<PAGE> 1
As filed with the Securities and Exchange Commission on August 1, 1996
Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
FPIC INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3359111
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Riverside Avenue, Suite 800, Jacksonville, Florida 32204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 354-5910
FLORIDA PHYSICIANS INSURANCE COMPANY, INC. DEFINED CONTRIBUTION PLAN
(Full title of the plan)
William R. Russell
President and Chief Executive Officer
FPIC Insurance Group, Inc.
1000 Riverside Avenue, Suite 800
Jacksonville, Florida 32204
(904) 354-5910
(Name, address and telephone number of agent for service)
___________________________________
Copies to:
John R. Byers
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
50 N. Laura Street
Suite 2800
Jacksonville, Florida 32202
___________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed Amount of
Title of Securities Amount to Maximum Offering Price Maximum Aggregate Registration
to be Registered be Registered1 Per Share2 Offering Price Fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,$0.10 par 250,000 shares $10.00 $2,500,000 $862.07
value
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Plus such indeterminate number of additional shares as may become
available for sale pursuant to the anti- dilution provisions of such
Plan. In addition, pursuant to Rule 416(c) under the Securities Act
of 1933, this Registration Statement also covers an indeterminate
amount of interests in the employee benefit plan described herein.
2 Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
________________________________________________________________________________
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended (the "Securities Act of 1933")
and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference in this Registration
Statement the following documents heretofore filed with the Commission.
(a) The Registrant's prospectus which is part of the Registrant's
Amendment No 4 to Registration Statement on Form S-1 (File No.
333-4585) that was filed with the Commission on August 1, 1996.
(b) Description of the Registrant's Common Stock as set forth in
the Registration Statement on Form 8-A/A dated July 30, 1996.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment that indicates that all securities offered
have been sold or that deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Prospectus and to be a part
thereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that 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 to constitute a part hereof except as so modified or superseded.
2
<PAGE> 3
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
Not Applicable
Item 6. Indemnification of Directors and Officers.
Subsection (1) of Section 607.0850 of the Florida Business Corporation
Act (the "FBCA") empowers a corporation to indemnify any person who was or is a
party to any proceeding (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 is or was serving at the
request of the corporation as a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against liability incurred in connection
with such proceeding (including any appeal thereof) if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
Subsection (2) of Section 607.0850 of the FBCA empowers a corporation
to indemnify any person who was or is a party to any proceeding by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that such person acted in any of the capacities set forth in the preceding
paragraph, against expenses and amounts paid in settlement not exceeding, in
the judgment of the board of directors, the estimated expenses of litigating
the proceeding including appeals, provided that the person acted under the
standards set forth in the preceding paragraph. However, no indemnification
may be made for any claim, issue or matter as to which such person is adjudged
to be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction,
determines upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses that the court deems proper.
Section 607.0850(3) of the FBCA provides that to the extent a director,
officer, employee or agent of a corporation has been successful on the merits
or otherwise in the defense of any proceeding referred to in subsections (1)
and (2) of Section 607.0850 or in the defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses actually and
reasonably incurred by him or her in connection therewith. Subsection (4)
provides that any indemnification under
3
<PAGE> 4
subsections (1) and (2) of Section 607.0850, unless determined by a court,
shall be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in subsections (1) and (2) of Section 607.0850.
Such determination shall be made:
(a) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such proceeding;
(b) if such a quorum is not obtainable, or, even if
obtainable, by a majority vote of a committee duly designated by the
board of directors (in which directors who are parties may participate)
consisting solely of two or more directors not at the time parties to
the proceeding;
(c) by independent legal counsel:
(1) selected by the board of directors as
prescribed in paragraph (a) or a committee selected as
prescribed in paragraph (b); or
(2) if no quorum of directors can be obtained
under paragraph (a) no committee can be designated under
paragraph (b), by a majority vote of the full board of
directors (in which directors who are parties may
participate); or
(d) by the shareholders by a majority vote of a quorum of
shareholders who were not parties to such proceedings or if no quorum
is obtainable, by a majority vote of shareholders who were not parties
to such proceeding.
Expenses incurred by a director or officer in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition thereof upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it is ultimately determined that
such director or officer is not entitled to indemnification under Section
607.0850.
Section 607.0850(7) of the FBCA states that indemnification and
advancement of expenses are not exclusive and empowers the corporation to make
any other further indemnification or advancement of expenses of its directors,
officers, employees or agents under any bylaw, agreement, vote of shareholders
or disinterested directors or otherwise, for actions in an official capacity
and in other capacities while holding an office. However, a corporation cannot
indemnify or advance expenses if a judgment or other final adjudication
establishes that the actions of the director, officer, employee or agent (a)
violated criminal law, unless the director, officer, employee or agent had
reasonable cause to believe his or her conduct was lawful or had no reasonable
cause to believe his or her conduct was unlawful,
4
<PAGE> 5
(b) derived an improper personal benefit from such transaction, (c) was or is a
director in a circumstance where the liability under Section 607.0834 of the
FBCA (relating to unlawful distributions) applies, or (d) engages in willful
misconduct or conscious disregard for the best interests of the corporation in
a proceeding by or in right of the corporation to procure a judgment in its
favor or in a proceeding by or in right of a shareholder.
Section 607.0850(9) of the FBCA permits any director, officer, employee
or agent who is or was a party to a proceeding to apply for indemnification or
advancement of expenses to any court of competent jurisdiction. Section
607.0850(12) of the FBCA permits a corporation to purchase and maintain
insurance for a director, officer, employee or agent against any liability
incurred in his or her official capacity or arising out of his or her status as
such regardless of the corporation's power to indemnify him or her against such
liability under this section.
The Company's articles provide that the Company's directors and
officers will not be liable for any monetary damages to the Company or its
shareholders to the full extent permitted by Florida law.
The Company's articles and bylaws provide that the Company's directors
and officers shall be indemnified to the fullest extent allowed by law. The
Company has also entered into indemnification agreements with its directors and
officers and has committed to obtaining directors and officers liability
insurance.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
Exhibits required to be filed with the Registration Statement are
listed in the following Exhibit Index. Certain of such exhibits that have
heretofore been filed with the Commission and that are designated by reference
to their exhibit number in prior filings are hereby incorporated herein by
reference and made a part hereof.
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;
5
<PAGE> 6
(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. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change in 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, Form S-8 or Form F-3, 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 Section
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.
6
<PAGE> 7
(c) The undersigned Registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each person to whom
the prospectus is sent or given, a copy of the latest annual report to
shareholders that is incorporated in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c- 3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(d) 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 any provision or arrangement
for such indemnification, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
7
<PAGE> 8
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Jacksonville, State of Florida, on
the 25th day of July, 1996.
FPIC INSURANCE GROUP, INC.
(Registrant)
By: /s/ STEVEN R. SMITH
-------------------------------
Steven R. Smith
Executive Vice President
and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
(Signature) (Title) (Date)
--------- ----- ----
<S> <C> <C>
* Chairman of the Board July 25, 1996
- ---------------------------------- of Directors
Gaston J. Acosta-Rua, M.D.
* Director July 25, 1996
- -----------------------------------
Richard J. Bagby, M.D.
* Director July 25, 1996
- ----------------------------------
Robert O. Baratta, M.D.
* Director July 25, 1996
- ----------------------------------
James W. Bridges, M.D.
* Vice President and July 25, 1996
- ---------------------------------- Chief Financial Officer
Robert B. Finch (Principal Financial Officer)
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
(Signature) (Title) (Date)
---------- ----- ----
<S> <C> <C>
* Director July 25, 1996
- ----------------------------------
Curtis E. Gause, D.D.S.
* Director July 25, 1996
- ----------------------------------
J. Stewart Hagen, M.D.
* Director July 25, 1996
- ----------------------------------
Louis C. Murray, M.D.
* President, Chief Executive July 25, 1996
- ---------------------------------- Officer and Director
William R. Russell (Principal Executive Officer)
* Controller (Principal July 25, 1996
- ---------------------------------- Accounting Officer)
Donald J. Sabia
* Director July 25, 1996
- ----------------------------------
Guy T. Selander, M.D.
* Director July 25, 1996
- ----------------------------------
David M. Shapiro, M.D.
* Director July 25, 1996
- ----------------------------------
D. L. Van Eldik, M.D.
* Vice Chairman of the July 25, 1996
- ---------------------------------- Board of Directors
James G. White, M.D.
* Director July 25, 1996
- ----------------------------------
Henry M. Yonge, M.D.
</TABLE>
*By: /s/ STEVEN R. SMITH
Steven R. Smith
(Attorney-in-fact)
9
<PAGE> 10
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrator has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Jacksonville, State of Florida, on July 25, 1996.
FLORIDA PHYSICIANS INSURANCE
COMPANY, INC. DEFINED
CONTRIBUTION PLAN
By: /s/ STEVEN R. SMITH
--------------------------------------
Name: Steven R. Smith
------------------------------------
Executive Vice President for
-----------------------------------------
Plan Administrator
-----------------------------------------
10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
- ----------
<S> <C>
4(a) Restated Articles of Incorporation (incorporated by reference to Exhibit 3(a) to
Registration Statement on Form S-4 (File No. 333-2040), first filed with the
Commission on March 7, 1996).
4(b) Bylaws (incorporated by reference to Exhibit 3(b) to Registration Statement on Form S-
4 (File No. 333-2040), first filed with the Commission on March 7, 1996).
4(c) Specimen certificate of the Common Stock to be registered hereunder (incorporated by
reference to Exhibit 4 of the Registrant's Registration Statement on Form S-1 (File
No. 333-4585), first filed with the Commission on May 24, 1996).
5 Opinion of Counsel.
23(a) Consent of KPMG Peat Marwick, L.L.P.
23(b) Consent of Counsel (included in Exhibit 5).
24 Power of Attorney
99 Florida Physicians Insurance Company, Inc. Defined Contribution Plan.
</TABLE>
11
<PAGE> 1
Exhibit 5
OPINION OF COUNSEL
<PAGE> 2
LEBOEUF, LAMB, GREENE & MACRAE
L.L.P.
A LIMITED LIABILITY PARTNERSHIP INCLUDING
PROFESSIONAL CORPORATIONS 50
N. LAURA STREET
SUITE 2800
JACKSONVILLE, FL 32202-3650
(904) 354-8000
FACSIMILE: (904) 353-1673
July 25, 1996
FPIC Insurance Group, Inc.
1000 Riverside Avenue
Jacksonville, FL 32204
Ladies and Gentlemen:
We have acted as counsel to FPIC Insurance Group, Inc., a Florida
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") being filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the offer and sale of 250,000 shares of
the Company's common stock, par value $0.10 per share (the "Common Stock"),
pursuant to the Florida Physicians Insurance Company, Inc. Defined Contribution
Plan (the "Plan").
We have examined such documents, corporate records and other
instruments, and have made such other and further investigations as we have
deemed relevant and necessary for the purposes of this opinion. We have
assumed, without inquiry, the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons and the conformity with authentic original documents of any copies
thereof submitted to us for our examination.
Based upon the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
3. The Company has been incorporated under the laws of the State
of Florida and the Company's status is active.
4. The Common Stock will be legally issued, fully paid and
non-assessable when: (i) the Registration Statement shall have become effective
under the Securities Act; (ii) the Common Stock shall have been issued and
sold in the manner contemplated by the Plan; and
<PAGE> 3
FPIC Insurance Group, Inc.
July 25, 1996
Page 2
(iii) certificates representing the Common Stock shall have been executed,
countersigned and registered and delivered to the purchasers against payment of
the agreed consideration therefor.
The opinions rendered herein are limited to the laws of the State of
Florida and the Federal laws of the United States.
This opinion is being delivered in connection with the Registration
Statement and, accordingly, may not be used for any other purpose without our
prior written consent. We assume no obligation to update or supplement this
opinion to reflect any facts or circumstances that may hereafter come to our
attention with respect to the opinions expressed above, including any changes
in applicable law that may hereafter occur.
We hereby consent to the use of our name in the Registration Statement
as counsel who will pass upon the legality of the Common Stock for the Company
and as having prepared this opinion, and to the use of this opinion as an
exhibit to the Registration Statement. We also consent to the use of our name
as counsel for the Company and to any references to this firm in the prospectus
that constitutes part of the Registration Statement.
In giving this consent, we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules or regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
LeBoeuf, Lamb, Greene & MacRae L.L.P.
<PAGE> 1
Exhibit 23(a)
CONSENT OF KPMG PEAT MARWICK, L.L.P.
<PAGE> 2
EXHIBIT 23(A)
The Board of Directors
Florida Physicians Insurance Group, Inc.:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the Prospectus. Our
reports refers to a change in the accounting method for certain investments in
debt and equity securities and for reinsurance.
KPMG Peat Marwick LLP
Jacksonville, Florida
August 1, 1996
<PAGE> 1
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Henry M. Yonge, M.D.
--------------------------
Henry M. Yonge, M.D.
<PAGE> 2
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ D.L. Van Eldik, M.D.
--------------------------
D.L. Van Eldik, M.D.
<PAGE> 3
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ J. Stewart Hagen, M.D.
--------------------------
J. Stewart Hagen, M.D.
<PAGE> 4
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ James W. Bridges, M.D.
--------------------------
James W. Bridges, M.D.
<PAGE> 5
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ William R. Russell
--------------------------
William R. Russell
<PAGE> 6
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Louis C. Murray, M.D.
--------------------------
Louis C. Murray, M.D.
<PAGE> 7
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Robert O. Baratta, M.D.
---------------------------
Robert O. Baratta, M.D.
<PAGE> 8
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Richard J. Bagby, M.D.
--------------------------
Richard J. Bagby, M.D.
<PAGE> 9
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ James G. White, M.D.
--------------------------
James G. White, M.D.
<PAGE> 10
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Guy T. Selander, M.D.
--------------------------
Guy T. Selander, M.D.
<PAGE> 11
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ David M. Shapiro, M.D.
--------------------------
David M. Shapiro, M.D.
<PAGE> 12
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Curtis E. Gause, D.D.S.
--------------------------
Curtis E. Gause, D.D.S.
<PAGE> 13
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director or
Officer of FPIC Insurance Group, Inc. (the "Corporation") hereby constitutes
and appoints Steven R. Smith, Steven M. Rosenbloom and Robert B. Finch, and
each and any of them, his or her true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution, for him or her and in his
or her name, place and stead, to sign that certain Form S-8 Registration
Statement, on behalf of the Corporation's 401(k) Plan, and any and all
amendments (including post-effective amendments) thereto relating to the
registration of up to 250,000 (two hundred and fifty thousand) shares of the
Corporation's Common Stock and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this special power of attorney this
20th day of July 1996.
/s/ Gaston J. Acosta-Rua, M.D.
-----------------------------
Gaston J. Acosta-Rua, M.D.
<PAGE> 1
Exhibit 99
FLORIDA PHYSICIANS INSURANCE COMPANY, INC.
DEFINED CONTRIBUTION PLAN
<PAGE> 2
CHANGE TO COMPLY WITH SECTION 401(a)(17) OF THE INTERNAL REVENUE CODE
AS AMENDED BY THE OMNIBUS BUDGET RECONCILIATION ACT OF 1993
BY ADOPTION OF MODEL AMENDMENT PURSUANT TO REV. PROC. 94-13
The Plan described below gives the undersigned the right to amend or change it
at any time. According to that right, the Plan is changed by adopting the
Model Amendment set forth below, effective as of the first day of the Plan Year
beginning on or after January 1, 1994.
ARTICLE 1: The following is added to the definition of COMPENSATION:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401 (a)(17)(b) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding
12 months, over which compensation is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under section 401(a)(17) of the Code shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current Plan Year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
Executed the 21st day of December, 1994.
For the EMPLOYER
By
/s/ Steven R. Smith
------------------------
Title
Trustee
---------------------
Funded Under GA 79737
<PAGE> 3
AMENDMENT NO. 1
FLORIDA PHYSICIANS INSURANCE COMPANY, INC. DEFINED CONTRIBUTION PLAN
The Plan named above gives the Employer the right to amend it at any
time. According to that right, the Plan is amended as provided below:
Effective January 1, 1996,
by striking the following:
Page 1
Page 14
Page 15
Page 39
Page 42
Page 57
and substituting the following:
Page 1
Page 14
Page 15
Page 39
Page 39a
Page 42
Page 57
Page 57a
The provisions and conditions set forth on any page of this amendment
are a part of the Plan as fully as if recited over the signature(s) below.
By signing this amendment, the Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.
Signed this ____ day of ___________, 19__.
FLORIDA PHYSICIANS INSURANCE
COMPANY, INC.
By
---------------------------
---------------------------
Title
<PAGE> 4
AMEND. NO. 1 PAGE DTD. 1-1-92
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the
Trust, the Group Contract and any other funding arrangement in which the Trust
Fund is or may be invested. To the extent permitted by the Trust. Group
Contract or other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group
Contract and may request the transfer of assets resulting from those
Contributions between such accounts. A Participant may not direct the Trustee
to invest the Participant's Account in collectibles. Collectibles means any
work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage or
other tangible personal property specified by the Secretary of Treasury. To
the extent that a Participant does not direct the investment of his Account,
such Account shall be invested ratably in the accounts available under the
Trust or Group Contract in the same manner as the undirected Accounts of all
other Participants. The Vested Accounts of all Inactive Participants may be
segregated and invested separately from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged,
payments made and changes in the value of the assets held in the Trust Fund.
The Account of a Participant shall be credited with its share of the gains and
losses of the Trust Fund. That part of a Participant's Account invested in a
funding arrangement which establishes an account or accounts for such
Participant thereunder shall be credited with the gain or loss from such
account or accounts. That part of a Participant's Account which is invested in
other funding arrangements shall be credited with a proportionate share of the
gain or loss of such investments. The share shall be determined by multiplying
the gain or loss of the investment by the ratio of the part of the
Participant's Account invested in such funding arrangement to the total of the
Trust Fund invested in such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding policy of
the Plan and to determine appropriate methods of carrying out the Plan's
objectives. The Named Fiduciary shall inform the Trustee and any Investment
Manager of the Plan's short-term and long-term financial needs so the
investment policy can be coordinated with the Plan's financial requirements.
a) Employer Contributions other than Elective Deferral
Contributions: The Trustee shall direct the investment of such
Employer Contributions and transfer of assets resulting from
those Contributions.
b) Elective Deferral Contributions: The Trustee shall direct the
investment of Elective Deferral Contributions and transfer of
assets resulting from those Contributions.
c) Rollover Contributions: The Trustee shall direct the
investment of Rollover Contributions and transfer of assets
resulting from those Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject
to Participant direction.
37
<PAGE> 5
FLORIDA PHYSICIANS
INSURANCE COMPANY, INC.
DEFINED CONTRIBUTION PLAN
Defined Contribution Plan 7.6
Restated January 1, 1989
<PAGE> 6
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 -- Format
Section 1.02 -- Definitions
ARTICLE II PARTICIPATION
Section 2.01 -- Active Participant
Section 2.02 -- Inactive Participant
Section 2.03 -- Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 -- Employer Contributions
Section 3.01A -- Rollover Contributions
Section 3.02 -- Forfeitures
Section 3.03 -- Allocation
Section 3.04 -- Contribution Limitation
Section 3.05 -- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 -- Investment of Contributions
Section 4.01A -- Investment in Qualifying Employer Securities
Section 4.01B -- Limitation on Investment in Qualifying Employer
Securities by Some Participants
ARTICLE V BENEFITS
Section 5.01 -- Retirement Benefits
Section 5.02 -- Death Benefits
Section 5.03 -- Vested Benefits
Section 5.04 -- When Benefits Start
Section 5.05 -- Withdrawal Privileges
Section 5.06 -- Loans to Participants
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 -- Automatic Forms of Distribution
Section 6.02 -- Optional Forms of Distribution and Distribution
Requirements
Section 6.03 -- Election Procedures
Section 6.04 -- Notice Requirements
ARTICLE VII TERMINATION OF PLAN
TABLE OF CONTENTS 1
<PAGE> 7
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 - Administration
Section 8.02 - Records
Section 8.03 - Information Available
Section 8.04 - Claim and Appeal Procedures
Section 8.05 - Unclaimed Vested Account Procedure
Section 8.06 - Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 - Amendments
Section 9.02 - Direct Rollovers
Section 9.03 - Mergers and Direct Transfers
Section 9.04 - Provisions Relating to the Insurer and Other Parties
Section 9.05 - Employment Status
Section 9.06 - Rights to Plan Assets
Section 9.07 - Beneficiary
Section 9.08 - Nonalienation of Benefits
Section 9.09 - Construction
Section 9.10 - Legal Actions
Section 9.11 - Small Amounts
Section 9.12 - Word Usage
Section 9.13 - Transfers Between Plans
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 - Application
Section 10.02 - Definitions
Section 10.03 - Modification of Vesting Requirements
Section 10.04 - Modification of Contributions
Section 10.05 - Modification of Contribution Limitation
PLAN EXECUTION
TABLE OF CONTENTS 2
<PAGE> 8
INTRODUCTION
The Primary Employer previously established a savings plan on January
1, 1988.
The Primary Employer is of the opinion that the plan should be
changed. It believes that the best means to accomplish these changes is to
completely restate the plan's terms, provisions and conditions. The
restatement, effective January 1, 1989, is set forth in this document and is
substituted in lieu of the prior document.
The provisions of this Plan apply as of the date specified above or
such other date as may be specified in this Plan with the following exceptions:
The provisions included to comply with the technical corrections to
the Deficit Reduction Act of 1984 (DEFRA) and the Retirement Equity
Act of 1984 (REA) contained in the Tax Reform Act of 1986 (TRA) are
effective as if included in the respective laws to which the
corrections apply.
The provisions included to comply with the provisions of the Tax
Reform Act of 1986 other than the technical corrections to DEFRA and
REA are effective as of the dates specified in the law.
The provisions included to comply with the provisions of the Omnibus
Budget Reconciliation Act of 1986 (OBRA 86) are effective as of the
dates specified in the law.
The provisions included to comply with the provisions of the Omnibus
Budget Reconciliation Act of 1987 (OBRA 87) are effective as of the
dates specified in the law.
The provisions included to comply with the final regulations on
optional forms of benefit issued July 11, 1988, are effective as of
the effective date prescribed by such regulations.
The provisions included to comply with the final REA regulations
issued August 22, 1988, are effective as of the effective date
prescribed by such regulations.
The provisions included to comply with the provisions of the Technical
and Miscellaneous Revenue Act of 1988 are effective as of the dates
specified In the law.
The provisions included to comply with the final regulations on loans
issued July 20, 1989, are effective as of the effective date
prescribed by such regulation.
The provisions included to comply with the provisions of the Omnibus
Budget Reconciliation Act of 1989 (OBRA 89) are effective as of the
dates specified in the law.
The restated plan continues to be for the exclusive benefit of the
employees of the Employer. All persons covered under the plan on December 31,
1988, shall continue to be covered under the restated plan with no loss of
benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
INTRODUCTION 3
<PAGE> 9
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I
shall have that defined meaning when used in this Plan, unless the context
clearly indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund.
Separate accounting records are kept for those parts of his Account
that result from:
a) Elective Deferral Contributions.
b) Matching Contributions.
c) Other Employer Contributions.
If the Employer elects to include any of these
Contributions in computing the percentages in the
EXCESS AMOUNTS SECTION of Article III, a separate
accounting record shall be kept for any part of his
Account resulting from such Employer Contributions.
d) Rollover Contributions.
If the Participant's Vesting Percentage is less than 100% as to any of
the Employer Contributions, a separate accounting record will be kept
for any part of his Account resulting from such Employer Contributions
and, if there has been a prior Forfeiture Date, from such
Contributions made before a prior Forfeiture Date.
A Participant's Account shall be reduced by any distribution of his
Vested Account and by any Forfeitures. A Participant's Account will
participate in the earnings credited, expenses charged and any
appreciation or depreciation of the Investment Fund. His Account is
subject to any minimum guarantees applicable under the Group Contract
or other investment arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE
PARTICIPANT SECTION of Article II.
ADDITIONAL CONTRIBUTIONS means additional contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
ARTICLE I 4
<PAGE> 10
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or other
organizations of which the Employer is a part and which is affiliated within
the meaning of Code Section 414(m) and regulations thereunder. Such a group
includes at least two organizations one of which is either a service
organization (that is, an organization the principal business of which is
performing services), or an organization the principal business of which is
performing management functions on a regular and continuing basis. Such
service is of a type historically performed by employees. In the case of a
management organization, the Affiliated Service Group shall include
organizations related, within the meaning of Code Section 144(a)(3), to either
the management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in this Plan,
shall include the term Affiliated Service Group.
ANNUAL COMPENSATION means, on any given date, the Employee's Compensation for
the latest Compensation Year ending on or before the given date.
Annual Compensation over $200,000 shall be disregarded.
ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is paid as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive any
benefits under this Plan upon the Participant's death. See the BENEFICIARY
SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this Plan.
See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total earnings
paid or made available to an Employee by the Employer or a Predecessor Employer
during any specified period. Earnings from a Predecessor Employer include
earnings while a partner or proprietor of such Predecessor Employer.
"Earnings" in this definition means Compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For purposes of determining the amount of Elective Deferral Contributions,
Compensation shall exclude reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation and welfare
benefits.
ARTICLE I 5
<PAGE> 11
For years beginning after December 31, 1988, the annual Compensation of each
Participant taken into account for determining all benefits provided under the
Plan for any year shall not exceed $200,000. This limitation shall be adjusted
by the Secretary at the same time and in the same manner as under Code Section
415(d), except that the dollar increase in effect on January 1 of any calendar
year is effective for years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effected on January 1, 1990. If the
Plan determines Compensation on a period of time that contains fewer than 12
months, then the annual compensation limit is an amount equal to the annual
compensation limit for the calendar year in which the period begins multiplied
by the ratio obtained by dividing the number of full months in the period by
12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except that in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendents of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of
such rules the adjusted $200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration level
if this Plan provides for permitted disparity), the limitation shall be
prorated among the affected individuals in proportion to each such individual's
Compensation as determined under this definition prior to the application of
this limitation.
If Compensation for any prior period is taken into account in determining a
Participant's allocations or benefits for the current period, the Compensation
for such prior year is subject to the applicable annual compensation limit in
effect for that prior year. For this purpose, for years beginning before
January 1, 1990, the applicable annual compensation limit is $200,000.
Compensation means, for an Employee who is a Leased Employee, the Employee's
Compensation for the services he performs for the Employer, determined in the
same manner as the Compensation of Employees who are not Leased Employees,
regardless of whether such Compensation would be received directly from the
Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of the Plan
Year, including corresponding periods before January 1, 1988.
CONTINGENT ANNUITANT means an individual named by the Participant to receive a
lifetime benefit after the Participant's death in accordance with a
survivorship life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Additional Contributions
Discretionary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
ARTICLE I 6
<PAGE> 12
CONTROLLED GROUP means any group of corporations, trades or businesses of which
the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister
group, or a combined group within the meaning of Code Section 414(b), Code
Section 414(c) and regulations thereunder and, for purposes of determining
contribution limitations under the CONTRIBUTION LIMITATION SECTION of Article
III, as modified by Code Section 415(h) and, for the purpose of identifying
Leased Employees, as modified by Code Section 144(a)(3). The term Controlled
Group, as it is used in this Plan, shall include the term Affiliated Service
Group and any other employer required to be aggregated with the Employer under
Code Section 414(o) and the regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
DISTRIBUTEE means 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.
EARLY RETIREMENT DATE means the first day of any month before a Participant's
Normal Retirement Date which the Participant selects for the start of his
retirement benefit. This day shall be on or after the date on which he ceases
to be an Employee and the date he meets the following requirement(s):
a) He has attained age 60.
b) He has completed 10 years of Vesting Service.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to
fund this Plan in accordance with a qualified cash or deferred arrangement as
described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
ELIGIBILITY SERVICE means an Employee's Period of Service. If he has more than
one Period of Service, or if all or a part of a Period of Service is not
counted, his Eligibility Service shall be determined by adjusting his
Employment Commencement Date so that he has one continuous period of
Eligibility Service equal to the aggregate of all his countable Periods of
Service. An Employee's Eligibility Service shall be determined on the basis
that 30 days equal one month and 365 days equal one year.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service includes service performed
while a proprietor or partner.
ARTICLE I 7
<PAGE> 13
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
a) the Period of Severance immediately follows a period
during which an Employee is not absent from work and
ends within 12 months; or
b) the Period of Severance immediately follows a period
during which an Employee is absent from work for any
reason other than quitting, being discharged or
retiring (such as a leave of absence or layoff) and
ends within 12 months of the date he was first
absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means 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.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include:
a) Any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or
the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated Beneficiary, or
for a specified period of ten years or more.
b) Any distribution to the extent such distribution is required
under Code Section 401(a)(9).
c) The portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
ARTICLE I 8
<PAGE> 14
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o). A Controlled Group member is required to be
aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(h) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any predecessor corporation or firm of the
Employer (absorbed by the Employer, or of which the Employer was once a part)
which became a predecessor because of a change of name, merger, purchase of
stock or purchase of assets and which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Additional Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FAMILY MEMBER means an individual described in Code Section 414(q)(6)(B).
FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the last day of five consecutive
one-year Periods of Severance.
This is the date on which the Participant's Nonvested Account will be
forfeited unless an earlier forfeiture occurs as provided in the FORFEITURES
SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used in
this Plan is deemed to include the plural unless the context clearly indicates
otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
ARTICLE I 9
<PAGE> 15
A highly compensated active Employee means any Employee who performs service
for the Employer during the determination year and who, during the look-back
year:
a) received compensation from the Employer in excess of $75,000
(as adjusted pursuant to Code Section 415(d)),
b) received compensation from the Employer in excess of $50,000
(as adjusted pursuant to Code Section 415(d)) and was a member
of the top-paid group for such year, or
c) was an officer of the Employer and received compensation
during such year that is greater than 50 percent of the dollar
limitation in effect under Code Section 415(b)(1)(A).
The term Highly Compensated Employee also means:
d) Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees
who received the most compensation from the Employer during
the determination year; and
e) Employees who are 5 percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for
such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member and
5 percent owner or top-ten highly compensated Employee shall be treated as a
single Employee receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated Employee. For
purposes of this definition, family member includes the spouse, lineal
ascendants and descendants of the Employee or former Employee and the spouses
of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with Code Section
414(q) and the regulations thereunder.
ARTICLE I 10
<PAGE> 16
HOUR-OF-SERVICE means, for an Employee, each hour for which he is paid, or
entitled to payment, for performing duties for the Employer.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c),
(m) or (o) and the regulations thereunder for purposes of eligibility and
vesting. Hours-of-Service shall also be credited for any individual who is
considered an employee for purposes of the Plan pursuant to Code Section 414(n)
or Code Section 414(o) and the regulations thereunder.
INACTIVE PARTICIPANT means a former Active Participant who has an Account. See
the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Mutual Life Insurance Company and any other insurance
company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made under
the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
a) who has the power to manage, acquire, or dispose of any assets
of the Plan; and
b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as defined
in the Investment Advisers Act of 1940, or (3) is an insurance
company qualified to perform services described in
subparagraph (a) above under the laws of more than one state;
and
c) who has acknowledged in writing being a fiduciary with respect
to the Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits begin.
If a Participant continues to work for the Employer after his Normal Retirement
Date, his Late Retirement Date shall be the earliest first day of the month on
or after he ceases to be an Employee. An earlier or a later Retirement Date
may apply if, the Participant so elects. An earlier Retirement Date may apply
if the Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of
Article V.
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 of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to service
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 if:
ARTICLE I 11
<PAGE> 17
a) such employee is covered by a money purchase pension plan
providing (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in Code Section
415(c)(3), but including amounts contributed pursuant to a
salary reduction agreement which are excludable from the
employee's gross income under Code Sections 125, 402(a)(8),
402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting and
b) Leased Employees do not constitute more than 20 percent of the
recipient's non-highly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to administer the
Participant loan program.
The Loan Administrator is the DIRECTOR OF OFFICE SERVICES.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer to
fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MONTHLY DATE means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to control and
manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account that is in
excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal Retirement
Age is 65.
NORMAL RETIREMENT DATE means the earliest first day of the month on or after
the date the Participant reaches his Normal Retirement Age. Unless otherwise
provided in this Plan, a Participant's retirement benefits shall begin on a
Participant's Normal Retirement Date if he has ceased to be an Employee on such
date and has a Vested Account. Even if the Participant is an Employee on his
Normal Retirement Date, he may choose to have his retirement benefit begin on
such date. See the WHEN BENEFITS START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or after
the first Yearly Date after December 31, 1984,
a) by reason of pregnancy of the Employee,
b) by reason of birth of a child of the Employee,
ARTICLE I 12
<PAGE> 18
c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PERIOD OF MILITARY DUTY means, for an Employee
a) who served as a member of the armed forces of the United
States, and
b) who was reemployed by the Employer at a time when the Employee
had a right to reemployment in accordance with seniority
rights as protected under Section 2021 through 2026 of Title
38 of the U.S. Code,
the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.
PERIOD OF SERVICE means a period of time beginning on an Employee's Employment
Commencement Date or Reemployment Commencement Date (whichever applies) and
ending on his Severance from Service Date.
PERIOD OF SEVERANCE means a period of time beginning on an Employee's Severance
from Service Date and ending on the date he again performs an Hour-of-Service.
A one-year Period of Severance means a Period of Severance of 12 consecutive-
months.
Solely for purposes of determining whether a one-year Period of Severance has
occurred for eligibility or vesting purposes, the 12 consecutive month period
beginning on the first anniversary of the first date of a Parental Absence
shall not be a one-year Period of Severance.
PLAN means the savings plan of the Employer set forth in this document,
including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
PREDECESSOR EMPLOYER means a firm absorbed by the Employer by change of name,
merger, acquisition or a change of corporate status, or a firm of which the
Employer was once a part.
PRIMARY EMPLOYER means FLORIDA PHYSICIANS INSURANCE COMPANY, INC.
ARTICLE I 13
<PAGE> 19
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the
survivorship percentage is 50% and the Contingent Annuitant is the
Participant's spouse. A former spouse will be treated as the spouse to the
extent provided under a qualified domestic relations order as described in Code
Section 414(p). If a Participant does not have a spouse, the Qualified Joint
and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form shall
be the amount of benefit which may be provided by the Participant's Vested
Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITY means any instrument issued by the Employer and
meeting the requirements of Section 4975(e)(8) of the Code.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share of
Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following a Period of Severance.
REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by or
for a Participant according to the provisions of the ROLLOVER CONTRIBUTIONS
SECTION of Article III.
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after each
Yearly Date which is within the same Plan Year.
SEVERANCE FROM SERVICE DATE means the earlier of
a) the date on which an Employee quits, retires, dies or is
discharged, or
b) the first anniversary of the date an Employee begins a
one-year absence from service (with or without pay). This
absence may be the result of any combination of vacation,
holiday, sickness, disability, leave of absence or layoff.
Solely to determine whether a one-year Period of Severance has occurred for
eligibility or vesting purposes for an Employee who is absent from service
beyond the first anniversary of the first day of a Parental Absence, Severance
from Service Date is the second anniversary of the first day of the Parental
Absence. The period between the first and second anniversaries of the first
day of the Parental Absence is not a Period of Service and is not a Period of
Severance.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the provisions of
TEFRA. The TEFRA Compliance Date as used in this Plan is,
ARTICLE I 14
<PAGE> 20
a) for purposes of contribution limitations, Code Section 415,
1. if the plan was in effect on July 1, 1982, the first
day of the first limitation year which begins after
December 31, 1982, or
2. if the plan was not in effect on July 1, 1982, the
first day of the first limitation year which ends
after July 1, 1982.
b) for all other purposes, the first Yearly Date after December
31, 1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled, as a
result of sickness or injury, to the extent the Participant is unable to
perform the duties that such Participant was employed to perform for the
Employer.
To assist the Trustee in the determination of whether or not a Participant is
Totally and Permanently Disabled, initial written proof that the disability
exists must be furnished to the Trustee by one or more physicians. These
physicians shall be selected by the Trustee.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund under
the provisions of the Plan. The Trust may provide for the investment of all or
any portion of the Trust Fund in the Group Contract.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions
made under the Plan which are forwarded to the Trustee to be deposited in the
Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee as it
is used in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
VALUATION DATE means for the purposes of the date on which the value of the
assets of the Trust is determined. The value of each Account which is
maintained under this Plan shall be determined on the Valuation Date. In each
Plan Year, the Valuation Date shall be semi monthly. In addition, the Plan
Administrator may designate from time to time, so long as the Trustee agrees,
that another date or dates shall be Valuation Dates with respect to a specific
Plan Year.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals his
Account.
If the Participant's Vesting Percentage is less than 100%, his Vested Account
equals the sum of (a) and (b) below:
a) The part of the Participant's Account that results from
Employer Contributions made before a prior Forfeiture Date and
all other Contributions which were 100% vested when made.
b) The balance of the Participant's Account in excess of the
amount in (a) above multiplied by his Vesting Percentage.
The Participant's Vested Account is nonforfeitable.
VESTING PERCENTAGE means the percentage used to determine the nonforfeitable
portion of a Participant's Account attributable to Employer Contributions which
were not 100% vested when made.
ARTICLE I 15
<PAGE> 21
A Participant's Vesting Percentage is shown in the following schedule opposite
the number of whole years of his Vesting Service.
<TABLE>
<CAPTION>
VESTING SERVICE VESTING
(whole years) PERCENTAGE
<S> <C>
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
However, the Vesting Percentage for a Participant who is an Employee on or
after the earliest of (i) the date he reaches his Normal Retirement Age, (ii)
the date of his death, (iii) the date he meets the requirement(s) for an Early
Retirement Date, or (iv) the date he becomes Totally and Permanently Disabled,
shall be 100% on such date.
If the schedule used to determine a Participant's Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is
credited with an Hour-of-Service on or after the date of the change and the
Participant's nonforfeitable percentage on the day before the date of the
change is not reduced under this Plan. The amendment provisions of the
AMENDMENT SECTION of Article IX regarding changes in the computation of the
Vesting Percentage shall apply.
VESTING SERVICE means an Employee's Period of Service. If he has more than one
Period of Service or if all or a part of a Period of Service is not counted,
his Vesting Service shall be determined by adjusting his Employment
Commencement Date so that he has one continuous period of Vesting Service equal
to the aggregate of all his countable Periods of Service. This period of
Vesting Service shall be expressed as whole years and fractional parts of a
year (to two decimal places) on the basis that 365 days equal one year.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service includes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
ARTICLE I 16
<PAGE> 22
a) the Period of Severance immediately follows a period during
which an Employee is not absent from work and ends within 12
months; or
b) the Period of Severance immediately follows a period during
which an Employee is absent from work for any reason other
than quitting, being discharged or retiring (such as a leave
of absence or layoff) and ends within 12 months of the date he
was first absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
YEARLY DATE means January 1, 1988, and the same day of each following year.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
ARTICLE I 17
<PAGE> 23
ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
a) An Employee shall first become an Active Participant (begin
active participation in the Plan) on the earliest Semi-yearly
Date on or after January 1, 1989, on which he is an Eligible
Employee and has met both of the eligibility requirements set
forth below. This date is his Entry Date.
1. He has completed six months of Eligibility Service
before his Entry Date.
2. He is age 21 or older.
Each Employee who was an Active Participant under the Plan on
December 31, 1988, shall continue to be an Active Participant
if he is still an Eligible Employee on January 1. 1989, and
his Entry Date shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible
Employee on the date which would have been his Entry Date, he
shall become an Active Participant on the date he again
becomes an Eligible Employee. This date is his Entry Date.
b) An Inactive Participant shall again become an Active
Participant (resume active participation In the Plan) on the
date he again performs an Hour-of-Service as an Eligible
Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to
be an Inactive Participant
c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) an the date he again
performs an Hour-of-Service as an Eligible Employee. This
date is his Reentry Date.
An Active Participant or an Eligible Employee may elect not to be an
Active Participant. The election may be for a specified or an indefinite
period of time. The election shall be made by filing a written request with
the Plan Administrator not to be an Active Participant. Employer Contributions
shall not be allocated to the Eligible Employee for any period during which he
is not an Active Participant. The Eligible Employee may at any time revoke
such election and,
a) if he has met all of the other eligibility requirements under
this section and his Entry Date has occurred, he shall become
an Active Participant as of the date of revocation, or
b) if he has met all of the other eligibility requirements under
this section and his Entry Date has not occurred, he shall
become an Active Participant as provided in this section, or
c) if he has not met all of the other eligibility requirements
under this section, he shall become an Active Participant as
provided in this section.
ARTICLE II 18
<PAGE> 24
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible
Employee occurs within one month of his Retirement Date).
b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive Participant under
the Plan on December 31, 1988, shall continue to be an inactive Participant on
January 1, 1989. Eligibility for any benefits payable to him or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.
ARTICLE II 19
<PAGE> 25
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after January 1,
1989, may be made without regard to current or accumulated net income,
earnings, or profits of the Employer. Notwithstanding the foregoing, the Plan
shall continue to be designed to qualify as a profit sharing plan for purposes
of Code Sections 401(a), 402, 412, and 417. Such Contributions will be equal
to the Employer Contributions as described below:
a) The amount of each Elective Deferral Contribution for a
Participant shall be equal to any percentage (not more than
2.5%) of his Compensation for the pay period as elected in his
elective deferral agreement. An Employee who is eligible to
participate in the Plan may file an elective deferral
agreement with the Employer. The elective deferral agreement
to start Elective Deferral Contributions may be effective on a
Participant's Entry Date (Reentry Date, if applicable) or any
following Semi-yearly Date. The Participant shall make any
change or terminate the elective deferral agreement by filing
a new elective deferral agreement. A Participant's elective
deferral agreement making a change may be effective on any
date an elective deferral agreement to start Elective Deferral
Contributions could be effective. A Participant's elective
deferral agreement to stop Elective Deferral Contributions may
be effective on any date. The elective deferral agreement
must be in writing and completed before the beginning of the
pay period in which Elective Deferral Contributions are to
start, change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
b) The amount of each Matching Contribution for a Participant
shall be equal to 100% of the Elective Deferral Contributions
made for him for the pay period, disregarding any Elective
Deferral Contributions in excess of 2.5% of his Compensation
for the pay period.
Matching Contributions are subject to the Vesting Percentage.
c) The amount of each Additional Contribution for a Participant
eligible for an allocation for the Plan Year shall be equal to
10% of his Compensation for the Plan Year.
Additional Contributions are subject to the Vesting
Percentage.
d) The amount of each Discretionary Contribution shall be
determined by the Employer.
Discretionary Contributions are subject to the Vesting
Percentage.
No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.
ARTICLE III 20
<PAGE> 26
The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not later than the end
of the twelve-month period immediately following the Plan Year for which they
are deemed to be paid. Any such Contributions accumulated through payroll
deductions shall be paid within 90 days of the date withheld or the date it is
first reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions
(but not more than the original amount of those Contributions) may be returned
if the Employer Contributions are made because of a mistake of fact or are more
than the amount deductible under Code Section 404 (excluding any amount which
is not deductible because the plan is disqualified). The amount involved must
be returned to the Employer within one year after the date the Employer
Contributions are made by mistake of fact or the date the deduction is
disallowed, whichever applies. Except as provided under this paragraph and
Article VII, the assets of the Plan shall never be used for the benefit of the
Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if
the following conditions are met:
a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the
requirements of Code Section 401(a).
b) If the Contribution is made by the Eligible Employee, it is
made within sixty days after he receives the distribution.
c) The Eligible Employee furnishes evidence satisfactory to the
Plan Administrator that the proposed transfer is in fact a
rollover contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution.
The Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions or Forfeitures
until the time he meets all the requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times.
A separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the
earlier of the following: the date of the Participant's death, if prior to such
date he had ceased to be an Employee; or his Forfeiture Date. All or a part of
a Participant's Nonvested Account will be forfeited if, after he ceases to be
an Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer
ARTICLE III 21
<PAGE> 27
Contributions which were not 100% vested when made according to the provisions
of the VESTED BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of
Article IX. If a Participant's Vested Account is zero on the date he ceases to
be an Employee, he shall be deemed to have received a distribution of his
entire Vested Account on such date. The forfeiture will occur as of the date
he receives the distribution or on the date such provision became effective, if
later. If he receives a distribution of his entire Vested Account, his entire
Nonvested Account will be forfeited. If he receives a distribution of his
Vested Account from Employer Contributions which were not 100% vested when
made, but less than his entire Vested Account, the amount to be forfeited will
be determined by multiplying his Nonvested Account by a fraction. The
numerator of the fraction is the amount of the distribution derived from
Employer Contributions which were not 100% vested when made and the denominator
of the fraction is his entire Vested Account derived from such Employer
Contributions on the date of distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS
SECTION of Article III.
Forfeitures may first be applied to pay expenses under the Plan which
would otherwise be paid by the Employer.
Forfeitures not used to pay expenses shall be allocated as described
in the ALLOCATION SECTION of Article III as of the last day of the Plan Year in
which they arise. Upon such allocation, Forfeitures shall be deemed to be
Discretionary Contributions.
Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he
received (excluding any amount of such distribution resulting from
Contributions which were 100% vested when made). The repayment must be made
before the earlier of the date five years after the date he again becomes an
Eligible Employee or the end of the first period of five consecutive one-year
Periods of Severance which begin after the date of the distribution.
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the Participant was deemed to have received a
distribution because his Vested Account was zero or the plan did not have
repayment provisions in effect on the date the distribution was made and he
again performs an Hour-of-Service as an Eligible Employee within the repayment
period, the Plan Administrator shall restore the Participant's Account as if he
had made a required repayment on the date he performed such Hour-of-Service.
Restoration of the Participant's Account shall include restoration of all Code
Section 411(d)(6) protected benefits with respect to that restored Account,
according to applicable Treasury regulations. Provided, however, the Plan
Administrator shall not restore the Nonvested Account if a Forfeiture Date has
occurred after the date of the distribution and on or before the date of
repayment and that Forfeiture Date would result in a complete forfeiture of the
amount the Plan Administrator would otherwise restore.
The Plan Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition
of the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount
needed to make the required restoration. The repaid and restored amounts are
not included in the Participant's Annual Addition, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
ARTICLE III 22
<PAGE> 28
SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year, plus any Forfeitures
released for allocation for the Plan Year, shall be allocated among all
eligible persons:
Additional Contributions
Discretionary Contributions
The eligible persons are all Participants who are Active Participants on the
last day of the Plan Year. The amount allocated to such a person shall be
determined below and under Article X.
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
The following Contributions are allocated as of the last day of the
Plan Year to each eligible person for whom they are made and credited to his
Account:
Additional Contributions
Discretionary Contributions plus any Forfeitures are allocated as of
the last day of each Plan Year. The amount allocated to each eligible person
for the Plan Year shall be equal to the Discretionary Contributions plus any
Forfeitures for the Plan Year, multiplied by the ratio of (a) his Annual
Compensation as of the last day of the Plan Year to (b) the total of such
compensation for all eligible persons. This amount is credited to his Account.
In determining the amount of Employer Contributions to be allocated to
a Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased
Employee performs for the Employer shall be treated as provided by the Employer
and there shall be no duplication of those contributions or benefits under this
Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
a) For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined:
ARTICLE III 23
<PAGE> 29
Aggregate Annual Addition means, for a Participant with respect to any
Limitation Year, the sum of his Annual Additions under all defined contribution
plans of the Employer, as defined in this section, for such Limitation Year.
The nondeductible participant contributions which the Participant makes to a
defined benefit plan shall be treated as Annual Additions to a defined
contribution plan. The Contributions the Employer, as defined in this section,
made for the Participant for a Plan Year beginning on or after March 31, 1984,
to an individual medical benefit account, as defined in Code Section 415(I)(2),
under a pension or annuity plan of the Employer, as defined in this section,
shall be treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31, 1985, in
Fiscal 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 fund, as defined in
Code Section 419(e), maintained by the Employer, as defined in this section,
are treated as Annual Additions to a defined contribution plan. The 25% of
Compensation limit under Maximum Permissible Amount does not apply to Annual
Additions resulting from contributions made to an individual medical account,
as defined in Code Section 415(I)(2), or to Annual Additions resulting from
contributions for medical benefits, within the meaning of Code Section 419A,
after separation from service.
Annual Addition means the amount added to a Participant's account for any
Limitation Year which may not exceed the Maximum Permissible Amount. The
Annual Addition under any plan for a Participant with respect to any Limitation
Year, shall be equal to the sum of (1) and (2) below:
1. Employer contributions and forfeitures credited to his account for the
Limitation Year.
2. Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986, the amount
under (2) above is the lesser of (i) 1/2 of his nondeductible participant
contributions made for the Limitation Year, or (ii) the amount, if any, of his
nondeductible participant contributions made for the Limitation Year which is
in excess of six percent of his Compensation, as defined in this section, for
such Limitation Year.
Compensation means all wages for Federal income tax withholding purposes, as
defined under Code Section 3401(a) (for purposes of income tax withholding at
the source), disregarding any rules limiting the remuneration included as wages
based on the nature or location of the employment or the services performed.
Compensation also includes all other payments to an Employee in the course of
the Employer's trade or business, for which the Employer must furnish the
Employee a written statement under Code Sections 6041(d) and 6051(a)(3). The
amount reported in the "Wages, Tips and Other Compensation" box on Form W-2
satisfies this definition.
For any self-employed individual Compensation will mean earned income.
For purposes of applying the limitations of this section, Compensation for a
Limitation Year is the Compensation actually paid or made available during such
Limitation Year.
ARTICLE III 24
<PAGE> 30
Defined Benefit Plan Fraction means, with respect to a Limitation Year for a
Participant who is or has been a participant in a defined benefit plan ever
maintained by the Employer, as defined in this section, the quotient, expressed
as a decimal, of
1. the Participant's Projected Annual Benefit under all such plans as of
the close of such Limitation Year, divided by
2. on and after the TEFRA Compliance Date, the lesser of (i) or (ii)
below:
i. 1.25 multiplied by the maximum dollar limitation which applies
to defined benefit plans determined for the Limitation Year
under Code Sections 415(b) or (d) or
ii. 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of the
Limitation Year if the plan(s) provided the maximum benefit allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
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, as defined in this
section, 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.
Defined Contribution Plan Fraction means, for a Participant with respect to a
Limitation Year, the quotient, expressed as a decimal, of
1. the Participant's Aggregate Annual Additions for such Limitation Year
and all prior Limitation Years, under all defined contribution plans
(including the Aggregate Annual Additions attributable to
nondeductible accounts under defined benefit plans and attributable to
all welfare benefit funds, as defined in Code Section 419(e) and
attributable to individual medical accounts, as defined in Code
Section 415 (1)(2)) ever maintained by the Employer, as defined in
this section, divided by
2. on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below, whichever
is less, and the amounts determined in the same manner for all prior
Limitation Years during which he has been an Employee or an employee
of a predecessor employer:
ARTICLE III 25
<PAGE> 31
i. 1.25 multiplied by the maximum permissible dollar amount for
each such Limitation Year, or
ii. 1.4 multiplied by the maximum permissible percentage of the
Participant's Compensation, as defined in this section, for
each such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum of the
maximum allowable amount of Annual Addition to his account(s) under
all the plan(s) of the Employer, as defined in this section, for each
such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
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
contribution plans maintained by the Employer, as defined in this section,
which were in existence on May 6, 1986, the numerator of this fraction shall be
adjusted if the sum of the Defined Contribution Plan Fraction and Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, the dollar amount determined below shall be permanently
subtracted from the numerator of this fraction. The dollar amount is equal to
the excess of the sum of the two fractions, before adjustment, over 1.0
multiplied by the denominator of his Defined Contribution Plan Fraction. The
adjustment is calculated using his Defined Contribution Plan Fraction and
Defined Benefit Plan Fraction 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 limitations 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.
For a plan that was in existence on July 1, 1982, for purposes of determining
the Defined Contribution Plan Fraction for any Limitation Year ending after
December 31, 1982, the Plan Administrator may elect, in accordance with the
provisions of Code Section 415, that the denominator for each Participant for
all Limitation Years ending before January 1, 1983, will be equal to
1. the Defined Contribution Plan Fraction denominator which would apply
for the last Limitation Year ending in 1982 if an election under this
paragraph were not made, multiplied by
2. a fraction, equal to (i) over (ii) below:
i. the lesser of (A) $51,875, or (B) 1.4, multiplied by 25% of
the Participant's Compensation, as defined in this section,
for the Limitation Year ending in 1981;
ii. the lesser of (A) $41,500, or (B) 25% of the Participant's
Compensation, as defined in this section, for the Limitation
Year ending in 1981.
The election described above is applicable only if the plan administrators
under all defined contribution plans of the Employer, as defined in this
section, also elect to use the modified fraction.
ARTICLE III 26
<PAGE> 32
Employer means any employer that adopts this Plan and all Controlled
Group members and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).
Limitation Year means the 12-consecutive month period within which it
is determined whether or not the limitations of Code Section 415 are
exceeded. Limitation Year means each 12-consecutive month period
ending on the last day of each Plan Year, including corresponding
12-consecutive month periods before January 1, 1988. It the
Limitation Year is other than the calendar year, execution of this
Plan (or any amendment to this Plan changing the Limitation Year)
constitutes the Employer's adoption of a written resolution electing
the Limitation Year. If the Limitation Year is changed, the new
Limitation Year shall begin within the current Limitation Year,
creating a short Limitation Year.
Maximum Permissible Amount means, for a Participant with respect to
any Limitation Year, the lesser of (1) or (2) below:
1. The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth in
Code Section 415(b)(1) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the
cost of living adjustment factor permitted by Federal
regulations.)
2. 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 419A(f)(2)) which is otherwise treated as an
annual addition under Code Section 415(f)(1) or Code Section
419A(d)(2).
If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum
dollar limitation which would otherwise apply multiplied by the
following fraction:
Number of months in the short Limitation Year
12
Projected Annual Benefit means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The Projected Annual Benefit shall be
determined assuming that the Participant will continue employment
until the later of current age or normal retirement age under such
plan(s), and that the Participant's compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under such plan(s) will remain constant for all future
Limitation Years. Such expected annual benefits shall be adjusted to
the actuarial equivalent of a straight life annuity if expressed in a
form other than a straight life or qualified joint and survivor
annuity.
b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible Amount.
ARTICLE III 27
<PAGE> 33
c) Contributions and Forfeitures which would otherwise be credited to the
Participant's Account shall be limited or reallocated to the extent
necessary to meet the restrictions of subparagraph (b) above for any
Limitation Year in the following order. Forfeitures shall be
reallocated in the same manner as described in the ALLOCATION SECTION
of Article III to the remaining Participants to whom the limitations
do not apply for the Limitation Year. Discretionary Contributions
shall be reallocated in the same manner as described in the ALLOCATION
SECTION of Article III to the remaining Participants to whom the
limitations do not apply for the Limitation Year. The Discretionary
Contributions shall be limited if there are no such remaining
Participants. Additional Contributions shall be limited. Elective
Deferral Contributions that are not the basis for Matching
Contributions shall be limited. Matching Contributions shall be
limited to the extent necessary to limit the Participant's Annual
Addition under this Plan to his maximum amount. If Matching
Contributions are limited because of this limit, Elective Deferral
Contributions that are the basis for Matching Contributions shall be
reduced in proportion.
If, due to (i) an error in estimating a Participant's Compensation as
defined in this section, (ii) because Forfeitures cannot be
reallocated to remaining Participants due to the limits of this
section, (iii) as a result of 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 individual under the
limits of Code Section 415, or (iv) other limited facts and
circumstances, a Participant's Annual Addition is greater than the
amount permitted in (b) above, such excess amount shall be applied as
follows. Elective Deferral Contributions will be returned to the
Participant. If after the return of Elective Deferral Contributions,
an excess amount still exists, and the Participant is an Active
Participant as of the end of the Limitation Year, the excess amount
shall be used to offset Employer Contributions for him in the next
Limitation Year. If after the return of Elective Deferral
Contributions, an excess amount still exists, and the Participant is
not an Active Participant as of the end of the Limitation Year, the
excess amount will be held in a suspense account which will be used to
offset Employer Contributions for all Participants in the next
Limitation Year. No Employer Contributions that would be included in
the next Limitation Year's Annual Addition may be made before the
total suspense account has been used.
d) A Participant's Aggregate Annual Addition for a Limitation Year shall
not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or a welfare benefit
fund, as defined in Code Section 419(e), or an individual medical
account, as defined in Code Section 415(l)(2), maintained by the
Employer, as defined in this section, and such plans and welfare
benefit funds and individual medical accounts do not otherwise limit
the Aggregate Annual Addition to the Maximum Permissible Amount, any
reduction necessary shall be made first to the profit sharing plans,
then to all other such plans and welfare benefit funds and individual
medical accounts and, if necessary, by reducing first those that were
most recently allocated. Welfare benefit funds and individual medical
accounts shall be deemed to be allocated first. However, elective
deferral contributions shall be the last contributions reduced before
the welfare benefit fund or individual medical account is reduced.
ARTICLE III 28
<PAGE> 34
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that date,
the Maximum Permissible Amount which is based on a dollar amount may
differ for a Limitation Year. The Aggregate Annual Addition for the
Limitation Year in which the dollar limit differs shall not exceed the
lesser of (1) 25% of Compensation as defined in this section, (2)
$45,475, or (3) the greater of $30,000 or the sum of the Annual
Additions for such Limitation Year under all the plan(s) to which the
$45,475 amount applies.
e) If a Participant is or has been a participant in both defined benefit
and defined contribution plans (including a welfare benefit fund or
individual medical account) ever maintained by the Employer, as
defined in this section, the sum of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction for any Limitation Year
shall not exceed 1.0 (1.4 before the TEFRA Compliance Date).
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance
Date). The Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual Benefit, as
limited, then Annual Additions to the defined contribution plan(s)
shall be limited to the extent needed to reduce the sum to 1.0 (1.4).
First, the voluntary contributions the Participant may make for the
Limitation Year shall be limited. Next, in the case of a profit
sharing plan, any forfeitures allocated to the Participant shall be
reallocated to remaining participants to the extent necessary to
reduce the decimal to 1.0 (1.4). Last, to the extent necessary,
employer contributions for the Limitation Year shall be reallocated or
limited, and any required and optional employee contributions to which
such employer contributions were geared shall be reduced in
proportion.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or welfare benefit fund
or individual medical account maintained by the Employer, as defined
in this section, any reduction above shall be made first to the profit
sharing plans, then to all other such plans and welfare benefit plans
and individual medical accounts and, if necessary, by reducing first
those that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before the
welfare benefit fund or individual medical account is reduced. The
annual addition to the welfare benefit fund and individual medical
account shall be limited last.
SECTION 3.05--EXCESS AMOUNTS.
a) For the purposes of this section, the following terms are defined:
Actual Deferral Percentage means the ratio (expressed as a percentage)
of Elective Deferral Contributions under this Plan on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year. In modification of the foregoing,
Compensation shall be limited to the Compensation received while an
Active Participant. The Elective Deferral Contributions used to
determine the Actual Deferral Percentage shall include Excess Elective
Deferrals (other than Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the Employer
or a Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution Percentage
(provided the Average Actual Deferral Percentage test is satisfied
both with and without exclusion of these Elective Deferral
Contributions). Under such rules as the Secretary of the Treasury
shall prescribe, the Employer may elect to include Qualified
ARTICLE III 29
<PAGE> 35
Nonelective Contributions and Qualified Matching Contributions under this Plan
in computing the Actual Deferral Percentage. For an Eligible Participant for
whom such Contributions on his behalf for the Plan Year are zero, the
percentage is zero.
Aggregate Limit means the greater of (1) or (2) below:
1. The sum of
i. 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the Plan
Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement and
ii. the lesser of 200% or two plus the lesser of such Average
Actual Deferral Percentage or Average Contribution Percentage.
2. The sum of
i. 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the Plan
Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement and
ii. the lesser of 200% or two plus the greater of such Average
Actual Deferral Percentage or Average Contribution Percentage.
Average Actual Deferral Percentage means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible Participants in
a group.
Average Contribution Percentage means the average (expressed as a percentage)
of the Contribution Percentages of the Eligible Participants in a group.
Contribution Percentage means the ratio (expressed as a percentage) of the
Eligible Participant's Contribution Percentage Amounts to the Eligible
Participant's Compensation for the Plan Year. In modification of the
foregoing, Compensation shall be limited to the Compensation received while an
Active Participant. For an Eligible Participant for whom such Contribution
Percentage Amounts for the Plan Year are zero, the percentage is zero.
Contribution Percentage Amounts means the sum of the Participant Contributions
and Matching Contributions (that are not Qualified Matching Contributions)
under this Plan on behalf of the Eligible Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Matching Contributions that
are forfeited either to correct Excess Aggregate Contributions or because the
Contributions to which they relate are Excess Elective Deferrals, Excess
Contributions or Excess Aggregate Contributions. Under such rules as the
Secretary of the Treasury shall prescribe, the Employer may elect to include
Qualified Nonelective Contributions and Qualified Matching Contributions under
this Plan which were not used in computing the Actual Deferral Percentage in
computing the Contribution Percentage. The Employer may also elect to use
Elective Deferral Contributions in computing the Contribution Percentage so
long as the Average Actual Deferral
ARTICLE III 30
<PAGE> 36
Percentage test is met before the Elective Deferral Contributions are used in
the Average Contribution Percentage test and continues to be met following the
exclusion of those Elective Deferral Contributions that are used to meet the
Average Contribution Percentage test.
Elective Deferral Contributions means employer contributions made on behalf of
a participant pursuant to an election to defer under any qualified cash or
deferred arrangement as described in Code Section 401(k), any simplified
employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section 457,
any plan as described under Code Section 501(c)(18), and any employer
contributions made on behalf of a participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a salary reduction agreement.
Elective Deferral Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
Eligible Participant means, for purposes of determining the Actual Deferral
Percentage, any Employee who is otherwise authorized under the terms of the
Plan to have Elective Deferral Contributions made on his behalf for the Plan
Year. Eligible Participant means, for purposes of determining the Average
Contribution Percentage, any Employee who is otherwise authorized under the
terms of the Plan to have Participant Contributions or Matching Contributions
made on his behalf for the Plan Year.
Excess Aggregate Contributions means, with respect to any Plan Year, the excess
of:
1. The aggregate Contributions taken into account in computing the
numerator of the Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
2. The maximum amount of such Contributions permitted by the Average
Contribution Percentage test (determined by reducing Contributions
made on behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the excess of:
1. The aggregate amount of Contributions actually taken into account in
computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
2. The maximum amount of such Contributions permitted by the Actual
Deferral Percentage test (determined by reducing Contributions made on
behalf of Highly Compensated Employees in order of the Actual Deferral
Percentages, beginning with the highest of such percentages).
A Participant's Excess Contributions for a Plan Year will be reduced by the
amount of Excess Elective Deferrals, if any, previously distributed to the
Participant for the taxable year ending in that Plan Year.
Excess Elective Deferrals means those Elective Deferral Contributions that are
includable in a Participant's gross income under Code Section 402(g) to the
extent such Participant's Elective Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section.
ARTICLE III 31
<PAGE> 37
Excess Elective Deferrals shall be treated as Annual Additions defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan,
unless such amounts are distributed no later than the first April 15
following the close of the Participant's taxable year.
Participant Contributions means contributions made to any plan by or
on behalf of a participant that are included in the participant's
gross income in the year in which made and that are maintained under a
separate account to which earnings and losses are allocated.
Matching Contributions means employer contributions made to this or
any other defined contribution plan, or to a contract described in
Code Section 403(b), on behalf of a participant on account of a
Participant Contribution made by such participant, or on account of a
participant's Elective Deferral Contributions, under a plan maintained
by the employer.
Qualified Matching Contributions means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash Instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k).
b) A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year by notifying the Plan Administrator in
writing on or before the first following March 1 of the amount of the
Excess Elective Deferrals to be assigned to the Plan. A Participant
is deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective
Deferral Contributions made to this Plan and any other plans of the
Employer or a Controlled Group member and reducing such Excess
Elective Deferrals by the amount of Excess Contributions. If any,
previously distributed for the Plan Year beginning in that taxable
year. The Participant's claim for Excess Elective Deferrals shall be
accompanied by the Participant's written statement that if such
amounts are not distributed, such Excess Elective Deferrals, when
added to amounts deferred under other plans or arrangements described
in Code Sections 401(k), 408(k) or 403(b), will exceed the limit
imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred. The Excess Elective Deferrals assigned
to this Plan can not exceed the Elective Deferral Contributions
allocated under this Plan for such taxable year.
Notwithstanding any other provisions of the Plan. Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose Account Excess Elective Deferrals were assigned
for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the sum of:
1. the income or loss allocable to the Participant's Elective Deferral
Contributions for the taxable year in which the excess occurred
multiplied by a fraction and
2. the income or loss allocable to the Participant's Elective Deferral
Contributions for the gap period between the end of such taxable year
and the date of distribution multiplied by a fraction.
ARTICLE III 32
<PAGE> 38
The numerator of the fractions is the Excess Elective Deferrals. The
denominator of the fraction in (1) above is the closing balance
without regard to any income or loss occurring during such taxable
year (as of the end of such taxable year) of the Participant's Account
resulting from Elective Deferral Contributions. The denominator of
the fraction in (2) above is the closing balance without regard to any
income or loss occurring during such gap period (as of the end of such
gap period) of the Participant's Account resulting from Elective
Deferral Contributions. The amount determined in (2) above shall not
be included for taxable years beginning after December 31, 1991.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited,
if forfeitable. These Forfeitures shall be used to offset the
earliest Employer Contribution due after the Forfeiture arises.
c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
1. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Deferral Percentage
for Eligible Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 1.25.
2. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Deferral Percentage
for Eligible Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 2 and the difference
between the Average Actual Deferral Percentages is not more
than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) allocated to his account
under two or more plans or arrangements described in Code Section
401(k) that are maintained by the Employer or a Controlled Group
member shall be determined as if all such Elective Deferral
Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the regulations
under Code Section 401(k).
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this Plan,
then this section shall be applied by determining the Actual Deferral
Percentage of employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code Section 401(k) only
if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten
most highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions,
ARTICLE III 33
<PAGE> 39
or both, if used in computing the Actual Deferral Percentage) and
Compensation of such Eligible Participant include the Elective
Deferral Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) and
Compensation for the Plan Year of Family Members. Family Members,
with respect to such Highly Compensated Employees, shall be
disregarded as separate employees in determining the Actual Deferral
Percentage both for Participants who are Nonhighly Compensated
Employees and for Participants who are Highly Compensated Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of
the 12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contributions used in computing
the Actual Deferral Percentage shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were
allocated for the preceding Plan Year if such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year
in which such excess amounts arose, a ten (10) percent excise tax will
be imposed on the employer maintaining the plan with respect to such
amounts. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess
Contributions attributable to each of such employees. Excess
Contributions of Participants who are subject to the family member
aggregation rules shall be allocated among the Family Members in
proportion to the Elective Deferral Contributions (and amounts treated
as Elective Deferral Contributions) of each Family Member that is
combined to determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal
to the sum of
3. the income or loss allocable to the Participant's Elective
Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching Contributions,
or both) for the Plan Year in which the excess occurred
multiplied by a fraction and
ARTICLE III 34
<PAGE> 40
4. the income or loss allocable to the Participant's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) for the gap period
between the end of such Plan Year and the date of distribution
multiplied by a fraction.
The numerator of the fractions is the Excess Contributions. The
denominator of the fraction in (3) above is the closing balance
without regard to any income or loss occurring during such Plan Year
(as of the end of such Plan Year) of the Participant's Account
resulting from Elective Deferral Contributions (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if used in computing the Actual Deferral Percentage). The
denominator of the fraction in (4) above is the closing balance
without regard to any income or loss occurring during such gap period
(as of the end of such gap period) of the Participant's Account
resulting from Elective Deferral Contributions (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if used in computing the Actual Deferral Percentage). The
amount determined in (4) above shall not be included for Plan Years
beginning after December 31, 1991.
Excess Contributions shall be distributed from the Participant's
Account resulting from Elective Deferral Contributions. If such
Excess Contributions exceed the balance in the Participant's Account
resulting from Elective Deferral Contributions, the balance shall be
distributed from the Participant's Account resulting from Qualified
Matching Contributions (if applicable) and Qualified Nonelective
Contributions, respectively.
For Plan Years beginning after December 31, 1992, any Matching
Contributions which were based on the Elective Deferral Contributions
which are distributed as Excess Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if forfeitable.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
d) As of the end of each Plan Year, one of the following tests must be
met:
1. The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 1.25.
2. The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 2 and the difference between the
Average Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group
member and the sum of the Average Actual Deferral Percentage and
Average Contribution Percentage of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the
Contribution Percentage of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employees whose Contribution
Percentage is the highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution
Percentage is reduced shall be treated as an Excess Aggregate
Contribution. The Average Actual Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests.
Multiple use does not occur if both the Average Actual
ARTICLE III 35
<PAGE> 41
Deferral Percentage and Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Average Actual
Deferral Percentage and Average Contribution Percentage of the Nonhighly
Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Contribution
Percentage Amounts allocated to his account under two or more plans described
in Code Section 401(a) or arrangements described in Code Section 401(k) that
are maintained by the Employer or a Controlled Group member shall be determined
as if the total of such Contribution Percentage Amounts was made under each
plan. If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated as a
single arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under regulations under Code
Section 401(m).
In the event that this Plan satisfies the requirements of Code Sections 401(m),
401(a)(4), or 410(b) only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of such Code sections only if
aggregated with this Plan, then this section shall be applied by determining
the Contribution Percentages of Eligible Participants as if all such plans were
a single plan. Plans may be aggregated in order to satisfy Code Section 401(m)
only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of an Eligible
Participant who is a five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include Contribution Percentage Amounts
and Compensation for the Plan Year of Family Members. Family Members, with
respect to Highly Compensated Employees, shall be disregarded as separate
employees in determining the Contribution Percentage both for employees who are
Nonhighly Compensated Employees and for employees who are Highly Compensated
Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in which
contributed to the Plan. Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later than the
end of the 12-month period beginning on the day after the close of the Plan
Year.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the Average Contribution Percentage test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both, used in
such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if not vested, or distributed, if vested, no later than the last day
of each Plan Year to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess Aggregate
Contributions of Participants who are subject to the family member aggregation
rules shall be allocated among the Family Members in proportion to the Employee
and Matching Contributions (or amounts treated as Matching Contributions) of
each Family Member that is combined to determine the combined Contribution
Percentage. If such Excess Aggregate Contributions are distributed more than 2
1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten (10) percent
ARTICLE III 36
<PAGE> 42
excise tax will be imposed on the employer maintaining the plan with respect to
those amounts. Excess Aggregate Contributions shall be treated as Annual
Additions, as defined in the CONTRIBUTION LIMITATION SECTION of Article III,
under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Aggregate Contributions shall be equal
to the sum of:
3. the income or loss allocable to the Participant's Contribution
Percentage Amounts for the Plan Year in which the excess occurred
multiplied by a traction and
4. the income or loss allocable to the Participant's Contribution
Percentage Amounts for the gap period between the end of such Plan
Year and the date of distribution multiplied by a fraction.
The numerator of the fractions is the Excess Aggregate Contributions. The
denominator of the fraction in (3) above is the closing balance without regard
to any income or loss occurring during such Plan Year (as of the end of such
Plan Year) of the Participant's Account resulting from Contribution Percentage
Amounts. The denominator of the fraction in (4) above is the closing balance
without regard to any income or loss occurring during such gap period (as of
the end of such gap period) of the Participant's Account resulting from
Contribution Percentage Amounts. The amount determined in (4) above shall not
be included for Plan Years beginning after December 31, 1991.
Excess Aggregate Contributions shall be distributed from the Participant's
Account resulting from Participant Contributions that are not required as a
condition of employment or participation or for obtaining additional benefits
from Employer Contributions, if such Excess Aggregate Contributions exceed the
balance in the Participant's Account resulting from such Participant
Contributions, the balance shall be forfeited, if not vested, or distributed,
if vested on a pro-rata basis from the Participant's Account resulting from
Contribution Percentage Amounts. These Forfeitures shall be used to offset the
earliest Employer Contribution due after the Forfeiture arises.
ARTICLE III 37
<PAGE> 43
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund is
or may be invested. To the extent permitted by the Trust. Group Contract or
other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group
Contract and may request the transfer of assets resulting from those
Contributions between such accounts. A Participant may not direct the Trustee
to invest the Participant's Account in collectibles. Collectibles means any
work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage or
other tangible personal property specified by the Secretary of Treasury. To
the extent that a Participant does not direct the investment of his Account.
such Account shall be invested ratably in the accounts available under the
Trust or Group Contract in the same manner as the undirected Accounts of all
other Participants. The Vested Accounts of all inactive Participants may be
segregated and invested separately from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion
of the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and
changes In the value of the assets held In the Trust Fund. The Account of a
Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain
or loss of such investments. The share shall be determined by multiplying the
gain or loss of the investment by the ratio of the part of the Participant's
Account invested In such funding arrangement to the total of the Trust Fund
invested in such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives.
The Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term f lnancial needs so the investment policy can
be coordinated with the Plan's financial requirements.
<TABLE>
<S> <C>
a) Employer Contributions other than Elective Deferral Contributions: The Participant shall direct the investment of
such Employer Contributions and transfer of assets resulting from those Contributions.
b) Elective Deferral Contributions: The Participant shall direct the investment of Elective Deferral Contributions
and transfer of assets resulting from those Contributions.
c) Rollover Contributions: The Participant shall direct the investment of Rollover Contributions and transfer of
assets resulting from those Contributions.
</TABLE>
ARTICLE IV 38
<PAGE> 44
Before January 1, 1992, the Trustee directed the investments of a), b)
and c) above.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject
to Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest in Qualifying
Employer Securities.
Once investments in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan and
Trust is amended to disallow such available investment.
Participants shall be entitled to have their Elective Deferral
Contributions and other portions of their Account invested in Qualifying
Employer Securities. In the absence of such election, such Eligible Employees
shall be deemed to have elected to have their Accounts invested wholly in the
Investment Funds. Once an election is made, it shall be considered to continue
until a new election is made.
If the securities of the Employer are not publicly traded and if no
market or an extremely thin market exists for the Qualifying Employer
Securities, so that a reasonable valuation may not be obtained from the market
place, then such Qualifying Employer Securities must be valued at least
annually by an independent appraiser who is not associated with the Employer,
the Plan Administrator, the Trustee, or any other person related to any
fiduciary under the Plan. The independent appraiser may be associated with a
person who is merely a contract administrator with respect to the Plan, but who
exercises no discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the type
held by the Plan, then the Plan Administrator may use as the value of the
shares the price at which such shares traded in such market, or an average of
the bid and asked prices for such shares in such market, provided that such
value is representative of the fair market value of such shares in the opinion
of the Plan Administrator. If the Qualifying Employer Securities do not trade
on the annual valuation date or if the market is very thin on such date, then
the Plan Administrator may use the average of trade prices for a period or time
ending on such date, provided that such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to
the last day of the Plan Year. The fair market value of Qualifying Employer
Securities shall be determined on such a Valuation Date. The average of the
bid and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuating distributions and other
transactions of the Plan to the extent such value is representative of the
fair market value of such shares in the opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a price,
or prices, which, in the judgement of the Plan Administrator, do not exceed the
fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of the Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2), in exchange for cash or other assets of the Trust, the terms of
such purchase shall contain the provision that in the event that there is a
final determination by the Internal Revenue Service or court of contempt
jurisdiction that the fair market value of such shares of Qualifying Employer
Security as of the date of purchase was less than the purchase price paid by
the Trustee, then the seller shall pay or transfer, as the case may be, to the
Trustee an amount of cash, shares of Qualifying Employer Security, or any
combination thereof equal in value to the difference between the purchase price
and said fair market value for all such shares. In the event that cash and/or
shares of Qualifying Employer Security are paid and/or transferred to the
Trustee under this provision, shares of Qualifying Employer Security shall be
valued at their fair market value as of the date of said purchase, and interest
at a reasonable rate from the date of purchase to the date of payment shall be
paid by the seller on the amount of cash paid.
ARTICLE IV 39
<PAGE> 45
The Plan Administrator may direct the Trustee to sell, resel or otherwise
dispose of Qualifying Employer Securities to any person, including the
Employer, provided that any such sales to any disqualified person, including
the Employer, will be made at not less than the fair market value and no
commission is charged. Any such sale shall be made in conformance with Section
408(e) of ERISA.
In the event the Plan Administrator directs the Trustee to dispose of any
Qualifying Employer Securities held as Trust Assets under circumstances which
require registration and/or qualification of the securities, under applicable
Federal or state securities laws, then the Employer, at its own expense, will
take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.
SECTION 4.01B--LIMITATION OF INVESTMENT IN QUALIFYING EMPLOYER SECURITIES BY
SOME PARTICIPANTS.
Participants who are directors, officers, 10% stockholders of the
Employer, and other persons subject to Section 16 of the Securities Exchange
Act of 1934 (the "1934 Act") will be permitted to change the level of
investment in the Qualifying Employer Securities Account only once every six
months. Additionally, Participants who are directors, officers, 10%
stockholders of the Employer, and other persons subject to Section 16 of the
1934 Act who cease participation in the Qualifying Employer Securities Account,
or who reduce their participation in such account to a nominal level, may not
participate (e.g., direct that investments be made on their behalf) under the
Qualifying Employer Securities Account again for at least six months.
Intra-plan transfers by such Participants between the Qualifying Employer
Securities Account and other investment accounts available under the Plan may
only be made pursuant to an investment election made during the period
beginning on the third business day following the date of release of annual or
quarterly financial information by the Employer and ending on the twelfth
business day following such date. Subject to certain limited exceptions,
Participants who are directors, officers, 10% stockholders under the Qualifying
Employer Securities Account must cease further purchases/investment under the
Qualifying Employer Securities Account for six months.
With respect to Participants who are directors, officers, 10% stockholders
of the Employer, and other persons subject to the 1934 Act, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provisions of the Plan
or action by the Plan Administrator fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Plan
Administrator.
ARTICLE IV 40
<PAGE> 46
ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date. his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any time
after he ceases to be an Employee. provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX, it will be distributed only if the Participant
so elects. The Participant's election shall be subject to the requirements in
the ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to the
provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon his
Retirement Date or death, his Vested Account shall be applied according to the
provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION of
Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until It becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections of
this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an Employee
shall be deemed to begin because he is Totally and Permanently Disabled. The
start of benefits is subject to the qualified election procedures of Article
VI.
ARTICLE V 41
<PAGE> 47
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
a) The date the Participant attains age 65 or (Normal Retirement Age,
if earlier).
b) The tenth anniversary of the Participant's Entry Date.
c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be deemed
to be an election to defer commencement of payment of any benefit sufficient to
satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of
this section. The Participant shall make the election in writing and deliver
the signed statement of election to the Plan Administrator before Normal
Retirement Date or the date he ceases to be an Employee, if later. The
election must describe the form of distribution and the date the benefits will
begin. The Participant shall not elect a date for beginning benefits or a form
of distribution that would result in a benefit payable when he dies which would
be more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage. as
defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw all or any portion of his Vested Account which
results from the following Contributions
Elective Deferral Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions plus income allocable thereto credited to his Account as
of December 31, 1988. Immediate and heavy financial need shall be limited to:
(1) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152); (11) purchase (excluding
mortgage payments) of a principal residence for the Participant: (III) payment
of tuition and related educational fees for the next 12 months of
post-secondary education for the Participant, his spouse, children or
dependents; (iv) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of
ARTICLE V 42
<PAGE> 48
immediate and heavy financial need as provided in Treasury regulations. The
Participant's request for a withdrawal shall include his written statement that
an immediate and heavy financial need exists and explain its nature.
No withdrawal shall be allowed which is in excess of the amount required
to relieve the financial need or if such need can be satisfied from other
resources that are reasonably available to the Participant. The amount of an
immediate and heavy financial need may include any amount necessary to pay any
Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution. The Participant's request for a withdrawal shall
include his written statement that the amount requested does not exceed the
amount needed to meet the financial need. The Participant's request for a
withdrawal shall include his written statement that the need cannot be
relieved: (i) through reimbursement or compensation by insurance or otherwise;
(ii) by reasonable liquidation of the Participant's assets to the extent such
liquidation would not itself cause immediate and heavy financial need; (iii) by
cessation of elective contributions or employee contributions under the Plan;
or (iv) by other distributions or nontaxable (at the time of the loan) loans
currently available from plans maintained by the Employer or any other
employer, or by borrowing from commercial sources on reasonable commercial
terms.
Before the first Yearly Date in 1992, immediate and heavy financial need
in (i) shall be limited to medical expenses described in Code Section 213 (d)
incurred by the Participant (as defined in Code Section 152) and such need in
(iii) shall be limited to payment of tuition for the next semester or quarter
of post-secondary education for the Participant, his spouse, children or
dependents. In addition, the amount of the immediate an heavy financial need
shall not include amounts necessary to pay any Federal, state or local income
taxes or penalties reasonably anticipated to result from the distribution.
A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, Participant means any
Participant or Beneficiary who is an Employee. Loans shall not be made to
highly compensated employees, as defined in Code Section 414(q), in an amount
greater than the amount made available to other Participants.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or
is considered as owning within the meaning of Code Section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall share
in the interest paid on the loan or bear any expense or loss because of the
loan. A loan will not be made if in order to make the loan, the sale of
qualifying Employer Securities would be required. The repayment of any loan
will not be directed to the Participant's Qualifying Employer Securities
Account.
The number of outstanding loans shall be limited to one. No more than one
loan will be approved for any Participant in any l2-month period. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of interest.
ARTICLE V 43
<PAGE> 49
The amount of the loan shall not exceed the maximum amount that may be treated
as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan
is made.
b) The greater of (1) or (2), reduced by (3) below:
1. One-half of the Participant's Vested Account.
2. $10.000.
3. Any outstanding loan balance on the date the new loan is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account. For purposes of this
maximum, a Participant's Vested Account does not include any accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant's Vested Account (as limited
above) shall be accepted. The Loan Administrator shall determine if the
collateral Is adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date an which the loan to be so secured is made. The consent must be in
writing, must acknowledge the effect of the loan, and must be witnessed by a
plan representative or a notary public. Such consent shall thereafter be
binding with respect to that loan. A new consent shall be required if the
Vested Account issued for collateral upon renegotiation, extension, renewal, or
other revision of the loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account used as a security interest he d by t e an by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Vested Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than lOO% of the Participant's Vested Account (determined
without regard to the preceding sentence) is payable to the surviving spouse,
then the Vested Account shall be adjusted by first reducing the Vested Account
by the amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently
being charged by commercial lenders for loans of comparable risk on similar
terms and for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate
among the Participants In the matter of interest rates in accordance with the
current appropriate standards.
ARTICLE V 44
<PAGE> 50
The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the loan. A
loan is not subject to this five-year repayment requirement if it is used to
buy any dwelling unit, which within a reasonable time, is to be used as the
principal residence of the Participant. The "reasonable time" will be
determined at the time the loan is made. The period of repayment for any loan
shall be arrived at by mutual agreement between the Loan Administrator and the
Participant.
The Participant shall make a written application for a loan from the Plan
on forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the Participant
is creditworthy. The Participant must grant authority to the Loan
Administrator to investigate the Participant's creditworthiness so that the
loan application may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will
be able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether
a loan should be approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.
There will be an assignment of collateral to the Plan executed at the
time the loan is made.
In those cases where repayment through payroll deduction by the Employer
is available, Installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely
made.
Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments and penalties, if any, and other
amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so
provides. such amounts may be assessed and collected from the Account of the
Participant as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued Interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or penalty, or any portion thereof,
is not made for a period of 90 days after due, the entire principal balance
whether or not otherwise then due, shall become immediately due and payable
without demand or notice, and subject to collection or satisfaction by any
lawful means, including
45
<PAGE> 51
specifically but not limited to the right to enforce the claim against the
security pledged and to execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 3l
days, a default is deemed to occur as above. If any amount remains past due more
than 90 days, the entire principal amount, whether or not otherwise then due,
along with interest then accrued and any penalty amount then due, shall become
due and payable, as above.
If the Participant ceases to be an Employee, the balance of the
outstanding loan becomes due and payable, and the Participant's Vested Account
will be used as available for distribution(s) to pay the outstanding loan. The
Participant's Vested Account will not be used to pay any amount due under the
outstanding loan before the date which is 31 days after the date he ceased to
be an Employee, and the Participant may elect to repay the outstanding loan
with interest on the day of repayment if no distributable event has occurred
under the Plan at the time that the Participant's Vested Account would
otherwise be used under this provision to pay any amount due under the
outstanding loan, this will not occur until the time, or in excess of the
extent to which, a distributable event occurs under the Plan.
ARTICLE V 46
<PAGE> 52
ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
1. A Qualified Preretirement Survivor Annuity for a Participant
who has a spouse to whom he has been continuously married
throughout the one-year period ending on the date of his
death. The spouse may elect to start receiving the death
benefit on any first day of the month on or after the
Participant dies and before the date the Participant would
have been age 70 1/2. If the spouse dies before benefits
start, the Participant's Vested Account, determined as of the
date of the spouse's death, shall be paid to the spouse's
Beneficiary.
2. A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of
a Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be estblished
to the satisfaction of a plan representative that the
Participant does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
Designated Beneficiary means the individual who is designated
as the beneficiary under the Plan in accordance with Code Section
401(a)(9) and the regulations thereunder.
ARTICLE VI 47
<PAGE> 53
Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to (e) below.
Joint and Last Survivor Expectancy means joint and last survivor expectancy
computed by use of the expected return multiples in Table VI of section 1.72-9
of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated.
Life Expectancy means life expectancy computed by use of the expected return
multiples in Tables V of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated.
Participant's Benefit means
1. The Account Balance as of the last valuation date in the calendar year
immediately preceding the Distribution Calendar Year (valuation calendar
year) increased by the amount of any contributions or forfeitures
allocated to the Account balance as of the dates in the valuation
calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date.
2. For purposes of (1) above, if any portion of the minimum distribution
for the first Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required Beginning Date, the
amount of the minimum distribution made in the second Distribution
Calendar Year shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
Required Beginning Date means, for a Participant, the first day of April of the
calendar year following the calendar year in which the Participant attains age
70 1/2, unless otherwise provided in (1), (2) or (3) below:
1. The Required Beginning Date for a Participant who attains age 70 1/2
before January 1, 1988, and who is not a 5-percent owner is the first day
of April of the calendar year following the calendar year in which the
later of retirement or attainment of age 70 1/2 occurs.
2. The Required Beginning Date for a Participant who attains age 70 1/2
before January 1, 1988, and who is a 5-percent owner is the first day of
April of the calendar year following the later of
i. the calendar year in which the Participant attains age 70 1/2, or
ARTICLE VI 48
<PAGE> 54
ii. the earlier of the calendar year with or within which ends the
Plan Year in which the Participant becomes a 5-percent owner,
or the calendar year in which the Participant retires.
3. The Required Beginning Date of a Participant who is not a 5-percent
owner and who attains age 70 1/2 during 1988 and who has not retired
as of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this section
if such Participant is a 5-percent owner as defined in Code Section 416(i)
(determined in accordance with Code Section 416 but without regard to
whether the Plan is top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 66 1/2 or
any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this section,
they must continue to be distributed, even if the Participant ceases to be
a 5-percent owner in a subsequent year.
b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of five,
ten or fifteen years, a single life annuity with installment refund;
survivorship life annuities with installment refund and survivorship
percentages of 50, 66 2/3 or 100; fixed period annuities for any period
of whole months which is not less than 60 and does not exceed the Life
Expectancy of the Participant and the named Beneficiary as provided in (d)
below where the Life Expectancy is not recalculated; and a series of
installments chosen by the Participant with a minimum payment each year
beginning with the year the Participant turns age 70 l/2. The payment for
the first year in which a minimum payment is required will be made by
April 1 of the following calendar year. The payment for the second year
and each successive year will be made by December 31 of that year. The
minimum payment will be based on a period equal to the Joint and Last
Survivor Expectancy of the Participant and the Participant's spouse, if
any, as provided in (d) below where the Joint and Last Survivor Expectancy
is recalculated. The balance of the Participant's Vested Account, if any,
will be payable on the Participant's death to his Beneficiary in a single
sum. The Participant may also elect to receive his Vested Account in a
single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The terms of
any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of this Plan.
c) The optional forms of death benefit are a single-sum payment and any
annuity that is an optional form of retirement benefit. However, a series
of installments shall not be available if the Beneficiary is not the
spouse of the deceased Participant.
d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI,
joint and survivor annuity requirements, the requirements of this section
shall apply to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this section apply to calendar
years beginning after December 31, 1984.
All distributions required under this section shall be determined and made
in accordance with the proposed regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of
section 1.401(a)(9)-2 of the proposed regulations.
ARTICLE VI 49
<PAGE> 55
The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning Date.
As of the first Distribution Calendar Year, distributions, if not made in a
single sum, may only be made over one of the following periods (or combination
thereof):
1. the life of the Participant,
2. the life of the Participant and a Designated Beneficiary,
3. a period certain not extending beyond the Life Expectancy of the
Participant, or
4. a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.
If the Participant's interest is to be distributed in other than a single sum,
the following minimum distribution rules shall apply on or after the Required
Beginning Date:
5. Individual account:
i. If a Participant's Benefit is to be distributed over
1) a period not extending beyond the Life Expectancy of the
Participant or the Joint Life and Last Survivor Expectancy
of the Participant and the Participant's Designated
Beneficiary or
2) a period not extending beyond the Life Expectancy of
the Designated Beneficiary,
the amount required to be distributed for each calendar
year beginning with the distributions for the first
Distribution Calendar Year, must be at least equal to the
quotient obtained by dividing the Participant's Benefit by
the Applicable Life Expectancy.
ii. For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least
50% of the present value of the amount available for distribution
is paid within the Life Expectancy of the Participant.
iii. For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the
first Distribution Calendar Year shall not be less than the
quotient obtained by dividing the Participant's Benefit by the
lesser of
1) the Applicable Life Expectancy or
2) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations.
ARTICLE VI 50
<PAGE> 56
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy in (5)(i)
above as the relevant divisor without regard to proposed
regulations section 1.401(a)(9)-2.
iv. The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before
the Participant's Required Beginning Date. The minimum
distribution for the Distribution Calendar Year for other
calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Participant's
Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
6. Other forms:
i. If the Participant's Benefit is distributed in the form of
an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements
of Code Section 401 (a)(9) and the proposed regulations
thereunder.
e) Death distribution provisions:
1. Distribution beginning before death. If the Participant dies
after distribution of his interest has begun, the remaining
portion of such interest will continue to be distributed at least
as rapidly as under the method of distribution being used prior
to the Participant's death.
2. Distribution beginning after death. If the Participant dies
before distribution of his interest begins, distribution of the
Participant's entire interest shall be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made
to receive distributions in accordance with (i) or (ii) below:
i. if any portion of the Participant's interest is payable to
a Designated Beneficiary, distributions may be made over
the life or over a period certain not greater than the Life
Expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
ii. if the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to
begin in accordance with (i) above shall not be earlier
than the later of
1) December 31 of the calendar year immediately
following the calendar year in which the
Participant died and
2) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to
this (e)(2) by the time of his death, the Participant's
Designated Beneficiary must elect the method of
distribution no later than the earlier of
iii. December 31 of the calendar year in which distributions
would be required to begin under this subparagraph, or
ARTICLE VI 50
<PAGE> 57
iv. December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant.
If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be completed
by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
3. For purposes of (e)(2) above, if the surviving spouse dies after the
Participant, but before payments to such spouse begin, the
provisions of (e)(2) above, with the exception of (e)(2)(ii)
therein, shall be applied as if the surviving spouse were the
Participant.
4. For purposes of this (e), any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when
the child reaches the age of majority.
5. For purposes of this (e), distribution of a Participant's interest
is considered to begin on the Participant's Required Beginning Date
(or if (e)(3) above is applicable, the date distribution is required
to begin to the surviving spouse pursuant to (e)(2) above). If
distribution in the form of an annuity irrevocably commences to the
Participant before the Required Beginning Date, the date
distribution is considered to begin is the date distribution
actually commences.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
b) Death Benefits. A Participant may elect his Beneficiary and may
elect to have death benefits distributed under any of the optional
forms of death benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
If the Participant has not elected an optional form of distribution
for the death benefit payable to his Beneficiary, the Beneficiary
may, for his own benefit, elect the form of distribution, in like
manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as Beneficiary.
ARTICLE VI 52
<PAGE> 58
In lieu of the Qualified Preretirement Survivor Annuity described in the
AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the spouse may,
for his own benefit, waive the Qualified Preretirement Survivor Annuity
by electing to have the benefit distributed under any of the optional
forms of death benefit described in the OPTIONAL FORMS OF DISTRIBUTION
AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
c) Qualified Election. The Participant, Beneficiary or spouse may make an
election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the Qualified
Joint and Survivor Form may not be made before the date he is provided
with the notice of the ability to waive the Qualified Joint and Survivor
Form. If the Participant elects the series of installments, he may
elect on any later date to have the balance of his Vested Account paid
under any of the optional forms of retirement benefit available under
the Plan. His election period for this election is the 90-day period
ending on the Annuity Starting Date for the optional form of retirement
benefit elected.
A Participant may make an election as to death benefits at any time
before he dies. The spouse's election period begins on the date the
Participant dies and ends on the date benefits begin. The Beneficiary's
election period begins an the date the Participant dies and ends on the
date benefits begin. An election to waive the Qualified Preretirement
Survivor Annuity may not be made by the Participant before the date he
is provided with the notice of the ability to waive the Qualified
Preretirement Survivor Annuity. A Participant's election to waive the
Qualified Preretirement Survivor Annuity which is made before the first
day of the Plan Year in which he reaches age 35 shall become invalid on
such date. An election made by a Participant after he ceases to be an
Employee will not become invalid on the first day of the Plan Year in
which he reaches age 35 with respect to death benefits from that part of
his Account resulting from Contributions made before he ceased to be an
Employee.
If the Participant's Vested Account has at any time exceeded $3,500, any
benefit which is (1) immediately distributable or (2) payable in a form
other than a Qualified Joint and Survivor Form or a Qualified
Preretirement Survivor Annuity requires the consent of the Participant
and the Participant's spouse (or where either the Participant or spouse
has died, the survivor). The consent of the Participant or spouse to a
benefit which is immediately distributable must not be made before the
date the Participant or spouse is provided with the notice of the
ability to defer the distribution. Such consent shall be made in
writing. The consent shall not be made more than 90 days before the
Annuity Starting Date. Spousal consent is not required for a benefit
which is immediately distributable in a Qualified Joint and Survivor
Form. Furthermore, if spousal consent is not required because the
Participant is electing an optional form of retirement benefit that is
not a life annuity pursuant to (d) below, only the Participant need
consent to the distribution of a benefit payable in a form that is not a
life annuity and which is immediately distributable. Neither the
consent of the Participant nor the Participant's spouse shall be
required to the extent that a distribution is required to satisfy Code
Section 401(a)(9) or Code Section 415. In addition, upon termination
of this Plan if the Plan does not offer an annuity option (purchased
from a commercial provider), the Participant's Account balance may,
without the Participant's consent, be distributed to the Participant or
transferred to another defined contribution plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)) within the
same Controlled Group. A benefit is immediately
ARTICLE VI 53
<PAGE> 59
distributable if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the older of Normal Retirement Age
or age 62. If the Qualified Joint and Survivor Form is waived, the
spouse has the right to consent only to a specific Beneficiary or a
specific form of benefit. The spouse can relinquish one or both such
rights. Such consent shall be made in writing. The consent shall not
be made more than 90 days before the Annuity Starting Date. If the
Qualified Preretirement Survivor Annuity is waived, the spouse has the
right to limit consent only to a specific Beneficiary. Such consent
shall be in writing. The spouse's consent shall be witnessed by a plan
representative or notary public. The spouse's consent must acknowledge
the effect of the election, including that the spouse had the right to
limit consent only to a specific Beneficiary or a specific form of
benefit, if applicable, and that the relinquishment of one or both such
rights was voluntary. Unless the consent of the spouse expressly
permits designations by the Participant without a requirement of further
consent by the spouse, the spouse's consent must be limited to the form
of benefit, if applicable, and the Beneficiary (including any Contingent
Annuitant), class of Beneficiaries, or contingent Beneficiary named in
the election. Spousal consent is not required, however, if the
Participant establishes to the satisfaction of the plan representative
that the consent of the spouse cannot be obtained because there is no
spouse or the spouse cannot be located. A spouse's consent under this
paragraph shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of the
spouse. Any new election will require a new spousal consent, unless the
consent of the spouse expressly permits such election by the Participant
without further consent by the spouse. A spouse's consent may be
revoked at any time within the Participant's election period.
d) Special Rule for Profit Sharing Plan. As provided in the preceding
provisions of the Plan, if a Participant has a spouse to whom he has
been continuously married throughout the one-year period ending on the
date of his death, the Participant's Vested Account shall be paid to
such spouse. However, if there is no such spouse or if the surviving
spouse has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall be payable
to the Participant's Beneficiary in the event of the Participant's
death.
The Participant may waive the spousal death benefit described above at
any time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the notification
requirement referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death benefits as
described above, this subsection (d) applies if the following condition
is met: with respect to the Participant, this Plan is not a direct or
indirect transferee after December 31, 1984, of a defined benefit plan,
money purchase plan (including a target plan), stock bonus plan or
profit sharing plan which is subject to the survivor annuity
requirements of Code Section 401(a)(11) and Code Section 417. If the
above condition is met, spousal consent is not required for electing a
benefit payable in a form that is not a life annuity. If the above
condition is not met, the consent requirements of this article shall be
operative.
ARTICLE VI 54
<PAGE> 60
SECTION 6.04--NOTICE REQUIREMENTS.
a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Participant and the Participant's spouse a written
explanation of the optional forms of retirement benefit in the OPTIONAL
FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI, including the material features and relative values of these
options, in a manner that would satisfy the notice requirements of Code
Section 417(a)(3) and the right of the Participant and the Participant's
spouse to defer distribution until the benefit is no longer immediately
distributable. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention of
the Participant and the Participant's spouse no less than 30 days and no
more than 90 days before the Annuity Starting Date.
b) Qualified Joint and Survivor Form. The Plan Administrator shall furnish
to the Participant a written explanation of the following: the terms and
conditions of the Qualified Joint and Survivor Form; the Participant's
right to make, and the effect of, an election to waive the Qualified
Joint and Survivor Form, the rights of the Participant's spouse: and the
right to revoke an election and the effect of such a revocation. The
Plan Administrator shall furnish the written explanation by a method
reasonably calculated to reach the attention of the Participant no less
than 30 days and no more than 90 days before the Annuity Starting Date.
After the written explanation is given, a Participant or spouse may make
written request for additional information. The written explanation
must be personally delivered or mailed (first class mail, postage
prepaid) to the Participant or spouse within 30 days from the date of
the written request. The Plan Administrator does not need to comply
with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Joint and Survivor Form and the financial effect upon the Participant's
benefit (in terms of dollars per benefit payment) of electing not to
have benefits distributed in accordance with the Qualified Joint and
Survivor Form.
c) Qualified Preretirement Survivor Annuity. As required by the Code and
Federal regulation, the Plan Administrator shall furnish to the
Participant a written explanation of the following: the terms and
conditions of the Qualified Preretirement Survivor Annuity; the
Participant's right to make, and the effect of, an election to waive the
Qualified Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and the effect
of such a revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention of
the Participant within the applicable period. The applicable period for
a Participant is whichever of the following periods ends last:
1. the period beginning one year before the date the individual
becomes a Participant and ending one year after such date; or
2. the period beginning one year before the date the Participant's
spouse is first entitled to a Qualified Preretirement Survivor
Annuity and ending one year after such date.
ARTICLE VI 55
<PAGE> 61
If such notice is given before 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, an additional notice shall be
given within such period. If a Participant ceases to be an Employee
before attaining age 35, an additional notice shall be given within
the period beginning one year before the date he ceases to be an
Employee and ending one year after such date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30 days
from the date of the written request. The Plan Administrator does
not need to comply with more than one such request by a Participant
or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions of
the Qualified Preretirement Survivor Annuity and the financial
effect upon the spouse's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in accordance
with the Qualified Preretirement Survivor Annuity.
ARTICLE VI 56
<PAGE> 62
ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions
under the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which are
used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if
it would contravene any provision of law.
ARTICLE VII 57
<PAGE> 63
ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative
duties. Not in limitation, but in amplification of the foregoing, the Plan
Administrator has the power to construe the Plan and to determine all questions
that may arise under the Plan, including all questions relating to the
eligibility of Employees to participate in the Plan and the amount of benefit
to which any Participant, Beneficiary, spouse or Contingent Annuitant may
become entitled. The Plan Administrator's decisions upon all matters within
the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those
benefits under the provisions of the Plan. The Plan Administrator may
establish rules and procedures to be followed by Claimants in filing claims for
benefits, in furnishing and verifying proofs necessary to determine age, and in
any other matters required to administer the Plan.
Except as provided for hereinafter, the Plan Administrator shall direct
the Trustee as to the exercise of all voting powers over any shares of
Qualifying Employer Securities. Effective for Plan Years beginning after
December 31, 1991, each Participant shall be entitled to direct the Trustee as
to the exercise of all voting powers over shares allocated to his Account with
respect to any corporate matter which involves the voting of such shares
allocated to the Participant's Account with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets of
a trade or business, or such similar transaction as may be prescribed in the
Treasury Requirements.
In the event that a tender offer is made for some or all of the shares of
the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered.
This right shall be exercised in the manner set forth herein. In the absence
of a written direction from or election by a Participant to the Plan
Administrator, the Plan Administrator shall direct the Trustee not to tender
such shares. Because the choice is to be given to the Participants, the Plan
Administrator and the Trustee shall not have fiduciary responsibility with
respect to the decision to tender or not whether to tender all of such shares
or only a small portion thereof.
In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender), the Plan
Administrator shall provide election forms for the Participants, whereby they
may elect to tender or not and whereby they may elect to tender all or a
portion of such shares. Unless otherwise limited by Federal securities law,
such election may be made or changed at any time prior to the date before the
expiration date of the tender offer (with extensions); any election or change
in election must be received by the Plan Adminstrator, or designated
representative of the Plan Administrator, on or before the day
ARTICLE VIII 58
<PAGE> 64
preceding the expiration date of the tender offer (with extensions, if any).
The Plan Administrator may develop procedures to facilitate the Participants'
choices, such as the use of facsimile transmissions for the Employees located
in areas physically remote from the Plan Administrator. The election shall be
binding on the Plan Administrator and the Trustee. The Plan Administrator
shall make every effort to distribute the notice of the tender, election forms
and other communications related to the tender offer to all Participants as
soon as practicable following the announcement of the tender offer, including
mailing such notice and form to Participants and posting such notice in places
designed to be reviewed by Participants.
As to shares which are not allocated to the Accounts of any Participant,
all such shares (in the aggregate) shall be tendered or not as the majority of
the shares held by Participants and directed by Participants are tendered or
not. The Plan Administrator shall direct the Trustee to tender all such
unallocated shares or not, in accordance with the elections of the Participants
having an allocation of the majority of the shares under the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan,
the Group Contract or any other instrument under which the Plan was established
or is operated. The Plan Administrator shall maintain all of the items listed
in this section in its office, or in such other place or places as it may
designate in order to comply with governmental regulations. These items may be
examined during reasonable business hours. Upon the written request of a
Participoant or Beneficiary receiving benefits under the Plan, the Plan
Administrator will furnish him with a copy of any of these items. The Plan
Administrator may make a reasonable charge to the requesting person for the
copy.
ARTICLE VIII 59
<PAGE> 65
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 9O days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered.
The written notice shall be furnished no later than 180 days after the date
the claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be made in writing to the Plan Administrator within 60 days after receipt
of the Plan Administrator's notice of denial of benefits and that failure to
make the written appeal within such 60-day period shall render the Plan
Administrator's determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its
decision within 60 days of his written request for review, unless special
circumstances (such as a hearing) would make rendering a decision within the
60-day limit unfeasible. The Claimant must be notified within the 60-day limit
If an extension is necessary. The Plan Administrator shall render a decision
on a claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the
date of mailing the notice, the Plan Administrator may treat such unclaimed
Vested Account as a forfeiture and apply it according to the forfeiture
provisions of Article Ill. If Article III contains no forfeiture provisions,
such amount will be applied to reduce the earliest Employer Contributions due
after the forfeiture arises.
If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at
any time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
ARTICLE VIII 60
<PAGE> 66
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall
be set out in a separate written agreement.
ARTICLE VIII 61
<PAGE> 67
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined
by Internal Revenue Service regulations) to comply with the requirements of any
law or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued
interest or benefit of Participants or their Beneficiaries or eliminate an
optional form of distribution with respect to benefits attributable to service
before the amendment nor allow reversion or diversion of Plan assets to the
Employer at any time, except as may be necessary to comply with the
requirements of any law or regulation issued by any governmental agency to
which the Employer is subject. No amendment to this Plan shall be effective to
the extent that it has the effect of decreasing a Participant's accrued
benefit. However, a Participant's Account may be reduced to the extent
permitted under Code Section 412(c)(8). For purposes of this paragraph, a Plan
amendment which has the effect of decreasing a Participant's Account or
eliminating an optional form of benefit, with respect to benefits attributable
to service before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of the Plan is amended, in the
case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's employer-derived
accrued benefit will not be less than his percentage computed under the Plan
without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a
change in top-heavy status of the Plan as provided in the MODIFICATION OF
VESTING REQUIREMENTS SECTION of Article X, changes the computation of the
percentage used to determine that portion of a Participant's Account
attributable to Employer Contributions which is nonforfeitable (whether
directly or indirectly), each Participant or former Participant
a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if
the Participant does not have at least one Hour-of-Service in a
Plan Year beginning after December 31, 1988) and
b) whose nonforfeitable percentage will be determined on any date
after the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need
to be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the top-heavy status of
the Plan, and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed amendment) by the
Employer or the Plan Administrator.
SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, a Distributee may
ARTICLE IX 62
<PAGE> 68
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan, specified by the Distributee, in a Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then
terminated). The Employer may enter into merger agreements or direct transfer
of assets agreements with the employers under other retirement plans which are
qualifiable under Code Section 401(a), including an elective transfer, and may
accept the direct transfer of plan assets, or may transfer plan assets, as a
party to any such agreement. The Employer shall not consent to, or be a party
to a merger, consolidation or transfer of assets with a defined benefit plan if
such action would result in a defined benefit feature being maintained under
this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated
to the Eligible Employee, until the time he meets all of the requirements to
become an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit
of the Employee on whose behalf the Plan accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to
the Plan is an elective transfer, the Plan shall apply the optional forms of
benefit protections described in the AMENDMENTS SECTION of Article IX to all
transferred assets. A transfer is elective if: (1) the transfer is voluntary,
under a fully informed election by the Participant; (2) the Participant has an
alternative that retains his Code Section 411(d)(6) protected benefits
(including an option to leave his benefit in the transferor plan, if that plan
is not terminating); (3) if the transferor or plan is subject to Code Sections
401(a)(11) and 417, the transfer satisfies the applicable spousal consent
requirements of the Code; (4) the notice requirements under Code Section 417,
requiring a written explanation with respect to an election not to receive
benefits in the form of a qualified joint and survivor annuity, are met with
respect to the Participant and spousal transfer election; (5) the Participant
has a right to immediate distribution from the transferor plan under
provisions in the plan not inconsistent with Code Section 401(a); (6) the
transferred benefit is equal to the Participant's entire nonforfeitable accrued
benefit under the transferor plan, calculated to be at least the greater of the
single sum distribution provided by the transferor plan (if any) or the present
value of the Participant's accrued benefit under the transferor plan payable at
the plan's normal retirement age and calculated using an interest rate subject
to the restrictions of Code Section 417(e) and subject to the overall
limitations of Code Section 415; (7) the Participant has a 100% nonforfeitable
interest in the transferred benefit; and (8) the transfer otherwise satisfies
applicable Treasury regulations.
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
ARTICLE IX 63
<PAGE> 69
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look
to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected
in assuming that the Plan has not been amended or terminated and in dealing
with any party acting as Trustee according to the latest information which they
have received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to discharge
any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates. In
that event, the written designations made by Participants shall be filed with
the Plan Administrator. If a Participant dies before his Retirement Date, the
Plan Administrator shall certify to the Insurer the Beneficiary designation on
its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
ARTICLE IX 64
<PAGE> 70
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations
order, as defined in Code Section 414(p), or any domestic relations order
entered before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under
and construed according to Federal law and, to the extent permissible,
according to the laws of the state in which the Employer has its principal
office. In case any provision of this Plan is held illegal or invalid for any
reason, such determination shall not affect the remaining provisions of this
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTI0N 9.10--LEGAL ACTI0NS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary
are the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgement entered in any
such action or proceeding shall be binding and conclusive on all persons having
or claiming to have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of
his Retirement Date, the date he dies, or the date he ceases to be an Employee
for any other reason. This is a small amounts payment. If a small amount is
payable as of the date the Participant dies, the small amounts payment shall be
made to the Participant's Beneficiary (spouse if the death benefit is payable
to the spouse). If a small amounts payment is payable while the Participant is
living, the small amounts payment shall be made to the Participant. The small
amounts payment is in full settlement of all benefits otherwise payable.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.
ARTICLE IX 65
<PAGE> 71
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which
under this Plan is determined using the hours method, then the Employee's
service shall be equal to the sum of (a), (b) and (c) below:
a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he is
credited with the required number of Hours-of-Service. If the
Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the service
period before the date he became an Eligible Employee, the
Hours-of-Service shall be determined using an equivalency. For
any month in which he would be required to be credited with one
Hour-of-Service, the Employee shall be deemed for purposes of
this section to be credited with 190 Hours-of-Service.
c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service period
under that plan in which he became an Eligible Employee under
this Plan.
e) The greater of (1) the service that would be credited to him for
that entire service period using the elapsed time method or (2)
the service credited to him under the other plan as of the date
he became an Eligible Employee under this Plan.
f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled Group
member which credited service under a different method than is used in this
Plan, for purposes of determining eligibility and vesting the provisions above
shall apply as though the plan of the Controlled Group member were a plan of
the Employer.
ARTICLE IX 66
<PAGE> 72
ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in
the Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all
members of the Controlled Group unless the term as used clearly indicates only
the Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or
more employers, including the Employer, if there is evidence that retirement
benefits were the subject of good faith bargaining between such
representatives. For this purpose, the term "employee representatives" does
not include any organization more than half of whose members are employees who
are owners, officers, or executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
Aggregation Group means
a) each of the Employer's retirement plans in which a Key Employee is a
participant during the Year containing the Determination Date
(regardless of whether the plans have terminated) or one of the four
preceding Years,
b) each of the Employer's other retirement plans which allows the
plan(s) described in (a) above to meet the nondiscrimination
requirement of Code Section 401(a)(4) or the minimum coverage
requirement of Code Section 410, and
c) any of the Employer's other retirement plans not included in (a) or
(b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only if
the Aggregation Group would continue to satisfy the requirements of
Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation Group.
The plans in (a), (b) and (c) above constitute the "permissive" Aggregation
Group.
Compensation means, as to an Employee for any period, compensation as defined
in the CONTRIBUTION LIMITATION SECTION of Article III. For purposes of
determining who is a Key Employee, Compensation shall include, in addition to
compensation as defined in the CONTRIBUTION LIMITATION SECTION of Article III,
elective contributions. Elective contributions are amount which are excludible
from the Employee's gross
ARTICLE X 67
<PAGE> 73
income under Code Sections 125, 402(a)(8), 402(h) or 403(b), and contributed by
the Employer, at the Employee's election, to a Code Section 401(k) arrangement,
a simplified employee pension, cafeteria plan or tax-sheltered annuity.
Determination Date means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination Date
is the last day of such Year.
Key Employee means any Employee or former Employee (including Beneficiaries of
deceased Employees) who at any time during the determination period was
a) one of the Employer's officers (subject to the maximum below)
whose Compensation (as defined in this section) for the Year
exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A).
b) one of the ten Employees who owns (or is considered to own, under
Code Section 318) more than a half percent ownership interest and
one of the largest interests in the Employer during any Year of
the determination period if such person's Compensation (as
defined in this section) for the Year exceeds the dollar
limitation under Code Section 415(c)(1)(A),
c) a five-percent owner of the Employer, or
d) a one-percent owner of the Employer whose Compensation (as
defined in this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer for
purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and the
four preceding Years. If the Employer has fewer than 30 Employees, no more
than three Employees shall be treated as Key Employees because they are
officers. If the Employer has between 3O and 5OO Employees, no more than ten
percent of the Employer's Employees (if not an integer, increased to the next
integer) shall be treated as Key Employees because they are officers. In no
event will more than 5O Employees be treated as Key Employees because they are
officers if the Employer has 500 or more Employees. The number of Employees
for any Plan Year is the greatest number of Employees during the determination
period. Officers who are employees described in Code Section 4l4(q)(8) shall
be excluded. If the Employer has more than the maximum number of officers to be
treated as Key Employees, the officers shall be ranked by amount of annual
Compensation (as defined in this section), and those with the greater amount of
annual Compensation during the determination period shall be treated as Key
Employees. To determine the ten Employees owning the largest interests in the
Employer, if more than one Employee has the same ownership interest, the
Employee(s) having the greater annual Compensation shall be treated as owning
the larger interest(s). The determination of who is a Key Employee shall be
made according to Code Section 416(i)(1) and the regulations thereunder.
Non-key Employee means a person who is a non-key employee within the meaning of
Code Section 416 and regulations thereunder.
Present Value means the present value of a participant's accrued benefit under
a defined benefit plan as of his normal retirement age (attained age if later)
or, if the plan provides non-proportional subsidies, the age at which the
benefit is most valuable. The accrued benefit of any Employee (other than a
Key Employee) shall be determined under the method which is used for accrual
purposes for all plans of the
ARTICLE X 68
<PAGE> 74
Employer or if there is no one method which is used for accrual purposes for
all plans of the Employer, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Code Section 411(b)(1)(C). For purposes
of establishing Present Value, any benefit shall be discounted only for 7.5%
interest and mortality according to the 1971 Group Annuity Table (Male) without
the 7% margin but with projection by Scale E from 1971 to the later of (a)
1974, or (b) the year determined by adding the age to 1920, and wherein for
females the male age six years younger is used. If the Present Value of
accrued benefits is determined for a participant under more than one defined
benefit plan included in the Aggregation Group, all such plans shall use the
same actuarial assumptions to determine the Present Value.
Top-heavy Plan means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and
this Plan is not part of any required Aggregation Group or
permissive Aggregation Group.
b) this Plan is a part of a required Aggregation Group, but not part
of a permissive Aggregation Group, and the Top-heavy Ratio for
the required Aggregation Group exceeds 60 percent.
c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the
permissive Aggregation Group exceeds 60 percent.
Top-heavy Ratio means the ratio calculated below for this Plan or for the
Aggregation Group.
a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
has not maintained any defined benefit plan which during the
five-year period ending on the determination date has or has had
accrued benefits, the Top-heavy Ratio for this Plan alone or for
the required or permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the determination date and
the denominator of which is the sum of all account balances of
all employees as of the determination date. Both the numerator
and denominator of the Top-heavy Ratio are adjusted for any
distribution of an account balance (including those made from
terminated plan(s) of the Employer which would have been part of
the required Aggregation Group had such plan(s) not been
terminated) made in the five-year period ending on the
determination date. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required
to be taken into account on that date under Code Section 416 and
the regulations thereunder.
ARTICLE X 69
<PAGE> 75
b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans
which during the five-year period ending on the determination
date has or has had accrued benefits, the Top-heavy Ratio for any
required or permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances under the defined contribution plan(s) of all Key
Employees and the Present Value of accrued benefits under the
defined benefit plan(s) for all Key Employees, and the
denominator of which is the sum of the account balances under the
defined contribution plan(s) for all employees and the Present
Value of accrued benefits under the defined benefit plans for all
employees. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance or
an accrued benefit (including those made from terminated plan(s)
of the Employer which would have been part of the required
Aggregation Group had such plan(s) not been terminated) made in
the five-year period ending on the determination date.
c) For purposes of (a) and (b) above, the value of account balances
and the Present Value of accrued benefits will 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. The
account balances and accrued benefits of an employee who is not
a Key Employee but who was a Key Employee in a prior year will
be disregarded. The calculation of the Top-heavy Ratio and the
extent to which distributions, rollovers and transfers during
the five-year period ending on the determination date are to be
taken into account, shall be determined according to the
provisions of Code Section 416 and regulations thereunder. The
account balances and accrued benefits of an individual who has
performed no service for the Employer during the five-year period
ending on the determination date shall be excluded from the
Top-heavy Ratio until the time the individual again performs
service for the Employer. Deductible employee contributions
will not be taken into account for purposes of computing the
Top-heavy Ratio. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference
to the determination dates that fall within the same calendar
year.
Account, as used in this definition, means the value of an employee's account
under one of the Employer's retirement plans on the latest valuation date. In
the case of a money purchase plan or target benefit plan, such value shall be
adjusted to include any contributions made for or by the employee after the
valuation date and on or before such determination date or due to be made as of
such determination date but not yet forwarded to the insurer or trustee. In
the case of a profit sharing plan, such value shall be adjusted to include any
contributions made for or by the employee after the valuation date and on or
before such determination date. During the first Year of any profit sharing
plan such adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a defined
benefit plan of the Employer shall be treated as if they were contributions
under a separate defined contribution plan.
Valuation Date means, as to this Plan, the last day of the last calendar month
ending in a Year.
Year means the Plan Year unless another year is specified by the Employer in a
separate written resolution in accordance with regulations issued by the
Secretary of the Treasury or his delegate.
ARTICLE X 70
<PAGE> 76
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall apply. During any
Year in which the Plan is a Top-heavy Plan, the Participant's Vesting
Percentage shall be the greater of the Vesting Percentage determined under
Article I or the schedule below.
<TABLE>
<CAPTION>
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
<S> <C>
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy
Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of Article IX
shall apply when changing to or from the schedule as though the automatic
change were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
For any Plan Year in which the Plan is top-heavy, only the first $200,000
of a Participant's annual compensation shall be taken into account for purposes
of determining Employer Contributions under the Plan. This limitation shall be
adjusted by the Secretary at the same time and in the same manner as under Code
Section 415(d), except that the dollar increase in effect on January 1 of any
calendar year is effective for years beginning in such calendar year and the
first adjustment to the $200,000 limitation is effected on January 1, 1990.
If the Plan determines Compensation, as defined in this article, on a period of
time that contains fewer than 12 months, then the annual compensation limit is
an amount equal to the annual compensation limit for the calendar year in which
the period begins multiplied by the ratio obtained by dividing the number of
full months in the period by 12. In determining the Compensation as defined in
this article, of a Participant for purposes of this limitation, the rules of
Code Section 414(q)(6) shall apply, except that in applying such rules, the
term "family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the year. If as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such individual's Compensation
as determined under the definition in this article prior to the application of
this limitation.
ARTICLE X 71
<PAGE> 77
During any Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation on the last day of the Year for each
person who is an Employee on that day and who either was or could have been an
Active Participant during the Year. An Employee is not required to have a
minimum number of hours-of-service or minimum amount of Compensation, or to
have had any Elective Deferral Contributions made for him in order to be
entitled to this minimum. The minimum contribution or allocation for such
person shall be equal to the lesser of (a) or (b) below:
a) Three percent of such person's Compensation (as defined in this
article).
b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions are
made for or allocated to any Key Employee. The highest
percentage shall be determined by dividing the Employer
Contributions made for or allocated to each Key Employee during
such Year by the amount of his Compensation (as defined in this
article), which is not more than the maximum set out above, and
selecting the greatest quotient (expressed as a percentage). To
determine the highest percentage, all of the Employer's defined
contribution plans within the Aggregation Group shall be treated
as one plan. The provisions of this paragraph shall not apply if
this Plan and a defined benefit plan of the Employer are required
to be included in the Aggregation Group and this Plan enables the
defined benefit plan to meet the requirements of Code Section
401(a)(4) or Code Section 410.
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The
remaining Contributions shall be allocated as provided in the preceding
articles of this Plan taking into account any amount which was reallocated to
provide the minimum. If the Employer's total contributions and allocations are
less than the minimum above after any reallocation provided above, the Employer
shall contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according to
a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in
determining if the minimum contribution requirement has been met, but shall
apply in determining the minimum contribution required. Forfeitures credited
to a Participant's Account are treated as employer contributions.
ARTICLE X 72
<PAGE> 78
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act),
Title II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION SECTION
of Article III are applicable for any Limitation Year during which this Plan is
a Top-heavy Plan, the benefit limitations shall be modified. The definitions
of Defined Benefit Plan Fraction and Defined Contribution Plan Fraction in the
CONTRIBUTION LIMITATION SECTION of Article III shall be modified by
substituting "1.0" in lieu of "1.25." The optional denominator for determining
the Defined Contribution Plan Fraction shall be modified by substituting
"$41,500" in lieu of "$51,875." In addition, an adjustment shall be made to the
numerator of the Defined Contribution Plan Fraction. The adjustment is a
reduction of that numerator similar to the modification of the Defined
Contribution Plan Fraction described in the CONTRIBUTION LIMITATION SECTION of
Article III, and shall be made with respect to the last Plan Year beginning
before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
ARTICLE X 73
<PAGE> 79
By executing this Plan, the Primary Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
Plan's legal and tax implications.
Executed this 21st day of December, 1994.
FLORIDA PHYSICIANS INSURANCE COMPANY, INC.
By:/s/ Steven R. Smith
---------------------------------------
Trustee
---------------------------------------
Title
PLAN EXECUTION 74
