator which provides for the participant's consent to the
distribution thereof in the event of a default on this loan, and must be
secured by a pledge of the participant's accounts.
(c) Each loan will bear interest at a reasonable rate established by
the plan administrator in a uniform and nondiscriminatory manner and
include any fees directly associated with its processing and
administration.
(d) The principal amount of each loan, when added to any other
outstanding loan balances of a participant under the plan and all other
plans of the employer, may not exceed the lessor of $50,000 or 50% of the
participants' vested account balances. The $50,000 limit above shall be
reduced by the excess of (1) the highest outstanding balance of all loans
from plans maintained by the employer during the 12-month period ending on
the day before the date on which the loan is made, over (2) the outstanding
balance of all loans from such plans on the date the loan is made. The
principal amount of each loan shall not be less than $1,000.
(e) Each loan will be for a term not exceeding five years and will be
payable in level payments due at least quarterly; provided that the term of
a loan may be for more than a period of five years where the loan is used
to acquire any dwelling unit which within a reasonable time is to be used
as a principal residence of the participant.
(f) If after any participant's termination of employment any loan
made to him or any part thereof, together with accrued interest thereon,
remains unpaid, the total of the unpaid balance or balances and accrued
interest shall be charged to the balances of the participant's accounts, as
otherwise adjusted under the plan as of that date. The distribution of a
participant's canceled note to him (or to his beneficiary in the event of
his death) shall be considered as a payment for purposes of the plan.
(g) Each note evidencing a loan to a participant shall be held on the
participant's behalf and shall be considered an investment of his accounts.
Accordingly, principal and interest payments on the note shall be credited
to such accounts on the participant's behalf.
(h) A participant may have only one loan outstanding at a time under
the plan and all loans shall be payable through payroll deduction each
payroll period, except as to employees on authorized leave pursuant to
Section 2.4 and such leave does not exceed twelve months.
(i) All administrative costs associated with the loan, to include but
not limited to loan origination fees and annual maintenance fees, shall be
deducted from the participant's account balances.
(j) The plan administrator may adopt such policies that it deems
necessary for the administration of this loan program.
(k) A participant must obtain the consent of the participant's
spouse, if any, within the 90-day period before the time a loan is made and
the participant's account balances are used as security for a loan. A new
consent is required if any account balances are used for any increase in
the amount of security. The consent shall comply with the requirements of
section 6.6, but shall be deemed to meet any requirements contained in such
section relating to the consent of any subsequent spouse.
(l) The following events will constitute default on a loan: (i) the
failure to make an installment payment of the date on which it becomes due;
(ii) any other person (other than the plan trustee) acquires an interest in
the participant's account except as otherwise required by law; (iii) the
participant dies or becomes legally incompetent; or(iv) the participant's
employment with the employer is terminated for any reason, including
retirement, disability, resignation or discharge. Upon default, the plan
may foreclose on the loan at the earliest opportunity permitted by law and
the loan will, consequently, be treated as a taxable distribution at such
time. During the period, if any, between the date of the event
constituting default and the date of foreclosure, interest on the loan will
continue to accrue and shall be charged to the participant's account.
7.3. Other Withdrawals. Notwithstanding any other provision hereof, a
participant who has attained age 591/2 years may elect to receive payment of
part or all of his vested account balances and any participant for whom a
rollover account or voluntary contribution account is maintained may elect to
receive payment of part or all of his balances in such accounts. Any such
election shall not affect the participant's continued plan participation.
ARTICLE 8.
REHIRED EMPLOYEE OR PARTICIPANT
8.1. Rehired Employee or Participant. If an employee or a participant who
has completed less than one year of vesting service terminates his employment,
incurs a one-year break in service and is subsequently reemployed by the Fort
Lock Companies, his service prior to his termination of employment shall not be
reinstated for purposes of section 2.1 or 6.2. In all other cases an employee's
or participant's prior years of service shall be reinstated upon reemployment
for purposes of sections 2.1 and 6.2 However, in no event shall years of service
occurring after a participant incurs five consecutive one-year breaks in service
be used to determine the vested and nonforfeitable interest of a participant in
his employer contribution account as of his prior termination of employment
which has become a remainder. A rehired participant shall become a participant
as of the date of his rehire and shall be eligible to make salary deferral
contributions as of the pay period next following his date of rehire. A rehired
employee shall become a participant as of the date he meets the requirements of
section 2.1.
ARTICLE 9.
MAXIMUM CONTRIBUTIONS
9.1. Contribution Limitations. Section 415 of the Code imposes certain
limitations on the amount of contributions that may be allocated to a
participant under a defined contribution plan (as defined in Section 414(i) of
the Code) maintained by his employer. If a participant in a defined
contribution plan maintained by his employer also is a participant in a defined
benefit plan (as defined in Section 414(j) of the Code) maintained by his
employer, Section 415 of the Code imposes certain combined limitations as to the
aggregate amount of contributions and benefits that may be provided for the
participant under both types of plans. This plan is a defined contribution plan
and, therefore, each participant in the plan shall be subject to the maximum
contribution and benefit limitations set forth in Section 415 of the Code and
the regulations thereunder which are incorporated herein by reference. For
purposes of Section 415 of the Code and this Article 9, the "limitation year"
with respect to this plan is the plan year, and a participant's "total
compensation" means, with respect to any plan year, the total compensation (as
defined in Section 415 of the Code and the regulations thereunder) paid to the
participant during that year for services rendered to the Fort Lock Companies as
an employee, but excluding any noncash compensation and any compensation
deferred beyond the participant's termination of employment. In applying the
limitations set forth in sections 9.2 and 9.3, reference to the plan shall mean
the plan and all other defined contribution plans (whether or not terminated)
maintained by the Fort Lock Companies and reference to a defined benefit plan
maintained by the Fort Lock Companies shall mean that plan and all other defined
benefit plans (whether or not terminated) maintained by the Fort Lock Companies.
9.2. Participant Covered by Defined Contribution Plan Only. If a
participant in the plan is not covered by a defined benefit plan maintained by
the Fort Lock Companies, the annual addition (as defined below) which is
allocated to his accounts under this plan and under any other defined
contribution plans maintained by the Fort Lock Companies shall not exceed the
lesser of $30,000 (or if greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b) (1) of the Code of 1986 as in effect for
the limitation year) (the "defined contribution dollar limitation") or 25
percent of the participant's total compensation. In applying the preceding
limitation, the annual addition to a participant's accounts under this defined
contribution plan will be limited before the annual addition to his account
under any such other plan is limited. Any employers' contributions described in
subsection 3.2(a) which cannot be credited to a participant's accounts because
of the limitations of this section 9.2 or section 9.3 shall be held under the
plan and applied to reduce the employer's contributions otherwise required to be
made and allocated to participants' accounts in succeeding plan years, in order
of time. Any salary deferral contributions described in subsection 3.2(b)
elected by a participant which cannot be credited to a participant's accounts
because of the limitations of sections 4.1, 4.2, 9.2 or 9.3 and earnings thereon
shall be paid to such participant as soon as practicable. A participant's
"annual addition" for any plan year means the sum for that year of the
following:
(a) Employer contributions (including salary reduction contributions)
credited to the participant's accounts under this plan and under any
related defined contribution plans;
(b) Forfeitures credited to the participant's accounts under this
plan or under any related defined contribution plans;
(c) The amount of the participant's voluntary contributions to any
related defined contribution or defined benefit plan (determined without
regard to rollover contributions, if any);
(d) Amounts allocated to an individual medical account, as defined in
Section 415(l)(2) of the Code, which is a part of a pension or annuity plan
maintained by the Fort Lock Companies; and
(e) Amounts derived from contributions which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e) of the Code, maintained by the
Fort Lock Companies.
9.3. Participant Covered by Defined Contribution Plan and Defined Benefit
Plan. If a participant in the plan also is a participant in a defined benefit
plan maintained by the Fort Lock Companies, the contributions made on behalf of
the participant and the benefits payable to the participant shall be determined
in a manner consistent with Section 415 of the Code, and for years prior to the
year 2000, as follows:
(a) A fraction shall be determined indicating the ratio of the
participant's annual additions under the defined contribution plans of the
Fort Lock Companies for each plan year to the aggregate of the "defined
contribution limitation amount" in effect for each year of the
participant's employment by the Fort Lock Companies. The "defined
contribution limitation amount" for any year shall be the lesser of
(i) 1.25 multiplied by the dollar limitation in effect under Section
415(c)(l) (A) of the Code for such year, provided that in any year in which
the plan would be a top-heavy plan, if 90% is substituted for 60%, 1.0
shall be substituted for 1.25, or (ii) 1.4 multiplied by 25% of the
participant's total compensation for such year.
(b) A fraction shall also be determined which will equal the benefits
accrued or payable to or for such participant under the defined benefit
plans of the Fort Lock Companies as of the end of the plan year divided by
the "defined benefit limitation amount" in effect for that year. The
"defined benefit limitation amount" for any plan year shall be the lesser
of (i) 1.25 multiplied by the dollar limitation in effect under Section
415(b)(l)(A) of the Code for such year, provided that in any year in which
the plan would be a top-heavy plan, if 90% is substituted for 60%, 1.0
shall be substituted for 1.25, or (ii) 1.4 multiplied by 100 percent of the
participant's average annual total compensation for the three consecutive
plan years during which he actively participated in a defined benefit plan
of the Fort Lock Companies and in which his aggregate total compensation
was the greatest; provided that such amount shall be appropriately
adjusted, if necessary, as provided in Section 415(b) of the Code.
(c) The benefits under all defined benefit plans of the Fort Lock
Companies and the contributions under this plan and under any other defined
contribution plans of the Fort Lock Companies will be adjusted to the
extent necessary (by first adjusting the benefits and contributions under
such other plans) so that the sum of the fractions determined with respect
to any participant in accordance with subsections (a) and (b) above will
not exceed 1.0 (or such other applicable maximum amount permitted by law).
ARTICLE 10.
PLAN ADMINISTRATOR
10.1. Plan Administrator's Duties. As provided in section 1.2, a
committee appointed by the company is responsible for the administration of the
plan. Except as otherwise specifically provided and in addition to the powers,
rights and duties specifically given to the plan administrator elsewhere in the
plan, the plan administrator shall have the following powers, rights and duties:
(a) To construe and interpret the plan, to decide all questions of
plan eligibility, to determine the amount, manner and time of payment of
any benefits under the plan, and to remedy ambiguities, inconsistencies or
omissions, all in its discretion.
(b) To adopt such rules of procedure as may be necessary for the
efficient administration of the plan and as are consistent with the plan,
and to enforce the plan in accordance with its terms and such rules.
(c) To make determinations as to the right of any person to a
benefit, to afford any person dissatisfied with such determination the
right to a hearing thereon, and to direct payments or distributions from
the trust in accordance with the provisions of the plan.
(d) To furnish the employers with such information as may be required
by them for tax or other purposes in connection with the plan.
(e) To enroll participants in the plan, to distribute and receive
plan administration forms, and to comply with all applicable governmental
reporting and disclosure requirements.
(f) To employ agents, attorneys, accountants, actuaries or other
persons (who also may be employed by the employers, the trustee, or any
investment manager or managers) and to allocate or delegate to them such
powers, rights and duties as the plan administrator considers necessary or
advisable to properly carry out the administration of the plan (including
but not limited to the preparation of recommendations of actuarial
assumptions which shall be reviewed by the plan administrator), provided
that any such allocation or delegation and the acceptance thereof must be
in writing.
(g) To report to the directors of the company or to such person or
persons as the directors of the company designate as to the administration
of the plan, any significant problems which have developed in connection
with the administration of the plan and any recommendations which the plan
administrator may have as to the amendment of the plan or the modification
of plan administration.
10.2. Action by Plan Administrator. During a period in which two or
more plan administrative committee members are acting, any action by the plan
administrator will be subject to the following provisions:
(a) The committee may act by meeting (including a meeting from
different locations by telephone conference) or by document signed without
meeting, and documents may be signed through the use of a single document
or concurrent documents.
(b) A committee member by writing may delegate part or all of his
rights, powers, duties and discretions to any other committee member, with
such other committee member's consent.
(c) The committee shall act by a majority decision, which action
shall be as effective as if such action had been taken by all members of
the committee; provided that by majority action one or more committee
members or other persons may be authorized to act with respect to
particular matters on behalf of all committee members.
(d) If there is an equal division among the committee members with
respect to any questions, a disinterested party may be selected by a
majority vote to decide the matter. Any decision by such disinterested
party will be binding.
(e) The certificate of the secretary of the committee or the majority
of the committee members that the committee has taken or authorized any
action shall be conclusive in favor or any person relying on such
certificate.
(f) Except as required by law, no member of the committee shall be
liable or responsible for an act or omission of other committee members in
which the former has not concurred.
10.3. Information Required for Plan Administration. The employers
shall furnish the plan administrator with such data and information as the plan
administrator considers necessary or desirable to perform its duties with
respect to plan administration. The records of an employer as to an employee's
or participant's period or periods of employment, termination of employment and
the reason therefor, leaves of absence, reemployment, and compensation will be
conclusive on all persons unless determined to the plan administrator's
satisfaction to be incorrect. Participants and other persons entitled to
benefits under the plan also shall furnish the plan administrator with such evi-
dence, data or information as the plan administrator considers necessary or
desirable for the plan administrator to perform its duties with respect to plan
administration.
10.4. Decision of Plan Administrator Final. Subject to applicable law
and the provision of section 10.5, any interpretation of the provisions of the
plan and any decision on any matter within the discretion of the plan
administrator made by the plan administrator in good faith shall be binding on
all persons. A misstatement or other mistake of fact shall be corrected when it
becomes known, and the plan administrator shall make such adjustment on account
thereof as the plan administrator considers equitable and practicable.
10.5. Review of Benefit Determinations. If a claim for benefits made
by a participant or his beneficiary is denied, the plan administrator shall,
within 90 days (or 180 days if special circumstances require an extension of
time) after the claim is made, furnish the person making the claim with a
written notice specifying the reasons for the denial. Such notice shall also
refer to the pertinent plan provisions on which the denial is based, describe
any additional material or information necessary for properly completing the
claim and explain why such material or information is necessary, and explain the
plan's claim review procedures. If requested in writing, the plan administrator
shall afford each claimant whose claim has been denied a full and fair review of
the plan administrator's decision and, within 60 days (120 days if special
circumstances require additional time) of the request for reconsideration of the
denied claim, the plan administrator shall notify the claimant in writing of the
plan administrator's final decision.
10.6. Uniform Rules. The plan administrator shall perform his duties
with respect to plan administration on a reasonable and nondiscriminatory basis
and shall apply uniform rules to all participants similarly situated.
10.7. Plan Administrator's Expenses. All reasonable costs, charges and
expenses reasonably incurred by the plan administrator will be paid by or out of
the assets of the plan , unless paid by the employers in such portions as the
company shall direct; provided no compensation will be paid to a committee
member as such.
10.8. Interested Plan Administrator. If a member of the plan committee
is also a participant in the plan, he may not decide or determine any matter or
question concerning his benefits unless such decision or determination could be
made by him under the plan if he were not a committee member.
10.9. Resignation or Removal of Plan Administrative Committee Members.
A member of the committee may be removed by the company at any time prior notice
to him and the other members of the committee. A member of the committee may
resign at any time by giving ten days' prior written notice to the company and
the other members of the committee. The company may fill any vacancy in the
membership of the committee; provided, however, that if a vacancy reduces the
membership of the committee to less than three, such vacancy shall be filled as
soon as practicable. The company shall give prompt written notice thereof to
the other members of the committee. Until any such vacancy is filled, the
remaining members may exercise all of the powers, rights and duties conferred on
the plan administrator.
10.10. Indemnification. To the extent permitted by law, no person
(including the employers, a trustee, any present or former plan administrative
committee member, and any present or former director, officer or employee of any
employer) shall be personally liable for any act done or omitted to be done in
good faith in the administration of the plan or the investment of the pension
fund. To the extent permitted by law, each present or former director, officer
or employee of any employer to whom the plan administrator or an employer has
delegated any portion of its responsibilities under the plan and each present or
former plan administrative committee member shall be indemnified and saved
harmless by the employers (to the extent not indemnified or saved harmless under
any liability insurance or other indemnification arrangement with respect to the
plan) from and against any and all claims of liability to which they are
subjected by reason of any act done or omitted to be done in good faith in
connection with the administration of the plan or the investment of the trust
fund, including all expenses reasonably incurred in their defense if the
employers fail to provide such defense.
ARTICLE 11.
RELATING TO THE EMPLOYERS
11.1. Action by Employers. Any action required or permitted of an
employer under the plan shall be by resolution of its Board of Directors or by a
duly authorized committee of its Board of Directors, or by a person or persons
authorized by resolution of its Board of Directors or such committee.
11.2. Additional Employers; the Fort Lock Companies. Any subsidiary or
other related company that is not an employer may adopt the plan and become an
employer thereunder by filing with the trustee and the plan administrator a
certified copy of a resolution of the Board of Directors of the subsidiary or
other related company providing for its adoption of the plan and a certified
copy of a resolution of the Board of Directors of the company consenting to such
adoption. For this purpose, a "subsidiary" means any corporation more than 50
percent of the voting stock of which is directly or indirectly owned by the
company and a "related company" means any corporation (other than the company
and its subsidiaries) more than 50 percent of the voting stock of which is
directly or indirectly owned by any corporation or any person or group of
persons who directly or indirectly own more than 50 percent of the voting stock
of the company. The term "Fort Lock Companies" includes the employers and all
subsidiaries and related companies that have not adopted the plan (and each such
corporation is sometimes referred to herein individually as a "Fort Lock
Company"). Any corporation which is not an employer under the plan and which
does not qualify as a subsidiary or related company, but is a member of a
controlled group of corporations (within the meaning of Section 1563(a) of the
Internal Revenue Code (the "Code"), determined without regard to Sections
1563(a)(4) and 1563(e)(3)(C) thereof) which contains an employer under the plan
or a member of an affiliated service group (as defined in Section 414(m) of the
Code) which contains an employer under the plan shall, for purposes of the plan,
be considered as a subsidiary or related company that has not adopted the plan
and, therefor, as a Fort Lock Company for purposes of certain determinations as
to employment with the For Lock Companies.
11.3. Restrictions on Reversions. The employers shall have no right,
title or interest in the assets of the plan, nor will any part of the assets of
the plan at any time revert or be repaid to an employer, directly or indirectly,
except as follows:
(a) If the Internal Revenue Service initially determines that the
plan, as applied to any employer, does not meet the requirements of a
"qualified plan" under Section 401(a) of the Code, the assets of the plan
attributable to contributions made by that employer under the plan shall be
returned to that employer within one year of the date of denial of
qualification of the plan as applied to that employer.
(b) If a contribution or a portion of a contribution is made by an
employer as a result of a mistake of fact, such contribution or portion of
a contribution shall not be considered to have been contributed under the
plan by that employer and, after having been reduced by any losses of the
trust fund allocable thereto, shall be returned to that employer within one
year of the date the amount is contributed under the plan.
(c) Each contribution made by an employer is conditioned upon the
continued qualification of the plan and the deductibility of such
contribution as an expense for federal income tax purposes and, therefore,
to the extent that a contribution is made by an employer under the plan for
a period for which the plan is not a qualified plan or the deduction for a
contribution made by the employer is disallowed, then such contribution or
portion of a contribution, after having been reduced by any losses of the
trust fund allocable thereto, shall be returned to that employer within one
year of the date of determination of the nonqualified status of the plan or
the date of disallowance of the deduction.
ARTICLE 12.
AMENDMENT, TERMINATION OR PLAN MERGER
12.1. Amendment. While the employers expect and intend to continue the
plan, the company must necessarily reserve and hereby does reserve the right,
subject to Article 11, to amend the plan from time to time, except as follows:
(a) The duties and liabilities of the plan administrator cannot be
changed substantially without its consent; and
(b) No amendment shall reduce the value of a participant's benefits
to less than the amount he would be entitled to receive if he had resigned
from the employ of all of the Fort Lock Companies on the day of the
amendment.
The foregoing provisions of this section shall be subject to any applicable
collective bargaining agreements, provided that the company may amend the plan
at any time to the extent necessary in order that the plan shall meet the
requirements of a "qualified plan" under Section 401(a) of the Code and any
other requirements of applicable law. The current intent is to maintain the
plan as a plan meeting the requirements of Section 401(a) of the Code, but such
tax favorable status is not guaranteed.
12.2. Termination. The plan will terminate as to all employers on any
date specified by the company if advance written notice of the termination is
given to the plan administrator and any other employers. The plan will
terminate as to an individual employer on the first to occur of the following:
(a) The date it is terminated by that employer, if ten days' advance
written notice of the termination is given to the company, the plan
administrator and the other employers.
(b) The date that employer is judicially declared bankrupt or
insolvent.
(c) The dissolution, merger, consolidation or reorganization of that
employer, or the sale by that employer of all or substantially all of its
assets, except that:
(i) In any such event arrangements may be made with the consent
of the company whereby the plan will be continued by any successor to
that employer or any purchaser of all or substantially all of its
assets without a termination thereof, in which case the successor or
purchaser will be substituted for that employer under the plan; and
(ii) If any employer is merged, dissolved or in any way
reorganized into, or consolidated with, any other employer, the plan
as applied to the former employer will automatically continue in
effect without a termination thereof.
Notwithstanding the foregoing, if any of the events described above should occur
but some or all of the participants employed by an employer are transferred to
employment with one or more of the other employers coincident with or
immediately after the occurrence of such event, the plan as applied to those
participants will automatically continue in effect without a termination
thereof. The foregoing provisions of this section shall be subject to any
applicable collective bargaining agreements.
12.3. Plan Merger. In no event shall there be any merger or
consolidation of the plan with, or transfer of assets or liabilities to, any
other plan unless each participant in the plan would (if the plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit the participant would
have been entitled to receive immediately before the merger, consolidation or
transfer (if the plan had then terminated).
12.4. Continuation by a Successor or Purchaser. Notwithstanding
section 12.2, the plan and the trust shall not terminate in the event of
dissolution, merger, consolidation or reorganization of an employer or sale by
an employer of its entire assets or substantially all of its assets if
arrangements are made in writing between the employer and any successor to the
employer or purchaser of all or substantially all of its assets whereby such
successor or purchaser will continue the plan and the trust. If such
arrangements are made, then such successor or purchaser shall be substituted for
the employer under the plan and the trust agreement.
12.5. Notice to Participants of Amendments, Terminations or Plan
Mergers. Participants affected thereby shall be notified by the company within
a reasonable time following any amendment, termination, plan merger, or
consolidation.
12.6. Vesting and Distribution on Termination. The date of any
termination or partial termination of the plan as respects all employers (and,
at the discretion of the company, on a termination or partial termination of the
plan as respects any employer that does not result in the termination or partial
termination of the plan as respects all employers) and any permanent
discontinuance of employer contributions as respects all employers, will be an
"interim accounting date", and the benefits of each participant affected by such
termination, partial termination, or permanent discontinuance of employer
contributions as respects all employers will be fully vested.
ARTICLE 13.
GENERAL PROVISIONS
13.1. Examination of Plan Documents. Copies of the plan and any
amendments thereto will be on file at the principal office of each employer
where they may be examined by any participant or any other person entitled to
benefits under the plan.
13.2. Notices. A notice mailed to a participant or beneficiary at his
last address filed with the plan administrator in care of the company will be
binding on the participant or beneficiary for all purposes of the plan. Any
notice or document relating to the plan required to be given to or filed with
the plan administrator or any employer shall be considered as given or filed if
delivered or mailed by registered or certified mail, postage prepaid, to the
plan administrator, in care of the company.
13.3. Nonalienation of Plan Benefits. The rights or interests of any
participant or any participant's beneficiaries to any benefits or future
payments hereunder shall not be subject to attachment or garnishment or other
legal process by any creditor of any such participant or beneficiary, nor shall
any such participant or beneficiary have any right to alienate, anticipate,
commute, pledge, encumber or assign any of the benefits or rights which he may
expect to receive, contingently or otherwise under this plan except as may be
required by the tax withholding provisions of the Code or of a state's income
tax act or pursuant to a qualified domestic relations order (as defined in
Section 414(p) of the Code) which provides for an immediate lump sum
distribution.
13.4. No Employment or Benefit Guarantee. None of the establishment of
the plan, modification thereof, the creation of any fund or account, or the
payment of any benefits shall be construed as giving to any participant or other
person any legal or equitable right against the employers, the plan
administrator or trustee, except as herein provided. Under no circumstances
shall the terms of employment of any participant be modified or in any way
affected hereby. The maintenance of this plan shall not constitute a contract
of employment, and participation in the plan will not give any participant a
right to be retained in the employ of the employers. None of the employers, the
plan administrator or the trustee in any way guarantees any assets of the plan
from loss or depreciation or any payment to any person. The liability of the
plan administrator or any employer as to any payment or distribution of benefits
under the plan is limited to the available assets of the trust fund.
13.5. Litigation. In any action or proceeding regarding the plan
assets or any property constituting a portion or all thereof or regarding the
administration of the plan, employees or former employees of the employers or
their beneficiaries or any other persons having or claiming to have an interest
in this plan shall not be necessary parties and shall not be entitled to any
notice or process. Any final judgment which is not appealed or appealable and
may be entered in any such action or proceeding shall be binding and conclusive
on the parties hereto and all persons having or claiming to have any interest in
this plan. To the extent permitted by law, if a legal action is begun against
the employers, the plan administrator or the trustee by or on behalf of any
person, and such action results adversely to such person, or if a legal action
arises because of conflicting claims to a participant's or other person's
benefits, the costs to the employers, the plan administrator or the trustee of
defending the action will be charged to the sums, if any, which were involved in
the action or were payable to the participant or other person concerned. To the
extent permitted by applicable law, acceptance of participation in this plan
shall constitute a release of the employers, the plan administrator and the
trustee and their agents from any and all liability and obligation not involving
willful misconduct or gross neglect.
13.6. Successors. The plan and the trust will be binding on all
persons entitled to benefits hereunder and their respective heirs and legal
representatives, and on the plan administrator and the trustee and their
successors.
13.7. Adequacy of Evidence. Evidence which is required of anyone under
the plan shall be executed or presented by the proper individuals or parties and
may be in the form of certificates, affidavits, documents or other information
which the plan administrator, the trustee, the employers or other persons acting
on such evidence considers pertinent and reliable.
13.8. Gender and Number. Words denoting the masculine gender shall
include the feminine and neuter genders and the singular shall include the
plural and the plural shall include the singular wherever required by the
context.
13.9. Waiver of Notice. Any notice required under the plan may be
waived by the person entitled to notice.
13.10. Applicable Law. The plan and the trust shall be construed in
accordance with the provisions of ERISA and other applicable federal laws. To
the extent not inconsistent with such laws, or preempted thereby, this plan
shall be construed in accordance with the laws of the State of Texas.
13.11. Severability. If any provision of the plan shall be held illegal
or invalid for any reason, such illegal or invalid provision shall not affect
the remaining provisions of the plan, and the plan shall be construed and
enforced as if such illegal or invalid provisions had never been contained in
the plan.
13.12. Fiduciary Responsibilities. It is specifically intended that all
provisions of the plan shall be applied so that all fiduciaries with respect to
the plan shall be required to meet the prudence and other requirements and
responsibilities of applicable law to the extent such requirements of
responsibilities apply to them. No provisions of the plan are intended to
relieve a fiduciary from any responsibility, obligation, duty or liability
imposed by applicable law. In general, a fiduciary shall discharge his duties
with respect to the plan solely in the interests of participants and other
persons entitled to benefits under the plan and with the care, skill, prudence,
and diligence under the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims.
13.13. Highly Compensated Employees. An employee shall be considered a
"highly compensated employee" for any plan year if:
(a) He or she was a 5-percent owner as defined in Section
416(i)(1)(B)(i) of the Code for the plan year or the preceding
plan year; or
(b) He or she for the preceding plan year:
(i) had compensation from the employer in excess of $80,000
(or such adjusted number as may be determined under the Code or
regulations thereunder to reflect a change in the cost-of-living
index);
(ii) if the employer elects the application of this clause
for such preceding plan year, was in the top-paid group (as
defined in Section 414(q)(3) of the Code) of employees for such
preceding year.
For purposes of this section 13.13 "compensation" for purposes of
determination of highly compensated employee means compensation within
the meaning of Section 415(c)(3) of the Code.
13.14. Supplements. Supplements to this plan may be adopted from time
to time and will be attached to and form a part of the plan. The provisions of
any such supplements shall be given the same effect that such provisions would
have if they were incorporated within the basic text of the plan. Supplements
may modify or supplement provisions of the plan as they apply to particular
groups of participants. Each supplement will specify the persons affected and
shall supersede the other provisions of the plan to the extent necessary to
eliminate inconsistencies between the plan provisions and the provisions of such
supplement. The terms used in such supplements shall have the same meanings as
those terms have for all other purposes under the plan and all provisions of the
plan not inconsistent with such supplements will continue to apply to the
persons affected by such supplements or exhibits.
13.15. Leased Employees. Notwithstanding any other provision of the
plan, a leased employee will not be considered a covered employee and may not
become a participant in the plan. However, for purposes of the plan, a leased
employee shall be treated as an employee of the recipient employer and benefits
provided by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. The term "leased employee" means any person (other than an
employee of the recipient employer) who pursuant to an agreement between the
recipient employer and any other person (the "leasing organization") has
performed services for the recipient employer (or for the employer and related
persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year and such
services are performed by employees under the primary direction or control of
the recipient employer.
13.16. Transfers Upon Sale of a Business Unit. Notwithstanding any
other provision of the plan, upon the sale of any business unit of an employer
(including any plant, division, or subsidiary of an employer), the
reorganization of a business unit of an employer by transfer to another business
entity (including a joint venture entity) or the spin-out to shareholders of any
subsidiary which is an employer, unless otherwise determined by the plan
administrator, affected participants shall not be considered to have terminated
employment with the Fort Lock Companies, participants' account balances shall
not be distributable to such affected participants as a result of such sale,
reorganization or spin-out, and provision may be made for the transfer of the
account balances of affected participants to any successor plan covering such
participants.
13.17. Uniformed Services Employment Rights. Notwithstanding any other
provisions hereof, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code. Accordingly, participants who are absent from employment due to
service which is protected under the Uniformed Services Employment and
Reemployment Rights Act and who are reemployed may make salary deferral
contributions and receive plan benefits, and the employers shall make
contributions on behalf of such participants, in accordance with such Section of
the Code.
13.18. Application of Earnings Limitations. In the event the earnings
of a participant for a plan year would exceed the maximum limitation on earnings
set forth in section 4.4, the earnings which will be taken into account under
the plan with respect to each payment of compensation during such year shall be
(i) first, an amount equal to four times any salary deferral contribution made
with respect to each payment of compensation, and (ii) next, with respect to
each portion of any payment of compensation which exceeds the amounts taken into
account under (i) above, the full amount of such excess commencing with the
first such payment in such year until the total amount taken into account for
the plan year equals the maximum limitation amount for such year.
13.19. Telephonic and Electronic Signatures. To the extent any
election, direction ,response, consent, designation, or other action of a
participant, beneficiary or other person under the plan is permitted to be made
by telephonic voice response or other telephonic or electronic transmission,
such action by or on behalf of the participant, beneficiary or other person
shall be considered an action by writing signed by the participant, beneficiary
or other person for all purposes of the plan.
ARTICLE 14.
TOP-HEAVY PLAN RULES
14.1. Key Employees. A "key employee" means an employee or former
employee who during any plan year or during any of the four preceding plan years
is:
(a) An officer of an employer having annual compensation in excess of
50 percent of the dollar limitation in effect under Section 415(b)(1)(A) of
the Code for the plan year;
(b) One of the ten employees of the employer having annual
compensation from the employer in excess of the dollar limitation in effect
under Section 415(c)(1)(A) of the Code for the plan year and owning (or
considered as owning within the meaning of Section 318 of the Code) the
largest interests in the employer;
(c) Any person who owns (or is considered as owning within the
meaning of Section 318 of the Code) more than 5 percent of the outstanding
stock of the employer or stock possessing more than 5 percent of the total
combined voting power of all the employer's stock; or
(d) Any person having annual total compensation in excess of $150,000
who owns (or is considered as owning within the meaning of Section 318 of
the Code) more than one percent of the outstanding stock of the employer or
stock possessing more than one percent of the total combined voting power
of all the employer's stock.
For purposes of (a) above, if the number of officers exceeds 50, only the 50
officers with the highest total compensation shall be considered key employees
and if the number of officers is less than 50, the number of officers considered
key employees shall not exceed the greater of 3 such officers or 10 percent of
all employees. For purposes of (c) and (d) above, Section 318(a) (2)(C) of the
Code shall be applied by substituting "5 percent" for the reference to "50
percent" therein and the rules of Sections 414(b), (c) and (m) of the Code shall
not apply for purposes of determining ownership in the employer. The term
"employer" includes all Fort Lock Companies. The beneficiary of a key employee
shall be considered a key employee. Any employee who is not a key employee, as
described above, is a non-key employee. For purposes of this Article 14,
"compensation" shall mean compensation as defined in Section 415(c)(3) of the
Code and the regulations thereunder, not to exceed $160,000 (or such other,
maximum amount as may be permitted pursuant to Section 401(a)(17) of the Code or
from time to time by the Secretary of the Treasury or his delegate or by law).
14.2. Top-Heavy Determinations. The plan will be considered top-heavy
for any plan year if as of the last day of the preceding plan year (but the last
day of the initial plan year in the case of that year) (the "determination
date") the sum of (a) the aggregate of the account balances of key employees
under the plan and all other defined contribution plans in an aggregation group
of plans as described in section 14.3 and (b) the present value determined as of
the date of the most recent valuation which is within a twelve-month period
ending on the determination date of the aggregate cumulative accrued benefits
for key employees under all defined benefit plans in an aggregation group of
plans as described in section 14.3 exceeds 60 percent of such sum determined for
all participants under all such plans, excluding participants who are former key
employees. Included in the determination of a participant's account balances
and accrued benefit under such plan are any amounts distributed to him during
the preceding five-year period. For purposes of determining whether the plan is
a top-heavy plan, there shall not be taken into account (i) a rollover
contribution initiated by an employee and made to the plan or any other plan in
an aggregation group of plans after December 31, 1983; or (ii) any accrued
benefit (and any plan account) of any individual who has not performed any
services for an the employer at any time during the five-year period ending on
the determination date.
14.3. Aggregation of Plans. All employer plans in a required
aggregation group of plans shall be considered top heavy if the required
aggregation group of plans or permissive aggregation group of plans, as the case
may be, is determined to be top-heavy under section 14.2. If the required
aggregation group of plans or permissive aggregation group of plans is not top-
heavy, no employer plans in the group shall be considered top-heavy. A
"required aggregation group of plans" shall include each employer plan (whether
or not terminated) in which a key employee participates and any other employer
plan which enables any plan in which a key employee participates to meet the
coverage and nondiscrimination requirements of Sections 401(a)(4) or 410 of the
Code. A "permissive aggregation group of plans" shall include all plans in the
required aggregation group plus any other employer plans which satisfy the
requirements of Sections 401(a)(4) and 410 of the Code when considered together
with the required aggregation group or plans.
14.4. Top-Heavy Rules. If the plan is considered top-heavy in any
year, the following rules will apply:
(a) Combined Benefit Limitations for Top-Heavy Plan. For purposes of
determining the combined benefit limitations under section 9.3 of this
plan, for any plan year in which the plan would be top-heavy, 1.0 shall be
substituted for 1.25 in determining the dollar limitation in effect under
Section 415(b)(1)(A) and 415(c)(l)(A) of the Code for such year.
(b) Minimum Benefit. Notwithstanding anything to the contrary in
Article 3, the amount contributed by an employer for each active
participant who is a non-key employee employed by that employer for each
plan year in which the plan is considered a top-heavy plan shall not be
less than the lesser of (i) 3 percent of each active participant's total
compensation for that year, or (ii) the highest percentage of such
compensation contributed by such employer for such plan year on behalf of a
key employee; provided if for such plan year the minimum benefit under
Section 416(c) of the Code is provided for under any other plan to which
the employer contributes, no minimum contribution shall be made under this
subsection (b) for the participant. For purposes of the preceding sentence
only, the group of participants shall include a participant who would
otherwise not be considered a participant solely because of his failure to
make salary deferral contributions for such plan year. For purposes
hereof, elective contributions made on behalf of employees who are not key
employees shall be disregarded and elective contributions made on behalf of
key employees shall be taken into account.
14.5. Top-Heavy Vesting Schedule. Notwithstanding the provisions of
section 6.2, a participant who is employed by an employer when the plan is
considered as top-heavy plan shall be vested in that portion of the
participant's employer contribution account equal to the greater of the amount
the participant is vested in under section 6.2 or the product of the balance of
the participant's employer contribution account and the vested percentage
determined in accordance with the following table based on the participant's
years of service:
If the Participant's His Vested and
Number of Full Years Nonforfeitable
of Service Equals: Interest Shall Be:
- -------------------------- -------------------
less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
If the plan becomes a top-heavy plan and subsequently ceases to be a top-heavy
plan, the vested interest in the employer contribution account of a participant
who has become vested under this special vesting schedule shall be determined as
follows:
(a) A participant who has less than three years of service on the
date the plan ceases to be a top-heavy plan shall have (i) his vested
interest in his employer contribution account which accrued prior to such
date determined under the top-heavy vesting schedule in effect on such date
and (ii) his vested interest in his employer contribution account which
accrues on or after such date determined under section 6.2.
(b) A participant who has three or more years of service on the date
the plan ceases to be a top-heavy plan, may elect, during the election
period described below, to have his vested interest in his employer
contribution account which accrues after such date to be determined under
the top-heavy vesting schedule. The "election period" must begin no later
than the date the plan ceases to be a top-heavy plan and end no earlier
than the latest of the following dates:
(i) The date which is 60 days after the plan ceases to be a top-
heavy plan, or
(ii) The date which is 60 days after the day the participants is
issued written notice that the plan is no longer a top-heavy plan.
WITNESSETH THAT:
Pursuant to the authority delegated to the undersigned officers of
Fort Lock Corporation, the document attached hereto entitled "The 401(k) Plan of
the Fort Lock Corporation" is hereby amended, restated and adopted effective as
of February 1, 1999.
Dated this 12th day of Ferbuary, 1999.
FORT LOCK CORPORATION
By: /s/ Jay A. Fine
---------------------------------
Its: President
---------------------------------
ATTEST:
By: /s/ Julie Raske
-----------------------------
Its: Personnel Manager
-----------------------------
INDEX
DEFINITION OF TERMS
Term Paragraph No.
Account Balances 5.1
Accounting Date 5.1
Accounts 5.1
Active Participant 2.1
Actual Deferral Percentage 4.2
Annual Addition 9.2
Code 1.5
Company 1.1
Contribution Percentage 3.4
Covered Employee 2.1(a)
Defined Benefit Limitations Amount 9.3
Defined Contribution Dollar Limitation 9.2
Defined Contribution Limitation Amount 9.3
Direct Rollover 6.10(d)
Distributee 6.10(c)
Earnings 4.4
Effective Date 1.1
Eligible Retirement Plan 6.10(b)
Eligible Rollover Distribution 6.10(a)
Employer 1.4
Employers 1.4
Employer Contribution Account 5.1(b)
Employer Matching Contribution 3.4
Highly Compensated Employee 13.13
Highly Compensated Former Employee 13.13
Hours of Service 2.3
Inactive Participant 2.1
Key Employee 14.1
Leased Employee 13.15
Leave of Absence 2.4
Limitation Year 9.1
One Year Break in Service 6.3
Participant 2.1
Permanent Disability 6.1
Plan 1.1
Plan Administrator 1.2
Plan Year 1.2
Qualified Rollover Distribution 4.5
Remainders 6.3
Required Beginning Date 6.5
ROA Companies 11.2
Rollover Account 5.1(c)
Salary Deferral Contribution 4.1
Salary Deferral Contribution Account 5.1(a)
Total Compensation 9.1
Trust 1.3
Trustee 1.3
Voluntary Contribution Account 5.1(d)
Year of Vesting Service 6.2
INTRODUCTION
The 401(k) Plan of the Fort Lock Companies
A-1 Purpose, Use of Terms. The purpose of this Supplement A is to
list January 31, 1999 participants (active and inactive) with account balances
and set forth the special distribution restrictions which apply to such
participants and any other amounts (and earnings thereon) which were accrued
under predecessor plans or which are transferred to the plan from any defined
benefit plan, any defined contribution plan which is subject to the minimum
funding standards of Section 412 of the Code, or any other defined contribution
plan subject to Section 401(a)(11) of the Code, and which remain subject to
Section 401(a)(11) of the Code ("annuity option benefits"). Except where the
context indicates to the contrary, terms used and defined in the plan shall have
the same respective meanings for purposes of this Supplement.
A-2 Distribution Restrictions. Notwithstanding any other provisions
of this plan, any annuity option benefits shall be distributed as follows:
(a) If the participant is married on the participant's annuity
staring date, such participant's annuity option benefits shall be applied
for the purchase of a qualified joint and survivor annuity, unless the
participant has elected to waive the qualified joint and survivor annuity
form of benefit during the applicable election period or during such other
period as the plan administrator in its discretion may permit. The term
"qualified joint and survivor annuity" means an annuity payable for the
life of a participant with a survivor annuity payable for the life of the
participant's spouse which is not less than 50 percent of the amount of the
annuity payable during the joint life of the participant and the
participant's spouse which may be purchased with the participant's annuity
option benefits. Such qualified joint and survivor annuity shall provide
that payments thereunder shall commence immediately, at the election of the
participant, and shall be at least as valuable as any other form of payment
available to the participant under the plan.
(b) If the participant dies before the participant's annuity starting
date and if the participant has a surviving spouse, a qualified
preretirement survivor annuity will be provided to the surviving spouse of
such participant unless such spouse consents or elects otherwise. The term
"qualified preretirement survivor annuity" means an annuity for the life of
the surviving spouse which is purchased with 50 percent of the annuity
option benefits of the participant as of the participant's date of death.
The first such annuity payment to the surviving spouse shall not be later
than the month in which the participant would have attained age 55 years.
The participant may elect to waive the qualified preretirement survivor
annuity during the applicable election period or during such other period
as the plan administrator in its discretion may permit. For purposes of
this subsection a participant's "surviving spouse" shall be the husband or
wife of the participant, if any, to whom the participant was married
throughout the one year period ending on the date of the participant's
death. In the event that a participant's surviving spouse is entitled to a
qualified preretirement survivor annuity hereunder, the amount of the
participant's annual option benefits which are not applied to the purchase
of the qualified preretirement survivor annuity shall be distributed in
accordance with Article 6 of the plan. Notwithstanding the foregoing, the
participant's surviving spouse may at any time consent to have all of the
participant's benefits paid in accordance with the participant's election
filed under Article 6.
(c) The plan administrator shall provide each participant within a
reasonable period of time before the participant's annuity starting date
and, at least once during the three plan years commencing with the plan
year in which the participant attains age 32 years, a written explanation
of (i) the terms and conditions of the qualified joint and survivor annuity
and the qualified preretirement survivor annuity, (ii) the participant's
right to make an election to waive each such annuity form of benefit
payments and the effect of such election, (iii) the participant's right to
revoke an election to waive such annuity forms of benefit payments and the
effect of such revocation, and (iv) the rights of the participant's spouse
under this section.
(d) For purposes of subsection (a) above, the "applicable election
period" means the 90-day period ending on the annuity starting date. For
purposes of subsection (b) above, the term "applicable election period"
means the period which begins on the first day of the plan year in which
the participant attains age 35 years and ends on the date of the
participant's death; provided that in the case of a participant who has
terminated employment with the company, the applicable election period
shall not begin later than the date of the participant's termination of
employment.
(e) The participant's election to waive the qualified joint and
survivor annuity or the qualified preretirement survivor annuity shall not
take effect unless (i) the spouse of the participant consents in writing to
such election, the spouse's consent acknowledges the effect of such
election and such consent is witnessed by a plan representative or a notary
public, or (ii) it is established to the satisfaction of the plan
administrator that a required consent may not be obtained because the
participant is not married, because the spouse cannot be located, or
because such other circumstances of the Secretary of the Treasury may by
regulations prescribe. Any consent by a spouse required under the
preceding sentence shall be effective only with respect to such spouse.
The participant may revoke any election to waive the qualified form of
benefits at any time during the applicable election period or during such
other period as the plan administrator may permit. If the participant has
filed an election meeting the requirements of this section or if it is
determined to the satisfaction of the plan administrator that a participant
has no spouse, then the plan administrator shall issue the participant's
account balances under the terms of Article 6 of the plan.
(f) For purposes of this section, the term annuity starting date
means the first day of the first period for which an amount is received
under this plan as an annuity.
