EXHIBIT 10.6
CB RICHARD ELLIS 401(K) PLAN
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
ARTICLE II
ELIGIBILITY TO PARTICIPATE
2.1 Eligibility to Participate.......................................................................... 17
2.2 Exclusions from Participation....................................................................... 18
2.3 Participation Upon Reemployment..................................................................... 20
2.4 Leased Employees.................................................................................... 20
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.1 Voluntary Contributions............................................................................. 21
3.2 Withdrawal of Participant Contributions............................................................. 21
3.3 Rollover and Transfer Contributions................................................................. 22
ARTICLE IV
PARTICIPATING COMPANY CONTRIBUTIONS
4.1 Contribution of Deferrals........................................................................... 23
4.2 Matching Profit Sharing Contribution................................................................ 23
4.3 Discretionary Profit Sharing Contribution........................................................... 23
4.4 Discretionary Contributions; Form and Time of Payment............................................... 24
4.5 Return of Excess Deferrals.......................................................................... 24
4.6 Average Deferral Percentage Limitation.............................................................. 24
4.7 Allocation of Excess Contributions to Highly Compensated Employees.................................. 26
4.8 Distribution of Excess Contributions................................................................ 26
4.9 Qualified Matching Profit Sharing Contributions..................................................... 27
4.10 Corrective Qualified Non-Elective Contributions..................................................... 27
4.11 Special Rules....................................................................................... 27
4.12 Recordkeeping....................................................................................... 28
4.13 Average Contribution Percentage Limitation.......................................................... 28
4.14 Allocation of Excess Aggregate Contributions to Highly Compensated Employees........................ 29
4.15 Distribution or Forfeiture of Excess Aggregate Contributions........................................ 30
4.16 Use of Deferrals.................................................................................... 30
4.17 Corrective Qualified Non-Elective Contributions..................................................... 30
4.18 Special Rules....................................................................................... 30
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4.19 Applicability of the Multiple-Use Limitation........................................................ 31
4.20 Multiple-Use Limitation............................................................................. 31
4.21 Correction of Multiple-Use Limitation............................................................... 32
ARTICLE V
ACCOUNTING FOR PARTICIPANT'S INTERESTS
5.1 Establishment of Accounts........................................................................... 32
5.2 Allocation of Contributions and Forfeitures......................................................... 33
5.3 Code Section 415 Limitation......................................................................... 34
5.4 Accounting for Trust Fund Income or Losses.......................................................... 38
5.5 Valuation of Trust Fund............................................................................. 38
5.6 Annual Statement of Accounts........................................................................ 38
5.7 Directed Accounts and Investment Options............................................................ 39
5.8 Investment Funds.................................................................................... 39
5.9 Old Company Stock Fund.............................................................................. 39
5.10 Investment Direction for all Funds.................................................................. 40
5.11 Voting Rights....................................................................................... 40
5.12 ERISA 404(c) Requirements........................................................................... 41
ARTICLE VI
VESTING
6.1 Company Contribution Accounts....................................................................... 42
6.2 Aggregation of Years of Service for Vesting......................................................... 43
6.3 Other Accounts...................................................................................... 43
6.4 Forfeiture of Nonvested Amounts..................................................................... 43
6.5 Unclaimed Benefits.................................................................................. 45
6.6 Application of Forfeited Amounts.................................................................... 45
ARTICLE VII
DESIGNATION OF BENEFICIARY
7.1 Designation of Beneficiary.......................................................................... 46
7.2 Failure to Designate Beneficiary.................................................................... 46
ARTICLE VIII
DISTRIBUTIONS FROM THE TRUST FUND
8.1 Events Permitting Distributions..................................................................... 47
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(continued)
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8.2 Rules Governing Distributions....................................................................... 49
8.3 Valuation of Interest............................................................................... 51
8.4 Characterization of Disability Distribution......................................................... 51
8.5 Payment of Benefits to Alternate Payee.............................................................. 51
8.6 Direct Rollovers.................................................................................... 52
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 Priority over other Plan Provisions................................................................. 53
9.2 Compensation Taken Into Account..................................................................... 53
9.3 Minimum Allocation.................................................................................. 53
9.4 Modification of Aggregate Benefit Limit............................................................. 55
9.5 Minimum Vesting..................................................................................... 55
ARTICLE X
ADMINISTRATIVE PROCEDURES
10.1 Appointment of Committee Members.................................................................... 56
10.2 Officers and Employees of the Committee............................................................. 56
10.3 Action of the Committee............................................................................. 56
10.4 Disqualification of Committee Member................................................................ 57
10.5 Expenses of the Committee........................................................................... 57
10.6 Bonding and Compensation............................................................................ 57
10.7 General Powers and Duties of the Committee.......................................................... 57
10.8 Specific Powers and Duties of the Committee......................................................... 57
10.9 Allocation of Fiduciary Responsibility.............................................................. 58
10.10 Information to be Submitted to the Committee........................................................ 58
10.11 Allocation of Fiduciary Responsibility.............................................................. 59
10.12 Information to be Submitted to the Committee........................................................ 59
10.13 Notices, Statements and Reports..................................................................... 60
10.14 Claims Procedure.................................................................................... 60
10.15 Service of Process.................................................................................. 62
10.16 Correction of Participants' Accounts................................................................ 62
10.17 Payment to Minors or Persons Under Legal Disability................................................. 62
10.18 Uniform Application of Rules and Policies........................................................... 63
10.19 Funding Policy...................................................................................... 63
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(continued)
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ARTICLE XI
INVESTMENT OF PLAN ASSETS
11.1 Trust Fund Investments.............................................................................. 63
11.2 Loans to Participants............................................................................... 63
ARTICLE XII
TERMINATION, PARTIAL TERMINATION AND COMLETE DISCONTINUANCE OF CONTRIBUTIONS
12.1 Continuance of Plan................................................................................. 65
12.2 Complete Vesting.................................................................................... 65
12.3 Disposition of the Trust Fund....................................................................... 65
12.4 Withdrawal by Participating Company................................................................. 66
ARTICLE XIII
AMENDMENT OR TERMINATION OF THE PLAN
13.1 Right of Company to Amend Plan...................................................................... 66
13.2 Amendment Procedure................................................................................. 67
13.3 Effect on Other Participating Companies............................................................. 67
13.4 Company Not Liable for Benefits..................................................................... 67
ARTICLE XIV
ADOPTION OF PLAN BY AFFILIATED COMPANIES
14.1 Adoption Procedure.................................................................................. 67
14.2 Effect of Adoption by Affiliated Company............................................................ 68
14.3 Additional Adoption Procedure....................................................................... 68
ARTICLE XV
MISCELLANEOUS
15.1 Reversion Prohibited................................................................................ 69
15.2 Bonding, Insurance and Indemnity.................................................................... 70
15.3 Merger, Consolidation or Transfer of Assets......................................................... 70
15.4 Spendthrift Clause.................................................................................. 71
15.5 Rights of Participants.............................................................................. 72
15.6 Gender, Tense and Headings.......................................................................... 72
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15.7 Governing Law....................................................................................... 72
ARTICLE XVI
NEW COMPANY STOCK FUND
16.1 Definitions......................................................................................... 73
16.2 Establishment of New Company Stock Fund............................................................. 73
16.3 Direction to Purchase Stock......................................................................... 74
16.4 Purchase of Stock by Trustee........................................................................ 74
16.5 Maximum Number of Shares............................................................................ 74
16.6 Allocation of New Company Stock to Participants Accounts............................................ 74
16.7 Repurchase of New Company Stock..................................................................... 75
16.8 Plan Distributions.................................................................................. 75
16.9 Voting of New Company Stock......................................................................... 75
16.10 Tender of New Company Stock......................................................................... 76
16.11 General Provisions.................................................................................. 77
APPENDIX I
v
CB RICHARD ELLIS 401(K) PLAN
The CB Commercial Holdings, Inc. Capital Accumulation Plan was adopted
effective as of April 19, 1989, and was subsequently amended and renamed the CB
Commercial 401(k) Capital Accumulation Plan. The Plan is hereby amended and
restated as set forth herein as of the date of the Merger to add the New
Employer Stock Fund, to rename the Plan the CB Richard Ellis 401(k) Plan and,
except where other dates are specified, for the purpose of complying with the
Uruguay Round Agreements Act of 1994, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997 and the IRS Restructuring and Reform Act of
1998. Set forth as Appendix I are provisions having application on or after
April 19, 1989, but which are deleted from the Plan effective January 1, 1996
due to lack of any further applicability. The Plan is intended to qualify under
Sections 401(a) and 401(k) of the Code. The Plan is subject to modification,
amendment or termination at any time as provided in Articles 12 and 13,
including (without limitation) amendments required to meet regulations and rules
issued by the Secretary of the Treasury or his delegate or the Secretary of
Labor. Capitalized terms used in this paragraph and in the hereinafter set forth
text of the Plan are defined in Article 1 and Article 16.
ARTICLE I
Definitions
1.1 "Account" means the records maintained by the Committee to determine
the value of each Participant's interest in the assets of the Plan, and may
refer to the Participant's Company Contribution Account, Matching Profit Sharing
Contribution Account, Deferral Account, Voluntary Contribution Account or
Rollover Account singularly or in any appropriate combination. All references to
an Account of a Participant shall include any subaccount established pursuant to
Section 5.1.
1.2 "Actual Contribution Percentage" means the ratio determined under
Section 4.13(a).
1.3 "Actual Deferral Percentage" means the ratio determined under Section
4.6(a).
1.4 "Affiliated Company" means:
(a) any member of a controlled group of corporations (within the
meaning of Section 414(b) of the Code, modified, for purposes of Section 5.3, by
Section 415(h) of the Code) of which the Company is a member,
(b) any trade or business (whether or not incorporated) under common
control with the Company (within the meaning of Section 414 (c) of the Code,
modified, for purposes of Section 5.3, by Section 415(h) of the Code), or
(c) any member of an affiliated service group (within the meaning of
Section 414(m) of the Code) of which the Company is a member.
1.5 "Affiliated Group" means the Company and the Affiliated Companies.
1.6 "Aggregate 401(k) Contributions" means, for any Plan Year, the sum of
the following: (a) the Participant's Deferrals for the Plan Year; (b) the
Matching Profit Sharing Contribution allocated to the Participant's Accounts as
of a date within the Plan Year, to the extent that such Matching Profit Sharing
Contributions are aggregated with Deferrals pursuant to section 4.9; and (c) the
Qualified Non-Elective Contributions allocated to the Participant's Accounts as
of a date within the Plan Year, to the extent that such Qualified Non-Elective
Contributions are aggregated with Deferrals pursuant to Section 4.10.
1.7 "Aggregate 401(m) Contributions" means, for any Plan Year, the sum of
the following: (a) the Participant's Matching Profit Sharing contributions for
the Plan Year; (b) the Participant's Deferrals for the Plan Year, to the extent
that such Deferrals are aggregated with Deferrals, Voluntary Contributions and
Matching Profit Sharing Contributions pursuant to Section 4.16; and (c) the
Qualified Non-Elective Contributions allocated to the Participant's Accounts as
of a date within the Plan Year, to the extent that such Qualified Non-Elective
Contributions are aggregated with Voluntary Contributions and Matching Profit
Sharing Contributions pursuant to Section 4.17; and (d) the Participant's
voluntary Contributions for the Plan Year.
1.8 "Annual Addition" means the sum described in Section 5.3(b).
1.9 "Annual Statement" means the statement of a Participant's Accounts
referred to in Section 5.6.
1.10 "Applicant" has the meaning set forth in Section 10.12(a).
1.11 "Average Contribution Percentage" means the average ratio determined
under Section 4.13(b).
1.12 "Average Deferral Percentage" means the average ratio determined under
Section 4.6(b).
1.13 "Beneficiary" means the one or more persons or entities entitled to
receive distribution of a Participant's interest in the Plan in the event of his
death.
1.14 "Board" means the Board of Directors of the Company.
1.15 "Claimant" has the meaning set forth in Section 10.12(b).
1.16 "Claims Coordinator" has the meaning set forth in Section 10.12.
1.17 "Code" means the Internal Revenue Code of 1986, as amended.
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1.18 "Committee" means the Administrative Committee appointed and acting
pursuant to the provisions of Article 10.
1.19 "Company" means CB Richard Ellis Services, Inc., a Delaware
corporation, formerly known as CB Commercial Holdings, Inc. The term "Company"
shall also include any successor employer if the successor employer expressly
agrees in writing as of the effective date of succession to continue the Plan
and become a party to the Trust Agreement.
1.20 "Company Contribution Account" means the Account established under
Section 5.1 for each Participant, the balance of which is attributable to Profit
Sharing Contributions made pursuant to Section 4.3, forfeitures and earnings and
losses of the Trust Fund with respect to such contributions and forfeitures.
1.21 "Compensation" means remuneration of an Employee received while a
Participant from the Affiliated Group in a Plan Year or fraction of a Plan Year
calculated in accordance with Section 1.75(f) (including application of the Code
Section 401(a)(17) limit set forth in the last two paragraphs of Section 1.75).
1.22 "Deferral" means the portion of a Participant's compensation which he
elects to defer so that such amount may be contributed to this Plan as a
Participating Company contribution pursuant to Section 4.1.
1.23 "Deferral Account" means the Account established under Section 5.1
for each Participant, the balance of which is attributable to the Participant's
Deferrals and Qualified Non-Elective Contributions and earnings and losses of
the Trust Fund with respect to such Deferrals and Qualified Non-Elective
Contributions.
1.24 "Defined Benefit Dollar Limitation" means, for any Plan Year or other
Limitation Year, $90,000 or such amount as determined by the Commissioner of
Internal Revenue under Section 415(d) (1) of the code and Treasury Regulations
thereunder as of the January 1 falling within such Plan Year or Limitation Year.
1.25 "Defined Benefit Fraction" means the fraction described in Section
5.3(d)(1).
1.26 "Defined Benefit Plan" means a Qualified Plan other than a Defined
Contribution Plan.
1.27 "Defined Contribution Dollar Limitation" means, for any Plan Year or
other Limitation Year, $30,000 or, if greater, 25% of the dollar limitation in
effect under Code Section 415(b) (1) (A) as of the January 1 falling within such
Plan Year or Limitation Year. If a short Limitation Year is created because of a
Plan amendment changing the Limitation Year to a different 12-consecutive month
period, the Defined Contribution Dollar Limitation for the short Limitation Year
shall not exceed the amount determined in the preceding sentence multiplied by a
fraction, the numerator of which is the number of months in the short Limitation
Year and the denominator of which is 12.
1.28 "Defined Contribution Fraction" means the fraction described in
Section 5.3(d)(2).
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1.29 "Defined Contribution Plan" means a Qualified Plan which provides
individual participant accounts for employer contributions, forfeitures and
gains or losses thereon, in accordance with Section 414(i) of the Code.
1.30 "Determination Date" means for any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year.
1.31 "Determination Period" means the Plan Year containing the
Determination Date and the four preceding Plan Years.
1.32 "Directed Account" means an Account, the investment of which is
subject to Participant direction under Section 5.7.
1.33 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.34 "Disability" means a physical or mental condition which totally and
permanently prevents a Participant from engaging in any substantial gainful
employment with the Affiliated Group. The determination of Disability shall be
made by the Committee in its complete discretion after it has received such
medical advice as it deems, in its complete discretion, appropriate and
competent.
1.35 "Distributee" means an Employee or a 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
QDRO are Distributees with regard to the interest of the spouse or former
spouse.
1.36 "Effective Date" means April 19, 1989.
1.37 "Eligible Participant" means a Participant who is eligible to receive
an allocation of the Participating Company Profit Sharing Contribution and
forfeitures in a particular Plan Year, pursuant to Section 5.2(a)(2).
1.38 "Eligible Retirement Plan" means an individual retirement account
described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in section
403 (a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts a 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.
1.39 "Eligible Rollover Distribution" means any distribution of all or any
portion of the balance to the credit of a Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of 10 years or more; hardship withdrawals
from Deferral Accounts; and any distribution to the extent such distribution is
required under section 401(a)(9) of the Code;
4
and the portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
1.40 "Employee" means any person who is: (a) employed by a member of the
Affiliated Group if the relationship between the member of the Affiliated Group
and such person is, for federal income tax purposes, the legal relationship of
employer and employee, or (b) a Leased Employee as provided in Section 2.4. For
purposes of this definition of "Employee," and notwithstanding any other
provisions of the Plan to the contrary, individuals who are not classified by
the Company, in its discretion, as employees under Section 3121(d) of the Code
(including, but not limited to, individuals classified by the Company as
independent contractors and non-employee consultants) and individuals who are
classified by the Company, in its discretion, as employees of any entity other
than a Participating Company do not meet the definition of Eligible Employee and
are ineligible for benefits under the Plan, even if the classification by the
Company is determined to be erroneous, or is retroactively revised. In the event
the classification of an individual who is excluded from the definition of
Employee under the preceding sentence is determined to be erroneous or is
retroactively revised, the individual shall nonetheless continue to be excluded
from the definition of Employee and shall be ineligible for benefits for all
periods prior to the date the Company determines its classification of the
individual is erroneous or should be revised. The foregoing sets forth a
clarification of the intention of the Company regarding participation in the
Plan for any Plan Year, including Plan Years prior to the amendment of this
definition of "Employee."
1.41 "Employment Commencement Date" means whichever of the following is
applicable:
(a) Except as provided in subsection (b) of this section, the date
on which an Employee first performs an Hour of Service in any capacity for the
Affiliated Group with respect to which the Employee is compensated or is
entitled to compensation by the Affiliated Group.
(b) In the case of an Employee who incurs a Period of Severance of
one or more years, the term "Employment Commencement Date" shall mean the first
day following the commencement of such Period of Severance on which the Employee
performs an Hour of Service for the Affiliated Group with respect to which the
Employee is compensated or entitled to compensation by the Affiliated Group.
1.42 "ERISA " means the Employee Retirement Income Security Act of 1974,
as amended.
1.43 "Excess Aggregate Contributions" means the amount by which the
Aggregate 401(m) Contributions of Highly Compensated Employees are reduced
pursuant to Sections 4.13(c), 4.14 and 4.15.
1.44 "Excess Contributions" means the amount by which the Aggregate 401(k)
Contributions of Highly Compensated Employees are reduced pursuant to Sections
4.6(c), 4.7 and 4.8.
5
1.45 "Excess Deferrals" means the amount of a Participant's, Deferrals and
other elective deferrals (within the meaning of section 402(g) (3) of the Code)
that exceed the limits set forth in Section 4.5.
1.46 "Highly Compensated Employee" for means
(a) Any Employee who performs services for the Company or any
Affiliated Company who (i) was a 5% owner of the Company or any Affiliated
Company at any time during the Plan Year or the preceding Plan Year; or (ii) for
the preceding Plan Year, received compensation from the Company or any
Affiliated Company in excess of $80,000 (as adjusted pursuant to Section 415(d)
of the Code).
(b) Any former Employee who separated from service (or was deemed to
have separated) prior to the current Plan Year, who performs no services for the
Company or any Affiliated Company during the current Plan Year, and who met the
description in (a) above for the year of his separation or any year after he
attained age 55.
(c) For purposes of this definition of "Highly Compensated
Employee", "compensation" means compensation within the meaning of Section
415(c)(3) of the Code, but including qualified transportation fringes and
elective or salary reduction contributions to a cafeteria plan, cash or deferred
arrangement or tax-sheltered annuity.
(d) This definition of "Highly Compensated Employee" shall be
effective for Plan Years beginning on or after January 1, 1997, except that for
purposes of determining if an Employee was a Highly Compensated Employee in
1997, this definition will be treated as having been in effect in 1996.
1.47 "Hour of Service" means:
(a) Each hour for which an Employee is directly or indirectly
compensated, or entitled to compensation, by the Company or an Affiliated
Company or a predecessor employer as required by section 414(a)(2) of the Code
and the Treasury Regulations thereunder for the performance of services. Hours
of Service under this subsection will be credited to the Employee for the
Computation Period in which the services are performed.
(b) Each hour for which an Employee is directly or indirectly
compensated, or entitled to compensation, by the Company or an Affiliated
Company on account of a period of time during which no services are performed
(without regard to whether the employment relationship between the Employee and
the Company or Affiliated Company has terminated) due to vacation, holiday,
illness, incapacity, disability, layoff, jury duty, military duty or leave of
absence with pay. Hours of Service under this subsection will be calculated and
credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations
which are incorporated herein by this reference.
(c) Each hour for which an Employee is directly or indirectly
compensated, or entitled to compensation for, an amount as back pay (without
regard to mitigation of damages) either awarded or agreed to by the Company or
an Affiliated Company. Hours of Service under this subsection will be credited
to the Employee for the Computation Period or Periods to which
6
the award or agreement pertains rather than the Computation Period in which the
award, agreement or payment is made.
(d) Each hour credited on the basis of applicable regulations under
ERISA for unpaid periods of absence for service in the armed forces of the
United States or the Public Health Service of the United States as a result of
which such Employee's reemployment rights are guaranteed by law, provided that
the Employee returns to employment with the Company or any Affiliated Company
within the time such rights are guaranteed.
(e) If the Company or an Affiliated Company maintains a Qualified
Plan of a predecessor employer, each hour credited by such predecessor employer
as required by Section 414 (a) of the Code.
(f) Solely for purposes of preventing a One Year Break in Service,
each hour credited in accordance with Sections 410(a)(5)(E) and 411(a)(6)(E) of
the Code for unpaid periods during which an Employee is absent from work by
reason of the pregnancy of the Employee, the birth of a child of the Employee,
the placement of a child with the Employee in connection with the adoption of
such child by the Employee, or for purposes of caring for such child for a
period beginning immediately following such birth or placement, provided-that
the Employee furnishes timely information to the Company to establish that the
absence from work is for one of the aforementioned reasons, and the number of
days for which there was such an absence. The Hours of Service created under
this subsection shall be credited in the computation Period in which the absence
begins only if necessary to prevent a One Year Break in Service in that period,
and in all other cases, in the immediately succeeding Computation Period.
Notwithstanding the foregoing: (1) no more than 501 Hours of Service
shall be credited to an Employee under subsection (b) , (c) or (f) on account of
any single continuous period of time during which no services are performed; (2)
an hour for which an Employee is directly or indirectly compensated or entitled
to compensation by the Company or an Affiliated Company on account of a period
during which no services are performed shall not constitute an Hour of Service
hereunder if such compensation is paid or due under a plan maintained solely for
the purpose of complying with applicable workers' compensation, unemployment
compensation or disability insurance laws; (3) Hours of Service shall not be
credited for payments which solely reimburse an Employee for medical or
medically related expenses; and (4) the same Hour of Service shall not be
credited to an Employee both under subsection (a) or (b) and under subsection
(c).
Each Employee whose Compensation is not determined on the basis of
certain amounts for each hour worked (such as salaried, commission and piecework
employees) and whose hours are not required to be counted and recorded by any
federal law (such as the Fair Labor Standards Act) shall be credited with 10
Hours of Service daily, 45 Hours of Service weekly, 95 Hours of Service
semimonthly or 190 Hours of Service monthly, if his Compensation is determined
on a daily, weekly, semimonthly or monthly basis, respectively, for each such
period in which the Employee would be credited with at least one Hour of Service
pursuant to this Section. In addition, in lieu of counting Hours of Service for
Employees whose Compensation is determined on the basis of certain amounts for
each hour worked or whose hours are required to be counted and recorded by
federal law, the Committee may apply one of
7
the foregoing equivalencies for purposes of crediting such Employees with Hours
of Service under this Section.
The Committee shall determine the number of Hours of Service, if any,
to be credited to an Employee under the foregoing rules in a uniform and
nondiscriminatory manner and in accordance with applicable federal laws and
regulations including without limitation Department of Labor Regulation Section
2530.200b-2 (b) and (c).
1.48 "Key Employee" means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the Determination Period
was:
(a) an officer of the Company or any Affiliated Company, if such
individual's Section 415 Compensation exceeds 50% of the amount in effect under
Code Section 415(b)(1)(A),
(b) an owner (or considered an owner under Section 318 of the Code)
of one of the ten largest interests in the Company or any Affiliated Company, if
such individual's Section 415 Compensation exceeds the Defined Contribution
Dollar Limitation,
(c) a 5% owner of the Company or any Affiliated Company, or
(d) a 1% owner of the Company or any Affiliated Company who has an
annual Section 415 Compensation of more than $150,000.
The determination of who is a Key Employee will be made in accordance with
Section 416(i) of the Code and the Treasury Regulations thereunder.
1.49 "Leased Employee" means a person described in Section 2.4 (a).
1.50 "Limitation Year" means the 12-consecutive-month period used by a
Qualified Plan for purposes of computing the limitations on benefits and annual
additions under Section 415 of the Code. The Limitation Year for this Plan is
the Plan Year. If the Limitation Year is amended to a different 12-consecutive-
month period, the new Limitation Year shall begin on a date within the
Limitation Year in which the amendment is made.
1.51 "Matching Profit Sharing Contributions" means the Participating
Company contribution made on behalf of a Participant pursuant to Section 4.2.
1.52 "Matching Profit Sharing Contributions Account" means the Account
established under Section 5.1 for each Participant, the balance of which is
attributable to Matching Profit Sharing Contributions made pursuant to Section
4.2, forfeitures and earnings and losses of the Trust Fund with respect to such
contributions and forfeitures.
1.53 "Maximum Annual Addition" means the limitation described in Section
5.3.
1.54 "Merger" means the merger of BLUM CB Corp., a subsidiary of CBRE
Holding, Inc., into CB Richard Ellis Services, Inc.
8
1.55 "Minimum Allocation" means the Minimum Allocation described in
Section 9.3.
1.56 "Nonhighly Compensated Employee" for any Plan Year means any
active Employee who is not a Highly Compensated Employee.
1.57 "Normal Retirement Age" means the date a Participant attains age
65.
1.58 "Old Company Stock" means shares of Class B-2 Common Stock, par
value $.01 per share, of the Company, as in existence prior to the Merger.
1.59 "One Year Break in Service" means, for purposes of determining
vesting under Article 6, a Plan Year in which the Participant fails to complete
at least one Hour of Service.
1.60 "Participant" means an Employee or former Employee who has met
the applicable eligibility requirements of Article 2 and who has not yet
received a distribution of the entire amount of his vested interest in the Plan.
1.61 "Participating Company" means the Company, each Affiliated
Company that has adopted the Plan in the manner provided in Article 14, and each
organizational unit of the Company or an Affiliated Company that is designated
as a Participating Company by the Board of Directors of the Company; excluding,
however, each organizational unit of the Company or any Affiliated Company that
has adopted the Plan that is designated as a nonparticipating unit by the Board
of Directors of the Company. For purposes of the Plan the term "organizational
unit" shall include, without limitation, any division, department or office of
the Company or any Affiliated Company.
1.62 "Period of Service" means a period of time computed under the
"elapsed time", method, as follows:
(a) An Employee shall be credited with a Period of Service
equal to the elapsed time between his Employment Commencement Date and the date
on which he commences a Period of Severance.
(b) If an Employee incurs a Period of Severance and is
subsequently reemployed by the Affiliated Group, he shall be credited with a
Period of Service pursuant to the following rules:
(i) An Employee shall receive credit for a Period of
Severance as if it were a Period of Service if such Period of Severance
commences by reason of a voluntary termination of employment, discharge or
retirement and the Participant is reemployed by the Affiliated Group within
12 months after the commencement of such Period of Severance.
(ii) An Employee shall receive credit for a Period of
Severance as if it were a Period of Service if such Period of Severance
commences by reason of a voluntary termination of employment, discharge or
retirement during a time in which such Employee is absent from service for
a reason other than a voluntary termination of
9
employment, discharge or retirement and the Employee is reemployed by the
Affiliated Group within 12 months after his initial absence from service.
(iii) Except as provided in subsections(b)(i) and (ii) hereof,
the Period of Severance shall not be included in the Employee's Period of
Service and, subject to subsection (c) hereof, all of an Employee's Periods
of Service shall be aggregated for purposes of the Plan.
(c) Notwithstanding any other provision of this Plan, service
performed by Employees for an Affiliated Company (or a unit or division of such
Company) prior to the date as of which such entity becomes an Affiliated Company
(or a unit or division of such Company) shall not be taken into account in
computing Periods of Service for any purpose of this Plan, except to the extent
and in the manner determined by resolution of the Board.
1.63 "Period of Severance" means:
(a) The period of time commencing on the earlier of (i) the date on
which an Employee voluntarily terminates employment, retires, is discharged, or
dies; or (ii) the first anniversary of the first date of a period in which an
Employee remains absent from service (with or without pay) with the Company and
all Affiliated Participating Companies for any reason other than a voluntary
termination of employment, retirement, discharge or death (such as vacation,
holiday, sickness, disability, leave of absence or layoff), and continuing until
the first day, if any, on which the Participant completes one or more Hours of
Service for which he is directly or indirectly paid by the Affiliated Group for
the performance of duties as an Employee.
(b) In the case of an Employee who is absent from work for maternity
or paternity reasons, no Period of Severance shall commence until the second
anniversary of the first date of such absence. The period between the date of
commencement of an absence for maternity or paternity reasons and the first
anniversary thereof shall be considered a Period of Service; the period between
the first and second anniversaries of the commencement of such absence shall be
considered neither a Period of Service nor a Period of Severance. For purposes
of this Section 1.63(b), an absence from work for maternity or paternity reasons
means an absence:
(i) By reason of pregnancy of the Employee,
(ii) By reason of the birth of a child of the Employee,
(iii) By the reason of the placement of a child with the
Employee in connection with the adoption of such child by such Employee, or
(iv) For purposes of caring for such child for a period
beginning immediately following such birth or placement.
1.64 "Permissive Aggregation Group" means the Required Aggregation Group of
Qualified Plans plus any other Qualified Plan or Qualified Plans of the Company
or any Affiliated Company which, when considered as a group with the Required
Aggregation Group,
10
would continue to satisfy the "requirements of Sections 401 (a) (4) and 410 of
the Code (including simplified employee pension plans).
1.65 "Plan" means, effective as of the date of the Merger, the CB Richard
Ellis 401(k) Plan set forth herein, as amended from time to time.
1.66 "Plan Year" means the period with respect to which the records of the
Plan are maintained, which shall be the 12-month period beginning on January 1
and ending on December 31, and includes such periods prior to the Effective
Date.
1.67 "Present Value" means present value based only on the interest and
mortality rates specified in a Defined Benefit Plan for purposes of the
calculation of the Top-Heavy Ratio.
1.68 "Profit Sharing Contribution" means the Participating Company
contribution made on behalf of a Participant pursuant to Section 4.3.
1.69 "Projected Annual Benefit," means the annual benefit described in
Section 5.3(d)(3).
1.70 "QDRO" means a qualified domestic relations order as set forth in
Section 15.4(b).
1.71 "Qualified Plan" means an employee benefit plan that is qualified
under Section 401(a) of the Code.
1.72 "Qualified Non-Elective Contribution" means the contribution made
under Section 4.10.
1.73 "Required Aggregation Group" consists of: (a) each Qualified Plan
(including simplified employee pension plans) of the Company or any Affiliated
Company in which at least one Key Employee participates, and (b) any other
Qualified Plan (including simplified employee pension plans) of the Company or
any Affiliated Company which enables a Qualified Plan described in subclause (a)
to meet the requirement of Sections 401(a)(4) or 410 of the Code.
1.74 "Rollover Account" means the Account established under Section 5.1 for
a Participant, the balance of which is attributable to the Participant's
rollover and transfer contributions under Section 3.3 and earnings and losses of
the Trust Fund attributable to such contributions.
1.75 "Section 414 (s) Compensation" means Compensation, unless, by
appropriate action of the Committee or its delegate, with respect to a Plan
Year, the Committee determines that it shall consist of remuneration received by
an Employee from members of the Affiliated Group in a Plan Year, or fraction of
a Plan Year, while such Employee is a Participant, as determined under one of
the following subsections (a) through (g), and otherwise determined in
accordance with the rules of this Section 1.75:
(a) Compensation as defined in Treasury Regulation section 1.415-
2(d)(2) and (d)(3) or any successor thereto.
11
(1) Such compensation includes:
(A) The Employee's wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not
an amount is paid in cash) for personal services actually rendered in
the course of employment with the Affiliated Group to the extent that
the amounts are includable in gross income (including, but not limited
to, commissions paid salespeople, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements or other expense
allowances 'under a nonaccountable plan (as described in Treas. Reg.
Section 1.62-2 (c) ). Such wages include foreign earned income,
whether or not excludable from gross income under Code Section 911,
and such wages are determined without regard to the exclusions from
gross income under Code Sections 931 and 933;
(B) Amounts described in Code Sections 104(a)(3), 105(a),
and 105(h), but only to the extent that these amounts are includable
in the gross income of the Employee;
(C) Amounts paid or reimbursed by the Affiliated Group for
moving expenses incurred by an Employee, but only to the extent that
at the time of the payment it is reasonable to believe that these
amounts are not deductible by the Employee under Code Section 217 or
excludable by the Employee under Code Section 132;
(D) The value of a non-qualified stock option granted to an
Employee by the Affiliated Group, but only to the extent that the
value of the option is includable in the gross income of the Employee
for the taxable year in which granted; and
(E) The amount includable in the gross income of an
Employee upon making the election described in Code Section 83(b).
(F) Amounts received by the Employee pursuant to an
unfunded deferred compensation plan, in the Plan Year in which
includable in the Employee's gross income.
(2) Such compensation does not include:
(A) (i) Contributions made by the Affiliated to a plan of
deferred compensation to the extent that, before the application of
Code Section 415 limitations to that plan, the contributions are not
includable in the gross income of the Employee for the taxable year
in which contributed; and (ii) employer contributions made on behalf
of an Employee to a simplified employee pension described in Code
Section 408(k) for the taxable year in which contributed;
12
(B) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture (in accordance with Code Section 83
and the regulations thereunder);
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(D) Other amounts which receive special tax benefits, such
as premiums for group-term life insurance (but only to the extent that
the premiums are not includable in the gross income of the Employee),
or contributions made by a member of the Affiliated Group (whether or
not under a salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee).
(b) Compensation as defined in Treas. Reg. Section 1.415-2 (d) (10)
or any successor thereto (such compensation includes the items described in (a)
(1) (A) above and excludes, to the extent otherwise applicable, those items
described in (a)(1)(F) and (a)(2) above).
(c) "Wages" within the meaning of section 3401(a) and all other
payments of compensation to an Employee by a member of the Affiliated Group (in
the course of such employer's trade or business) for which such employer is
required to furnish the Employee a written statement under sections 6041(d),
6051(a)(3), and 6052, but determined without regard to any rules under section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in section 3401 (a) (2)) . (This option is "wages" as
reflected on the taxable federal wages box of the Form W-2 (or the aggregate of
same for an Employee receiving more than one W-2 for a taxable year from the
Affiliated Group) of the Employee.)
(d) "Wages" as defined in section 3401(a) of the Code for purposes of
income tax withholding at the source, but determined without regard to any rules
that limit the remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception for agricultural
labor in section 3401(a)(2) of the Code).
(e) Any of the definitions set forth in subsections (a), (b), (c) and
(d) above, reduced by all of the following items (even if includable in gross
income) : reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation and welfare benefits; provided
that the definition of Section 414(s) Compensation set forth in subsection (d)
may be reduced by moving expenses only to the extent that at the, time of the
payment it is reasonable to believe that these amounts are deductible by the
Employee under section 217 of the Code;
(f) Any of the definitions set forth in subsections (a), (b), (c),
(d) and (e) above, modified to include any elective contributions made by a
member of the Affiliated Group on behalf of the Employee that are described in
Code Section 415(c)(3)(D); or
13
(g) Any reasonable definition of compensation that does not by design
favor Highly Compensated Employees and that satisfies the nondiscrimination
requirement set forth in Treas. Reg. Section 1.414(s)-1(d)(2) or the successor
thereto.
Any definition of Section 414(s) Compensation shall be used consistently to
define the compensation of all Employees taken into account in satisfying the
requirements of an applicable provision for the relevant determination period.
For purposes of applying the limitations of Article 4, Section 414(s)
Compensation shall not include in any Plan Year amounts in excess of $150,000,
as adjusted by the Commissioner of Internal Revenue to reflect increases in the
cost-of-living in accordance with section 401(a)(17)(B).
1.76 "Section 415 Compensation" means an Employee's remuneration described
in Section 1.75(c) unless, by appropriate action of the Committee or its
delegate, with respect to a Limitation Year, the Committee determines that it
shall consist of any one of the definitions of remuneration described in
subsections (a), (b) or (d) of Section 1.75. Any definition of Section 415
Compensation shall be used consistently, to define the compensation of all
Employees taken into account in satisfying the requirements of an applicable
provision of this Plan for the relevant determination period.
1.77 "Severance" means an Employee's voluntary or involuntary termination
of employment with the Company and all Affiliated Companies for any reason at
any time.
1.78 "TEFRA" means the Tax Equity and Fiscal Responsibility Act of 1982, as
amended.
1.79 "Top-Heavy Plan" means one of the following conditions exists:
(a) If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is
not a part of any Required Aggregation Group or Permissive-Aggregation Group of
Qualified Plans.
(b) If the Plan is a part of a Required Aggregation Group but not
part of a Permissive Aggregation Group of Qualified Plans and the Top-Heavy
Ratio for the Required Aggregation Group exceeds 60%.
(c) If the Plan is a part of a Required Aggregation Group and part of
a Permissive Aggregation Group of Qualified Plans and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60%.
1.80 "Top-Heavy Ratio" means the following:
(a) The Top-Heavy Ratio with respect to the Qualified Plans taken
into account under Section 1.79(a), (b) or (c), as applicable, is a fraction,
the numerator of which is the sum of the Present Value of accrued benefits and
the account balances (as required by Code Section 416) of all Key Employees with
respect to such Qualified Plans as of the Determination Date (including any part
of any accrued benefit or account balance distributed during the five-year
period ending on the Determination Date), and the denominator of which is the
sum of
14
the Present Value of the accrued benefits and the required account balances
(including any part of any accrued benefit or account balance distributed in the
five-year period ending on the Determination Date) of all Employees with respect
to such Qualified Plans as of the Determination Date.
(b) For purposes of subsection (a), the value of account balances and
the Present Value of accrued benefits will be determined as of the most recent
Top-Heavy Valuation. Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Section 416 of the Code
and the Treasury Regulations thereunder for the first and second plan years of a
Defined Benefit Plan. The account balances and accrued benefits of a participant
who is not a Key Employee but who was a Key Employee in a prior year will be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, transfers and contributions unpaid as of the
Determination Date are taken into account, will be made in accordance with
Section 416 of the Code and the Treasury Regulations thereunder. Employee
contributions described in Section 219(e)(2) of the Code will not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar year.
(c) Notwithstanding the foregoing, the account balances and accrued
benefits of any Employee who has not performed services for an employer
maintaining any of the aggregated plans during the five-year period ending on
the Determination Date shall not be taken into account for purposes of this
subsection.
1.81 "Top-Heavy Valuation Date" means the last day of each Plan Year.
1.82 "Top-Paid Group" for any Plan Year means the top 20 percent (in terms
of Total Compensation) of all Employees of the Affiliated Company, excluding the
following:
(a) Any Employee covered by a collective bargaining agreement unless
such Employee would not be excluded from becoming a Participant under Section
2.2;
(b) Any Employee who is a nonresident alien with respect to the
United States who receives no income from a source within the United States from
a member of the Affiliated Group;
(c) Any Employee who has not completed at least 500 Hours of Service
during any six-month period at the end of the-Plan Year;
(d) Any Employee who normally works less than 17% hours per week;
(e) Any Employee who normally works no more than six months during
any year; and
(f) Any Employee who has not attained the age of 21 at the end of the
Plan Year.11
15
1.83 "Total Compensation" means for purposes of determining Highly
Compensated Employee status, the Section 415 Compensation employed in the
"determination year" or "look-back year" (as those terms are used in the
definition of Highly Compensated Employee) adjusted, in each case, to add back
all elective deferrals in the manner described in Section 1.75(f).
1.84 "Trust Agreement" means the agreement or agreements executed by the
Company and the Trustee which establishes a trust fund to provide for the
investment, reinvestment, administration and distribution of contributions made
under the Plan and the earnings thereon, as amended from time to time.
1.85 "Trust Fund" means the assets of the Plan held by the Trustee pursuant
to the Trust Agreement
1.86 "Trustee" means the one or more individuals or organizations who have
entered into the Trust Agreement as Trustee(s), and any duly appointed
successor.
1.87 "Valuation Date" means the date with respect to which the Trustee
determines the fair market value of the assets comprising the Trust Fund or any
portion thereof. The regular Valuation Date shall be the last day of each Plan
Year. However, if the Committee determines that the fair market value of the
assets comprising the Trust Fund (or any portion thereof) has changed
substantially since the previous Valuation Date, or if the Committee determines
it to be in the best interests of the Plan and the Participants to value the
assets of the Trust Fund (or any portion thereof) at a time other than the
regular Valuation Date, the Committee may fix, in a uniform and
nondiscriminatory manner, one or more interim Valuation Dates. While applying
the foregoing rules to Trust Fund assets other than open and investment
companies, the Committee may, with respect to the latter, establish Valuation
Dates (including valuations more often than once a day) which coincide with such
investment companies' mandated valuations for public shareholders generally.
1.88 "Voluntary Contribution" means a contribution made to the Plan by or
on behalf of a Participant pursuant to Section 3.1 that is included in the
Participant's gross income for the year in which made.
1.89 "Voluntary Contribution Account" means the Account established under
Section 5.1 for a Participant, the balance of which is attributable to the
Participant's Voluntary Contributions and the earnings and losses of the Trust
Fund with respect to such contributions.
1.90 "Welfare Benefit Fund" means an organization described in paragraph
(7), (9), (17) or (20) of Section 501 (c) of the code, a trust, corporation or
other organization not exempt from federal income tax, or to the extent
provided. in Treasury Regulations, any account held for an employer by any
person, which is part of a plan of an employer through which the employer
provides benefits to employees or their beneficiaries, other than a benefit to
which Sections 83(h), 404 (determined without regard to Section 404(b)(2)) or
404A applies, or to which an election under Section 463 applies.
1.91 "Year of Service" means a Plan Year in which an Employee completes at
least one Hour of Service.
16
ARTICLE II
ELIGIBILITY TO PARTICIPATE
2.1 Eligibility to Participate
(a) Subject to the provisions of this Article 2, each Employee shall
become a Participant on the first day of the first calendar month following such
Employee's (a) completion of a Period of Service of at least six months, and (b)
attainment of age 21.
(b) Effective July 1, 1996, subject to the provisions of this Article
2, each Employee shall become a Participant upon such Employee's (i) attainment
of age 21 and (ii) completion of a Period of Service consisting of at least one
Hour of Service with a Participating Company.
(c) Effective for Plan Years ended in 1996 and thereafter, at the
option of the Committee, Code Section 410(b) and Article 4 hereof may be applied
in either of the following two alternative ways:
(i) By treating Employees not meeting the requirement of
subsection 2.1(b) above as excludable employees within the meaning of
Treas. Reg. (S) 1.410(b)-6(b)(1).
(ii) By treating the Plan as consisting of two plans: (A) the
excludable employees under the first of which consist of Employees who, on
the January 1 or July 1 falling within the Plan Year, had not completed a
one-year Period of Service and attained age 21 and (B) the excludable
employees under the second of which consist of Employees who have not
satisfied Section 2.1(b) and Employees who, on the January 1 or July 1
falling within the Plan Year had completed a one-year Period of Service and
attained age 21.
2.2 Exclusions from Participation
Notwithstanding the fact that an Employee would otherwise become a
Participant pursuant to Section 2.1 or 2.3:
(a) Collective Bargaining Employees
An Employee shall not become a Participant if he is covered by a
collective bargaining agreement that does not expressly provide for
participation in the Plan, provided that the representative of the Employees
with whom the collective bargaining agreement is executed has had an opportunity
to bargain concerning retirement benefits for such Employees. An Employee who
is ineligible to participate in the Plan solely by reason of this paragraph
shall become a Participant on the first day after he is no longer covered by
such a collective bargaining agreement on which he completes at least one Hour
of Service with a Participating Company.
17
(b) Nonparticipating Affiliated Companies and Units
An Employee who is employed by a nonparticipating unit of a
Participating Company or by an Affiliated Company that is not a Participating
Company shall not become a Participant until the date on which he is credited
with one or more Hours of Service by a Participating Company.
(c) Leaves of Absence
An Employee who is on an approved leave of absence without pay or in
the service of the armed forces of the United States shall not become a
Participant until the date on which he is credited with one or more Hours of
Service by a Participating Company, provided that the Employee returns to
employment with the Company or an Affiliated Company immediately following such
leave of absence or, in the case of an Employee who is on military leave, during
the period in which his reemployment rights are guaranteed by law.
Notwithstanding any other provision of the Plan to the contrary, contributions,
benefits, and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.
(d) Nonresident Aliens
An Employee shall not become a Participant if he is a nonresident
alien who receives no earned income (within the meaning of Section 911(d) (2) of
the Code) from the Company or an Affiliated Company which constitutes income
from sources within the United States (within the meaning of Section 861 (a) (3)
of the Code), until the date on which he receives such earned income from a
Participating Company.
(e) Exclusion after Participation
A Participant who becomes ineligible under this Section shall continue
to receive credit for Hours of Service for purposes of determining vesting under
Section 6.1, but during the period of such ineligibility, (1) such Participant's
Compensation and Hours of Service shall not be taken into account for purposes
of determining the allocation of Participating Company contributions and
forfeitures to his Company Contribution Account under Sections 5.2 and 5.3, (2)
such Participant's Section 415 Compensation shall not be taken into account for
purposes of Section 9.3, and (3) such Participant may not make Deferrals.
(f) Leased Employees
A Leased Employee described in Section 2.4 (a) shall not become a
Participant.
(g) Employees Covered by Another Qualified Plan
An Employee covered by a Qualified Plan (other than this Plan)
maintained by an Affiliated Company shall not become a Participant.
18
(h) Statutory Independent Contractors
A real estate professional having the status of independent contractor
under Code Section 3508 shall not become a Participant.
(i) Effect of Koll Acquisition
Neither Koll Real Estate Services nor any entity which is a subsidiary
or affiliate of Koll Real Estate Services shall become a Participating Company
under the Plan or be deemed to have done so except pursuant to an adoption in
accordance with Section 14.1 or Section 14.3. In the event Koll Real Estate
Services or a subsidiary or affiliate thereof does become a Participating
Company on or after August 28, 1997 by reason of such a proper adoption ("Koll
Participating Entity"), Section 2.2 (b) (pertaining to the exclusion from
participation in the Plan of Employees employed by entities other than
Participating Companies) shall not apply so as to exclude any Employee of such a
Koll Participating Entity provided that, as determined by the Committee, the
Employee is employed primarily by such Koll Participating Entity. However,
Section 2.2 (g) (excluding employees covered by another qualified plan) shall
remain applicable in the case of such a Koll Participating Entity with respect
to its Employees that were participants on August 28, 1997 in the Koll Company
401(k) Plus Plan ("Koll Plan"), so long as the Koll Plan remains in existence.
On the other hand, any Employee of such a Koll Participating Entity not excluded
under the previous two sentences shall be eligible to participate in this Plan
in accordance with this Article 2, if such Employee otherwise meets the
requirements for participation set forth in this Article 2. With respect to
Employees described in the preceding sentence, such an Employee's "Hours of
Service" as defined in Section 1.26 of the Koll Plan shall be deemed Hours of
Service under this Plan for purposes of determining whether such Employee's
Company Contribution Account and Matching Profit Sharing Contribution Account
are 100% vested and non-forfeitable by reason of completion of 5 Years of
Service under Section 6.1(a), as amended by the Second Amendment.
2.3 Participation Upon Reemployment
(a) An Employee who has a Severance before becoming a Participant and
is then reemployed by a Participating Company shall be eligible to participate
on the later of (i) the first day of the first calendar month following
Employee's satisfaction of the requirements of Section 2.1, or (ii) the date he
resumes employment with a Participating Company.
(b) An Employee who has a Severance after becoming a Participant
shall be eligible to become a Participant again immediately upon his
reemployment by a Participating Company.
(c) Notwithstanding Section 2.3 (a) or 2.3 (b), if an Employee has a
Severance and has earned no vested interest in an Account at the date of
Severance, and such Employee incurs a Period of Severance equal to the greater
of (i) five years or (ii) the aggregate number of years of his Period of Service
before such Period of Severance, then such Employee will be treated as a new
Employee for purposes of the Plan and his Period of Service prior to his Period
of Severance shall be disregarded.
19
2.4 Leased Employees
(a) Definitions
A "Leased Employee" means any person (other than an Employee defined
under Section 1.41(a)) who, pursuant to an agreement between the Company or an
Affiliated Company ("Recipient") and any other person ("Leasing Organization"),
has performed services for the Recipient or for the Recipient 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 under primary direction or control by the Recipient.
"Leased Employee, shall not include a statutory independent contractor under
Code Section 3508.
(b) Inclusion as Employee
Upon satisfaction of the requirements of Section 2.4(a), a Leased
Employee shall be treated as an Employee of the Recipient, retroactive to the
date upon which he first completed an Hour of Service for a Participating
Company. However, contributions to or benefits under a Qualified Plan provided
by the Leasing Organization which are attributable to the services performed for
the Recipient shall be treated as if they had been provided by the Recipient.
(c) Exception
Subsection (b) shall not apply to any Leased Employee if such employee
is covered by a money purchase pension plan sponsored by the Leasing
Organization providing: (1) a nonintegrated employer contribution rate of at
least 10% of compensation, (2) immediate participation, and (3) full and
immediate vesting.
ARTICLE III
Participant Contributions
3.1 Voluntary Contributions
Each Participant who is an Employee and who is not subject to Section 2.2
may, if permitted by the Company, make Voluntary Contributions during the Plan
Year through payroll deductions or in a lump sum in such amount as such
Participant may elect, provided that the amount of such contributions, when
added to the contributions previously made by the Participant, if any, and
reduced by any amounts withdrawn under Section 3.2, does not exceed 10% of the
total Compensation of the Participant since becoming a Participant, and
provided, further, that if the Affiliated Group maintained or maintains any
other Qualified Plan, the total amount that may be contributed by the
Participant to the Plan and such other Qualified Plan shall not exceed 10% of
the total Compensation of the Participant since becoming a Participant in this
Plan and all other such Qualified Plans. Voluntary Contributions are also
subject to the limitations set forth in Section 4.13, 5.3 and 8.1(c)(2)(A).
20
3.2 Withdrawal of Participant Contributions
Upon application to the Committee, a Participant may withdraw an amount
from his Voluntary Contribution Account not to exceed the fair market value of
his Voluntary Contribution Account as of the Valuation Date preceding his
application for withdrawal, excluding therefrom the unpaid principal balance of
any outstanding loans to the Participant secured by his Voluntary Contribution
Account pursuant to Section 11.2. Distribution of the amount requested and
permitted to be distributed hereunder shall be made to the Participant as soon
as it is administratively feasible to do so after Participant's application for
withdrawal. Notwithstanding the foregoing, no withdrawal can be made of any
portion of a Participant's Voluntary Contribution Account invested in the New
Company Stock Fund.
3.3 Rollover and Transfer Contributions
(a) Rollover Contributions
The Committee may, in the exercise of its complete discretion in a
nondiscretionary manner, direct the Trustee to accept from a Participant all or
part of the cash and other property (including the sales proceeds of such
property) distributed for the benefit of the Participant from another Qualified
Plan or from an individual retirement account or annuity, as defined in Section
7701(a)(37) of the Code, provided the contribution to the Plan is made within 60
days after such distribution is received by the Participant. The foregoing
authorization shall include direct rollovers from another Qualified Plan, as
contemplated by Code Section 401(a)(31). However, the Committee shall not direct
the Trustee to accept from a Participant any of the following:
(i) Any amount considered to have been contributed by the
Participant to the Qualified Plan as "accumulated deductible employee
contributions," as defined in Section 72(o)(5)(3) of the Code;
(ii) Any amount distributed to the Participant pursuant to a
qualified domestic relations order within the meaning of Section 414(p) of
the Code;
(iii) Any amount distributed from an individual retirement
account or annuity unless the amount distributed represents the entire
balance in such account or annuity, and such entire balance was
attributable to a rollover contribution of a qualified distribution (as
defined in Section 402(a)(5)(E)(i) of the Code) from a Qualified Plan; or
(iv) Any property other than U.S. dollars, unless the Committee
in the exercise of its complete discretion, in a nondiscriminatory manner,
determines that acceptance of the property will not create an
administrative burden.
(b) Transfer Contributions
The Committee may, in the exercise of its complete discretion in a
nondiscriminatory manner, direct the Trustee to accept a direct transfer of
assets to the Plan on behalf of a Participant from another Qualified Plan,
provided, however, that: (1) the transfer will result in the deferral of
taxation on the amount transferred to the Plan, (2) the Committee shall
21
not direct the Trustee to accept a direct transfer of assets from (a) a Defined
Benefit Plan or (b) a Defined Contribution Plan that is subject to the funding
standards of Section 412 of the Code or that would otherwise provide for a life
annuity form of payment to the Participant, and (3) the Committee shall not
direct the Trustee to accept any property other than U.S. dollars, unless the
Committee in the exercise of its complete discretion, determines that acceptance
of the property will not create an administrative burden. A subaccount of the
Rollover Account consisting of the transfer contributions and earnings or losses
of the Trust Fund attributable thereto shall be employed if the transfer
contribution is subject to additional restrictions for any reason. A transfer
contribution resulting from a merger into this Plan of another Qualified Plan or
portion thereof which the Committee determines to consist of the Employee's
elective and qualified non-elective contributions in the other Qualified Plan as
contemplated by Code Section 401(k) shall be credited to the Employee's Deferral
Account.
ARTICLE IV
PARTICIPATING COMPANY CONTRIBUTIONS
4.1 Contribution of Deferrals
Subject to the limitations set forth in this Article 4 and in Section 5.3,
each Participating Company shall pay to the Trustee the Deferrals made for each
Plan Year by Participants while they were employed with that Participating
Company. The Committee shall establish procedures under which: (1) each
Participant shall specify the portion of his Compensation which is to be
deferred, and (2) such Deferrals are to be deposited with the Trustee as
contributions to the Plan. The Committee has the authority and discretion to
limit any Participant's individual Deferrals, if necessary to ensure compliance
with this Article 4, the rules and restrictions of Sections 401(k), 404, and 415
of the Code and the regulations promulgated thereunder or, if desirable, for
administrative reasons. For the latter purpose, the Committee may, without
limitation, limit Deferrals to at least 1% of Compensation, or not more than 15%
of Compensation, or impose other nondiscriminatory limitations.
4.2 Matching Profit Sharing Contribution
In addition to the contribution described in Section 4.1 and subject to the
limitations set forth in this Article 4 and in Section 5.3, each Participating
Company may pay to the Trustee, on behalf of each Participant who makes
Deferrals during the Plan Year and is employed by the Participating Company on
the last day of the Plan Year (within the meaning of Section 5.2(a)(2)(C)), a
Matching Profit Sharing Contribution. Matching Profit Sharing Contributions
shall equal a uniform percentage of all such Participants' Deferrals during the
Plan Year, such percentage to be determined by the company in its complete
discretion for such Plan Year, subject to the limitation that the Matching
Profit Sharing Contribution made on behalf of a Participant for a Plan Year
shall not exceed 5% of such Participant's Compensation for such Plan Year.
22
4.3 Discretionary Profit Sharing Contribution
In addition to the contribution described in Sections 4.2, each
Participating Company may pay to the Trustee as a Profit Sharing Contribution
for a Plan Year such an amount, if any, as may be determined by the Board of
Directors of such Participating Company.
4.4 Discretionary Contributions; Form and Time of Payment
No Participating Company shall be required to make a Matching Profit
Sharing Contribution or a Profit Sharing Contribution for any Plan Year, and
each Participating Company's Board of Directors shall have the sole discretion
to determine whether any such contribution shall be made for a Plan Year. Prior
to the date of the Merger, Matching Profit Sharing Contributions and Company
Contributions may be made in whole or in part in Old Company Stock. A
Participating Company's contribution of a Participant's Deferrals to the Plan
pursuant to Section 4.1 shall be paid to the Trustee as soon as administratively
possible after they are withheld from the Participant's Compensation; provided,
however, that such contribution shall be made no later than the fifteenth
business day of the month following the month in which such amount would
otherwise have been payable to the Participant in cash, or as of such earlier or
later date (in the case of any available extensions of time) as may be required
or permitted by regulations issued pursuant to ERISA. A Participating Company's
Contributions pursuant to Section 4 .2 or 4 .3 shall be paid to the Trustee
prior to the deadline, as extended, for the filing of the Company's Federal
Income Tax Return.
4.5 Return of Excess Deferrals
The aggregate Deferrals of any Participant for any calendar year, together
with his elective deferrals under any other plan or arrangement to which section
402(g) of the Code applies and that is maintained by an Affiliated Company,
shall not exceed $7,000 (or such larger amount as may be adopted by the
Commissioner of Internal Revenue to reflect a cost-of -living adjustment). To
the extent necessary to satisfy this limitation for any year, (1) Deferrals and
such other elective deferrals may be prospectively restricted; and (2) after any
such prospective restriction, the Excess Deferrals and excess elective deferrals
under such other plan or arrangement (with earnings thereon, but reduced by any
amounts previously distributed as Excess Contributions for the year) shall be
paid to the Participant on or before the April 15 next following the calendar
year in which such contributions were made. in the event that the aggregate
Deferrals of any Participant for any calendar year, together with any other
elective deferrals (within the meaning of section 402(g) (3) of the Code) under
all plans, contracts or arrangements of an Affiliated Company, exceed $7,000 (or
such larger amount as may be adopted by the Commissioner of Internal Revenue to
reflect a cost-of-living adjustment), then the Participant may designate all or
a portion of such Excess Deferrals as attributable to this Plan and may request
a refund of such portion by notifying the Company in writing on or before the
March 1 next following the close of such calendar year. If timely notice is
received by the Company, then such portion of the Excess Deferrals, and any
income or loss allocable to such portion, shall be refunded to the Participant
not later than the April 15 next following the close of such calendar year. Any
Excess Deferrals distributed pursuant to this Section 4.5 shall not be included
in Deferrals that attract a Matching Profit Sharing Contribution under Section
4.2.
23
4.6 Average Deferral Percentage Limitation
The Plan shall satisfy the average deferral percentage test, as provided in
section 401(k)(3) of the Code and section 1.401(k)-1 of the regulations issued
thereunder. Subject to the special rules described in Section 4.11, the
Aggregate 401(k) Contributions of Highly Compensated Employees shall not exceed
the limits described below:
(a) An Actual Deferral Percentage shall be determined for each
individual who, at any time during the Plan Year, is a Participant eligible to
make Deferrals (without regard to any suspension under Section 8 .1 (c) ), which
Actual Deferral Percentage shall be the ratio, computed to the nearest one-
hundredth of one percent, of the individual's Aggregate 401(k) Contributions for
the Plan Year to the individual's Section 414(s) Compensation for the Plan Year;
(b) The Actual Deferral Percentages (including zero percentages) of
Highly Compensated Employees and Nonhighly Compensated Employees shall be
separately averaged to determine each group's Average Deferral Percentage; and
(c) Effective for Plan Years beginning on and after January 1, 1997,
the average of the actual deferral percentages for Highly Compensated Employees
in any Plan Year (the "High Average") when compared with the average of the
actual deferral percentages for non-Highly Compensated Employees in the
preceding Plan Year (the "Low Average") must meet one of the following
requirements:
(i) The High Average is no greater than 1.25 times the Low
Average; or
(ii) The High Average is no greater than two times the Low
Average, and the High Average is no greater than the Low Average plus two
percentage points.
(d) If, at the end of a Plan Year, a Participant or class of
Participants has excess Deferrals, then the Committee may elect, at its
discretion, to pursue any of the following courses of action or any combination
thereof:
(i) Excess Deferrals for a Plan Year may be redesignated as
after-tax contributions and accounted for separately. Excess Deferrals,
however, may not be redesignated as after-tax employee contributions with
respect to a Highly Compensated Employee to any extent that such
redesignated after-tax employee contributions would exceed the limits of
Section 4.13 when combined with the Voluntary Contributions of that
Employee for the Plan Year. Adjustments to withhold any federal, state, or
local taxes due on such amounts may be made by the Company against
Compensation yet to be paid to the Participant during that taxable year.
(ii) Excess Deferrals, and any earnings attributable thereto
through the last day of the Plan Year for which the excess occurred, (but
not including earnings for the "gap period" between the end of such Plan
Year and the date of distribution), may be distributed to the Participant
(as set forth in subsection (e)) within the 2-1/2 month period following
the close of the Plan Year to which the excess Deferrals relate to the
extent
24
feasible, but in all events no later than 12 months after the close of such
Plan Year. Any such excess Deferrals distributed from the Plan with respect
to a Participant for a Plan Year shall be reduced by any amount previously
distributed to such Participant under Section 4.8 for the Participant's
taxable year ending with or within such Plan Year.
(iii) The Committee may authorize a suspension or reduction of
Deferrals made pursuant to Section 4.1 in accordance with rules promulgated
by the Committee. These rules may include provisions authorizing the
suspension or reduction of Deferrals above a specified dollar amount or
percentage of Compensation.
(iv) The Company, in its discretion, may make a contribution to
the Plan, which will be allocated as a fixed dollar amount among the
Accounts of some or all non-Highly Compensated Employees (as determined by
the Company) who have met the requirements of Section 2.1 or 2.3, as
applicable. Such contributions shall be fully (100%) vested at all times,
and shall be subject to the withdrawal restrictions which are applicable to
Deferrals. Such contributions shall be considered "Qualified Non-Elective
Contributions" under applicable Treasury Regulations.
4.7 Allocation of Excess Contributions to Highly Compensated Employees.
Excess Deferrals for Plan Years beginning on or after January 1, 1997 shall
be determined by the Committee in accordance with this Section 4.7. The
Committee shall calculate a tentative reduction amount to the Deferrals of the
Highly Compensated Employee(s) with the highest Actual Deferral Percentage equal
to the amount which, if it were actually reduced, would enable the Plan to meet
the limits in Section 4.6(c) above, or to cause the Actual Deferral Percentage
of such Highly Compensated Employee(s) to equal the Actual Deferral Percentage
of the Highly Compensated Employee(s) with the next-highest Actual Deferral
Percentage, and the process shall be repeated until the limits in Section 4.6(c)
above are satisfied. The aggregate amount of the tentative reduction amounts in
the preceding sentence shall constitute "Refundable Contributions." The entire
aggregate amount of the Refundable Contributions shall be refunded to Highly
Compensated Employees (as set forth in Section 4.6(d)(ii)), or recharacterized
as after-tax contributions (as set forth in Section 4.6(d)(i)). The amount to
be refunded to each Highly Compensated Employee (or recharacterized) (which
shall constitute his excess Deferrals) shall be determined as follows: (i) the
Deferrals of the Highly Compensated Employee(s) with the highest dollar amount
of Deferrals shall be refunded (or recharacterized) to the extent that there are
Refundable Contributions or to the extent necessary to cause the dollar amount
of Deferrals of such Highly Compensated Employee(s) to equal the dollar amount
of Deferrals of the Highly Compensated Employee(s) with the next-highest
Deferrals, and (ii) the process in the foregoing clause shall be repeated until
the total amount of Deferrals refunded (or recharacterized) equals the total
amount of Refundable Contributions. The Committee will not be liable to any
Participant (or his Beneficiary, if applicable) for any losses caused by
inaccurately estimating or calculating the amount of any Participant's excess
Deferrals and earnings attributable to the Deferrals.
25
4.8 Distribution of Excess Contributions
Excess Contributions allocated to Highly Compensated Employees for the Plan
Year pursuant to Section 4.7, together with any income or loss allocable to such
Excess Contributions, shall be distributed to such Highly Compensated Employees
not later than March is next following the close of such Plan Year (in order to
avoid a 10% excise tax under Section 4979 of the Code), if possible, and in any
event not later than December 31 next following the close of such Plan Year. The
distributed Excess Contributions shall be reduced by any Excess Deferrals
previously distributed pursuant to Section 4.5 to such Highly Compensated
Employee for the Plan Year of the Excess Contributions. Any Deferrals
distributed pursuant to this Section 4.8 shall not be included in the Deferrals
that attract a Matching Profit Sharing Contribution under Section 4.2 of the
Plan.
4.9 Qualified Matching Profit Sharing Contributions
The Company, in its sole discretion, may include all or a portion of the
Matching Profit Sharing Contribution for a Plan Year in Aggregate 401(k)
Contributions taken into account in applying the Average Deferral Percentage
limitation described in Section 4.6 for such Plan Year, provided that the
requirements of Treasury Regulation section 1.401(k)-1(b)(5) are satisfied.
4.10 Corrective Qualified Non-Elective Contributions
In order to satisfy (or partially satisfy) the Average Deferral Percentage
limitation described in Section 4.6, the Average Contribution Percentage
limitation described in Section 4.13 or the multiple-use limitation described in
Section 4.20 (or more than one of such limitations) the Company, in its sole
discretion, may make a Qualified Non-Elective Contribution to the Plan. Any
such Qualified Non-Elective Contribution contributed anew to the Plan shall be
allocated, in a manner determined by the Company, to the Deferral Accounts of
such Nonhighly Compensated Employees as the Company selects. Such Qualified Non-
Elective Contributions shall be paid to the Trustee as soon as reasonably
practicable following the close of the Plan Year and shall be allocated to the
Accounts of Nonhighly Compensated Employees as of the last day of the Plan Year.
Qualified Non-Elective Contributions contributed anew to the Plan shall be 100%
vested and nonforfeitable. Qualified Non-Elective Contributions shall be subject
to the same distribution restrictions as Participant Deferrals. As an
alternative to making a new Qualified Non-Elective Contribution to the Plan, the
Company may redesignate a vested Profit-Sharing Contribution as a Qualified Non-
Elective Contribution under the Plan; provided that the redesignated Profit-
Sharing Contribution shall remain credited to the Account of the Participant
whose Profit-Sharing Contribution is being redesignated. The Company, in its
sole discretion, may include all or a portion of the Qualified Non-Elective
Contributions for a Plan Year in Aggregate 401(k) Contributions taken into
account in applying the Average Deferral Percentage limitation described in
Section 4.6 for such Plan Year, provided that the requirements of Treasury
Regulation section 1.401(k)1(b)(5) are satisfied.
4.11 Special Rules
The following special rules shall apply for purposes of this Article 4:
26
(a) For purposes of applying the limitation described in Section 4.5,
Deferrals taken into account for the calendar year for any Participant shall not
include any Excess Contributions previously distributed to such Participant for
the Plan Year ending within such calendar year;
(b) For purposes of applying the limitation described in Section 4.6,
the Aggregate 401(k) Contributions taken into account for the Plan Year for any
Participant shall include the Excess Deferrals distributed to such Participant,
less the Excess Deferrals that are distributed to such Participant under the
second sentence of Section 4.5 if such Participant is a Nonhighly Compensated
Employee;
(c) For purposes of applying the limitation described in Section 4.6,
the Actual Deferral Percentage of any Highly Compensated Employee who is
eligible to make Deferrals and to make elective deferrals (within the meaning of
section 402(g)(3) of the Code) under any other plans, contracts or arrangements
of an Affiliated Company shall be determined as if all such Deferrals elective
deferrals were made under a single arrangement;
(d) The amount of Excess Contributions to be distributed to a
Participant pursuant to Section 4.8 shall be reduced by the amount of any Excess
Deferrals previously distributed to such Participant for the Plan Year;
provided, however, that plans, contracts and arrangements shall not be treated
as a single arrangement to the extent that Treasury Regulation section 1.401(k)-
1(b)(3)(ii)(B) prohibits aggregation;
(e) In the event that this Plan is aggregated with one or more other
plans in order to satisfy the requirements of Code section 401(a)(4), 401(k) or
410(b) , then all such aggregated plans, including the Plan, shall be treated as
a single plan for all purposes under all such Code sections (except for purposes
of the average benefit percentage provision of Code section 410(b)(2)(A)(ii)) ;
and
(f) Income (and loss) allocable to Excess Contributions for the Plan
Year and, if the Company elects to return this amount, income (and loss) for the
period between the end of the Plan Year and the date of distribution of such
Excess Contributions shall be determined pursuant to Treasury Regulation section
1.401(k)-1(f)(4) or the successor thereto.
4.12 Recordkeeping
The Company shall maintain records to demonstrate compliance with the
nondiscrimination requirements of section 401(k) of the Code, including the
extent to which Qualified Non-Elective Contributions and Qualified Matching
Profit Sharing Contributions are taken into account.
4.13 Average Contribution Percentage Limitation
The Plan shall satisfy the average contribution percentage test, as
provided in section 401(m)(2) of the Code and section 1.401(m)-l of the
regulations issued thereunder. Subject to the special rules described in Section
4.18, the Aggregate 401(m) Contributions of Highly Compensated Employees shall
not exceed the limits described below:
27
(a) An Actual Contribution Percentage shall be determined for each
individual who, at any time during the Plan Year, is a Participant eligible to
make Deferrals (without regard to any suspension under Section 8.1(c)(2)), which
Actual Contribution Percentage shall be the ratio, computed to the nearest one-
hundredth of one percent, of the individual's Aggregate 401(m) Contributions for
the Plan Year to the individual's Section 414(s) Compensation for the Plan Year;
(b) The Actual Contribution Percentages (including zero percentages)
of Highly Compensated Employees and Nonhighly Compensated Employees shall be
separately averaged to determine each group's Average Contribution Percentage;
and
(c) Effective for Plan Years beginning on and after January 1, 1997,
the Average Contribution Percentage for Highly Compensated Employees in any Plan
Year (the "High Average") when compared with the Average Contribution Percentage
for Nonhighly Compensated Employees in the preceding Plan Year (the "Low
Average") must meet one of the following requirements:
(i) The High Average is no greater than 1.25 times the Low
Average; or
(ii) The High Average is no greater than two times the Low
Average, and the High Average is no greater than the Low Average plus two
percentage points.
Notwithstanding Section 4.13(a), no Actual Contribution Percentage
shall be determined for an individual who did not receive any Matching Profit
Sharing Contribution for the Plan Year because the Plan requires that the
individual perform a certain amount of service or be employed on the last day of
the Plan Year and such individual failed to meet such requirement. Such an
individual shall be disregarded in performing the test under this section.
4.14 Allocation of Excess Aggregate Contributions to Highly Compensated
Employees
Excess Aggregate Contributions for Plan Years beginning on or after January
1, 1997 shall be determined by the Committee in accordance with this Section
4.14. The Committee shall calculate a tentative reduction amount to the Matching
Profit Sharing Contributions and/or Voluntary Contributions made with respect to
the Highly Compensated Employee(s) with the highest contribution percentage
equal to the amount which, if it were actually reduced, would enable the Plan to
meet the limits in Section 4.13(c) above, or to cause the Actual Contribution
Percentage of such Highly Compensated Employee(s) to equal the Actual
Contribution Percentage of the Highly Compensated Employee(s) with the next-
highest contribution percentage, and the process shall be repeated until the
limits in Section 4.13 (c) above are satisfied. The aggregate amount of the
tentative reduction amounts in the preceding sentence shall constitute
"Refundable Company Contributions". The entire aggregate amount of the
Refundable Company Contributions shall be refunded to Highly Compensated
Employees. The amount to be refunded to each Highly Compensated Employee (which
shall constitute his excess Matching Profit Sharing Contributions and/or
Voluntary Contributions) shall be determined as follows: (i) the Matching Profit
Sharing Contributions and/or Voluntary Contributions made
28
with respect to the Highly Compensated Employee(s) with the highest dollar
amount of Matching Profit Sharing Contributions and/or Voluntary Contributions
shall be refunded to the extent that there are Refundable Company Contributions
or to the extent necessary to cause the dollar amount of Matching Profit Sharing
Contributions and/or Voluntary Contributions of such Highly Compensated
Employee(s) to equal the dollar amount of Matching Profit Sharing Contributions
and/or Voluntary Contributions made with respect to the Highly Compensated
Employee(s) with the next-highest Matching Profit Sharing Contributions and/or
Voluntary Contributions, and (ii) the process in the foregoing clause shall be
repeated until the total amount of Matching Profit Sharing Contributions and/or
Voluntary Contributions refunded equals the total amount of Refundable Company
Contributions. The earnings attributable to excess contributions will be
determined in accordance with Treasury Regulations. The Committee will not be
liable to any Participant (or to his Beneficiary, if applicable) for any losses
caused by inaccurately estimating or calculating the amount of any Participant's
excess contributions and earnings attributable to the contributions.
4.15 Distribution or Forfeiture of Excess Aggregate Contributions
Vested Excess Aggregate Contributions allocated to Highly Compensated
Employees for the Plan Year pursuant to Section 4.14, together with any income
or loss allocable to such Excess Aggregate Contributions, shall be distributed
to such Highly Compensated Employees not later than the March 15 next following
the close of such Plan Year, if possible, and in any event no later than the
December 31 next following the close of such Plan Year. Nonvested Excess
Aggregate Contributions shall be forfeited.
4.16 Use of Deferrals
The Company, in its sole discretion, may include all or a portion of the
Deferrals for a Plan Year in Aggregate 401(m) Contributions taken into account
in applying the Average Contribution Percentage limitation described in Section
4.13 for such Plan Year, provided that the requirements of Treasury Regulation
section 1.401(m)-l(b)(5) are satisfied.
4.17 Corrective Qualified Non-Elective Contributions
The Company, in its sole discretion, may include all or a portion of the
Qualified Non-Elective contributions authorized under Section 4.10 for a Plan
Year in Aggregate 401(m) Contributions taken into account in applying the
Average Contribution Percentage limitation described in Section 4.13 for such
Plan Year, provided that the requirements of Treasury Regulation section
1.401(m)-l(b)(5) are satisfied.
4.18 Special Rules
The following special rules shall apply for purposes of this Article 4:
(a) For purposes of applying the limitation described in Section
4.13, the Actual Contribution Percentage of any Highly Compensated Employee who
is eligible to participate in the Plan and to make employee contributions or
receive an allocation of matching contributions (within the meaning of section
401(m)(4)(A) of the Code) under any other plans, contracts or arrangements of an
Affiliated Company shall be determined as if Matching Profit
29
Sharing Contributions allocated to such Highly Compensated Employee's Accounts
and all such employee contributions and matching contributions were made under a
single arrangement; provided, however, that plans, contracts and arrangements
shall not be treated as a single arrangement 'to the extent that Treasury
Regulation section 1.401(m)-1(b)(3)(ii) prohibits aggregation;
(b) In the event that this Plan is aggregated with one or more other
plans in order to satisfy the requirements of Code section 401(a) (4) , 401(m)
or 410(b), then all such aggregated plans, including the Plan, shall be treated
as a single plan for all purposes under all such Code sections (except for
purposes of the average benefit percentage provisions of Code section
410(b)(2)(A)(ii)); and
(c) Income (and loss) allocable to Excess Aggregate Contributions for
the Plan Year and, if the Company elects to return this amount, income (and
loss) for the period between the end of the Plan Year and the date of
distribution of such Excess Aggregated Contributions shall be determined
pursuant to Proposed Treasury Regulation section 1.401(m)-1(e) (3) or the
successor thereto.
4.19 Applicability of the Multiple-Use Limitation
The limitation described in Section 4.20 shall apply only if, for a Plan
Year, after the other limitations of this Article are applied as follows:
(a) The Average Deferral Percentage of Highly Compensated Employees
(1) exceeds 125 percent of the Average Deferral Percentage of Nonhighly
Compensated Employees, but (2) does not exceed the lesser of (A) 200 percent of
the Average Deferral Percentage of Nonhighly Compensated Employees or (B) the
Average Deferral Percentage of Nonhighly Compensated Employees plus two
percentage points; and
(b) The Average Contribution Percentage of Highly Compensated
Employees (1) exceeds 125 percent of the Average Contribution Percentage of
Nonhighly Compensated Employees, but (2) does not exceed the lesser of (A) 200
percent of the Average Contribution Percentage of Nonhighly Compensated
Employees or (B) the Average Contribution Percentage of Nonhighly Compensated
Employees plus two percentage points.
4.20 Multiple-Use Limitation
The sum of the Average Deferral Percentage and Average Compensation
Percentage of Highly Compensated Employees shall not exceed the greater of (a)
or (b) below.
(a) This limit equals the sum of:
(i) 1.25 times the greater of the Average Deferral Percentage or
Average Contribution Percentage of Nonhighly Compensated Employees; and
(ii) The lesser of (A) 200 percent of the lesser of the Average
Deferral Percentage or Average Contribution Percentage of Nonhighly
Compensated Employees,
30
or (B) the lesser of the Average Deferral Percentage or Average
Contribution Percentage of Nonhighly Compensated Employees plus two
percentage points.
(b) This limit equals the sum of:
(i) 1.25 times the lesser of the Average Deferral Percentage or
Average Contribution Percentage of Nonhighly Compensated Employees; and
(ii) The lesser of (A) 200 percent of the greater of the Average
Deferral Percentage or Average Contribution Percentage of Nonhighly
Compensated Employees, or (B) the greater of the Average Deferral
Percentage or Average Contribution Percentage of Nonhighly Compensated
Employees plus two percentage points.
4.21 Correction of Multiple-Use Limitation
To the extent necessary, the limitation of section 4.20 shall be satisfied
by one or more of the following methods: (a) the allocation of corrective
'Qualified Non-Elective Contributions in the manner set forth in Sections 4.10
and 4.17, or (b) the distribution or forfeiture of Aggregate 401(m)
Contributions (and income or loss allocable thereto) to Highly Compensated
Employees in the manner set forth in Sections 4.14 and 4.15, followed by the
distribution of Aggregate 401(k) Contributions (and income or loss allocable
thereto) to Highly Compensated Employees in the manner set forth in Sections 4.7
and 4.8.
ARTICLE V
Accounting for Participant's Interests
5.1 Establishment of Accounts
The Committee shall establish for each Participant each of the applicable
Accounts set forth in Section 1.1. In addition, the committee may establish one
or more subaccounts of a Participant's Account, if the Committee determines that
such subaccounts are necessary or appropriate in administering the Plan.
5.2 Allocation of Contributions and Forfeitures
(a) Allocation of Profit Sharing Contributions and Forfeitures of
Profit Sharing Contributions
(i) Method of Allocation
Subject to the provisions of Sections 5.3, 9.2 and 9.3, each
Profit Sharing Contribution made by a Participating company with respect to
a Plan Year, and all forfeitures arising during that Plan Year from Company
Contribution Accounts, shall be allocated to Eligible Participants' Company
Contribution Accounts in the ratio that the Compensation for the Plan Year
of each Participant who is an Eligible Participant bears
31
to the total Compensation for the Plan Year of all Participants who are
Eligible Participants.
(ii) Eligible Participants
For purposes of paragraph (1), the following Participants are
Eligible Participants for a Plan Year:
(1) Each Participant (other than a Participant subject to
Section 2.2) who is employed by a Participating Company on the last
day of the Plan Year and who completed at least 1,000 Hours of Service
during the Plan Year; and
(2) Each Participant employed by the Company or an Affiliated
Company on the last day of the Plan Year who became subject to Section
2.2 during the Plan Year and completed at least 1,000 Hours of Service
with a Participating Company during the Plan Year before becoming
subject to Section 2.2.
(3) A Participant shall be considered employed on the last day
of a Plan Year if the Participant completes at least one Hour of
Service during the Plan Year, on or after December 20 of the Plan
Year, with the applicable Participating Company or Affiliated Company.
(b) Allocation of Deferrals, Qualified Non-Elective Contributions,
Matching Profit Sharing Contributions and Forfeitures of Matching Profit Sharing
Contributions
Each Participant's Deferrals, and the Participating Company's Matching
Profit Sharing Contributions made with respect to such Deferrals in accordance
with Section 4.2, shall be allocated to such Participant's respective Deferral
Account and Matching Profit Sharing Contribution Account. A Participant, s
Qualified Non-Elective Contributions allocated under Section 4.10 shall be
allocated to the Participant's Deferral Account. Forfeitures arising during a
Plan Year from Matching Profit Sharing Contribution Accounts shall be considered
Matching Profit Sharing Contributions allocated as described in Section 4.2.
(c) Allocation of Voluntary Contributions
Voluntary Contributions of a Participant referred to in Section 3.1
shall be allocated to the Participant's Voluntary Contribution Account.
(d) Allocation of Rollover Contributions
Each rollover or transfer contribution made by a Participant pursuant
to Section 3.3 shall be Allocated to the Participant's Rollover Account.
(e) Allocation of Old Company Stock Contributions
32
With respect to periods prior to the Merger, the Committee in its
complete discretion may devise nondiscriminatory procedures for allocation of
Old Company Stock contributed such that allocations to Accounts are in whole
shares of Old Company Stock.
5.3 Code Section 415 Limitation
(a) Notwithstanding any provision of the Plan to the contrary, but
subject to subsection (d), if the Annual Addition (as hereinafter defined) of a
Participant for any Limitation Year exceeds the lesser of the Defined
Contribution Dollar Limitation or 25% of the Section 415 Compensation of such
Participant for the Limitation Year (the "Maximum Annual Addition"), the excess
Annual Addition attributable to this Plan shall not be allocated to the
Participant's Accounts for the Plan Year, but shall be subject to the provisions
of subsection (c). Each Participant entitled to share in the allocations under
Section 5.2 for a Limitation Year shall be subject to this Section for such
Limitation Year. The limitations contained in this Section shall apply on an
aggregate basis to all Defined Contribution Plans and all Defined Benefit Plans
(whether or not any of such plans have terminated) established by the Company
and all Affiliated Companies.
(b) Annual Addition
The Annual Addition of each Participant for a Limitation Year shall
equal the sum of the following amounts with respect to all Qualified Plans and
Welfare Benefit Funds maintained by the Company or any Affiliated Company:
(1) The amount of Company and Affiliated Company contributions
with respect to the Limitation Year allocated to the Participant's
account;
(2) The amount of any forfeitures for the Limitation Year
allocated to the Participant's account;
(3) The amount, if any, carried forward pursuant to subsection
(c) or a similar provision in another Qualified Plan and allocated to
the Participant's account;
(4) The amount of a Participant's voluntary nondeductible
contributions for the Limitation Year;
(5) The amount allocated to an individual medical account (as
defined in Section 415(l) (2) of the Code) which is part of a Defined
Benefit Plan; and
(6) The amount derived from contributions paid or accrued 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.
A Participant's Annual Addition for a Limitation Year shall not
include any amounts allocated to his Rollover Account for the
Limitation Year or any amounts repaid to the Plan as principal or
interest on a loan pursuant to Section
33
11.3. A corrective allocation pursuant to Section 10.14 shall be
considered an Annual Addition for the Limitation Year to which it
relates.
(c) Excess Allocations
(i) If the Participant is not covered under another Defined
Contribution Plan or a Welfare Benefit Fund maintained by the Company or
any Affiliated Company during the Limitation Year and the amount otherwise
allocable to the Participant's Accounts exceeds the Maximum Annual Addition
prescribed in subsection (a), the Participant's Voluntary Contributions for
the Limitation Year, together with the earnings attributable thereto, will
be refunded to the extent necessary to reduce the Participant's Annual
Addition for the Limitation Year to the Maximum Annual Addition. If the
excess amounts cannot be eliminated by the foregoing procedure, the
Participating Company contributions under Sections 4.2 and 4.3 and
forfeitures which cause the Participant's Annual Addition to exceed the
maximum Annual Addition shall be successively allocated in the manner
described in Section 5.2 among the Accounts of Eligible Participants whose
Annual Additions do not exceed the maximum allowable amount. If, after such
allocations have been made, there remain Participating Company
contributions or forfeitures which cannot be allocated without causing the
Annual Addition of a Participant to exceed the Maximum Annual Addition, the
forfeitures which cause the Annual Addition to exceed the Maximum Annual
Addition and the Participating Company contributions which result from a
reasonable error in estimating the Participant's Section 415 Compensation
or from any other limited facts and circumstances which the Commissioner of
Internal Revenue finds justifiable under Section 1.415-6(b) (6) of the
Treasury Regulations, and which cause the Participant's Annual Addition to
exceed the Maximum Annual Addition shall be held in a suspense account in
the Trust Fund to be carried forward and allocated in subsequent Limitation
Years as provided in Section 5.2. Such suspense account shall not
participate in the allocation of the net income or net loss of the Trust
Fund under Section 5.4.
(ii) This paragraph applies if, in addition to this Plan, the
Participant is covered under another Defined Contribution Plan or a Welfare
Benefit Fund maintained by the Company or any Affiliated Company during the
Limitation Year.
(1) The Annual Addition which may be credited to a Participant's
Company Contribution Account under this Plan for any such Limitation
Year will not exceed the Maximum Annual Addition reduced by the Annual
Addition credited to a Participant's accounts under the other Defined
Contribution Plans and Welfare Benefit Funds for the same Limitation
Year. If the Annual Addition with respect to the Participant under the
other Defined Contribution Plans and Welfare Benefit Funds maintained
by the Company or any Affiliated Company is less than the Maximum
Annual Addition and the Participating Company contribution that would
otherwise be contributed or allocated to the Participant's Company
Contribution Account under this Plan would cause the Annual Addition
for the Limitation Year to exceed the Maximum Annual Addition, the
amount contributed or allocated will be reduced so that the Annual
Addition under all such Defined Contribution Plans and Welfare Benefit
Funds for the Limitation
34
Year will equal the Maximum Annual Addition. If the aggregate Annual
Addition with respect to the Participant under such other Defined
Contribution Plans and Welfare Benefit Funds is equal to or greater
than the Maximum Annual Addition, no amount will be contributed or
allocated to the Participant's Company Contribution Account under this
Plan for the Limitation Year. An excess Annual Addition will be
reduced in the manner described in subparagraph (B).
(2) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Annual Addition for the Limitation
Year will be determined on the basis of the Participant's actual
Section 415 Compensation for the Limitation Year. if a Participant's
Annual Addition under this Plan and such other Defined Contribution
Plans and Welfare Benefit Funds would result in the Annual Addition
exceeding the Maximum Annual Addition for the Limitation Year, the
excess amount will be deemed to consist of the Annual Addition last
allocated. In making this determination, the Annual Addition
attributable to a Welfare Benefit Fund shall be deemed to have been
allocated first regardless of the actual date of allocation. If an
excess amount was allocated to a Participant on an allocation date of
this Plan that coincides with an allocation date of another plan, the
excess amount attributed to this Plan will be the product of:
(iii) The total excess amount allocated as of such date,
multiplied by the ratio of the Annual Addition allocated to the Participant
for the Limitation Year as of such date under this Plan to the total Annual
Addition allocated to the Participant for the Limitation Year as of such
date under this and all the other Defined Contribution Plans. Any excess
amount attributed to this Plan will be disposed of in the manner described
in paragraph (1).
(d) Aggregate Benefit Limitation
This Section 5.3(d) applies only to Plan Years begining on or after
January 1, 1999. If the Company or an Affiliated Company maintains, or at any
time maintained, one or more Defined Benefit Plans covering any Participant in
this Plan, the sum of the Defined Benefit Fraction (defined in paragraph (1))
and the Defined Contribution Fraction (defined in paragraph (2)) for any
Limitation Year shall equal no more than one (1.0). The rate of accrual under
the Defined Benefit Plans will be reduced first, if necessary to meet this
limitation.
(i) "Defined Benefit Fraction" shall mean a fraction, the
numerator of which is the Projected. Annual Benefit (as defined in
paragraph M) of the Participant under all Defined Benefit Plans maintained
by the Company or any Affiliated Company determined as of the close of the
Limitation Year pursuant to Treasury Regulations under Section 415 of the
Code, and the denominator of which is the lesser of: (A) 140% of the
Participant's average Section 415 Compensation for the three consecutive
Years of Service that produce the highest average Section 415 compensation,
or (B) 125% of the Defined Benefit Dollar Limitation, determined as of the
close of the Limitation Year.
(ii) "Defined Contribution Fraction" shall mean a fraction, the
numerator of which is the sum of the Annual Additions allocated to the
Participant's
35
accounts for the applicable Limitation Year and each prior Limitation Year,
and the denominator of which is the sum of the lesser of the following
products for each Limitation Year in which' the Participant was an Employee
(regardless of whether a Defined Contribution Plan was in existence for
such Limitation Year): (A) the Defined Contribution Dollar Limitation
effective for the Limitation Year, multiplied by 125%, or (B) 35% of the
'Participant's Section 415 Compensation for such Limitation Year.
(iii) For purposes of this subsection, the term "Projected
Annual Benefit" means the annual benefit (as defined in Section 415(b) (2)
of the Code) to which a Participant would be entitled under the terms of a
Defined Benefit Plan maintained by the Company or an Affiliated Company,
assuming:
(1) The Participant will continue employment until his normal
retirement age under the Defined Benefit Plan (or current age, if
later); and
(A) The Participant's Compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under the Defined Benefit Plan will remain constant for all
future Limitation Years.
(2) For purposes of this subsection, a Participant's voluntary
nondeductible contributions to a Defined Benefit Plan shall be treated
as being part of a separate Defined Contribution Plan.
(e) Aggregation of Plans
For purposes of this Section, all Defined Benefit Plans ever
maintained by the Company or an Affiliated Company shall be treated as one
Defined Benefit Plan, and all Defined Contribution Plans ever maintained by the
Company or an Affiliated Company shall be treated as one Defined Contribution
Plan.
5.4 Accounting for Trust Fund Income or Losses
The Committee, through its accounting records, shall clearly segregate each
Account hereunder and each subaccount thereof established pursuant to Section
5.1, and shall maintain a separate and distinct record of all income and losses
of the Trust Fund attributable to each such Account or subaccount. For purposes
of this Section, income or loss of the Trust Fund shall include any unrealized
increase or decrease in the fair market value of the assets of the Trust Fund as
such values are determined by the Trustee pursuant to Section 5.5.
Except as provided in Section 5.7, the share of net income or net loss of
the Trust Fund to be credited to, or deducted from, each Account of each
Participant shall be the allocable portion of the net income or net loss of the
Trust Fund attributable to each such Account determined by the Committee as of
each Valuation Date in a uniform and nondiscriminatory manner based upon the
ratio that the balance of each such Account as of the previous Valuation Date
bears to all such Account balances after adjustment for withdrawals,
distributions and other additions or subtractions that may be appropriate.
36
The share of net income or net loss to be credited to, or deducted from,
any subaccount established for a Participant shall be-an allocable portion of
the net income or net loss credited to or deducted from the Account under which
such subaccount is established.
5.5 Valuation of Trust Fund
Except as provided in Section 5.7, the fair market value of the total net
assets comprising the Trust Fund shall be determined by the Trustee as of each
Valuation Date. The Participating Companies, the Committee and the Trustee do
not guarantee the Participants or their Beneficiaries against loss or
depreciation or fluctuation of the value of the assets comprising the Trust
Fund.
5.6 Annual Statement of Accounts
The Committee shall furnish each Participant or his Beneficiary, at least
annually, a statement (referred to as the "Annual Statement") showing: (a) the
value of his Accounts at the end of the Plan Year, (b) the allocations to and
distributions from his Accounts during the Plan Year, and (c) his vested and
nonforfeitable interest in his Accounts at the end of the Plan Year, provided,
however, that no Annual Statement shall be provided to a Participant or his
Beneficiary after such Participant's entire vested and nonforfeitable interest
in his Accounts has been distributed to the Participant or his Beneficiary. In
addition, the Annual Statement shall include other information required to be
furnished to each Participant or his Beneficiary under applicable disclosure or
reporting laws.
5.7 Directed Accounts and Investment Options
Until otherwise provided by written resolution of the Committee, each
Participant shall be permitted to direct the investment of all of his respective
Accounts or subaccounts thereof as among investment vehicles created within the
Trust Fund by the Committee. Such Accounts or subaccounts shall constitute
Directed Accounts, and shall be subject to Participant investment direction
under such procedures established by the Committee which are nondiscriminatory
and acceptable to the Trustee. Such Accounts and subaccounts will be credited
with only the income or losses directly attributable to their respective assets,
including income and losses from the investment vehicles established by the
Committee, and selected by the Participant for investment of Directed Accounts,
in which case income or losses of such subfunds shall be allocated ratably to
Directed Accounts invested therein, except as otherwise provided herein. Neither
the Company, the Committee, nor the Trustee warrant, guarantee, or represent
that the value of a Participant's Accounts at any time will equal or exceed the
amount previously allocated or contributed thereto.
5.8 Investment Funds
The assets of this Plan shall be invested in such categories of assets as
shall be determined by the Committee and announced and made available on an
equal basis to all Participants. Investment vehicles shall be designated only
by the Committee. When the Trustee receives funds to be invested, such funds
may be held as uninvested cash pending investment in one or more of the
investment vehicles designated by the Committee.
37
5.9 Old Company Stock Fund
(a) Until the date of the Merger, one of the investment funds
established thereunder shall be the Old Company Stock Fund, which shall be
invested in Old Company Stock. In connection with the Merger, the Old Company
Stock Fund will be liquidated and eliminated as an investment alternative.
Participants will be permitted to direct the investment of the cash proceeds
received from such liquidation among the other investment vehicles created
within the Trust Fund. The following provisions of this Section 5.9 and Section
5.11 will not be effective after the date of the Merger. Investment in, and
withdrawals from, the Old Company Stock Fund shall be limited in accordance with
this Section 5.9 and nondiscriminatory procedures adopted by the Committee, in
the Committee's complete discretion, under Section 10.8(e). Subject to the
Committee's authority to eliminate, limit or modify the Old Company Stock Fund,
for purposes of ERISA Section 407(d)(3)(B), up to 100% of the assets of the
Trust Fund may be invested in Old Company Stock through the Old Company Stock
Fund.
(b) Subject to complying with Section 5.9(g) below, each Participant
may voluntarily elect to have all or a portion of his Account used to purchase
units of the Old Company Stock Fund (each such unit representing a share of Old
Company Stock on a one-for-one basis), but not to exceed such limit as may be
set yearly by the Committee, or to direct the sale of units of the Old Company
Stock Fund and invest the proceeds of such sale in any one or more of the other
investment funds.
(c) A Participant entitled to a distribution in accordance with
Article 8 shall elect within such time as designated by the Committee to either:
(1) have the Trustee convert all units of the Old Company Stock Fund held for
his account into, and receive, such Old Company Stock in-kind, or (2) have the
Trustee sell units of the Old Company Stock Fund allocated to his Account and
receive such distribution in cash.
(d) In order to implement Participants' directions under Section
5.9(b) and pursuant to such administrative procedures as the Committee may
establish, all purchases and sales of Old Company Stock shall be at the market
price of the Old Company Stock at the time of such purchase or sale.
(e) All earnings received or earned on the Old Company Stock Fund
prior to an election period designated by the Committee shall be invested in an
investment vehicle designated by the Committee until the next election period
whereupon a Participant may direct the investment of such earnings.
(f) Except for the in-kind distribution right provided in Section
5.9(c) above, no Participant shall have any ownership in any shares of Old
Company Stock held by the Trust Fund.
(g) Notwithstanding any other provision herein, from November 25,
1996 through May 25, 1997, no sales or purchases of Old Company Stock shall be
made by the Plan, no participant may elect to have any portion of his Account
used to purchase units of the Old Company Stock Fund. During this period,
however, the Trustee may make distributions of Old Company Stock in-kind in
accordance with the provisions hereof governing distributions.
38
5.10 Investment Direction for all Funds
Each Participant shall instruct the Trustee at the time and on the form
prescribed by the Committee as to the investment of all future contributions
allocated to his Accounts which are available to be invested in investment
vehicles. The initial investments made at the direction of the Participant
shall continue until changed by the Participant in a subsequent election period.
5.11 Voting Rights
The voting rights to stock held in the Old Company Stock Fund shall be
exercised by the Trustee in accordance with the direction of the Participants
holding units in the Old Company Stock Fund with respect to the Old Company
Stock underlying such units on the basis of one vote for each whole unit so
held. With respect to the election of directors and the appointment of the
Company's independent accountants, the Committee, subject to its duties under
ERISA, shall direct the Trustee to vote the shares of Old Company Stock for
which the Trustee does not receive a Participant's direction in the same
proportion as the shares of Old Company Stock for which the Trustee did receive
Participants' directions. With respect to other matters for which stockholder
approval is solicited, the Executive Committee of the Board shall, in its sole
discretion, direct the Trustee with respect to the voting of shares of Old
Company Stock for which the Trustee does not receive a Participant's direction.
This solicitation of the direction of the Participants shall be at the time and
in such manner as shall be in accordance with procedures set by the Company from
time to time providing adequate time to the extent possible to receive a reply
from all such Participants holding an interest in such Funds.
5.12 ERISA 404(c) Requirements
The Plan is intended to comply with ERISA Section 404(c). Accordingly, the
Plan is intended to satisfy, among other requirements, subsections (a), (b) and
(c) below. Notwithstanding the foregoing, ERISA Section 404(c)(1)(B) will not
apply to a Participant's election to acquire or dispose of interests in the New
Company Stock Fund before New Company Stock is publicly traded on a national
exchange or other generally recognized market and is traded with sufficient
frequency and in sufficient volume to assure that Participant directions to buy
or sell interests in the New Company Stock Fund may be acted upon promptly and
efficiently.
(a) Choice of Broad Range of Investment Alternatives
The Participant or Beneficiary must be able to choose from at least
three investment alternatives. The alternatives must constitute a broad range
of alternatives ("core alternatives") which : (1) are diversified, (2)
demonstrate materially different risk and return characteristics, (3) in the
aggregate, enable a Participant to achieve a portfolio with risk and return
characteristics at any point within the range normally appropriate by choosing
among the core alternatives, and (4) tend to minimize, through diversification
and in combination with the other alternatives, the overall risk to the
Participant's portfolio.
39
(b) Frequency of Investment Instructions
The Participant or Beneficiary must be able to give investment
instructions to a person designated by the Company as an agent for this purpose.
The person is obligated to comply with the instructions of the Participant or
Beneficiary, except as permitted by law. The Participant or Beneficiary must be
able to give investment instructions for each investment alternative as
frequently as is appropriate given the volatility of the investment, but no less
frequently than once within every three-month period.
(c) Provision of Sufficient Information to Participant or Beneficiary
The Participant or Beneficiary shall be provided information
sufficient to make informed decisions regarding the investment alternatives
under the Plan. Such information shall: (1) explain that the Plan is intended
to be in compliance with ERISA section 404(c) and that Plan fiduciaries may be
relieved of liability for losses that arise from the Participant's investment
choices; (2) describe all investment alternatives, including a general
description of the investment objectives of each alternative and the level of
diversification in each alternative; (3) explain that Participants may review
any prospectuses or similar materials made available to the Plan for each
alternative; (4) identify any designated investment manager; (5) explain the
circumstances under which a Participant may give investment instructions along
with any limitations on those instructions; (6) describe any transaction fees,
charges or expenses to a Participant's Accounts in connection with the purchase
or sale of any investment alternative; (7) provide the name, address and
telephone number of the Plan fiduciary responsible for providing information on
request with a description of such information available upon request; (8)
explain the established procedures designed to provide for the confidentiality
of information concerning the purchase, holding or sale of Company common stock
(if any); (9) provide a copy of the most recent prospectus in the case of an
initial purchase in an alternative subject to the Securities Act of 1933; and
(10) provide any materials provided to the Plan which relate to the exercise of
voting, tender or similar rights passed through to Participants. Information
which must be provided on request in accordance with Department of Labor
Regulation 2550.404c-1(b)(2) includes certain information relating to financial
reports of investment alternatives, operating expenses of the alternative
portfolio assets of the alternatives, overall investment performance of the
alternatives, and information relating to the shares of an investment in the
requesting Participants' Accounts. Additional information may be available upon
request.
ARTICLE VI
VESTING
6.1 Company Contribution Accounts
(a) Years of Service
Subject to subsection (b), the interest of each Participant in his
Company Contribution Account and Matching Profit Sharing Contribution Account
shall become 100% vested and nonforfeitable upon the Participant's completion of
five years of Service, provided
40
that a Participant who commenced employment with the Coldwell Banker Commercial
Group, Inc. prior to 1989 and who has four years of Service shall be 100% vested
in such Accounts.
(b) Certain Events
A Participant's interest in his Company Contribution Account and
Matching Profit Sharing Contribution Account shall become 100% vested and
nonforfeitable without regard to his Years of Service (1) if he is an Employee
on or after his Normal Retirement Age, (2) on the death of the Participant while
an Employee or (3) by reason of the Participant's Disability. All amounts
credited to Company Contribution Accounts and Matching Profit Sharing
Contribution Accounts as of the date of the Merger will become 100% vested and
nonforfeitable without regard to Years of Service as of the date of the Merger.
(c) References to the Company Contribution Account in Sections 6.2
and 6.6 shall include the Matching Profit Sharing Contribution Account.
6.2 Aggregation of Years of Service for Vesting
(a) Vested Participants
If a Participant who has a nonforfeitable right to all or a portion of
his Company Contribution Account has a Severance and again becomes an Employee,
the Participant's Years of service prior to hint Severance shall be included in
determining his vested and nonforfeitable interest in his Company Contribution
Account after he again becomes an Employee.
(b) Nonvested Employees and Participants
(i) If an Employee or a Participant who does not have any
nonforfeitable right to his Company Contribution Account balance has a
Severance and again becomes an Employee before incurring the number of
consecutive one Year Breaks in Service specified in paragraph (ii), his
Years of Service prior to his Severance shall be included in determining
his vested and nonforfeitable interest after he again becomes an Employee.
(ii) If an Employee or a Participant who does not have any
nonforfeitable right to his Company Contribution Account balance has a
Severance and again becomes an Employee after incurring a number of
consecutive One Year Breaks in Service equal to the greater of five or the
number of his Years of Service at his severance, his Years of Service
completed prior to his One Year Breaks in Service shall be disregarded for
purposes of determining his vested and nonforfeitable interest in his
Company Contribution Account. The aggregate number of Years of Service
before such One Year Breaks in Service shall not include any Years of
Service disregarded under this Section by reason of a prior period of One
Year Breaks in Service.
41
6.3 Other Accounts
The interest of each Participant in his Accounts, other than the Accounts
referenced in Section 6.1, if one or more such Accounts have been established
for the Participant pursuant to Section 5.1, shall at all times be 100% vested
and nonforfeitable.
6.4 Forfeiture of Nonvested Amounts
(a) Forfeiture
(i) Subject to paragraph (ii) below, any nonvested amounts in
the Company Contribution Account of a Participant who receives a
distribution pursuant to Section 8.1(a) shall be forfeited on the earlier
of (1) the date of the Participant's final distribution, or (2) the date
the Participant incurs five consecutive One Year Breaks in Service.
(ii) If the Participant has consented to a distribution of less
than the entire vested balance in his Company Contribution Account, the
part of the nonvested portion of such Account that will be treated as a
forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution from such Account and
the denominator of which is the total vested portion of such Account.
(iii) For purposes of this subsection, if the nonforfeitable
interest in the Participant's Company Contribution Account is zero, the
Participant shall be deemed to have received a distribution of his entire
vested Account balance as of the date the Participant terminates
employment.
(b) Buy-Back Option
The following rules apply with respect to a Participant who receives a
distribution on account of Severance:
(i) If an Employee receives or is deemed to receive a
distribution and resumes participation under Section 2.3, the Employee's
Company Contribution Account will be restored to the balance on the date of
the distribution if the Employee repays to the Plan the full amount of the
distribution from such Account within five years of his reemployment with
the Participating Company and before the Employee incurs after such
distribution five consecutive One Year Breaks in Service.
(ii) Restoration of the Employee's Company Contribution Account
balance under paragraph (i) shall be made first out of forfeitures
otherwise available for allocation and then Participating Company
contributions. Assets representing the restoration must be provided to the
Plan by the end of the Plan Year following the Plan Year in which repayment
occurs.
(iii) The repayment by the employee and restoration of his
Company Contribution Account balance shall not be treated as part of the
annual Addition under Section 5.3(b).
42
(iv) If a Participant is deemed to receive a distribution
pursuant to subsection 6.4(a)(iii), and the Participant resumes employment
covered under this Plan before the date the Participant incurs 5
consecutive One Year Breaks in Service, upon the reemployment of such
Participant, the Participant's Company Contribution Account will be
restored to the amount on the date of such deemed distributions.
(c) Distribution When Partially Vested
If a distribution is made at the time when a Participant has a
nonforfeitable right to less than 100 percent of his Company Contribution
Account and the Participant may increase (after reemployment or otherwise) the
nonforfeitable percentage in his Account:
(i) Separate subaccount will be established for the
Participant's remaining interest in his Company Contribution Account as of
the time of the distribution, and
(ii) At any relevant time the Participant's nonforfeitable
portion of the separate subaccount will be equal to an amount ("X")
determined by the formula:
X = P (AB + R x D) - (R x D)
For purposes of applying the formula, P is the nonforfeitable
percentage at the relevant time, AB is the subaccount balance at the relevant
time, D is the amount of the distribution, and R is the ratio of the subaccount
balance at the relevant time to the account balance after distribution.
(iii) Deferred Distribution
If (i) a Participant is reemployed by the Company or an
Affiliated Company after incurring five consecutive One Year Breaks in
Service, (ii) such Participant did not have a 100% vested and
nonforfeitable interest in his Company Contribution Account at his
Severance and (iii) the Participant's vested and nonforfeitable interest in
his Company Contribution Account was not entirely distributed to him prior
to his reemployment, then the Committee shall establish a subaccount of the
Participant's Company Contribution Account, which shall represent the
Participant's vested and nonforfeitable interest in his Company
contribution Account prior to his reemployment. The Participant shall have
thereafter a 100% vested and nonforfeitable interest in the subaccount, and
the vesting schedule shall apply only to amounts which are allocated to the
Participant's Company Contribution Account after his reemployment.
6.5 Unclaimed Benefits
If the Committee, acting upon information available to it, cannot locate a
person entitled to receive a benefit under the Plan within a reasonable period
of time (as determined by the Committee in its sole discretion) after the
benefit becomes payable and such person has not contacted the Committee or the
Trustee concerning the distribution by the end of such period, the amount of the
benefit shall be treated as a forfeiture and shall be applied in the manner
described in Section 6.6. If, prior to the date final distributions are made
from the Trust Fund following
43
termination of the Plan, a person who was entitled to a benefit which has been
forfeited pursuant to this Section makes a claim to the Committee or the Trustee
for such benefit, such person shall be entitled to receive the amount of such
benefit as soon as administratively feasible after such claim is received. The
amount of the previously forfeited benefit shall be reinstated.
6.6 Application of Forfeited Amounts
Subject to Section 6.4(b) (iii), the amount of a Participant's Company
Contribution Account which is forfeited pursuant to Section 6.4 or 6.5 shall be
allocated in accordance with Section 5.2 among the Company Contribution Accounts
of Eligible Participants for the Plan Year in which the forfeiture occurs. The
amount forfeited from Matching Profit Sharing Contribution Accounts shall be
allocated as provided in Section 5.2(b).
ARTICLE VII
DESIGNATION OF BENEFICIARY
7.1 Designation of Beneficiary
(a) Designation by Participant
Subject to subsection (b), each Participant shall have the right to
designate a Beneficiary or Beneficiaries to receive his distributable interest
(if any) in the Trust Fund upon his death. The designation shall be made on
forms prescribed by the Committee and shall be effective upon delivery to the
Committee. A Participant shall have the right to change or revoke from time to
time any such designation by filing a new designation or notice of revocation
with the Committee, but such revised designation or revocation shall be
effective only upon receipt by the Committee.
(b) Consent of Spouse
A Participant who is married may not designate a Beneficiary other
than, or in addition to, his spouse unless his spouse consents to such
designation by means of a writing that is signed by the spouse, contains an
acknowledgment by the spouse of the effect of such consent, and is witnessed by.
a member of the Committee (other than the Participant) or by a notary public.
Such designation shall only be effective with respect to the consenting spouse,
whose consent shall be irrevocable.
7.2 Failure to Designate Beneficiary
Effective January 1, 1996, in the event a Participant has not designated a
Beneficiary, or in the event no Beneficiary survives a Participant, the
distribution of the Participant's interest in the Trust Fund (if any) upon his
death shall be made: (a) to the Participant's spouse, if living, (b) if his
spouse is not then living, to his then living issue by right of representation,
(c) if neither his spouse nor his issue are then living, to his then living
parents, and (d) if none of the above are
44
then living, to his estate. In the event a Participant's death occurs prior to
January 1, 1996, the order of any such distribution shall be subject to the
provisions of the prior plan document.
ARTICLE VIII
DISTRIBUTIONS FROM THE TRUST FUND
8.1 Events Permitting Distributions
(a) Severance, Disability, Death or Attainment of Age 70 1/2 .
Subject to the provisions of subsections (b), (c) and (d), and Section
8.2 (b) and (c), a Participant's vested Account balances become distributable
only after his Severance, Disability, death or attainment of age 70-1/2. The
timing and form of the distribution shall be in accordance with this Article.
(b) Withdrawals After Age 59-1/2.
A Participant who has attained age 59-1/2 may at any time request to
withdraw a portion or all of his vested Accounts, provided that his employment
with the Company has not terminated. Disbursement of withdrawals shall be made
in a single cash lump sum payment and, if the Participant's Accounts include
investments in the Old Company Stock Fund, shares of Old Company Stock in-kind,
as soon as administratively practicable after receiving the prescribed
withdrawal request form. Except as provided in subsection (c), a Participant
shall be limited to four withdrawals under this subsection (b) per Plan Year.
Subject to reasonable administrative limitations established by the Committee, a
Participant may designate the proportion of a distribution to be made in-kind
(in the form of Old Company Stock), provided that such in-kind distribution
shall not exceed the number of vested Old Company Stock Fund units allocated to
his Accounts as of the date his withdrawal request is received by the Claims
Coordinator. Notwithstanding the foregoing, no withdrawal can be made of any
portion of a Participant's Accounts pursuant to this Section 8.1(b) that are
invested in the New Company Stock Fund.
(c) Hardship Withdrawal
(i) Reason for Hardship Withdrawal
Upon written request from a Participant, the Committee may
authorize a distribution to a Participant from his Deferrals (but not
earnings on such Deferrals) prior to his Severance if the Participant can
demonstrate that he is suffering from a hardship. The Company shall act
upon requests for withdrawals in a uniform and nondiscriminatory manner,
consistent with the requirements of Sections 401(a), 401(k) and related
provisions of the Code. A hardship withdrawal may be made only if it is
required on account of one or more of the following:
(1) The construction or purchase (excluding mortgage payments)
of a principal residence of the Participant;
45
(2) The payment of tuition, related educational fees, and room
and board expenses for the next 12 months of post-secondary education
for the Participant or for the Participant's spouse, children or
dependents;
(3) The payment of medical expenses described in section 213
(d) of the Code incurred or to be incurred by the Participant or the
Participant's spouse or dependents;
(4) The prevention of the eviction of the Participant from his
or her principal residence or foreclosure on a mortgage on the
Participant's principal residence. For purposes of this Section
8.1(c), the term "dependent" shall be defined as set forth in Section
152 of the Code.
(ii) Amount of Hardship Withdrawal
The minimum amount of a hardship withdrawal shall not be less
than $500. The maximum amount of a hardship withdrawal shall not exceed the
Participant's immediate and heavy financial need (including amounts
necessary to pay income taxes and penalties reasonably anticipated to
result from the distribution) , determined after the Participant has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under all plans of Affiliated
Companies, and shall be conditioned upon:
(1) Suspension of the Participant's participation under
Sections 3.1 and 4.1 and suspension of the Participant's employee
contributions to any plan sponsored by the Affiliated Group. (other
than a health or welfare benefit plan) for a period of not less than
12 months, commencing as soon as reasonably practicable after the
hardship withdrawal is made; and
(2) Reduction of the limit on the Participant's Deferrals, as
described in Section 4.5, for the Plan Year following the Plan Year in
which the hardship withdrawal is made by an amount equal to the
Participant's Deferrals for the Plan Year in which the hardship
withdrawal was made.
Additional methods under which the amount of a hardship withdrawal
will be deemed necessary to meet the Participant's immediate and heavy financial
need shall be made available to the extent provided in a ruling, notice or other
document of general applicability issued under the authority of the Commissioner
of Internal Revenue. Notwithstanding the foregoing, no withdrawal can be made
of any portion of a Participant's Accounts pursuant to this Section 8.1(c) that
are invested in the New Company Stock Fund.
(d) Sale of Subsidiary or Assets
Distributions shall be made to the Participants described in
Subsections (1) or (2) below pursuant to the provisions of this Article as if
such Participants terminated employment on the closing date of the sale therein
described; provided further that the distribution must be a lump sum
distribution within the meaning of Section 402(d) (4) of the Code without regard
to clauses (i) , (ii) , (iii) and (iv) of subparagraph (A), subparagraph (B), or
subparagraph (F);
46
provided further that Company continues to maintain this Plan in accordance with
Code Section 401(k)(10)(C).
(i) Upon the sale to an entity that is not a member of the
Affiliated Group of substantially all the assets used by a Participating
Company in the trade or business of such Participating Company, a
Participant who continues employment with the entity acquiring such assets
shall be entitled to have his or her vested Account balances paid to him or
her.
(ii) Upon the sale by a Participating Company of such
Participating Company's interest in a subsidiary to an entity that is not a
member of the Affiliated Group, a Participant who continues employment with
the subsidiary shall be entitled to have his or her vested Account balances
paid to him or her.
8.2 Rules Governing Distributions
(a) Form of Distributions
Distribution of a Participant's Accounts shall, subject to the
Participant's election in accordance with Section 5.9(c) or Section 16.8, be
made to the Participant (or, in the event of his death, to his Beneficiary) in a
single lump sum cash payment. Notwithstanding the foregoing, if a Participant
with an interest in the New Company Stock Fund elects, in accordance with
Section 16.8, that the Trustee sell the Participant's interest in the New
Company Stock Fund and receive the proceeds in cash, then the Participant can
also elect that his interest in the Plan, other than the portion invested in the
New Company Stock Fund, be distributed prior to such sale at such time that is
otherwise permissible under the terms of the Plan.
(b) Restrictions on Certain Payments and Repayments Thereof
If the amount of a Participant's vested Account balance derived from
employer contributions and nondeductible employee contributions exceeds $5,000
($3,500 for distributions prior to January 1, 1998), the Committee shall not
distribute the Participant's vested Account balances to him unless the
Participant consents to such payment. If the amount of a Participant's vested
Account balance derived from employer contributions and nondeductible employee
contributions does not exceed $5,000 ($3,500 for distributions prior to January
1, 1998), the Committee may distribute the benefit in a single lump sum.
(c) Commencement of Benefits
Unless the Participant elects otherwise, in writing, distributions
will be made no later than the 60th day after the close of the Plan Year in
which occurs the latest of:
(i) His attainment of age 65;
(ii) The 10th anniversary of the Plan Year in which he
commenced participation in the Plan;
or
47
(iii) His Severance.
If the Participant elects to receive his distribution earlier, or if
the distribution to be paid to the Participant is less than $5,000 ($3,500 for
distributions prior to January 1, 1998), such distribution shall be paid within
six months after the end of the Plan Year in which such distribution is payable
(unless the Committee determines that extraordinary circumstances exist
requiring later payment).
Subject to subsection (d) , a Participant may elect, with the
Committee's approval, to have distribution commence at a later date by
submitting to the Committee a written request therefor. If the Participant is
married, his spouse must consent in writing to such deferred distribution.
(d) Restrictions on Delay of Distribution
Distribution of a Participant's entire vested interest will be made
not later than April 1 of the calendar year following the later of (1) the
calendar year in which the Participant attains age 70-1/2 or (2), effective
January 1, 1997, the calendar year in which the Participant retires. Clause (2)
of the preceding sentence shall not apply in the case of any Participant who is
a 5% owner (as defined in Code Section 416) in the calendar year in which he
attains age 70 1/2.
(e) Restrictions in the Event of Death
If the Participant dies before distribution of his interest is made,
the Participant's entire interest will be distributed no later than 5 years
after the Participant's death.
(f) Delayed Payments
If the amount of a distribution required to be made on a date
determined under this Section cannot be ascertained by such date, or if it is
not possible to make such payment on such date because the Committee has been
unable to locate the Participant after making reasonable efforts to do so, a
payment retroactive to such date may be made no later than 60 days after the
earliest date on which the amount of such payment can be ascertained or the date
on which the Participant is located (whichever is applicable).
(g) Reemployment of Participant
If a Participant who had a Severance becomes reemployed with the,
Company or any Affiliated Company, no distribution from the Trust Fund shall be
made to the Participant while he is so employed except as provided in Section
8.1(b) or (c). Any amounts which the Participant was entitled to receive on his
prior Severance shall be held in the Trust Fund until he or his Beneficiary is
again entitled to a distribution under the terms of the Plan.
8.3 Valuation of Interest
The interest of a Participant in his Accounts and any subaccounts thereof
which shall have become distributable hereunder shall be valued as of the
Valuation Date immediately preceding the date such interest is to be
distributed, provided, however, that there shall be added
48
to the value of the Participant's Accounts the fair market value of any amounts
allocated to his Accounts pursuant to Article 5 after such Valuation Date.
Section 5.9 shall govern the valuation of Old Company Stock for valuation
purposes.
8.4 Characterization of Disability Distribution
In the event that a Participant receives a distribution by reason of the
Participant's Disability, the benefit he receives hereunder shall be considered
a payment for the loss of use of a bodily function unrelated to the period of
his absence from work under Section 105(c) of the Code. The benefit shall be
distributed to the Participant as soon as possible under the Plan, consistent
with any requests or elections made hereunder by the Participant.
8.5 Payment of Benefits to Alternate Payee
(a) Immediate Distribution
Any distribution to an Alternate Payee pursuant to a domestic
relations order, including any interest in a Participant's Accounts awarded to
an Alternate Payee by a domestic relations order, shall be made as soon as
reasonably practicable after such order is determined to be a QDRO (as defined
in Section 15.4(b)), if:
(i) The value of such distribution (determined as of the
Valuation Date coinciding with or immediately preceding such distribution)
does not exceed $5,000 ($3,500 in the case of a distribution before January
1, 1998);
(ii) The QDRO specifies such time of distribution; or
(iii) The Alternate Payee has consented in writing to such time
of distribution.
Notwithstanding the foregoing, no distribution can be made of any
portion of a Participant's Accounts pursuant to this Section 8.5 that are
invested in the New Company Stock Fund before the Participant experiences a
Liquidation Event, as defined in Section 16.1.
(b) Alternate Payee Accounts
In all cases where Subsection (a) above is not applicable, separate
"Alternate Payee Accounts" shall be established for the Alternate Payee at such
time as the Company shall determine. The portion of each of the Participant's
Accounts that was assigned or made payable to the Alternate Payee by the QDRO
shall be transferred to such Alternate Payee Accounts. Unless the QDRO otherwise
provides, the transfers to the Alternate Payee Accounts shall be made pro rata
from the Participant's Accounts. Alternate Payees shall not make withdrawals
from their Alternate Payee Accounts under Section 8.1 nor borrow from such
Accounts under Section 11.3.
49
(c) Death of Alternate Payee
Alternate Payees shall not designate beneficiaries. Upon the death of
an Alternate Payee, the entire balance in his or her Alternate Payee Accounts
shall be distributed to his or her estate (unless the QDRO otherwise provides).
(d) Distributions From Alternate Payee Accounts
Distributions to Alternate Payees from their Alternate Payee Accounts
shall be made as soon as reasonably practicable after the earliest of:
(i) The date when the Alternate Payee consents in writing to
the distribution;
(ii) The date specified in the QDRO; or
(iii) The date when the Participant's remaining Plan Benefit is
distributed pursuant to this Article 8.
(e) Definition of Alternate Payee
"Alternate Payee" means any spouse, former spouse, child or other
dependent of the Participant who is recognized by a domestic relations order as
having a right to receive all or a portion of the benefits payable under the
Plan with respect to the Participant.
8.6 Direct Rollovers
(a) The Direct Rollover Option
Effective for distributions made on or after January 1, 1993, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. Notwithstanding the foregoing, amounts distributed in the form of New
Company Stock can be rolled over only to an Eligible Retirement Plan that agrees
to accept a distribution in such form.
(b) Time of Notice
The notice to be given under Code Section 402(f) explaining the Direct
Rollover option will be provided to a Participant no less than 30 days and no
more than 90 days before the date the distribution is to occur. However, a
distribution may commence less than 30 days after such notice is given, provided
that:
(i) The Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution,
and
50
(ii) The Participant, after receiving the notice, affirmatively
elects a distribution.
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 Priority over other Plan Provisions
If the Plan is or becomes a Top-Heavy Plan, the provisions of this Article
9 will supersede any conflicting provisions of the Plan. However, the provisions
of this Article shall not operate to increase the rights or benefits of
Participants under the Plan except to the extent required by Section 416 of the
Code and other provisions of law and the Treasury Regulations applicable to
"top-heavy" plans, as that term is defined in Section 416(g) of the code, taking
into account amendments of Section 416 of the Code and such other provisions of
law which are enacted after TEFRA.
9.2 Compensation Taken Into Account
For any Plan Year in which the Plan is a Top-Heavy Plan, the amount of each
Participant's Compensation taken into account for purposes of determining
allocations under the Plan shall not exceed the first $200,000 (effective
January 1, 1994, $150,000, or such larger amount as may be prescribed by the
Secretary of the Treasury or his delegate) of such Participant's Section 415
Compensation for such Plan Year.
9.3 Minimum Allocation
(a) Calculation of Minimum Allocation
Notwithstanding any other provision in this Plan except subsections
(b) and (c) and Section 9.4, for any Plan Year in which this Plan is a Top-Heavy
Plan, each Participant who is not a Key Employee will receive an allocation of
Participating Company contributions and forfeitures of not less than the lesser
of 3% of his Section 415 Compensation for such Plan Year or, in the event that
the Company and Affiliated Companies maintain no Defined Benefit Plan which
covers a Participant in this Plan, the percentage of Section 415 Compensation
that equals the largest percentage of Participating Company contributions and
forfeitures allocated to a Key Employee expressed as a percentage of the first
$150,000 ($200,000 for Plan Years beginning prior to January 1, 1994) of Section
415 Compensation received by such Key Employee in that Plan Year (the "Minimum
Allocation") . The Minimum Allocation is determined without regard to any Social
Security contribution. The Minimum Allocation applies even though under other
Plan provisions the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the Plan Year
because: (1) the non-Key Employee fails to make mandatory contributions to the
Plan, (2) the non-Key Employee's Compensation is less than a stated amount, or
(3) the non-Key Employee fails to complete 1,000 Hours of Service in the Plan
Year. For purposes of this Section, Deferrals for Participants who are not Key
Employees shall not be taken into consideration as Participating Company
contributions. To the
51
extent Matching Profit Sharing Contributions are used to satisfy the Minimum
Allocation, such matching Profit Sharing Contributions shall not be used to
satisfy the requirements of Sections 401(k) or 401(m) of the Code.
(b) Limitation on Minimum Allocation
No Minimum Allocation shall be provided pursuant to subsection (a) to
a Participant who is not employed by the Company or any Affiliated Company on
the last day of the Plan Year.
(c) Minimum Allocation When Participant is Covered by Another
Qualified Plan
(i) If the Company or any Affiliated Company maintains one or
more other Defined Contribution Plans covering Employees who are
Participants in this Plan, the Minimum Allocation shall be provided under
this Plan, unless such other Defined Contribution Plans make explicit
reference to this Plan and provide that the Minimum Allocation shall not be
provided under this Plan, in which case the provisions of subsection (a)
shall not apply to any Participant covered under such other Defined
Contribution Plans.
(ii) If the Company or any Affiliated Company maintains one or
more Defined Benefit Plans covering Employees who are Participants in this
Plan, and such Defined Benefit Plan(s) provide that Employees who are
participants therein shall accrue the minimum benefit applicable to top-
heavy Defined Benefit Plans notwithstanding their participation in this
Plan (making explicit reference to this Plan), then the provisions of
subsection (a) shall not apply to any Participant covered under such
Defined Benefit Plan(s).
(iii) If the Company or any Affiliated Company maintains one or
more Defined Benefit Plans covering Employees who are Participants in this
Plan, and the provisions of paragraph (2) do not apply, then each
Participant who is not a Key Employee and who is covered by such Defined
Benefit Plan(s) shall receive a Minimum Allocation determined by applying
the provisions of subsection (a) with the substitution of "5%" in each
place that "3%" occurs therein.
(d) Nonforfeitability
The Participant's Minimum Allocation required under this Section, to
the extent required to be nonforfeitable under Section 416(b) of the Code and
the special vesting schedule provided in Section 9.5, may not be forfeited under
Sections 411(a)(3)(B) (relating to suspension of benefits on reemployment) or
411(a)(3)(D) (relating to withdrawal of mandatory contributions) of the Code.
52
9.4 Modification of Aggregate Benefit Limit
(a) Modification
Subject to the provisions of subsection (b), in any Plan Year in which
the Top-Heavy Ratio exceeds 60%, the aggregate benefit limit described in
Section 5.3 (d) shall be modified by substituting "100%" for "125%" in
paragraphs (1) and (2) of Section 5.3(d).
(b) Exception
The modification of the aggregate benefit limit described in
subsection (a) shall not be required if the Top-Heavy Ratio does not exceed 90%
and one of the following conditions is met:
(i) Employees who are not Key Employees do not participate in
both a Defined Benefit Plan and a Defined Contribution Plan which are in
the Required Aggregation Group ' and the Minimum Allocation requirements of
Section 9.3 (a) are met when such requirements are applied with the
substitution of "4%" in each place that "3%" occurs therein;
(ii) The Minimum Allocation requirements of Section 9.3(c)(3)
are met when such requirements are applied with the substitution of "7-
1/2%" in each place that "5%" occurs therein; or
(iii) Employees who are not Key Employees accrue a benefit for
such Plan Year of not less than three percent of his or her average Section
415 Compensation for the five consecutive Plan Years in which the
Participant had the highest Section 415 Compensation (not to exceed a total
such benefit of 30 percent), expressed as a life annuity commencing at the
Participant's normal retirement age in a Defined Benefit Plan which is in
the Required Aggregation Group.
9.5 Minimum Vesting
The vesting schedule set forth below shall apply for any Plan Year in which
Plan is a Top-Heavy Plan:
Completed Years of Service Percentage
-------------------------- ----------
2 20%
3 40%
4 60%
5 l00%
No decrease in a Participant's vested Percentage shall occur in the event the
Plan's status as a Top-Heavy Plan changes for any Plan Year.
Notwithstanding the above, this Section shall not apply to the Account
balances of any Employee who does not have an Hour of ervice after the Plan has
initially become a Top-Heavy Plan. Such Employee's vested Account shall be
determined without regard to this section.
53
ARTICLE X
ADMINISTRATIVE PROCEDURES
10.1 Appointment of Committee Members
The Board shall appoint an Administrative Committee consisting of three or
more members, to hold office at the pleasure of the Board. Members of the
Committee shall not be required to be Employees or Participants. Any member may
resign by giving notice in writing, filed with the Board. Notwithstanding the
above, if any Committee member ceases to be an Employee while a member, such
individual shall cease to be a Committee member upon such individual's date of
termination or retirement unless otherwise determined by the Board.
10.2 Officers and Employees of the Committee
Unless designated by the Board, the Committee shall choose from its members
a Chairman and a Secretary. The Chairman may appoint one or more Assistant
Secretaries for the Committee who may, but need not, be members of the
Committee. The Secretary (or an Assistant Secretary) shall keep a record of the
Committee's proceedings and all dates, records and documents pertaining to the
Committee's administration of the Plan. The Committee may employ and suitably
compensate such persons or organizations to render advice with respect to the
duties of the Committee under the Plan as the Committee determines to be
necessary or appropriate.
10.3 Action of the Committee
Action of the Committee may be taken with or without a meeting of Committee
members, provided, however, that any action shall be taken only upon the vote or
other affirmative expression of a majority of the Committee's members qualified
to vote with respect to such action. The Chairman or the Secretary of the
Committee may execute any certificate or other written direction on behalf of
the Committee. In the event the Committee members qualified to vote on any
question are unable to determine such question by a majority vote or other
affirmative expression of a majority of the Committee members qualified to vote
on such question, such question shall be determined by the Board, or some person
designated by the Board.
10.4 Disqualification of Committee Member
A member of the Committee who is a Participant shall not vote on any
question relating specifically to himself.
10.5 Expenses of the Committee
The expenses of the Committee properly and actually incurred in the
performance of its duties under the Plan shall be paid from the Trust Fund,
unless the Participating Companies in their discretion pay such expenses.
54
10.6 Bonding and Compensation
The members of the Committee shall serve without bond, except as may be
required by ERISA, and without compensation for their services as Committee
members.
10.7 General Powers and Duties of the Committee
The committee shall have full power to administer the Plan and the Trust
Agreement and to construe and apply their provisions. For purposes of ERISA, the
Committee shall be the named fiduciary with respect to the operation and
administration of the Plan and the Trust Agreement. In addition, the Committee
shall have the powers and authority granted by the terms of the Trust Agreement.
The Committee, and all other persons with discretionary control respecting
the operation, administration, control, and/or management of the Plan, the Trust
Agreement, and/or the Trust Fund, shall perform their duties under the Plan and
the Trust Agreement solely in the interests of Participants and their
Beneficiaries, and shall use the care, 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 a like
character and with like aims.
10.8 Specific Powers and Duties of the Committee
The Committee shall administer the Plan and have all powers necessary to
accomplish that purpose, including the following:
(a) Resolving all questions relating to the eligibility of Employees
to become Participants;
(b) Determining the amount of benefits payable to Participants or
their Beneficiaries, and determining the time and manner in which such benefits
are to be paid;
(c) Authorizing and directing all disbursements by the Trustee from
the Trust Fund;
(d) Engaging any administrative, legal, medical, accounting,
clerical, or other services it may deem appropriate to effectuate the Plan or
the Trust Agreement;
(e) Construing and interpreting the Plan and the Trust Agreement and
adopting rules for administration of the Plan and the Trust Agreement which are
not inconsistent with the terms of such documents;
(f) Compiling and maintaining all records it determines to be
necessary, appropriate or convenient in connection with the administration of
the Plan and the Trust Agreement;
(g) Determining the disposition and distribution of assets in the
Trust Fund in the event the Plan is terminated;
55
(h) Reviewing the performance of the Trustee with respect to the
Trustee's administrative duties, responsibilities and obligations under the Plan
and the Trust Agreement as such administrative duties, responsibilities and
obligations are set forth in the Trust Agreement; reporting to the Board
regarding such administrative performance of the Trustee; and recommending to
the Board, if necessary, the removal of the Trustee and the appointment of a
successor Trustee;
(i) Performing such other functions that are delegated to the
Committee under the Trust Agreement.
10.9 Allocation of Fiduciary Responsibility
The Committee from time to time may allocate to one or more of its members
and/or may delegate to any other persons or organizations any of its rights,
powers, duties and responsibilities of the Committee with respect to the
operation and administration of the Plan and the Trust Agreement that are
permitted to be so delegated under ERISA. Any such allocation or delegation
shall be made in writing, shall be reviewed periodically by the Committee, and
shall be terminable upon such notice as the Committee in its discretion deems
reasonable and proper under the circumstances.
Whenever a person or organization (the "Delegating Party") has the power
and authority under the Plan or the Trust Agreement to delegate discretionary
power and authority respecting the control, management, operation or
administration of the Plan or any portion of the Trust Fund to another person or
organization (the "Appointee"), the Delegating Party's responsibility with
respect to such delegation is limited to the selection of the Appointee and the
periodic review of the Appointee's performance and compliance with applicable
law and regulations. Any breach of fiduciary responsibility by the Appointee
which is not proximately caused by the Delegating Party's failure to properly
select or supervise the Appointee, and in which breach the Delegating Party does
not otherwise participate, will not be considered a breach by the Delegating
Party.
10.10 Information to be Submitted to the Committee
To enable the Committee to perform its functions, the Participating
Companies shall supply full and timely information to the Committee on all
matters relating to Employees and Participants as the Committee may require, and
shall maintain such other records as the Committee may determine are necessary,
including:
(a) Compiling and maintaining all records it determines to be
necessary, appropriate or convenient in connection with the administration of
the Plan and the Trust Agreement;
(b) Determining the disposition and distribution of assets in the
Trust Fund in the event the Plan is terminated;
(c) Reviewing the performance of the Trustee with respect to the
Trustee's administrative duties, responsibilities and obligations under the Plan
and the Trust Agreement as such administrative duties, responsibilities and
obligations are set forth in the Trust Agreement;
56
reporting to the Board regarding such administrative performance of the Trustee;
and recommending to the Board, if necessary, the removal of the Trustee and the
appointment of a successor Trustee;
(d) Performing such other functions that are delegated to the
Committee under the Trust Agreement.
10.11 Allocation of Fiduciary Responsibility
The Committee from time to time may allocate to one or more of its members
and/or may delegate to any other persons or organizations any of its rights,
powers, duties and responsibilities of the Committee with respect to the
operation and administration of the Plan and the Trust Agreement that are
permitted to be so delegated under ERISA. Any such allocation or delegation
shall be made in writing, shall be reviewed periodically by the Committee, and
shall be terminable upon such notice as the Committee in its discretion deems
reasonable and proper under the circumstances.
Whenever a person or organization (the "Delegating Party") has the power
and authority under the Plan or the Trust Agreement to delegate discretionary'
power and authority respecting the control, management, operation or
administration of the Plan or any portion of the Trust Fund to another person or
organization (the "Appointee"), the Delegating Party's responsibility with
respect to such delegation is limited to the selection of the Appointee and the
periodic review of the Appointee's performance and compliance with applicable
law and regulations. Any breach of fiduciary responsibility by the Appointee
which is not proximately caused by the Delegating Party's failure to properly
select or supervise the Appointee, and in which breach the Delegating Party does
not otherwise participate, will not be considered a breach by the Delegating
Party.
10.12 Information to be Submitted to the Committee
To enable the Committee to perform its functions, the Participating
Companies shall supply full and timely information to the Committee on all
matters relating to Employees and Participants as the Committee may require, and
shall maintain such other records as the Committee may determine are necessary
in order to determine the benefits due or which may become due to Participants
or their Beneficiaries under the Plan. In addition, the Committee shall make
arrangements to obtain from other Affiliated Companies such records and other
information with respect to each Employee as are necessary for the Committee to
determine benefits hereunder.
10.13 Notices, Statements and Reports
The Company shall be the "administrator" of the Plan as defined in Section
3(16) (A) of ERISA for purposes of the reporting and disclosure requirements
imposed by ERISA and the Code. The committee shall assist the Company, as
requested, in complying with such reporting and disclosure requirements.
57
10.14 Claims Procedure
(a) Filing Claim for Benefits
If an individual (hereinafter referred to as the "Applicant," which
reference shall include where appropriate the authorized representative, if any,
of the individual) does not receive the timely payment of the benefits which he
believes he is entitled to receive under the Plan, he may make a claim for
benefits in the manner hereinafter provided.
All claims for benefits under the Plan shall be made in writing and
shall be signed by the Applicant. Claims shall be submitted to a representative
designated by the Committee and hereinafter referred to as the "Claims
Coordinator." The Claims Coordinator may, but need not, be an Employee or a
member of the Committee. If the Applicant does not furnish sufficient
information with the claim for the Claims Coordinator to determine the validity
of the claim, the Claims Coordinator shall indicate to the Applicant any
additional information which is necessary for the Claims Coordinator to
determine the validity of the claim.
Each claim hereunder shall be acted on and approved or disapproved
by the Claims Coordinator within 90 days following the receipt by the Claims
Coordinator of the information necessary to process the claim.
In the event the Claims Coordinator denies a claim for benefits in
whole or in part, the Claims Coordinator shall notify the Applicant in writing
of the denial of the claim and notify such Applicant of his right to a review of
the Claims Coordinator's decision by the Committee. Such notice by the Claims
Coordinator shall also set forth, in a manner calculated to be understood by the
Applicant, the specific reason for such denial, the specific Plan provisions on
which the denial is based, a description of any additional material or
information necessary to perfect the claim with an explanation of why such
material or information is necessary, and an explanation of the Plan's claim
review procedure as set forth in this Section.
If no action is taken by the Claims Coordinator on an Applicant's
claim within 90 days after receipt by the Claims Coordinator, such application
will be deemed to be denied for purposes of the following appeals procedure.
(b) Appeals Procedure
Any Applicant whose claim for benefits is denied in whole or in part
(such Applicant being hereinafter referred to as the "Claimant") may appeal from
such denial to the Committee for a review of the decision by the entire
Committee. Such appeal must be made within three months after the denial
provided above. An appeal must be submitted in writing within such period and
must:
(i) Request a review by the entire Committee of the claim
for benefits under the Plan;
(ii) Set forth all of the grounds upon which the Claimant's
request for review is based and any facts in support thereof; and
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(iii) Set forth any issues or comments which the Claimant
deems pertinent to the appeal.
The Committee shall regularly review appeals by Claimants. The
Committee shall act upon each appeal within 60 days after receipt thereof unless
special circumstances require an extension of the time for processing, in which
case a decision shall be rendered by the Committee as soon as possible but not
later than 120 days after the appeal is received by the Committee.
The Committee shall make a full and fair review of each appeal and
any written materials submitted by the Claimant and/or the Participating Company
in connection therewith. The Committee may require the Claimant and/or the
Participating Company to submit such additional facts, documents or other
evidence as the Committee in its discretion deems necessary or advisable in
making its review. The Claimant shall be given the opportunity to review
pertinent documents or materials upon submission of a written request to the
Committee, provided the Committee finds the requested documents or materials are
pertinent to the appeal.
On the basis of its review, the Committee shall make an independent
determination of the Claimant's eligibility for benefits under the Plan. The
decision of the Committee on any claim for benefits shall be final and
conclusive upon all parties thereto.
In the event the Committee denies an appeal in whole or in part, the
Committee shall give written notice of the decision to the Claimant, which
notice shall set forth in a manner calculated to be understood by the Claimant
the specific reasons for such denial and which shall make specific reference to
the pertinent Plan provisions on which the Committee decision was based.
(c) Review of Annual Statement
If a Participant or Beneficiary believes the Annual statement or any
other statement he receives regarding his interest the Plan is incorrect, such
Participant or Beneficiary may submit a written request for correction or
verification of such Annual Statement to the Claims Coordinator, and the Claims
Coordinator shall respond in writing to such request in the same manner as a
claim for benefits by an Applicant. If the Participant Beneficiary believes the
Claims Coordinator's response is correct, the Participant or Beneficiary may
request in writing within 60 days of the response that the entire Committee
review -h statement, and the Committee shall follow the same procedure h respect
to such request as provided above for a Claimant.
(d) If an error or omission is discovered in the Accounts of a
Participant (other than as a result of a failure to follow a Participant's
applicable and permissible investment instructions), or in the amount
distributed to a Participant, the Committee shall make such equitable
adjustments in the records of the Plan as may be necessary or appropriate to
correct such error or omission. In the case of a failure to follow a
Participant's last applicable and permissible investment instruction, a
correction to comply with such instruction shall be made retroactively to the
beginning of the quarter immediately preceding the quarter in which the
Participant informs the Claims Coordinator in writing of the error. Further, a
Participating Company may, in its discretion, make a special contribution to the
Plan which shall be allocated
59
by the Committee only to the Accounts of one or more Participants to correct an
error or omission.
10.15 Service of Process
The Committee may from time to time designate an agent of the n for the
service of legal process. The Committee shall cause h agent to be identified in
materials it distributes or causes to be distributed when such identification is
required under applicable law. In the absence of such a designation, the Company
shall be the agent of the Plan for the service of legal process.
10.16 Correction of Participants' Accounts
If an error or omission is discovered in the Accounts of a participant, or
in the amount distributed to a Participant, the Committee shall make such
equitable adjustments in the records of the Plan as may be necessary or
appropriate to correct such error omission as of the Plan Year in which such
error or omission is covered. Further, a Participating Company may, in its
discretion, make a special contribution to the Plan which shall be allocated by
the Committee only to the Accounts of one or more Participants to correct such
error or omission.
10.17 Payment to Minors or Persons Under Legal Disability
If any benefit becomes payable to a minor or to a person under legal
disability, payment of such benefit shall be made only to the conservator or the
guardian of the estate of such person appointed by a court of competent
jurisdiction or such other person in such other manner as the Committee
determines is necessary to ensure that the payment will legally discharge the
Plan's obligation to such person.
10.18 Uniform Application of Rules and Policies
The Committee in exercising its discretion granted under any the provisions
of the Plan or the Trust Agreement shall do so in accordance with rules and
policies established by it which 11 be uniformly applicable to all Participants.
10.19 Funding Policy
The Plan is to be funded through Participating Company contributions,
voluntary Participant contributions, and earnings on such contributions; and
benefits shall be paid to Participants and Beneficiaries as provided in the
Plan. The Committee shall determine investment policies from time to time that
are consistent with the consistent of the Plan.
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ARTICLE XI
INVESTMENT OF PLAN ASSETS
11.1 Trust Fund Investments
The investment and reinvestment of Plan assets held in the Trust Fund shall
be governed by the terms of the Trust Agreement executed in connection with the
Plan.
11.2 Loans to Participants
Upon application to the Committee on a form provided by the Committee, any
Participant that is actively employed by a Participating Company may request a
loan from his Accounts, the terms and conditions of which shall be determined
pursuant to the provisions of this Section. If the Committee approves such
application, the loan shall be made first from the Participant's Company
Contribution Account and then, if applicable, from his Matching Profit Sharing
Contribution Account, Rollover Account, Voluntary Contribution Account and
Deferral Account, in that order, and shall be withdrawn proportionate to the
current balance of the Participant's Accounts within each investment vehicle
(excluding until May 25, 1997 any investment in the Old Company Stock Fund).
Notwithstanding the foregoing, no loan can be made from any portion of a
Participant's Accounts that are invested in the New Company Stock Fund.
(a) Amount
The Committee shall not approve an application for a loan in an amount
that, when added to the unpaid balance of all outstanding loans to the
Participant from the Plan or any other Qualified Plan maintained by the Company
or any Affiliated Company, exceeds the lesser of:
(i) $50,000, less the amount by which such aggregate balance has
been reduced through repayments during the period of 12 months ending on
the day before the new loan is made; or
(ii) One-half of the Participant's vested interest in his or her
Accounts.
(b) Security
Each loan shall be evidenced by the Participant's promissory note and
shall be adequately secured. For purposes of this Section, a loan shall be
"adequately secured" if the value of the Participant's vested interest in his
Accounts which equals or exceeds the principal amount of the loan at the time of
the initiation of the loan is pledged as security for repayment of the loan.
61
(c) Interest Rate
The interest rate to be charged on the principal amount outstanding of
any loan hereunder shall be a reasonable rate of interest as determined by the
Committee, provided that such rate shall be comparable to that which is charged
on similar commercial loans by persons in the business of lending money for
loans made under similar circumstances.
(d) Repayment
The promissory note of a Participant evidencing a loan shall provide
for level amortization of the loan with repayments of principal and interest to
be made monthly. The loan shall be repaid over a period not to exceed three
years from the date the note was executed. No penalty shall be imposed for
prepayment of any principal amount due under a Participant's promissory note.
(e) Default on Loan
A Participant loan shall be in default if a scheduled payment of
principal or interest under the promissory note is delinquent. In the event a
Participant is in default more than 30 days, the Committee shall notify the
Participant in writing of the default. If the default is not cured within the
period stated in the notice, the amount, if any, of the Participant's Company
Contribution Account, Matching Profit Sharing Contribution Account, Rollover
Account, and Voluntary Contribution Account (in that order) pledged as security
for the loan shall be reduced by the unpaid balance of the loan plus interest,
whether or not such amount would be distributable under Article 8, and the
Participant's indebtedness shall be discharged to the extent of the reduction.
If this action is insufficient to fully discharge the Participant's
indebtedness, then the Participant's Deferral Account pledged as security for
the loan shall be used to reduce the Participant's indebtedness at such time as
the Participant is entitled to a distribution pursuant to Section 8.1.
(f) Rules
The Committee shall adopt and follow loan procedures which shall be
uniformly applicable to all Participants to administer this Section. Such
procedures shall include provisions necessary to assure that loans are made
available to all Participants on a reasonably equivalent basis and that loans
are not made available to a Participant who is a member of the Committee, a
highly compensated Employee, or an officer or shareholder of a Participating
Company in an amount greater (as a percentage of the value of his vested
interest in his Accounts) than the amount available to other Participants. The
Committee may adopt loan procedures which provide for more restrictive terms and
conditions for Participant loans than provided in this Article 11.
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ARTICLE XII
TERMINATION, PARTIAL TERMINATION AND
COMLETE DISCONTINUANCE OF CONTRIBUTIONS
12.1 Continuance of Plan
The Participating Companies expect to continue this Plan indefinitely, but
they do not assume an individual or collective contractual obligation to do so,
and the right is reserved to the Company, by action of the Board, through
adoption of a resolution in accordance with the Company's bylaws to terminate
the Plan or to reduce, suspend or completely discontinue contributions thereto
at any time. Any failure by the Company to contribute to the Trust in any year
when no contribution is required under this Plan shall not of itself be a
discontinuance of contributions under this Plan. In addition, subject to Section
12.4, any Participating Company at any time may discontinue its participation in
the Plan with respect to its Employees.
12.2 Complete Vesting
If the Plan is terminated, or if there is a complete discontinuance of
contributions under the Plan by the Participating Companies, the amounts
allocated or to be allocated to the Company Contribution Accounts and Matching
Accounts of all affected Participants shall become 100% vested and
nonforfeitable without regard to their Years of Service.
In the event of a partial termination of the Plan, the amounts allocable to
the Company Contribution Accounts and Matching Accounts of those Participants
who cease to participate on account of the facts and circumstances which result
in the partial termination shall become 100% vested and nonforfeitable without
regard to their Years of Service.
12.3 Disposition of the Trust Fund
If the Plan is terminated, or if there is complete discontinuance of
contributions to the Plan, the Committee shall instruct the Trustee either: (a)
to continue to administer the Plan and pay benefits in accordance with the Plan
until the Trust Fund has been depleted, or (b) to liquidate the assets remaining
in the Trust Fund. if the Trust Fund is liquidated, the Committee shall make,
after deducting estimated expenses for liquidation and distribution, the
allocations required under the Plan as though the date of completion of
liquidation were a Valuation Date. The Trustee shall distribute to each
Participant the amount credited to his Accounts as of the date of completion of
the liquidation.
12.4 Withdrawal by Participating Company
A Participating Company may withdraw from participation in the Plan or
completely discontinue contributions to the Plan only with the approval of the
Board. If any Participating Company withdraws from the Plan or completely
discontinues contributions to the Plan, a copy of the resolutions of the Board
of Directors of such Participating Company adopting such action, certified by
the secretary of such Board of Directors and reflecting approval by the Board,
shall
63
be delivered to the Committee as soon as it is administratively feasible to do
so, and the Committee shall communicate such action to the Trustee and to the
Employees of the Participating Company.
ARTICLE XIII
AMENDMENT OR TERMINATION OF THE PLAN
13.1 Right of Company to Amend Plan
The Company reserves the right to amend the Plan in the manner set forth in
Section 13.2 at any time and from time to time to the extent it may deem
advisable or appropriate, provided, however, that:
(a) No amendment shall increase the duties or liabilities of the
Trustee or the Committee without their respective written consent;
(b) No amendment shall contravene the provisions of Section 15.1;
(c) No amendment shall have-the effect of reducing the percentage of
the vested and nonforfeitable interest of any Participant in his Accounts nor
shall the vesting provisions of the Plan be amended unless each Participant with
at least three (3) Years of Service (including Years of Service disregarded
pursuant to Section 6.3(b)) is permitted to elect to continue to have the prior
vesting provisions apply to him, within 60 days after the latest of: the date on
which the amendment is adopted, the date on which the amendment is effective, or
the date on which the Participant is issued written notice of the amendment; and
(d) No amendment shall be effective to the extent that it has the
effect of decreasing a Participant's Account balances or eliminating an optional
form of distribution as it applies to an existing Account balance.
Notwithstanding the preceding sentence, a Participant's Company Contribution
Account balance may be reduced to the extent permitted under Section 412(c)(8)
of the Code.
13.2 Amendment Procedure
Any amendment to the Plan shall be made by adoption of same pursuant to
resolutions of the Board adopted in accordance with the Company's bylaws. A
certified copy of the resolutions adopting any amendment and a copy of the
adopted amendment as executed by the individual authorized by the resolutions on
behalf of the Company shall be delivered to the Committee and to the Trustee.
Upon such action by the Board, the Plan shall be deemed amended as of the
date specified as the effective date by such Board action or in the instrument
of amendment. The effective date of any amendment may be before, on or after the
date of such Board action.
64
The Board may delegate to an officer of the Company by written resolution
the power to amend the Plan by such officer's execution of a written amendment.
13.3 Effect on Other Participating Companies
Unless an amendment expressly provides otherwise, all Participating
Companies shall be bound by any amendment adopted pursuant to this Article 13.
13.4 Company Not Liable for Benefits
No member of the Affiliated Group shall not be liable for the payments of
any benefits under this Plan and all benefits hereunder shall be payable solely
from the assets of the Trust except as otherwise required by ERISA.
ARTICLE XIV
ADOPTION OF PLAN BY AFFILIATED COMPANIES
14.1 Adoption Procedure
Any Affiliated Company may become a Participating Company under the Plan
provided that:
(a) The Board approves the adoption of the Plan by the Affiliated
Company and designates such Affiliated Company as a Participating Company;
(b) The Affiliated Company agrees in writing to adopt the Plan
together with all amendments then in effect, and to be bound thereby as though
it were an original signatory hereto, and such agreement is authorized by
appropriate resolutions of the Board of Directors of the Affiliated Company;
(c) The Affiliated Company agrees in writing to adopt the Trust
Agreement together with all amendments thereto then in effect, and to be bound
thereby as though it were an original signatory thereto, and such agreement is
authorized by appropriate resolutions of the Board of Directors of the
Affiliated Company; and
(d) The Affiliated Company agrees in writing to be bound by any other
terms and conditions which may be required by the Board, provided that such
terms and conditions are not inconsistent with the purposes of the Plan.
14.2 Effect of Adoption by Affiliated Company
An Affiliated Company which adopts the Plan pursuant to Section 14.1 shall
be deemed to be a Participating Company for all purposes hereunder, unless
otherwise specified in the resolutions of the Board designating the Affiliated
Company as a Participating Company. In addition, the Board may provide, in its
discretion and by appropriate resolutions, that the
65
Employees of the Affiliated Company shall receive credit for their employment
with the Affiliated Company prior to the date it became an Affiliated Company
for purposes of determining either or both the eligibility of such Employees to
participate in the Plan and the vested and nonforfeitable interest of such
Employees as Participants under Article 6, provided, however, that such credit
shall be applied in a uniform and nondiscriminatory manner with respect to all
such Employees.
14.3 Additional Adoption Procedure
An Affiliated Company may also become a Participating Company under the
Plan by means of completion and execution of a signature block as set forth on a
form to be determined by the Committee, entitled 'Adoption and Execution the CB
Richard Ellis 401(k) Plan and Trust.' Such complete execution shall be deemed to
have the same effect as adoption and designation by the Board pursuant to
Section 14.1(a) and shall constitute the agreement of the Affiliated Company in
accordance with sections 14.1(b), (c) and (d). The effect of such completion
and execution of such form shall be as described in Section 14.1 and the
crediting of past service with an Affiliated Company referred to in Section 14.2
may also be implemented by a written amendment executed by an authorized officer
as permitted by the last sentence of Section 13.2.
ARTICLE XV
MISCELLANEOUS
15.1 Reversion Prohibited
(a) General Rule
Except as provided in subsections (b), (c) and (d), it shall be
impossible for any part of the Trust Fund either: (1) to be used for or diverted
to purposes other than those which are for the exclusive benefit of Participants
and their Beneficiaries (except for the payment of taxes and administrative
expenses), or (2) to revert to the Company or any Affiliated Company.
(b) Disallowed Contributions
Each contribution of the Participating Companies under the Plan is
expressly conditioned upon the deductibility of the contribution under Section
404 of the Code. If all or part of a Participating Company's contribution is
disallowed as a deduction under the Code, and the contribution of the disallowed
amount was due to a good faith mistake in determining the deductibility of the
contribution, then such disallowed amount (reduced by any Trust Fund losses
attributable thereto) may be returned to the Participating Company with respect
to which the deduction was disallowed within one year after the disallowance
upon the adoption of appropriate resolutions by the Board of Directors of the
Participating Company.
66
(c) Mistaken Contributions
If a contribution is made by a Participating Company by reason of a
mistake of fact which was made in good faith, then so much of the contribution
as was made as a result of the mistake (reduced by any Trust Fund losses
attributable thereto) may be returned to such Participating Company within one
year after the mistaken contribution was made upon the adoption of appropriate
resolutions by the Board of Directors of the Participating Company.
(d) Failure to Qualify
In the event the Internal Revenue Service determines that the Plan and
the Trust Agreement, as amended by amendments acceptable to the Company,
initially fail to constitute a qualified plan and establish a tax exempt trust
under the Code, then notwithstanding any other provisions of the Plan or the
Trust Agreement, the contributions made by the Participating companies prior to
the date. of such determination may be returned to the Participating Companies
upon adoption of appropriate resolutions by the Board of Directors of each
Participating Company, provided (1) such contributions are returned within one
year after the date the initial qualification is denied, and (2) the application
for the ualification has made by the time prescribed by law for filing the
employer's return for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe.
15.2 Bonding, Insurance and Indemnity
(a) Bonding
To the extent required under the ERISA or any other applicable federal
or state law of similar import, the Participating Companies shall obtain, pay
for and keep current a bond or bonds with respect to each Committee member and
each Employee who receives, handles, disburses, or otherwise exercises custody
or control of, any of the assets of the Plan.
(b) Insurance
The Participating Companies, in their discretion, may obtain, pay for
and keep current a policy or policies of insurance, insuring the Committee
members, the members of the Board of Directors of each Participating Company and
other Employees to whom any fiduciary responsibility with respect to the
administration of the Plan has been delegated against any and all costs,
expenses and liabilities (including attorneys, fees) incurred by such persons as
a result of any act, or omission to act, in connection with the performance of
their duties, responsibilities and obligations under the Plan and any applicable
law.
(c) Indemnity
To the extent permitted by applicable state law, the Company shall
indemnify and save harmless the Board of Directors, the Operating Committee of
the Company and each member thereof, the Committee and each member thereof, and
any Employee to whom any duties respecting the Plan are delegated, against any
and all expenses, liabilities, and claims, including legal fees to defend
against such liabilities and claims (as and when such expenses, liabilities,
claims and fees are incurred), arising out of their discharge in good faith of
67
responsibilities under or incident to the Plan, excepting only expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude
such further indemnities as may be available under insurance purchased by the
company or provided by the Company under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, as such indemnities are
permitted under state law. Payments with respect to any indemnity and payment of
expenses or fees under this Section 15.2 shall be made only from assets of the
Company and shall not be made directly or indirectly from Trust assets.
15.3 Merger, Consolidation or Transfer of Assets
(a) In General
There shall be no merger or consolidation of all or any part of the
Plan with, or transfer of the assets or liabilities of all or any part of the
Plan to, any other Qualified Plan unless each Participant who remains a
Participant hereunder and each Participant who becomes a participant in the
other Qualified Plan would receive a benefit immediately after the merger,
consolidation or transfer (determined as if the other Qualified Plan and the
Plan were then terminated) which is equal to or greater than the benefit, they
would have been entitled to receive under the Plan immediately before the
merger, consolidation or transfer if the Plan had then terminated.
(b) Merger of Westmark Real Estate Investment Services 401(k)
Retirement Plan
Effective January 1, 1996, the merger of the Westmark Real Estate
Investment Services 401(k) Retirement Plan and the trust forming a part thereof
("Westmark Plan") into this Plan is hereby ratified and affirmed, and the
adoption of the Third Amendment to this Plan shall also constitute an amendment
to the Westmark Plan effectuating its merger into this Plan. Such merger shall
meet the requirements of subsection (a) of this section 15.3. Any Participant
under this Plan that had an account balance under the Westmark Plan which
account balance forms a part of such Participant's Account balances under this
Plan as a result of the merger of the Westmark Plan into this Plan shall have
the entire balance of his Company Contribution Account and Matching Profit
Sharing Contribution Account hereunder deemed 100% vested and non-forfeitable
notwithstanding that it would otherwise not be 100% non-forfeitable by reason of
Section 6.l(a)'s five Years of Service requirement.
15.4 Spendthrift Clause
(a) General Rule
Except as provided in Section 11.3 and subsection (b) the rights of
any Participant or Beneficiary to and in any benefits under the Plan shall not
be subject to assignment or alienation, and no Participant or Beneficiary shall
have the power to assign, transfer or dispose of such rights, nor shall any such
rights to benefits be subject to attachment,. execution, garnishment,
sequestration, the laws of bankruptcy or any other legal or equitable process.
(b) Qualified Domestic Relations Order
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Subsection (a) shall not apply to a "qualified domestic relations
order." A "qualified domestic relations order" (or "QDRO") means a judgment,
decree or order made pursuant to a state domestic relations law which relates to
the provision of child support, alimony payments or marital property rights to a
spouse, former spouse, child or other dependent of a Participant; creates or
recognizes the existence of an alternate payee's right to, or assigns to an
alternate payee the right to, receive all or a portion of the benefits payable
with respect to a Participant under the Plan; and meets the following additional
requirements:
(i) Such order clearly specifies:
(1) The name and the last known mailing address (if any) of the
Participant and the name and mailing address of each alternate payee
covered by the order,
(2) The amount or percentage of the Participant's benefits to be
paid by the Plan to each such alternate payee, or the manner in which
such amount or percentage is to be determined,
(3) The number of payments or period to which such order applies,
(4) Each plan to which such order applies; and
(ii) Such order does not require:
(1) The provision of any type or form of benefit, or any option,
not otherwise provided under the Plan,
(2) The provision of increased benefits, (determined on the basis
of actuarial value), and
(3) Does not require the payment of benefits to an alternate
payee which are required to be paid to another alternate payee under
another order previously determined to be a qualified domestic
relations order.
15.5 Rights of Participants
Participation in the Plan shall not give any Participant the right to be
retained in the employ of the Company or any Affiliated Company or any right or
interest in the Plan or the Trust Fund except as expressly provided herein.
15.6 Gender, Tense and Headings
Whenever any words are used herein in the masculine gender, they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply. Whenever any words used herein are in the singular
form, they shall be construed as though they were also used in the plural form
in all cases where they would so apply.
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Headings of Articles, Sections and subsections as used herein are inserted
solely for convenience and reference and constitute no part of the Plan.
15.7 Governing Law
The Plan shall be construed and governed in all respects in accordance with
applicable federal law and, to the extent not preempted by such federal law, in
accordance with the laws of the State of California.
ARTICLE XVI
NEW COMPANY STOCK FUND
16.1 Definitions.
The following terms used in this Article XVI will have the meanings set
forth below.
(a) "Liquidation Event" means, with respect to New Company Stock
allocated to a Participant's Account under the Plan, the earliest of: (1) the
Participant's termination of employment with the Company and all Affiliated
Companies which results in the Participant's entitlement to receive a
distribution from the Plan; (2) termination of the Plan; or (3) any circumstance
under which the Participant or a Beneficiary is required by applicable law to
receive a distribution of that portion of his interest in the Trust Fund which
is invested in New Company Stock.
(b) "Merger Date Participant" means a Participant in the Plan who is
actively employed by a Participating Company on the date of the Merger.
(c) "New Company Stock" means the Class A common stock, $.01 par value
per share, of CBRE Holding, Inc., a Delaware corporation.
(d) "New Company Stock Fund" means a fund to be invested in New
Company Stock.
(e) "Purchase Date" means the date of the Merger.
(f) "Purchase Price" means $16.00 per share.
(g) "Repurchase Date" means the date determined by the Committee for
the repurchase of New Company Stock from the Account of a Participant who has
experienced a Liquidation Event and elected to receive distribution of his
interest in the New Company Stock Fund in cash.
(h) "Value" means the fair market value of New Company Stock as
determined in good faith by the Trustee based upon an appraisal provided at
least annually by an independent appraiser selected by the Trustee.
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16.2 Establishment of New Company Stock Fund.
The New Company Stock Fund is hereby established under the Trust as of
the date of the Merger. The New Company Stock Fund is in addition to the
investment funds established for investment of the Trust Fund. Dividends or
other distributions received in cash with respect to New Company Stock will be
invested in one of the other investment funds in accordance with Participant
directions. Dividends and other distributions received in the form of New
Company Stock will be held in the New Company Stock Fund. The Company will
provide a statement, at least annually, reflecting the most recent valuation of
New Company Stock allocated to a Participant's account.
16.3 Direction to Purchase Stock.
A Merger Date Participant can direct that up to fifty percent of the assets
allocated to his Account under the Plan as of June 1, 2001, be invested in the
New Company Stock Fund. The direction must specify a whole numbers of shares of
New Company Stock to be allocated to each Participant's Account. If a Merger
Date Participant provides a direction with respect to more shares of New Company
Stock than can be purchased with fifty percent of the assets allocated to his
Account as of June 1, 2001, the direction will be effective only with respect to
the maximum number of whole shares that can be purchased with such assets. The
direction will not be effective unless it is in writing on forms provided by the
Company and received by the Company on or before such date as the Company
designates.
16.4 Purchase of Stock by Trustee.
The Trustee will purchase from CBRE Holding, Inc. the aggregate number of
shares of New Company Stock set forth in effective directions received from
Merger Date Participants at the Purchase Price, provided that all of the
following conditions have been satisfied:
(a) The Trustee has determined that such purchase is not inconsistent
with ERISA.
(b) The Trustee has received an opinion from an independent financial
advisor selected by the Trustee that the Purchase Price does not exceed
fair market value and that the purchase of New Company Stock is fair and
reasonable to the Plan from a financial point of view.
(c) No commission is charged with respect to the purchase.
16.5 Maximum Number of Shares.
Notwithstanding the foregoing, the number of shares of New Company Stock
that can be purchased by the Trustee under the Plan cannot exceed 889,819
shares.
16.6 Allocation of New Company Stock to Participants Accounts.
The Trustee will allocate to the accounts of each Merger Date Participant
providing an effective direction pursuant to Section 16.3 the number of shares
of New Company Stock subject
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to such direction that have been purchased by the Trustee. If the number of
shares subject to effective directions by Merger Date Participants exceeds the
maximum number of shares that can be purchased under Section 16.5, the number of
shares to be allocated to each Merger Date Participant's accounts will be
determined by multiplying the number of shares elected by each Merger Date
Participant by a fraction the numerator of which is the maximum number of shares
that can be purchased under Section 16.5 and the denominator of which is the
aggregate number of shares subject to effective directions. The amounts
allocated to the other investment funds within the Merger Date Participant's
Account immediately after the Merger will be reduced pro rata by the amount
needed to purchase New Company Stock. The number of shares of New Company Stock
allocated to a Participant's Account shall be adjusted as appropriate if there
is a stock split, reverse stock split, stock dividend, recapitalization,
combination or reclassification of New Company Stock.
16.7 Repurchase of New Company Stock.
The Trustee will not have the right to sell the New Company Stock allocated
to a Participant's accounts to the Company or an Affiliated Company prior to a
Liquidation Event, although the Committee can establish a mechanism for the
purchase and sale of New Company Stock between the Accounts of electing
Participants. If a Liquidation Event occurs and the Participant elects to have
his interest in the New Company Stock Fund distributed in cash, the Company or
an Affiliated Company will repurchase the New Company Stock allocated to the
applicable Participant's accounts from the Trustee as of the Repurchase Date.
The Company or an Affiliated Company will repurchase such New Company Stock for
cash at a price per share equal to the Value as of the Repurchase Date. No
commission can be charged with respect to the repurchase and the repurchase will
satisfy the other requirements of Department of Labor Regulations Section
2550.408e.
16.8 Plan Distributions.
If a Participant who is entitled to receive a distribution from the Plan
following a Liquidation Event has a portion of this Account balance invested in
the New Company Stock Fund, the Participant can elect within such time as
designated by the Committee: (1) to have the Trustee convert the Participant's
interest in the New Company Stock Fund into, and receive, such New Company Stock
in-kind (with cash for any fractional shares), or (2) to have the Trustee sell
the Participant's interest in the New Company Stock Fund and receive such
distribution in cash. A Participant cannnot elect to receive a distribution of
New Company Stock, rather than cash, at any time prior to the earlier of the
tenth anniversary of the Merger or 180 days after an underwritten initial public
offering of New Company Stock after which New Company Stock is listed on a
national securities exchange or the Nasdaq National Market, unless the
Participant agrees to sign a stockholders' agreement in a form to be determined
by the Company.
Notwithstanding the foregoing, any portion of a Participant's accounts
under the Plan invested in the New Company Stock Fund will not be available for
distribution pursuant to Section 3.2 (relating to withdrawals from the Voluntary
Contribution Account), Section 8.1(b) (relating to distributions to Participants
who have attained age 59-1/2 but not terminated
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employment) or Section 8.1(c) (relating to hardships), distribution to an
Alternate Payee pursuant to Section 8.5 prior to a Liquidation Event or loan to
the Participant pursuant to Section 11.2.
16.9 Voting of New Company Stock.
The Trustee will vote any New Company Stock held in the Trust Fund in
accordance with the provisions of this Section 16.9. Within a reasonable time
before each annual or special meeting of shareholders of New Company Stock, the
Company or its delegate will send to each Participant who has an investment in
the New Company Stock Fund a copy of the applicable proxy solicitation material,
together with a form requesting instructions for the Trustee on how to vote New
Company Stock allocated to such Participant's accounts. Such Participants will
also receive a notice from the Trustee explaining (i) that all shares of New
Company Stock will be voted or not voted by the Trustee only in accordance with
instructions provided by Participants acting in their capacity as named
fiduciaries; (ii) the implications under the fiduciary responsibility provisions
of ERISA of the Participant agreeing to become a named fiduciary; (iii) that by
returning the proxy solicitation and pursuant thereto specifically directing the
Trustee how the shares are to be voted, such Participant is consenting to his
appointment as named fiduciary hereunder with respect to the shares of New
Company Stock allocated to his account and, a proportionate number of shares of
New Company Stock allocated to the accounts of Participants who fail to consent
to their appointment as named fiduciaries; (iv) that a Participant's consent to
appointment as a named fiduciary or failure to consent to such appointment shall
be binding only with respect to the specific proxy solicitation; (v) that, if
voting instructions for the shares of New Company Stock allocated to the
Participant's account are not timely received, the Trustee shall treat the non-
receipt as a refusal by the Participant to be appointed as named fiduciary with
respect to that proxy solicitation. The disclosure materials provided to each
Participant must include an explanation that, when the Participant agrees to
become a named fiduciary with respect to the New Company Stock allocated to his
account, he also is agreeing to become a named fiduciary with respect to a
proportionate number of shares of New Company Stock allocated to the accounts of
Participants who have declined their appointment as named fiduciaries. Upon
receipt of instructions, the Trustee will vote the shares as instructed. The
Trustee will maintain the instructions of each Participant in confidence. The
Trustee will vote New Company Stock for which it does not receive timely voting
instructions with respect to such transaction in the same proportion as the
Trustee votes New Company Stock for which it does receive timely instructions;
provided, however, that the Trustee will in all events exercise its voting
obligations consistent with the Trustee's fiduciary duties under ERISA.
16.10 Tender of New Company Stock.
The Trustee will notify each Participant whose accounts are invested in the
New Company Stock Fund of each tender or exchange offer for one percent or more
of the New Company Stock and will use its best efforts to distribute or cause to
be distributed to each such Participant in a timely manner all information
distributed to shareholders of New Company Stock in connection with any such
tender or exchange offer. Each Participant will have the right from time to
time with respect to the New Company Stock allocated to his accounts to instruct
the Trustee in writing as to the manner in which to respond to any tender or
exchange offer which shall be pending or which may be made in the future for all
such shares or any portion thereof. Any Participant's instructions will remain
in force until superseded in writing by the
73
Participant. Such Participants will also receive a notice from the Trustee
explaining that (i) all shares of New Company Stock allocated to such
Participant's account and subject to the offer will be tendered or exchanged or
will not be tendered or exchanged by the Trustee only in accordance with
decisions made by Participants acting in their capacity as named fiduciaries;
(ii) by timely returning the form and pursuant thereto specifically directing
that the shares subject to the decision of the Participant either be tendered or
exchanged or not tendered or exchanged, such Participant is consenting to his
appointment as named fiduciary hereunder; and (iii) a Participant's consent to
appointment as a named fiduciary or failure to consent to such appointment shall
be binding only with respect to the specific tender or exchange offer described
in the materials sent to the Participant by the Trustee. The Trustee will tender
or exchange whole shares only as and to the extent so instructed and will
aggregate Participants' responses with respect to fractional shares and tender
or exchange fractional shares in a manner designed to comply as closely as
reasonably possible with the aggregate responses of all Participants with
respect to such fractional shares. Except as provided by law, if the Trustee
does not receive instructions from a Participant regarding any tender or
exchange offer for New Company Stock allocated to such Participant's accounts,
the Trustee will have no discretion in such matter and will not tender or
exchange any such shares in response thereto. Unless and until shares are
tendered or exchanged, the individual instructions received by the Trustee from
Participants will be held by the Trustee in strict confidence and will not be
divulged or released to any person, including officers or employees of the
Company or any Affiliated Company, or any other company unless consented to by
the Participant or otherwise required by law; provided, however that the Trustee
will advise the Company at any time upon request of the total number of shares
of New Company Stock held by the Trustee not subject to instructions or tender.
16.11 General Provisions.
The provisions of this Article XVI supersede any provisions of the Trust
Agreement or Plan which are inconsistent with this Article XVI. To the extent,
if any, permitted by ERISA, each Participant will be a named fiduciary with
respect to the exercise of voting and tender or exchange offer rights for New
Company Stock held in such Participant's account. Notwithstanding any provision
of this Trust Agreement to the contrary and subject to all federal and state
securities laws, the terms of any stockholders agreement to which the Trustee is
a party and all applicable provisions of ERISA, the Trustee can sell New Company
Stock to any person, including any person deemed to be a "party in interest"
within the meaning of ERISA Section 3(14) or a "disqualified person" within the
meaning of Code Section 4975, if the Trustee determines that such sale is
necessary to fulfill the Trustee's fiduciary obligations under ERISA. The
Trustee shall comply with all federal and state securities laws and with all
applicable provisions of ERISA when selling such New Company Stock, including,
if required, the conditions that such sale or purchase be for "adequate
consideration" (as defined in Section 3(18) of ERISA), and no commission be
charged when a sale of New Company Stock is made with a "party in interest" or a
"disqualified person." The Company will pay any reasonable expenses incurred as
a result of such sale including without limitation any expenses related to
compliance with applicable law.
74
Executed this _____ day of ___________________, 2001.
"Company"
CB Richard Ellis Services, Inc.
By________________________
75
APPENDIX I
to the CB Richard Ellis 401(k) Plan
The following provisions shall be in effect from April 19, 1989 through the
earlier of any date indicated in such provision or December 31, 1995, and shall
be deleted from the Plan effective January 1, 1996:
1. Compensation Limit Through 1993. In any Plan Year commencing prior to
---------------------------------
January 1, 1994, neither "Compensation" nor "Section 414(s) Compensation" shall
include amounts in excess of $200,000, as adjusted by the Commissioner of
Internal Revenue to reflect increases in the cost-of-living in accordance with
Code Section 415(d), as then in effect.
2. Initial Plan Year Top Heavy Determination Date. Section 1.31 shall
------------------------------------------------
include at the end thereof the following sentence: "The Determination Date for
the 1989 Plan Year shall be December 31, 1989."
3. Previous Eligibility. Subject to the provisions of Article 2, each
----------------------
Employee who was a participant in the Coldwell Banker Commercial Group, Inc.
Capital Accumulation Plan on the day prior to the Effective Date shall be a
Participant in this Plan as of the Effective Date if he was employed by a
Participating Company on the Effective Date, and not excluded under Section 2.2.
Section 2.1 shall be effective June 1, 1992, and prior to such date, but after
the Effective Date, Section 2.1 shall provide that an Employee who did not
become a Participant under the preceding sentence shall become a Participant on
the January 1 or July 1 next following his attainment of age 21 and completion
of a one-year Period of Service, if then employed by a Participating Company,
and not excluded under Section 2.2.
4. Past Voluntary Contributions. Section 3.1 shall include the following
------------------------------
sentence at the end thereof: "Non-deductible voluntary contributions and
earnings thereon transferred to the Plan from the Coldwell Banker Commercial
Group, Inc. Capital Accumulation Plan shall be allocated to the relevant
Participant's Voluntary Contribution Account and distributed therefrom in
accordance with non-discriminatory procedures of the Committee."
5. Sears Stock Fund. The Sears Stock Fund shall contain only that Sears
----------------
Stock which was transferred or rolled over to this Plan from the Prior Plan.
This Fund shall provide for separate accounting for all shares. Participants may
sell shares in the manner prescribed by the Committee but are prohibited from
purchasing any further shares. All earnings received or earned on the Sears
Stock Fund prior to an election period designated by the Committee shall be
invested in one of the investment vehicles listed above or another investment
vehicle designated by the Committee until the next election period whereupon a
Participant may direct the investment of such earnings in accordance with
Section 5.7.
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