View:
As filed with the Securities and Exchange Commission on March 19, 1997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE TJX COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2207613
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
770 Cochituate Road
Framingham, Massachusetts 01701
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Address of principal executive offices, including zip code)
THE TJX COMPANIES, INC. GENERAL SAVINGS/PROFIT SHARING PLAN
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(Full title of the plan)
Donald G. Campbell
The TJX Companies, Inc.
770 Cochituate Road
Framingham, Massachusetts 01701
(508) 390-1000
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(Name, Address and Telephone Number, including Area Code, of Agent for Service)
THE TJX COMPANIES INC.
GENERAL SAVINGS/PROFIT SHARING PLAN
(Amended and Restated Effective January 1, 1997)
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THE TJX COMPANIES INC.
GENERAL SAVINGS/PROFIT SHARING PLAN
TABLE OF CONTENTS
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Article 1. Introduction......................................................1
1.1. Amendment and restatement.......................................1
1.2. Plan and Trust intended to qualify..............................1
1.3. Merger of Marshall's Plan and Savings Plan......................1
Article 2. Definitions.......................................................2
2.1. "Administrator".................................................2
2.2. "Affiliated Company"............................................2
2.3. "Annual Addition"...............................................2
2.4. "Basic Contribution"............................................3
2.5. "Beneficiary"...................................................3
2.6. "Board of Directors"............................................3
2.7. "Code"..........................................................3
2.8. "Committee".....................................................3
2.9. "Company".......................................................3
2.10. "Compensation".................................................3
2.11. "Credited Period of Severance".................................5
2.12. "Credited Vesting Service".....................................5
2.13. "Effective Date"...............................................6
2.14. "Elective Contribution Account"................................6
2.15. "Eligibility Computation Period"...............................6
2.16. "Eligible Employee"............................................7
2.17. "Employee".....................................................7
2.18. "Employer".....................................................7
2.19. "Employment Commencement Date".................................7
2.20. "Entry Date"...................................................7
2.21. "ERISA"........................................................7
2.22. "Highly Compensated Eligible Employee".........................7
2.23. "Highly Compensated Employee"...................................8
2.24. "Hour of Service"..............................................9
2.25. "Key Employee"................................................11
2.27. "Matching Contribution".......................................11
2.28. "Matching Contribution Account"...............................11
2.29. "Maternity/Paternity Leave of Absence"........................11
2.30. "Normal Retirement Date"......................................12
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2.31. "Participant".................................................12
2.32. "Participating Employer"......................................12
2.33. "Period of Severance".........................................12
2.34. "Plan"........................................................12
2.35. "Plan Year"...................................................12
2.36. "Prior Plan Account"..........................................12
2.37. "Qualified Domestic Relations Order"..........................12
2.38. "Savings Plan"................................................13
2.39. "Severance from Service Date".................................13
2.40. "Share of the Trust Fund".....................................14
2.41. "Stock".......................................................14
2.42. "Supplemental Contribution"...................................14
2.43. "Top Heavy Plan Year".........................................14
2.44. "Trust".......................................................16
2.45. "Trust Fund"..................................................16
2.46. "Trustee".....................................................16
2.47. "Valuation Date"..............................................16
2.48. "Year of Service for Participation"...........................16
Article 3. Administration...................................................17
3.1. Allocation of administrative responsibilities..................17
3.2. Appointment and operations of the Committee....................17
3.3. Powers of Administrator and Committee..........................18
3.4. Examination of records.........................................19
3.5. Nondiscriminatory exercise of authority........................19
3.6. Reliance on tables, etc........................................20
3.7. Claims and review procedures...................................20
3.8. Indemnification of Administrator and Committee.................21
3.9. Expenses of Trust..............................................21
Article 4. Participation....................................................23
4.1. Participation..................................................23
4.2. Cessation of participation.....................................24
4.3. Breaks in participation........................................24
Article 5. Contributions; Limitations.......................................26
5.1. Basic and Supplemental Contributions...........................26
5.2. Matching Contributions.........................................26
5.3. Persons sharing in certain Matching Contributions..............28
5.4. General provisions and limitations.............................29
5.5. Code Section 401(k)(3) Limits..................................29
5.6. Code Section 401(m) Limits.....................................37
5.7. Distribution of excess deferrals...............................44
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5.8. Special contribution for Top Heavy Plan Years..................44
5.9. Return of contributions........................................46
5.10. Participant contributions.....................................47
Article 6. Accounts.........................................................48
6.1. Administrator to maintain accounts.............................48
6.2. Adjustment of accounts.........................................48
6.3. Transfers from the Marshall's Plan and the Savings Plan........50
6.4. Treatment of forfeitures.......................................51
6.5. Limitations....................................................51
6.6. Reports to Participants........................................53
Article 7. Trust Fund.......................................................54
7.1. Appointment of Trustee.........................................54
7.2. Investment funds...............................................54
7.3. Acquisition of Stock...........................................55
7.4. Investments for the Trust Fund.................................55
7.5. Directed investments...........................................55
7.6. Method of making investment directions.........................56
Article 8. Withdrawals......................................................59
8.1. Hardship withdrawals...........................................59
8.2. Withdrawals after age 59 1/2...................................62
8.3. Order of withdrawals; adjustments..............................62
Article 9. Loans............................................................64
9.1. In general. .................................................64
9.2. Time and amount of loans.......................................64
9.3. Formal requirements............................................65
9.4. Replacement other than in normal course........................65
9.5. Source of loans; treatment of loan payments....................66
9.6. Loans to be nondiscriminatory..................................67
9.7. Role of Administrator and Committee............................67
Article 10. Rights to Benefits..............................................68
10.1. Normal and Late Retirement....................................68
10.2. Disability....................................................68
10.3. Death.........................................................69
10.4. Separation from service.......................................73
10.5. Election of former vesting schedule...........................76
10.6. Forfeitures...................................................77
10.7. Separate Account..............................................78
10.8. Direct Rollover of Eligible Distributions.....................79
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Article 11. Distribution of Benefits........................................81
11.1. Method of making distributions................................81
11.2. Notice to Trustee.............................................81
Article 12. Amendment and Termination.......................................83
12.1. Amendment.....................................................83
12.2. Termination or partial termination............................83
12.3. Distributions upon termination of the Plan....................84
12.4. Merger or consolidation of Plan; transfer of Plan assets......84
Article 13. Miscellaneous...................................................86
13.1. Voting of Stock...............................................86
13.2. Transfers from other plans....................................86
13.3. Limitation of rights..........................................87
13.4. Nonalienability of benefits...................................88
13.5. Participants' period of military service......................88
13.6. Payment under Qualified Domestic Relation Orders..............88
13.7. Information between Administrator and Trustee.................89
13.8. Governing law.................................................89
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Article 1. Introduction
1.1. Amendment and restatement. This Plan amends, restates and
continues The TJX Companies, Inc., General Savings/Profit Sharing Plan,
effective January 1, 1997. Except as otherwise expressly provided herein, the
rights of Participants who ceased to be Employees prior to January 1, 1997 and
do not subsequently become Eligible Employees shall be determined in accordance
with the terms of the Plan as in effect when they ceased to be Employees.
1.2. Plan and Trust intended to qualify. This Plan and its related
Trust, as initially adopted effective February 12, 1992, are intended to qualify
under sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as
amended. Subject to the provisions of Section 5.9, no part of the corpus or
income of the Trust forming part of the Plan will be used for or diverted to
purposes other than for the exclusive benefit of each Participant and
Beneficiary.
1.3. Merger of Marshall's Plan and Savings Plan. The 401(k) Plan for
Marshall's Associates (the "Marshall's Plan") and The TJX Companies, Inc.
Savings/Profit Sharing Plan (the "Savings Plan") were each merged into this Plan
as of the close of December 31, 1996. All benefits payable from the Marshall's
Plan and the Savings Plan are to be paid hereunder, provided, that the right of
a Participant who ceased to be an Employee prior to January 1, 1997 and does not
subsequently become an Eligible Employee shall be determined in accordance with
the terms of the Savings Plan or the Marshall's Plan, as applicable, each as in
effect when the Participant ceased to be an Employee.
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Article 2. Definitions.
Wherever used herein, the following terms have the following meanings
unless a different meaning is clearly required by context:
2.1. "Administrator" means the Company.
2.2. "Affiliated Company" means (a) any corporation (other than the
Company) which is a member of a controlled group of corporations (as defined in
section 414(b) of the Code) with the Company, (b) any trade or business (other
than the Company), whether or not incorporated, which is under common control
(as defined in section 414(c) of the Code) with the Company, (c) any trade or
business (other than the Company) which is a member of an affiliated service
group (as defined in section 414(m) of the Code) of which the Company is also a
member, and (d) any entity (other than the Company) required to be aggregated
with the Company pursuant to regulations issued under section 414(o) of the
Code. Solely for purposes of Section 6.5, sections 414(b) and 414(c) of the Code
will be considered modified as provided in section 415(h) of the Code. The
Company in its sole discretion may determine that periods of service with an
Affiliated Company prior to its becoming an Affiliated Company shall be taken
into account in computing Credited Vesting Service and/or Years of Service for
Participation, provided that such determination shall apply uniformly to all
persons employed by such Affiliated Company.
2.3. "Annual Addition" means, in the case of any Participant for any
Limitation Year, the sum of all amounts contributed for such year by a
Participating Employer and credited to the Participant's accounts under the
Plan, including any such contributions made to the Plan and later distributed to
the Participant pursuant to Section 5.7.
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2.4. "Basic Contribution" means that portion of any contribution made
on behalf of a Participant under Section 5.1 which is determined by reference to
the first five (5) percentage points by which such Participant has elected to
have his or her compensation reduced pursuant to Article 4.
2.5. "Beneficiary" means the person or persons entitled under Article
10 to receive benefits under the Plan upon the death of the Participant.
2.6. "Board of Directors" means the Board of Directors of the Company.
The Board of Directors may allocate and delegate its fiduciary responsibilities,
or may designate others to carry out its fiduciary responsibilities, in
accordance with section 405 of ERISA.
2.7. "Code" means the Internal Revenue Code of 1986, as amended from
time to time. Reference to any section or subsection of the Code includes
reference to any comparable or succeeding provisions of any legislation which
amends, supplements or replaces such section or subsection.
2.8. "Committee" means the committee appointed under Article 3 to
perform certain administrative functions under the Plan.
2.9. "Company" means The TJX Companies, Inc., a Delaware corporation,
and any successor to all or a major portion of the assets or business of the
Company which assumes the obligations of the Company.
2.10. "Compensation" means, with respect to any Participant in any
period, the following:
(a) As used in Sections 4.1, 5.1 and 5.2, "Compensation" means
the total amount of payments made during such period to a Participant
for services rendered to a
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Participating Employer (before taking account of any reduction in such
payments pursuant to a compensation reduction under this Plan and any
other plan or arrangement described in section 125 or 401(k) of the
Code), excluding reimbursement for relocation or tuition expenses,
amounts under The TJX Companies, Inc. Long Range Management Incentive
Plan, Long Range Performance Incentive Plan, Matching Contributions
under this Plan or contributions under any other employee benefit plan
(within the meaning of section 3(3) of ERISA), fund, program or
arrangement, imputed compensation or property received by the
Participant, or any amounts received in connection with any stock
option plan, performance share plan, employee stock purchase plan, or
stock appreciation rights, whether such plan is qualified or
nonqualified and whether such amounts are deferred or not deferred;
(b) For purposes of (i) applying the minimum contribution
provisions of Section 5.8, or (ii) determining twenty-five percent of a
Participant's Compensation for the purposes of the limitations
described in Section 6.5, the term "Compensation" includes all wages,
salaries, fees for professional services and other amounts received
during such period for personal service actually rendered in the course
of employment with the Company or an Affiliated Company but does not
include amounts excluded under the definition of compensation provided
in the Treasury Regulations promulgated under section 415 of the Code;
and
(c) For purposes of (i) determining, for plan years beginning
on or after January 1, 1989, whether an individual is a "key employee"
under Section 2.25 and within the meaning of section 416(i) of the Code
and regulations promulgated
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thereunder, (ii) any compensation test relevant in determining whether
an individual is a Highly Compensated Employee (or Highly Compensated
Eligible Employee), and (iii) the nondiscrimination requirements under
Sections 5.5 and 5.6, an individual's "Compensation" will be the same
as her or his Compensation under (b) above increased by amounts that
would have been received by the individual but for a compensation
reduction under this Plan or any other plan or arrangement described in
section 125 or 401(k) of the Code. This paragraph shall not apply for
Plan Years beginning on or after January 1, 1998.
Consistent with section 401(a)(17) of the Code, Compensation in excess of
$150,000 (as adjusted from time to time by the Secretary of the Treasury or his
or her delegate) shall not be taken into account for any Participant for any
Plan Year.
2.11. "Credited Period of Severance" means a Period of Severance
following a quit, discharge or retirement if the Employee performs one or more
Hours of Service for the Employer within twelve (12) months after the Severance
from Service Date.
2.12. "Credited Vesting Service" means the period of time, expressed in
years and fractions of years based on days, which commences on the Employee's
Employment Commencement Date and ends on his or her Severance from Service Date,
but excluding any portions of such period prior to the date on which the
Employee attains age 18. Credited Periods of Severance will also be included in
Credited Vesting Service. All periods of Credited Vesting Service will be
accumulated and shall count in determining the vested percentage of an
Employee's accounts, whether accumulated before or after a Period of Severance,
except that in the case of an Employee who has five consecutive one-year Periods
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of Severance and who later returns to the employ of the Employer, for purposes
of determining the vested portion of the Employee's accounts as of the date his
or her employment most recently terminated, all Credited Vesting Service after
such five-year Period of Severance will be disregarded. For purposes of
determining the vested portion of the Employee's accounts to the extent
accumulated after reemployment, all Credited Vesting Service accumulated prior
to such five-year Period of Severance will be disregarded, unless the
Participant had a vested interest in any portion of his or her portion of the
Trust Fund or the Period of Severance does not equal or exceed the greater of
five years or the Participant's period of Credited Vesting Service before the
Period of Severance. An Employee's service actually credited for vesting
purposes under the Marshall's Plan will be counted in determining the Employee's
vested portion of his or her accounts under this Plan.
2.13. "Effective Date" means January 1, 1997.
2.14. "Elective Contribution Account" means that portion of a
Participant's Share of the Trust Fund attributable to Basic Contributions,
Supplemental Contributions and the earnings thereon.
2.15. "Eligibility Computation Period" means a period of twelve (12)
consecutive months beginning with the Employee's Employment Commencement Date;
provided, that if an Employee fails to complete a Year of Service for
Participation during the first such period, his or her Eligibility Computation
Period shall be the Plan Year which includes the first anniversary of his or her
Employment Commencement Date and, if necessary, each succeeding Plan Year.
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2.16. "Eligible Employee" means any Employee employed by a
Participating Employer other than an Employee covered by a collective bargaining
agreement that does not provide for participation in the Plan. No individual who
would be considered an Employee solely by reason of the leased employee rules of
section 414(n) of the Code or the second sentence of Section 2.17 shall be
considered an Eligible Employee unless (a) the Employer for which he performs
services is a Participating Employer, and (b) such Participating Employer has
elected in writing to treat a class of leased employees which includes such
individual as Eligible Employees, and the Company has consented to such
election.
2.17. "Employee" means any individual employed by the Employer. Any
person who is a "leased employee," within the meaning of section 414(n) of the
Code, of an Employer shall be considered an Employee to the extent required
under section 414(n) of the Code.
2.18. "Employer" means the Company and all Affiliated Companies.
2.19. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service under Section 2.24(a).
2.20. "Entry Date" means the first day of the first pay period in any
calendar quarter and such other days as the Administrator may from time to time
determine.
2.21. "ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended, and any successor statute or statutes of
similar import.
2.22. "Highly Compensated Eligible Employee" means an Eligible Employee
who is a Highly Compensated Employee and who has satisfied the participation
requirements of Section 4.1 (other than the requirement that a compensation
reduction agreement be in effect).
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2.23. "Highly Compensated Employee" means an employee of the Employer
who is a "highly compensated employee" within the meaning of Code section
414(q). The term Highly Compensated Employee includes highly compensated active
Employees and highly compensated former Employees.
(a) A highly compensated active Employee is any Employee who
performs service for the Employer during the Plan Year and who (i)
during the preceding Plan Year received compensation from the Employer
in excess of $80,000 (as adjusted pursuant to Code section 415(d)) and,
(ii) if the Employer elects the application of this clause (ii) for the
preceding Plan Year, was in the top-paid group for the preceding Plan
Year.
(b) The term Highly Compensated Employee also includes
Employees who are 5 percent owners at any time during the Plan Year or
the preceding Plan Year.
(c) A highly compensated former Employee includes any Employee
who separated from service (or was deemed to have separated) prior to
the Plan Year, performs no service for the Employer during the Plan
Year, and was a highly compensated active Employee for either the Plan
Year during which he or she separated from service or any Plan Year
ending on or after the Employee's 55th birthday.
(d) The top paid group shall consist of the top 20 percent of
active Employees, ranked on the basis of Compensation received from the
Employer during the year. In determining the number of active
Employees, Employees described in Section 414(q)(8) of the Code and
section 1.414(2)-1T (Q&A-9(b)) shall be excluded.
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(e) The determination of who is a Highly Compensated
Employee, including the determinations of the number and identity of the
employees in the top-paid group and the compensation that is considered, will
be made in accordance with Code section 414(q).
2.24. "Hour of Service" means, with respect to any Employee,
(a) each hour for which the Employee is directly or indirectly
paid, or entitled to payment, for the performance of duties for the
Employer, each such hour to be credited to the Employee for the
Eligibility Computation Period in which the duties were performed;
(b) each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer (including payments made
or due from a trust fund or insurer to which the Employer contributes
or pays premiums) on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity, disability,
layoff, jury duty, military duty, or leave of absence, each such hour
to be credited to the Employee for the Eligibility Computation Period
in which such period of time occurs, subject to the following rules:
(i) no more than 501 Hours of Service will be
credited under this paragraph (b) to the Employee on account
of any single continuous period during which the Employee
performs no duties;
(ii) Hours of Service will not be credited under this
paragraph (b) for a payment which solely reimburses an
individual for medically related expenses,
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or which is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation,
unemployment compensation or disability insurance laws; and
(iii) if the period during which the Employee
performs no duties falls within two or more Eligibility
Computation Periods and if the payment made on account of such
period is not calculated on the basis of units of time, the
Hours of Service credited with respect to such period shall be
allocated between not more than the first two such Eligibility
Computation Periods on any reasonable basis consistently
applied with respect to similarly situated Employees;
(c) each hour not credited under (a) or (b) above for which
back pay, irrespective of mitigation of damages, has been either
awarded or agreed to by the Employer, each such hour to be
credited to the Employee for the Eligibility Computation Period to
which the award or agreement pertains; and
(d) each hour not credited under (a), (b) or (c) above during
a period of leave of absence from the Employer for service in the armed
forces of the United States if the Employee returns to work for the
Employer as an Employee at a time when he or she has reemployment
rights under federal law.
Hours of Service to be credited to an individual under (a), (b) and (c) above
will be calculated and credited pursuant to paragraphs (b) and (c) of section
2530.200(b)-2 of the Department of Labor Regulations, which are incorporated
herein by reference. Hours of Service to be credited to an individual under (d)
above will be determined by the Administrator with reference to the individual's
most recent normal work schedule.
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2.25. "Key Employee" means any Employee or Beneficiary who is a "key
employee" within the meaning of section 416(i) of the Code and the regulations
promulgated thereunder.
2.26. "Marshall's Plan" means The 401(k) Plan for Marshall's
Associates.
2.27. "Matching Contribution" means any contribution made to the
Trust under Section 5.2.
2.28. "Matching Contribution Account" means that portion of a
Participant's Share of the Trust Fund attributable to Matching Contributions and
to the earnings thereon.
2.29. "Maternity/Paternity Leave of Absence" means a period of absence
from the Employer that begins after January 1, 1985 for any of the following
reasons:
(a) the Employee's pregnancy;
(b) birth of the Employee's child;
(c) placement of a child with the Employee in connection with
the adoption of such child by the Employee; or
(d) the caring for such child for a period beginning
immediately following such birth or placement;
provided, however, that in order for an Employee's absence to qualify as a
Maternity/Paternity Leave of Absence, the Employee must furnish the
Administrator with such information as the Administrator may reasonably require
(in such form and at such time as the Administrator may reasonably require)
establishing:
(i) that the absence from work is an absence
described hereunder, and
(ii) the number of days for which the absence lasted.
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2.30. "Normal Retirement Date" means the date on which the Participant
attains age 65.
2.31. "Participant" means each Eligible Employee who participates in
the Plan in accordance with Article 4 hereof.
2.32. "Participating Employer" means (a) the Company, (b) the
Affiliated Companies listed in Schedule A (but only so long as each such entity
is an Affiliated Company), and (c) each other Affiliated Company which has
adopted the Plan with the consent of the Company.
2.33. "Period of Severance" means the period of time, expressed in
years and fractions of years based on days, which commences on the Employee's
Severance from Service Date and ends on the date on which the Employee next
completes an Hour of Service for the Employer.
2.34. "Plan" means The TJX Companies, Inc. General Savings/Profit
Sharing Plan as set forth herein, together with any and all amendments and
supplements hereto.
2.35. "Plan Year" or "Limitation Year" means the calendar year.
2.36. "Prior Plan Account" means the portion of the Trust Fund
established for a Participant pursuant to Section 13.2 attributable to amounts
transferred from other qualified plans and the earnings thereon.
2.37. "Qualified Domestic Relations Order" means any judgment, decree
or order (including approval of a property settlement agreement) which:
(a) 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;
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(b) is made pursuant to a State domestic relations law
(including a community property law);
(c) constitutes a "qualified domestic relations order" within
the meaning of section 414(p) of the Code and section 206(d)(3)(B) of
ERISA, as added by the Retirement Equity Act of 1984; and
(d) is entered on or after January 1, 1985.
In addition, any judgment, decree or order which satisfies the requirements of
(a) and (b) above and which is entered prior to January 1, 1985 shall constitute
a Qualified Domestic Relations Order (whether or not the requirements of (c)
above are satisfied) if, as of January 1, 1985, benefits under the Plan are
being paid pursuant to such judgment, decree or order. Any other judgment,
decree or order which satisfies the requirements of (a) and (b) above and which
is entered prior to January 1, 1985 may also be treated as a Qualified Domestic
Relations Order in the discretion of the Committee.
2.38. "Savings Plan" means the TJX Companies, Inc. Savings/Profit
Sharing Plan, as in effect from time to time prior to the Effective Date.
2.39. "Severance from Service Date" means the earlier of (a) the date
on which an Employee quits, is discharged, retires or dies, or (b) the first
anniversary of the first day of a period in which an Employee remains absent
from service (with or without pay) with the Employer for any reason other than a
quit, discharge, retirement or death (e.g., because of vacation, holiday,
sickness, disability, leave of absence or layoff). In the case of a
Maternity/Paternity Leave of Absence, the Severance from Service Date of an
Employee or Participant who is absent from work beyond the first anniversary of
the first date of such
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Absence shall be the second anniversary of the first date of such Absence. The
period between the first and second anniversaries of the first date of such
Absence shall be treated as neither Credited Vesting Service nor a Period of
Severance.
2.40. "Share of the Trust Fund" means, in the case of each Participant,
that portion of the Trust's assets which is allocated to the accounts maintained
on behalf of the Participant under the Plan.
2.41. "Stock" means the common stock of the Company.
2.42. "Supplemental Contribution" means any contribution, other than a
Basic Contribution, made on behalf of a Participant under Section 5.1. In no
event will the sum of the Basic Contribution and the Supplemental Contribution
made on behalf of a Participant for any payroll period exceed fifteen(15%)
percent of the Participant's Compensation for such payroll period.
2.43. "Top Heavy Plan Year" means a Plan Year commencing on or after
January 1, 1984 if the sum of the account balances of all Key Employees under
the Plan and under each other qualified defined contribution plan (as of the
applicable determination date of each such plan) which is aggregated with this
Plan plus the sum of the present value of the total accrued benefits of all Key
Employees under each qualified defined benefit plan (as of the applicable
determination date of each such plan) which is aggregated with this Plan exceeds
sixty (60) percent of the sum of such amounts for all Employees, former
Employees and Beneficiaries (other than former Key Employees) under such plans.
The following rules shall apply for purposes of the foregoing determination:
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(a) All determinations hereunder will be made in accordance
with section 416 of the Code and the regulations promulgated
thereunder, which are specifically incorporated herein by reference.
(b) The term "determination date" means, with respect to the
initial plan year of a plan, the last day of such plan year and, with
respect to any other plan year of a plan, the last day of the preceding
plan year of such plan. The term "applicable determination date" means,
with respect to the Plan, the determination date for the Plan Year of
reference and, with respect to any other plan, the determination date
for any plan year of such plan which falls within the same calendar
year as the applicable determination date of the Plan. Accrued benefits
or account balances under a plan will be determined as of the most
recent valuation date of the plan; provided, however, that in the case
of a defined benefit plan such valuation date must be the same date as
is employed for computing plan costs for minimum funding purposes, and
in the case of a defined contribution plan the value so determined will
be adjusted for contributions made after the valuation date to the
extent required by applicable Treasury Regulations.
(c) There shall be aggregated with this Plan (i) any other
plan of an Employer under which at least one Key Employee participates
and which is able to satisfy the requirements of sections 401(a)(4) or
410 of the Code by reason, at least in part, of the existence of this
Plan, and (ii) if at least one Key Employee is a Participant hereunder,
any other plan of an Employer (A) in which a Key Employee participates
or (B) which enables another such plan (including, but not limited to,
the Plan) to satisfy the requirements of sections 401(a)(4) or 410 of
the Code. Any plan of an Employer not
-15-
required to be aggregated with the Plan may nevertheless, at the
discretion of the Administrator, be aggregated with the Plan if the benefits and
coverage of all aggregated plans would continue to satisfy the requirements of
sections 401(a)(4) and 410 of the Code.
2.44. "Trust" means the trust or trusts established by the Company in
connection with the Plan under an agreement between the Company and the
Trustee, together with any and all amendments thereto.
2.45. "Trust Fund" means the property held in trust by the Trustee for
the benefit of Participants, former Participants and their Beneficiaries.
2.46. "Trustee" means the person or persons appointed as Trustee
pursuant to Section 7.1, any successor trustee or trustees, and any additional
trustee or trustees.
2.47. "Valuation Date" means each day on which the New York Stock
Exchange is open for business and such other dates as may be determined from
time to time by the Administrator.
2.48. "Year of Service for Participation" means, with respect to any
Employee, an Eligibility Computation Period during which the Employee has
completed 1,000 or more Hours of Service. Service of an Employee credited for
eligibility purposes under the 401(k) Profit Sharing Plan of Melville
Corporation and Affiliated Companies will be treated as if it were service for
the Employer.
-16-
Article 3. Administration.
3.1. Allocation of administrative responsibilities. The Company as
Administrator will be the "named fiduciary" of the Plan for purposes of section
402(a)(1) of ERISA with discretionary authority to control, supervise and manage
the operation and administration of the Plan, and will be responsible for
complying with all of the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA. Except as hereinafter expressly provided the
Administrator shall be responsible for all administrative functions under the
Plan. The powers of the Administrator are more particularly set forth in Section
3.3 below.
In addition to the Administrator there shall be a Qualified Plans
Committee (the "Committee") with responsibility to interpret and execute those
provisions of the Plan requiring case by case determinations (in each case made
in accordance with Section 3.5 below), including but not limited to
determinations as to eligibility for Plan loans and other matters pertaining to
Plan loans under Article 9, eligibility for hardship withdrawals under Article
8, and benefit claims and appeals under Section 3.7. The powers of the Committee
are more particularly set forth in Section 3.3 below.
3.2. Appointment and operations of the Committee. The Committee shall
consist of at least three individuals, but not more than five, appointed from
time to time by the Executive Compensation Committee of the Board of Directors
to serve at its pleasure. Participants may be appointed to serve as Committee
members at the discretion of the Executive Compensation Committee of the Board
of Directors. Except as may be directed by the Company, no person serving on the
Committee will receive any compensation for his or her services on the
Committee.
-17-
The Committee will act by majority vote, or in writing by all the
members at the time in office, if they act without a meeting. If at any time a
majority of the individuals serving on the Committee and eligible to vote are
unable to agree, or if there is only one such individual, any action required of
the Committee will be taken by the Executive Compensation Committee and its
decision will be final. The Committee may appoint from its members such
subcommittees with such powers as it shall determine and may authorize one or
more of its members or any agent to execute and deliver any instrument on its
behalf. An individual serving on the Committee who is a Participant will not
vote or act on any matter relating solely to himself or herself.
3.3. Powers of Administrator and Committee. The Administrator will have
full power to administer the Plan in all of its details, subject, however, to
the requirements of ERISA. For this purpose the Administrator's power will
include, but will not be limited to, the following discretionary authority:
(a) to make and enforce such rules and regulations as it
deems necessary or proper for the efficient administration of the Plan;
(b) to interpret the Plan;
(c) to decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan, except as such
questions are delegated herein to the Committee;
(d) to compute the amount of benefits which will be payable to
any Participant, former Participant or Beneficiary in accordance with
the provisions of the Plan, and to determine the person or persons to
whom such benefits will be paid;
(e) to authorize the payment of benefits;
-18-
(f) to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required
under the Code and applicable regulations, or under state or local law
and regulations;
(g) to appoint such agents, counsel, accountants and
consultants as may be required to assist in administering the Plan; and
(h) by written instrument, to allocate and delegate its
fiduciary responsibilities in accordance with section 405 of ERISA.
The Committee will have the responsibility to consider and resolve
those questions and controversies that are specified under Section
3.7, Article 8, Article 9, Section 10.3 and Section 13.6 below as
being within its competence, as well as such other matters as may be
delegated to it by the Administrator. To discharge its duties and
responsibilities, the Committee will have the powers enumerated
above in respect of the Administrator, except that the appointment
of agents, counsel, accountants and consultants will be made only by
the Administrator. Any interpretation or other determination with
respect to the Plan by the Administrator or the Committee shall be
final and conclusive on all persons, in the absence of clear and
convincing evidence that the Administrator or Committee acted
arbitrarily and capriciously.
3.4. Examination of records. The Administrator and the Committee will
make available to each Participant such of their records as pertain to him or
her, for examination at reasonable times during normal business hours.
3.5. Nondiscriminatory exercise of authority. Whenever, in the
administration of the Plan, any discretionary action by the Committee or the
Administrator is required, each shall
-19-
exercise its authority in a nondiscriminatory manner so that all persons
similarly situated will receive substantially the same treatment.
3.6. Reliance on tables, etc. In administering the Plan, the
Administrator and the Committee will be entitled, to the extent permitted by
law, to rely conclusively on all tables, valuations, certificates, opinions and
reports which are furnished by any accountant, trustee, counsel or other expert
who is employed or engaged by the Administrator.
3.7. Claims and review procedures.
(a) Claims procedure. If any person believes he or she is
being denied any rights or benefits under the Plan, such person may
file a claim in writing with the Administrator. If any such claim is
wholly or partially denied, the Administrator will notify such person
of its decision in writing. Such notification will contain (i) specific
reasons for the denial, (ii) specific reference to pertinent plan
provisions, (iii) a description of any additional material or
information necessary for such person to perfect such claim and an
explanation of why such material or information is necessary, and (iv)
information as to the steps to be taken if the person wishes to submit
a request for review. Such notification will be given within 90 days
after the claim is received by the Administrator (or within 180 days,
if special circumstances require an extension of time for processing
the claim, and if written notice of such extension and circumstances is
given to such person within the initial 90 day period). If such
notification is not given within such period, the claim will be
considered denied as of the last day of such period and such person may
request a review of his or her claim.
-20-
(b) Review procedure. Within 60 days after the date on which a
person receives written notice of a denied claim (or, if applicable,
within 60 days after the date on which such denial is considered to
have occurred) such person (or his or her duly authorized
representative) may (i) file a written request with the Committee for a
review of his or her denied claim and of pertinent documents and (ii)
submit written issues and comments to the Committee. The Committee will
notify such person of its decision in writing. Such notification will
be written in a manner calculated to be understood by such person and
will contain specific reasons for the decision as well as specific
references to pertinent Plan provisions. The decision on review will be
made within 60 days after the request for review is received by the
Committee (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by
the Committee to hold a hearing, and if written notice of such
extension and circumstances is given to such person within the initial
60 day period). If the decision on review is not made within such
period, the claim will be considered denied.
3.8. Indemnification of Administrator and Committee. The Company
agrees to indemnify and defend to the fullest extent of the law any Employee or
former Employee who in good faith serves or has served as a member of the
Committee or otherwise exercises or has exercised fiduciary responsibilities
under this Article 3 against any liabilities, damages, costs and expenses
occasioned by his or her having occupied a fiduciary position in connection with
the Plan.
3.9. Expenses of Trust. Unless paid by a distributee in connection
with a distribution from the Trust Fund, all expenses of the Trust, including
without limitation reasonable legal fees, compensation of the Trustee, and all
taxes of any nature whatsoever including interest and
-21-
penalties, assessed against or imposed upon the Trustee or the Trust Fund or the
income thereof, will constitute a charge upon the Trust Fund and will be paid
out of the Trust Fund. Any amount so paid out of the Trust Fund, unless
allocable to the account of a particular distributee, will be apportioned among
the individual accounts of Participants and former Participants who continue to
hold a Share of the Trust Fund as the Administrator may direct, or in the
absence of such direction, as the Trustee may determine.
-22-
Article 4. Participation.
4.1. Participation.
(a) Each individual who (i) was a participant in the Plan, the
Savings Plan or the Marshall's Plan on the day before the Effective
Date and (ii) is an Eligible Employee on the Effective Date will
continue to be a Participant on the Effective Date.
(b) An individual who is not described in (a) above will
become a Participant on the first Entry Date that follows the latest
of:
(i) the date he or she attains age 21,
(ii) the date on which he or she completes one Year
of Service for Participation, and
(iii) the Effective Date;
provided that (A) such individual is an Eligible Employee on such Entry
Date and (B) there is in effect on such Entry Date a compensation
reduction agreement between such individual and his or her
Participating Employer. An individual who has satisfied the
requirements of (i), (ii) and (iii) of this subparagraph (b) but who
has not satisfied the requirements of (A) or (B) will become a
Participant on the first Entry Date as of which the requirements of
both (A) and (B) are satisfied.
(c) As used herein and for all other purposes of the Plan,
"compensation reduction agreement" means an agreement, entered into by
a Participant and a Participating Employer, which satisfies the
requirements of this paragraph. Each such agreement shall provide that
the Participant's Compensation will be reduced by a number of whole
percentage points between 1 percent and 15 percent, inclusive (but in
no event by more
-23-
than 15 percent), as the Participant elects, in consideration for which
reduction an equivalent amount will be contributed to the Trust
pursuant to Section 5.1. Each such agreement will be effective as soon
as administratively practicable following receipt of such agreement by
the Administrator. Each such agreement will be in a form prescribed or
approved by the Administrator and will be (i) irrevocable while the
agreement is in effect with respect to Compensation already earned but
(ii) revocable at any time by the Participant with respect to amounts
not yet earned. A Participant may elect to increase or decrease the
amount by which his or her Compensation is to be reduced, with respect
to amounts not yet earned, by giving notice to the Administrator, in a
form prescribed or approved by the Administrator and subject to such
other as procedures the Administrator may impose, with such change in
amount to take effect in the first pay period administratively
practicable following receipt of this notice.
(d) A Participant may revoke a compensation reduction
agreement in effect between himself or herself and a Participating
Employer as of the payment of Compensation in any week by delivery to
the Administrator, at least 10 days in advance of the effective date of
such revocation, of a written notice of revocation in a form prescribed
or approved by the Administrator.
4.2. Cessation of participation. A Participant will cease to be a
Participant as of the earlier of (a) the date on which he ceases to be an
Eligible Employee, and (b) the date on which the Plan terminates.
4.3. Breaks in participation. If a Participant ceases to be a
Participant pursuant to Section 4.2(a) and thereafter returns to the employ of a
Participating Employer, he will again
-24-
become a Participant on the Entry Date coinciding with or next following the
date on which he first performs an Hour of Service as an Eligible Employee after
his or her reemployment, provided the conditions of clauses (A) and (B) of
Section 4.1(b) are both satisfied on such Entry Date.
-25-
Article 5. Contributions; Limitations.
5.1. Basic and Supplemental Contributions. Each Participating Employer
will contribute to the Trust on behalf of a Participant for each pay period in
which the Participant receives Compensation from the Participating Employer an
amount equal to the amount by which the Participant's Compensation for such pay
period was reduced pursuant to the compensation reduction agreement then in
effect between the Participant and the Participating Employer. Contributions
made pursuant to this Section 5.1 will be paid in cash to the Trustee on a
periodic basis (but in no event less frequently than once a month) and will be
credited to the Participant's Elective Contribution Account in accordance with
the provisions of Section 6.2.
5.2. Matching Contributions. In addition to contributions under
Section 5.1, each Participating Employer will make additional contributions to
the Trust, in accordance with the provisions of this Section, as follows:
(a) For each pay period during which the Plan is in existence,
each Participating Employer will contribute to the Trust an amount
equal to twenty-five (25%) percent of the total Basic Contributions
made by such Participating Employer for such pay period;
(b) For each Plan Year during which the Plan is in existence,
each Participating Employer will contribute to the Trust, in addition
to amounts (if any) contributed under (a) above, an amount equal to a
percentage (which may be zero), as determined by the Board of Directors
in its sole discretion, of the Participating Employer's total Basic
Contributions made for such Year on behalf of the Participating
Employer's
-26-
Participants eligible to share in the contribution under this
subsection (b) (as determined pursuant to Section 5.3). The percentage
rate of contribution determined by the Board of Directors under this
subsection (b) for any Plan Year may be set by said Board at any point
between, and including, zero (0%) percent and twenty-five (25%)
percent; provided, however, that the Board of Directors may determine a
percentage rate of contribution hereunder in excess of twenty-five
(25%) percent for any Plan Year if said Board, in its sole discretion,
concludes that extraordinary profitability or other circumstances
warrant such higher rate of contribution.
(c) In the event that
(i) a Participant's Basic Contributions either cease
or are reduced during the Plan Year as a result of the Code
Section 402(g)(1) limit referred to in Section 5.4, an
adjustment by the Administrator under Section 5.6, or a 12-
month suspension of contributions under Section 8.1(d)
resulting from a hardship withdrawal,
(ii) the Participant has made Supplemental
Contributions during the Plan Year, and
(iii) the Participant remains a Participant on the
last day of the Plan Year or has died, retired on or after
Normal Retirement Date, or left by reason of total disability
(within the meaning of Section 10.2) at any time during the
Plan Year,
the Participant's Participating Employer will make an additional
contribution to the Trust, for the benefit of the Participant, equal to
the excess of (1) the total matching
-27-
contributions under Section 5.2(a) and (b) that would have been
allocable to the Participant for the Plan Year if the Participant's
combined actual Basic and Supplemental Contributions for the Plan Year
had been made at a level percentage of Compensation throughout the Plan
Year over (2) the actual matching contributions under Section 5.2(a)
and (b) that are allocable to the Participant for the Plan Year. Each
contribution made pursuant to subsection (a) above will be paid to the
Trustee as
soon as practicable after the close of the pay period for which such
contribution is made, and each contribution made pursuant to subsection (b) or
(c) above will be paid to the Trustee not later than the time prescribed by law
(including extensions thereof) for filing the Company's income tax return for
its taxable year with or within which ends the Plan Year for which such
contribution is made. Contributions will be made in cash, except that the
Company may make contributions required for investment in the Stock Fund in cash
or in shares of Stock (which may be newly issued shares or shares theretofore
issued) or any combination thereof. The amount of each contribution will be
based on the best information available at the time the contribution is made and
any contribution so made will be final, except as hereinafter provided. All
contributions made to the Trust under this Section 5.2 will be allocated and
credited to the accounts of Participants in accordance with Section 6.2.
5.3. Persons sharing in certain Matching Contributions. A Participant
will be entitled to share in Matching Contributions made for any pay period
under Section 5.2(a) if a Basic Contribution is made on his or her behalf for
such pay period. A Participant will be entitled to share in Matching
Contributions made for any Plan Year under Section 5.2(b) if he or she (i) was a
Participant on the last day of such Plan Year or (ii) died, retired on or after
Normal
-28-
Retirement Date or left by reason of total disability (within the meaning of
Section 10.2) at any time during such Plan Year.
5.4. General provisions and limitations. In no event will the sum of
the contributions under Section 5.1 and Section 5.2 for any Plan Year (a) exceed
the maximum amount which is permitted to be deducted for federal income tax
purposes, or (b) be in an amount which would cause the Annual Addition for any
Participant to exceed the amount permitted under Section 6.5. Contributions
under the Plan are conditioned on their deductibility under section 404 of the
Code. In no event will the Basic and Supplemental Contributions made for a
Participant for any Plan Year exceed the limit in effect for the Plan Year under
section 402(g)(1) of the Code, reduced by any other elective deferrals (as
defined in section 402(g)(3) of the Code) of the Participant under any plan or
plans of the Employer for the Plan Year.
5.5. Code Section 401(k)(3) Limits.
(a) In General. Basic Contributions and Supplemental
Contributions (collectively "Elective Contributions") made under the
Plan are subject to the limits of Code section 401(k)(3), as more fully
described below. The Plan provisions relating to the 401(k)(3) limits
are to be interpreted and applied in accordance with Code sections
401(k)(3) and 401(a)(4), which are hereby incorporated by reference,
and in such manner as to satisfy such other requirements relating to
Code section 401(k) as may be prescribed by the Secretary of the
Treasury from time to time.
(b) Actual deferral ratios. For each Plan Year, the
Administrator will determine the "actual deferral ratio" for each
Participant who is eligible for Elective Contributions. The actual
deferral ratio shall be the ratio, calculated to the nearest
one-
-29-
hundredth of one percent, of the Elective Contributions made on behalf of
the Participant for the Plan Year to the Participant's Compensation for
the applicable period. For purposes of determining a Participant's actual
deferral ratio,
(i) Elective Contributions will be taken into account
only if each of the following requirements is satisfied:
(A) the Elective Contribution is allocated
to the Participant's account as of a date within the
Plan Year, is not contingent upon participation in
the Plan or performance of services on any date
subsequent to that date, and is actually paid to the
Trust no later than the end of the 12-month period
immediately following the Plan Year to which the
contribution relates; and
(B) The Elective Contribution relates to the
Compensation that either would have been received by
the Participant in the Plan Year but for the
Participant's election to defer under the Plan or is
attributable for services performed in the Plan Year
and, but for the Participant's election to defer,
would have been received by the Participant within 2
1/2 months after the close of the Plan Year.
To the extent Elective Contributions which meet the
requirements of (A) and (B) above constitute excess deferrals,
they will be taken into account for each Highly Compensated
Employee, but will not be taken into account for any non-
Highly Compensated Employee.
-30-
(ii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible to have
elective deferrals (and qualified nonelective or qualified
matching contributions, to the extent treated as elective
deferrals) allocated to his or her accounts under two or more
cash or deferred arrangements described in Code section 401(k)
maintained by an Affiliated Company, the Participant's actual
deferral ratio shall be determined as if such elective
deferrals (as well as qualified matching contributions) are
made under a single arrangement, and if two or more of the
cash or deferred arrangements have different Plan Years, all
cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement;
(iii) the applicable period for determining
Compensation for each participant for a Plan Year shall be the
12-month period ending on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
Administrator may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during
which the individual was a Participant.
(iv) in the event that the Plan satisfies the
requirements of Code Sections 401(k), 410(a)(4), or 410(b)
only if aggregated with one or more other plans with the same
plan year, of if one or more other plans with the same Plan
Year satisfy such Code sections only if aggregated with the
Plan, then this section shall be applied by determining the
actual deferral ratios as if all such plans were a single
plan; and
-31-
(v) Elective Contributions which are made on behalf
of non- Highly Compensated Employees which could be used to
satisfy the Code section 401(k)(3) limits but are not
necessary to be taken into account in order to satisfy such
limits, may instead be taken into account for purposes of the
Code section 401(m) limits to the extent permitted by the
corresponding Regulation sections.
(c) Actual deferral percentages.
The actual deferral ratios for the current
Plan Year of all Highly Compensated Employees who are eligible for
Elective Contributions for the current Plan Year shall be averaged to
determine the actual deferral percentage for the highly compensated
group for purposes of testing for the current Plan Year, and the actual
deferral ratios for the preceding Plan Year of all Employees who were
not Highly Compensated Employees but were eligible for Elective
Contributions during the preceding Plan Year shall be averaged to
determine the actual deferral percentage for the non-highly compensated
group for purposes of testing for the current Plan Year. The actual
deferral percentages for any Plan Year must satisfy at least one of the
following tests:
(i) the actual deferral percentage for the highly
compensated group does not exceed 125% of the actual deferral
percentage for the non-highly compensated group; or
(ii) the excess of the actual deferral percentage for
the highly compensated group over the actual deferral
percentage for the non-highly compensated group does not
exceed two percentage points, and the actual
-32-
deferral percentage for the highly compensated group does not
exceed twice the actual deferral percentage of the non-highly
compensated group.
(d) Current Plan Year Ratio. The Administrator may
apply (c) above by using the current Plan Year's actual
deferral ratios of Eligible Employees who are not Highly
Compensated Employees, rather than the preceding Plan Year's
actual deferral ratios for Eligible Employees who
were not Highly Compensated Employees in the preceding Plan Year, if
the Administrator so elects, except that if such an election is made
for Plan Years beginning after December 31, 1997, it may not be changed
except as provided by the Secretary of the Treasury or his designate.
(e) Adjustments by Administrator. If, prior to the time all
Elective Contributions for a Plan Year have been contributed to the
Trust, the Administrator determines that Elective Contributions are
being made at a rate which will cause the Code section 401(k)(3) limits
to be exceeded for the Plan Year, the Administrator may, in its sole
discretion, limit the amount of Elective Contributions to be made with
respect to one or more Highly Compensated Employees for the balance of
the Plan Year by suspending or reducing Elective Contribution elections
to the extent the Administrator deems appropriate. Any Elective
Contributions which would otherwise be made to the Trust shall instead
be paid to the affected Participant in cash.
If the Administrator determines pursuant to this Section
5.5(e) to decrease the rate of contributions, any such decrease shall
be effected as follows:
-33-
(i) first, by decreasing by increments of one
percentage point the percentage rate of Supplemental
Contributions made on behalf of those Highly Compensated
Eligible Employees on whose behalf the highest percentage rate
of such Contributions to Compensation under the compensation
reduction agreements then in effect (determined immediately
before each such decrease, and taking into account prior
decreases) would have been made, so that no reduction is made
in the Supplemental Contributions for any Highly Compensated
Eligible Employee as long as any other Highly Compensated
Eligible Employee has a higher percentage in effect of
Supplemental Contributions to Compensation; and
(ii) second, if further decreases are necessary, by
decreasing by increments of one percentage point the rate of
Basic Contributions made on behalf of those Highly Compensated
Eligible Employees on whose behalf the highest percentage rate
of such Contributions to Compensation under the compensation
reduction agreements then in effect (determined immediately
before each such decrease, and taking into account prior
decreases) would have been made, in the manner described in
(i) but with respect to such Basic Contributions. To the
extent the Administrator decreases hereunder the Basic
Contribution made on behalf of any Participant, such decrease
will also be effective for purposes of determining the
Participant's allocable portion of any Matching Contributions
made under Section 5.2.
-34-
(f) Excess contributions.
(1) If the Code section 401(k)(3) limits have not
been met for a Plan Year after all contributions for the Plan
Year have been made, the Administrator will determine the
aggregate amount of excess contributions with respect to
Participants who are Highly Compensated Employees and will
distribute them in accordance with the provisions of paragraph
(2) and (3) below. The aggregate amount of such excess
contributions shall be the difference, if any, between the
amount of Elective Contributions actually made for the benefit
of all the Highly Compensated Employees for the Plan Year and
the amount of such contributions that would have been made had
the Administrator reduced the actual deferral ratios of the
Highly Compensated Employees with the highest actual deferral
ratio to the extent necessary to (i) enable the Plan to
satisfy the 401(k)(3) limits or (ii) cause such Employees'
actual deferral ratio to equal the actual deferral ratio of
the Highly Compensated Employees with the next highest actual
deferred ratio (whichever first occurred), and had repeated
this process until the Plan satisfied the Code section 401(k)
(3) limits.
(2) The excess contribution to be distributed to a
particular Highly Compensated Employee shall thereupon be the
amount, if any, that the dollar amount of Elective
Contributions made for the benefit of such Highly Compensated
Employee would be reduced if the dollar amount of Elective
Contributions made on behalf of the Highly Compensated
Employees with the
-35-
highest dollar amount of Elective Contributions for the Plan
Year were reduced so that such reduction (i) in the aggregate,
equaled the aggregate amount of excess contributions as
determined above or (ii) reduced the actual dollar amount of
Elective Contributions of such Highly Compensated Employees to
the next highest dollar amount of Elective Contributions made
on behalf of Highly Compensated Employees (whichever occurs
first), and had repeated this process until the aggregate
amount of such reduction equaled the aggregate amount of
excess contributions determined above.
(3) A Participant's excess contributions described in
paragraph (2) will be designated by the Participating Employer
as a distribution of excess contributions and distributed to
the Participant together with income to the extent necessary
to comply with Code section 401(k)(8). For purposes of
distributing excess contributions, the amount of excess
contributions that may be distributed with respect to a Highly
Compensated Employee for a Plan Year shall be reduced by the
amount of excess deferrals previously distributed to the
Highly Compensated Employee for his or her taxable year ending
with or within such Plan Year. If there has been a net
investment loss instead of income allocable to excess
contributions, the amount of the excess contributions to be
refunded hereunder shall be reduced by such loss to the extent
permitted by section 401(k)(8) of the Code or the Regulation
thereunder. In no event will distribution of excess
contributions be made later than 12 months following the close
of the Plan Year to which the contributions relate.
-36-
(g) Effect on Matching Contributions. A Participant's Elective
Contributions which are returned as a result of Code section 401(k)(3)
limits for a Plan Year shall not be taken into account in determining
the amount of Matching Contributions to be made for the Participant's
benefit for the Year. To the extent Matching Contributions have already
been made with respect to the Elective Contributions at the time the
Elective Contributions are determined to be excess contributions, such
Matching Contributions shall be distributed to the Participant at the
same time as the Elective Contributions are returned.
(h) Excess tax where failure to correct. If the excess
contributions are not corrected within 2 and 1/2 months after the close
of the Plan Year to which they relate, the Company and Affiliated
Companies will be liable for a 10 percent excise tax on the amount of
excess contributions attributable to them, to the extent provided by
Code section 4979.
5.6. Code Section 401(m) Limits.
(a) In General. Matching Contributions made under the Plan are
subject to the limits of Code section 401(m), as more fully described
below. The Plan provisions relating to the 401(m) limits are to be
interpreted and applied in accordance with Code Sections 401(m) and
401(a)(4), which are hereby incorporated by reference, and in such
manner as to satisfy such other requirements relating to Code section
401(m) as may be prescribed by the Secretary of the Treasury from time
to time.
(b) Actual contribution ratios. For each Plan Year, the
Administrator will determine the "actual contribution ratio" for each
Participant who is eligible for
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Matching Contributions. The actual contribution ratio shall be the
ratio, calculated to the nearest one-hundredth of one percent, of the
Matching Contributions made on behalf of the Participant for the Plan
Year, to the Participant's Compensation for the Plan Year.
For purposes of determining a Participant's actual
contribution ratio,
(i) a Matching Contribution will be taken into
account only if the Contribution is allocated to a
Participant's Account as of a date within the Plan Year, is
actually paid to the Trust no later than 12 months after the
close of the Plan Year, and is made on behalf of a
Participant on account of the Participant's Elective
Contributions for the Plan Year.
(ii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible to have
matching contributions or employee contributions (including
amounts treated as matching contributions) allocated to his or
her accounts under two or more plans maintained by an
Affiliated Company which may be aggregated for purposes of
Code sections 410(b) and 401(a)(4), the Participant's actual
contribution ratio shall be determined as if such
contributions are made under a single plan, and if two or more
of the plans have different Plan Years, all plans ending with
or within the same calendar year shall be treated as a single
plan;
(iii) the applicable period for determining
Compensation for each Participant for a Plan Year shall be the
12-month period ending on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
-38-
Administrator may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during
which the individual was a Participant.
(iv) Elective Contributions not applied to satisfy
the Code section 401(k)(3) limits may be treated as Matching
Contributions to the extent permitted by the corresponding
Regulation sections.
(v) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b)
only if aggregated with one or more other plans with the same
plan year, or if one or more other plans with the same plan
year satisfy such code sections only if aggregated with this
Plan, then this section shall be applied by determining the
actual deferral ratios as if all such plans were a single
plan; and
(vi) any forfeitures under the Plan which are
applied against Matching Contributions shall be treated as
Matching Contributions.
(c) Actual contributions percentages. The actual
contribution ratios for the current Plan Year of all Highly
Compensated Employees who are eligible for Matching
Contributions for the current Plan Year shall be averaged
to determine the actual contribution percentages for the highly
compensated group for purposes of testing for the current Plan Year,
and the actual contribution ratios for the preceding Plan Year for all
Employees who were not Highly Compensated Employees but were eligible
for Matching Contributions during the preceding Plan Year shall be
averaged to determine the actual contribution percentage for the
non-highly compensated group for purposes of
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testing for the current Plan Year. The actual contribution percentages
for any Plan Year must satisfy at least one of the following tests:
(i) The actual contribution percentage for the highly
compensated group does not exceed 125% of the actual
contribution percentage for the non-highly compensated group;
or
(ii) The excess of the actual contribution percentage
for the highly compensated group over the actual contribution
percentage for the non-highly compensated group does not
exceed two percentage points, and the actual contribution
percentage for the highly compensated group does not exceed
twice the actual contribution percentage of the non-highly
compensated group.
(d) Current Plan Year Ratio. The Administrator may
apply (c) above by using the current Plan Year's actual
contribution ratios of Eligible Employees who are not Highly
Compensated Employees, rather than the preceding Plan Year's actual
contribution ratios for Eligible Employees who were not Highly
Compensated Employees in the preceding Plan Year, if the Administrator
so elects, except that if such an election is made for any Plan Year
beginning after December 31, 1997, it may not be changed except as
provided by the Secretary of the Treasury of the United States or
his designate.
(e) Multiple use test. In the event that (i) the actual
deferral percentage and actual contribution percentage for the highly
compensated group each exceed 125% of the respective actual deferral
and actual contribution percentages for the non-highly compensated
group, and (ii) the sum of the actual deferral percentage and the
actual
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contribution percentage for the highly compensated group exceeds the
"aggregate limit" within the meaning of Regulation section
1.401(m)-2(b)(3), the Administrator shall reduce the actual
contribution ratios of Highly Compensated Employees who had both
Elective Contributions and Matching Contributions for the Plan Year to
the extent required by such section and in the same manner as described
in paragraph (g) below.
(f) Adjustments by Administrator. If, prior to the time all
Matching Contributions for a Plan Year have been contributed to the
Trust, the Administrator determines that such Contributions are being
made at a rate which will cause the Code section 401(m) limits to be
exceeded for the Plan Year, the Administrator may, in its sole
discretion, limit the amount of such Contributions to be made with
respect to one or more Highly Compensated Employees for the balance of
the Plan Year by limiting the amount of such Contributions to the
extent the Administrator deems appropriate.
If the Administrator determines pursuant to this Section
5.6(a) to decrease the rate of Matching Contributions, any such
decrease shall be made only after adjustments, if any, under Section
5.5(e) have been made. Any decrease in Matching Contributions in order
under this Section 5.6(f) shall be made first in the Matching
Contributions for the Highly Compensated Eligible Employees whose rate
of Matching Contributions represents the highest percentage of
Compensation, so that no reduction is made in the Matching
Contributions for any Highly Compensated Eligible Employee as long as
any other Highly Compensated Eligible Employee has a higher percentage
in effect of Matching Contributions to Compensation. If Basic or
Supplemental Contributions are treated as Matching Contributions in
this Section 5.6, then such Basic
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or Supplemental Contributions shall be reduced along with the Matching
Contributions to the extent necessary in order to satisfy Section 5.6.
(g) Excess aggregate contributions.
(1) If the Code section 401(m) limits have not been
met for a Plan Year after all contributions for the Plan Year
have been made, the Administrator will determine the aggregate
amount of excess contributions with respect to Participants
who are Highly Compensated Employees and will then distributed
in accordance with the provisions of paragraphs (2) and (3)
below. The aggregate amount of such excess contributions shall
be the difference, if any, between the amount of Matching
Contributions (plus Elective Contributions treated as Matching
Contributions for purposes of the Code section 401(m) limits)
actually made for the benefit of all the Highly Compensated
Employees for the Plan Year and the amount of such
contributions that would have been made had the Administrator
reduced the actual contribution ratios of the Highly
Compensated Employees with the highest actual contribution
ratio to the extent necessary to (i) enable the Plan to
satisfy the 401(m) limits or (ii) cause such Employees' actual
contribution ratio to equal the actual contribution ratio of
the Highly Compensated Employees with the next highest actual
contribution ratio (whichever first occurred), and had
repeated this process until the Plan satisfied the Code
section 401(m) limits.
(2) The excess contribution to be distributed to a
particular Highly Compensated Employee shall thereupon be the
amount, if any, that the dollar
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amount of Matching Contributions made for the benefit of such
Highly Compensated Employee would be reduced if the dollar
amount of Matching Contributions made on behalf of the Highly
Compensated Employees with the highest dollar amount of
Matching Contributions for the Plan Year were reduced so that
such reduction (i) in the aggregate, equaled the aggregate
amount of excess contributions as determined above or (ii)
reduced the actual dollar amount of Matching Contributions of
such Highly Compensated Employees to the next highest dollar
amount of Matching Contributions made on behalf of Highly
Compensated Employees (whichever occurs first), and had
repeated this process until the aggregate amount of such
reduction equaled the aggregate amount of excess contributions
determined above.
(3) A Participant's excess contributions described in
paragraph (2) will be designated by the Participating Employer
as a distribution of excess contributions and distributed to
the Participant together with income to the extent necessary
to comply with Code section 401(m). If there has been a net
investment loss instead of income allocable to excess
contributions, the amount of the excess contributions to be
refunded hereunder shall be reduced by such loss to the extent
permitted by section 401(m)(6) of the Code or the Regulations
thereunder. In no event will the distribution of excess
contributions be made later than twelve months following the
close of the Plan Year to which the contributions relate.
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(h) Excise tax where failure to correct. If the excess
aggregate contributions are not corrected within 2 and 1/2 months
after the close of the Plan Year to which they relate, the Company and
Affiliated Companies will be liable for a 10 percent excise tax on the
amount of excess contributions attributable to them, to the extent
provided by Code section 4979.
5.7. Distribution of excess deferrals. If, on or before March 1 of
any year, a Participant notifies the Administrator, in accordance with section
402(g)(2)(A) of the Code and Treasury Regulations thereunder, that all or part
of the Basic or Supplemental Contributions made for his or her benefit
represent an excess deferral (as defined in section 402(g) of the Code) for the
preceding taxable year of the Participant, the Administrator may cause such
excess deferral to be distributed to the Participant on or before the
April 15 following such notification. Except to the extent otherwise
provided in such regulations, any amount distributed under this Section
5.7 shall be taken into account in applying Sections 5.5 and 5.6 as if it had
not been distributed. Notwithstanding the foregoing and in accordance with
applicable Treasury Regulations, any distribution of excess contributions to
a Participant under Section 5.6 shall be reduced by the amount of any previous
distribution to the Participant under this Section 5.7, and any distribution
under this Section 5.7 shall be reduced by any previous distribution of excess
contributions under Section 5.6.
5.8. Special contribution for Top Heavy Plan Years. Notwithstanding
anything contained in this Article 5 to the contrary, for any Top Heavy Plan
Year the Employer contributions made for the benefit of any Participant who is
not a Key Employee for that year must not be less than three percent of such
Participant's Compensation; provided, however,
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that if for such Top Heavy Plan Year the Employer contributions made for the
benefit of each Key Employee, expressed as a percentage of his or her
Compensation, is less than three percent, the minimum contribution required
under this Section 5.8 for the benefit of each Participant who is not a Key
Employee will be limited to an amount which, when added to the Employer
contributions made for the benefit of such Participant, constitutes a percentage
of such Participant's Compensation not less than the highest percentage obtained
by dividing, for each Key Employee, the sum of the Employer contributions made
for the benefit of such Key Employee by his or her Compensation; and provided
further, that if the highest rate allocated to a Key Employee for a year in
which the Plan is top-heavy is less than 3%, amounts contributed as a result of
a salary reduction agreement must be included in determining contributions made
on behalf of such Key Employees. In applying the preceding sentence, (i) there
shall be aggregated with Employer contributions made for a Participant's benefit
under the Plan all Employer contributions for the benefit (and forfeitures
allocated to the account) of the Participant under all qualified defined
contribution plans (if any) required to be aggregated with the Plan pursuant to
the first sentence of section 2.43(c), other than under any such plan which
enables a defined benefit plan required to be so aggregated to meet the
requirements of section 401(a)(4) or section 410 of the Code, and (ii) for Plan
Years beginning after December 31, 1988, Basic and Supplemental Contributions
made on behalf of any Participant who is not a Key Employee shall not be taken
into account as Employer contributions. For purposes of this Section 5.8 only,
the term "Participant" shall mean, with respect to any Top Heavy Plan Year, any
Eligible Employee who has fulfilled the participation requirements of Section
4.1 (without regard to the requirement that a binding compensation reduction
agreement be in
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effect) and who is employed by a Participating Employer on the last day of such
Top Heavy Plan Year.
If any Participant hereunder who is also a participant in a defined
benefit plan maintained by the Employer does not accrue under said defined
benefit plan, for any Top Heavy Plan Year, a minimum benefit at least sufficient
to satisfy the requirements of section 416(c)(1) of the Code with respect to
said plan, the preceding paragraph of this Section 5.8 shall be applied with
respect to such Participant by substituting "five percent" for "three percent"
wherever "three percent" appears therein. Notwithstanding the foregoing, no
amount shall be required to be contributed pursuant to this Section in respect
of any Participant for any year (A) if, by reason of any amounts contributed or
benefits accrued with respect to such Participant for such year under one or
more other plans maintained by the Employer, a contribution hereunder in respect
of such Participant would result in the duplication of minimum benefits or
contributions, as determined under section 416(f) of the Code and the
regulations thereunder, or (B) if the Participant is accruing for such year at
least the minimum benefit required to be accrued pursuant to section 416(c)(1)
of the Code under one or more defined benefit plans maintained by the Employer.
Any additional contribution made for the benefit of any Participant
under this Section shall be credited to his or her Matching Contribution Account
as soon as practicable after the close of the Plan Year for which the
contribution is made.
5.9. Return of contributions. If a contribution to the Trust is
(a) made by reason of a good faith mistake of fact, or
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(b) believed in good faith to be deductible under section 404
of the Code, but the deduction is disallowed, the Trustee shall, upon
request by the Company, return the excess of the amount contributed
over the amount, if any, that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the deduction.
If the Trust has suffered a net loss since the time of the excess
contribution, the amount returned shall be reduced by the portion of
the net loss attributable to the excess contribution.
If the excess contribution described in the preceding paragraph has
been allocated among the accounts of Participants, the amount returned under
this Section 5.9 shall be subtracted from each Participant's Share of the
Trust Fund in proportion to the amount of the excess contribution allocated
to him or her. However, if, as a result of distributions from the Trust, a
Participant's Share of the Trust Fund is less than the amount to be subtracted
from it under the preceding sentence, the amount returned shall be reduced by
the difference, and the accounts of other Participants shall not be further
adjusted under the preceding sentence. In no event shall the return of a
contribution hereunder cause any Participant's Share of the Trust Fund to be
reduced to less than it would have been had the mistaken or nondeductible amount
not been contributed.
No return of a contribution hereunder shall be made more than one year
after the mistaken payment of the contribution, or disallowance of the
deduction, as the case may be.
5.10. Participant contributions. No contributions by Participants
will be required or permitted under the Plan.
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Article 6. Accounts.
6.1. Administrator to maintain accounts. The Administrator will
establish and maintain on its books for each Participant an Elective
Contribution Account, a Matching Contribution Account, a Prior Plans Account and
such other account or sub-accounts as it deems necessary or desirable to fulfill
the provisions of the Plan.
6.2. Adjustment of accounts. As of each Valuation Date, the
Administrator will, with respect to the accounts maintained under Section 6.1
for each Participant,
(a) first, determine the values of the sub-accounts maintained
for the Participant according to the current fair market value of the
assets in the investment fund to which each sub-account refers;
(b) second, (i) credit the Participant's Elective Contribution
Account with the Basic and Supplemental Contributions, respectively,
made on behalf of the Participant and paid to the Trustee since the
last Valuation Date, and (ii) credit the Participant's Elective and
Matching Contribution Accounts, as provided in Section 9.5, with
payments, if any, made by the Participant since the last Valuation Date
with respect to any loan made to the Participant pursuant to Article 9;
(c) third, reduce the Participant's accounts by any
withdrawals made by, and any distributions and loans made to, the
Participant since the last Valuation Date;
(d) fourth, if the Participant has forfeited any amount since
the last Valuation Date in accordance with Section 10.6, reduce his or
her Matching Contribution Account by the amount of such forfeiture;
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(e) fifth, allocate to the Participant's Elective, Prior Plans
and Matching Contribution Accounts, after adjustment pursuant to (b),
(c) and (d) above, each such Account's proportionate share of the
increase or decrease reflected in the adjustments to the Participant's
sub-accounts under (a) above;
(f) sixth, allocate and credit the contributions, if any, made
under Section 5.2(a) for the pay period among the Matching Contribution
Accounts of all Participants entitled under Section 5.3 to share in
such contributions, in proportion to the respective Basic Contributions
made on their behalf for such pay period;
(g) seventh, as of the last Valuation Date of each Plan Year
only, allocate and credit the contributions, if any, made under Section
5.2(b) for such Year among the Matching Contribution Accounts of all
Participants entitled under Section 5.3 to share in such contributions,
in proportion to the respective Basic Contributions made on their
behalf for such Year;
(h) eighth, as of the last Valuation Date of each Plan Year
only, credit the contribution, if any, made under Section 5.2(c) for
such Year to the Matching Contribution Account of each Participant for
whose benefit such a contribution has been made under Section 5.2(c);
and
(i) ninth, adjust the balances of the sub-accounts as required
to reflect the adjustments to the Participant's Accounts, and in
accordance with the Participant's investment directions as transmitted
by the Administrator in accordance with Article 7.
Notwithstanding the foregoing, the adjustments described above shall be subject
to such reasonable delay determined by the Administrator, the Trustee or its
agents as necessary to
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effect such adjustments (including, but not limited to the allocation of
contributions to the accounts of Participants) and to any determination by the
Administrator, the Trustee or its agents that such adjustments shall be made
less frequently or according to different procedures than described above. In
adjusting sub-accounts under (a) above to reflect the current value of the
assets in the investment fund to which the sub-account refers, the Administrator
will allocate to such sub-accounts, in proportion to the balances therein
immediately prior to such adjustment, an amount equal to the income (including
accrued income) and expenses of such fund and of the gain and loss (realized and
unrealized) on the assets credited to all such sub-accounts invested in the
fund, valued at their fair market value.
6.3. Transfers from the Marshall's Plan and the Savings Plan. If
amounts have been transferred to the Trust from the Marshall's Plan or the
Savings Plan with respect to an individual, such assets have been allocated as
follows:
(a) Assets attributable to the individual's elective
contributions account (if any) under the Marshall's Plan or the Savings
Plan have been allocated to his or her Elective Contribution Accounts;
(b) Assets attributable to the individual's matching
contributions account and discretionary contribution account under the
Marshall's Plan or the Savings Plan have been allocated to his or her
Matching Contribution Account, provided, however, that the balance, as
of November 16, 1995, of the matching contribution account under the
Marshall's Plan of a Participant who was an employee of Marshall's on
such date shall be credited to the Prior Plans Account; and
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(c) Assets attributable to an individual's after-tax
contributions made under the Marshall's Plan or any predecessor thereto
have been allocated to an "after-tax contribution" account established
hereunder for this purpose.
Any individual for whom amounts have been transferred hereunder and who has not
become a Participant under Section 4.1 shall be treated as a Participant
effective as of January 1, 1997 for purposes of Articles 3, 4, 5, 6, 7, 10, 11,
12 and 13 and, so long as he or she is an Employee, Articles 8 and 9.
6.4. Treatment of forfeitures. If a Participant forfeits any interest
in the Trust Fund as the result of a forfeiture, as provided in Section 10.6
below, the amount of the forfeiture will be applied toward the Matching
Contribution under Section 5.2(a) for the first calendar quarter commencing
after the date of forfeiture.
6.5. Limitations. Notwithstanding any other provisions of the Plan:
(a) Limitations applicable to Participants in defined
contribution plans only.
(i) The Annual Addition to a Participant's
accounts under the Plan for any Limitation Year, when added to
the annual additions to his or her accounts for such year
under all other defined contribution plans (if any)
maintained by the Company or an Affiliated Company, shall not
exceed the lesser of (A) $30,000 (or, if greater, one-fourth
of the limitation in effect for the Limitation Year under
section 415(b)(1)(A) of the Code), or (B) twenty-five
(25%) percent of the Participant's Compensation for such
Limitation Year.
(ii) To the extent necessary to satisfy the
limitations contained in (i) above, the Administrator will
reduce Supplemental Contributions not yet made
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to the Trust for the Limitation Year, if any, and, next, Basic
Contributions not yet made for the Limitation Year, if any,
together with any Matching Contributions to be made in respect
of such Basic Contributions. Such Supplemental or Basic
Contributions shall be paid to the Participant. If further
adjustments are required, the Administrator will reduce
Supplemental Contributions already made to the Trust for the
Limitation Year and, next, Basic Contributions already made
for the Limitation Year, together with any Matching
Contributions made in respect of such Basic Contributions. The
amount of any reduction of Matching Contributions will be
applied, consistent with the limitations of this Section 6.5
and applicable Treasury Regulations, to reduce subsequent
Matching Contributions to be made under Section 5.2(a).
(b) Limitations applicable to Participants who also
participate in a qualified defined benefit plan. In the case of
a Participant who also participates in a qualified defined
benefit plan maintained by the Company or an Affiliated Company, the
Annual Addition for a Limitation Year will be further limited, if
necessary (after reduction of the benefits payable under such
qualified defined benefit plan to the extent permitted by the
terms thereof), so that the sum of the Participant's "defined
contribution plan fraction" (as determined under section 415(e)(3)
of the Code and the regulations promulgated thereunder,
including, if elected, the special transition rule of
section 415(e)(6) of the Code and subject to the provisions of section
235(g)(3) of the Tax Equity and Fiscal Responsibility Act of 1982) and
his or her "defined benefit plan fraction" (as determined under section
415(e)(2) of the Code and the regulations
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promulgated thereunder) for such Limitation Year does not exceed 1.0.
For any Plan Year which is a Top Heavy Plan Year, the adjustment
described in section 416(h) of the Code will apply for purposes of
determining a Participant's "defined benefit plan fraction" and
"defined contribution plan fraction" unless (i) the Plan and each
qualified plan with which the Plan is required to be aggregated
pursuant to the first sentence of Section 2.43(c) satisfies the
requirements of section 416(h)(2)(A) of the Code, and (ii) such Plan
Year would not be a Top Heavy Plan Year if "ninety percent" were
substituted for "sixty percent" in the first paragraph of Section 2.43.
6.6. Reports to Participants. The Administrator, at least quarterly,
will determine each Participant's Share of the Trust Fund and will report the
same in writing to the Participant concerned.
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Article 7. Trust Fund.
7.1. Appointment of Trustee. The Board of Directors will appoint one or
more persons (including, in the Board of Directors' discretion, banks or other
institutions as well as natural persons) to act as Trustee under the Plan, and
at any time may remove and appoint a successor to any such person or persons.
The Company may, without reference to any Participant or other party in
interest, enter into a trust agreement with the Trustee and make such amendments
to such trust agreement or such further agreements as the Company in its sole
discretion may deem necessary or desirable to carry out the Plan.
7.2. Investment funds. All contributions to the Trust and all
investments thereunder will be held by the Trustee in the Trust Fund. Subject to
Section 9.5, the Trust Fund will be maintained in accordance with the following
rules:
(a) Contributions to the Plan shall be invested in one or more
investment fund available under the Plan from time to time. The
Committee shall determine which investment fund shall be available from
time to time and the mutual fund shares or other investments available
under each such fund, or in the case of any investment fund shall
appoint one or more investment managers (within the meaning of Section
3(38) of ERISA) to determine and manage the investments of such fund.
(b) The Trustee may keep such amounts of cash as it, in its
sole discretion, shall deem necessary or advisable as part of the Trust
Fund, all within the limitations specified in the trust agreement.
(c) The Trust Fund will include a "Company Common Stock Fund,"
consisting of all Stock held by the Trustee (and other property
distributed in respect of such
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Stock) and all cash held by the Trustee resulting from the receipt of
dividends or other distributions on Stock held in the Company Common
Stock Fund, all of which cash is to be invested in additional shares of
Stock.
In addition to the investments described above, cash held in any of the funds
described or established under (a), (b), or (c) above may also be invested, for
such temporary periods as the Trustee deems advisable, in savings accounts or
other liquid, short-term investments.
For purposes of discharging its responsibilities under this Section,
the Company may appoint one or more investment managers (within the meaning of
section 3(38) of ERISA) to manage some or all of the assets of the Plan, and may
otherwise allocate and delegate its fiduciary responsibilities under the Plan,
in accordance with section 405 of ERISA.
7.3. Acquisition of Stock. The Stock required to be purchased by the
Trustee for purposes of the Plan will be purchased by the Trustee from such
sources and at such prices as the Trustee in its sole discretion may determine.
7.4. Investments for the Trust Fund. Investments for the Trust Fund,
other than investments for the fund established pursuant to Section 7.2(c),
shall not include any Stock, provided the foregoing shall not prohibit Stock
being held as a portfolio asset of a mutual fund or similar collective
investment entity that is designated under Section 7.2(a).
7.5. Directed investments. All amounts credited to a Participant's
accounts under the Plan will be invested, pursuant to the Participant's
directions, in the funds established pursuant to Section 7.2. In addition,
subject to the provisions of Article 9, amounts credited to a Participant's
accounts may be invested in the note evidencing a loan from the Participant's
account in the Plan to the Participant under said Article 9.
-55-
Subject to the provisions of Section 7.4 and this Section 7.5, each
Participant may direct that some or all of the amounts credited to his or her
Accounts be invested, in multiples of one percent (1%), in one or more of the
funds established pursuant to Section 7.2; provided, however, in directing the
allocation of the amount credited to his or her Accounts among such investment
funds, no such allocation to the Company Stock Fund may exceed 10 percent (10%).
The selection of investment options is the sole responsibility of each
Participant, and no employee or representative of any Participating Employer,
including the Administrator and members of the Committee, or of the Trustee, is
authorized to make any recommendations to any Participant with respect thereto.
7.6. Method of making investment directions.
(a) Each Participant will direct the Administrator, in a
manner prescribed or approved by the Administrator, as to his or her
choice of investment in one or more of the funds described in Section
7.2 not later than the date on which the Participant enters into a
compensation reduction agreement in accordance with the provisions of
Section 4.1. Upon receipt of a Participant's duly executed investment
directions, the Administrator will transmit such investment directions
to the Trustee. Any such investment direction may be changed as of any
Valuation Date as to future contributions and existing account
balances, by like notice to the Administrator specifying a new choice
of investment in one or more of the funds described in Section 7.2,
provided, however, no change in investment direction shall be permitted
within 30 days of the Participant's original investment direction or
any subsequent change in investment direction.
-56-
(b) Notwithstanding the foregoing, in the event of any tender
or exchange offer with respect to the Stock, the Trustee shall be
entitled to sell or exchange that portion of the shares of Stock held
in the Stock Fund which represents a Participant's proportionate
interest in that Fund, irrespective of the Participant's existing
investment direction as described in paragraph (a); provided, that if
the Trustee determines to sell or exchange such shares of Stock in
accordance with the provisions of this paragraph, the Trustee shall do
so only if the Participant (or, if the Participant is deceased, his or
her Beneficiary or such other person as is entitled to receive benefits
with respect to the Participant under the Plan) consents in writing to
such action.
(c) In the event of any sale or exchange of Stock by the
Trustee pursuant to paragraph (b), any Participant who consents to the
disposition of his or her interest in the Stock Fund shall be entitled
to direct that the cash proceeds of such disposition, if any, be
invested, as soon as reasonably practicable thereafter, in multiples of
one percent (1%) in one or more of the funds described in Section
7.2(a). Any investment direction given pursuant to this paragraph (c)
shall be made to the Administrator in such manner as the Administrator
shall prescribe or approve. Upon receipt of a duly executed investment
direction given in accordance with this paragraph, the Administrator
shall transmit such direction to the Trustee. In the event any
Participant consents to a disposition of his or her interest in the
Stock Fund pursuant to paragraph (b) but fails to direct the
Administrator as to how any cash proceeds of such disposition shall be
invested, such proceeds shall be invested in savings accounts or in
such other
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short-term investments as the Trustee may determine and shall remain so
invested until such time as the Participant otherwise directs in
accordance with paragraph (a).
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Article 8. Withdrawals.
8.1. Hardship withdrawals.
(a) Any Participant who has suffered an immediate and heavy
financial hardship, as hereinafter defined, may request a withdrawal
from his or her Share of the Trust Fund (determined as of the Valuation
Date coinciding with or immediately preceding the date of the
withdrawal) of any sum not in excess of his or her nonforfeitable
interest in such Share, exclusive of earnings credited after December
31, 1988 on Basic and Supplemental Contributions under this Plan or the
Savings Plan, by written notice to the Committee setting forth the
facts establishing the existence of such hardship and the amount
requested. In addition to such notice, the Committee may require such
other information, in form satisfactory to the Committee, as it deems
necessary to discharge its responsibilities pursuant to this Article 8.
Upon receipt of a request based upon a claim of financial hardship, the
Committee will determine whether a financial hardship exists; if the
Committee determines that such a hardship does exist, it will further
determine what portion of the amount requested by the Participant is
necessary to satisfy the financial need created by the hardship, and
will direct the Trustee to distribute to the Participant in a single
lump-sum payment the amount so determined to be required.
(b) For purposes of this Section, a distribution will be
deemed to be on account of an immediate and heavy financial need if the
distribution is on account of:
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(i) expenses for medical care described in section
213(d) of the Code incurred by the Participant or his or her
spouse or dependents, including expenses necessary to obtain
such medical care, or
(ii) payment of tuition, room and board expenses, and
related educational fees for the next twelve months of
post-secondary education for the Participant or his or her
spouse, children or dependents (as defined in section 152 of
the Code), or
(iii) costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage
payments), or
(iv) payments necessary to prevent the eviction of
the Participant from his or her principal residence or
foreclosure on the mortgage of that residence,
or
(v) other circumstances specified under applicable
Treasury Regulations as constituting an immediate and heavy
financial need.
(c) For purposes of this Section, a distribution will not be
treated as an amount necessary to satisfy the financial need
unless:
(i) the distribution is not in excess of the amount
of the immediate and heavy financial need of the Participant,
and
(ii) the Participant has obtained all distributions
(other than hardship withdrawals) and loans available under
this Plan and all other qualified retirement plans maintained
by the Employer.
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(d) Any Participant making a withdrawal under this Section
shall be ineligible to make, or have made for his or her benefit, Basic
and Supplemental Contributions to the Plan, and elective contributions
and employee contributions to all other qualified and nonqualified
plans of the Employer (other than health or welfare plans), for the 12-
month period following the Valuation Date as of which the withdrawal is
effective. In addition, for the Plan Year following the Plan Year in
which the hardship withdrawal is effective, no Basic or Supplemental
Contributions shall be made for the benefit of the Participant to the
Plan and no elective contributions shall be made for the Participant to
any other qualified retirement plan maintained by the Employer for such
year in excess of the applicable limit in effect under section
402(g)(1) of the code for such year, reduced by the aggregate amount of
Basic and Supplemental Contributions for the benefit of the Participant
to the Plan and elective contributions for his or her benefit to all
other qualified retirement plans maintained by the Employer for the
Plan Year in which the hardship withdrawal is effective. For purposes
of this Section 8.1(d), any Participant who was a participant in the
Marshall's Plan or Savings Plan prior to January 1, 1997 and who made a
hardship withdrawal under such plan, will be ineligible to make Basic
or Supplemental Contributions to this Plan to the extent such
contributions would have continued to have been suspended under
comparable provisions of the Marshall's Plan or Savings Plan.
(e) The amount of a hardship withdrawal may include funds
necessary to pay federal, state or local income tax and penalties
resulting from the withdrawal.
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8.2. Withdrawals after age 59 1/2. Any Participant who has attained age
59 1/2 while a Participant may request a one-time withdrawal of all or a part of
his or her nonforfeitable interest in his or her Share of the Trust Fund
(determined as of the Valuation Date coinciding with or immediately preceding
the date of his or her request), whether or not he or she has suffered a
financial hardship, by written notice to the Administrator. Upon receipt by the
Administrator of such notice, the Administrator will direct the Trustee to
distribute to the Participant in a single lump-sum payment the amount of the
withdrawal. A one-time withdrawal pursuant to this Section 8.2 will not affect a
Participant's right to request or receive thereafter a withdrawal from his or
her Share of the Trust Fund pursuant to Section 8.1.
8.3. Order of withdrawals; adjustments. Amounts withdrawn pursuant to
this Article 8 in the case of any Participant will be taken from each of the
funds described in Section 7.2 in proportion to the percentage of the
Participant's Share of the Trust Fund, determined for each Account of the
Participant, invested in each such fund. Such amounts will be applied first
against the Participant's Elective Contribution Account and will be deemed to
have been taken, subject to the limitations on amounts which may be withdrawn
under Section 8.1. If the amount of the withdrawal exceeds the balance of the
Participant's Elective Contribution Accounts, determined as of the Valuation
Date coinciding with or immediately preceding the date of withdrawal, the excess
will be applied next against the balance in the Participant's Prior Plans
Account, and, then, to the nonforfeitable interest in his or her Matching
Contribution Account. After any withdrawal, the Administrator will adjust the
balance of the Participant's accounts and sub-accounts to reflect the
withdrawal. Notwithstanding the
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foregoing, in the case of any Participant on whose behalf an "after-tax
contribution account" has been transferred from the Marshall's Plan and
maintained under this Plan, any withdrawn amount shall be first applied against
such "after-tax contribution account."
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Article 9. Loans.
9.1. In general. Any Participant who has been a Participant in the Plan
or the Savings Plan for six months or more may, with the consent of the
Administrator, obtain a loan from his or her Share of the Trust Fund, subject to
the conditions of this Article 9. Loans that were received by a Participant from
the Savings Plan or Marshall's Plan and are outstanding to the Savings Plan or
Marshall's Plan as of the Effective Date shall be allocated to a Participant's
Share of the Trust Fund but shall continue to be subject to the conditions
applicable to the loan under the Savings Plan or Marshall's Plan.
9.2. Time and amount of loans. A Participant may request a loan at any
time during the Plan Year. No request for a loan will be honored unless made in
such form and in accordance with such procedures as the Administrator may
prescribe or approve. The amount of any loan obtained under this Article 9 may
not be less than $500 and when added to the outstanding balance of all other
loans to the Participant from the Plan or the Savings Plan may not exceed the
lesser of (a) $50,000, reduced by the excess (if any) of the highest outstanding
balance of such loans during the one-year period ending on the day before the
date on which the loan is made, over the outstanding balance of such loans on
the date on which the loan is made, or (b) one-half of the nonforfeitable
portion of the Participant's Share of the Trust Fund under the Plan and under
the Savings Plan. For purposes of this Section 9.2, the value of a Participant's
Share of the Trust Fund will be determined as of the Valuation Date immediately
preceding the date of the loan (but taking into account any withdrawals under
Article 8 made on or after such Valuation Date, up to and including the date of
the loan).
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9.3. Formal requirements. Each loan obtained from the Trust under this
Article 9 must be evidenced by a note signed by the Participant and shall bear
interest at a reasonable rate determined by the Administrator. Such interest
rate shall be commensurate with the interest rates charged by persons in the
business of lending money for loans which would be made in similar
circumstances, as determined by the Plan Administrator. Each loan must be
secured by the Participant's Share of the Trust Fund. Each such loan shall be
repayable in substantially level installments paid no less frequently then
quarterly, as the Administrator shall determine, over a period, as also
determined by the Administrator, which does not exceed 5 years from the date the
loan is made (unless the loan is used to acquire a dwelling unit which is to be
used within a reasonable time as a principal residence of the Participant). Any
loan obtained from the Trust under this Article 9 may provide for prepayment,
without penalty, at any time prior to the term of the loan.
9.4. Replacement other than in normal course.
(a) If, as of the time benefits are to be distributed (or to
commence being distributed) to the Participant or his or her
Beneficiary pursuant to Article 10 of the Plan, there remains any
unpaid balance of a loan obtained by the Participant hereunder, the
unpaid balance of the loan will become immediately due and payable.
Such unpaid balance, together with any accrued but unpaid interest
under the note evidencing the loan, will be deducted from the
Participant's Share of the Trust Fund before any distribution of the
Participant's benefits is made; provided, that if distribution is to be
made to the Participant's Beneficiary and the Administrator so directs
the Trustee, the Trustee may distribute the unpaid note to such
Beneficiary in lieu of a formal set-off.
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If the unpaid balance of any loan is to be deducted from a
Participant's Share of the Trust Fund under this subsection, the amount
so deducted will be treated as distributed to the Participant and
applied by the Participant as a payment of the unpaid interest and
principal (in that order) under the note evidencing such loan.
(b) In the event of a default by a Participant in making any
payment of principal or interest when due under the note evidencing any
loan under this Article 9, if such default continues for more than 30
days after written notice of the default by the Trustee, the unpaid
principal of the note will become immediately due and payable in full.
In the event of any such default or failure to pay, the Trustee will
promptly proceed to deduct such unpaid principal, together with any
accrued but unpaid interest, from the Participant's Share of the Trust
Fund; provided, that in no event will the Trustee cause that portion of
a Participant's Share of the Trust Fund which is attributable to Basic
and Supplemental Contributions to be reduced pursuant to this
subsection until (i) the Participant has either attained age 59 1/2 or
ceased to be employed by the Employer or (ii) there has occurred any
other event permitting distribution to the Participant under section
401(k)(2)(B) of the Code.
9.5. Source of loans; treatment of loan payments. Amounts loaned to
a Participant under this Article 9 will be paid out of each of the funds
described in Section 7.2 in proportion to the percentage of the
Participant's Share of the Trust Fund, determined for each account of the
Participant, invested in each such fund. Such amounts will be applied against
the Participant's accounts in the order described in Section 8.3. The note
evidencing a loan to a Participant under this Article 9 will constitute an
asset of the Trust allocated to the Participant
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and will, for purposes of the Plan, be deemed to have a value at any given time
equal to the unpaid balance of the note plus the amount of any accrued but
unpaid interest. Payments made with respect to any such note will be credited to
the Participant's accounts in proportion to the respective amounts loaned to the
Participant from each such account and will be invested in the funds described
in Section 7.2 in accordance with the Participant's investment direction as in
effect at the time such payment is made.
9.6. Loans to be nondiscriminatory. Loans will be made available under
this Article 9 to all Participants on a reasonably equivalent basis, except that
the Administrator may make reasonable distinctions based upon creditworthiness
and other factors that may adversely affect the ability to assure repayment, and
may otherwise limit the availability of loans in accordance with the provisions
of this Article 9. Any former Participant and the Beneficiary of a Participant
or former Participant shall be treated as a Participant for purposes of this
Article 9, to the extent required under regulations or other interpretations
issued by the Department of Labor.
9.7. Role of Administrator and Committee. Notwithstanding references to
the Administrator hereinabove set forth in this Article 9, the Committee shall
decide such matters pertaining to loans under this Article 9 as shall be
delegated in writing to it by the Administrator, whether in individual cases or
in specified classes of cases. To the extent any matter is so delegated, the
provisions of this Article 9 shall apply to the Committee as though it were the
Administrator.
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Article 10. Rights to Benefits.
10.1. Normal and Late Retirement. Upon attainment of his or her Normal
Retirement Date, each Participant will have a fully vested and nonforfeitable
interest in his or her Share of the Trust Fund. In the event a Participant
retires on or after his or her Normal Retirement Date, his or her Share of the
Trust Fund, determined as of the Valuation Date coinciding with or immediately
preceding the date of such distribution, will be distributed to him or her as
soon as reasonably practicable following retirement in accordance with Article
11 below. Any additional amounts allocated thereafter to the Participant's
Matching Contribution Account will be distributed to him or her as soon as
reasonably practicable following the close of the Plan Year in which his or her
retirement occurs, in accordance with Article 11 below.
10.2. Disability. A Participant may leave the employ of the Employer
prior to the attainment of his or her Normal Retirement Date if, because of a
medically determinable physical or mental impairment likely to result in death
or to be of long-continued and indefinite duration, he or she cannot engage in
any substantial gainful activity and terminates his or her employment with the
Employer. In the event of such a disability termination, the Participant will
have a fully vested and nonforfeitable interest in, and will be entitled to
receive, his or her Share of the Trust Fund determined as of the Valuation Date
coinciding with or immediately preceding the date of distribution. Distribution
will be made to him or her as soon as reasonably practicable following such
disability termination in accordance with Article 11 below. Any additional
amounts allocated thereafter to the Participant's Matching Contribution Account
will be distributed to him or her as soon as reasonably practicable after
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the close of the Plan Year in which his or her disability termination occurs, in
accordance with Article 11 below. Whether or not a Participant is disabled will
be determined by the Committee on the basis of medical evidence satisfactory to
the Committee.
Notwithstanding the foregoing provisions of this Section 10.2, if the
value of the Share of the Trust Fund of a Participant who has a disability
termination exceeds $3,500, distribution will not be made prior to the
Participant's Normal Retirement Date without his or her written consent. Until
distribution of the disabled Participant's Share of the Trust Fund, the
provisions of Section 10.4 regarding the timing of distribution and the
investment and adjustment of the disabled Participant's Share of the Trust Fund
will apply as though the Participant had terminated employment under Section
10.4; provided, that the disabled Participant will at all times after his or her
disability termination have a fully vested and nonforfeitable interest in his or
her Share of the Trust Fund. The Administrator will, within the period beginning
90 days prior to the Participant's annuity starting date (as defined for
purposes of section 411(a)(11) of the Code and Treasury Regulations thereunder)
and ending 30 days prior to such date, provide the Participant with notice in
accordance with applicable Treasury Regulations of his or her right, if any, to
defer receipt of the distribution. Notwithstanding the foregoing, such
distribution may commence less than 30 days after the required notification
described above is given, provided that (a) the Administrator clearly informs
the Participant that the Participant has a right to a period of at least 30 days
after receiving the notice to consider whether or not to elect the distribution,
and (b) the Participant, after receiving the notice, affirmatively elects a
distribution.
10.3. Death.
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(a) If a Participant dies before the distribution of his or
her Share of the Trust Fund has commenced or before such distribution
has been completed, upon his or her death his or her designated
Beneficiary will have a fully vested and nonforfeitable interest in,
and will be entitled to receive, the amount or remaining amount of such
Participant's Share of the Trust Fund determined as of the Valuation
Date coinciding with or immediately preceding the date of distribution.
Distribution to the Beneficiary will be made as soon as reasonably
practicable following the death of the Participant in accordance with
Article 11 below. Any additional amounts allocated thereafter to the
Participant's Matching Contribution Account will be distributed to his
or her Beneficiary as soon as reasonably practicable following the
close of the Plan Year in which the Participant's death occurs, in
accordance with Article 11 below.
(b) Notwithstanding the foregoing, if the Participant is
married at the time of death and his or her Beneficiary is his or her
surviving spouse, such spouse may elect in writing, in such manner and
at such time as shall be prescribed or approved by the Administrator,
to defer receipt of the benefit under this Section 10.3. If a spouse
elects such deferral, the deceased Participant's Share of the Trust
Fund will continue to be invested for the entire period of deferral in
accordance with his or her investment direction in effect with respect
to such Share on the day of his or her death; provided, that if the
spouse wishes, the spouse may direct that such Share instead be
invested in accordance with the provisions of Article 7. During any
such deferral period the balance deferred will continue to be adjusted
in accordance with the provisions of Section 6.2.
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A spouse who elects deferral of a benefit under this Section
may at any time subsequent to such election request a distribution of
the benefit so deferred. The Administrator may prescribe such rules as
it deems necessary pertaining to the form of such a request or to any
information or signatures required with respect thereto. Distribution
of a benefit deferred under this Section will be made as soon as
practicable following the Valuation Date coinciding with or next
succeeding the date on which the Administrator receives a properly
executed request for distribution, but in no event later than the
Valuation Date coinciding with or next following the date which would
have been the Participant's Normal Retirement Date. If any person who
has deferred distribution of a benefit hereunder dies before requesting
a distribution, such benefit shall be distributed as soon as reasonably
practicable to such person's estate following notice of such death.
(c) If a Participant was married at the time of death, he or
she shall be deemed to have named his or her surviving spouse as his or
her Beneficiary unless
(i) prior to his or her death, he or she designated
as his or her Beneficiary a person other than his or her
surviving spouse, such designation to be made in writing at
such time and in such manner as the Administrator shall
approve or prescribe; and
(ii) either (A) his or her surviving spouse consents
in writing to the designation described in (i) above, such
consent acknowledges the effect of such designation and the
specific nonspouse Beneficiary (including any class of
Beneficiaries or any contingent Beneficiaries) or authorizes
the Participant to
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designate Beneficiaries without further consent, and such
consent is witnessed by a Plan representative or a notary
public, or (B) it is established to the satisfaction of the
Committee that the consent required under (A) above may not be
obtained because there is no spouse, because the spouse cannot
be located, or because of such other circumstances as the
Secretary of the Treasury may prescribe, or (C) the Committee
determines that neither (A) nor (B) need be satisfied with
respect to that Participant's designation in order to permit
the Plan, under applicable law, to pay the full amount of the
benefits due on account of the Participant's death, pursuant
to the provisions of Section 10.3(a) and (insofar as relevant)
Section 10.3(b), solely in accordance with such designation;
and
(iii) the nonspouse Beneficiary designated in
accordance with the provisions of this Section survives the
Participant.
Any consent by a spouse under (ii)(A) above, or a determination by the
Committee with respect to such spouse under (ii)(B) above, shall be
effective only with respect to such spouse. Any consent that permits
Beneficiary designations by the Participant without any requirement of
further consent must acknowledge the spouse's right to limit consent to
a specific Beneficiary and the spouse's voluntary election to
relinquish such right. A Participant who is not married may designate
any person as Beneficiary provided such designation is made in writing
at such time and in such manner as the Administrator shall approve or
prescribe. A Participant who has designated a nonspouse as Beneficiary
in accordance with the provisions of the preceding paragraph
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may change such designation at any time by giving written notice to the
Administrator, subject to such conditions and requirements (including a
requirement of spousal consent) as the Administrator may prescribe in
accordance with applicable law. If a Participant dies without a
surviving Beneficiary, the full amount payable upon his or her death
will be paid to his or her executor or administrator or applied to the
payment of his or her debts and funeral expenses or paid to any
relative, all as the Administrator shall determine.
10.4. Separation from service.
If a Participant separates from the service (within the
meaning of section 401(k)(2)(B)(i)(I) of the Code) of the Employer for any
reason other than death or normal, late or disability retirement, he or she will
be entitled under this Section 10.4 to a benefit equal to the sum of (a) the
balances of his or her Basic Contribution Account and his or her Supplemental
Contribution Account, determined as of the Valuation Date coinciding with or
immediately preceding the date of distribution; plus (b) the balance of any
account maintained for his or her benefit under Section 13.2, determined as of
such Valuation Date; plus (c) a percentage, as determined in accordance with the
following vesting schedule, of the balance of his or her Matching Contribution
Account, also determined as of such Valuation Date:
Vesting Schedule
----------------
Years of Credited Vested Percentage of Company
Vesting Service Matching Contribution Account
---------------- -----------------------------
1 25%
2 50%
3 75%
4 or more 100%
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Such distribution will be made as soon as reasonably practicable after such
separation from service; provided, that if the value of the Participant's Share
of the Trust Fund exceeds $3,500, distribution may not begin, however, unless
(a) Between the 30th and 90th day prior to the date
distribution is to begin, the Administrator notifies the Participant in
writing that he or she may defer distribution until his or her Normal
Retirement Date and provides the Participant with a written description
of the material features and (if applicable) the relative values of the
forms of distribution under the Plan; and
(b) The Participant consents to the distribution in writing
after the information described above has been provided to him or her,
and files such consent with the Administrator. Distribution to the
Participant will be made or commenced as soon as practicable after such
consent is received by the Administrator.
Notwithstanding the foregoing, such distribution may commence less than 30 days
after the required notification described above is given, provided that (a) the
Administrator clearly informs the Participant that the Participant has a right
to a period of at least 30 days after receiving the notice to consider whether
or not to elect the distribution, and (b) the Participant, after receiving the
notice, affirmatively elects a distribution. The value of a Participant's Share
of the Trust Fund will be considered to be valued in excess of $3,500 if the
value of such vested portion exceeds such amount at the time of the distribution
in question or exceeded such amount at the time of any prior distribution to the
Participant under the Plan.
A Participant may elect in writing, in a manner prescribed or approved
by the Administrator, to defer distribution of his or her benefit under this
Section 10.4. If
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distribution of a Participant's benefit is deferred under this Section, his or
her Share of the Trust Fund, to the extent not forfeited, will continue to be
invested in accordance with his or her investment directions in accordance with
the provisions of Article 7. Any investment direction made, or continued in
force, pursuant to the preceding sentence will continue in effect until modified
by the Participant or until such time as the deferred benefit is distributed or
the separated Participant again becomes a Participant in the Plan. During any
such deferral period the balance deferred will continue to be adjusted in
accordance with the provisions of Section 6.2.
If distribution of a Participant's benefit is deferred under this
Section, the Participant may at any time subsequent to such election request a
distribution of his or her benefit. The Administrator may prescribe such rules
as it deeds necessary pertaining to the form of such a request or to any
information or signatures required with respect thereto. Distribution of a
benefit deferred under this Section will be made as soon as practicable
following the Valuation Date coinciding with or next succeeding the date on
which the Administrator receives a properly executed request for distribution,
but in no event later than the Valuation Date coinciding with or next following
the former Participant's Normal Retirement Date. If any person who has deferred
distribution of his or her benefit hereunder dies before requesting a
distribution, his or her benefit shall be distributed as soon as reasonably
practicable following notice of such death, subject to Section 10.3.
For purposes of this Section 10.4, a Participant shall be treated as
having separated from the service of the Employer if the Participant ceases to
be an Employee because of the disposition by a Participating Employer of a
subsidiary, or of substantially all the assets of a
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trade or business, unless the Company or the Participating Employer agrees with
the organization acquiring the subsidiary or trade or business that the
Participant's Share of the Trust Fund shall be transferred to a plan maintained
by such organization.
10.5. Election of former vesting schedule. If the Plan is amended at
any time and if such amendment directly or indirectly affects the computation of
the nonforfeitable percentage of a Participant's rights to his or her Share of
the Trust Fund, each Participant who has completed 3 years of Credited Vesting
Service (determined without regard to the exclusion of service prior to
attainment of a stated age) as of the end of the election period described below
and whose nonforfeitable percentage any time after such amendment could be less
than such percentage determined without regard to such amendment, may elect,
during such election period, to have the nonforfeitable percentage of his or her
Share of the Trust Fund determined without regard to such amendment. The
election period referred to in the preceding sentence will begin on the date the
amendment is adopted and will end on the latest of the following dates:
(a) the date which is sixty (60) days after the date on which
such amendment is adopted;
(b) the date which is sixty (60) days after the date on which
such amendment becomes effective; or
(c) the date which is sixty (60) days after the date on which
the Participant is issued written notice of such amendment by the
Administrator.
An election under this Section 10.5 may be made only by an individual who is a
Participant at the time such election is made and once made shall be
irrevocable.
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10.6. Forfeitures. If a Participant leaves the employ of the Employer
at a time when he or she has a less than a one hundred percent (100%)
nonforfeitable interest in his or her Share of the Trust Fund, any portion of
his or her Share of the Trust Fund not payable to him or her under Section 10.4
(without regard to any election by the Participant to defer payment until Normal
Retirement Date) will remain credited to his or her account until such time as
he or she incurs a one-year Period of Severance, and such portion will then be
forfeited by him or her. Notwithstanding the foregoing, if at any time prior to
incurring a five-year Period of Severance the Participant is reemployed by the
Employer, any amount so forfeited, adjusted as hereinafter described, will be
recredited to the Participant's Matching Contribution Account, subject to the
following special rules:
(a) Amounts required to be recredited to a Participant's
Matching Contribution Account pursuant to this Section will be taken
first from amounts forfeited by other Participants which have not yet
been applied toward future Matching Contributions and then from
additional contributions to be made by the Participating Employer for
such purpose.
(b) The amount, if any, to be recredited to the Matching
Contribution Account of a reemployed Participant pursuant to this
Section will be the greater of (i) the amount forfeited, or (ii) the
amount forfeited adjusted for such gains and losses as would have been
attributable to a like amount invested for the period between the date
of forfeiture and the date of reinstatement in accordance with the
Participant's investment direction in effect on the day of his or her
separation from service (or, if the
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Participant made a subsequent investment direction under Section 10.4,
then in accordance with such later direction).
(c) A reemployed Participant's nonforfeitable interest in any
amounts recredited to his or her Matching Contribution Account pursuant
to this Section will be determined under Section 10.7 (without regard
to the last sentence thereof) as though such amounts had been
transferred to the separate account described in Section 10.7 for the
period between the date of forfeiture and the date of reinstatement.
All forfeitures arising under this Section 10.6, to the extent not applied to
the recrediting of Matching Contribution Accounts of reemployed Participants as
described above, will be applied toward future Matching Contributions, as
provided in section 6.4.
10.7. Separate Account. If a distribution has been made to a
Participant at a time when he or she has a nonforfeitable right to less than one
hundred (100%) percent of his or her Share of the Trust Fund, the vesting
schedule in Section 10.4 will thereafter apply only to his or her Share of the
Trust Fund attributable to contributions allocated after such distribution. The
balance in his or her account immediately after such distribution will be
transferred to a separate account which will be maintained for the purpose of
determining his or her interest therein at any later time. At any relevant time
his or her nonforfeitable interest in the portion of his or her Share of the
Trust Fund held in such separate account will be equal to P(AB+D)-D, where P is
the nonforfeitable percentage at the relevant time determined under Section
10.4; AB is the account balance of the separate account at the relevant time;
and D is the amount of the distribution. However, if any portion of such
separate account is
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forfeited under Section 10.6, the Participant's interest in the remaining
balance in such separate account will thereafter be fully vested and
nonforfeitable.
10.8. Direct Rollover of Eligible Distributions. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the time and in a
manner prescribed by the Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. For purposes of this Section, the
following terms have the following meanings:
(a) "Eligible Rollover Distribution" is any distribution of
all or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include: 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 of the distributee in
the distributee's Beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required
under Code section 401(a)(9); in the portion of any distribution that
is not includable in gross income (determine without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
(b) With respect to a distributee other than the Participant's
surviving spouse, and "eligible retirement plan" in an individual
retirement account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust described in
Code section 401(a). With respect to a distributee who is a
Participant's surviving spouse,
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an eligible retirement plan is an individual retirement account or an
individual retirement annuity.
(c) A "distributee" includes an employee or former employee.
In addition, the employee or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse, who is an
alternate payee under a Qualified Domestic Relations Order, are
distributees with regard to the interest of the spouse or former
spouse.
(d) A "direct rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
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Article 11. Distribution of Benefits.
11.1. Method of making distributions. Distributions to a Participant or
Beneficiary from the Trust will be made in a single sum payment as soon as
reasonably practicable after the date specified in the applicable Section of
Article 10. In no case, however, unless the Participant otherwise elects, will
the payment of benefits to any Participant commence later than the 60th day
after the latest of the following: (a) the close of the Plan Year in which
occurs the date on which the Participant attains age 65; (b) the close of the
Plan Year in which occurs the tenth anniversary of the year in which the
Participant commenced participation in the Plan; or (c) the close of the Plan
Year in which the Participant terminates his or her service with the Employer.
In any event, and notwithstanding any election to the contrary (other than an
election under section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act
of 1982), payment of benefits with respect to a Participant who is not a
5-percent owner (as defined in section 416(i)(1)(B) of the Code) shall commence
not later than the April 1 of the calendar year following the later of either:
(i) the calendar year in which the Participant attains age 70 1/2, or (ii) the
calendar year in which the Participant retires. Five percent owners must begin
receiving distributions no later than April 1 of the calendar year following the
calendar year in which they attain the age 70 1/2. The single sum payment
distributed from the Trust will be made in cash; however, distributions from the
Company Common Stock Fund may be distributed as shares of Stock, if the
Participant so elects.
11.2. Notice to Trustee. The Administrator will notify the Trustee
whenever any Participant or Beneficiary is entitled to receive a distribution
under the Plan. In giving such notice, the Administrator will specify the name
and last known address of the person receiving
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such distribution. Upon receipt of such notice from the Administrator, the
Trustee will, as soon as is reasonably practicable, distribute such amount.
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Article 12. Amendment and Termination.
12.1. Amendment. The Company reserves the power at any time or times to
amend the provisions of the Plan and Trust to any extent and in any manner that
it may deem advisable by written instrument providing for such amendment. Any
such instrument will be effective in accordance with its terms as to all
Participants and all persons having or claiming any interest hereunder;
provided, however, that the Company will not have the power:
(a) to amend the Plan and Trust in such manner as would cause
or permit any part of the assets of the Trust to be diverted to
purposes other than for the exclusive benefit of each Participant and
his or her Beneficiary, unless such amendment is permitted by law,
governmental regulation or ruling;
(b) to amend the Plan or Trust retroactively in such a manner
as would reduce the accrued benefit of any Participant, except as
otherwise permitted or required by law. For purposes of this paragraph,
to the extent consistent with section 411(d)(6) of the Code and
regulations thereunder, an amendment which has the effect of decreasing
a Participant's account balance or eliminating an optional form of
benefit, with respect to benefits attributable to service before the
amendment, shall be treated as reducing an accrued benefit; or
(c) to amend the Plan or Trust in such manner as would
increase the duties or liabilities of the Trustee or affect its fee for
services hereunder, unless the Trustee consents thereto in writing.
12.2. Termination or partial termination. The Company has established
the Plan and the Trust with the bona fide intention and expectation that
contributions will be continued
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indefinitely, but the Company will have no obligation or liability whatsoever to
maintain the Plan for any given length of time and may discontinue contributions
under the Plan or terminate the Plan at any time by written notice delivered to
the Trustee without any liability whatsoever for any such discontinuance or
termination. The Plan will be deemed terminated (a) if and when the Company is
judicially declared bankrupt, (b) if and when the Company is a party to a merger
in which it is not the surviving corporation or sells all or substantially all
of its assets, unless the surviving corporation or the purchaser adopts the Plan
by an instrument in writing delivered to the Trustee within 60 days after the
merger or sale, or (c) upon dissolution of the Company.
12.3. Distributions upon termination of the Plan. Upon termination or
partial termination of the Plan or complete discontinuance of contributions
thereunder, each affected Participant (including a terminated Participant in
respect of amounts not previously forfeited by him or her) will have a fully
vested and nonforfeitable interest in his or her Share of the Trust Fund, and
the Trustee will make distributions to such Participants or other persons
entitled to distributions in a single sum payment. However, if a successor plan
is established within the meaning of section 401(k)(2)(B)(i)(II) of the Code,
distributions will be made to Participants or other persons entitled to
distributions only in accordance with Articles 10 and 11. Upon the completion of
such distributions to all Participants, the Trust will terminate, the Trustee
will be relieved from all liability under the Trust, and no Participant or other
person will have any claims thereunder, except as required by applicable law.
12.4. Merger or consolidation of Plan; transfer of Plan assets. In
case of any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other
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plan, provision must be made so that each Participant would, if the Plan then
terminated, receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation or transfer if
the Plan had then terminated.
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Article 13. Miscellaneous.
13.1. Voting of Stock. The Trustee shall vote, in person or by proxy,
in accordance with the directions of the company or, in the absence of such
directions, as it may see fit, all shares of Stock held in the Trust Fund.
13.2. Transfers from other plans. In the case of an individual who
becomes an employee of a Participating Employer and who immediately prior
thereto had an interest in a pension or profit-sharing plan (the "other plan")
qualified under section 401(a) of the Code which was maintained by an employer
other than a Participating Employer, the following provisions will apply:
(a) If permitted by the provisions of the other plan, an
amount in cash equal to the value of all or a portion of such
individual's vested interest in the other plan may be transferred to
the Trustee by the trustee or other fiduciary of the other plan. In no
event, however, shall any such transfer be permitted if, in the opinion
of the Trustee and the Administrator, such transfer would adversely
affect the qualification of the Plan under the Code. Such individual
may also roll over to the Plan cash amounts received as all or part of
a distribution from the other plan, if in the opinion of the Trustee
and the Administrator such rollover will not adversely affect the
qualification of the Plan under the Code. The Administrator will
develop such procedures and require such information from individuals
transferring or rolling over funds pursuant to this Section 13.2 as it
deems necessary to insure compliance with all laws, regulations and
procedures applicable with respect to such transfer or rollover.
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(b) The amount so transferred or rolled over to the Trust will
be invested by the Trustee, pursuant to such individual's directions as
transmitted to the Trustee by the Administrator, in accordance with the
provisions of Article 7. The investment direction described in the
preceding sentence must be made in such form as the Administrator may
prescribe or approve, at the time such amounts are transferred to the
Trustee, and thereafter may be changed in accordance with the terms of
Article 7.
(c) Such individual will not become a Participant until he or
she has satisfied the eligibility requirements of Article 4, but a
Prior Plans Account will be maintained for him or her to reflect the
contribution under paragraph (a), and the balance thereof will be
adjusted from time to time, as if he or she were a Participant. In
addition, such individual will be treated as a Participant, with
respect to his or her interest in his or her Prior Plans Account, for
purposes of Articles 8, 9, 10 and 11 of the Plan. Such individual will
have a fully vested and nonforfeitable interest in the balance of his
or her Prior Plans Account.
13.3. Limitation of rights. Neither the establishment of the Plan and
the Trust, nor any amendment thereof, nor the creation of any fund or account,
nor the payment of any benefits, will be construed as giving to any Participant
or other person any legal or equitable right against any Participating
Employer, the Administrator or the Trustee, except as provided herein, and
in no event will the terms of employment or service of any Participant be
modified or in any way be affected hereby. It is a condition of the Plan,
and each Participant expressly agrees by his or her participation herein,
that each Participant will look solely to the assets held in the Trust for the
payment of any benefit to which he or she is entitled under the Plan.
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13.4. Nonalienability of benefits. The benefits provided hereunder will
not be subject to alienation, assignment, garnishment, attachment, execution or
levy of any kind, and any attempt to cause such benefits to be so subjected will
not be recognized, except to such extent as may be required by law.
The provisions of the preceding paragraph shall apply in general to the
creation, assignment or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order. Notwithstanding
the foregoing, if such order is a Qualified Domestic Relations Order, the
provisions of the preceding paragraph shall not apply.
13.5. Participants' period of military service. Notwithstanding any
provisions of this 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.
13.6. Payment under Qualified Domestic Relation Orders. Notwithstanding
any provisions of the Plan to the contrary, if there is entered any Qualified
Domestic Relations Order that affects the payment of benefits under the Plan
(including any Qualified Domestic Relations Order in effect under the Savings
Plan that affects the payment of benefits from an account transferred to this
Plan from the Savings Plan pursuant to Article 6.3), such benefits shall be paid
under this Plan in accordance with the applicable requirements of such Order. To
the extent required by any such Order, the Administrator shall make
distributions from a Participant's Accounts to an alternate payee or payees in a
single sum, regardless of whether the Participant is otherwise entitled to a
distribution at such time under the Plan. The Committee shall establish
reasonable procedures to determine whether an order or other decree
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is a Qualified Domestic Relations Order, and to administer distributions under
such Orders and decide all matters in respect thereof.
13.7. Information between Administrator and Trustee. The Administrator
will furnish to the Trustee, and the Trustee will furnish to the Administrator,
such information relating to the Plan and Trust as may be required under the
Codes and any regulations issued or forms adopted by the Treasury Department
thereunder or under the provisions of ERISA and any regulations issued or forms
adopted by the Labor Department thereunder.
13.8. Governing law. The Plan and Trust will be construed, administered
and enforced according to the laws of the Commonwealth of Massachusetts to the
extent such laws are not inconsistent with, or preempted by, ERISA.
IN WITNESS WHEREOF, The TJX Companies, Inc. has caused this instrument
to be signed by its duly authorized officer effective as of the 1st day of
January, 1997.
THE TJX COMPANIES INC.
By___________________________
By___________________________
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SCHEDULE A
159 Properties, Inc.
The TJX Companies, Inc.
Strathmex Corp.
T.J. Maxx P.A., Inc.
T.J. Maxx Texas, Inc.
NBC Nevada Merchants, Inc.
NBC Fourth Realty Corp.
TJX Foundation, Inc.
Newton Buying Corp.
NBC First Realty Corp.
NBC Distributors, Inc.
NBC Merchants, Inc.
Commonwealth Direct Marketing, Inc.
NBC Second Realty Corp.
Specialty Apparel Corp.
South Shore Marketing, Inc.
Marshalls of MA, Inc.
Marshalls of Novato, CA., Inc.
Marshalls of Campbell, CA, Inc.
Marshalls of Northridge-Devonshire, CA, Inc.
Marshalls of Fresno-FWY. 41, CA, Inc.
Marshalls of Mt. Prospect, IL, Inc.
Marshalls of Lombard, IL, Inc.
Marshalls of Oaklawn, IL, Inc.
Marshalls of Matteson, IL, Inc.
Marshalls of Countryside, IL, Inc.
Marshalls of Morton Grove, IL, Inc.
Marshalls of Berwyn, IL, Inc.
Marshalls of Harwood Heights, IL, Inc.
Marshalls of Melrose Park, IL, Inc.
Marshalls of Calumet City, IL, Inc.
Marshalls of Evanston, IL, Inc.
Marshalls of Bloomingdale, IL, Inc.
Marshalls of Orland Park, IL, Inc.
Marshalls of Rockford, IL, Inc.
Marshalls of Vernon Hills, IL, Inc.
Marshalls of Chicago Ridge, IL, Inc.
Marshalls of Chicago-Brickyard, IL, Inc.
Marshalls of Gurnee Mills, IL, Inc.
Marshalls of Chicago-Fullerton, IL, Inc.
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Marshalls of Chicago-Ford City, IL, Inc.
Marshalls of Downers Grove-Lamont, IL, Inc.
Marshalls of Schaumburg, IL, Inc.
Marshalls of Arlington Heights, IL, Inc.
Marshalls of Broadview, IL, Inc.
Marshalls of Streamwood, IL, Inc.
Marshalls of Bolingbrook, IL, Inc.
Marshalls of Chicago-Clark, IL, Inc.
Marshalls of Naperville-Rt. 59, IL, Inc.
Marshalls of Northbrook, IL, Inc.
Marshalls of Glen Burnie, MD, Inc.
Marshalls of Catonsville, MD, Inc.
Marshalls of Medford, MA, Inc.
Marshalls of Stoneham, MA, Inc.
Marshalls of Laredo, TX, Inc.
Marshalls Department Store of San Antonio-De Zavala, TX, Inc.
Marshalls Department Store of San Antonio-Ingram, TX, Inc.
Marshalls of Beacon, VA, Inc.
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Exhibit 5.1
March 19, 1997
The TJX Companies, Inc.
770 Cochituate Road
Framingham, MA 01701
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-8 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, for the registration of 1,000,000 shares of common stock,
$1.00 par value per share (the "Common Stock"), of The TJX Companies, Inc., a
Delaware corporation (the "Company"), issuable pursuant to The TJX Companies,
Inc. General Savings/Profit Sharing Plan (the "Plan") and an indeterminable
amount of interests to be offered or sold pursuant to the Plan (the "Plan
Interests").
We have acted as counsel for the Company in connection with certain
matters relating to the Plan and are familiar with the actions taken by the
Company in connection therewith. For purposes of this opinion we have examined
the Registration Statement, the Plan and such other documents as we have deemed
appropriate.
Based upon the foregoing, we are of the opinion that (i) the Common
Stock and the Plan Interests have been duly authorized and (ii) the Common Stock
and the Plan Interests, when issued and sold in accordance with the terms of the
Plan, will have been validly issued and will be fully paid and non-assessable.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
Exhibit 23.1
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
We consent to the incorporation by reference in the Registration Statement
of The TJX Companies, Inc. on Form S-8 of our report dated March 12, 1996 on
our audits of the financial statements and financial statement
schedule of The TJX Companies, Inc. as of January 27, 1996 and January 28, 1995
and for the years ending January 27, 1996, January 28, 1995 and January 29, 1994
which reports are included in or incorporated by reference in, the Annual Report
on Form 10-K of the TJX Companies, Inc. for the fiscal year ended January 27,
1996.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
March 18, 1997
Exhibit 23.2
The Board of Directors
The TJX Companies, Inc.
We consent to the incorporation by reference of our report dated December 1,
1995, with respect to the consolidated balance sheets of Marshalls of Roseville,
Minn., Inc. as of December 31, 1994 and 1993, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1994, in the Form S-8 Registration
Statement of the TJX Companies, Inc., which report appears in the Form 8-K/A
of the TJX Companies, Inc. dated November 17, 1995.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, MA
March 19, 1997