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Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Incorporated |
AMERICAN FINANCIAL GROUP, INC. |
I.R.S. Employer |
RETIREMENT AND SAVINGS PLAN
Vice President, Deputy General Counsel and Secretary
American Financial Group, Inc.
Cincinnati, Ohio 45202
(513) 579-2538
(Agent for Service)
CALCULATION OF REGISTRATION FEE
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Proposed |
Proposed |
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(1) |
This Registration Statement is filed for up to 250,000 shares of common stock of American Financial Group, Inc. (the "Registrant") issuable to employees of the Registrant's subsidiary, Great American Financial Resources, Inc., pursuant to the Great American Financial Resources, Inc. Retirement and Savings Plan. |
(2) |
Estimated solely for purposes of calculating registration fee. |
(3) |
Registration fee has been calculated pursuant to Rule 457(h). |
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by American Financial Group, Inc. (the “Registrant”) with the Securities and Exchange Commission (the “Commission”) are incorporated herein by reference and made a part hereof:
- Annual Report on Form 10-K for the year ended December 31, 2000.
- Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2001, June 30, 2001 and September 30,
2001.
- Current Report on Form 8-K dated August 2, 2001.
- The description of the Registrant’s common stock contained in the Form 8-A filed with the Commission on November 23, 1997.
All reports and other documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The legality of the Common Stock will be passed upon for the Registrant by Keating, Muething & Klekamp, P.L.L., 1400 Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202.
Item 6. Indemnification of Directors and Officers
Ohio Revised Code, Section 1701.13(E), allows indemnification by the Registrant to any person made or threatened to be made a party to any proceedings, other than a proceeding by or in the right of the Registrant, by reason of the fact that he is or was a director, officer, employee or agent of the Registrant, against expenses, including judgment and fines, if he acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Registrant and, with respect to criminal actions, in which he had no reasonable cause to believe that his conduct was unlawful. Similar provisions apply to actions brought by or in the right of the Registrant, except that no indemnification shall be made in such cases when the person shall have been adjudged to be liable for negligence or misconduct to the Registrant unless deemed otherwise by the court. Indemnifications are to be made by a majority vote of a quorum of disinterested directors or the written opinion of independent counsel or by the shareholders or by the court. The Registrant’s Code of Regulations extends such indemnification.
The Registrant maintains, at its expense, Directors and Officers Liability and Registrant Reimbursement Liability Insurance. The Directors and Officers Liability portion of such policy covers all directors and officers of the Registrant and of the companies which are, directly or indirectly, more than 50% owned by the Registrant. The policy provides for payment on behalf of the directors and officers, up to the policy limits and after expenditure of a specified deductible, of all Loss (as defined) from claims made against them during the policy period for defined wrongful acts, which include errors, misstatements or misleading statements, acts or omissions and neglect or breach of duty by directors and officers in the discharge of their individual or collective duties as such. The insurance includes the cost of investigations and defenses, appeals and bonds and settlements and judgments, but not fines or penalties imposed by law. The insurance does not cover any claims arising out of acts alleged to have been committed prior to October 24, 1978. The insurer limit of liability under the policy is $50,000,000 in the aggregate for all losses each year subject to certain individual and aggregate deductibles. The policy contains various exclusions and reporting requirements.
The Registrant also has entered into indemnification agreements with its executive officers and directors providing for indemnification against certain liabilities to the fullest extent permitted under Ohio law.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
5 |
Opinion of Keating, Muething & Klekamp, P.L.L. |
10 |
Great American Financial Resources, Inc. Retirement and Savings Plan |
23.1 |
23.1 Consent of Keating, Muething & Klekamp, PLL (contained on Exhibit 5). |
| 23.2 | Consent of Ernst & Young LLP 24 Power of Attorney (contained on the signature page). |
Item 9. Undertakings
9.1 The Registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
- to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
- to reflect in the
prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement.
- to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
provided, however, that paragraphs (1) and (2) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
9.2 The undersigned Registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
9.3 The undersigned Registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
9.4 The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
9.5 Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Cincinnati, Ohio, on November 30, 2001.
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AMERICAN FINANCIAL GROUP, INC. |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each person below whose signature is preceded by an (*) hereby constitutes and appoints Fred J. Runk, James C. Kennedy and Karl J. Grafe, or any of them, his true and lawful attorney and agent, to sign all amendments to this Registration Statement as well as any related registration statement (or amendment thereto) filed pursuant to Rule 462(b) promulgated under the Securities Act of 1933.
Signature
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Capacity
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Date
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EXHIBIT 5
OPINION OF KEATING, MUETHING & KLEKAMP, P.L.L.
November 30, 2001
Mark A. Weiss
Direct Dial: 579-6599
Facsimile: 579-6956
E-Mail: MWeiss@kmklaw.com
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
This firm serves as general counsel to American Financial Group, Inc. (the “Company”). In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents as we have deemed necessary or appropriate as a basis for the opinions set forth below including (1) the Registration Statement on Form S-8 relating to the Retirement and Savings Plan (the “Plan”) of Great American Financial Resources, Inc. (“GAFR”), a subsidiary of the Company, (2) the Articles of Incorporation and Code of Regulations of the Company, each as amended to the date hereof, and (3) resolutions of the Board of Directors of the Company relating to the approval of the Plan, issuance of shares of Common Stock pursuant to the Plan and the filing of the Registration Statement.
Based upon the foregoing, it is our opinion that:
| (1) | When shares of common stock of the Company (the “Common Stock”) have been issued as contemplated by the Plan, such shares of Common Stock will constitute duly issued, fully paid and non-assessable shares of Common Stock of the Company; |
| (2) | the Company is a duly organized and validly existing corporation under the laws of the State of Ohio; and |
| (3) | the Company has taken all necessary and required corporate actions in connection with the Plan. |
We hereby consent to the reference to our firm in the Registration Statement. In providing this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Commission promulgated thereunder.
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Sincerely yours, |
EXHIBIT 10
GREAT AMERICAN FINANCIAL RESOURCES, INC.
RETIREMENT AND SAVINGS PLAN
GREAT AMERICAN FINANCIAL
RESOURCES, INC.
RETIREMENT AND SAVINGS PLAN
(Amended and Restated as of January 1, 2001)
TABLE OF CONTENTS
Article 1. The Plan........................................................1-1
1.1 Establishment of the Plan................................1-1
1.2 Applicability of the Plan................................1-1
1.3 Purpose of the Plan......................................1-1
Article 2. Definitions.....................................................2-1
2.1 Definitions..............................................2-1
2.2 Gender and Number.......................................2-10
Article 3. Eligibility and Participation...................................3-1
3.1 Eligibility..............................................3-1
3.2 Excluded Employees.......................................3-1
3.3 Eligibility for Rollover Contributions...................3-2
3.4 Participants From Merged Plans...........................3-2
3.5 Enrollment...............................................3-2
3.6 Duration of Participation................................3-2
3.7 Participation Upon Reemployment..........................3-2
3.8 Hours of Service.........................................3-3
3.9 Special Provisions for Participants
Who Enter the Armed Forces...............................3-3
3.10 Participation Errors.....................................3-3
3.11 Waiver of Participation..................................3-4
Article 4. Contributions...................................................4-1
4.1 Section 401(k) Contributions.............................4-1
4.2 Matching Contributions...................................4-2
4.3 Actual Deferral Percentage Test and
Actual Contribution Percentage Test......................4-2
4.4 Adjustment to Actual Deferral Percentage Test............4-4
4.5 Adjustment to Actual Contribution Percentage Test........4-5
4.6 Employer Retirement Contributions........................4-6
4.7 Forfeitures..............................................4-7
4.8 Limitations on Annual Additions..........................4-7
4.9 Rollover Contributions...................................4-9
4.10 Special Rules for Early Participation....................4-9
Article 5. Vesting in Accounts.............................................5-1
5.1 Fully Vested Accounts....................................5-1
5.2 Vesting in Employer Contributions........................5-1
5.3 Accelerated Vesting......................................5-1
Article 6. Distributions, Withdrawals, and Loans...........................6-1
6.1 Distribution Upon Retirement, Death,
or Disability............................................6-1
6.2 Distribution Upon Severance from Service
for Reasons Other Than Retirement,
Disability or Death......................................6-1
6.3 Forfeitures..............................................6-1
6.4 Commencement of Distributions............................6-2
6.5 Method of Distribution...................................6-3
6.6 Withdrawals During Employment............................6-4
6.7 Participant Loans........................................6-4
6.8 Hardship Withdrawals. ...................................6-7
6.9 Required Distributions...................................6-7
6.10 Withholding Taxes........................................6-7
6.11 Distributions Under Qualified Domestic
Relations Orders.........................................6-8
Article 7. Investment Elections............................................7-1
7.1 Investment of Specified Contributions....................7-1
7.2 Investment Elections.....................................7-1
7.3 Investment Transfers.....................................7-1
7.4 Transfer of Assets.......................................7-1
7.5 Investment of Matching and Employer
Retirement Contributions Account.........................7-1
7.6 Diversification..........................................7-1
Article 8. Accounts and Records of the Plan................................8-1
8.1 Accounts and Records.....................................8-1
8.2 Trust Fund...............................................8-1
8.3 Valuation and Allocation of Expenses.....................8-1
8.4 Allocation of Earnings and Losses........................8-1
Article 9. Financing.......................................................9-1
9.1 Financing................................................9-1
9.2 Contributions............................................9-1
9.3 Nonreversion.............................................9-1
9.4 Rights in the Trust Fund.................................9-1
Article 10. Administration................................................10-1
10.1 Plan Administrator and Fiduciary........................10-1
10.2 Compensation and Expenses...............................10-1
10.3 Manner of Action........................................10-1
10.4 Chairman, Secretary, and Employment
of Specialists..........................................10-1
10.5 Assistance..............................................10-1
10.6 Records.................................................10-2
10.7 Rules...................................................10-2
10.8 Administration..........................................10-2
10.9 No Enlargement of Employee Rights.......................10-2
10.10 Initial Claims Procedure................................10-2
10.11 Claim Review Procedure..................................10-3
10.12 Notice of Address and Missing Persons...................10-5
10.13 Data and Information for Benefits.......................10-5
10.14 Indemnity...............................................10-6
10.15 Effect of a Mistake.....................................10-6
10.16 Self-Interest...........................................10-6
Article 11. Amendment and Termination.....................................11-1
11.1 Amendment and Termination...............................11-1
11.2 Limitations on Amendments...............................11-1
11.3 Effect of Bankruptcy and Other
Contingencies Affecting an Employer.....................11-2
Article 12. ESOP Provisions...............................................12-1
12.1 Establishment of ESOP Fund..............................12-1
12.2 Investment in GAFRI Common Stock........................12-1
12.3 Allocation of Employer Contributions....................12-1
12.4 ESOP Loans and Suspense Accounts........................12-1
12.5 Required Terms of ESOP Loan.............................12-2
12.6 Termination of Suspense Account.........................12-3
12.7 Allocation of Earnings on Stock.........................12-3
12.8 Valuation of GAFRI Securities...........................12-3
12.9 Voting Rights...........................................12-3
12.10 Rights on Tender or Exchange Offer......................12-4
12.11 Diversification.........................................12-4
12.12 Put Option..............................................12-4
12.13 Non-traded Stock........................................12-5
12.14 Stock not Subject to "Put" or "Call"....................12-6
Article 13. Top-Heavy Provisions..........................................13-1
13.1 Application of Top-Heavy Provisions.....................13-1
13.2 Definitions.............................................13-1
13.3 Vesting Requirements....................................13-3
13.4 Minimum Contribution....................................13-3
13.5 Limit on Annual Additions: Combined Plan Limit..........13-5
13.6 Limit on Annual Adjusted Compensation
Taken into Account......................................13-5
13.7 Collective Bargaining Agreements........................13-5
Article 14. Participation In and Withdrawal...............................14-1
14.1 Participation in the Plan...............................14-1
14.2 Withdrawal from the Plan................................14-1
14.3 Other Termination.......................................14-1
14.4 Distribution............................................14-2
Article 15. Miscellaneous.................................................15-1
15.1 Section 16(b) Restrictions..............................15-1
15.2 Beneficiary Designation.................................15-1
15.3 Incompetency............................................15-1
15.4 Nonalienation...........................................15-2
15.5 Applicable Law..........................................15-2
15.6 Severability............................................15-2
15.7 No Guarantee............................................15-2
15.8 Merger, Consolidation, or Transfer......................15-3
15.9 Internal Revenue Service Approval.......................15-3
GREAT AMERICAN FINANCIAL RESOURCES, INC.
RETIREMENT AND SAVINGS PLAN
(Amended and Restated as of January 1, 2001)
Article 1. The Plan
1.1 Establishment of the Plan.
Effective January 1, 2001, GREAT AMERICAN FINANCIAL RESOURCES, INC.,
formerly known as American Annuity Group, Inc., (referred to herein as the
"Company" or "GAFRI") amends and restates the American Annuity Group, Inc.
Employee Stock Ownership/Retirement Plan and merges the American Annuity Group,
Inc. Retirement Savings Plan into it. Hereafter, it shall be known as the GREAT
AMERICAN FINANCIAL RESOURCES, INC. RETIREMENT AND SAVINGS PLAN (the "Plan"). The
Plan is maintained for the benefit of eligible Employees of the Company and any
participating Employers.
1.2 Applicability of the Plan.
The provisions of this Plan are applicable only to Employees in the employ
of an Employer on or after the Effective Date. If an Employee's employment with
an Employer terminated prior to the Effective Date, his right to benefits, if
any, and the amount thereof, will be determined in accordance with the
provisions of the prior plans in effect as of his date of termination.
1.3 Purpose of the Plan.
The purpose of the Plan is to enable Participants to accumulate capital on
a regular and long-term basis for their retirement income needs.
_________________________
End of Article 1
Article 2. Definitions
2.1 Definitions.
Whenever used in the Plan, the following terms shall have the respective
meanings set forth below unless otherwise expressly provided herein, and when
the defined meaning is intended the term is capitalized.
(a) "AAG ESORP" means the American Annuity Group Employee Stock
Ownership/Retirement Plan into which the AAG 401(k) Plan was merged as
of the Effective Date to form this Plan.
(b) "AAG 401(k) Plan" means the American Annuity Group Retirement Savings
Plan which was merged as of the Effective Date into the AAG ESORP to
form this Plan.
(c) "Account" means the separate account maintained for each Member which
represents the Member's total proportionate interest in the Trust Fund
as of any Valuation Date and which consists of the sum of the
following sub-accounts:
(1) "Section 401(k) Contributions Account" means that portion of such
Member's Account which evidences the value of the Section 401(k)
Contributions made on the Member's behalf by an Employer,
including any gains and losses of the Trust Fund attributable
thereto.
(2) "Employer Retirement Contributions Account" means that portion of
such Member's Account which evidences the value of the Employer
Retirement Contributions made on the Member's behalf by an
Employer, including any gains and losses of the Trust Fund
attributable thereto.
(3) "Matching Contributions Account" means that portion of such
Member's Account which evidences the value of the Matching
Contributions made on the Member's behalf by an Employer,
including any gains and losses of the Trust Fund attributable
thereto.
(4) "Rollover Contributions Account" means that portion of such
Participant's or Employee's Account which evidences the value of
the Rollover Contributions made by the Member in accordance with
Section 4.9, including any gains and losses of the Trust Fund
attributable thereto.
(d) "Act" means the Employee Retirement Income Security Act of 1974, as
amended.
(e) "Adjusted Compensation" means a Participant's wages, salaries, fees
for professional services, and other amounts received for personal
services actually rendered as an Employee (including, but not limited
to, commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips,
and bonuses) and any other items included under Treasury Regulation
1.415-2(d)(1). Adjusted Compensation shall include elective or salary
reduction amounts which are excludable from gross income under
Sections 125, 402(a)(8), 402(h) or 403(b) of the Code for Plan Years
beginning prior to January 1, 1998. Adjusted Compensation shall
exclude:
(1) Contributions by an Employer to a plan of deferred compensation
to the extent contributions are not included in the gross income
of the Participant for the taxable year in which contributed, or
on behalf of the Participant to a simplified employee pension
described in Section 408(k) of the Code to the extent such
contributions are deductible under Section 219(b)(2) of the Code,
and any distributions from a plan of deferred compensation
whether or not includable in the gross income of the Participant
when distributed;
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Participant becomes freely transferable or is no longer subject
to a substantial risk or forfeiture;
(3) Amounts realized from the sale, exchange, or other disposition of
stock acquired under a qualified stock option; and
(4) Other amounts that receive special tax benefits, or contributions
made by an Employer (whether or not under a salary reduction
agreement) toward the purchase of a 403(b) annuity contract
(whether or not the contributions are excludable from the gross
income of the Participant).
Adjusted Compensation in excess of the Compensation Limit shall be
disregarded.
(f) "Administrative Plan Committee" means the committee which has been
designated as the "plan administrator" as provided in Section 10.1.
(g) "Affiliate" means the following:
(1) Any corporation other than GAFRI, i.e., either a subsidiary
corporation or an affiliated or associated corporation of GAFRI,
which together with GAFRI is a member of a "controlled group" of
corporations;
(2) any organization which together with GAFRI is under "common
control"; or
(3) any organization which together with GAFRI is an "affiliated
service group";
as those terms inside quotation marks are used in Sections 414(b), 414(c),
and 414(m) of the Code.
The term "Affiliate" also includes any other entity required to be
aggregated with GAFRI pursuant to regulations under Section 414(o) of
the Code.
(h) "AFG Common Stock" means shares of common stock, $1.00 par value, of
AFG.
(i) "Aggregation Group" means the group as defined in Section 13.2(a).
(j) "Board" means the Board of Directors of GAFRI or any committee of the
Board to which the Board delegates responsibilities under this Plan.
(k) "Code" means the Internal Revenue Code of 1986, as amended.
(l) "Company" means GAFRI or any successor thereto.
(m) "Compensation Limit" means the maximum amount of Covered Compensation
or Adjusted Compensation taken into account under the Plan for any
Plan Year as set forth in Section 401(a)(17) of the Code and as may be
adjusted by the Secretary of Treasury to reflect increases in the cost
of living.
(n) "Covered Compensation" means all wages as defined in Section 3401(a)
of the Code and all other payments of compensation to an Employee by
the Employer (in the course of the Employer's trade or business) for
which the Employer is required to furnish the employee a written
statement under Sections 6041(d) and 6051(a)(3) of the Code.
Compensation must be determined without regard to any rules under
Section 3401(a) of the Code that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in
Section 3041(a)(2) of the Code). Compensation shall exclude any
addition to gross pay for benefits, including but not limited to group
term life, auto/homeowners coverage, service awards, educational
reimbursements and/or any addition to gross pay, including but not
limited to, non-reimbursable expense items, cost of air transportation
on company-owned aircraft, relocation expenses, any payments made on
account of participation in any other qualified or non-qualified
plan(s) that result in taxable distribution(s) and statutory payments
such as worker's compensation or state disability payments. Covered
Compensation shall include any elective deferrals for that calendar
year with respect to employment with the Employer (1) under a
qualified cash or deferred arrangement described in Section 401(k) of
the Code, (2) to a plan qualified under Section 125 of the Code, (3)
to a plan qualified under Section 402(h) of the Code, (4) to a plan
qualified under Section 132(f)(4) of the Code, or (5) to another to
another similar type of plan. Covered Compensation shall not include
any amounts paid by reason of services performed prior to the date an
Employee becomes a Participant or bonuses (other than an annual bonus)
paid by an Employer as a long-term incentive bonus or a similar type
of bonus that is considered long-term incentive compensation. Covered
Compensation in excess of the Compensation Limit shall be disregarded.
(o) "Defined Benefit Fraction" means for a Limitation Year, except as
provided in Article 13 for a top-heavy plan, a fraction, the numerator
of which shall be the projected annual benefit of the Participant
under the defined benefit plan(s) (determined as of the close of the
Limitation Year) and the denominator of which shall be an amount equal
to the lesser of: (1) the product of 1.25 multiplied by the dollar
limitation in effect for such Limitation Year under Section
415(b)(1)(A) of the Code, as adjusted under Section 415(d)(1)(A) of
the Code, or (2) the product of 1.4 multiplied by the amount which may
be taken into account for such Limitation Year under Section
415(b)(1)(B) of the Code with respect to such Participant.
(p) "Defined Contribution Fraction" means for a Limitation Year, except as
provided in Article 13 for a top-heavy plan, a fraction, the numerator
of which shall be the sum of the Annual Additions to the Participant's
Accounts under all defined contribution plan(s) maintained by an
Employer or Affiliate as of the close of the Limitation Year, and the
denominator of which shall be the sum of the lesser of the following
amounts determined for each such plan for the Limitation Year and for
each prior year of Service with an Employer or an Affiliate: (1) the
product of 1.25 multiplied by the dollar limitation in effect for such
Limitation Year under Section 415(c)(1)(A) of the Code, as adjusted
under Section 415(d)(1)(B) of the Code, (determined without regard to
Section 415(c)(6) of the Code) or (2) the product of 1.4 multiplied by
the amount that may be taken into account under Section 415(c)(1)(B)
of the Code with respect to such individual under the defined
contribution plan(s) of the Limitation Year.
(q) "Determination Date" means that date as defined in Section 13.2(b).
(r) "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(s) "Disability" or "Disabled" means a total physical or mental inability
to perform work, resulting from injury or disease, as determined under
any long-term disability plan sponsored by an Employer.
(t) "Distributee" means a Member. In addition, the Member's surviving
spouse and the Member's spouse or former spouse who is the alternate
payee under a Qualified Domestic Relations Order as defined in Section
2.1(ccc) of the Plan are Distributees with regard to the interest of
the spouse or former spouse.
(u) "Earnings" mean, for purposes of Article 12, all dividends and other
distributions made with respect to GAFRI Common Stock (whether or not
taxable and whether paid in cash or other property), including the
proceeds from the sale or other disposition of such other property and
dividends or other distributions made with respect to such other
property.
(v) "Effective Date" means 12:00 a.m. on January 1, 2001 for the amendment
and restatement of this Plan following 11:59 p.m. on December 31,
2000. For purposes of compliance with the Uruguay Round Agreements
Act, the Uniformed Services Employment and Reemployment Rights Act of
1994, the Small Business Job Protection Act of 1996, the Taxpayer
Relief Act of 1997, and/or the Internal Revenue Service Restructuring
and Reform Act of 1998 (collectively referred to as "GUST"), an
earlier effective date shall apply as specified in the Plan. In
addition, to the extent specified in the Plan, a later effective date
may be applicable. For purposes of the original adoption of this Plan,
Effective Date means January 1, 1994 for both the AAG ESORP and the
AAG 401(k) Plan.
(w) "Eligible Retirement Plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of
an Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual
retirement annuity.
(x) "Eligible Rollover Distribution" means 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 (or joint life expectancies) of
the Distributee and the Distributee's designated beneficiary, or for a
specified period of 10 years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(y) "Employee" means an individual who performs services for an Employer,
and who is considered by an Employer in its sole and absolute
discretion to be an Employee for purposes of the Plan. An individual
who performs services for an independent contractor, leased employee,
employee of a temporary agency or in any other capacity not considered
by an Employer in its sole and absolute discretion to result in
classification as an Employee for purposes of the Plan shall not be
considered an Employee. A determination that a person is an employee
of the Employer for other purposes such as employment tax purposes,
shall have no bearing whatsoever on the determination of whether the
individual is an Employee under the Plan if an Employer does not
consider the individual to be its Employee for purposes of the Plan.
(z) "Employer" means GAFRI or any Affiliate which elects to become a party
to the Plan, with the approval of GAFRI by adopting the Plan for the
benefit of its eligible Employees in the manner described in Article
14.
(aa) "Employer Retirement Contributions" mean the Retirement Contributions
made by an Employer on behalf of a Participant pursuant to Section
4.6.
(bb) "Employment Commencement Date" means the first day on which an
Employee first performs an Hour of Service for GAFRI, another
Employer, or a nonparticipating Affiliate or, if applicable, the first
day following a Severance from Service, on which an Employee performs
an Hour of Service for GAFRI, another Employer, or a nonparticipating
Affiliate.
(cc) "Entry Date" means the following: (i) January 1 and July 1 for
purposes of the Employer Retirement Contributions; (ii) any date that
is at least thirty (30) days after the Employee's Employment
Commencement Date for purposes of Section 401(k) Contributions and
Matching Contributions.
(dd) "ESOP Loan" means a loan described in Section 404(a)(9)(A) of the Code
and that otherwise satisfies the requirements of Section 12.5. All
ESOP Loans entered into simultaneously shall be treated as one ESOP
Loan for all purposes under the Plan.
(ee) "Fair Market Value" of GAFRI Securities means the closing price per
share of GAFRI Securities for the most recent date on which there was
a sale of GAFRI Securities on a stock exchange or, if the GAFRI
Securities are not listed on an exchange as of the date of such
purchase or sale, such price as the Trustee shall in good faith
determine is appropriate through appraisals made by an "independent
appraiser" in accordance with Section 401(a)(28)(C) of the Code.
(ff) "Forfeiture" means the non-vested portion of a Participant's Account
which is forfeited and allocated pursuant to Section 4.7.
(gg) "Former Participant" means any person who has been a Participant
hereunder whose employment with the Employer has been terminated and
who has not yet received the entire benefit to which he is entitled
under the terms of the Plan.
(hh) "GAFRI" means Great American Financial Resources, Inc., formerly known
as American Annuity Group, Inc., or any successor thereto.
(ii) "GAFRI Common Stock" means shares of common stock, $1.00 par value, of
GAFRI.
(jj) "GAFRI Common Stock Fund" means the investment fund which consists of
GAFRI Common Stock.
(kk) "GAFRI Securities" means GAFRI Common Stock, preferred stock,
convertible debentures, or other securities which are deemed to be
"qualifying employer securities" as that term is defined under the
provisions of the Act.
(ll) "Highly Compensated Employee" means an individual, as determined under
Section 414(q) of the Code and the Regulations thereunder, who:
(1) During the Plan Year or the preceding 12-month period was at any
time a 5% owner. Five Percent Owners mean any person who owns (or
is considered as owning within the meaning of Section 318 of the
Code) more than 5% of the outstanding stock of the Participant's
Employer or stock possessing more than 5% of the total combined
voting power of all stock of such Employer. In determining
percentage ownership hereunder, employers that would otherwise be
aggregated under Sections 414(b), (c), (m) and (o) of the Code
shall be treated as separate employers; or
(2) Received Adjusted Compensation from an Employer in excess of
$85,000 (as adjusted pursuant to Section 414(q)(1) of the Code)
during the 12-month period preceding the Plan Year, and, if
elected by GAFRI, was in the group consisting of the top 20% of
the Employees when ranked on the basis of Adjusted Compensation
paid during such preceding 12-month period.
(3) Effective for Plan Years beginning after December 31, 1996, the
family aggregation rules previously in effect for this purpose no
longer apply.
(mm) "Hour of Service" means a period of employment, as defined in Section
3.8.
(nn) "Investment Fund" means any investment fund established from time to
time by the Plan Administrator as an investment media for the Trust
Fund. The Plan Administrator shall have the discretion to establish
and terminate such funds as it shall deem appropriate and to change
the investment guidelines for any such funds as it shall deem
appropriate.
(oo) "Key Employee" means those Employees as defined in Section 13.2(c).
(pp) "Leased Employee" means any person (other than an Employee) who
pursuant to an agreement between an Employer and any other person
("leasing organization") has performed services for such Employer (or
for such Employer and related persons determined in accordance with
Section 414(n)(6) of the Code) on a substantially full-time basis for
a period of at least one year, and such services are performed under
the primary direction or control of such Employer. Contributions or
benefits provided a Leased Employee by the leasing organization which
are attributable to services performed for an Employer shall be
treated as provided by such Employer. A Leased Employee shall not be
considered an Employee of an Employer if: (1) such Employee is covered
by a money purchase pension plan providing: (A) a nonintegrated
employer contribution rate of at least 10% of compensation, as defined
in Section 415(c)(3) of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code, (B) immediate participation, and
(C) full and immediate vesting; and (2) Leased Employees do not
constitute more than 20% of an Employer's Employees who are not Highly
Compensated Employees. If such a person participates in the Plan as a
result of subsequent employment with an Employer or nonparticipating
Affiliate, he shall receive Service for his employment as a Leased
Employee.
(qq) "Limitation Year" means the Plan Year or any other
12-consecutive-month period adopted pursuant to a written resolution
of the Board.
(rr) "Matching Contributions" mean the contributions made by an Employer on
behalf of a Participant, conditioned on the making of Section 401(k)
Contributions, as described in Section 4.2.
(ss) "Maximum Deferral Amount" means the maximum amount that may be
contributed as a Section 401(k) Contribution for any calendar year
under Section 402(g) of the Code. This amount may be adjusted by the
Secretary of Treasury under Section 402(g)(5) of the Code
(cost-of-living adjustments).
(tt) "Member" means a Participant, a Former Participant who still has a
balance in his Account or an Employee who has a Rollover Contributions
Account.
(uu) "Merged Plans" mean the AAG 401(k) Plan and the AAG ESORP. The
provisions in this Plan affecting qualification under Section 401 of
the Code with effective dates on or before the merger date shall be
treated as amendments to such plan, as it existed prior to the merger,
effective as of the same effective dates.
(vv) "Month of Service" means a calendar month during any part of which an
Employee completes an Hour of Service. Except, however, a Participant
shall be credited with a Month of Service for each month during the
12-month computation period in which he has not incurred a One Year
Period of Severance.
(ww) "Non-Highly Compensated Employee" means any Employee who is not a
Highly Compensated Employee.
(xx) "One-Year Period of Severance" means the applicable computation period
of 12 consecutive months during which an Employee fails to accrue a
Month of Service. Solely for purposes of determining whether a
One-Year Period of Severance has occurred, in the case of an Employee
who is absent from work beyond the first anniversary of the first date
of an absence and the absence is for an approved leave for maternity
or paternity reasons, the date the Employee incurs a Severance from
Service shall be the second anniversary of the Employee's absence from
employment. The period between the first and second anniversaries of
the first date of absence will not constitute Service. For purposes of
this Subsection, an absence from work for maternity or paternity
reasons means an absence (1) by reason of pregnancy of the individual,
(2) by reason of the birth of a child of the individual, (3) by reason
of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately following
such birth or placement. A Year of Service and a One Year Period of
Severance shall be measured on the same computation period. An
Employee shall not be deemed to have incurred a One Year Period of
Severance if he completes an Hour of Service within 12 months
following the last day of the month during which his employment
terminated.
(yy) "Participant" means any Employee of an Employer who has met and
continues to meet the requirements of the Plan as set forth in
Sections 3.1 and 3.5 and who has not ceased being a Participant under
the provisions of Section 3.6.
(zz) "Plan" means this Great American Financial Resources, Inc. Retirement
and Savings Plan, as from time to time amended.
(aaa)"Plan Administrator" means the entity which has been designated as
the "plan administrator" as provided in Section 10.1.
(bbb)"Plan Year" means the 12-consecutive-month period ending each
December 31.
(ccc)"Qualified Domestic Relations Order" means a judgment, decree or
order (including approval of a property settlement agreement) that (1)
is related to the provision of child support, alimony payments or
marital property rights to a spouse, former spouse, child or other
dependent of a Participant, (2) is made pursuant to a state domestic
relations order, (3) creates or recognizes an alternate payee's right
to receive all or a portion of the benefits payable to a Participant
under the Plan, and (4) otherwise meets the requirements of Section
414(p) of the Code and Section 206(d) of the Act.
(ddd)"Retirement" means Severance from Service as an Employee on or after
attaining age 60.
(eee)"Rollover Contributions" mean the contributions made by an Employee
or Participant as described in Section 4.9.
(fff)"Section 16 Participant" means any Participant who is an "officer" or
director of GAFRI or a "beneficial owner" of 10% or more of any class
of any equity securities of GAFRI which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934 as those terms are
defined under Section 16 of the Securities Exchange Act of 1934 and
the Rules promulgated thereunder.
(ggg)"Section 401(k) Contributions" mean the contributions made by an
Employer on behalf of a Participant pursuant to the Participant's
election to reduce Covered Compensation as described in Section 4.1.
(hhh)"Section 416 Account" means that account as defined in Section
13.2(d).
(iii)"Service" means a period or periods of employment of an Employee by
GAFRI or an Affiliate.
(jjj) "Severance from Service" means the earlier of (1) or (2) below:
(1) the date the Employee terminates, retires, is discharged, becomes
subject to a Disability or dies, or
(2) the first anniversary of the first day of an Employee's absence
from employment with an Employer or nonparticipating Affiliate
(with or without pay) for any reason other than in (1) above,
such as vacation, sickness, leave of absence, layoff, or military
service (except as otherwise provided in Section 3.9).
(kkk)"Suspense Account" means an account established for Excess Annual
Additions under Section 4.8.
(lll)"Trust Agreement" means any agreement establishing a trust, which
forms part of the Plan, to receive, hold, invest, and dispose of the
Trust Fund.
(mmm)"Trustee" means the corporation, or individual or individuals, or
combination thereof, acting as trustee under the Trust Agreement at
any time of reference as appointed by the Board from time to time.
(nnn)"Trust Fund" means the assets of every kind and description held
under the Trust Agreement.
(ooo)"Valuation Date" means each business day of the Plan Year, or such
other dates as may be determined by the Plan Administrator.
(ppp) "Year of Service" means the following:
(1) Each Plan Year during which the Employee completes at least 1,000
Hours of Service for all Plan Years prior to January 1, 2002. For
purposes of vesting, a Year of Service shall be determined on the
basis of the Plan Year.
(2) Effective January 1, 2002, a Year of Service means each
consecutive 12-month period of Service commencing on the
Employee's Employment Commencement Date and anniversaries
thereof. For purposes of vesting, a Year of Service shall be
determined on the basis of the Plan Year.
(3) For purposes of determining an Employee's Years of Service, all
periods of employment with an Employer or an Affiliate, including
periods during which the Employee was considered eligible under
the Merged Plan prior to the Effective Date, shall be recognized
subject to the rules for participation upon reemployment pursuant
to Section 3.7.
2.2 Gender and Number.
Unless the context clearly requires otherwise, the masculine pronoun
whenever used shall include the feminine and neuter pronoun, and the singular
shall include the plural.
-------------------------
End of Article 2
Article 3. Eligibility and Participation
3.1 Eligibility.
Subject to Section 3.2, each Employee shall become a Participant in the
Plan as follows:
(a) Participants in Merged Plans. Any Employee who was a Participant in
the AAG 401(k) Plan on December 31, 2000, and who is an Employee on
the Effective Date, shall continue as a Participant in the Plan as of
the Effective Date for purposes of Section 401(k) Contributions and
Matching Contributions. An Employee who was a Participant in the AAG
ESORP on December 31, 2000, and who is an Employee on the Effective
Date, shall continue as a Participant in the Plan as of the Effective
Date for purposes of Employer Retirement Contributions.
(b) Participants on Effective Date. Any other Employee who would have been
eligible for the AAG 401(k) Plan as of the Effective Date and who is
an Employee on the Effective Date, shall become eligible to be a
Participant in the Plan as of the Effective Date for purposes of
Section 401(k) Contributions and Matching Contributions. Any other
Employee who would have been eligible for the AAG ESORP as of the
Effective Date, and who is an Employee on the Effective Date, shall
become a Participant in the Plan as of the Effective Date for purposes
of Employer Retirement Contributions.
(c) Subsequent Eligibility. Any other Employee shall become a Participant
in the Plan, pursuant to Section 3.5, for purposes of Section 401(k)
Contributions and Matching Contributions on any Entry Date following
the Employee's Employment Commencement Date, provided the individual
is still an Employee on that date. Any other Employee who has
completed one Year of Service shall become a Participant in the Plan
for purposes of Employer Retirement Contributions on the Entry Date
concurrent with or immediately following the date on which the
Employee completed one Year of Service, provided the individual is
still an Employee on that Entry Date.
3.2 Excluded Employees.
An Employee shall not be eligible to participate in the Plan if:
(a) He is included in a unit of Employees covered by a collective
bargaining agreement between Employee representatives and an
Employer if retirement benefits were the subject of good faith
bargaining between such Employee representatives and such
Employer.
(b) He is neither an United States citizen nor a resident alien.
(c) He is a Leased Employee.
(d) He is self-employed.
(e) He is covered by another qualified retirement plan sponsored by
GAFRI or an Affiliate of GAFRI.
3.3 Eligibility for Rollover Contributions.
An Employee of an Employer that meets the eligibility requirements of
Section 3.1 above for Section 401(k) Contributions and Matching Contributions
shall be eligible to make a Rollover Contribution pursuant to Section 4.9 before
any election is made under Section 4.1.
3.4 Participants From Merged Plans.
A Former Participant from any of the Merged Plans who is no longer an
Employee of an Employer but who maintained an account in a Merged Plan shall be
a Member of this Plan to the extent of any transferred Accounts.
3.5 Enrollment.
(a) Section 401(k) Contributions and Matching Contributions. Each Employee
who is eligible to participate in accordance with Section 3.1 shall
become a Participant for purposes of Section 401(k) Contributions and
Matching Contributions by making an election to have Section 401(k)
Contributions made on his behalf in accordance with Section 4.1. Such
election must be made with prior notice as may be determined by the
Plan Administrator.
(b) Employer Retirement Contribution. The Employee shall be eligible to
receive an Employer Retirement Contribution automatically upon meeting
the eligibility requirements as of the next following Entry Date.
3.6 Duration of Participation.
A Participant shall continue to be a Participant until he has a Severance
from Service with all Employers or his employment status changes to one
described in Section 3.2; thereafter, he shall be a Member for as long as he has
an Account. If an Employee transfers his employment to a non-participating
Affiliate, such Employee shall not be eligible for any further Employer
Retirement Contributions, Matching Contributions or Section 401(k)
Contributions; provided, however, such Employee shall receive Matching
Contributions for any Section 401(k) Contributions made until the date of such
transfer. However, the Employee may receive credit for Service pursuant to the
terms of the Plan. Further, the Employee will not be eligible to receive a
distribution pursuant to Section 6.2 as long as he remains in active service
with a non-participating Affiliate.
3.7 Participation Upon Reemployment.
If an Employee who has had a Severance from Service is subsequently
reemployed as an Employee, the following shall apply:
(a) For the purposes of Section 401(k) Contributions and Matching
Contributions, a Former Participant shall become a Participant
immediately upon the Former Participant's return to the employ of an
Employer.
(b) For purposes of the Employer Retirement Contributions, a Former
Participant shall become a Participant immediately upon the Former
Participant's return to the employ of an Employer if such Former
Participant was eligible for the Employer Retirement Contributions
Account prior to the Severance from Service. If such Former
Participant was not eligible for the Employer Retirement Contributions
Account prior to the Severance from Service, the Former Participant
shall become a Participant for purposes of the Employer Retirement
Contributions at the time provided in the eligibility requirements
pursuant to Section 3.1(c).
3.8 Hours of Service.
An Employee shall receive credit for each hour for which the Employee is
paid, or is entitled to payment, for the performance of duties for GAFRI or an
Affiliate. Hours of Service shall be credited in accordance with the rules of
Department of Labor Regulations Section 2530.200b-2. Hours of Service shall
include each hour for which an Employee is considered a Leased Employee under
Section 414(n) of the Code or serves as an Employee that Section 414(o) of the
Code requires an Employer to treat as an Employee.
3.9 Special Provisions for Participants Who Enter the Armed Forces.
Notwithstanding any provision of this Plan to the contrary, effective
December 12, 1994, contributions, benefits and Service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code.
3.10 Participation Errors.
(a) Omission of Eligible Employee. If in any Plan Year an Employee who
should have been included as a Participant is erroneously omitted and
the error is not discovered until after an Employer Retirement
Contribution or Matching Contribution for the Plan Year has been
allocated to Employer Retirement Contributions Accounts or the
Matching Contributions Accounts, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount that
the Employer would have contributed with respect to him had he not
been omitted. Any contribution required by this Subsection shall be
made regardless of whether it is deductible in whole or in part under
Section 404 of the Code.
(b) Inclusion of Ineligible Employee. If in any Plan Year any person who
should not have been included as a Participant in the Plan is
erroneously included and the error is not discovered until after a
contribution for the Plan Year has been allocated to the Employer
Retirement Contributions Account and Matching Contributions Account,
an Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a
deduction is allowed with respect to the contribution. In that event,
the amount contributed with respect to the ineligible person shall
constitute a Forfeiture for the Plan Year in which the discovery is
made and allocated in accordance with Section 4.7.
3.11 Waiver of Participation.
An Employee who is otherwise eligible to receive an Employer Retirement
Contribution may, subject to the approval of an Employer, elect voluntarily not
to participate in the Employer Retirement Contributions part of the Plan. The
election not to participate is not revocable and must be communicated to the
Plan Administrator at least 90 days before the end of the Plan Year in a manner
designated by the Plan Administrator.
-------------------------
End of Article 3
Article 4. Contributions
4.1 Section 401(k) Contributions.
For each Plan Year, an Employer shall contribute to the Plan on behalf of
such Employer's Participants an amount equal to the Section 401(k) Contributions
as provided below:
(a) Amount of Section 401(k) Contributions. When an Employee becomes
eligible to be a Participant in the Plan for purposes of Section
401(k) Contributions and Matching Contributions, the following
elections shall be available:
(1) Each Participant may elect, in the manner provided by the Plan
Administrator, to reduce his Covered Compensation by whole
percentages not to exceed 15% of his Covered Compensation and to
have the amount by which his Covered Compensation is reduced
contributed on his behalf by his Employer as a Section 401(k)
Contribution to the Plan. Effective January 1, 2002, 25% shall be
substituted for 15% in the prior sentence.
(2) The Participant may elect, in the manner provided by the Plan
Administrator, to receive the full amount of his Covered
Compensation in cash and not be reduced by any Section 401(k)
Contributions.
(b) Payment of Section 401(k) Contributions. The Section 401(k)
Contributions made on behalf of each Participant shall be paid by each
Employer to the Trustee as soon as the Employer can reasonably
segregate such amounts, but not later than the 15th business day of
the month following the month in which such amounts would have
otherwise been payable to the Participant. Such contributions shall be
credited as may be determined by the Plan Administrator. In addition,
an Employer may require or allow a Highly Compensated Employee to
reduce the percentage specified in his salary reduction agreement to
the extent that the Employer reasonably anticipates that without the
reduction, the limits set forth in this Article 4 would be exceeded
for the Plan Year.
(c) Changes to Section 401(k) Contributions. Each Participant may elect in
a manner provided by the Plan Administrator to increase or decrease
his Covered Compensation reductions (within the limits stated above)
and cease future Covered Compensation reductions upon prior notice to
the Plan Administrator. Any such election shall be effective as soon
as administratively feasible. Such elections shall be effective only
with respect to Covered Compensation not yet paid as of the effective
dates of such elections. Upon ceasing future Covered Compensation
reductions, an election to again reduce Covered Compensation may only
be made by giving prior notice to the Plan Administrator which
election shall be effective as soon as administratively feasible.
(d) Excess Deferrals. Any Participant who makes Section 401(k)
Contributions in excess of the Maximum Deferral Amount for any Plan
Year shall receive a distribution of such excess deferral (and any
income allocated to such excess deferral) as soon as practicable
following discovery of such excess amounts, but not later than April
15 following the close of the Plan Year in which such excess deferrals
were made.
4.2 Matching Contributions.
(a) Determination of Matching Contributions. For each Plan Year at the
discretion of the Board, an Employer may make a Matching Contribution
in cash, in AFG Common Stock, or in GAFRI Common Stock, on behalf of
each Participant who made Section 401(k) Contributions during the Plan
Year and who is actively employed by an Employer on the last day of
the Plan Year.
(b) Allocation of Matching Contributions. Any Matching Contributions made
pursuant to this Section 4.2 shall be allocated on a pro rata basis to
the Matching Contributions Account of those Participants who are
employed by the Company or an Affiliate on the last day of the Plan
Year based on the amount of Section 401(k) Contributions made by the
Participants. Participants who died, retired or became Disabled during
the Plan Year shall be deemed to have been employed on the last day of
the Plan Year.
(c) Due Date of Matching Contributions. Matching Contributions, if any,
shall be paid by each Employer to the Trustee no later than the end of
the Plan Year following the Plan Year to which the contributions
relate (or such later time as may be permitted by Treasury
Regulations). Allocation of all Matching Contributions to the Matching
Contributions Accounts of Highly Compensated Employees shall be made
contingent upon satisfaction of the discrimination tests of Sections
401(k)(3) and 401(m)(2) of the Code. Any Matching Contribution
attributable to an excess Section 401(k) Contribution distributed
under Section 4.4 or any other excess Matching Contribution, shall not
be allocated to the Highly Compensated Employees' Matching
Contributions Account, but shall be held in a Suspense Account and
used to reduce any Matching Contributions due from an Employer in
current, next, or succeeding Plan Years.
(d) Valuation of Matching Contributions. For purposes of determining the
amount of Matching Contributions to be made to the Plan, the value of
any contribution shall be determined as of the date such contribution
is deemed to have been made to the Trust Fund. If the contribution is
made prior to the last day of the Plan Year, any earnings or interest
on such contribution shall be allocated to the Participants' Matching
Contributions Account in the same way as other interest and earnings
when the Matching Contribution is credited.
4.3 Actual Deferral Percentage Test and Actual Contribution Percentage
Test.
(a) Maximum Annual Allocation. Effective for Plan Years beginning after
December 31, 1996, for each Plan Year, the annual allocation derived
from Section 401(k) Contributions and Matching Contributions to a
Participant's Section 401(k) Contributions Account and Matching
Contributions Account, respectively, shall satisfy one of the
following tests:
(1) 1.25 times the Actual Deferral Percentage and the Actual
Contribution Percentage for the preceding Plan Year for
Participants who were Non-Highly Compensated Employees eligible
to make Section 401(k) Contributions for such preceding Plan
Year; or
(2) the lesser of:
(A) 2 times the Actual Deferral Percentage and the Actual
Contribution Percentage for the preceding Plan Year for the
Participants who were Non-Highly Compensated Employees
eligible to make Section 401(k) Contributions for such
preceding Plan Year, provided that the Actual Deferral
Percentage and the Actual Contribution Percentage for the
Participants who are Highly Compensated Employees shall not
exceed the Actual Deferral Percentage and the Actual
Contribution Percentage for the preceding Plan Year for
Participants who were Non-Highly Compensated Employees
eligible to make Section 401(k) Contributions for such
preceding Plan Year by more than 2 percentage points; or
(B) such amount as the Secretary of the Treasury or his delegate
may prescribe to prevent multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(b) Actual Deferral Percentage. For purposes of this Section and Section
4.4, Actual Deferral Percentage means, with respect to all Highly
Compensated Employees and all Non-Highly Compensated Employees for a
Plan Year, the average of the ratios, calculated separately for each
Participant in such group, of Section 401(k) Contributions allocated
to each Participant's Section 401(k) Contributions Account for such
Plan Year to such Participant's Covered Compensation or Adjusted
Compensation for such Plan Year or for a Participant who enters the
Plan at a time other than the beginning of the Plan Year, such
Participant's Covered Compensation or Adjusted Compensation for that
part of the Plan Year in which the Participant is eligible to make
Section 401(k) Contributions. The determination of whether to use
Covered Compensation or Adjusted Compensation for purposes of the
Actual Deferral Percentage or the Actual Contribution Percentage shall
be made by the Plan Administrator in a non-discriminatory manner.
(c) Actual Contribution Percentage. For purposes of this Section and
Section 4.5, Actual Contribution Percentage for a Plan Year means,
with respect to all Highly Compensated Employees and all Non-Highly
Compensated Employees, the average of the ratios, calculated
separately for each Participant in each group, of Matching
Contributions allocated to each Participant's Matching Contributions
Account for such Plan Year to such Participant's Covered Compensation
or Adjusted Compensation for such Plan Year.
(d) Other Restrictions. For purposes of determining the Actual
Contribution Percentage and the amount of Excess Aggregate
Contributions, the Plan Administrator may elect to take into account,
with respect to Employees eligible to have Matching Contributions
pursuant to Section 4.2, Section 401(k) Contributions (as defined in
Section 1.402(g)-1(b) of the Treasury Regulations) and Qualified
Nonelective Contributions (as defined in Section 401(m)(4)(C) of the
Code) contributed to any plan maintained by an Employer. Such Section
401(k) Contributions and Qualified Nonelective Contributions shall be
treated as Matching Contributions subject to Section 1.401(m)-1(b)(2)
of the Treasury Regulations, the provisions of which are incorporated
herein by reference. However, the Plan Year must be the same as the
plan year of the plan to which the Section 401(k) Contributions and
the Qualified Nonelective Contributions are made. Effective for Plans
Years beginning after December 31, 1996, the family aggregation rules
previously in effect no longer apply.
4.4 Adjustment to Actual Deferral Percentage Test.
In the event that the initial allocations of the Section 401(k)
Contributions do not satisfy one of the tests set forth in Section 4.3, the Plan
Administrator shall adjust the Section 401(k) Contributions in excess of the
limits described in Section 4.3 ("Excess Contributions") pursuant to this
Section.
(a) Distribution of Excess Contributions. On or before the 15th day of the
3rd month following the end of each Plan Year, but in no event later
than the close of the following Plan Year, excess contributions will
be distributed to the Highly Compensated Employees as determined by
the Plan Administrator in accordance with the Code and applicable
Treasury Regulations For each Highly Compensated Employee, the amount
of Excess Contributions is equal to the Section 401(k) Contributions
on behalf of such Highly Compensated Employee (determined prior to the
application of this Section 4.4(a)) minus the amount determined by
multiplying the Highly Compensated Employee's actual deferral ratio
(determined after application of this Section 4.4(a)) by his Covered
Compensation or Adjusted Compensation. However, in determining the
amount of Excess Contributions to be distributed with respect to an
affected Highly Compensated Employee as determined herein, such amount
shall be reduced by any Section 401(k) Contributions in excess of the
Maximum Deferral Amount previously distributed to such affected Highly
Compensated Employee for his taxable year ending with or within such
Plan Year.
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distributions:
(A) Shall be made first from unmatched Section 401(k)
Contributions and, thereafter, simultaneously from Section
401(k) Contributions which are matched and Matching
Contributions which relate to such Section 401(k)
Contributions;
(B) Shall be made from Qualified Nonelective Contributions only
to the extent that Excess Contributions exceed the balance
in the Participant's Section 401(k) Contributions Account
attributable to Section 401(k) Contributions and Matching
Contributions made pursuant to Section 4.2;
(C) Shall be increased by income allocable to the Excess
Contributions up to the date of distribution; and
(D) Shall be designated by an Employer as a distribution of
Excess Contributions and related income.
(2) Any distribution of less than the entire amount of Excess
Contributions (and income) shall be treated as a pro rata
distribution of Excess Contributions and related income.
(b) Qualified Nonelective Contribution. Notwithstanding the above, within
12 months after the end of the Plan Year, an Employer may make a
special Qualified Nonelective Contribution on behalf of Non-Highly
Compensated Employees in an amount sufficient to satisfy one of the
tests set forth in Section 4.3. Such contribution shall be allocated
to the Section 401(k) Contributions Account of each Non-Highly
Compensated Employee in the same proportion that each Non-Highly
Compensated Employee's Covered Compensation or Adjusted Compensation
for the year bears to the total Covered Compensation or Adjusted
Compensation of all Non-Highly Compensated Employees.
(c) Alternative Limitation. If the alternative limitation referred to in
subsection 4.3(a)(2)(B) is exceeded, then the Plan Administrator shall
take corrective action under either this Section, Section 4.5 or a
combination of both, as determined by the Plan Administrator to
prevent multiple use of this alternative limitation with respect to
any Highly Compensated Employee.
4.5 Adjustment to Actual Contribution Percentage Test.
In the event that the initial allocations of the Matching Contributions
made pursuant to Section 4.2 do not satisfy one of the tests set forth in
Section 4.3, the Plan Administrator shall adjust the Matching Contributions in
excess of the limits described in Section 4.3 ("Excess Aggregate Contributions")
pursuant to this Section.
(a) Distribution of Excess Aggregate Contributions. On or before the 15th
day of the 3rd month following the end of each Plan Year, but in no
event later than the close of the following Plan Year, the Plan
Administrator shall determine the amount to be distributed, or if
forfeitable, forfeited, and the Highly Compensated Employees subject
to receiving a distribution or incurring a forfeiture in accordance
with the Code and applicable Treasury Regulations.
(1) With respect to the distribution of Excess Aggregate
Contributions pursuant to (a) above, such distributions:
(A) Shall be made first from Matching Contributions distributed
or forfeited pursuant to Section 4.4(a)(1) and, thereafter,
from remaining Matching Contributions;
(B) Shall be increased by income allocable to the Excess
Aggregate Contributions being distributed or forfeited up to
the date of distribution.
(C) Forfeitures of Excess Aggregate Contributions shall be
treated in the same manner as other Forfeitures under
Section 6.3 of the Plan; provided, however, no such
forfeiture may be allocated to a Highly Compensated Employee
whose contributions are reduced pursuant to this Section.
(2) Any distribution or forfeiture of less than the entire amount of
Excess Aggregate Contributions (and income) shall be treated as a
pro rata distribution or forfeiture of Excess Aggregate
Contributions (and income).
(b) Qualified Nonelective Contributions. Notwithstanding the above, within
12 months after the end of the Plan Year, an Employer may make a
special Qualified Nonelective Contribution on behalf of Non-Highly
Compensated Employees in an amount sufficient to satisfy one of the
tests set forth in Section 4.3. Such contribution shall be allocated
to the Section 401(k) Contributions of each Non-Highly Compensated
Employee in the same proportion that each Non-Highly Compensated
Employee's Covered Compensation or Adjusted Compensation for the year
bears to the total Covered Compensation or Adjusted Compensation of
all Non-Highly Compensated Employees. A separate accounting shall be
maintained for the purpose of excluding such contributions from the
Actual Deferral Percentage test pursuant to Section 4.3.
(c) Alternative Limitation. If the alternative limitation referred to in
subsection 4.3(a)(2)(B) is exceeded, then the Plan Administrator shall
take corrective action under either this Section, Section 4.4 or a
combination of both, as determined by the Plan Administrator to
prevent the multiple use of this alternative limitation with respect
to any Highly Compensated Employee.
4.6 Employer Retirement Contributions.
(a) Amount of Contribution. For each Plan Year, an Employer may make
contributions to this Plan and allocate such contributions to the
Employer Retirement Contributions Account of each Participant eligible
for an Employer Retirement Contribution. An Employer may contribute to
the Plan such amounts as the Board, in its sole discretion, may
determine to be allocated to the Employer Retirement Contributions
Account in accordance with this Section 4.6. The aggregate
discretionary Employer Retirement Contributions when added to the
amount of the Matching Contributions and Section 401(k) Contributions,
if any, for each Plan Year, shall not exceed the maximum deductible
contribution for such Plan Year under Section 404(a) of the Code. Each
Employer may make its contributions under the Plan for any Plan Year
at such time or times as it shall in such Employer's discretion
determine; provided, however, that the total amount of the Employer's
contributions for any Plan Year shall be made not later than the time
prescribed by law for filing such Employer's Federal Income Tax Return
for such Employer's taxable year ending with or within such Plan Year,
including any extensions thereof. Contributions made by an Employer
for any Plan Year shall be made in cash or in GAFRI Securities,
including GAFRI Common Stock and AFG Common Stock. Contributions made
by an Employer to the Plan shall be irrevocable except as provided in
Section 9.3.
(b) Participants Entitled to Employer Retirement Contributions. The
Employer Retirement Contributions, if any, in respect of the Plan Year
to which said Employer Retirement Contributions relate shall be
allocated among the Participants who were eligible for Employer
Retirement Contributions in accordance with Section 3.1 and who were
Employees of an Employer on the last day of such Plan Year.
Participants who died, retired or became Disabled during the Plan Year
shall be deemed to have been employed on the last day of the Plan
Year.
(c) Allocation of Contributions. In any Plan Year in which the Plan is not
a top-heavy plan, the Employer Retirement Contributions Account of
each Participant who is eligible to receive an allocation shall be
credited with that proportion of Employer Retirement Contributions, if
any, as the Participant's Covered Compensation for the Plan Year bears
to the total Covered Compensation of all eligible Participants for the
Plan Year. If the contribution is made prior to the last day of the
Plan Year, any earnings or interest on such contribution shall be
allocated to the Participant's Employer Retirement Contribution
Account in the same way as other interest and earnings when the
Employer Retirement Contribution Account is credited.
4.7 Forfeitures.
(a) Forfeiture of Employer Retirement Contributions prior to January 1,
2002 shall occur on the last day of the Plan Year in which a
Participant incurs five consecutive One Year Breaks in Service. All
Forfeitures of Employer Retirement Contributions shall be allocated in
accordance with Section 4.6.
(b) Forfeiture of Matching Contributions prior to January 1, 2002 shall be
allocated in accordance with Section 4.2.
(c) Effective for Forfeitures occurring after January 1, 2002, Forfeitures
occurring during any Plan Year shall be used to restore Forfeitures of
Members who are reemployed as provided in Section 6.3. Forfeitures
occurring during any Plan Year in the Employer Retirement
Contributions of a Member may be used to reduce future Employer
Retirement Contributions due under Section 4.6 or to offset
administrative costs of the Plan as provided in Section 8.3.
Forfeitures occurring during any Plan Year in the Matching
Contributions Account of a Member shall be used to reduce future
Matching Contributions due under Section 4.2.
4.8 Limitations on Annual Additions.
(a) Annual Addition. "Annual Addition" means for any Participant for any
Plan Year, which shall also be the Limitation Year, the sum of the
following:
(1) Employer Retirement Contributions, Matching Contributions and
Forfeitures allocated to a Participant under this Plan or any
other defined contribution plan of the Company or an Affiliate
for such Plan Year;
(2) Section 401(k) Contributions made to this Plan or Employee
contributions to any other defined contribution plan of the
Company or an Affiliate;
(3) Amounts allocated after March 31, 1984 to an individual medical
benefit account (as defined in Section 415(l)(2) of the Code)
included as part of the pension or annuity plan maintained by the
Company or an Affiliate; and
(4) Contributions paid or accrued after December 31, 1985 for taxable
years ending December 31, 1985 attributable to post-retirement
medical benefits allocated to the separate account of a Key
Employee that has been established under Section 419A(d)(3) of
the Code for a welfare benefit fund as defined in Section 419(e)
of the Code maintained by the Company or an Affiliate.
"Any defined contribution plan" means all defined
contribution plans of an Employer and Affiliates
considered as one plan. For purposes of this Section,
"Affiliate" shall have the meaning prescribed in
Section 2.1, except that the phrase "more than 50%"
shall be substituted for the phrase "at least 80%"
each place it appears in Section 1563(a)(1) of the
Code.
A restored Forfeiture pursuant to Section 6.3 shall
not be included as part of any Participant's Annual
Addition.
(b) Limitation. A Participant's Annual Addition for any Plan Year shall
not exceed the lesser of the following:
(1) $30,000; or
(2) 25% of such Participant's Adjusted Compensation for such Plan
Year.
Notwithstanding the foregoing, any contribution made after a
Participant's Severance from Service with an Employer and its
Affiliates for the purpose of providing medical care (within the
meaning of Section 419A(f)(2) of the Code) and any amount otherwise
treated as an Annual Addition under Section 415(l)(1) of the Code,
shall not be treated as an Annual Addition for purposes of this
Section. The dollar limitation contained above shall be adjusted for
cost of living increases to the extent authorized by the Secretary of
Treasury pursuant to Section 415(d) of the Code.
(c) Additional Limitation. If in any Plan Year beginning before January 1,
2000, a Participant is covered both under any defined contribution
plan and under any defined benefit plan, the sum of the Defined
Benefit Fraction (as defined in Section 2.1) and the Defined
Contribution Fraction (as defined in Section 2.1) for such Plan Year
shall not exceed one. It is intended to reduce Employer contributions
to any defined benefit plan and the benefits payable thereunder to the
extent necessary to prevent the sum of such fractions for any Plan
Year from exceeding one before reducing contributions to any defined
contribution plan. "Any defined benefit plan" means all defined
benefit plans of an Employer and Affiliates considered as one plan.
(d) Reduction in Annual Additions. If (i) as a result of the allocation of
Forfeitures, (ii) a reasonable error in estimating a Participant's
Adjusted Compensation, or (iii) a reasonable error in determining the
amount of elective deferrals (within the meaning of Section 402(g)(3)
of the Code) that may be made with respect to any individual under the
limits of Section 415 of the Code, or under other facts and
circumstances to which Section 1.415-6(b)(6) of the Treasury
Regulations shall be applicable, the Annual Additions under this Plan
would cause the maximum Annual Additions to be exceeded for any
Participant (such excess being hereinafter referred to as an "Excess
Annual Addition"), the Excess Annual Addition, shall be reduced as
follows:
(1) Return of Employee Contributions. To the extent needed to
eliminate the Excess Annual Addition, Section 401(k)
Contributions to the Plan shall be returned to the Participant.
(2) Suspense Account. If after returning Section 401(k)
Contributions, there is still an Excess Annual Addition that
cannot be allocated to any Participant as a result of the
limitations imposed by this Section, then the remaining Excess
Annual Addition shall be maintained in a Suspense Account under
the Trust Fund to be allocated among Employer Retirement
Contributions Accounts in the next succeeding Limitation Year.
The Suspense Account shall not share in the gains and losses or
other income of the Trust Fund. In the event the Plan is
terminated, the Suspense Account shall revert to the Employer to
the extent it cannot be allocated to the Participants' Employer
Retirement Contributions Accounts.
4.9 Rollover Contributions.
(a) Consent Required. A Participant may, with the consent of the Plan
Administrator and the Trustee, make a Rollover Contribution to the
Plan in cash, AFG Common Stock or GAFRI Common Stock; provided that
the consent of the Plan Administrator and the Trustee will be granted
in a nondiscriminatory manner.
(b) Crediting Rollover Contributions. A Rollover Contribution shall be
credited to the contributing Participant's Rollover Contribution
Account as soon as administratively feasible for the Plan Year in
which the Rollover Contribution is made.
(c) Rollover Contribution by Employee. An Employee who has not yet
satisfied the Plan's eligibility requirements, but who is otherwise
covered by the Plan, may make a Rollover Contribution to the Plan to
the same extent and in the same manner as a Participant. If an
Employee makes such a Rollover Contribution, the Plan Administrator
and Trustee shall treat the Employee as a Participant for all purposes
of the Plan except that the Employee shall not be eligible for
Employer Retirement Contributions under the Plan until he becomes a
Participant in the Plan pursuant to Section 3.1. If the Plan
Administrator later determines that a Rollover Contribution was
invalid, such Rollover Contribution, plus any earnings attributable
thereto shall be distributed to the Employee within a reasonable time
after such determination.
4.10 Special Rules for Early Participation.
If the Employer elects to apply the special rule of Section 410(b)(4) (B)
of the Code in determining that the service criteria which is lower than the
minimum service conditions permissible under Section 401(a) of the Code
satisfies the coverage rules of Section 410(b)(1) of the Code, then the
following special rules apply. In such a case, for testing purposes, the Plan
shall be treated as two separate plans: one benefiting the Employees who have
satisfied the lower minimum service conditions of the Plan but not the greatest
such conditions permitted under Section 410(a) of the Code (hereinafter
"Component Plan A"); and one benefiting Employees who have satisfied the
greatest such conditions permitted under Section 410(a) of the Code (hereinafter
"Component Plan B"). The testing in Section 4.3 shall be applied as follows:
(a) Plan Year Before January 1, 1999. For Plan Years beginning before
January 1, 1999, and at the election of the Employer, for Plan Years
beginning after December 31, 1998, the testing shall be applied
separately to Component Plan A and Component Plan B. In this regard,
the Actual Deferral Percentages and Actual Contribution Percentages
shall be determined separately for each such Component Plan.
(b) Plan Year After January 1, 1998. For Plan Years beginning after
December 31, 1998, at the election of the Employer, in lieu of the
testing as provided in (a) above, the testing shall be applied solely
to Component Plan B (and not Component Plan A); provided however any
Highly Compensated Employees in Component Plan A must be included in
the Actual Deferral Percentage, Actual Contribution Percentage and
testing of Component Plan B.
This provision shall be administered in accordance with rules and regulations
promulgated by the Secretary of Treasury or its delegate.
- -------------------------
End of Article 4
Article 5. Vesting in Accounts
5.1 Fully Vested Accounts.
A Member shall at all times be fully vested and have a nonforfeitable
interest in his Section 401(k) Contributions Account and his Rollover
Contributions Account. In addition, any amounts transferred from the Merged Plan
that was fully vested before the merger shall continue to be fully vested and
nonforfeitable.
5.2 Vesting in Employer Contributions.
(a) Employer Retirement Contributions Accounts. Subject to the provisions
below, a Member shall have a vested and nonforfeitable interest in his
Employer Retirement Contributions Account determined in accordance
with the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 5 years 0%
5 years or more 100%
(b) Matching Contributions Account. Subject to the provisions below, a
Member shall have a vested and nonforfeitable interest in his Matching
Contributions Account determined in accordance with the following
schedule:
Years of Service Vested Percentage
---------------- -----------------
1 year but less than 2 years 25%
2 years but less than 3 years 50%
3 years but less than 4 years 75%
4 years or more 100%
5.3 Accelerated Vesting.
Notwithstanding Section 5.2 above, a Member shall be fully vested and have
a nonforfeitable interest in his entire Matching Contributions Account and
Employer Retirement Contributions Account if:
(a) the Member's Severance from Service as an Employee is due to
Retirement or he attains the age specified for Retirement under
Section 2.1(dd) but has not as of such date had a Severance from
Service with an Employer;
(b) the Member dies or becomes Disabled while an Employee; or
(c) while the Member is an Employee, contributions to the Plan are
completely discontinued, the Plan is terminated, or the Plan is
partially terminated and such Member is affected by such partial
termination.
- -------------------------
End of Article 5
Article 6. Distributions, Withdrawals, and Loans
6.1 Distribution Upon Retirement, Death, or Disability.
Upon a Member's Retirement, or Severance from Service because of Disability
or death, there shall be distributed to the Member, or to the Member's
beneficiary in case of his death, the Member's Account at the time specified in
Section 6.4 as of the most recent Valuation Date coinciding with or preceding
the payment, increased by any nonforfeitable contributions made by or on behalf
of such Member for that Plan Year after such Valuation Date, but not yet
credited to his Account, and reduced by any payments and/or withdrawals after
such Valuation Date.
6.2 Distribution Upon Severance from Service for Reasons Other Than
Retirement, Disability or Death.
Upon the Severance from Service of a Member for any reason other than
Retirement, Disability or death, there shall be distributed to the Member the
full amount of the Member's Section 401(k) Contributions Account and Rollover
Contributions Account and the vested portion of his Matching Contributions
Account and Employer Retirement Contributions Account, at the time specified in
Section 6.4 as of the most recent Valuation Date coinciding with or preceding
the payment, increased by any nonforfeitable contributions made by or on behalf
of such Member for that Plan Year after such Valuation Date, but not yet
credited to his Account, and reduced by any payments and/or withdrawals after
such Valuation Date.
6.3 Forfeitures.
(a) If a Member has a Severance from Service and the nonforfeitable
portion of his Matching Contributions Account is less than the full
value of the Account, the Member will receive a distribution of the
value of the nonforfeitable portion of such Account, subject to the
provisions of Section 6.4. If the value of such Account is zero
dollars, the distribution shall be treated as a distribution of zero
dollars ("Deemed Distribution").
(b) If a Member receives an actual distribution of his Matching
Contributions Account pursuant to Section 6.3(a) and is reemployed by
any Employer or nonparticipating Affiliate prior to incurring five
consecutive One Year Periods of Severance, the portion of such Account
forfeited pursuant to Section 6.3(a) will be restored as soon as
administratively practicable if the Member repays to the Plan the full
amount of the distribution. If a Member receives a Deemed Distribution
of his Matching Contributions Account pursuant to Section 6.3(a) and
is reemployed by an Employer or nonparticipating Affiliate prior to
incurring five consecutive One-Year Periods of Severance, the portion
of such Account forfeited pursuant to Section 6.3(a) will be restored
upon reemployment as soon as administratively practicable. The source
for restoring Forfeitures shall be first, current Forfeitures, and if
insufficient, an additional contribution by the Member's Employer.
(c) If a Member incurs five consecutive One-Year Periods of Severance, he
shall permanently forfeit the portion of his Matching Contributions
Account and Employer Retirement Contributions Account that was not
vested pursuant to Article 5 at the time of his initial Severance from
Service.
(d) Forfeitures pursuant to Section 6.3(a) shall be treated in accordance
with Section 4.7.
6.4 Commencement of Distributions.
(a) How Long Distributions May Be Delayed. Effective as of January 1,
1998, subject to the provisions of this Section 6.4, if the
nonforfeitable portion of a Member's Account exceeds $5,000, as
determined at the time of the distribution regardless of the amount of
the Member's at any prior distribution, distributions pursuant to
Sections 6.1 and 6.2 may be deferred until the Member's 65th birthday;
provided, however, at the Member's election, such distribution may be
made or commence to the Member as follows:
(1) Distributions from all Accounts of the Member except the Employer
Retirement Contributions Account may be made, at the Member's
election, as soon as practicable following his Severance from
Service.
(2) Distributions from the Member's Employer Retirement Contributions
Account may be made at the Member's election after such Member
has incurred five consecutive One Year Periods of Severance.
(3) The Plan Administrator shall provide to each Member whose consent
is required under (a) above, no less than 30 days and no more
than 90 days prior to the commencement of benefit payments, a
written explanation of the material features and relative values
of the optional forms of benefit under the Plan, and his right
(if any) to defer receipt of the distribution. A Member may elect
to commence his distribution in less than thirty days from the
date he is provided with the explanation provided he is informed
of his right to the 30-day period. A Member's consent to a
distribution must not be made before he receives such written
explanation and must not be made more than 90 days before benefit
payments commence.
(b) Distributions Upon Death, Disability or Retirement. In the event of
death, Disability or Retirement, distribution of a Member's Account
will begin not later than the 60th day after the end of the Plan Year
in which the later occurs--
(1) he attains his 65th birthday; or
(2) such death, Disability or Retirement occurs.
(c) Distributions Upon Other Termination of Service. In the event of any
other termination of employment than those listed above, distribution
of a Member's Account will begin as specified above, but not later
than the 60th day after the later of the end of the Plan Year in which
the Participant incurred five consecutive One Year Periods of
Severance or he attains his 65th birthday. Notwithstanding anything
contained herein to the contrary, a distribution of the Section 401(k)
Contributions and Matching Contributions shall not occur earlier than
the time the Participant or Member incurred a separation from Service,
death, or disability, or another event described in Section 401(k)(10)
of the Code.
(d) Distributions After Severance from Service Upon Death. If a Member
dies after his Severance from Service but prior to receiving the full
distribution of his to which he is entitled under this Article 6, any
unpaid balance thereof at the time of his death shall be distributed
to the Member's beneficiary in a lump sum, to be distributed as soon
as practicable after his death.
(e) Cash-Out Distributions. Any other provisions of the Plan to the
contrary notwithstanding, any amount payable to a Participant under
the Plan may be paid in a lump sum, provided that the value of the
Participant's nonforfeitable benefit under the Plan, determined at the
time of distribution regardless of the amount of the Member's at any
prior distributions, does not exceed $3,500. Such lump sum may be paid
as soon as administratively feasible. Notwithstanding the foregoing, a
Participant's Employer Retirement Contributions Account shall not be
paid in this manner. Provided, however, effective January 1, 1998, any
amount payable to a Participant under the Plan may be paid in a lump
sum, provided that the value of the Participant's nonforfeitable
benefit under the Plan, determined at the time of distribution
regardless of the amount of Member's Account at any prior
distribution, does not exceed $5,000. Such lump sum shall be paid as
soon as administratively feasible without requiring the written
consent described in Section 6.4(a)(3) above. The payment of the
portion of the Account attributed to the Participant's Employer
Retirement Contributions Account shall be paid as soon as
administratively feasible without requiring the written consent
described in Section 6.4(a)(3) above after the Participant has
incurred five consecutive One Year Periods of Severance. Amounts
payable hereunder shall continue to accrue interest and losses pending
such payment.
6.5 Method of Distribution.
(a) Generally. Subject to the limitations described below, all
distributions may be paid in one of the following ways:
(1) The Section 401(k) Contributions Accounts may be paid in a single
lump sum in cash, in AFG Common Stock to the extent invested in
AFG Common Stock, or in GAFRI Common Stock to the extent invested
in GAFRI Common Stock.
(2) Assets from the Matching Contributions Accounts derived from
Matching Contributions shall be paid entirely in AFG Common Stock
to the extent invested in AFG Common Stock or in GAFRI Common
Stock to the extent invested in GAFRI Common Stock.
(3) The Employer Retirement Contribution Accounts will be paid
entirely in GAFRI Common Stock to the extent invested in GAFRI
Securities; provided, however, to the extent it is invested in
AFG Common Stock, it will be paid in AFG Common Stock.
(4) The Rollover Contributions Account may be paid in a single lump
sum in cash.
(b) Eligible Rollover Distribution. All distributions may be paid by an
Eligible Rollover Distribution paid directly to an Eligible Retirement
Plan specified by the Distributee in a Direct Rollover.
(c) Fractional Shares. Any distribution of GAFRI Common Stock or AFG
Common Stock will only be paid in whole shares and the value of any
fractional share will be paid in cash.
6.6 Withdrawals During Employment.
(a) General. Each Participant may only request one in-service withdrawal
every 6 months during any calendar year. Such withdrawals must come
from the Accounts in the order set out below.
(b) Regular Withdrawal. A Participant may request, for any reason, an
in-service withdrawal in cash from his Rollover Contributions Account.
(c) Age 59 1/2 Withdrawal. A Participant who is age 59 1/2 may request an
in-service withdrawal of the amount available under a regular
withdrawal described above plus the value in his Section 401(k)
Contributions Account. An age 59 1/2 withdrawal may be paid in cash,
in GAFRI Common Stock (to the extent invested in GAFRI Common Stock)
or AFG Common Stock (to the extent invested in AFG Common Stock), as
elected by the Participant.
(d) Secured Accounts. Notwithstanding the foregoing, no distributions to a
Participant shall be made under Section 6.6 from an Account to the
extent that the Account serves as collateral for a loan to the
Participant under Section 6.7.
6.7 Participant Loans.
(a) Eligibility. (1) A Participant or (2) an Employee who has made a
Rollover Contribution pursuant to Section 4.9, may, with the approval
of the Plan Administrator and subject to the provisions of this
Section 6.7, borrow amounts from any Account except his Employer
Retirement Contributions Account subject to the conditions set forth
below.
(b) Conditions. All loans shall meet the following conditions:
(1) Loans shall be made available to all Participants on a reasonably
equivalent basis; provided that loans shall not be available to
Participants who are not Employees (unless such a Participant is
a party in interest within the meaning of Section 3(14) of the
Act).
(2) Loans shall not be available to Highly Compensated Employees in
an amount greater than the amount made available to other
Participants.
(3) Loans shall bear a reasonable rate of interest. In determining
such interest rate, the interest rates being charged at the time
a loan is made shall be considered.
(4) Loans shall be adequately secured, which security shall consist
of an assignment of up to 50% of a borrowing Participant's
accrued nonforfeitable benefit under the Plan not including the
Participant's Employer Retirement Contributions .
(5) Loans shall be repaid only by payroll withholding properly
authorized by the Participant, provided that the Plan
Administrator may allow prepayment of the entire balance of the
loan through other means.
(6) No loan shall exceed the limitations under Section 6.7(c) below.
(7) In the event of default, foreclosure on the Participant's vested
Account, to the extent used as security for the loan, will occur
after a distributable event occurs under the Plan. Events
constituting default shall be specified in the promissory note or
security agreement to be executed by the Participant.
(8) Any expenses or fees attributable to obtaining a loan will be
paid by the Participant to the Plan Administrator in a timely
manner.
(9) No loans will be made in an amount less than $1,000.
(10) A Participant may have no more than two outstanding loans at any
time; provided; however, the unpaid loans of a Participant
transferred from the Merged Plan shall be carried over even if
there are more than two such loans.
The Plan Administrator may establish other rules relating to loans
made under this Section.
(c) Limitation on Amount. Loans made pursuant to this Section (when added
to the outstanding balance of all other loans under any other plans
taken into under Section 72(p)(2)(D) of the Code) shall be limited to
the lesser of the following:
(1) $50,000, reduced by the highest outstanding aggregate loan
balance during the preceding 12-month period ending on the day
before the date on which such loan is made;
(2) 50% of the total value of the Participant's Section 401(k)
Contributions, Matching Contributions and Rollover Contributions
Accounts; or
(3) the value of the Rollover Contributions, Section 401(k)
Contributions and vested Matching Contributions s.
(d) Repayment Period. Each loan, by its terms, shall be required to be
repaid within 60 months provided, however, loans used to acquire any
dwelling unit which within a reasonable time is to be used (determined
at the time the loan is made) as a principal residence of the
Participant, may provide for periodic repayment over a reasonable
period of time that may exceed 60 months but shall not be greater than
120 months. In addition, loans shall be due and payable upon a
Participant's termination of employment. To the extent that a loan is
unpaid at the time a distribution of such Participant's Account
becomes payable in accordance with the terms of the Plan, such unpaid
amount shall be deducted from the amount otherwise payable from his
Account.
(e) Level Amortization. Loans shall provide for substantially level
amortization with payments to be made not less frequently than
quarterly over the term of the loan.
(f) Accounting for Loans. Notwithstanding anything in the Plan to the
contrary, if a loan is made to a Participant, the loan shall be deemed
an earmarked investment for the borrower's benefit and shall be
evidenced by a separate loan account of the borrower. A borrower's
separate loan account shall be established as of the date on which the
loan is made and shall be funded with an amount equal to the principal
amount of the loan. All principal and interest payments made on a loan
granted hereunder shall be allocated upon receipt to the borrower's
other Plan Accounts in the proportion that such Accounts were debited
to fund the borrower's separate loan Account, but based upon his
investment election then in effect. The balance of the borrower's
separate loan Account shall be decreased by the amount of principal
payments and the loan shall be closed when the loan has been repaid in
full. Any expenses of the Trustee which are directly attributable to
its administration of a borrower's separate loan , as determined by
the Trustee, shall be charged to and paid from the borrower's Plan
Accounts in the proportion that such Accounts were debited to fund the
borrower's separate loan Account.
(g) Notice of Loan. The Plan Administrator may require that a request for
a loan be submitted within a certain period of time prior to such
date; and each loan shall be made as soon as administratively possible
after such date.
(h) Administration. Loans shall be made pursuant to a Participant loan
program. Such loan program shall be established in writing and must
include, but need not be limited to, the following:
(1) the identity of the person or persons authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered;
(5) the procedure under the loan for determining a reasonable rate of
interest;
(6) the types of collateral which may secure a plan loan; and
(7) the events constituting default and steps that will be taken to
preserve Plan assets.
Such Participant loan program may be contained in a separate written
document which, when properly executed by the Plan Administrator is
hereby incorporated by reference and made a part of the Plan.
Furthermore, such Participant loan program may be modified or amended
in writing by the Plan Administrator from time to time without the
necessity of amending this Section.
(i) Promissory Note. All loans shall be evidenced by a promissory note, in
such form and containing such terms and conditions as the Plan
Administrator from time to time directs.
(j) Truth in Lending. Appropriate disclosure shall be made pursuant to the
Truth in Lending Act to the extent possible.
6.8 Hardship Withdrawals. Hardship withdrawals will not be permitted.
6.9 Required Distributions.
Effective January 1, 1997, notwithstanding any of the preceding provisions
of this Article, the distribution of a Member's benefits shall be made in
accordance with the following requirements and shall otherwise comply with
Section 401(a)(9) of the Code and the Regulations thereunder (including Section
1.401(a)(9)-2 of the Treasury Regulations), the provisions of which are
incorporated herein by reference.
(a) Latest Date of Payment. Effective January 1, 1997, a Participant's
benefits shall be distributed to such Participant not later than April
1st of the calendar year following the later of (1) the calendar year
in which the Participant attains age 70 1/2 or (2) the calendar year
in which the Participant retires; provided, however, that this clause
(2) not apply in the case of a Participant who is a "5% owner" at any
time during the Plan Year ending with or within the calendar year in
which the Participant attained age 70 1/2.
(b) Additional Limitations After Death of Participant. If the Participant
dies before distribution of any of the Participant's benefits has
begun, then the entire interest of the Participant will be distributed
within five years after the Participant's death. If the designated
beneficiary is the surviving spouse of the Participant, then the
distributions under this Section 6.9(b) will not be required earlier
than the date on which the Participant would have attained age 70 1/2.
(c) Death Distribution Provisions. Upon the death of the Participant, the
following distribution provisions shall take effect:
(1) If the Participant dies after distribution of the Participant's
interest has commenced, the remaining portion of such interest
will continue to be distributed at least as rapidly as under the
method of distribution being used prior to the Participant's
death.
(2) If the Participant dies before distribution of the Participant's
interest commences, the Participant's entire interest will be
distributed no later than five years after the Participant's
death.
6.10 Withholding Taxes.
An Employer may withhold from a Member's Covered Compensation and the
Trustee may withhold from any payment under this Plan any taxes required to be
withheld with respect to contributions or benefits under this Plan and such sum
as such Employer or Trustee may reasonably estimate as necessary to cover any
taxes for which they may be liable and which may be assessed with respect to
contributions or benefits under this Plan.
6.11 Distributions Under Qualified Domestic Relations Orders.
Upon receipt by the Plan of a domestic relations order and a subsequent
determination by the Plan Administrator that the order is a Qualified Domestic
Relations Order, as defined in Section 2.1(ccc) of the Plan, the Plan
Administrator may in its sole discretion, allow for the payment of benefits
(except from the Employer Retirement Contributions Account) to each alternate
payee under the order to be made as soon as practicable after the date the order
becomes effective. Notwithstanding the foregoing, payment of benefits from the
Employer Retirement Contributions Account to the alternate payee may be made in
accordance with the terms of the order at the same time the Participant is
entitled to receive a distribution, but if the Participant is not entitled to a
distribution due to the 5-year period provided in Section 6.4(a)(2) above, then
not earlier than 5 years after the order is determined to be qualified and is
certified. Provided, however, that if the distribution to the alternate payee is
being made before the Participant in the order attains the earliest retirement
age as defined in the Plan, and the present value is greater than $5,000, the
alternate payee must consent in writing to such earlier distribution. For
purposes hereof, the term "alternate payee" shall mean the spouse, former
spouse, child or other dependent of a Participant who is recognized by a
domestic relations order as having a right to receive all, or a portion of, the
benefits payable under the Plan with respect to such Participant.
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End of Article 6
Article 7. Investment Elections
7.1 Investment of Specified Contributions.
Each Member shall elect the manner in which his Section 401(k)
Contributions and Rollover Contributions Accounts and any future contributions
thereto, shall be invested, in any one or more of the Investment Funds. At the
time the Merged Plans are combined, the Trustee shall transfer the Accounts from
the Merged Plans to similar types of investments.
7.2 Investment Elections.
Each Member may make the election described in Section 7.1 in the manner
determined by the Plan Administrator upon becoming a Member. The elections made
under Section 7.1 may be changed as of any day upon prior notice for future
contributions to the Plan.
7.3 Investment Transfers.
Each Member may elect with prior notice to have the assets allocated to his
Section 401(k) Contributions and Rollover Contributions Account, in any
Investment Fund transferred to any one or more other Investment Funds. Such
transfer shall be effective as soon as practicable after notice of the transfer
is given. Notwithstanding the foregoing, the Plan Administrator may impose
restrictions on transfers to and from an Employer securities fund and any fund
consisting of a guaranteed interest contract.
7.4 Transfer of Assets.
The Plan Administrator shall direct the Trustee to transfer moneys or other
property from the appropriate Investment Fund to the other Investment Fund as
may be necessary to carry out the aggregate transfer transactions after the Plan
Administrator has caused the necessary entries to be made in the Participants'
or Members' Accounts in the Investment Funds and has reconciled offsetting
transfer elections, in accordance with uniform rules therefor established by the
Plan Administrator.
7.5 Investment of Matching and Employer Retirement Contributions Account.
All Matching Contributions made on or after the Effective Date shall be
invested primarily in AFG Common Stock or GAFRI Common Stock unless otherwise
directed by the Administrative Plan Committee. All Employer Retirement
Contributions shall be invested primarily in GAFRI Securities unless otherwise
directed by the Administrative Plan Committee.
7.6 Diversification.
Any fully vested Member who has attained age 55 may elect within the period
as determined by the Plan Administrator after the close of the Plan Year after
which the Member attains age 55 and continuing for the five succeeding Plan
Years to direct the Plan as to the investment of at least 25% of the GAFRI
Securities, including AFG Common Stock, held in his Accounts (to the extent such
25% exceeds the amount to which a prior election under this Section applies). In
the case of the election year in which the Member can make his last election,
the preceding sentence shall be applied by substituting "50%" for "25%". The
Member's direction (a) shall be provided to the Plan Administrator in a manner
specified; and (b) shall be effective no later than 180 days after the close of
the Plan Year to which the direction applies. If the Member elects to diversify,
the Plan Administrator shall transfer such applicable percentage of GAFRI
Securities, including AFG Common Stock, from such Member's Accounts as directed
by such Member. The earnings on any amount diversified will automatically be
reinvested in the same manner.
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End of Article 7
Article 8. Accounts and Records of the Plan
8.1 Accounts and Records.
The Accounts and records of the Plan shall be maintained by the Plan
Administrator and shall accurately disclose the status of the Accounts of each
Member or his beneficiary in the Plan. Each Member shall be advised from time to
time, at least once during each Plan Year, as to the status of his Account.
8.2 Trust Fund.
Each Member shall have an undivided proportionate interest in the Trust
Fund which shall be measured by the proportion that the market value of his
Account bears to the total market value of all Accounts as of the date that such
interest is being determined.
8.3 Valuation and Allocation of Expenses.
As of each Valuation Date, the Trustee shall determine the fair market
value of the Trust Fund after first deducting any expenses which have not been
paid by an Employer. Unless paid by an Employer and subject to such limitations
as may be imposed by the Act or other applicable law, all costs and expenses
incurred in connection with the general administration of the Plan and the Trust
Fund shall be chargeable to the Trust Fund. The value of GAFRI Securities,
including AFG Common Stock and GAFRI Common Stock held by the Trust Fund, shall
be its Fair Market Value.
8.4 Allocation of Earnings and Losses.
As of each Valuation Date, the Plan Administrator, with the assistance of
the Trustee, shall allocate the net income and gains or losses of each
Investment Fund of the Trust Fund since the preceding Valuation Date to each
Member's Account in the same proportion that the market value of his Account in
such Investment Fund bears to the total market value of all Members' Accounts in
such Investment Fund; and, for this purpose, the Plan Administrator shall adopt
uniform rules which conform to applicable law and generally accepted accounting
practices.
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End of Article 8
Article 9. Financing
9.1 Financing.
GAFRI shall enter into a Trust Agreement in order to implement and carry
out the provisions of the Plan and to finance the benefits under the Plan. All
rights which may accrue to any person under the Plan shall be subject to all the
terms and provisions of such Trust Agreement. GAFRI may modify the Trust
Agreement in accordance with the terms of that Trust Agreement from time to time
to accomplish the purposes of the Plan.
9.2 Contributions.
The Employers shall make such contributions to the Trust Fund as are
required by the provisions of the Plan, subject to the right of GAFRI to amend,
modify, or terminate the Plan.
9.3 Nonreversion.
No Employer shall have any right, title, or interest in the contributions
made to the Trust Fund, and no part of the Trust Fund shall revert to any
Employer, except the following:
(a) If a contribution is made to the Trust Fund by an Employer by a
mistake of fact, then such contribution may be returned to such
Employer within one year after the payment of the contribution; and if
any part or all of a contribution is disallowed as a deduction under
Section 404 of the Code, then to the extent such contribution is
disallowed as a deduction it may be returned to such Employer within
one year after the disallowance.
(b) If the Internal Revenue Service initially determines that the Plan
does not meet the requirements of Section 401 of the Code, the Plan
shall be null and void from the Effective Date, and any contributions
shall be returned to all contributors within one year following the
determination that the Plan does not meet such requirements, but only
if the application for qualification is made by the time prescribed by
law for filing GAFRI's return for the taxable year in which the Plan
is adopted or such later date as the Secretary of Treasury may
prescribe, unless GAFRI elects to make the changes to the Plan
necessary to receive a determination from the Internal Revenue Service
that the requirements of Section 401 of the Code are met.
9.4 Rights in the Trust Fund.
Persons eligible for benefits under the Plan are entitled to look only to
the Trust Fund for the payment of such benefits and have no claim against any
Employer, the Plan Administrator, or any other person. No person has any right
or interest in the Trust Fund except as expressly provided in the Plan.
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End of Article 9
Article 10. Administration
10.1 Plan Administrator and Fiduciary.
The Plan shall be administered by GAFRI or by a committee appointed by the
Board for this purpose. The committee shall be composed of as many members but
no less than two as the Board may appoint from time to time and shall hold
office at the pleasure of the Board. Any member of the committee may resign by
delivering his written resignation to the Board. Vacancies in the committee
arising by resignation, death, removal, or otherwise shall be filled by the
Board. GAFRI or the committee appointed by the Board as Plan Administrator shall
be the administrator of the Plan within the meaning of Section 3(16)(A) of the
Act, a fiduciary with respect to the Plan within the meaning of Section
3(21)(A)(i) and (iii) of the Act, and the named fiduciary under Section 402 of
the Act. It shall also be the Plan Administrator for purposes of the Plan.
Further, such committee shall have such power and authority that the Board may
grant it from time to time.
10.2 Compensation and Expenses.
Any person acting on behalf of the Plan Administrator shall serve without
compensation for services as such if he is receiving full-time pay from an
Employer or nonparticipating Affiliate as an Employee. Any other person may
receive compensation for services to be paid from the Trust Fund to the extent
not paid by the Employers. Any person may receive reimbursement by the Trust
Fund to the extent not paid by the Employers of expenses properly and actually
incurred.
10.3 Manner of Action.
If a committee is appointed as Plan Administrator, a majority of the
members of the committee at the time in office shall constitute a quorum for the
transaction of business. All resolutions adopted and other actions taken by the
committee at any meeting shall be by a majority vote of those present at any
such meeting unless there are only two Members of the committee in which case
all resolutions and other actions shall be unanimous. Upon the unanimous
concurrence in writing of the members at the time in office, action of the
committee may be taken otherwise than at a meeting.
10.4 Chairman, Secretary, and Employment of Specialists.
The members of the committee may elect one of their members as chairman and
may elect a secretary who may, but need not, be a member of the committee. They
may authorize one or more of their members or any agent to execute or deliver
any instrument or instruments on their behalf, and may employ such counsel,
auditors, and other specialists, and such clerical, medical, actuarial, and
other services as they may require in carrying out the provisions of the Plan.
Such expenses shall be paid by the Trust Fund to the extent not paid by the
Employers.
10.5 Assistance.
The Plan Administrator may appoint one or more individuals and delegate
such of its power and duties as it deems desirable to any such individual, in
which case every reference herein made to the committee shall be deemed to mean
or include the individuals as to matters within their jurisdiction. Such
individuals shall be such officers or other employees of the Employers and such
other persons as the committee may appoint.
10.6 Records.
All resolutions, proceedings, acts, and determinations of the committee
shall be recorded by the secretary thereof or under his supervision, and all
such records, together with such documents and instruments as may be necessary
for the administration of the Plan, shall be preserved in the custody of GAFRI.
10.7 Rules.
Subject to the limitations contained in the Plan, the committee shall be
empowered from time to time in its discretion to adopt bylaws and establish
rules for the conduct of its affairs and the exercise of the duties imposed upon
it under the Plan.
10.8 Administration.
The Plan Administrator shall be responsible for the administration of the
Plan. The Plan Administrator shall have all such powers as may be necessary to
carry out the provisions hereof and may, from time to time, establish rules for
the administration of the Plan and the transaction of the Plan's business. In
making any such determination or rule, the Plan Administrator shall pursue
uniform policies as from time to time established by it and shall not
discriminate in favor of or against any Member. The Plan Administrator shall
have the exclusive right to make any finding of fact necessary or appropriate
for any purpose under the Plan including, but not limited to, the determination
of the eligibility for and the amount of any benefit payable under the Plan. The
Plan Administrator shall have the exclusive right to interpret the terms and
provisions of the Plan and to determine any and all questions arising under the
Plan or in connection with the administration thereof, including, without
limitation, the right to remedy or resolve possible ambiguities,
inconsistencies, or omissions, by general rule or particular decision. The Plan
Administrator shall make, or cause to be made, all reports or other filings
necessary to meet both the reporting and disclosure requirements and other
filing requirements of the Act which are the responsibility of "plan
administrators" under the Act. To the extent permitted by law, all findings of
fact, determinations, interpretations, and decisions of the committee shall be
conclusive and binding upon all persons having or claiming to have any interest
or right under the Plan. Benefits under this Plan will be paid only if the Plan
Administrator decides in its discretion that the applicant is entitled to them.
10.9 No Enlargement of Employee Rights.
Nothing contained in the Plan shall be deemed to give any Employee the
right to be retained in the service of an Employer or to interfere with the
right of an Employer to discipline, discharge, or retire any Employee at any
time.
10.10 Initial Claims Procedure.
(a) Claim.
(1) Filing. In order to present a complaint regarding the nonpayment
of a Plan benefit or a portion thereof (a "Claim"), a Participant
or beneficiary under the Plan (a "Claimant") or his duly
authorized representative must file such Claim by mailing or
delivering a writing stating such Claim to the department,
officer, or Employee responsible for employee benefit matters of
the Employer.
(2) Acknowledgment. Upon such receipt of a Claim, the Plan
Administrator shall furnish to the Claimant a written
acknowledgment which shall inform such Claimant of the time limit
set forth in (b)(1) below and of the effect, pursuant to (b)(3)
below, of failure to decide the Claim within such time limit.
(b) Initial Decision.
(1) Time Limit. The Plan Administrator shall decide upon a Claim
within a reasonable period of time after receipt of such Claim;
provided, however, that such period shall in no event exceed 90
days, unless special circumstances require an extension of time
for processing. If such an extension of time for processing is
required, then the Claimant shall, prior to the termination of
the initial 90-day period, be furnished a written notice
indicating such special circumstances and the date by which the
Plan Administrator expects to render a decision. In no event
shall an extension exceed a period of 90 days from the end of the
initial period.
(2) Notice of Denial. If the Claim is wholly or partially denied,
then the Plan Administrator shall furnish to the Claimant, within
the time limit applicable under (1) above, a written notice
setting forth in a manner calculated to be understood by the
Claimant:
(A) the specific reason or reasons for such denial;
(B) specific reference to the pertinent Plan provisions on which
such denial is based;
(C) a description of any additional material or information
necessary for such Claimant to perfect his Claim and an
explanation of why such material or information is
necessary; and
(D) appropriate information as to the steps to be taken if such
Claimant wishes to submit his Claim for review pursuant to
Section 10.11, including notice of the time limits set forth
in subsection 10.11(b)(2).
(3) Deemed Denial for Purposes of Review. If a Claim is not granted
and if, despite the provisions of (1) and (2) above, notice of
the denial of a Claim is not furnished within the time limit
applicable under (1) above, then the Claimant may deem such Claim
denied and may request a review of such deemed denial pursuant to
the provisions of Section 10.11.
10.11 Claim Review Procedure.
(a) Claimant's Rights. If a Claim is wholly or partially denied under
Section 10.10, then the Claimant or his duly authorized representative
shall have the following rights:
(1) to obtain, subject to (b) below, a full and fair review by the
Plan Administrator;
(2) to review pertinent documents; and
(3) to submit issues and comments in writing.
(b) Request for Review.
(1) Filing. To obtain a review pursuant to (a) above, a Claimant
entitled to such a review or his duly authorized representative
shall, subject to (2) below, mail or deliver a written request
for such a review (a "Request for Review") to the department,
officer, or Employee responsible for employee benefit matters of
the Employer.
(2) Time Limits for Requesting a Review. A Request for Review must be
mailed or delivered within 60 days after receipt by the Claimant
of written notice of the denial of the Claim or within such
longer period as is reasonable and related to the nature of the
benefit which is the subject of the Claim and to other attendant
circumstances.
(3) Acknowledgment. Upon such receipt of a Request for Review, the
Plan Administrator shall furnish to the Claimant a written
acknowledgment which shall inform such Claimant of the time limit
set forth in (c)(1) below and of the effect, pursuant to (c)(3)
below, of failure to furnish a decision on review within such
time limit.
(c) Decision on Review.
(1) Time Limit.
(A) General. If, pursuant to (b) above, a review is requested,
then, except as otherwise provided in (B) below, the Plan
Administrator or its delegate (but only if such delegate has
been given the authority to make a final decision on the
Claim) shall make a decision promptly and no later than 60
days after receipt of the Request for Review; except that,
if special circumstances require an extension of time for
processing, then the decision shall be made as soon as
possible but not later than 120 days after receipt of the
Request for Review. The Plan Administrator must furnish the
Claimant written notice of any extension prior to its
commencement.
(B) Regularly Scheduled Meetings. Anything to the contrary in
(A) above notwithstanding, if the decision on review is to
be made by a committee which holds regularly scheduled
meetings at least quarterly, then its decision on review
shall be made no later than the date of the meeting which
immediately follows the receipt of the Request for Review;
provided, however, if such Request for Review is received
within 30 days preceding the date of such meeting, then such
decision on review shall be made no later than the date of
the second meeting which follows such receipt; and provided
further that, if special circumstances require a further
extension of time for processing, and if the Claimant is
furnished written notice of such extension prior to its
commencement, then such decision on review shall be rendered
no later than the third meeting which follows such receipt.
(2) Notice of Decision. The Plan Administrator or its delegate shall
furnish to the Claimant, within the time limit applicable under
(1) above, a written notice setting forth in a manner calculated
to be understood by the Claimant:
(A) the specific reason or reasons for the decision on review;
and
(B) specific reference to the pertinent Plan provisions on which
the decision on review is based.
(3) Deemed Denial. If, despite the provisions of (1) and (2) above,
the decision on review is not furnished within the time limit
applicable under (1) above, then the Claimant shall be deemed to
have exhausted his remedies under the Plan and he may deem the
Claim to have been denied on review.
10.12 Notice of Address and Missing Persons.
Each person entitled to benefits under the Plan must file with the Plan
Administrator, his post office address and each change of post office address in
any manner prescribed by the Plan Administrator. Any communication, statement,
or notice addressed to such a person at his latest reported post office address
will be binding upon him for all purposes of the Plan and neither the Plan
Administrator nor the Employers or Trustee shall be obliged to search for or
ascertain his whereabouts. In the event that such person cannot be located, the
Plan Administrator may direct that such benefit and all further benefits with
respect to such person shall be discontinued, all liability for the payment
thereof shall terminate and the balance in such Member's Account, except for any
amounts representing the Member's interest in GAFRI Securities, including AFG
Common Stock, shall be deemed a Forfeiture allocated pursuant to Section 4.7;
provided, however, that in the event of the subsequent reappearance of the
Member or beneficiary prior to termination of the Plan, the benefits which were
due and payable and which such person missed shall be paid in a single sum and
the future benefits (not including any earnings or losses thereon) due such
person shall be reinstated in full. GAFRI Securities, including AFG Common
Stock, shall be transferred to the transfer agent responsible for such shares,
and such transfer agent shall follow its normal procedures for individuals with
shares who can not be located without any further obligation for payment by the
Plan Administrator.
10.13 Data and Information for Benefits.
All persons claiming benefits under the Plan must furnish to the Plan
Administrator or its designated agent such documents, evidence, or information
as the Plan Administrator or its designated agent consider necessary or
desirable for the purpose of administering the Plan; and such person must
furnish such information promptly and sign such documents as the Plan
Administrator or its designated agent may require before any benefits become
payable under the Plan.
10.14 Indemnity.
The Employer indemnifies and saves harmless individual Trustee(s),
individual Plan Administrators and the members of any committee including the
Administrative Plan Committee, from and against any and all loss resulting from
liability to which the individual Trustee(s), individual Plan Administrators and
the members of any committee, including the Administrative Plan Committee, may
be subjected by reason of any act or conduct (except willful or reckless
misconduct) in their official capacities in the administration of this Plan or
Trust Fund or both, including all expenses reasonably incurred in their defense,
in case the Employer fails to provide such defense. The indemnification
provisions of this Section shall not relieve individual Trustee(s), individual
Plan Administrator(s), or any members of any committee, including the
Administrative Plan Committee, from any liability he may have under the Act for
breach of fiduciary duty.
10.15 Effect of a Mistake.
In the event of a mistake or misstatement as to the eligibility,
participation, or service of any Member, or the amount of payments made or to be
made to a Member or beneficiary, the Plan Administrator shall, if possible,
cause to be withheld or accelerated or otherwise make adjustment of such amounts
of payments as will in its sole judgment result in the Member or beneficiary
receiving the proper amount of payments under this Plan.
10.16 Self-Interest.
A member of the committee who is also a Member shall not vote on any
question relating specifically to himself.
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End of Article 10
Article 11. Amendment and Termination
11.1 Amendment and Termination.
(a) Right to Amend. GAFRI does hereby expressly and specifically reserve
the sole and exclusive right at any time by action of the Board to
amend, modify, or terminate the Plan. Any such amendment, modification
or termination shall be in a writing authorized by the Board and
signed by an officer of GAFRI. GAFRI's right of amendment,
modification, or termination as aforesaid shall not require the
assent, concurrence, or any other action by any other Employer
notwithstanding that such action by GAFRI may relate in whole or in
part to persons in the employ of an Employer.
(b) Adopting Employers. While each Employer contemplates carrying out the
provisions of the Plan indefinitely with respect to its Employees, no
Employer shall be under any obligation or liability whatsoever to
maintain the Plan for any minimum or other period of time.
(c) Notification Upon Termination. Upon any termination of the Plan in its
entirety, or with respect to any Employer, GAFRI shall give written
notice thereof to the Plan Administrator, the Trustee, and any
Employer involved.
(d) Effect On Termination. Except as provided by law, upon any termination
of the Plan, no Employer with respect to whom the Plan is terminated
(including GAFRI) shall thereafter be under any obligation, liability,
or responsibility whatsoever to make any contribution or payment to
the Trust Fund, the Plan, any Member, any beneficiary, or any other
person, trust or fund whatsoever, for any purpose whatsoever under or
in connection with the Plan.
11.2 Limitations on Amendments.
The provisions of this Article are subject to and limited by the following
restrictions:
(a) No amendment shall operate either directly or indirectly to give any
Employer any interest whatsoever in any funds or property held by the
Trustee under the terms hereof, or to permit the corpus or income of
the Trust Fund to be used for or diverted to purposes other than the
exclusive benefit of Members or their beneficiaries.
(b) No amendment shall increase duties or responsibilities of the Trustee,
the Plan Administrator or any member of an Administrative Plan
Committee without the written consent of the affected Trustee, Plan
Administrator, or member of the Administrative Plan Committee.
(c) No such amendment shall operate either directly or indirectly to
reduce, eliminate or make subject to Employer discretion any accrued
benefit subject to the protection of Section 411(d)(6) of the Code,
except to the extent permitted under Treasury Regulations Section
1.411(d)-4 or deprive any Member of his vested and nonforfeitable
interest as of the time of such amendment.
(d) In the event the vesting schedule of this Plan is amended, any
Employee who has completed at least 3 Years of Service, as defined in
subsection 2.1(nnn), may elect to have his vested account balance
computed under the Plan without regard to such amendment by notifying
the Plan Administrator in writing during the election period
hereinafter described. The election period shall begin on the date
such amendment is adopted and shall end no earlier than the latest of
the following dates:
(1) The date which is 60 days after the day such amendment is
adopted;
(2) The date which is 60 days after the day such amendment becomes
effective; or
(3) The date which is 60 days after the day the Participant is given
written notice of such amendment by the Plan Administrator.
Any election made pursuant to this Section 11.2(d) shall be
irrevocable. The Plan Administrator, as soon as practicable, shall
forward a true copy of any amendment to the vesting schedule to each
affected Participant, together with an explanation of the effect of
the amendment, the appropriate form upon which the Participant may
make an election to remain under the vesting schedule provided under
the Plan prior to the amendment, and notice of the time within which
the Participant must make an election to remain under the prior
vesting schedule.
11.3 Effect of Bankruptcy and Other Contingencies Affecting an
Employer.
In the event an Employer terminates its connection with the Plan, or in the
event an Employer is dissolved, liquidated, or shall by appropriate legal
proceedings be adjudged a bankrupt, or in the event judicial proceedings of any
kind result in the involuntary dissolution of an Employer, the Plan shall be
terminated with respect to such Employer. The merger, consolidation, or
reorganization of an Employer, or the sale by it of all or substantially all of
its assets, shall not terminate the Plan if there is delivery to such Employer
by the Employer's successor or by the purchaser of all or substantially all of
the Employer's assets, of a written instrument requesting that the successor or
purchaser be substituted for the Employer and agreeing to perform all the
provisions hereof which such Employer is required to perform. Upon the receipt
of said instrument, with the approval of GAFRI, the successor or the purchaser
shall be substituted for such Employer herein, and such Employer shall be
relieved and released from any obligations of any kind, character, or
description herein or in any trust agreement imposed upon it.
- ---------------------------
End of Article 11
Article 12. ESOP Provisions
This Article 12, except for Sections 12.12 and 12.13 shall only be
applicable if the Trustee borrows funds pursuant to Section 12.4. In addition,
this Article 12 shall only be applicable if the Administrative Plan Committee
designates the Trustee's borrowing of funds as an ESOP Loan and shall not be
applicable to any other borrowing of funds by the Trustee for any other purpose
other than an ESOP Loan.
12.1 Establishment of ESOP Fund.
If the Trustee borrows funds pursuant to Section 12.4, GAFRI establishes an
Employee Stock Ownership Plan as defined in Section 4975(e)(7) of the Code with
respect to that part of the Plan consisting of Matching Contributions made on or
after such loan and those Employer Retirement Contributions made after such
date.
12.2 Investment in GAFRI Common Stock.
If the Trustee borrows funds pursuant to Section 12.4, all Matching
Contributions and Employer Retirement Contributions shall be invested primarily
in GAFRI Common Stock at the direction of the Trustee unless used to repay an
ESOP Loan. The proceeds of any ESOP Loan shall be invested solely in GAFRI
Common Stock.
12.3 Allocation of Employer Contributions.
All Matching Contributions and Retirement Contributions shall be allocated
in accordance with Article 4 unless used to repay an ESOP Loan. If Matching
Contributions and Retirement Contributions are used to repay an ESOP Loan, an
Employer shall contribute such amounts of Matching Contributions and Retirement
Contributions as may be required (after taking into consideration Earnings used
for such purposes) to repay the principal amount of and interest on an ESOP Loan
and cause the release from the Suspense Account shares of GAFRI Common Stock
with a Fair Market Value equal to the amount of the liability for the Matching
Contributions, under Section 4.1(c), and Employer Retirement Contributions under
Section 4.6. Such shares of GAFRI Common Stock then shall be allocated to a
Participant's Account in accordance with Article 4 as if the shares had been
contributed by an Employer under Sections 4.2 and 4.6.
12.4 ESOP Loans and Suspense Accounts.
(a) Any GAFRI Common Stock that is acquired with the proceeds of an ESOP
Loan shall be held in a Suspense Account and shall not be allocated to
the Accounts pursuant to Article 4 of Participants until its release
from such Suspense Account.
(b) If an ESOP Loan provides for annual payments of principal and interest
at a cumulative rate that is not less rapid at any time than level
annual payments of such amounts for ten years and satisfies such other
requirements as may be set forth in the Code and regulations
thereunder, the following number of shares of GAFRI Common Stock
acquired with the proceeds of an ESOP Loan shall be released by the
Trustee at the direction of the Plan Administrator from the Suspense
Account for each Plan Year during the duration of the relevant ESOP
Loan: the number of shares so acquired and held in the Suspense
Account immediately before release, multiplied by a fraction, the
numerator of which is the principal paid with respect to the relevant
ESOP Loan for the year and the denominator of which is the principal
to be paid in respect of the relevant ESOP Loan for the current and
all future years. In all other cases, the number of shares to be
released shall be determined in such other manner as is permitted by
applicable law.
In the case of a variable rate ESOP Loan, the determination of whether
an ESOP Loan provides for annual payments of principal and interest at
the cumulative rate referred to in the preceding paragraph shall be
made as of the date such ESOP Loan is made (and no subsequent
determination shall be required), assuming for purposes of such
determination that the term of the ESOP Loan was for ten years at a
fixed interest rate equal to the rate mutually agreed upon for this
purpose by the borrower and independent third-party commercial lenders
(whether or not such fixed interest rate is actually in effect). All
ESOP Loans entered into simultaneously shall be treated as one ESOP
Loan for purposes of the preceding sentence.
(c) Earnings paid during a Plan Year on GAFRI Common Stock held in the
Suspense Account shall, at the direction of the Plan Administrator, be
used to pay any installments of principal and interest due during such
Plan Year on an ESOP Loan and, to the extent not so used, shall be
allocated among the Accounts of Participants pursuant to Article 4.
12.5 Required Terms of ESOP Loan.
The Trustee may borrow funds (including a borrowing from GAFRI or other
Employers) to acquire GAFRI Common Stock under the Plan or repay a prior ESOP
Loan incurred to acquire GAFRI Common Stock, subject to the following
conditions:
(a) Any ESOP Loan to the Trust Fund shall be approved by the
Administrative Plan Committee.
(b) The term of the ESOP Loan shall be for a definite period.
(c) The interest rate on the ESOP Loan may not exceed a reasonable rate of
interest.
(d) Any collateral pledged to the creditor by the Trust Fund shall consist
only of the GAFRI Common Stock purchased with the borrowed funds or
the GAFRI Common Stock used as collateral on a prior ESOP Loan that is
being repaid with the proceeds of the current ESOP Loan.
(e) Under the terms of the ESOP Loan, the creditor shall have no recourse
against the Trust Fund except with respect to any collateral given for
the ESOP Loan and Earnings attributable thereto, and contributions
made hereunder (other than contributions of GAFRI Common Stock) to
meet obligations under the ESOP Loan and Earnings attributable to the
investment of such contributions.
(f) The ESOP Loan shall be repaid only from amounts lent to the Trust
Fund, from amounts contributed under the Plan (other than
contributions of GAFRI Common Stock) to meet obligations under the
ESOP Loan and Earnings attributable to the investment thereof, and
from Earnings attributable to any GAFRI Common Stock held in the
Suspense Account.
(g) In the event of default under the ESOP Loan, the value of the assets
of the Trust Fund transferred in satisfaction of the ESOP Loan may not
exceed the amount of the default.
12.6 Termination of Suspense Account.
In the event that the Plan is terminated in its entirety, the Trustee
shall, at the direction of the Administrative Plan Committee:
(a) To the extent necessary to satisfy any then outstanding ESOP Loan,
sell shares of GAFRI Common Stock held in the Suspense Account and pay
over to the creditor under Section 12.5 the proceeds of the sale of
such shares of GAFRI Common Stock;
(b) Release any remaining shares of GAFRI Common Stock held in the
Suspense Account to the Accounts of Participants in accordance with
Article 4; and
(c) Determine the balance in each Participant's Accounts.
12.7 Allocation of Earnings on Stock.
Earnings on GAFRI Common Stock allocated to a Member's Account under
Article 4 shall, at the discretion of the Administrative Plan Committee, be (a)
used for the purchase of GAFRI Common Stock, which stock shall be credited to
the Member's Account; (b) paid to the Member at the same time and in the same
manner as such dividends are paid to other shareholders of GAFRI Common Stock;
or (c) paid to the Trust Fund and distributed therefrom to Members within 90
days after the last day of the Plan Year in which so paid.
12.8 Valuation of GAFRI Securities.
For purposes of the Plan, the value of GAFRI Securities, including AFG
Common Stock, held by the Trust Fund shall be its Fair Market Value.
12.9 Voting Rights.
Each Member (or, in the event of his death, his beneficiary) shall have the
right to direct the Trustee as to the manner in which voting rights appurtenant
to GAFRI Common Stock and AFG Common Stock allocated to his Account are to be
exercised on each matter brought before an annual or special stockholders'
meeting of GAFRI or AFG and on each matter as to which shareholder authorization
of corporation account is solicited by written consent. Before each such meeting
or solicitation, the Plan Administrator shall cause to be furnished to each
Member (or the beneficiary thereof) a copy of the proxy or other solicitation
material, together with a form requesting confidential directions on how the
shares allocated to such Member's Account shall be voted on each such matter.
Upon timely receipt for such directions, the Trustee shall on each such matter
vote as directed the number of shares (including fractional shares) of GAFRI
Common Stock or AFG Common Stock allocated to such Member's Account. The
directions received by the Trustee from Members shall be held by the Trustee in
confidence and shall not be divulged or released to any person, including
officers or Employees of GAFRI, AFG or any Affiliate. The Trustee (a) shall vote
shares of allocated GAFRI Common Stock or AFG Common Stock for which it has not
received timely directions on a particular matter in the same proportion as
directed shares are voted, and (b) shall vote unallocated shares of GAFRI Common
Stock or AFG Common Stock at the direction of the Plan Administrator, which, in
so directing, shall act solely in accordance with the principles set forth in
Article 10.
12.10 Rights on Tender or Exchange Offer.
Each Member (or, in the event of his death, his beneficiary) shall have the
right, to the extent of the number of shares of GAFRI Common Stock or AFG Common
Stock allocated to his Account, to instruct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer with respect to shares
of such GAFRI Common Stock or AFG Common Stock. The Plan Administrator shall use
its best efforts to timely distribute or cause to be distributed to each Member
(or beneficiary thereof) such information as will be distributed to stockholders
of GAFRI or AFG Common Stock in connection with any such tender offer or
exchange offer. Upon timely receipt of such instructions, the Trustee shall
respond as instructed with respect to shares of such GAFRI Common Stock or AFG
Common Stock. The instructions received by the Trustee from Members shall be
held by the Trustee in confidence and shall not be divulged or released to any
person, including officers or Employees of GAFRI, AFG or any Affiliate. If the
Trustee does not receive timely instruction from a Member (or beneficiary) as to
the manner in which to respond to such a tender or exchange offer, such Member
(or beneficiary) shall be deemed to have instructed the Trustee not to tender or
exchange the shares allocated to his Account, and the Trustee shall not tender
or exchange any such shares. The Trustee shall tender or exchange unallocated
shares of GAFRI Common Stock or AFG Common Stock only if so directed by the Plan
Administrator, which, in so directing, shall act solely in accordance with the
principles set forth in Article 10.
12.11 Diversification.
The provisions of Section 7.6 shall continue to be applicable to satisfy
the diversification requirement if the Trustee borrows funds pursuant to Section
12.4.
12.12 Put Option.
(a) In the event that GAFRI Securities, including AFG Common Stock, ceases
to be readily tradable on an established securities market within the
meaning of Section 409(h) of the Code, shares of GAFRI Securities,
including AFG Common Stock, that are distributed (in accordance with
the provisions of this Plan) from a Member's Account shall be subject
to a "put" option at the time of distribution. The "put" option shall
be exercisable by the Member or beneficiary, by the donees of either,
or by a person (including an estate or its distributee) to whom the
GAFRI Securities, including AFG Common Stock, passes by reason of the
Member's or beneficiary's death. The "put" option shall provide that
for a period of at least 60 consecutive days immediately following the
date the shares are distributed to the holder of the option, and for
another 60-consecutive-day period during the Plan Year next following
the Plan Year in which the shares were distributed, the holder of the
option shall have the right to cause GAFRI, by notifying it in
writing, to purchase such shares at their Fair Market Value, or at
such greater price as GAFRI may agree. GAFRI shall allow the
Administrative Plan Committee to direct the Trustee to assume the
rights and obligations of GAFRI at the time the "put" option is
exercised, insofar as the repurchase of GAFRI Securities, including
AFG Common Stock, is concerned; provided, however, that the purchase
price paid by the Trustee may not exceed said Fair Market Value. If
the Plan Administrator so directs the Trustee, GAFRI agrees to take
such action as may be necessary to permit the Trustee to consummate
such repurchase, including but not limited to, providing or arranging
for the financing of such repurchase. The period during which the
"put" option is exercisable shall not include any period during which
the holder is unable to exercise such "put" option because GAFRI is
prohibited from honoring it by federal or state law. The terms of
payment for the purchase of such shares of GAFRI Securities, including
AFG Common Stock, shall be as set forth in the "put" and may be either
in a lump sum or in installments, as determined by the Administrative
Plan Committee. An installment obligation issued pursuant to the
exercise of such "put" option shall --
(1) bear a reasonable rate of interest, as determined by the
Administrative Plan Committee;
(2) require equal annual payments;
(3) have a payment period not longer than the period beginning with
the date the "put" option is exercised and ending with the date
that is the earlier of (A) ten years from the date of such
exercise and (B) the later of (i) the date on which there is no
longer an outstanding balance on the ESOP Loan and (ii) five
years from the date of such exercise;
(4) require that any payments pursuant to the installment obligation
begin to be made no later than 30 days after the date the "put"
option is exercised; and
(5) contain such other terms not inconsistent with applicable law as
the Administrative Plan Committee may deem appropriate.
(b) The "put" option provided for by this Section shall continue to apply
to shares of GAFRI Securities, including AFG Common Stock, purchased
by the Trustee with the proceeds of an ESOP Loan, notwithstanding any
amendment to or termination of this Plan that causes the Plan to cease
to be an employee stock ownership plan within the meaning of Section
4975(e)(7) of the Code and notwithstanding the absence of an
outstanding balance on an ESOP Loan at the time of the distribution of
such shares.
12.13 Non-traded Stock.
In the event that any GAFRI Securities, including AFG Common Stock, cease
to be readily tradable on an established securities market within the meaning of
Section 409(h) of the Code, any such GAFRI Securities, including AFG Common
Stock, that are distributed (in accordance with the provisions of this Plan)
from a Member's Account shall be subject to a right of first refusal on the part
of the Plan and of GAFRI, in that order, in the event that distributee of said
securities desires to sell all or any part of the same to a purchaser other than
the Plan or GAFRI. Said right shall consist of an obligation of the distributee
to inform the Plan Administrator, in writing, of his intention to sell the said
securities upon terms (described in said notice) that have been offered by a
third party purchaser in good faith, followed by the right of the Plan (and if
the Plan declines said right, GAFRI) to purchase said securities at a price
equal to the greater of (a) the then Fair Market Value of said securities or (b)
the purchase price offered by said purchaser, and otherwise upon terms no less
favorable to the seller than in the above described good faith offer. The right
of first refusal shall lapse 14 days after the distributee has given the written
notice referred to above. In the event that GAFRI Securities, including AFG
Common Stock, again become readily tradable on an established securities market,
this Section shall not apply.
12.14 Stock not Subject to "Put" or "Call".
Except as otherwise provided in Sections 12.12 and 12.13, no GAFRI Common
Stock or other security purchased with the proceeds of an ESOP Loan under the
Plan shall be subject to a "put", "call" or other option or to a "buy sell" or
similar arrangement during the time such GAFRI Common Stock or other security is
held by the Trust Fund or at the time of its distribution to a Member,
notwithstanding any amendment to or termination of this Plan that causes the
Plan to cease to be an employee stock ownership plan within the meaning of
Section 4975(e)(7) of the Code during or at such times.
- ---------------------------
End of Article 12
Article 13. Top-Heavy Provisions
13.1 Application of Top-Heavy Provisions.
(a) Single Plan Determination. Except as provided in Subsection
13.1(b)(2), if as of a Determination Date, the sum of the amount of
the Code Section 416 Accounts of Key Employees and the beneficiaries
of deceased Key Employees exceeds 60% of the amount of the Code
Section 416 Accounts of all Employees and beneficiaries (excluding
former Key Employees), the Plan is top-heavy and the provisions of
this Article shall become applicable.
(b) Aggregation Group Determination.
(1) If as of a Determination Date this Plan is part of an Aggregation
Group which is top-heavy, the provisions of this Article shall
become applicable. Top-heaviness for the purpose of this
Subsection shall be determined with respect to the Aggregation
Group in the same manner as described in Section 13.1(a) above.
(2) If this Plan is top-heavy under Section 13.1(a), but the
Aggregation Group is not top-heavy, this Article shall not be
applicable.
(c) Plan Administrator. The Plan Administrator shall have responsibility
to make all calculations to determine whether this Plan is top-heavy.
13.2 Definitions.
(a) "Aggregation Group" means this Plan and all other plans maintained by
the Employers and nonparticipating Affiliates which cover a Key
Employee at any time during the five-year period ending on the
Determination Date (regardless of whether the plan has terminated),
and any other plan which enables a plan covering a Key Employee to
meet the requirements of Sections 401(a)(4) or 410 of the Code. In
addition, at the election of the Plan Administrator, the Aggregation
Group may be expanded to include any other qualified plan maintained
by an Employer or nonparticipating Affiliate if such expanded
Aggregation Group meets the requirements of Sections 401(a)(4) and 410
of the Code.
(b) "Determination Date" means the last day of the Plan Year immediately
preceding the Plan Year for which top-heaviness is to be determined
or, in the case of the first Plan Year of a new plan, the last day of
such Plan Year.
(c) "Key Employee" means any Employee, former Employee, or beneficiary of
such Employee, who at any time during the current Plan Year, or any of
the four preceding Plan Years, is, or was any of the following:
(1) An officer of an Employer (as determined under Treasury
Regulations under Section 416 of the Code) having Adjusted
Compensation greater than 50% of the amount under Section
415(b)(1)(A) of the Code, including permitted cost of living
increases.
(2) One of the ten Employees both (A) having Adjusted Compensation
greater than the amount under Section 415(c)(1)(A) of the Code,
including permitted cost of living increases and (B) owning both
more than a1/2% interest and the largest interests in any
Employer or nonparticipating Affiliate.
(3) A 5% owner of any Employer or nonparticipating Affiliate. A 5%
owner means any person who owns more than 5% of the outstanding
stock of any Employer or nonparticipating Affiliate or stock
possessing more than 5% of the total combined voting power of all
stock of any Employer or nonparticipating Affiliate. If the
Employer or nonparticipating Affiliate is not a corporation, 5%
owner means any person who owns more than 5% of the capital or
profits interest in the Employer or nonparticipating Affiliate.
(4) A 1% owner of any Employer or nonparticipating Affiliate having
Adjusted Compensation of more than $150,000. A 1% owner means any
person who owns more than 1% of the outstanding stock of any
Employer or nonparticipating Affiliate or stock possessing more
than 1% of the total combined voting power of all stock of any
Employer or nonparticipating Affiliate. If the Employer or
nonparticipating Affiliate is not a corporation, a 1% owner means
any person who owns more than 1% of the capital or profits
interest in the Employer or nonparticipating Affiliate.
In determining the Employee's Adjusted Compensation under Subsection
(1) above, compensation from every Individual Employer or
nonparticipating Affiliate shall be taken into account. In determining
an Employee's percentage of ownership in an Employer or
nonparticipating Affiliate, the ownership attribution rules of Section
318 of the Code shall apply, except that Section 318(a)(2)(C) shall be
applied by substituting 5% for 50%.
(d) "Section 416 Account" means the sum of the following:
(1) The amount credited as of a Determination Date to a Member's or
beneficiary's Account, under the Plan and under any other
qualified defined contribution plan which is part of an
Aggregation Group (including amounts to be credited as of the
Determination Date but which have not yet been contributed). The
present value of the accrued benefit for any individual (other
than a Key Employee) under a defined benefit plan shall be as
determined using the single accrual method for all plans of each
Employer and Affiliates or if no such single method exists, using
a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under the fractional rule of
Section 411(b)(1)(C) of the Code.
(2) The present value of the accrued benefit credited to a Member or
beneficiary under a qualified defined benefit plan which is part
of an Aggregation Group. The present value of the accrued benefit
for any individual (other than a Key Employee) under a defined
benefit plan shall be as determined using the single accrual
method for all plans of an Employer and Affiliates or if no such
single method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C) of the Code.
(3) The amount of distributions to the Member or beneficiary during
the five-year period ending on the Determination Date other than
a distribution which is a tax-free rollover contribution (or
similar transfer) that is not initiated by the Member or that is
contributed to a plan which is maintained by an Employer or
nonparticipating Affiliate.
Reduced by the following:
(4) The amount of rollover contributions (or similar transfers) and
interest thereon credited as of a Determination Date under the
Plan or a plan forming part of an Aggregation Group which is
attributable to a rollover contribution (or similar transfer)
accepted after December 31, 1983, initiated by the Member and
derived from a plan not maintained by an Employer or
nonparticipating Affiliate.
The Account of a Member who was a Key Employee and who subsequently
meets none of the conditions of Section 13.2(c) for the Plan Year
containing the Determination Date is not a Code Section 416 Account
and shall be excluded from all computations under this Article 13.
Furthermore, if a Member has not performed any Service during the five
year period ending on the Determination Date, any Account of such
Member (and any accrued benefit for such Member) shall not be taken
into account in computing top-heaviness under this Article 13.
13.3 Vesting Requirements.
In any Plan Year in which the Plan is a top-heavy plan, and in which a
Participant performs at least one Hour of Service, a Participant shall have a
vested and nonforfeitable interest in that portion of his Matching Contributions
and Employer Retirement Contributions in accordance with the following schedule:
Years of Service Vested Percentage
----------------- -----------------
Less than 3 years 0%
3 years or more 100%
13.4 Minimum Contribution.
(a) General. If this Plan is determined to be top-heavy under the
provisions of Section 13.1 with respect to a Plan Year, the sum of
Employer contributions (including contributions under a salary
reduction agreement) and forfeitures under all qualified defined
contribution plans allocated to the Accounts of each Member in the
Aggregation Group who is not a Key Employee and is an Employee on the
last day of the Plan Year shall not be less than 3% of such Member's
Adjusted Compensation. This Section 13.4 shall not be applicable with
respect to a Member who is also covered under a defined benefit plan
maintained by GAFRI or an Affiliate which provides the benefit
specified by Section 416(c)(1) of the Code. Neither elective deferrals
nor Matching Contributions may be taken into Account for the purposes
of satisfying the minimum top-heavy contribution requirements.
(b) Exception. The contribution rates specified in Section 13.4(a) shall
not exceed the percentage at which Employer contributions and
forfeitures are allocated under the plans of the Aggregation Group to
the Account of the Key Employee for whom such percentage is the
highest for the Plan Year. For the purpose of this Section 13.4(b),
the percentage for each Key Employee shall be determined by dividing
the Employer contributions and forfeitures for the Key Employee by the
amount of his total Adjusted Compensation for the year not in excess
of the Compensation Limit.
(c) Multiple Defined Contribution Plans. If during the Plan Year an
Employer maintains two or more defined contribution plans, one of
which is a money purchase pension plan, the minimum contribution
required by this Section on behalf of a Participant who is not a Key
Employee and who participates in both the money purchase pension plan
and this Plan shall be provided under this Plan only to the extent
that this minimum contribution is not provided under the money
purchase pension plan. If an Employer maintains during a Plan Year two
or more defined contribution plans, neither of which is a money
purchase pension plan, the minimum contribution required by this
Section on behalf of a Participant who is not a Key Employee and who
participates in such other plans and this Plan shall be provided under
this Plan only to the extent such other plans do not require a
contribution that would satisfy the minimum contribution requirements
of this Section.
(d) Combination with a Defined Benefit Plan. Effective for Plan Years
beginning after December 31, 1986, the accrued benefit of a
Participant other than a Key Employee shall be determined (1) under
the method, if any, which uniformly applies for accrual purposes under
all defined benefit plans of the Employer, or (2) if there is no such
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
(e) Participants Eligible for Allocation of Minimum Contribution. In any
Plan Year in which the Plan is a top-heavy plan, minimum contributions
and forfeitures under this Section shall be allocated to the Employer
Contribution Account of each Participant who was an Employee on the
last day of the Plan Year. An Employee who is not a Key Employee shall
be eligible to receive a minimum contribution under this Section even
though he would otherwise be excluded from Participation in the Plan
(or accrue no benefit under the Plan) either (1) because his Adjusted
Compensation is less than a stated amount or (2) because of a failure
to make mandatory Employee contributions, if any are required.
Notwithstanding the foregoing, Employer contributions and Forfeitures
shall be allocated to the Accounts of those Participants who have had
a Severance from Service with an Employer during the Plan Year because
that Participant has died, become Disabled, or retired after attaining
Retirement.
13.5 Limit on Annual Additions: Combined Plan Limit.
(a) General. If this Plan is determined to be top-heavy under Section
13.1, Section 4.8 of this Plan shall be applied by substituting 1.0
for 1.25 in applying the provisions of Sections 415(e)(2) and (e)(3)
of the Code. The transitional rule of Section 415(e)(6)(B)(i) of the
Code shall be applied by substituting "$41,500" for "$51,875."
(b) Exception. Section 13.5(a) shall not be applicable if:
(1) Section 13.4 is applied by substituting "4%" for "3%" for
Participants participating only in a defined contribution plan
maintained by an Employer, and
(2) this Plan would not be top-heavy if "90%" is substituted for
"60%" in Section 13.1.
(c) Transitional Rule. If, but for this Section 13.5(c), Section 13.4(a)
would begin to apply with respect to the Plan, the application of
Section 13.4(a) shall be suspended with respect to a Member so long as
there are the following:
(1) no Employer contributions, forfeitures, or voluntary
nondeductible contributions allocated to such Member, and
(2) no accruals under a qualified defined benefit plan for such
Member.
13.6 Limit on Annual Adjusted Compensation Taken into Account.
During any Plan Year in which the Plan is determined to be top-heavy under
Section 13.1, the annual Adjusted Compensation of each Member that may be taken
into account under the Plan shall not exceed the Compensation Limit.
13.7 Collective Bargaining Agreements.
The requirements of Sections 13.3, 13.4, and 13.6 shall not apply with
respect to any Employee included in a unit of Employees covered by a collective
bargaining agreement between Employee representatives and an Employer or
nonparticipating Affiliate if retirement benefits were the subject of good faith
bargaining between such Employee representatives and such Employer or
nonparticipating Affiliate.
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End of Article 13
Article 14. Participation In and Withdrawal
From the Plan by an Employer
14.1 Participation in the Plan.
Each Affiliate whose employees were .covered under the AAG 401(k) Plan or
the AAG ESORP on Dcember 31, 2000, shall continue as an Employee under the Plan
on the Effective Date. Any Affiliate which desires to become an Employer
hereunder may elect, with the consent of the Board, to become a party to the
Plan and Trust Agreement by adopting the Plan for the benefit of its eligible
Employees, effective as of the date specified in such adoption and by completion
of the following:
(a) by filing with GAFRI a certified copy of a resolution of its board of
directors to that effect, and such other instruments as GAFRI may
require; and
(b) by GAFRI's filing with the then Trustee a copy of such resolution,
together with a certified copy of resolutions of the Board approving
such adoption.
The adoption resolution or decision may contain such specific changes and
variations in Plan terms and provisions applicable to such adopting Employer and
its Employees as may be acceptable to GAFRI. However, the sole, exclusive right
of any other amendment of whatever kind or extent to the Plan or Trust Agreement
is reserved by GAFRI. The adoption resolution or decision shall become, as to
such adopting organization and its employees, a part of this Plan as then
amended or thereafter amended. It shall not be necessary for the adopting
organization to sign or execute the original or then amended Plan and Trust
Agreement documents. The coverage date of the Plan for any such adopting
organization shall be that stated in the resolution or decision of adoption, and
from and after such effective date, such adopting organization shall assume all
the rights, obligations, and liabilities of an individual Employer entity
hereunder and under the Trust Agreement. The administrative powers and control
of GAFRI, as provided in the Plan and Trust Agreement, including the sole right
to amendment, and of appointment and removal of the Plan Administrator, the
Trustee, and their successors, shall not be diminished by reason of the
participation of any such adopting organization in the Plan and Trust Agreement.
14.2 Withdrawal from the Plan.
Any Employer, by action of its board of directors or other governing
authority, may withdraw from the Plan and Trust Agreement after giving 90 days'
notice to GAFRI, provided GAFRI consents to such withdrawal.
14.3 Other Termination.
Any Employer shall cease to be an Employer, and its Employees shall cease
to be Employees, as of any date it ceases to be an Affiliate of GAFRI unless
such Employer and GAFRI agree that it will continue. Any Employer shall cease to
be an Employer, and its Employees shall cease to be Employees as of any other
date that GAFRI may designate by action of its Board.
14.4 Distribution.
Upon any withdrawal or other termination of an Employer, distribution of
assets held for affected Participants and Members may be implemented through
continuation of the Trust Fund, or transfer to another trust fund exempt from
tax under Section 501 of the Code, or to a group annuity contract qualified
under Section 401 of the Code, or distribution may be made as an immediate cash
payment in accordance with the directions of the Plan Administrator; provided,
however, that no such action shall divert any part of such fund to any purpose
other than the exclusive benefit of the Employees of such Employer.
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End of Article 14
Article 15. Miscellaneous
15.1 Section 16(b) Restrictions.
Section 16 Participants may generally acquire or dispose of GAFRI Common
Stock or AFG Common Stock under the Plan to the same extent as Participants who
are not under Section 16. However, Section 16 Participants are restricted in
their ability to conduct "discretionary transactions." Discretionary
transactions are transactions by Section 16 Participants involving voluntary
fund switches or voluntary cash withdrawals relating to an issuer equity
securities fund. For a discretionary transaction to be exempt from Section 16
liability, it must be effected by an election made at least six months following
the date of the Section 16 Participant's most recent "opposite-way" election
under any plan of GAFRI or AFG. "Same-way" elections are not subject to this
six-month condition, nor are non-plan elections taken into consideration.
Section 16(b) of the Exchange Act provides that if a Section 16 Participant
makes any purchase and sale, or sale and purchase, of shares for his AFG Common
Stock Fund, GAFRI Common Stock Fund and/or his GAFRI and/or AFG Retirement Fund
within a six month period, all profit resulting from the transactions must be
turned over to GAFRI. The subsequent sale of the shares will constitute a "sale"
for purposes of Section 16(b).
15.2 Beneficiary Designation.
(a) Each Member may designate, on a form provided for that purpose by the
Plan Administrator, a beneficiary or beneficiaries to receive his
interest in the Plan in the event of his death, but such designation
shall not be effective for any purpose until it has been filed by him
during his lifetime with the Plan Administrator. The beneficiary of
each Member who is married shall be the surviving spouse of such
Member, unless such spouse consents in writing to the designation of
another beneficiary or beneficiaries. Each Member may, from time to
time, in a manner approved by and filed with the Plan Administrator,
change his beneficiary or beneficiaries; provided, that such change
shall not become effective unless the spouse of any married Member
consents thereto. All designation of beneficiary forms from the Merged
Plan shall continue to be applicable to such Accounts in this Plan
unless changed in accordance with this Section 15.2. In the event that
the Member fails to designate a beneficiary, or if for any reason such
designation shall be legally ineffective, or if all designated
beneficiaries predecease him or die simultaneously with him, the Plan
Administrator shall designate the surviving spouse as the beneficiary.
If there is no surviving spouse, then the Trustee shall pay the
Member's benefits to the legal representative or representatives of
the estate of the Member. The Plan Administrator, in its sole
discretion, shall direct the Trustee as to whom the Trustee shall make
payment of the distribution.
(b) The written consent described in Section 15.2(a) shall acknowledge the
effect of such election and shall be witnessed by a Plan
representative designated by the Plan Administrator or a notary
public.
15.3 Incompetency.
Whenever and as often as any person entitled to receive a distribution
under the Plan shall be under a legal disability or, in the sole judgment of the
Plan Administrator, shall otherwise be unable to care for such distributions to
his own best interest and advantage, the Plan Administrator, in the exercise of
its discretion, may direct such distributions to be made in any one or more of
the following ways:
(a) directly to such person;
(b) to his spouse;
(c) to his legal guardian or conservator; or
(d) any other person to be held and used for his benefit.
The decision of the Plan Administrator shall, in each case, be final and binding
upon all parties, and any distribution made pursuant to the power herein
conferred on the Plan Administrator shall, to the extent so made, be a complete
discharge of the obligations under the Plan of the Employers, the Trustee, and
the Plan Administrator in respect of such person.
15.4 Nonalienation.
Except as provided below and in Section 401(a)(13)(C) of the Code, benefits
payable to a Participant at any time under the Plan shall not be subject in any
manner to alienation, sale, transfer, assignment, pledge, attachment,
garnishment, or encumbrance of any kind by the Participant. Any attempt of a
Participant to alienate, sell, transfer, assign, pledge, or otherwise encumber
any such benefit, whether presently or thereafter payable, shall be void. No
benefit shall in any manner be liable for or subject to the debts or liabilities
of any Member or any person entitled to any benefit. The Plan Administrator
shall establish procedures to determine whether domestic relations orders are
Qualified Domestic Relations Orders and to administer distributions under such
Qualified Domestic Relations Orders. This provision shall not be interpreted to
limit the ability of the Trustee to borrow money on behalf of the Plan and
alienate, assign, pledge or encumber in any manner the assets of the Plan in
accordance with the other provisions of this Plan or the Trust.
15.5 Applicable Law.
The Plan and all rights hereunder shall be governed by and construed in
accordance with the laws of the State of Ohio to the extent such laws have not
been preempted by applicable federal law.
15.6 Severability.
If a provision of this Plan shall be held illegal or invalid, the
illegality or invalidity shall not affect the remaining parts of the Plan and
the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included in this Plan.
15.7 No Guarantee.
Neither the Plan Administrator, GAFRI, the Employers, nor the Trustee in
any way guarantees the Trust Fund from loss or depreciation nor the payment of
any money which may be or become due to any person from the Trust Fund. Nothing
herein contained shall be deemed to give any Participant, Member, or beneficiary
an interest in any specific part of the Trust Fund or any other interest except
the right to receive benefits out of the Trust Fund in accordance with the
provisions of the Plan and the Trust Agreement.
15.8 Merger, Consolidation, or Transfer.
In the case of any merger or consolidation of the Plan with, or in the case
of any transfer of assets or liabilities of the Plan to or from, any other plan,
each Member shall receive a benefit immediately after the merger, consolidation,
or transfer (if the Plan had then terminated) which is equal to or greater than
the benefit he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had then terminated). GAFRI
shall have the power to direct such a merger, consolidation or transfer and the
Trustee shall follow such instructions as it may receive from GAFRI in order to
implement the transaction. GAFRI may direct that the Plan accept transfers of
assets and benefit liabilities from other qualified plans and mergers of other
qualified plans into the Plan. In the event of any such transfer or merger, the
Plan Assets received shall be held in such subaccounts as are appropriate to
reflect the vesting provisions, distribution limitations and optional forms of
benefit applicable to the transferred or merged benefits. GAFRI shall amend the
Plan as necessary to reflect the appropriate vesting and optional forms of
benefit applicable with respect to such transferred benefits and to make such
other amendments as it deems necessary or appropriate in order to maintain the
qualified status of the Plan.
15.9 Internal Revenue Service Approval.
It is the intention of AFG to obtain a ruling or rulings by the District
Director of Internal Revenue Service as to the following:
(a) the Plan, as in effect from time to time, with respect to all
Employers, meets the requirements of Section 401(a) of the Code; and
(b) any and all contributions made by any Employer under the Plan are
deductible for income tax purposes under Section 404(a) or any other
applicable provisions of the Code.
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End of Article 15
IN WITNESS WHEREOF, GREAT AMERICAN FINANCIAL RESOURCES, INC. has caused
this instrument to be executed by its duly authorized officers effective as of
January 1, 2001, except where otherwise noted.
GREAT AMERICAN FINANCIAL RESOURCES, INC.
By:_____________________________________
Its:____________________________________
>EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference of our report dated March 19, 2001, with respect to the consolidated financial statements and schedules of American Financial Group, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2000, in the Registration Statement (Form S-8 No. 333______) of American Financial Group, Inc. for the registration of 250,000 shares of Common Stock pertaining to the Great American Financial Resources, Inc. Retirement and Savings Plan filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Cincinnati, Ohio
November 29, 2001