<PAGE> 1
Registration No. 333-
As filed with the Securities and Exchange Commission on February 12, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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NCS HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1816187
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
3201 ENTERPRISE PARKWAY
SUITE 220
BEACHWOOD, OHIO 44122
(216) 514-3350
(Address of principal executive offices including zip code)
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NCS HEALTHCARE EMPLOYEE SAVINGS PLAN AND TRUST
(Full title of plan)
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Copy to:
JON H. OUTCALT DOUGLAS E. HAAS, ESQ.
CHAIRMAN OF THE BOARD BENESCH, FRIEDLANDER,
NCS HEALTHCARE, INC. COPLAN & ARONOFF LLP
3201 ENTERPRISE PARKWAY, SUITE 220 2300 BP TOWER
BEACHWOOD, OHIO 44122 200 PUBLIC SQUARE
(216) 514-3350 CLEVELAND, OHIO 44114-2378
(216) 363-4500
(Name and address including zip code; and telephone number,
including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of securities Proposed maximum Proposed maximum
to be registered Amount to be registered offering price per aggregate offering Amount of registration
share (1) price (1) fee
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<S> <C> <C> <C> <C>
Class A Common Stock, 250,000 shares $21.40625 $5,351,562.50 $1,487.80
par value $.01 per
share
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</TABLE>
(1) Estimated in accordance with Rule 457 under the Securities Act of 1933,
solely for the purpose of calculating the registration fee, on the basis of the
average of the high and low prices of the Common Stock on February 8, 1999 as
reported on the NASDAQ (NMS).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by NCS HealthCare, Inc. with the Securities
and Exchange Commission are hereby incorporated or deemed to be incorporated by
reference in this registration statement:
1. NCS HealthCare's Annual Report on Form 10-K for the year ended June
30, 1998 as amended by NCS HealthCare's Amendment No. 1 to Annual
Report on Form 10-K/A for the year ended June 30, 1998 filed with the
Commission on October 1, 1998 (file no. 000-27602);
2. NCS HealthCare's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 (file no. 000-27602); and
3. The description of NCS HealthCare's common stock contained in NCS
HealthCare's registration statement on Form 8-A.
NCS HealthCare incorporates by reference in this registration statement all
documents it subsequently files under Sections 13(a), 13(c), 14 or 15(a) of the
Securities Exchange Act of 1934, after the date of this registration statement
and before the termination of the offering made hereby. Any statement
incorporated by reference in this registration statement shall be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to be part of this registration
statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law sets forth the
conditions and limitations governing the indemnification of officers, directors
and other persons. Section 145
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provides that a corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
contemplated action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation or was serving at the request of the corporation in a
similar capacity with another corporation or other entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
incurred in connection therewith if he or she acted in good faith and in a
manner that he or she reasonably believed to be in the best interests of the
corporation. With respect to a suit by or in the right of the corporation,
indemnity may be provided to the foregoing persons under Section 145 on a basis
similar to that set forth above, except that no indemnity may be provided in
respect of any claim, issue or matter as to which such person has been adjudged
to be liable to the corporation unless and to the extent that the Delaware Court
of Chancery or the court in which such action, suit or proceeding was brought
determines that despite the adjudication of liability, but in view of all the
circumstances of the case, such person is entitled to indemnity for such
expenses as the court deems proper. Moreover, Section 145 provides for mandatory
indemnification of a director, officer, employee or agent of the corporation to
the extent that such person has been successful in defense of any such action,
suit or proceeding and provides that a corporation may pay the expenses of an
officer or director in defending an action, suit or proceeding upon receipt of
an undertaking to repay such amounts if it is ultimately determined that such
person is not entitled to be indemnified. Section 145 establishes provisions for
determining that a given person is entitled to indemnification, and also
provides that the indemnification provided by or granted under Section 145 is
not exclusive of any rights to indemnity or advancement of expenses to which
such person may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
NCS HealthCare's by-laws, as amended, provide that NCS HealthCare shall
indemnify, to the fullest extent permitted by Delaware law, any director or
officer who was or is a party or is threatened to be made a party to, or is
involved in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he or she, or a person for whom he or she is the legal representative, is
or was a director or officer of NCS HealthCare, or is or was serving at the
request of NCS HealthCare as a director, officer, partner, trustee, employee or
agent of another entity, against all expense, liability and loss (including
attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid or
to be paid in settlement) actually and reasonably incurred or suffered by such
person in connection therewith. In addition, provisions of NCS HealthCare's
by-laws provide for the advancement of expenses, including attorneys' fees,
incurred by a director or officer of NCS HealthCare in defending any proceeding
for which indemnification is provided under the by-laws upon receipt of an
undertaking to repay such amount if it is ultimately determined that he or she
is not entitled to be indemnified by NCS HealthCare as authorized in the
by-laws. In addition, the by-laws permit NCS HealthCare to maintain insurance,
at its expense, to protect itself and any of its directors or officers or
individuals serving at the request of NCS HealthCare as a director, officer,
partner, trustee, employee or agent of another entity, against any expense,
liability or loss, whether or not NCS HealthCare would have the power to
indemnify such person against such expense, liability or loss under the Delaware
General Corporation Law.
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Section 102(b) of the Delaware General Corporation Law permits corporations
to eliminate or limit the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of the director's duty of care.
Accordingly, NCS HealthCare's certificate of incorporation provides that a
director of NCS HealthCare shall not be personally liable to NCS HealthCare or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for
any transaction from which the director derived an improper personal benefit.
NCS HealthCare's certificate of incorporation further provides that any repeal,
amendment or other modification of the foregoing provisions will not affect the
liability or alleged liability of any director of the corporation then existing
with respect to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought or threatened based in
whole or in part upon any such state of facts.
NCS HealthCare has entered into indemnity agreements with its executive
officers and directors. The indemnity agreements provide that the indemnified
person will be indemnified to the fullest extent permitted by law against all
expenses (including attorneys' fees), judgments, fines or amounts paid or
incurred by them for settlement in any action or proceeding on account of their
service as a director or officer of NCS HealthCare or of any subsidiary of NCS
HealthCare or of any other entity in which they are serving at the request of
NCS HealthCare. The indemnity agreements provide that NCS HealthCare indemnify
its directors and executive officers whether or not NCS HealthCare maintains
directors' and officers' liability insurance coverage and regardless of any
future changes in the by-laws. The protection to be afforded directors and
executive officers by the agreements is broader than that provided under the
indemnification provisions contained in the by-laws, in that the agreements
expressly provide for the advancement of expenses and for indemnification with
respect to amounts paid in settlements of derivative actions.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Amended and Restated Certificate of Incorporation of NCS HealthCare
(incorporated by reference to Exhibit 4.1 to NCS HealthCare's
registration statement on Form S-8 filed April 3, 1998, Registration
No. 333-49417).
4.2 By-Laws of NCS HealthCare (incorporated by reference to Exhibit 4.2 to
NCS HealthCare's registration statement on Form S-8 filed April 3,
1998, Registration No. 333-49417).
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4.3 Specimen certificate of NCS HealthCare's Class A common stock
(incorporated by reference to Exhibit 4.1 to NCS HealthCare's
registration statement on Form S-1 dated February 13, 1996,
Registration No. 33-80455).
4.4 Specimen certificate of NCS HealthCare's Class B common stock
(incorporated by reference to Exhibit 4.2 to NCS HealthCare's
registration statement on Form S-1, dated February 13, 1996,
Registration No. 33-80455).
4.5 Form of 5-3/4% Convertible Subordinated Debentures due 2004
(incorporated by reference to Exhibit 4.11 to NCS HealthCare's
registration statement on Form S-3 filed September 12, 1997,
Registration No. 333-35551).
4.6 Indenture, dated August 13, 1997, between NCS HealthCare and National
City Bank, as Trustee (incorporated by reference to Exhibit 4.10 to
NCS HealthCare's registration statement on Form S-3 filed September
12, 1997, Registration No. 333-35551).
4.7 NCS HealthCare Employee Savings Plan and Trust.
5.1 Opinion of Benesch, Friedlander, Coplan & Aronoff LLP, Counsel to NCS
HealthCare, regarding legality of the shares offered in this
registration statement.
15.1 Acknowledgement letter of Ernst & Young LLP, independent auditors.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Benesch, Friedlander, Coplan & Aronoff LLP (contained in
their opinion filed as Exhibit 5.1 to this registration statement).
24.1 Power of Attorney (included in Part II of this registration
statement).
NCS HealthCare will submit the NCS HealthCare Employee Savings Plan and
Trust and will submit any amendments to the plan to the Internal Revenue Service
in a timely manner and has made or will make all changes required by the
Internal Revenue Service in order to qualify the plan under Section 401 of the
Internal Revenue Code of 1986.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-5
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(ii) 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;
(iii) 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 (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed 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.
(2) 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.
(3) 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.
(b) 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to 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.
(c) 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 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
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<PAGE> 7
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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all 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 the City of Beachwood, State of Ohio, on the 12th day of
February, 1999.
NCS HEALTHCARE, INC.
(Registrant)
By: /s/ Kevin B. Shaw
-------------------------------------
Kevin B. Shaw
President and Chief Executive Officer
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jon H. Outcalt, Kevin B. Shaw, and Gerald D.
Stethem, or any one or more of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact, agent, or their substitutes may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of NCS
HealthCare, Inc. in the capacities and on the dates indicated.
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<S> <C> <C>
Dated: February 12, 1999 /s/ Jon H. Outcalt
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Jon H. Outcalt
Chairman of the Board of Directors
Dated: February 12, 1999 /s/ Kevin B. Shaw
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Kevin B. Shaw
President, Chief Executive Officer and
Director
Dated: February 12, 1999 /s/ Gerald D. Stethem
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Gerald D. Stethem
Chief Financial Officer
Dated: February 12, 1999 /s/ A. Malachi Mixon III
-----------------------------------------------
A. Malachi Mixon III
Director
Dated: February 12, 1999 /s/ Boake A. Sells
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Boake A. Sells
Director
Dated: February 12, 1999 /s/ Richard L. Osborne
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Richard L. Osborne
Director
Dated: February 12, 1999 /s/ Phyllis K. Wilson
-----------------------------------------------
Phyllis K. Wilson
Director
</TABLE>
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EXHIBIT INDEX
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EXHIBIT NO. EXHIBIT DESCRIPTION PAGE NO.
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<S> <C> <C>
4.1 Amended and Restated Certificate of Incorporation of NCS
HealthCare (incorporated by reference to Exhibit 4.1 to NCS
HealthCare's registration statement on Form S-8 filed April 3,
1998, Registration No. 333-49417).
4.2 By-Laws of NCS HealthCare (incorporated by reference to Exhibit
4.2 to NCS HealthCare's registration statement on Form S-8 filed
April 3, 1998, Registration No. 333-49417).
4.3 Specimen certificate of NCS HealthCare's Class A common stock
(incorporated by reference to Exhibit 4.1 to NCS HealthCare's
registration statement on Form S-1 dated February 13, 1996,
Registration No. 33-80455).
4.4 Specimen certificate of NCS HealthCare's Class B common stock
(incorporated by reference to Exhibit 4.2 to NCS HealthCare's
registration statement on Form S-1, dated February 13, 1996,
Registration No. 33-80455).
4.5 Form of 5-3/4% Convertible Subordinated Debentures due 2004
(incorporated by reference to Exhibit 4.11 to NCS HealthCare's
registration statement on Form S-3 filed September 12, 1997,
Registration No. 333-35551).
4.6 Indenture, dated August 13, 1997, between NCS HealthCare and
National City Bank, as Trustee (incorporated by reference to
Exhibit 4.10 to NCS HealthCare's registration statement on Form
S-3 filed September 12, 1997, Registration No. 333-35551).
4.7 NCS HealthCare Employee Savings Plan and Trust.
5.1 Opinion of Benesch, Friedlander, Coplan & Aronoff LLP, Counsel to
NCS HealthCare, regarding legality of the shares offered in this
registration statement.
15.1 Acknowledgement letter of Ernst & Young LLP, independent
auditors.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Benesch, Friedlander, Coplan & Aronoff LLP (contained
in their opinion filed as Exhibit 5.1 to this registration
statement).
24.1 Power of Attorney (included in Part II of this registration
statement).
</TABLE>
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Exhibit 4.7
NCS HEALTHCARE EMPLOYEE SAVINGS PLAN AND TRUST
<PAGE> 2
TABLE OF CONTENTS
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<TABLE>
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ARTICLE I DEFINITIONS............................................................................1
ARTICLE II ADMINISTRATION........................................................................13
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER..................................13
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY......................................13
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR.......................................13
2.4 RECORDS AND REPORTS..........................................................15
2.5 APPOINTMENT OF ADVISERS......................................................15
2.6 PAYMENT OF EXPENSES..........................................................15
2.7 CLAIMS PROCEDURE.............................................................15
2.8 CLAIMS REVIEW PROCEDURE......................................................16
ARTICLE III ELIGIBILITY...........................................................................16
3.1 CONDITIONS OF ELIGIBILITY....................................................16
3.2 EFFECTIVE DATE OF PARTICIPATION..............................................17
3.3 DETERMINATION OF ELIGIBILITY.................................................17
3.4 TERMINATION OF ELIGIBILITY...................................................17
3.5 OMISSION OF ELIGIBLE EMPLOYEE................................................17
3.6 INCLUSION OF INELIGIBLE EMPLOYEE.............................................17
3.7 ELECTION NOT TO PARTICIPATE..................................................18
ARTICLE IV CONTRIBUTION AND ALLOCATION...........................................................18
4.1 FORMULA FOR DETERMINING EMPLOYER
CONTRIBUTION.................................................................18
4.2 PARTICIPANTS SALARY REDUCTION ELECTION.......................................19
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION.....................................21
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES
AND EARNINGS.................................................................22
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS.............................................25
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE
TESTS........................................................................26
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS.........................................28
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION
PERCENTAGE TESTS.............................................................29
4.9 MAXIMUM ANNUAL ADDITIONS.....................................................31
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS....................................34
4.11 TRANSFERS FROM QUALIFIED PLANS...............................................34
4.12 DIRECTED INVESTMENT ACCOUNT..................................................36
ARTICLE V VALUATIONS............................................................................37
5.1 VALUATION OF THE TRUST FUND..................................................37
5.2 METHOD OF VALUATION..........................................................38
</TABLE>
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ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS............................................38
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT....................................38
6.2 DETERMINATION OF BENEFITS UPON DEATH.........................................38
6.3 DETERMINATION OF BENEFITS IN EVENT OF
DISABILITY...................................................................39
6.4 DETERMINATION OF BENEFITS UPON TERMINATION ..................................39
6.5 DISTRIBUTION OF BENEFITS.....................................................42
6.6 DISTRIBUTION OF BENEFITS UPON DEATH..........................................47
6.7 TIME OF SEGREGATION OR DISTRIBUTION..........................................49
6.8 DISTRIBUTION FOR MINOR BENEFICIARY...........................................50
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY
UNKNOWN......................................................................50
6.10 PRE-RETIREMENT DISTRIBUTION..................................................50
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP............................................50
6.12 QUALIFIED DOMESTIC RELATIONS ORDER
DISTRIBUTION.................................................................52
ARTICLE VII TRUSTEE........................................................................................52
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE........................................52
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE..................................53
7.3 OTHER POWERS OF THE TRUSTEE..................................................54
7.4 LOANS TO PARTICIPANTS........................................................56
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS.....................................58
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND
TAXES........................................................................58
7.7 ANNUAL REPORT OF THE TRUSTEE.................................................58
7.8 AUDIT........................................................................59
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF
TRUSTEE......................................................................59
7.10 TRANSFER OF INTEREST.........................................................60
7.11 DIRECT ROLLOVER..............................................................60
7.12 EMPLOYER SECURITIES AND REAL PROPERTY........................................61
ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS.............................................................61
8.1 AMENDMENT....................................................................61
8.2 TERMINATION..................................................................62
8.3 MERGER OR CONSOLIDATION......................................................62
ARTICLE IX TOP HEAVY.............................................................................63
9.1 TOP HEAVY PLAN REQUIREMENTS..................................................63
9.2 DETERMINATION OF TOP HEAVY STATUS............................................63
</TABLE>
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<TABLE>
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ARTICLE X MISCELLANEOUS.........................................................................66
10.1 PARTICIPANT'S RIGHTS.........................................................66
10.2 ALIENATION...................................................................66
10.3 CONSTRUCTION OF PLAN.........................................................67
10.4 GENDER AND NUMBER............................................................67
10.5 LEGAL ACTION.................................................................67
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS.......................................67
10.7 BONDING......................................................................67
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE...................................68
10.9 INSURER'S PROTECTIVE CLAUSE..................................................68
10.10 RECEIPT AND RELEASE FOR PAYMENTS.............................................68
10.11 ACTION BY THE EMPLOYER.......................................................68
10.12 NAMED FIDUCIARIES AND ALLOCATION
OF RESPONSIBILITY............................................................68
10.13 HEADINGS.....................................................................69
10.14 APPROVAL BY INTERNAL REVENUE SERVICE.........................................69
10.15 UNIFORMITY...................................................................70
ARTICLE XI PARTICIPATING EMPLOYERS...............................................................70
11.1 ADOPTION BY OTHER EMPLOYERS..................................................70
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS......................................70
11.3 DESIGNATION OF AGENT.........................................................71
11.4 EMPLOYEE TRANSFERS...........................................................71
11.5 PARTICIPATING EMPLOYER CONTRIBUTION..........................................71
11.6 AMENDMENT....................................................................71
11.7 DISCONTINUANCE OF PARTICIPATION..............................................72
11.8 ADMINISTRATOR'S AUTHORITY....................................................72
11.9 QUALIFIED MILITARY SERVICE...................................................72
</TABLE>
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<PAGE> 5
NCS HEALTHCARE EMPLOYEE SAVINGS PLAN AND TRUST
THIS AGREEMENT, hereby made and entered into this 5th day of January,
1999, by and between NCS HealthCare, Inc. formerly Aberdeen Group Inc. (herein
referred to as the "Employer") and Norwest Banks of Colorado, Inc (herein
referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan and
Trust effective July 1, 1988, (hereinafter called the "Effective Date") known as
NCS HealthCare Employee Savings Plan and Trust (herein referred to as the
"Plan") in recognition of the contribution made to its successful operation by
its employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability to
amend the Plan, provided the Trustee joins in such amendment if the provisions
of the Plan affecting the Trustee are amended; and
WHEREAS, the Employer amended and restated the Plan effective as of
January 1, 1996, except as otherwise provided; and
WHEREAS, the Employer desires to amend and restate the Plan to bring it
into compliance with current law and to make certain other changes;
NOW THEREFORE, the Employer hereby amends and restates the Plan as
follows, effective for all purposes as of January 1, 1999, unless otherwise
indicated, except that all changes associated with the Small Business Job
Protection Act of 1996 shall be effective as of January 1, 1997.
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity
has been designated by the Employer pursuant to Section 2.2 to administer the
Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1
<PAGE> 6
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 9.2.
1.5 "Anniversary Date" means December 31.
1.6 "Annuity Starting Date" means, with respect to any Participant, the
first day of the first period for which an amount is paid as an annuity or any
other form.
1.7 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation
must be determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation shall
be made by:
(a) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as
Employer contributions.
For a Participant's initial year of participation, Compensation shall
be recognized as of such Employee's effective date of participation pursuant to
Section 3.2.
Compensation in excess of $150,000 shall be disregarded. Such amount
shall be adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
For Plan Years beginning prior to January 1, 1997, the annual
compensation of an Employee taken into account under the Plan shall be
determined under the terms of the Plan as in effect on December 31, 1998.
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For purposes of this Section, if the Plan is a plan described in Code
Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
1.10 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.11 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.12 "Designated Investment Alternative" means a specific investment
identified by name by a Fiduciary as an available investment under the Plan
which may be acquired or disposed of by the Trustee pursuant to the investment
direction by a Participant.
1.13 "Directed Investment Option" means one or more of the
following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the
Participant Direction Procedures and acquired or disposed of by the
Trustee pursuant to the investment direction of a Participant.
1.14 "Early Retirement Date." This Plan does not provide for a
retirement date prior to Normal Retirement Date.
1.15 "Elective Contribution" means the Employer contributions to the
Plan of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.1(c) and Section
4.6(b) which is used to satisfy the "Actual Deferral Percentage" tests shall be
considered an Elective Contribution for purposes of the Plan. Any contributions
deemed to be Elective Contributions (whether or not used to satisfy the "Actual
Deferral Percentage" tests) shall be subject to the requirements of Sections
4.2(b) and 4.2(c) and shall further be required to satisfy the nondiscrimination
requirements of Regulation 1.401(k)-l(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.16 "Eligible Employee" means any Employee.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits were
the subject of good faith bargaining between the parties will not be eligible to
participate in this Plan unless such agreement expressly provides for coverage
in this Plan.
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Employees of Affiliated Employers shall not be eligible to participate
in this Plan unless such Affiliated Employers have specifically adopted this
Plan in writing.
1.17 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.18 "Employer" means NCS HealthCare, Inc. formerly Aberdeen Group Inc.
and any successor which shall maintain this Plan; and any predecessor which has
maintained this Plan. The Employer is a corporation, with principal offices in
the State of Delaware. In addition, where appropriate, the term Employer shall
include any Participating Employer (as defined in Section 11.1) which shall
adopt this Plan.
1.19 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a).
1.20 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions used to satisfy the "Actual Deferral
Percentage" tests made on behalf of Highly Compensated Participants for the Plan
Year over the maximum amount of such contributions permitted under Section
4.5(a). Excess Contributions shall be treated as an "annual addition" pursuant
to Section 4.9(b).
1.21 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 9.2 and 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.22 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
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1.23 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on July 1st of each year and ending the following June 30th.
1.24 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(g)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.25 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.26 "415 Compensation" with respect to any Participant effective for
Plan Years beginning on or after January 1, 1998, means the Participant's
compensation received from the Employer during the Plan Year as determined under
Code Section 415 and the Regulations thereunder. Such definition of "415
compensation" shall include elective deferrals made under Code Sections 401(k),
403(b), and 457 as well as contributions to a cafeteria plan under Code Section
125.
For Plan Years beginning prior to January 1, 1998, "415 Compensation"
means compensation determined pursuant to the Plan then in effect.
1.27 "414(s) Compensation" with respect to any Participant means such
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be disregarded. Such
amount shall be adjusted for increases in the cost of living in accordance with
Code Section 401(a)(17), except that the dollar increase in effect on January 1
of any calendar year shall be effective for the Plan Year beginning with or
within such calendar year. For any short Plan Year the "414(s) Compensation"
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<PAGE> 10
limit shall be an amount equal to the "414(s) Compensation" limit for the
calendar year in which the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by twelve (12).
If, in connection with the adoption of this amendment and restatement,
the definition of "414(s) Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement, "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
1.28 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and who:
(a) at any time during the "determination year" or the
preceding Plan Year was a "five percent owner" as defined in Section
416(i)(1) of the Code; or
(b) during the preceding year, (i) received "415 Compensation"
from the Employer in excess of $80,000 and (ii) if the Employer so
elects, was in the Top Paid Group of Employees for such preceding Plan
Year. Such election shall be made in accordance with such guidance as
the Secretary of the Treasury shall provide.
The "determination year" shall be the Plan Year for which testing is
being performed.
Additionally, the dollar threshold amounts specified in (b) above shall
be adjusted at such time and in such manner as is provided in Regulations. In
the case of such an adjustment, the dollar limits which shall be applied are
those for the calendar year in which the "determination year" begins.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of those in the Top-Paid Group,
will be made in accordance with Section 414(q) of the Code and the Regulations
thereunder.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
For Plan Years beginning prior to December 31, 1996, the term "Highly
Compensated Employee" shall be determined under the terms of the Plan as in
effect on December 31, 1998.
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1.29 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. For purposes of this Section,
"determination year" and "five percent owner" shall be determined in accordance
with Section 1.28. Highly Compensated Former Employees shall be treated as
Highly Compensated Employees. The method set forth in this Section for
determining who is a "Highly Compensated Former Employee" shall be applied on a
uniform and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.31 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by
or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
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1.32 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.33 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.34 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the calendar year in which
such Plan Year ends and owning (or considered as owning within the
meaning of Code Section 318) both more than one-half percent interest
and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than one percent (1%) of
the outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000,
"415 Compensation" from each employer required to be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be taken into account.
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1.35 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.36 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) 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 by the
recipient employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
recipient employer shall be treated as provided by the recipient employer. A
Leased Employee shall not be considered an Employee of the recipient:
(a) if such employee is covered by a money purchase pension
plan providing:
(1) a non-integrated employer contribution rate of at
least 10% of compensation, as defined in Code Section
415(c)(3), but including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which
are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.37 "Non-Elective Contribution" means the Employer contributions to
the Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.38 "Non-Highly Compensated Participant" means any Participant who is
not a Highly Compensated Employee.
1.39 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means the Participant's 65 birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.41 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
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1.42 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement of a child
with the Employee in connection with the adoption of such child, or any absence
for the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence,
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.43 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.44 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.12 and observed by the Administrator and
applied and provided to Participants who have Participant Directed Accounts.
1.45 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that portion
of the Participant's Account attributable to Employer matching contributions
made pursuant to Section 4.1(b), Employer discretionary contributions made
pursuant to Section 4.1(d) and any Employer Qualified Non-Elective
Contributions.
1.46 "Participant's Combined Account" means the total aggregate amount
of each Participant's Elective Account and Participant's Account.
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1.47 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.48 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Elective
Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to such Elective Contributions pursuant to Section
4.2 and any Employer Qualified Non-Elective Contributions.
1.49 "Plan" means this instrument, including all amendments thereto.
1.50 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31
effective January 1, 1995. Original plan year commenced July 1st and ended on
June 30th.
1.51 "Pre-Retirement Survivor Annuity" means a death benefit which is
an immediate annuity for the life of the Participant's spouse the payments under
which must be equal to the amount of benefit which can be purchased with the
accounts of a Participant.
1.52 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(c) and Section 4.6(b) and Section
4.8(h). Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests.
1.53 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to time.
1.54 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.55 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.56 "Super Top Heavy Plan" means a plan described in Section 9.2(b).
1.57 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.58 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.59 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
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1.60 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing his usual and customary
employment with the Employer. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.
1.61 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.62 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.63 "Valuation Date" means the Anniversary Date and such other date or
dates deemed necessary by the Administrator. The Valuation Date may include any
day during the Plan Year that the Trustee, any transfer agent appointed by the
Trustee or the Employer and any stock exchange used by such agent are open for
business.
1.64 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.65 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee who is credited with the required
Hours of Service in both the initial computation period (or the computation
period beginning after a 1-Year Break in Service) and the Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service, shall be credited with two (2) Years of Service for purposes of
eligibility to participate.
For vesting purposes, the computation periods shall be the Plan Year,
including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set
forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has complete a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c). However,
in determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with all entities acquired through acquisition shall
be recognized.
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Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities otherwise
provided for in this Plan, the Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems necessary for
the proper administration of the Plan to ensure that the Plan is being operated
for the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms cf the Plan, the Code, and the Act. The Employer may
appoint counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or desirable in
connection with the exercise of its fiduciary duties under this Plan. The
Employer may compensate such agents or advisers from the assets of the Plan as
fiduciary expenses (but not including any business (settlor) expenses of the
Employer), to the extent not paid by the Employer.
(b) The Employer shall establish a "funding policy and method," i.e.,
it shall determine whether the Plan has a short run need for liquidity (e.g., to
pay benefits) or whether liquidity is a long run goal and investment growth (and
stability of same) is a more current need, or shall appoint a qualified person
to do so. The Employer or its delegate shall communicate such needs and goals to
the Trustee, who shall coordinate such Plan needs with its investment policy.
The communication of such a "funding policy and method" shall not, however,
constitute a directive to the Trustee as to investment of the Trust Funds. Such
"funding policy and method" shall be consistent with the objectives of this Plan
and with the requirements of Title I of the Act.
(c) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated by it
under the provisions of this Plan or pursuant to procedures established
hereunder. This requirement may be satisfied by formal periodic review by the
Employer or by a qualified person specifically designated by the Employer,
through day-to-day conduct and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint any
person, including, but not limited to, the Employees of the Employer, to perform
the duties of the Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. Upon the resignation
or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The
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Administrator shall administer the Plan in accordance with its terms and shall
have the power and discretion to construe the terms of the Plan and to determine
all questions arising in connection with the administration, interpretation, and
application of the Plan. Any such determination by the Administrator shall be
conclusive and binding upon all persons. The Administrator may establish
procedures, correct any defect, supply any information, or reconcile any
inconsistency in such manner and to such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his duties under
this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any Participant shall
be entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration
of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the Trustee
from time to time the sums of money necessary or desirable to be
contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure for
notifying Participants and Beneficiaries of their rights to elect joint
and survivor annuities and Pre-Retirement Survivor Annuities as
required by the Act and regulations thereunder;
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(j) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their Compensation
deferred or paid to them in cash;
(k) to act as the named Fiduciary responsible for
communications with Participants as needed to maintain Plan compliance
with ERISA Section 404(c), including but not limited to the receipt and
transmitting of Participant's directions as to the investment of their
account(s) under the Plan and the formulation of policies, rules, and
procedures pursuant to which Participants may give investment
instructions with respect to the investment of their accounts;
(l) to assist any Participant regarding his rights, benefits,
or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, or any person or persons retained or appointed
by any Named Fiduciary incident to the exercise of their duties under the Plan,
including, but not limited to, fees of accountants, counsel, Investment
Managers, agents (including nonfiduciary agents) appointed for the purpose of
assisting the Administrator or the Trustee in carrying out the instructions of
Participants as to the directed investment of their accounts and other
specialists and their agents, and other costs of administering the Plan. Until
paid, the expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically
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<PAGE> 20
set forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and has
attained age 18 shall be eligible to participate hereunder after satisfying such
requirements at the time specified in Section 3.2. Effective as of January 1,
1999, any Eligible Employee who has completed six (6) consecutive months of
Service beginning with the date the Employee first performs an Hour of Service,
and who has performed 500 Hours of Service during such period shall be eligible
to participate after satisfying such requirements at the time specified in
Section 3.2. However, any Employee who was a Participant in the Plan prior to
the effective date of this amendment and restatement shall continue to
participate in the Plan.
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3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
earlier of the first day of the Plan Year or the first day of the seventh month
of such Plan Year coinciding with or next following the date such Employee met
the eligibility requirements of Section 3.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred).
In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his Participant's Account shall
be forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings and losses of the
Trust Fund.
(b) In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate, such Employee will
participate immediately upon returning to an eligible class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 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 discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the
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<PAGE> 22
contribution made with respect to the ineligible person regardless of whether or
not a deduction is allowable with respect to such contribution. In such event,
the amount contributed with respect to the ineligible person shall constitute a
Forfeiture (except for Deferred Compensation which shall be distributed to the
ineligible person) for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed an Employer Elective Contribution.
(b) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a discretionary matching
contribution equal to a uniform percentage of each such Participant's
Deferred Compensation or portion thereof, the exact percentage or
portion, if any, to be determined each year by the Employer, which
amount, if any, shall be deemed an Employer Non-Elective Contribution.
(c) On behalf of each Non-Highly Compensated Participant and
Non-Key Employee who is eligible to share in the Qualified Non-Elective
Contribution for the Plan Year, a discretionary Qualified Non-Elective
Contribution equal to a uniform percentage of each eligible individuals
Compensation, the exact percentage, if any, to be determined each year
by the Employer. Any Employer Qualified Non-Elective Contribution shall
be deemed an Employer Elective Contribution.
(d) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(e) Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top heavy
minimum contribution. All contributions by the Employer shall be made
in cash.
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4.2 PARTICIPANTS SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a portion of his Compensation
which would have been received in the Plan Year (except for the deferral
election) by up to the maximum amount which will not cause the Plan to violate
the provisions of Sections 4.5(a) and 4.9. A deferral election (or modification
of an earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election. For purposes of this Section, Compensation shall be determined prior
to any reductions made pursuant to Code Sections 125, 402(e)(3), 402(h)(1)(B),
403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2)
that are treated as Employer contributions.
The amount by which Compensation is reduced shall be that Participant's
Deferred Compensation and be treated as an Employer Elective Contribution and
allocated to that Participant's Elective Account.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the contrary, amounts held
in the Participant's Elective Account may not be distributable (including any
offset of loans) earlier than:
(1) a Participant's separation from service, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to
the limitations of Section 6.11; or
(4) if elected by the Employer, such earlier date permitted
under the applicable Regulations.
(d) For each Plan Year, a Participant's Deferred Compensation made
under this Plan and all other plans, contracts or arrangements of the Employer
maintaining this Plan shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g), as in effect at the
beginning of such taxable year. If such dollar limitation is exceeded, a
Participant will be deemed to have notified the Administrator of such excess
amount which shall be distributed in a manner consistent with Section 4.2(f).
The dollar limitation shall be adjusted annually pursuant to the method provided
in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
from his Participant's Elective Account pursuant to Section 6.11(b) or pursuant
to Regulation 1.401(k)-l(d)(2)(iv)(B) from any ) the plan maintained by the
Employer, then such Participant shall not be permitted to elect to have Deferred
Compensation contributed to the Plan on his behalf for a period of twelve (12)
months following the receipt of he distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in
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which the hardship distribution was made, by the amount of such Participant's
Deferred Compensation, if any, pursuant to this Plan (and any other plan
maintained by the Employer) for the taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals as defined in Regulation 1.402(g)-l(b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee Pension (as defined in Code Section 408(k)), a
salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)),
a deferred compensation plan under Code Section 457(b), or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the method provided in
Code Section 415(d) pursuant to Regulations) for such Participant's taxable
year, the Participant may, not later than March 1 following the close of the
Participant's taxable year, notify the Administrator in writing of such excess
and request that his Deferred Compensation under this Plan be reduced by an
amount specified by the Participant. In such event, the Administrator may direct
the Trustee to distribute such excess amount (and any Income allocable to such
excess amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated as a
pro rata distribution of Excess Deferred Compensation and Income. The amount
distributed shall not exceed the Participant's Deferred Compensation under the
Plan for the taxable year (and any Income allocable to such excess amount). Any
distribution on or before the last day of the Participant's taxable year must
satisfy each of the following conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Matching contributions which relate to Excess Deferred Compensation
which is distributed pursuant to this Section 4.2(f) shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any distribution
of Excess Contributions pursuant to Section 4.6 (a) for the Plan Year beginning
with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the Participant
shall be entitled to receive benefits, the value of the Participant's Elective
Account shall be used to provide additional benefits to the Participant or his
Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term debt
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security acceptable to the Trustee until such time as the allocations pursuant
to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the salary
reduction elections provided for herein in accordance with the following:
(1) A Participant must make his initial salary deferral
election within a reasonable time, not to exceed thirty (30) days,
after entering the Plan pursuant to Section 3.2. If the Participant
fails to make an initial salary deferral election within such time,
then such Participant may thereafter make an election in accordance
with the rules governing modifications. The Participant shall make
such an election by entering into a written salary reduction agreement
with the Employer and filing such agreement with the Administrator.
Such election shall initially be effective beginning with the pay
period following the acceptance of the salary reduction agreement by
the Administrator, shall not have retroactive effect and shall remain
in force until revoked.
(2) A Participant may modify a prior election during the Plan
Year and concurrently make a new election by filing a written notice
with the Administrator within a reasonable time before the pay period
for which such modification is to be effective. However, modifications
to a salary deferral election shall only be permitted quarterly, during
election periods established by the Administrator prior to the first
day of each Plan Year quarter. Any modification shall not have
retroactive effect and shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the Plan Year by
providing the Administrator with thirty (30) days written notice of
such revocation (or upon such shorter notice period as may be
acceptable to the Administrator). Such revocation shall become
effective as of the beginning of the first pay period coincident with
or next following the expiration of the notice period. Furthermore, the
termination of the Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any salary
reduction agreement then in effect, effective immediately following the
close of the pay period within which such termination or cessation
occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer federal income tax return for the Fiscal
Year with or within which such Plan Year ends.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer general assets, but
in any event not later than the fifteenth (15th) business day of the month
following the month in which the amount is (a) withheld from the pay of the
Participant, or (b) received by the Employer. Furthermore, any additional
Employer contributions
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which are allocable to the Participant's Elective Account for a Plan Year shall
be paid to the Plan no later than the twelve-month period immediately following
the close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date all amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer
contributions for each Plan Year. Within a reasonable period of time after the
date of receipt by the Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective Account in
an amount equal to each such Participant's Deferred Compensation for
the year.
(2) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(b), to each Participant's Account in
accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year shall
be eligible to share in the matching contribution for the Plan Year.
(3) With respect to the Employer Qualified Non-Elective
Contribution made pursuant to Section 4.1(c), to each Participant's
Elective Account when used to satisfy the "Actual Deferral Percentage"
tests or Participant's Account in accordance with Section 4.1(c).
Only Non-Highly Compensated Participants and Non-Key Employees
who have completed a Year of Service during the Plan Year and are
actively employed on the last day of the Plan Near shall be eligible to
share in the Qualified Non-Elective Contribution for the year.
(4) With respect to the Employer Non-Elective contribution
made pursuant to Section 4.1(d), to each Participant's Account in the
same proportion that each such Participant's Compensation for the year
bears to the total Compensation of all Participants for such year.
Only Participants who have completed a Year of Service during the Plan
Year and are actively employed on the last day of the Plan Year shall
be eligible to share in the discretionary contribution for the year.
(c) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of
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Former Participants, if any, in accordance with Section 6.4(g)(2). The remaining
Forfeitures, if any, shall be allocated to Participants' Accounts in the
following manner:
(1) Forfeitures attributable to Employer matching
contributions made pursuant to Section 4.1(b) shall be allocated among
the Participants' Accounts in the same proportion that each such
Participant's Compensation for the year bears to the total Compensation
of all Participants for the year.
Except, however, Participants who are not eligible to share in
matching contributions (whether or not a deferral election was made or
suspended pursuant to Section 4.2(e)) for a Plan Year shall not share
in Plan Forfeitures attributable to Employer matching contributions for
that year.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(d) shall be allocated among
the Participants' Accounts of Participants otherwise eligible to share
in the allocation of discretionary contributions for the year in the
same proportion that each such Participant's Compensation for the year
bears to the total Compensation of all such Participants for the year.
Provided, however, that in the event the allocation of Forfeitures
provided herein shall cause the "annual addition" (as defined in Section 4.9) to
any Participant's Account to exceed the amount allowable by the Code, the excess
shall be reallocated in accordance with Section 4.10.
(d) For any Top Heavy Plan Year, Non-Key Employees not otherwise
eligible to share in the allocation of contributions and Forfeitures as provided
above, shall receive the minimum allocation Provided for in Section 4.4(g) if
eligible pursuant to the provisions of Section 4.4(i).
(e) Notwithstanding the foregoing, Participants who are not actively
employed on the last day of the Plan Year due to Retirement (Normal or Late)
Total and Permanent Disability or death shall share in the allocation of
contributions and Forfeitures for that Plan Year.
(f) As of each Valuation Date, before the current valuation period
allocation of Employer contributions and Forfeitures, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall be allocated in
the same proportion that each Participant's and Former Participant's
nonsegregated accounts bear to the total of all Participants' and Former
Participants, nonsegregated accounts as of such date. Earnings or losses with
respect to a Participant's Directed Account shall be allocated in accordance
with Section 4.12.
Participants' transfers from other qualified plans deposited in the
general Trust Fund shall share in any earnings and losses (net appreciation or
net depreciation) of the Trust Fund in the same manner provided above. Each
segregated account maintained on behalf of a Participant shall be credited or
charged with its separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer contributions and Forfeitures allocated to the Participant's Combined
Account of each Non-Key Employee shall be equal to at least three
23
<PAGE> 28
percent (3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee in any
defined contribution plan included with this plan in a Required Aggregation
Group). However, if (1) the sum of the Employer contributions and Forfeitures
allocated to the Participant's Combined Account of each Key Employee for such
Top Heavy Plan Year is less than three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be included in an Aggregation
Group to enable a defined benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer contributions and Forfeitures
allocated to the Participant's Combined Account of each Non-Key Employee shall
be equal to the largest percentage allocated to the Participant's Combined
Account of any Key Employee. However, in determining whether a Non-Key Employee
has received the-required minimum allocation, such Non-Key Employee's Deferred
Compensation and matching contributions needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.7(a) shall not be taken
into account.
However, no such minimum allocation shall be required in this Plan for
any Non-Key Employee who participates in another defined contribution plan
subject to Code Section 412 included with this Plan in a Required Aggregation
Group.
(h) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key Employee
shall be equal to the ratio of the sum of the Employer contributions and
Forfeitures allocated on behalf of such Key Employee divided by the "415
Compensation" for such Key Employee.
For any Top Heavy Plan Year, the minimum allocations set forth above
shall be allocated to the Participant's Combined Account of all Non-Key
Employees who are Participants and who are employed by the Employer on the last
day of the Plan Year, including Non-Key Employees who have (1) failed to
complete a Year of Service; and (2) declined to make mandatory contributions (if
required) or, in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(j) For the purposes of this Section, "415 Compensation" shall be
limited to $150,000. Such amount shall be adjusted for increases in the cost of
living in accordance with Code Section 401(a)(17), except that the dollar
increase in effect on January 1 of any calendar year shall be effective for the
Plan Year beginning with or within such calendar year. For any short Plan Year
the "415 Compensation" limit shall be an amount equal to the "415 Compensation"
limit for the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short Plan Year by
twelve (12).
(k) Notwithstanding anything herein to the contrary, Participants who
terminated employment for any reason during the Plan Year shall share on the
salary reduction contributions made by the Employer for the year of termination
without regard to tho Hours of Service credited.
(l) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service then separate accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
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(2) one account representing his status in the Plan
attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer Elective Contributions to a Participant's
Elective Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group all not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group shall not
be more than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of Code Section
401(a)(3) and Regulation 1.401(k)-l(b) are incorporated herein by
reference.
However, in order to prevent the multiple use of the alternative method
described in (2) above and in Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section 4.2 and to
make Employee contributions or to receive matching contributions under this Plan
or under any other plan maintained by the Employer or an Affiliated Employer
shall have a combination of his actual deferral ratio and his actual
contribution ratio reduced pursuant to Section 4.6(a) and Regulation 1.401(m)-2,
the provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's Elective Account
tor such Plan Year, to such, Participant's "414(s) Compensation" for such Plan
Year. The actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest one-hundredth of
one percent. Employer Elective Contributions allocated to each Non-Highly
Compensated Participant's Elective Account shall be reduced by Excess Deferred
Compensation to the extent such excess amounts are made under this Plan or any
other plan maintained by the Employer.
(c) For the purposes of Sections 4.5 and 4.6, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to make a deferral election pursuant to Section 4.2, whether or not
such deferral election was made or suspended pursuant to Section 4.2.
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<PAGE> 30
(d) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section 401(a)(4)
or 410(b) (other than Code Section 410(b)(2)(A)(ii)), the cash or deferred
arrangements included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be considered as a
single arrangement for purposes of determining whether or not such, arrangements
satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the ans including such
arrangements shall be treated as one arrangement and as one plan for purposes of
this Section and Code Sections 401(a)(4), 410(b) and 401(k). Plans may be
aggregated under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan described
in Code Section 4975(e)(7) or 409 may not be combined with this Plan for
purposes of determining whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) or 409) of the Employer or
an Affiliated Employer, all such cash or deferred arrangements shall be treated
as one cash or deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant. However, if
the cash or deferred arrangements have different plan years, this paragraph
shall be applied by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
(f) The Maximum Annual Allocation for any Plan Year shall be calculated
by reference to the Actual Deferral Percentage of the Non-Highly Compensated
Participant group for the prior Plan Year; provided, however, that the Employer
may make an election in such manner as the Secretary of the Treasury specifies,
to calculate such Maximum Annual Allocation by reference to such percentage for
the current Plan Year. Such election may not be revoked except as provided by
the Secretary of the Treasury. Notwithstanding the foregoing, for the Plan Year
beginning after December 31, 1996, the Employer may determine the Maximum Annual
Allocation by reference to such percentage for the current Plan Year without
formal amendment or election and determine the Maximum Annual Allocation by
reference to the Actual Deferral Percentage of the Non-Highly Compensated
Participant group for the prior Plan Year for the Plan Year beginning after
December 31, 1997, unless the Employer makes an election as described above.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer Elective
Contributions made pursuant to Section 4.4 do not satisfy one of the tests set
forth in Section 4.5(a), the Administrator shall adjust Excess Contributions
pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following the end
of each Plan Year, the Highly Compensated Participant having the highest actual
deferral amount shall have his portion of Excess Contributions distributed to
him until one of the tests set forth in Section 4.5(a) is
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<PAGE> 31
satisfied, or until his actual deferral amount equals the actual deferral amount
of the Highly Compensated Participant having, the second highest actual deferral
amount. This process shall continue until one of the tests set forth in Section
4.5(a) is satisfied. For each Highly Compensated Participant, the amount of
Excess Contributions is equal to the Elective Contributions used to satisfy the
"Actual Deferral Percentage" tests on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus the
amount determined by multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this paragraph) by his "414(s)
Compensation." However, in determining the amount of Excess Contributions to be
distributed with respect to an affected Highly Compensated Participant as
determined herein, such amount shall be reduced pursuant to Section 4.2(f) by
any Excess Deferred Compensation previously distributed to such affected Highly
Compensated Participant 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 distribution:
(i) may be postponed but not later than the close
of the Plan Year following the Plan Year to which they are
allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by tho Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess
Contributions and Income.
(3) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related matching
contribution is distributed as an Excess Aggregate Contribution
pursuant to Section 4.8.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer may make a special Qualified Non-Elective Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy one of
the tests set forth in Section 4.5(a). Such contribution shall be allocated to
the Participant's Elective Account of each Non-Highly Compensated Participant in
the same proportion that each Non-Highly Compensated Participant's compensation
for the year bears to the total Compensation of all Non-Highly Compensated
Participants.
(c) If during a Plan Year the projected aggregate amount of Elective
Contributions to be allocated to all Highly Compensated Participants under this
Plan would, by virtue of the tests set forth in Section 4.5(a), cause the Plan
to fail such tests, then the Administrator may automatically reduce,
proportionately or in the order provided in Section 4.6(a), each affected Highly
Compensated Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section 4.5(a).
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<PAGE> 32
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage for the
Non-Highly Compensated Participant group plus 2 percentage points.
However, to prevent the multiple use of the alternative method
described in this paragraph and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and, to make Employee contributions
or to receive matching contributions under this Plan or under any plan
maintained by the Employer or an Affiliated Employer shall have a
combination of his actual deferral ratio and his actual contribution
ratio reduced pursuant to Regulation 1.401(m)-2 and Section 4.8(a). The
provisions of Code Section 401(m) and Regulations 1.401(m)-l(b) and
1.401(m)-2 are incorporated herein by Reference.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group, the
average of the ratios (calculated separately for each Participant in each group)
of:
(1) the sum of Employer matching contributions made pursuant
to Section 4.1(b) on behalf of each such Participant for such Plan
Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 14.8(d),
only Employer matching contributions contributed to the Plan prior to the end of
the succeeding Plan Year shall be considered. In addition, the Administrator may
elect to take into account, with respect to Employees eligible to have Employer
matching contributions pursuant to Section 4.1(b) allocated to their accounts,
elective deferrals (as defined in Regulation 1.402(g)-l(b)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C)) contributed
to any plan maintained by the Employer. Such elective deferrals and qualified
non-elective contributions shall be treated as Employer matching contributions
subject to Regulation 1.401(m)-l(b)(5) which is incorporated herein by
reference. However, Plan Year must be the same as the plan year of the plan to
which the elective deferrals and the qualified non-elective contributions are
made.
(d) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one plan
for purposes of Code Sections 401(a)(4) or 410(b) (other than the average
benefits test under Code Section 410(b)(2)(A)(ii)), such plans shall be treated
as one plan.
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<PAGE> 33
In addition, two or more plans Of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as a single plan for
purposes of determining whether or not such plans satisfy Code Sections
401(a)(4), 1410(b) and 401(m). In such a case, the aggregated plans must satisfy
this Section and Code Sections 401(al)(4), 410(b) and 401(m) as though such
aggregated Plans were a single plan. Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan described
in Code Section 4975(e)(7) or 409 may not be aggregated with this Plan for
purposes of determining whether the employee stock ownership plan or this Plan
satisfies this Section and code Sections 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee contributions, or both, are
made, all such contributions on behalf of such Highly Compensated Participant
shall be aggregated or purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans have different
plan years, this paragraph shall be applied by treating all plans ending with or
within the same calendar year as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated
Participant and Non- Highly Compensated Participant shall include any Employee
eligible to have Employer matching contributions pursuant to Section 4.1(b)
(whether or not a deferral election was made or suspended pursuant to section
4.2(e)) allocated to his account for the Plan Year.
(g) The Actual Contribution Percentage limitation for any Plan Year
shall be calculated by reference to the Actual Contribution Percentage for the
Non-Highly Compensated Participant group for the prior Plan Year; provided,
however, that the Employer may make an election in such manner as the Secretary
of the Treasury specifies, to calculate such Actual Contribution Percentage
limitation by reference to such percentage for the current Plan Year. Such
election may not be revoked except as provided by the Secretary of the Treasury.
Notwithstanding the foregoing, for the Plan Year beginning after December 31,
1996, the Employer may determine the Actual Contribution Percentage limitation
by reference to the Actual Contribution Percentage for the Non-Highly
Compensated Participant Group for the prior Plan Year for the Plan year
beginning after December 31, 1997, unless the Employer makes an election as
described above.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution Percentage" for the
Highly Compensated Participant group exceeds the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group pursuant to Section
4.7(a), the Administrator (on or before the fifteenth day of the third month
following the end of the Plan Year, but in no event later than the close of the
following Plan Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual contribution amount, his
Vested portion of Excess Aggregate Contributions (and Income allocable to such
contributions) and, if forfeitable, forfeit such non-Vested Excess Aggregate
Contributions attributable to Employer matching contributions (and Income
allocable to such
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<PAGE> 34
forfeitures) until either one of the tests set forth in Section 4.7(a) is
satisfied, or until his actual contribution amount equals the actual
contribution amount of the Highly Compensated Participant having the second
highest actual contribution amount. This process shall continue until one of the
tests set forth in Section 4.7(a) is satisfied.
If the correction of Excess Aggregate Contributions attributable to
Employer matching contributions is not in proportion to the Vested and
non-Vested portion of such contributions, then the Vested portion of the
Participant's Account attributable to Employer matching contributions after the
correction shall be subject to Section 6.5(h).
(b) Any distribution and/or forfeiture of less than the entire amount
of Excess Aggregate Contributions (and Income) shall be treated as a pro rata
distribution and/or forfeiture of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be designated by the
Employer as a distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated in accordance
with Section 4.4. However, no such forfeiture may be allocated to a Highly
Compensated Participant whose contributions are reduced pursuant to this
Section.
(c) Excess Aggregate Contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of Code
Sections 404 and 415 even if distributed from the Plan.
Forfeited matching contributions that are reallocated to Participants'
Accounts for the Plan Year in which the forfeiture occurs shall be treated as an
"annual addition" pursuant to Section 4.9(b) for the Participants to whose
Accounts they are reallocated and for the Participants from whose Accounts they
are forfeited.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the Employer matching contributions made
pursuant to Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
the Highly Compensated Participant (determined prior to the application of this
paragraph) minus the amount determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined after application of this
paragraph) by his "414(s) Compensation." The actual contribution ratio must be
rounded to the nearest one-hundredth of one percent. In no case shall the amount
of Excess Aggregate Contribution with respect to any Highly Compensated
Participant exceed the amount of Employer matching contributions made pursuant
to Section 4.1(b) and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate Contributions
with respect to any Plan Year shall be made after first determining the Excess
Contributions, if any, to be treated as voluntary Employee contributions due to
recharacterization for the plan year of any other qualified cash or deferred
arrangement (as defined in Code Section 401(k)) maintained by the Employer that
ends with or within the Plan Year.
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<PAGE> 35
(f) If during a Plan Year the projected aggregate amount of Employer
matching contributions to be allocated to all Highly Compensated Participants
under this Plan would, by virtue of the tests set forth in Section 4.7(a), cause
the Plan to fail such tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.8(a) each affected Highly
Compensated Participant's projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in Section 4.7(a).
(g) Notwithstanding the above, within twelve (12) months after the end
of the Plan Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.7(a). Such
contribution shall be allocated to the Participant's Account of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants. A separate accounting of any special
Qualified Non-Elective Contribution shall be maintained in the Participant's
Account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall equal the
lesser of: (1) $30,000 adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year." For any short
"limitation year," the dollar limitation in (l) above shall be reduced by a
fraction, the numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts for any
"limitation year" of (1) Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(l)(2) which is part of a pension
or annuity plan maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e))
maintained by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code Section
419A(f)(2)) after separation from service which is otherwise treated as an
"annual addition," or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual addition.
In addition, the following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in Code Sections
402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans made to
a Participant from the Plan; (3) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee
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<PAGE> 36
pursuant to Code Section 411(a)(3)(D) (mandatory contributions); and (5)
Employee contributions to a simplified employee pension excludable from gross
income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined-benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(f) For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by
Code Section 415(h)), is a member of an affiliated service group (as defined by
Code Section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all Employees of
such Employers shall be considered to be employed by a single Employer.
(g) For the purpose of this Section, if this Plan is a Code Section
413(c) plan, each Employer who maintains this Plan will be considered to be a
separate Employer.
(h) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different Anniversary
Dates, the maximum "annual additions" under this Plan shall equal the maximum
"annual additions" for the "limitation year" minus any "annual additions"
previously credited to such Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, "annual additions" will
be credited to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product of (A) the maximum
"annual additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs (1) or (2) above,
multiplied by (B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's accounts under
this Plan without regard to the limitations of Code Section 415 and
(ii) the denominator o which is such "annual additions" for all plans
described in this subparagraph.
(i) For limitation years beginning prior to December 31, 1999, if an
Employee is (or has been) a Participant in one or more defined benefit plans and
one or more defined contribution plans
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<PAGE> 37
maintained by the Employer, the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any "limitation year" may not exceed 1.0.
(j) The defined benefit plan fraction for any "limitation year" is a
fraction, the numerator of which is the sum of the Participant's projected
annual benefits under all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the "limitation year" under Code
Sections 415(b) and (d) or 140 percent of the highest average compensation,
including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first "limitation year, beginning after December 31, 1986,
in one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation year" beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
Code Section 415 for all "limitation years" beginning before January 1, 1987.
(k) The defined contribution plan fraction for any "limitation year, is
a fraction, the numerator of which is the sum of the annual additions to the
Participant's Account under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior "limitation
years" (including the annual additions attributable to the Participant's
nondeductible Employee contributions to all defined benefit plans, whether or
not terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code Section 419(e),
and individual medical accounts, as defined in Code Section 415(l)(2), maintains
by the Employer), and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior "limitation years" of service
with the employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation determined under
Code Sections 415(b) and (d) in effect under Code Section 415(c)(1)(A) or 35
percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first "limitation year" beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence on
May 6, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last "limitation year" beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first "limitation year" beginning on or after January 1, 1987. The annual
addition for any "limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.
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<PAGE> 38
(l) Notwithstanding anything contained in this Section to the contrary,
the limitations, adjustments and other requirements prescribed in this Section
shall at all times comply with the provisions of ode Section 415 and the
Regulations thereunder, the terms of which are specifically incorporated herein
by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the
limits of Section 4.9 or other facts and circumstances into which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions" under this Plan would
cause the maximum "annual additions" to be exceeded for any Participant, the
Administrator shall (1) distribute any elective deferrals (within the meaning
Code Section 402(g)(3)) or return any Employee contributions (whether voluntary
or mandatory), and for the distribution of gains attributable to those elective
deferrals and Employee contributions, to the extent that the distribution or
return would reduce the "excess amount" in the Participant's accounts (2) hold
any "excess amount" remaining after the return of any elective deferrals or
voluntary Employee contributions in a "Section 415 suspense account" (3) use the
"Section 415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to reduce Employer contributions for that
Participant if that Participant is covered by the Plan as of the end of the
"limitation year," or if the Participant is not so covered, allocate and
reallocate the "Section 415 suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to all Participants in the Plan
before any Employee or Employee contributions which would constitute "annual
additions are made to the Plan for such "limitation year" (4) reduce Employer
contributions to the Plan for such "limitation year" by the amount of the
"Section 415 suspense account" allocated and reallocated during such "limitation
year."
(b) For purposes of this Article, "excess amount" for any Participant
for a "limitation year" shall mean the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the Plan
without regard to the limitations of Code Section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense account" shall
mean an unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, transferred from other
qualified plans by Eligible Employees, provided that the trust from which such
funds are transferred permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be set up in a
separate account herein referred to as a "Participant's Rollover Account." Such
account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
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(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn by, of
distributed to the Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-l(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-l(d).
(d) The Administrator, at the election of the Participant, shall direct
the Trustee to distribute all or a portion of the amount credited to the
Participant's Rollover Account. Any distributions of amounts held in a
Participant's Rollover Account shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including, but not limited to,
all notice and consent requirements of Code Sections 417 and 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be considered as part of
a Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short term debt
security acceptable to the Trustee until such time as the allocations pursuant
to this Plan have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan" shall mean
any tax qualified plan under Code Section 401(a). The term "amounts transferred
from other qualified plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) distributions from another qualified
plan which a re eligible rollover distributions and which are either transferred
by the Employee to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover; (iii) amounts
transferred to this Plan from a conduit individual retirement account provided
that the conduit individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another qualified plan
as a lump-sum distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than earnings on
said assets; and (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii) above,
and transferred by the Employee to this Plan within sixty (60) days of his
receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies, the
Administrator may require the Employee to establish that the amounts to be
transferred to this Plan meet the requirements of this Section and may also
require the Employee to provide an opinion of counsel satisfactory to the
Employer that the amounts to be transferred meet the requirements of this
Section.
(h) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having the
effect of such a transfer) shall only be permitted
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<PAGE> 40
if it will not result in the elimination or reduction of any "Section 411(d)(6)
protected benefit" as described in Section 8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by the
Administrator (the Participant Direction Procedures) and applied in a uniform
nondiscriminatory manner, direct the Trustee to invest all of their accounts in
specific assets, specific funds or other investments permitted under the Plan
and the Participant Direction Procedures; provided, however, that amounts
credited to accounts attributable to the matching contribution portion of the
Employer Non-Elective Contribution for Plan Years beginning after 1998 shall be
automatically invested in common stock of the Employer. Participants may not
direct the investment of any portion of their account attributable to matching
contributions made for Plan Years beginning after 1998. That portion of the
interest of any Participant so directing will thereupon be considered a
Participant's Directed Account.
(b) As of each Valuation Date, all Participant Directed Accounts shall
be charged or credited with the net earnings, gains, losses and expenses as well
as any appreciation or depreciation in the market value using publicly listed
fair market values when available or appropriate.
(1) To the extent that the assets in it Participant's Directed
Account are accounted for as pooled assets or investments, the
allocation of earnings, gains and losses of each Participant's Directed
Account shall be based upon the total amount of funds so invested, in a
manner proportionate to the Participant's share of such pooled
investment.
(2) To the extent that the assets in the Participant's
Directed Account are accounted for as segregated assets, the allocation
of Earnings, gains and losses from such assets shall be made on a
separate and distinct basis.
(c) The Participant Direction Procedures shall provide an explanation
of the circumstances under which Participants and their Beneficiaries may give
investment instructions, including, but need not be limited to, the following:
(1) the conveyance of instructions by the Participants and
their Beneficiaries to invest Participant Directed Accounts in Directed
Investments;
(2) the name, address and phone number of the Fiduciary (and,
if applicable, the person or persons designated by the Fiduciary to act
on its behalf) responsible for providing information to the Participant
or a Beneficiary upon request relating to the investments in Directed
Investments;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender and
similar rights related to a Directed Investment by the Participants or
their Beneficiaries;
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<PAGE> 41
(5) a description of any transaction fees and expenses which
affect the balances in Participant Directed Accounts in connection with
the purchase or sale of Directed Investments; and
(6) general procedures for the dissemination of investment and
other information relating to the Designated Investment Alternatives as
deemed necessary or appropriate, including but not limited to a
description of the following:
(i) the investment vehicles available under the
Plan, including specific information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information
which may be obtained upon request from the Fiduciary
designated to provide such information.
(d) Any information regarding investments available under the Plan, to
the extent not required to be described in the Participant Direction Procedures,
may be provided to the Participant in one or more written documents which are
separate from the Participant Direction Procedures and are not thereby
incorporated by reference into this Plan.
(e) The Administrator may, at its discretion, include in or exclude by
amendment or other action from the Participant Direction Procedures such
instructions, guidelines or policies as it deems necessary or appropriate to
ensure proper administration of the Plan, and may interpret the same
accordingly.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation Date,
to determine the net worth of the assets comprising the Trust Fund as it exists
on the Valuation Date provided, however, that the Administrator may establish
Valuation Dates for valuation of assets in Participant Directed Investment
Accounts which may vary from the Valuation Dates for assets other than assets in
Participant Directed Investment Accounts. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value as of the Valuation Date and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or the Trust Fund.
The Trustee may update the value of any shares held in the Participant Directed
Account by reference to the number of shares held by that Participant, priced at
the market value as of the Valuation Date.
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<PAGE> 42
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date,
or as soon thereafter as is practicable, the Trustee shall distribute, at the
election of the Participant, all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or other
termination of his employment, all amounts credited to such Participant's
Combined Account shall become fully Vested. The Administrator shall direct the
Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to
distribute the value of the deceased Participant's accounts to the Participant's
Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct the Trustee, in accordance with the provisions of Sections 6.6 and 6.7,
to distribute any remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an outstanding
loan to the Participant or Former Participant shall be taken into account in
determining the amount of the Pre-Retirement Survivor Annuity.
(d) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or
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<PAGE> 43
Former Participant as the Administrator may deem desirable. The Administrator's
determination of death and of the right of any person to receive payment shall
be conclusive.
(e) Unless otherwise elected in the manner prescribed in Section 6.6,
the Beneficiary of the death benefit shall be the Participant's spouse, who
shall receive such benefit in the form of a Pre- Retirement Survivor Annuity
pursuant to Section 6.6. Except, however, the Participant may designate a
Beneficiary other than his spouse if:
(1) the Participant and his spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in Section
6.6, and the spouse has waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court order
to such effect (and there is no "qualified domestic relations order" as
defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Administrator. However, the Participant's
spouse must again consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. In the event no valid designation of Beneficiary exists
at the tine of the Participant's death, the death benefit shall be payable to
his estate.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or other termination of his employment, all amounts credited
to such Participant's Combined Account shall become fully Vested. In the event
of a Participant's Total and Permanent Disability, the Trustee, in accordance
with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is terminated for
any reason other than death, Total and Permanent Disability or retirement, such
Participant shall be entitled to such benefits as are provided hereinafter
pursuant to this Section 6.4.
Distribution of the funds due to a Terminated Participant shall be made
on the occurrence of an event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer (upon the
Participant's death, Total and Permanent Disability or Normal
39
<PAGE> 44
Retirement). However, at the election of the Participant, the Administrator
shall direct the Trustee to cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such Terminated Participant. Any
distribution under this paragraph shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including, but not limited to,
all notice and consent requirements of Code Sections 417 and 411(a)(11) and the
Regulations thereunder.
If the value of a Terminated Participant's Vested benefit derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution, the Administrator shall
direct the Trustee to cause the entire Vested benefit to be paid to such
Participant in a single lump sum.
Effective as of January 1, 1998, if the value of a Terminated
Participant's Vested benefit derived from Employer and Employee Contributions
does not exceed $5,000, and never exceeded $5,000 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause the entire
Vested benefit to be paid to such Participant in a single lump sum.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account determined
on the basis of the Participant's number of Years of Service according to the
following schedules:
<TABLE>
<CAPTION>
Vesting Schedule
Employer Discretionary Contributions
Years of Service Percentage
<S> <C>
1 20%
2 40%
3 60%
4 80%
5 100%
</TABLE>
<TABLE>
<CAPTION>
Vesting Schedule
Matching Contributions
Years of Service Percentage
<S> <C>
1 20%
2 40%
3 60%
4 80%
5 100%
</TABLE>
(c) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer contributions to the Plan or upon any full or
partial termination of the Plan, all amounts credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.
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<PAGE> 45
(d) The computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Plan. For this purpose, the Plan shall be treated as
having been amended if the Plan provides for an automatic change in vesting due
to a change in top heavy status. In the event that the Plan is amended to change
or modify any vesting schedule, a Participant with at least three (3) Years of
Service as of the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment, but only with respect to the Participant's accrued benefit as of the
effective date or, if later, the adoption of such amendment. If a Participant
fails to make such election, then such Participant shall be subject to the new
vesting schedule. The Participant's election period shall commence on the
adoption date of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
(g) (1) If any Former Participant shall be reemployed by the Employer
before a 1-Year Break in Service occurs, he shall continue to participate in the
Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service, and such
Former Participant had received a distribution of his entire Vested
interest prior to his reemployment, his forfeited account shall be
reinstated only if he repays the full amount distributed to him before
the earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of five (5) consecutive 1-Year Breaks in Service
commencing after the distribution. In the event the Former Participant
does repay the full amount distributed to him, the undistributed
portion of the Participant's Account must be restored in full,
unadjusted by any gains or losses occurring subsequent to the Valuation
Date coinciding with or preceding his termination. The source for such
reinstatement shall first be any Forfeitures occurring during the year.
If such source is insufficient, then the Employer shall contribute an
amount which is sufficient to restore any such forfeited Accounts
provided, however, that if a discretionary contribution is made for
such year pursuant to Section 4.1(d), such contribution shall first be
applied to restore any such Accounts and the remainder shall be a
allocated in accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include Years of
Service prior to his 1-Year Break in Service subject to the following
rules:
(i) If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service shall be used
for computing Years of Service for eligibility
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<PAGE> 46
and for vesting purposes only after he has been employed for
one (1) Year of Service following the date of his reemployment
with the Employer;
(ii) Any Former Participant who under the Plan does
not have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits
otherwise allowable under (i) above if his consecutive 1-Year
Breaks in Service equal or exceed the greater of (A) five (5)
or (B) the aggregate number of his pre-break Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance
attributable to pre-break service shall not be increased as a
result of post-break service;
(iv) If a Former Participant is reemployed by the
Employer, he shall participate in the Plan immediately on his
date of reemployment;
(v) If a Former Participant (a 1-Year Break in
Service previously occurred, but employment had not
terminated) is credited with an Hour of Service after the
first eligibility computation period in which he incurs a
1-Year Break in Service, he shall participate in the Plan
immediately.
6.5 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provide below, a Participant who is
married on the Annuity Starting Date and who does not die before the Annuity
Starting Date shall receive the value of all of his benefits in the form of a
joint and survivor annuity. The joint and survivor annuity is an annuity that
commences immediately and shall be equal in value to a single life annuity. Such
joint and survivor benefits following the Participant's death shall continue to
the spouse during the spouse's lifetime at a rate equal to 50% of the rate at
which such benefits were payable to the Participant. This joint and 50% survivor
annuity shall be considered the designated qualified joint and survivor annuity
and automatic form of payment for the purposes of this Plan. However, the
Participant may elect to receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent (75%) or one hundred
percent (100%) of the rate payable to a Participant during his lifetime, which
alternative joint and survivor annuity shall be equal in value to the automatic
joint and 50% survivor annuity. An unmarried Participant shall receive the value
of his benefit in the form of a life annuity. Such unmarried Participant,
however, may elect in writing to waive the life annuity. The election must
comply with the provisions of this Section as if it were an election to waive
the joint and survivor annuity by a married Participant, but without the spousal
consent requirement. The Participant may elect to have any annuity provided for
in this Section distributed upon the attainment of the "earliest retirement age"
under the Plan. The "earliest retirement age" is the earliest date on which,
under the Plan, the Participant could elect to receive retirement benefits.
(2) Any election to waive the joint and survivor annuity must
be made by the Participant in writing during the election period and be
consented to by the Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal guardian,
42
<PAGE> 47
even if such guardian is the Participant, may give consent. Such
election shall designate a Beneficiary (or a form of benefits) that may
not be changed without spousal consent (unless the consent of the
spouse expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Administrator that the required consent cannot be obtained
because there is no spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election made
by the Participant and consented to by his spouse may be revoked by the
Participant in writing without the consent of the spouse at any time
during the election period. The number of revocations shall not be
limited. Any new election must comply with the requirements of this
paragraph. A former spouse's waiver shall not be binding on a new
spouse.
(3) The election period to waive the point and survivor
annuity shall be the 90 day period ending on the Annuity Starting Date.
(4) With regard to the election, the Administrator shall
provide to the Participant no less than 30 days and no more than 90
days before the Annuity Starting Date a written explanation of:
(i) the terms and conditions of the joint and
survivor annuity,
(ii) The Participant's right to make, and the effect
of, an election to waive the joint and survivor annuity,
(iii) the right of the Participant's spouse to
consent to any election to waive the joint and survivor
annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(5) Any distribution provided for in this Section 6.5 may
commence less than 30 days after the notice required by Code Section
417(a)(3) is given, provided that:
(i) the Administrator clearly informs the Participant
that the Participant has a right to a period of 30 days after
receiving the notice to consider whether to waive the joint
and survivor annuity and consent to a form of distribution
other than a joint and survivor annuity,
(ii) the Participant is permitted to revoke an
affirmative distribution election at least until the Annuity
Starting Date, or, if later, at any time prior to the
expiration of the 7-day period that begins the day after the
explanation of the joint and survivor annuity is provided to
the Participant,
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<PAGE> 48
(iii) the Annuity Starting Date is after the date
that the explanation of the joint and survivor annuity is
provided to the Participant. However, the Annuity Starting
Date may be before the date that any affirmative distribution
election is made by the Participant and before the date that
the distribution is permitted to commence under (iv) below,
and
(iv) distribution in accordance with the affirmative
election does not commence before the expiration of the 7-day
period that begins the day after the explanation of the joint
and survivor annuity is provided to the Participant.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a joint and
survivor annuity, or if such Participant is not married, in the form of a life
annuity, the Administrator, pursuant to the election of the Participant, shall
direct the Trustee to distribute to a Participant or his Beneficiary any amount
to which he is entitled under the Plan in one or more of the following methods:
(1) One lump-sum payment in cash or in property.
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such
installment payments, the Administrator may (A) segregate the aggregate
amount thereof in a separate, federally insured savings account,
certificate of deposit in a bank or savings and loan association, money
market certificate or other liquid short-term security or (B) purchase
a nontransferable annuity contract for a term certain (with no life
contingencies) providing for such payment. The period over which such
payment is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and his
designated Beneficiary).
(3) Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for payments over a
period extending beyond either the life of the Participant (or the
lives of the Participant and his designated Beneficiary) or the life
expectancy of the Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(c) The present value of a Participant's joint and survivor annuity
derived from Employer and Employee contributions may not be paid without his
written consent if the value exceeds, or has ever exceeded, $3,500 at the time
of any prior distribution. Further, the spouse of a Participant must consent in
writing to any immediate distribution. Any written consent required by this
Section 6.5(c) must be obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with Section 6.5(a)(2).
If the value of the Participant's benefit derived from Employer and
Employee contributions does not exceed $3,500 and has never exceeded $3,500 at
the time of any prior distribution, the Administrator may immediately distribute
such benefit without such Participant's consent. Effective as of January 1,
1998, the $3,500 limit referred to in this paragraph (c) shall be raised to
$5,000. No distribution may be made under this paragraph after the Annuity
Starting Date unless the Participant and his spouse consent in writing to such
distribution.
44
<PAGE> 49
(d) Any distribution to a Participant who has a benefit which exceeds,
or has ever exceeded, $3,500 at the time of any prior distribution shall require
such Participant's consent if such distribution commences prior to the later of
his Normal Retirement Age or age 62. Effective as of January 1, 1998, such
$3,500 limit shall be raised to $5,000. With regard to this required consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material features and an
explanation of the relative values of the optional forms of benefit
available under the Plan that would satisfy the notice requirements of
Code Section 417.
(2) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent, it
shall be deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits shall
not apply with respect to distributions which are required under
Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall
be provided no less than 30 days and no more than 90 days before the
Annuity Starting Date.
(4) Written consent of the Participant to the distribution
must not be made before the Participant receives the notice and must
not be made more than 90 days before the Annuity Starting Date.
(5) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to the
distribution.
Any such distribution may commence less than 30 days, subject to
Section 6.5(a)(5), after the notice required under Regulation 1.411(a)-11(c) is
given, provided that: (1) the Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, whether under the Plan or through the
purchase of an annuity contract, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation 1.401(a)(9)-2), the provisions of
which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed or must
begin to be distributed to him not later than April 1st of the calendar
year following the later of (i) the calendar year in which the
Participant attains age 70 1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a "five (5) percent owner" at
any time during the five (5) Plan Year period ending in the calendar
year in which he attains age 70 1/2 or, in the case of a Participant
who becomes a "five (5) percent owner" during any subsequent Plan Year,
clause (ii) shall no longer apply and the required beginning date shall
be the April 1st of the calendar year following the
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<PAGE> 50
calendar year in which such subsequent Plan Year ends. Such
distributions shall be equal to or greater than any required
distribution. Notwithstanding the foregoing, clause (ii) above shall
not apply to any Participant unless the Participant had attained age 70
1/2 before January 1, 1988 and was not a "five (5) percent owner" at
any time during the Plan Year ending with or within the calendar year
in which the Participant attained age 66 1/2 or any subsequent Plan
Year.
Notwithstanding the foregoing, for Plan Years beginning after
December 31, 1998, a Participant who is not a Five Percent
Owner may elect that either:
(i) his "required beginning date" is April 1 of the
calendar year following the calendar year in which
the Participant attains age 70-1/2; or
(ii) his required beginning date is April 1 of the
calendar year following the later of:
(I) the calendar year in which the Participant
attains age 70-1/2, or
(II) the calendar in which the Participant
retires.
The required beginning date for a Participant who is a Five
Percent Owner (as described in Section 416(i) of the Code) is
April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2.
Distributions to a Participant must begin no later than the applicable
April 1st as determined under the preceding paragraph and must be made over the
life of the Participant (or the lives of the Participant and the Participant's
designated Beneficiary) or the life expectancy of the Participant (or the life
expectancies of the Participant and his designated Beneficiary) in accordance
with Regulations.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
(f) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) shall be
redetermined annually in accordance with Regulations. Life expectancy and joint
and last survivor expectancy shall be computed using the return multiples in
Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-transferable
when distributed. Furthermore, the terms of any annuity Contract purchased and
distributed to a Participant or spouse shall comply with all of the requirements
of the Plan.
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(h) If a distribution is made at a time when a Participant is not fully
Vested in his Participant's Account and the Participant may increase the Vested
percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the distribution;
and
(2) at any relevant time, the Participant's Vested portion of
the separate account shall be equal to an amount ("X") determined by
the formula:
X equals P (AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at the
relevant time, D is the amount of distribution, and R is the ratio of
the account balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested Participant
who dies before the Annuity Starting Date and who has a surviving spouse shall
have the Pre-Retirement Survivor Annuity paid to his surviving spouse. The
Participant's spouse may direct that payment of the Pre-Retirement Survivor
Annuity commence within a reasonable period after the Participant's death. If
the spouse does not so direct, payment of such benefit will commence at the time
the Participant would have attained the later of his Normal Retirement Age or
age 62. However, the spouse may elect a later commencement date. Any
distribution to the Participant's spouse shall be subject to the rules specified
in Section 6.6(g).
(b) Any election to waive the Pre-Retirement Survivor Annuity before
the Participant's death must be made by the Participant in writing during the
election period and shall require the spouse's irrevocable consent in the same
manner provided for in Section 6.5(a)(2). Further, the spouse's consent must
acknowledge the specific nonspouse Beneficiary. Notwithstanding the foregoing,
the nonspouse Beneficiary need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elects to relinquish such
right.
(c) The election period to waive the Pre-Retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Participant attains
age 35 and end on the date of the Participant's death. An earlier waiver (with
spousal consent) may be made provided a written explanation of the
Pre-Retirement Survivor Annuity is given to the Participant and such waiver
becomes invalid at the beginning of the Plan Year in which the Participant turns
age 35. In the event a Vested Participant separates from service prior to the
beginning of the election period, the election period shall begin on the date of
such separation from service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant (and
consistent with Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that
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required pursuant to Section 6.5(a)(4). For the purposes of this paragraph, the
term "applicable period" means, with respect to a Participant, whichever of the
following periods ends last:
(1) The period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains
age 35;
(2) A reasonable period after the individual becomes a
Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with respect
to the Participant;
(4) A reasonable period ending after Code Section 401 (a) (11)
applies to the Participant; or
(5) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35. For this
purpose, the Administrator must provide the explanation beginning one
year before the separation from service and ending one year after such
separation. If such a Participant thereafter returns to employment with
the Employer, the applicable period for such Participant, shall be
redetermined.
For purposes of applying this Section 6.6(d), a reasonable period
ending after the enumerated events described in paragraphs (2), (3) and (4) is
the end of the two year period beginning one year prior to the date the
applicable event occurs, and ending one year after that date.
(e) If the present value of the Pre-Retirement Survivor Annuity derived
from Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution, the Administrator shall
direct the immediate distribution of such amount to the Participant's spouse. No
distribution may be made under this paragraph after the Annuity Starting Date
unless the spouse consents in writing. If the value exceeds, or has ever
exceeded, $3,500 at the time of any prior distribution, an immediate
distribution of the entire mount of the Pre-Retirement Survivor Annuity may be
made to the surviving spouse, provided such surviving spouse consents in writing
to such distribution. Effective as of January 1, 1998, the $3,500 limit referred
to in this paragraph (e) shall be raised to $5,000. Any written consent required
under this paragraph must be obtained not more than 90 days before commencement
of the distribution and shall be made in a manner consistent with Section
6.5(a)(2).
(f) (1) To the extent the death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, it shall be paid to the Participant's
Beneficiary by either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's death, by his
Beneficiary), subject to the rules specified in Section 6.6(g):
(i) One lump-sum payment in cash or in property.
(ii) Payment in monthly, quarterly, semi-annual,
or annual cash installments over a period to be determined by
the Participant or his Beneficiary. After
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periodic installments commence, the Beneficiary shall have the
right to direct the Trustee to reduce the period over which
such periodic installments shall be made, and the Trustee
shall adjust the cash amount of such periodic installments
accordingly.
(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct the Trustee to segregate the
death benefit into a separate account, and the Trustee shall invest
such segregated account separately, and the funds accumulated in such
account shall be used for the payment of the installments.
(g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance with
the following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to Section 6.5 as of his date
of death. If a Participant dies before he has begun to receive any distributions
of his interest under the Plan or before distributions are deemed to have begun
pursuant to Regulations, then his death benefit shall be distributed to his
Beneficiaries by December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
However, the 5-year distribution requirement of the preceding paragraph
shall not apply to any portion of the deceased Participant's interest which is
payable to or for the benefit of a designated Beneficiary. In such event, such
portion shall be distributed over the life of such designated Beneficiary (or
over a period not extending beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later than December 31st of
the calendar year immediately following the calendar year in which the
Participant died. However, in the event the Participant's spouse (determined as
of the date of the Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's death shall not apply.
In lieu thereof, distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the calendar year in
which the Participant died; or (2) December 31st of the calendar year in which
the Participant would have attained age 70 1/2. If the surviving spouse dies
before distributions to such spouse begin, then the 5-year distribution
requirement of this Section shall apply as if the spouse was the Participant.
(h) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) shall be
redetermined annually in accordance with Regulations. Life expectancy and joint
and last survivor expectancy shall be computed using the return multiples in
Tables V and VI of Regulation 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to
make a distribution or to commence a series of payments the distribution may be
made or begun as soon as is practicable. However, unless a Former Participant
elects in writing to defer the receipt of benefits (such election may not result
in a death benefit that is more than incidental, the payment of benefits shall
begin not
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later than the 60th day after the close of the Plan Year in which the latest of
the following events occurs: (a) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein; (b) the 10th
anniversary of the year in which the Participant commenced participation in the
Plan; or (c) the date the Participant terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Uniform Transfer to Minors Act, if such
is permitted by the laws of the state in which said Beneficiary resides. Such a
payment to the legal guardian, custodian or parent of a minor Beneficiary shall
fully discharge the Trustee, Employer, and Plan from further liability on
account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored
unadjusted for earnings or losses.
6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of 59 1/2
years, the Administrator, at the election of the Participant, shall direct the
Trustee to distribute all or a portion of the amount then credited to the
accounts maintained on behalf of the Participant. However, no distribution from
a segregated portion of the Participant's Account shall occur prior to 100%
vesting of such segregated portion. In the event that the Administrator makes
such a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the Regulations
thereunder.
Notwithstanding the above, pre-retirement distributions from a
Participant's Elective Account shall not be permitted prior to the Participant
attaining age 59 1/2 except at otherwise permitted under the terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall direct
the Trustee to distribute to any Participant in any one Plan Year up to the
lesser of 100% of his Participant's
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Elective Account valued as of the last Valuation Date or the amount necessary to
satisfy the immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to be made as of the
first day of the Plan Year or, if later, the Valuation Date immediately
preceding the date of distribution, and the Participant's Elective Account shall
be reduced accordingly. Withdrawal under this Section shall be authorized only
if the distribution is on account of:
(1) Expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152) or necessary for these
persons to obtain medical care;
(2) The costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) Payment of tuition, related educational fees, and room and
board expenses for the next twelve (12) months of post-secondary
education for the Participant, his spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage
of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such other acts
as are known to the Administrator, determines that all of the following
conditions are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The amount of
the immediate and heavy financial need may include any amounts
necessary to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and voluntary
Employee contributions will be suspended for at least twelve (12)
months after receipt of the hardship distribution or, the Participant,
pursuant to a legally enforceable agreement, will suspend his elective
deferrals and voluntary Employee contributions to the Plan and all
other plans maintained by the Employer for at least twelve (12) months
after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer,
provide that the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such
Participant's elective deferrals for the taxable year of the hardship
distribution.
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(c) Notwithstanding the above, distributions from the Participant's
Elective Account pursuant to this Section shall be limited, as of the date of
distribution, to the Participant's Elective Account as of the end of the last
Plan Year ending before July 1, 1989, plus the total Participant's Deferred
Compensation after such date, reduced by the amount of any previous
distributions pursuant to this Section and Section 6.10.
(d) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate payee"
under a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
separated from service and has not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the meaning
set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories of
responsibilities:
(1) Consistent with the "funding policy and method" determined
by the Employer, to invest, manage, and control the Plan assets
subject, however, to the direction of a Participant with respect to his
Participant Directed Accounts, the Employer or an Investment Manager if
the Trustee should appoint such manager as to all or a portion of the
assets of the Plan;
(2) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event of
their death, to their Beneficiaries; and
(3) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan Year a
written annual report per Section 7.7.
(b) In the event that the Trustee shall be directed by a Participant
(pursuant to the Participant Direction Procedures), or the Employer, or an
Investment Manager with respect to the investment of any or all Plan assets, the
Trustee shall have no liability with respect to the investment of such assets,
but shall be responsible only to execute such investment instructions as so
directed.
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(1) The Trustee shall be entitled to rely fully on the written
instructions of a Participant (pursuant to the Participant Direction
Procedures), or the Employer, or any Fiduciary or nonfiduciary agent of
the Employer, in the discharge of such duties, and shall not be liable
for any loss or other liability, resulting from such direction (or lack
of direction) of the investment of any part of the Plan assets.
(2) The Trustee may delegate the duty to execute such
instructions to any nonfiduciary agent, which may be an affiliate of
the Trustee or any Plan representative.
(3) The Trustee may refuse to comply with any direction from
the Participant in the event the Trustee, in its sole and absolute
discretion, deems such directions improper by virtue of applicable law.
The Trustee shall not be responsible or liable for any loss or expense
which may result from the Trustee's refusal or failure to comply with
any directions from the Participant.
(4) Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's Directed
Account, unless paid by the Employer.
(c) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign papers
on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income and in such
securities or property, real or personal, wherever situated, as the Trustee
shall deem advisable, including, but not limited to, stocks, common or
preferred, bonds and other evidences of indebtedness or ownership, and real
estate or any interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the short and
long-term financial needs of the Plan on the basis of information furnished by
the Employer. In making such investments, the Trustee shall not be restricted to
securities or other property of the character expressly authorized by the
applicable law for trust investments; however, the Trustee shall give due regard
to any limitations imposed by the Code or the Act so that at all times the Plan
may qualify as a qualified Profit Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the duties
of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) The Trustee may from time to time transfer to a common, collective,
pooled trust fund or money market fund maintained by any corporate Trustee or
affiliate thereof hereunder, all or such part of the Trust Fund as the Trustee
may deem advisable, and such part or all of the Trust Fund so transferred shall
be subject to all the terms and provisions of the common, collective, pooled
trust fund or money market fund which contemplate the commingling for investment
purposes of such trust assets with trust assets of other trusts. The Trustee may
transfer any part of the Trust Fund intended for temporary investment of cash
balances to a money market fund maintained by Norwest Banks of Colorado, Inc or
its affiliates. The Trustee may, from time to time, withdraw from such
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common, collective, pooled trust fund or money market fund all or such part of
the Trust Fund as the Trustee may deem advisable.
(d) With respect to assets in a Participant's Directed Investment
Account, as well as any "qualifying employer securities" held in a Participant's
account as provided for in Section 7.12, the Participant or Beneficiary shall
direct the Trustee with regard to any voting, tender and similar rights
associated with the ownership of such assets, (i.e., the "Stock Right(s)") as
follows:
(1) Each Participant or Beneficiary shall direct the Trustee
to vote or otherwise exercise such Stock Rights in accordance with the
provisions, conditions and terms of any such Stock Right(s).
(2) Such directions shall be provided to the Trustee by the
Participant or Beneficiary in accordance with the procedure as
established by the Administrator. The Trustee shall vote or otherwise
exercise such Stock Right(s) with respect to which it has received
directions to do so under this Section.
(3) To the extent to which a Participant or Beneficiary does
not instruct the Trustee or does not issue valid directions to the
Trustee to vote or otherwise exercise such Stock Right(s), such
Participants or Beneficiaries shall be deemed to have directed the
Trustee that such Stock Rights remain nonvoted and unexercised.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of the Plan,
shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property held
by the Trustee, by private contract or at public auction. No person
dealing with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition, with or without
advertisement;
(c) To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or without
power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property. However, the Trustee shall not vote
proxies relating to securities for which it has
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not been assigned full investment management responsibilities. In those
cases where another party has such investment authority or discretion,
the Trustee will deliver all proxies to said party who will then have
full responsibility for voting those proxies; with respect to assets in
a Participant's Directed Investment Account, as well as any "qualifying
employer securities" held in a Participant's account as provided for in
Section 7.12, the Participant or beneficiary shall direct the Trustee
with regard to any voting, tender and similar rights associated with
investing of such assets as provided in Section 7.2(d).
(d) To cause any securities or other property to be registered
in the Trustee's own name or in the name of one or more of the
Trustee's nominees, and to hold any investments in bearer form, but the
books and records of the Trustee shall at all times show that all such
investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in
such amount, and upon such terms and conditions, as the Trustee shall
deem advisable; and for any sum so borrowed, to issue a promissory note
as Trustee, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the Trustee
shall be bound to see to the application of the money lent or to
inquire into the validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best
interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such tine as the Trustee may deem
advisable any securities or other property received or acquired as
Trustee hereunder, whether or not such securities or other property
would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted;
(i) To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan, to commence
or defend suits or legal or administrative proceedings, and to
represent the Plan in all suits and legal and administrative
proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or
may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment of the
Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at
any time or from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect, receive,
and settle for the proceeds of all such annuity or other Contracts as
and when entitled to do so under the provisions thereof;
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(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United
States government obligations;
(n) To invest in shares of investment companies registered
under the Investment Company Act of 1940, including any money market
fund advised by or offered through Norwest Banks of Colorado, Inc;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange;
(p) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(q) To pool all or any of the Trust Fund, from time to time,
with assets belonging to any other qualified employee pension benefit
trust created by the Employer or an affiliated company of the Employer,
and to commingle such assets and make joint or common investments and
carry joint accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such investments or
accounts or any pooled assets of the two or more trusts in accordance
with their respective interests;
(r) To appoint a nonfiduciary agent or agents to assist the
Trustee in carrying out any investment instructions of Participants and
of any Investment Manager or Fiduciary, and to compensate such agent(s)
from the assets of the Plan, to the extent not paid by the Employer;
(s) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to carry out the purposes of the Plan.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries under the following circumstances: (1) loans
shall be made available to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants and Beneficiaries; (3) loans shall bear a reasonable rate of
interest; (4) loans shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
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(b) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by the Plan to the Participant) shall be limited
to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant during
the one year period ending on the day before the date on which such
loan is made, over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan.
(c) Loans shall provide for level amortization with payments to be made
not less frequently than quarterly over a period not to exceed five (5) years.
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 shall provide for periodic repayment over a
reasonable period of time that may exceed five (5) years. For this purpose, a
principal residence has the same meaning as a principal residence under Code
Section 1034.
(d) Any loan made pursuant to this Section where the Vested interest of
the Participant is used to secure such loan shall require the written consent of
the Participant's spouse in a manner consistent with Section 6.5(a). Such
written consent must be obtained within the 90-day period prior to the date the
loan is made. However, no spousal consent shall be required under this paragraph
if the total accrued benefit subject to the security is not in excess of $3,500.
Effective as of January 1, 1998, such $3,500 limit shall be increased to $5,000.
(e) Any loans granted or renewed on or after the last day of the first
Plan Year beginning after December 31, 1988 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 positions 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 program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
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(7) the events constituting default and the steps that will be
taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate written
document which, when properly executed, is hereby incorporated by reference and
made a part of the Plan. Furthermore, such Participant loan program may be
modified or amended in writing from time to time without the necessity of
amending this Section.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary
Date or receipt of the Employer contribution for each Plan Year, the Trustee
shall furnish to the Employer and Administrator a written statement of account
with respect to the Plan Year for which such contribution was made setting
forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust
Fund;
(d) all payments and distributions made from the Trust Fund;
and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith upon its
receipt of each such statement of account, shall acknowledge receipt
thereof in writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to disapprove
any such statement of account within thirty (30) days after its receipt
thereof shall be deemed an
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approval thereof. The approval by the Employer of any statement of
account shall be binding as to all matters embraced therein as between
the Employer and the Trustee to the same extent as if the account of
the Trustee had been settled by judgment or decree in an action for a
judicial settlement of its account in a court of competent jurisdiction
in which the Trustee, the Employer and all persons having or claiming
an interest in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to have it
accounts judicially settled if the Trustee so desire.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act and
the regulations thereunder for any Plan Year, the Administrator shall direct the
Trustee to engage on behalf of all Participants an independent qualified public
accountant for that purpose. Such accountant shall, after an audit of the books
and records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of his audit setting forth his
opinion as to whether any statements, schedules or lists that are required by
Act Section 103 or the Secretary of Labor to be filed with the Plan's annual
report, are presented fairly in conformity with generally accepted accounting
principles applied consistently. All auditing and accounting fees shall be an
expense of and may, at the election of the Administrator, be paid from the Trust
Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank, insurance
company, or similar institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall transmit and certify
the accuracy of that information to the Administrator as provided in Act Section
103(b) within one hundred twenty (120) days after the end of the Plan Year or by
such other date as may be prescribed under regulations of the Secretary of
Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer,
at least thirty (30) days before its effective date, a written notice of his
resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at least
thirty (30) days before its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any Trustee,
a successor may be appointed by the Employer; and such successor, upon accepting
such appointment in writing and delivering same to the Employer, shall, without
further act, become vested with all the estate, rights, powers, discretions, and
duties of his predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and
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accepts such designation, the successor shall, without further act, become
vested with all the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally named Trustee herein
immediately upon the death, resignation, incapacity, or removal of his
predecessor.
(e) Whenever any Trustee hereunder ceases to as such, he shall furnish
to the Employer and Administrator a written statement of account with respect to
the portion of the Plan Year during which he served as Trustee. This statement
shall be either (i) included as part of the annual statement of account for the
Plan Year required under Section 7.71 or (ii) set forth in a special statement.
Any such special statement of account should be rendered to the Employer no
later than the due date of the annual statement of account for the Plan Year.
The procedures set forth in Section 7.7 for the approval by the Employer of
annual statements of account shall apply to any special statement of account
rendered hereunder and approval by the Employer of any such special statement in
the manner provided in Section 7.7 shall have the same effect upon the statement
as the Employer's approval of an annual statement of account. No successor to
the Trustee shall have any duty or responsibility to investigate the acts or
transactions of any predecessor who has rendered all statements of account
required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee
at the direction of the Administrator shall transfer the Vested interest, if
any, of such Participant in his account to another trust forming part of a
pension, profit sharing or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
7.11 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a distributee
may elect, at the time and in the manner prescribed by the Administrator, to
have any portion of an eligible rollover distribution that is equal to at least
$500 paid directly to an eligible retirement plan specified by the distributes
in a direct rollover.
(b) For purposes of this Section the following definitions shall apply:
(1) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the distributes,
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 distributes or the joint lives (or joint life
expectancies) of the distributes and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code
Section 401(a)(9); the portion of any other distribution that is not
includible in gross income (determined without regard to the exclusion
for net
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unrealized appreciation with respect to employer securities); and any
other distribution that is reasonably expected to total less than $200
during a year.
(2) An eligible retirement plan is an individual retirement
account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in
Code Section 403(a), or a qualified trust described in Code Section
401(a), 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.
(3) A distributes includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined
in Code Section 414(p), are distributees with regard to the interest of
the spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributes.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act, provided, however, that the Trustee shall not be permitted to
acquire any qualifying Employer securities or qualifying Employer real property
if, immediately after the acquisition of such securities or property, the fair
market value of all qualifying Employer securities and qualifying Employer real
property held by the Trustee hereunder should amount to more than 100% of the
fair market value of all the assets in the Trust Fund. The Employer may direct
the Trustee to invest and maintain investment of a portion of the Trust assets
in "qualifying Employer securities," subject to the limitations of the preceding
sentence.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the Plan,
subject to the limitations of this Section. However, any amendment which affects
the rights, duties or responsibilities of the Trustee and Administrator, other
than an amendment to remove the Trustee or Administrator, may only be made with
the Trustee's and Administrator's written consent. Any such amendment shall
become effective as provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the Trust provisions contained
herein are a part of the Plan and the amendment affects the duties of the
Trustee hereunder.
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(b) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to pay
taxes and administration expenses) to be used for or diverted to any purpose
other than for the exclusive benefit of the Participants or their Beneficiaries
or estates; or causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger, plan
transfer or similar transaction) shall be effective to the extent it eliminates
or reduces any "Section 411(d)(6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits" the result of
which is a further restriction on such benefit unless such protected benefits
are preserved with respect to benefits accrued as of the later of the adoption
date or effective date of the amendment. "Section 411(d)(6) protected benefits"
are benefits described in Code Section 411(d)(6)(A), early retirement benefits
and retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the Plan
by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100% Vested as provided in
Section 6.4 and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets of the Trust Fund to Participants in a manner
which is consistent with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or in property or through
the purchase of irrevocable nontransferable deferred commitments from an
insurer. Except as permitted by Regulations, the termination of the Plan shall
not result in the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c).
8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
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ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4 of the Plan.
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in which, as
of the Determination Date, (1) the Present Value of Accrued Benefits of Key
Employees and (2) the sum of the Aggregate Accounts of Key Employees under this
Plan and all plans of an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a Top Heavy
or Super Top Heavy Plan (or whether any Aggregation Group which includes this
Plan is a Top Heavy Group). In addition, if a Participant or Former Participant
has not performed any services for any Employer maintaining the Plan at any time
during the five year period ending on the Determination Date, any accrued
benefit for such Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued Benefits
of Key Employees and (2) the sum of the Aggregate Accounts of Key Employees
under this Plan and all plans of an Aggregation Group, exceeds ninety percent
(90%) of the Present Value of Accrued Benefits and the Aggregate Accounts of all
Key and Non-Key Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period ending on
the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but due on ox
before the Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made
after the Determination Date that are allocated as of a date in that
first Plan Year.
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(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding Plan
Years. However, in the case of distributions made after the Valuation
Date and prior to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the extent that
such distributions are already included in the Participant's Aggregate
Account balance as of the Valuation Date. Notwithstanding anything
herein to the contrary, all distributions, including distribution under
a terminated plan which if it had not been terminated would have been
required to be included in an Aggregation Group, will be counted.
Further, distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of death
shall be treated as a distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a part
of the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made from
a plan maintained by one employer to a plan maintained by another
employer), if this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or plan-to-plan
transfers as a distribution for the purposes of this Section. If this
Plan is the plan accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan transfers as part of
the Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers are
to be treated as the sane employer in (5) and (6) above, all employers
aggregated under Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(d) "Aggregation Group" means either Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key
Employee is a participant in the Plan Year containing the Determination
Date or any of the four preceding Plan Years, and each other plan of
the Employer which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections 401(a)(4) or
410, will be required to be aggregated. Such group shall be known as a
Required Aggregation Group.
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In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required Aggregation
Group is a Top Heavy Group. No plan in the Required Aggregation Group
will be considered a Top Heavy Plan if the Required Aggregation Group
is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Sections 401(a)(4) and
410. Such group shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is a Top Heavy Group. No
plan in the Permissive Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Gr up is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are top Heavy
Plans.
(4) An Aggregation Group shall include any terminated plan of
the Employer if it was maintained within the last five (5) years ending
on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding Plan
Year, or (b) in the close of the first Plan Year, the last day of such Plan
Year.
(f) Present Value of Accrued Benefit: In the case of a defined benefit
plan, the Present Value of Accrued Benefit for a Participant other than a Key
Employee, shall be as determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, 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 Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall be determined as of
the most recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date except as provided in Code Section 416
and the Regulations thereunder for the first and second plan years of a defined
benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all Participants.
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ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall be
payable out of the Trust Fund to any person (including a Participant or his
Beneficiary shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt to
Anticipate, alienate, sell, transfer, assign, pledge, encumbrance, or charge the
same shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or against
such person, and the same shall not be recognized by the Trustee, except to such
extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, as a result of a loan from the Plan. At the
time a distribution is to be made to or for a Participant's or Beneficiary's
benefit, such proportion of the amount distributed as shall equal such loan
indebtedness shall be paid by the Trustee to the Trustee or the Administrator,
at the direction of the Administrator, to apply against or discharge such loan
indebtedness. Prior to making a payment, however, the Participant or Beneficiary
must be given written notice by the Administrator that such loan indebtedness is
to be so paid in whole or part from his Participant Combined Account. If the
Participant or Beneficiary does not agree that the loan indebtedness is a valid
claim against his Vested Participant's Combined Account, he shall be entitled to
a review of the validity of the claim in accordance with procedures provided in
Sections 2.7 and 2.8.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations orders
permitted to be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the extent
provided under a "qualified domestic relations order," a former spouse of a
Participant shall be treated as the spouse or surviving spouse for all purposes
under he Plan.
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10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of Delaware, other than its laws respecting choice
of law, to the extent not preempted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the Administrator, they shall
be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the happening of
any contingency, by collateral arrangement or by any other meant, for any part
of the corpus or income of any trust find maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants, or their
Beneficiaries.
(b) In the event the Employer shall make an excessive contribution
under a mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may
demand repayment of such excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount to the
Employer within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
10.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted
by the Act and regulations thereunder, shall be bonded in an amount not less
than 10% of the amount of the funds such Fiduciary handles; provided, however,
that the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount
of funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide
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protection to the Plan against any loss by reason of acts of fraud or dishonesty
by the fiduciary alone or in connivance with others. The surety shall be a
corporate surety company (as such term is used in Act Section 412(a)(2)), and
the bond shall be in a form approved y the Secretary of Labor. Notwithstanding
anything in the Plan to the contrary, the cost of such bonds shall be an expense
of and may, at the election of the Administrator, be paid from the Trust Fund or
by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor their
successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.
10.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
10.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan or as accepted by or assigned to them pursuant to any
procedure provided under the Plan, including but not limited to any agreement
allocating or delegating their responsibilities, the terms of which are
incorporated herein by reference. In general, unless otherwise indicated herein
or pursuant to such agreements, the
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Employer shall have the duties specified in Article II hereof, as the same may
be allocated or delegated thereunder, including but not limited to the
responsibility for making the contributions provided for under Section 4.1; and
shall have the authority to appoint and remove the Trustee and the
Administrator; to 'formulate the Plan's "funding policy and method"; and to
amend or terminate, in whole or in part, the Plan. The Administrator shall have
the responsibility for the administration of the Plan, including but not limited
to the items specified in Article II of the Plan, as the same may be allocated
or delegated thereunder. The Administrator shall act as the named Fiduciary
responsible for communicating with the Participant according to the Participant
Direction Procedures. The Trustee shall have the responsibility of management
and control of the assets held under the Trust, except to the extent directed
pursuant to Article II or with respect to those assets, the management of which
has been assigned to an Investment Manager, who shall be solely responsible for
the management of the assets assigned to it, all as specifically provided in the
Plan and any agreement with the Trustee. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan as
specified or allocated herein. No named Fiduciary shall guarantee the Trust Fund
in any manner against investment loss or depreciation in asset value. Any person
or group may serve in more than one Fiduciary capacity. In the furtherance of
their responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
10.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, contributions to
this Plan are conditioned upon the initial qualification of the Plan under Code
Section 401. If the Plan receives an adverse determination with respect to its
initial qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the application for
the determination is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan was adopted, or such
later date as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except Sections
3.5, 3.6, and 4.1(e), any contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the Employer may,
within one (1) year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance. Earnings of the
Plan attributable to the excess contribution may
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not be returned to the Employer, but any losses attributable thereto must reduce
the amount so returned.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity, whether an affiliate
or subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating Employers, as
well as all increments thereof. However, the assets of the Plan shall, on an
ongoing basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or Participating
Employer who contributed such assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under the
Plan, and all amounts credited to such Participant's Combined Account as well as
his accumulated service time with the transfers or predecessor, and his length
of participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited try termination of employment shall
inure only to the benefit of the Participants of the Employer or Participating
Employer by which the forfeiting Participant was employed, except if the
Forfeiture is for an Employee whose Employer is an Affiliated Employer, then
said Forfeiture shall inure to the benefit of the Participants of those
Employers who are Affiliated Employers. Should an Employee of one ("First")
Employer be transferred to an associated ("Second") Employer which is an
Affiliated Employer, such transfer shall not cause his account balance
(generated while an Employee of "First" Employer) in any manner, or by any
amount to be forfeited). Such Employee's Participant Combined Account balance
for all purposes of the Plan, including length of service, shall be considered
as though he had always
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been employed by the "Second" Employer and as such had received contributions,
forfeitures, earnings or losses, and appreciation or depreciation in value of
assets totaling the amount so transferred.
(e) Any expenses of the Trust which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the same
proportion that the total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the credit of all
Participants.
11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent. Unless
the context of the Plan clearly indicates the contrary the word "Employer" shall
be deemed to include each Participating Employer as related to its adoption of
the Plan.
11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall be
allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall only be by the written action of each
and every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
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11.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or revoke
its participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 8.1(c). If no
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of Article VII hereof.
In no such event shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted to purposes other
than for the exclusive benefit of the Employees of such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
11.9 QUALIFIED MILITARY SERVICE
Effective as of December 12, 1994, notwithstanding any provision of
this Plan to the contrary, contributions, benefits and service will be provided
in accordance with Section 414(u) of the Code.
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
NCS HealthCare, Inc formerly
Aberdeen Group Inc.
By /s/ Judy Fimiani
--------------------------------
EMPLOYER
Norwest Banks of Colorado, Inc.,
National Association
By /s/ Penny Conyers
--------------------------------
TRUSTEE Penny Conyers
Vice President
ATTEST /s/ Heidi Streeks
----------------------------
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February 12, 1999
EXHIBIT 5.1
Board of Directors
NCS HealthCare, Inc.
3201 Enterprise Parkway, Suite 220
Beachwood, Ohio 44122
Re: Registration Statement on Form S-8
Ladies and Gentleman:
It is our understanding that NCS HealthCare, Inc., a Delaware
corporation ("NCS HealthCare"), intends to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, a Registration
Statement on Form S-8 ("Registration Statement"), which Registration Statement
relates to 250,000 shares of Class A common stock, par value $.01 per share, of
NCS HealthCare ("Common Stock"), to be issued pursuant to the NCS HealthCare
Employee Savings Plan and Trust (the "Plan").
We have examined and relied on originals or copies, certified or
otherwise identified to our satisfaction as being true copies, of all such
records of NCS HealthCare, all such agreements, certificates of officers of NCS
HealthCare and others, and such other documents, certificates and corporate or
other records as we have deemed necessary as a basis for the opinion expressed
in this letter.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals and the conformity to original documents of all
documents submitted to us as certified or photostatic copies.
We have investigated such questions of law for the purpose of rendering
the opinions in this letter as we have deemed necessary. We express no opinion
in this letter concerning any law other than the Delaware General Corporation
Law.
This opinion is being rendered to you as of today. The opinion
expressed herein assumes that there is no change in the facts, circumstances and
law in effect on the date of this opinion, particularly as it relates to
corporate authority and NCS HealthCare's good standing under Delaware law. We
have assumed that NCS HealthCare will remain in good standing as a Delaware
corporation at all times when shares of Common Stock are sold pursuant to the
Plan.
On the basis of the foregoing, we are of the opinion that the Common
Stock to be issued pursuant to the Plan, when and if issued and paid for in
accordance with the terms of the Plan, will be legally issued, fully paid and
nonassessable.
<PAGE> 2
Board of Directors
NCS HealthCare, Inc.
Page 2
February 12, 1999
The opinion in this letter is rendered only to NCS HealthCare in
connection with the filing of the Registration Statement. We consent to the
filing of this letter as an exhibit to the Registration Statement. The opinion
may not be relied upon by NCS HealthCare for any other purpose. This letter may
not be paraphrased, quoted or summarized, nor may it be duplicated or reproduced
in part.
Very truly yours,
BENESCH, FRIEDLANDER,
COPLAN & ARONOFF LLP
<PAGE> 1
EXHIBIT 15.1
February 10, 1999
The Board of Directors and Stockholders
NCS HealthCare, Inc. and Subsidiaries
We are aware of the incorporation by reference in the Registration Statement
Form S-8 of NCS HealthCare, Inc. for the registration of 250,000 shares of its
Class A Common Stock for the NCS HealthCare Employee Savings Plan and Trust of
our report dated October 28, 1998 relating to the unaudited condensed
consolidated interim financial statements of NCS HealthCare, Inc. and
subsidiaries that are included in its Form 10-Q for the quarter ended September
30, 1998.
/s/ ERNST & YOUNG LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) of NCS HealthCare, Inc. pertaining to the registration of
250,000 shares of its Class A Common Stock for the NCS HealthCare Employee
Savings Plan and Trust of our report dated August 6, 1998 with respect to the
consolidated financial statements of NCS HealthCare, Inc. and subsidiaries
included in its Annual Report (Form 10-K/A) for the year ended June 30, 1998
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Cleveland, Ohio
February 10, 1999
