<PAGE> 1
As filed with the Securities and Exchange Commission on October 7, 1996
Registration No. 333-
------------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------------
STRAYER EDUCATION, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MARYLAND 52-1975978
(State or other jurisdiction of 1025 FIFTEENTH STREET, N.W. (I.R.S. Employer
incorporation or organization) WASHINGTON, D.C. 20005 Identification Number)
(Address of principal executive offices) (Zip code)
</TABLE>
STRAYER COLLEGE INC. 401(k) PROFIT SHARING PLAN
(Full title of the plan)
RON K. BAILEY
PRESIDENT
STRAYER EDUCATION, INC.
1025 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(Name and address of agent for service)
(202) 408-2400
(Telephone number, including area code, of agent for service)
-------------------------------------------------------------
WITH A COPY TO:
WALTER G. LOHR, JR.
HOGAN & HARTSON L.L.P.
111 SOUTH CALVERT STREET
BALTIMORE, MARYLAND 21202
(410) 659-2700
-------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per aggregate offering price registration
share fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(1) (1) (1) $100 $100
===========================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(c), this registration statement covers an
indeterminate amount of interests to be offered or sold pursuant to the
Strayer College, Inc. 401(k) Profit Sharing Plan described herein.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Documents containing the information required to be provided
in this Part I will be separately sent or given to employees participating in
the Strayer College Inc. 401(k) Profit Sharing Plan (the "Plan"), as
contemplated by Rule 428(b)(1) under the Securities Act of 1933, as amended
(the "Securities Act"). In accordance with the instructions to Part I of Form
S-8, such documents will not be filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 under the
Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Strayer Education, Inc. (the "Company") hereby incorporates by
reference into this Registration Statement the following documents:
(a) The Registrant's prospectus filed with the Commission
on July 26, 1996 pursuant to Rule 424(b), which
prospectus contains audited financial information for
the year ended December 31, 1995;
(b) The Registrant's Form 10-Q for the quarter ended June
30, 1996 filed with the Commission on September 4,
1996; and
(c) The description of the Company's common stock contained
in the Company's Registration Statement on Form 8-A
filed with the Commission on July 28, 1996.
In addition, all documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part of hereof from the date of the filing of
such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference shall be deemed to be modified or superseded to
the extent that a statement contained in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such prior statement. The documents required to be so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.
To the extent that any proxy statement is incorporated by
reference herein, such incorporation shall not include any information
contained in such proxy statement which is not, pursuant to the Commission's
rules, deemed to be "filed" with the Commission or subject to the liabilities
of Section 18 of the Exchange Act.
- 2 -
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES.
A description of the Company's common stock, par value $ .01
per share, is incorporated by reference under Item 3.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Charter provides that, to the fullest extent
that limitations on the liability of directors and officers are permitted by
the Maryland General Corporation Law, no director or officer of the Company
shall have any liability to the Company or its stockholders for monetary
damages. The Maryland General Corporation Law provides that a corporation's
charter may include a provision which restricts or limits the liability of its
directors or officers to the corporation or its stockholders for money damages
except: (1) to the extent that it is provided that the person actually
received an improper benefit or profit in money, property or services, for the
amount of the benefit or profit in money, property or services actually
received, or (2) to the extent that a judgment or other final adjudication
adverse to the person is entered in a proceeding based on a finding in the
proceeding that the person's action, or failure to act, was the result of
active and deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding. The Company's Charter and By-Laws provide that
the Company shall indemnify and advance expenses to its currently acting and
its former directors to the fullest extent permitted by the Maryland General
Corporation Law and that the Company shall indemnify and advance expenses to
its officers to the same extent as its directors and to such further extent as
is consistent with law.
The Charter and By-Laws of the Company provide that the
Company will indemnify its directors and officers and may indemnify employees
or agents of the Company to the fullest extent permitted by law against
liabilities and expenses incurred in connection with litigation in which they
may be involved because of their offices with the Company. In addition, the
Company's Charter provides that its directors and officers will not be liable
to stockholders for money damages, except in limited instances. However,
nothing in the Charter and By-Laws of the Company protects or indemnifies a
director, officer, employee or agent against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. To the extent that a director has been successful in defense of any
proceeding, the Maryland General Corporation Law provides that he shall be
indemnified against reasonable expenses incurred in connection therewith.
The Company has in effect a policy of liability insurance
covering its directors and officers.
* * * * *
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to trustees, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of the
expenses incurred or paid by a trustee, officer or controlling person of the
Registrant of the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
counsel the matter has been settled by controlling precedent, submit to
- 3 -
<PAGE> 4
a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Articles of Incorporation (incorporated by reference to Exhibit 3.01, Registration Statement on Form S-1,
Reg. No. 333-3967, filed with the Commission on May 17, 1996)
4.2 Amended and Restated By-laws (incorporated by reference to Exhibit 3.02, Amendment No. 3 to the
Registration Statement on Form S-1, Reg. No. 333-3967, filed with the Commission on July 16, 1996)
4.3 Specimen Stock Certificate (incorporated by reference to Exhibit 4.01, Amendment No. 3 to the Registration
Statement on Form S-1, Reg. No. 333-3967, filed with the Commission on July 16, 1996)
4.4 401(k) Profit Sharing Plan for the Employees of Strayer College, Inc.
23.1 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney
</TABLE>
The Registrant undertakes to submit the Plan and the
amendments thereto to the IRS in a timely manner and agrees to make all changes
required by the IRS in order to qualify the Plan.
- 4 -
<PAGE> 5
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;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the 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 Exchange Act that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, 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, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act and each
filing of the Plan's annual report pursuant to Section 15(d)
of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) The undertaking concerning indemnification is set forth under
the response to Item 6.
- 5 -
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Company 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 Washington, District of Columbia, on October 3,
1996.
Strayer Education, Inc.
By: /s/ RON K. BAILEY
----------------------------------------------
Ron K. Bailey
President and Chief Executive 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
date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ RON K. BAILEY President and October 3, 1996
- ---------------------------------- Chief Executive Officer
Ron K. Bailey (Principal Executive
Officer)
/s/ HARRY T. WILKINS Chief Financial Officer October 3, 1996
- ---------------------------------- (Principal Financial Officer
Harry T. Wilkins and Principal Accounting Officer)
</TABLE>
Board of Directors:
Ron K. Bailey, Stanley G. Elmore, Todd A. Milano, Jennie D. Seaton, Roland
Carey, Donald T. Benson, G. Thomas Waite, III, Donald Stoddard and Charlotte
Beason
<TABLE>
<S> <C> <C>
By: /s/ HARRY T. WILKINS October 3, 1996
-------------------------------
Harry T. Wilkins, as
Attorney-in-Fact
</TABLE>
- 6 -
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933,
the trustees of the Strayer College, Inc. 401(k) Profit Sharing Plan have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, District of
Columbia on October 3, 1996.
STRAYER COLLEGE, INC.
401(k) PROFIT SHARING PLAN
By: /s/ RON K. BAILEY
------------------------------------
Name: Ron K. Bailey
Title: Trustee
By: /s/ HARRY T. WILKINS
------------------------------------
Name: Harry T. Wilkins
Title: Trustee
By: /s/ MARLA BOULTER
------------------------------------
Name: Marla Boulter
Title: Trustee
By: /s/ ROBERT E. FARMER
------------------------------------
Name: Robert E. Farmer
Title: Trustee
By: /s/ PIROJ PIROOLNURUK
------------------------------------
Name: Piroj Piroolnuruk
Title: Trustee
- 7 -
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Articles of Incorporation (incorporated by reference to Exhibit 3.01, Registration Statement on Form S-1,
Reg. No. 333-3967, filed with the Commission on May 17, 1996)
4.2 Amended and Restated By-laws (incorporated by reference to Exhibit 3.02, Amendment No. 3 to the
Registration Statement on Form S-1, Reg. No. 333-3967, filed with the Commission on July 16, 1996)
4.3 Specimen Stock Certificate (incorporated by reference to Exhibit 4.01, Amendment No. 3 to the Registration
Statement on Form S-1, Reg. No. 333-3967, filed with the Commission on July 16, 1996)
4.4 401(k) Profit Sharing Plan for the Employees of Strayer College, Inc.
23.1 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney
</TABLE>
- 8 -
<PAGE> 1
AMENDMENT TO
THE 401(K) PROFIT SHARING PLAN FOR
THE EMPLOYEES OF STRAYER COLLEGE INC.
WHEREAS, Strayer College Inc., hereinafter referred to as the "Employer", has
established a Retirement Plan, evidenced in writing, executed on the 7th day of
December, 1992; and
WHEREAS, the Employer now desires to amend the said Agreement, said Amendment
to be effective as of the 1st day of January, 1993, in the respects hereinafter
set forth; and
WHEREAS, said Agreement is to remain in full force and effect insofar as all of
its provisions are concerned, except as hereinafter amended;
NOW THEREFORE, the said Strayer College Inc. 401(k) Profit Sharing Plan shall
be, and the same hereby is, amended effective January 1, 1993 in the respects
hereinafter set forth:
(1) Adoption Agreement - Section D5
An Eligible Employee shall become a Participant as of the first day
of the calendar quarter following the date on which he met the
requirements.
(2) Adoption Agreement - Section E8(a) is amended to use E8(a)(iii) -
terminated participants will share in such allocations provided the
Participant completed a Year of Service.
(3) Adoption Agreement - Section E9
Allocation of earnings with respect to amounts contributed to the Plan
after the previous Anniversary Date or other valuation date shall be
determined by using a weighted average.
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed by
its owner this 1 day of March, 1993.
BY
- --------------------------- ----------------------------
WITNESS ADMINISTRATOR
/s/ Amy E. Karey By /s/ Harry T. Wilkins
- --------------------------- ----------------------------
WITNESS TRUSTEE
/s/ Janene Eighmey BY /s/ Ron K. Bailey
- --------------------------- ----------------------------
WITNESS EMPLOYER
<PAGE> 2
THE 401 (K) PROFIT SHARING PLAN FOR EMPLOYEES OF STRAYER COLLEGE (1478)
AMENDMENT NUMBER ONE TO
COASTAL PENSION SERVICES, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
Coastal Pension-Services, Inc. Regional Prototype Defined Contribution Plan
and Trust is hereby amended as follows:
1. Section 1.9 is amended by replacing the first paragraph with the following
paragraphs:
"Compensation" with respect to any Participant means one of the following
as elected in the Adoption Agreement. However, compensation for any
Self-Employed Individual shall be equal to his Earned Income.
i. Information required to be reported under sections 6041, 6051 (Wages,
Tips and Other Compensation Box on Form W-2). Compensation is defined
as wages as defined in section 3401(a) and all other payments of
compensation to an employee by the employer (in the course of the
employer's trade or business) for which the employer is required to
furnish the employee a written statement under sections 6041(d) and
6051(a)(3) of the Code. Compensation must be determined without
regard to any rules under section 3401(a) that limit the remuneration
included in wages based on the nature (such as the exception for
agricultural labor in section 3401(a)(2)).
ii. Section 3401(a) wages. Compensation is defined as wages within the
meaning of section 3401(a) for the purposes of income tax withholding
at the source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception for
agricultural labor in section 3401(a)(2)).
iii. 415 safe-harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment
with the employer maintaining the plan to the extent that the amounts
are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan (as described in 1.62-2(c)),
and excluding the following:
a. Employer contributions to a plan of deferred compensation
which are not includible in the employee's gross income for the
taxable year in which contributed, or employer contributions
under a simplified employee pension plan to the extent such
contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
b. Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
c. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
d. Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of
the employee).
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of such amendment,
Compensation means compensation determined pursuant to the Plan then in
effect.
(1)
<PAGE> 3
2. Section 1.14 is amended in its entirety to read as follows:
"Elective Contribution" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2, excluding any such amounts distributed as "excess annual
additions" pursuant to Section 4.4. In addition, if selected in E3 of the
Adoption Agreement, the Employer's matching contribution shall or shall
not be considered an Elective Contribution for purposes of the Plan, as
provided in Section 11.1(b). Elective Contributions shall be subject
to the requirements of Sections 11.2(b) and 11.2(c) and shall further be
required to satisfy the discrimination requirements of Regulation
1.401(k)-l (b)(3), the provisions of which are specifically incorporated
herein by reference.
3. Section 1.20 is amended by the addition of the following at the end:
"Excess Deferred Compensation" means, with respect to any taxable year of
a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 1
1.2(f) actually made on behalf of such Participant for such taxable year,
over the dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be
treated as "annual addition" pursuant to Section 4.4 when contributed to
the Plan unless distributed to the affected Participant not later than the
first April 15th following the close of the Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his Compensation
as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and shall only be recognized as of
an Employee's effective date of participant. If, in connection with the
adoption of this or any other amendment, the definition of "414(s)
Compensation" has been modified, then, for Plan Years prior to the Plan
Year which includes the adoption date of such amendment, "414(s)
Compensation" means compensation determined pursuant to the Plan then in
effect.
5. Section 1.27 ("415 Compensation") is amended by the addition of the
following paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of "415 Compensation" has been modified, then, for Plan Years
prior the Plan Year which includes the adoption date of such amendment,
"415 Compensation" means compensation determined pursuant tot he Plan
then in effect.
6. Section 4.4(a)(4) and 4.4(a)(i) are amended to read as follows:
4. If there is an excess amount pursuant to Section 4.4(a)(2) or Section
4.5, the excess will be disposed of in one of the following manners,
as uniformly determined by the Plan Administrator for all Participants
similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess Amount will
be distributed to the Participant:
7. Section 4.4(f)(2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the Adoption
Agreement. However, regardless of any selection made in the Adoption
Agreement, "415 Compensation" shall exclude compensation which is not
currently includible in the Participant's gross income by reason of the
application of Code Sections 125, 401 (a)(8), 402(h)(1)(B), or 403(b).
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation
year is the compensation actually paid or made available during such
limitation year.
Notwithstanding the preceding sentence, compensation for a participant in
a defined contribution plan who is permanently and totally disabled (as
defined in section 22(e)(3) of the Internal Revenue Code) is the
compensation such participant would have received for the limitation year
if the participant had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled; such imputed
compensation for participant is not a Highly Compensated Employee and
contributions made on behalf of such participant are nonforfeitable when
made.
(2)
<PAGE> 4
8. Section 4.5(a) is amended in its entirety to read as follows:
(a) If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's annual compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of
Code Section 402(g)(3)) that may be made with respect to any
Participant under the limits of Section 4.4, or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable,
the "annual additions" under this Plan would cause the maximum
provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with section 4.4(a)(4).
9. Section 6.11(a)(4) is amended in its entirety to read as follows:
(4) Payment of tuition and related education fees for the next 12 months
of post-secondary education for the Participant, his spouse, children.
or dependents;
10. Section 7.10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant
shall be permitted to elect to have any "eligible rollover
distribution" transferred directly to an "eligible retirement plan"
specified by the Participant. The Plan provisions otherwise
applicable to distributions continue to apply to the direct transfer
option. The Participant shall, in the time and manner prescribed by
the Administrator, specify the amount to be directly transferred and
the "eligible retirement plan" to receive the transfer. Any portion
of a distribution which is not transferred shall be distributed to the
Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution' means any distribution other than a distribution of
substantially equal periodic payments over the life or life expectancy
of the Participant (or joint life or joint life expectancies of the
Participant and the designated beneficiary) or a distribution over a
period certain of ten years or more. Amounts required to be
distributed under Code Section 401(a)(9) are not eligible rollover
distributions. The direct transfer option described in subsection (a)
applies only to eligible rollover distributions which would otherwise
be includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan"
means an individual retirement account as described in Code Section
408(a), an individual retirement annuity as described in Code Section
408(b), an annuity plan as described in Code Section 403(a), or a
defined contribution plan as described in Code Section 401(a) which
is exempt from tax under Code Section 501(a) and which accepts
rollover distributions.
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however distributions
to the surviving spouse may only be transferred to an individual
retirement account or individual retirement annuity. for purposes of
subsection (a), a spouse or former spouse who is the alternate payee
under a qualified domestic relations order as defined in Code Section
414(p) will be treated as the Participant.
For purposes of this section, the term "eligible retirement plan" has
the meaning given such term by Code Section 402(c)(8)(B), except that a
qualified trust shall be considered an eligible retirement plan only if
it is a defined contribution plan, the terms of which permit the
acceptance of rollover distributions.
11. Section 11.2(d) is amended in its entirety read as follows:
(d) In any Plan Year beginning after December 31, 1986, a Participant's
Deferred Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this Plan shall
not exceed the limitation imposed by Code Section 402(g), as in effect
for the calendar year in which such Plan Year began. If such dollar
limitation is exceeded solely from elective deferrals made under this
Plan or any other Plan maintained by the Employer, a Participant will
be deemed to have notified the Administrator of such excess amount
which shall be distributed in a manner consistent with Section
11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with
Regulations.
(3)
<PAGE> 5
12. Section 11.2(f) is amended by the addition of the following paragraph
after paragraph (f)(3) to read as follows:
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which relate to
such Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being distributed.
13. Section 11.2(f) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which
is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution
under this Section which is made after August 15, 1991, the amount of
Income may be computed using a reasonable method that is used
consistently for all Participants and for all distributions for the Plan
Year.
14. Section 11.5(c) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which
is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution
under this Section which is made after August 15, 1991, the amount of
Income may be computed using a reasonable method that is used
consistently for all Participants and for all such distributions for the
Plan Year.
15. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
11.7(d), only Employer matching contributions (excluding matching
contributions forfeited or distributed pursuant to Section 11.2(f),
11.5(a), or 11.7(a)) contributed to the Plan prior to the end of
the succeeding Plan Year shall be considered. In addition, the
Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made
pursuant to Section 11.1(b) or voluntary Employee contributions
made pursuant to Section 4.7 allocated to their accounts, elective
deferrals (as defined in Regulation 1.402(g)-1(b)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. Such elective
deferrals and qualified non-elective contributions shall be treated
as Employer matching contributions subject to Regulation
1.401(m)-l(b)(2) which is incorporated herein by reference.
However, for Plan Years beginning after December 31, 1988, the Plan Year
must be the same as the plan year of the plan to which the elective
deferrals and the qualified non-elective contributions are made.
16. Section 11.7(i) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which
is made after August 15, 1991, such distribution shall not include any
Income for the "gap period". Further provided, for any distribution
under this Section which is made after August 15, 1991, the amount of
Income may be computed using a reasonable method that is consistent with
Section 4.3(c), provided such method is used consistently for all
Participants and for all distributions for the Plan Year.
17. Section 11.8(a)(3) is amended in its entirety to read as follows:
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse,
children, or dependents; or
(4)
<PAGE> 6
18. Section 11.8(a)(3) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of the
immediate and heavy financial need may include any amounts
necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution.
19. Section E1a of the Adoption Agreement is amended in its entirety to read
as follows:
Compensation with respect to any Participant means:
[ ] 1. Wages, Tips and other Compensation (Box 10 an Form W-2).
[ ] 2. Section 3401(a) wages (wages for withholding purposes.
[x] 3. 415 Safe-harbor compensation.
AND Compensation
[x] shall
[ ] shall not
exclude (even if includible in gross income) reimbursements or
other expense allowances, fringe benefits (cash or noncash),
moving expenses, deferred compensation, and welfare benefits.
20. Section E3 of the 401(k) Adoption Agreement(s) is amended by the
addition of E3p to read as follows:
p. [ ] Notwithstanding anything in the Plan to the contrary, all
matching contributions which relate to distributions of
Excess Deferred Compensation, Excess Contributions and
Excess Aggregate Contributions shall be Forfeited. (Select
this option only if it is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE PLAN
IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION El OR E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment to be executed
on this 5th day of August, 1993.
EMPLOYER: PARTICIPATING EMPLOYER:
Strayer College, Inc.
- ------------------------- ----------------------------
(enter name) (enter name)
By: /s/ Ron K. Bailey By:
------------------------- -------------------------
(5)
<PAGE> 7
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of Strayer College, Inc. hereby certifies that
the following resolutions were duly adopted by vote of the shareholders of the
Corporation on August 5, 1993, and that such resolutions have not been modified
or rescinded as of the date hereof:
RESOLVED, that the amendment to the THE 401(K) PROFIT SHARING PLAN FOR
EMPLOYEES OF STRAYER COLLEGE (1478) is hereby approved and adopted.
The undersigned further certifies that attached hereto as Exhibit A is a
true copy of the amendment approved and adopted in the foregoing resolution.
Glenda S. Hardison
------------------
Secretary
August 5, 1993
------------------
Date
<PAGE> 8
AMENDMENT TO
THE 401K PROFIT SHARING PLAN FOR
EMPLOYEES OF STRAYER COLLEGE INC.
WHEREAS, Strayer College Inc., hereinafter referred to as the "Employer", has
established a Retirement Plan, evidenced in writing, executed on the 7th day of
December, 1992; and
WHEREAS, the Employer now desires to amend the said Agreement, said Amendment
to be effective as of the 19th day of January, 1994, in the respects
hereinafter set forth; and The 401K Profit Sharing Plan for Employees of
Strayer College Inc. January 1, 1994.
WHEREAS, said Agreement is to remain in full force and effect insofar as all of
its provisions are concerned, except as hereinafter amended;
NOW THEREFORE, the said The 401k Profit Sharing Plan For Employees of Strayer
College Inc. shall be, and the same hereby is, amended effective January 1,
1994 in the respects hereinafter set forth:
Adoption Agreement Section B3
This section is amended to correct an error in
the employer identification number. The correct number is 52-0500740.
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed by
its owner this 2nd day of June, 1994.
/s/ Amy E. Karey BY /s/ Harry T. Wilkins
- ---------------------- ------------------------
WITNESS EMPLOYER
<PAGE> 9
[DEPARTMENT OF THE TREASURY LOGO]
Department of the Treasury Date of this notice: MAY 16, 1994
Internal Revenue Service Taxpayer Identifying Number 52-0500740
HOLTSVILLE, NY 00501 Form: 5500 Tax Period:
For assistance you may
call us at:
649-2361 LOCAL RICHMOND
1-800-829-1040 OTHER V
STRAYER COLLEGE INC
3045 COLUMBIA PIKE
ARLINGTON VA 22204-4338453 Or you may write to us at
the address shown at the
left. If you write, be
sure to attach the bottom
part of this notice.
CORRECT EIN ASSIGNED IN ERROR
OUR RECORDS INDICATE WE HAVE INCORRECTLY ASSIGNED MORE THAN ONE EMPLOYER
IDENTIFICATION NUMBER TO YOU. THE NUMBER SHOWN ABOVE IS YOUR CORRECT ONE. THE
FOLLOWING NUMBER HAS BEEN INCORRECTLY ASSIGNED:
52-0050740
WE WILL TRANSFER ANY RETURN TO YOUR ACCOUNT UNDER THE CORRECT EMPLOYER
IDENTIFICATION NUMBER.
PLEASE USE THE CORRECT NUMBER AND ACCOUNT NAME, EXACTLY AS SHOWN ABOVE,
ON ANY RELATED CORRESPONDENCE.
WE APOLOGIZE FOR ANY INCONVENIENCE WE MAY HAVE CAUSED YOU, AND THANK YOU
FOR YOUR COOPERATION.
To make sure that IRS employees give courteous and correct information to
taxpayers, a second IRS employee sometimes listens in on telephone calls
Keep this part for your records Overlay 5 Form: 8489/Rev.
- --------------------------------------------------------------------------------
Return this portion to us with your inquiry or with your check if you have a
balance due.
- --------------------- -----------------
Your telephone number Best time to call
( ) -
- --------------------- -----------------
520500740 UY 74 0000
INTERNAL REVENUE SERVICE
HOLTSVILLE, NY 00501
STRAYER COLLEGE INC
3045 COLUMBIA PIKE
ARLINGTON VA 22204-433845
<PAGE> 10
AMENDMENT TO
THE 401(K) PROFIT SHARING PLAN FOR EMPLOYEES
OF
STRAYER COLLEGE, INC.
WHEREAS, STRAYER COLLEGE, INC., hereinafter referred to as the "Employer", has
established a Retirement Plan, evidenced in writing, executed on the 7th day of
December, 1992; and
WHEREAS, the Employer now desires to amend the said Agreement, said Amendment
to be effective as of the 1st day of January, 1994, in the respects hereinafter
set forth; and
WHEREAS, said Agreement is to remain in full force and effect insofar as all of
its provisions are concerned, except as hereinafter amended;
NOW THEREFORE, the said THE 401(K) PROFIT SHARING PLAN FOR EMPLOYEES OF STRAYER
COLLEGE, INC. shall be, and the same hereby is, amended effective January 1,
1994 in the respects hereinafter set forth:
ADOPTION AGREEMENT - SECTION E3: FORMULA FOR DETERMINING EMPLOYER'S MATCHING
CONTRIBUTION:
delete: item j. In determining matching contributions, only salary reductions
up to 10% of a Participant's Compensation will be matched.
replace with: item j. In determining matching contributions, only salary
reductions up to 2% of a Participant's Compensation will be matched.
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed by
its owner this 8 day of December, 1984.
/s/ Amy E. Karey BY /s/ Harry T. Wilkins
- --------------------------- -------------------------------
WITNESS EMPLOYER
<PAGE> 11
THE 401(K) PROFIT SHARING PLAN FOR EMPLOYEES OF STRAYER COLLEGE
AMENDMENT TO
COASTAL PENSION SERVICES, INC.
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
(1) SECTION 1.9 IS AMENDED BY THE ADDITION OF THE FOLLOWING:
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 plan year beginning on or after January 1, 1994, the OBRA
'93 annual compensation limit is $150,000.
(2) SECTION 6.13 IS AMENDED BY THE ADDITION OF THE FOLLOWING:
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under Section 1.411(a)-11 (c) of
the Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the participant, after receiving the notice, affirmatively
elects a distribution.
(3) SECTION 7.10 IS AMENDED BY THE ADDITION OF THE FOLLOWING:
(a) Notwithstanding any provision of the plan to the contrary,
with respect to distributions made after December 31, 1992, a
Participant shall be permitted to elect to have any "eligible
rollover distribution" transferred directly to an "eligible
retirement plan" specified by the Participant. The Plan provisions
otherwise applicable to distributions continue to apply to the direct
transfer option. The Participant shall, in the time and manner
prescribed by the Administrator, specify the amount to be directly
transferred and the "eligible retirement plan" to receive the
transfer. Any portion of a distribution which is not transferred
shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distributions" means any distribution other than a distribution of
substantially equal period payments over the life or life expectancy
of the Participant (or joint life or joint life expectancies of the
Participant and the designated beneficiary) or a distribution over a
period certain of ten years or more. Amounts required to be
distributed under Code Section 401(a)(9) are not eligible rollover
distributions. The direct transfer option described in subsection
(a) applies only to eligible rollover distributions which would
otherwise be includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible
retirement plan" means an individual retirement account as described
in Code Section 4018(a), an individual retirement annuity as
described in Code Section 4018(b), an annuity plan as described in
Code Section 403(a), or a defined contribution plan under Code
Section 401(a) which is exempt from tax under Code Section 501(a) and
which accepts rollover distributions.
(d) The election described in subsection (a) also applies to
the surviving spouse after the Participant's death; however,
distributions to the surviving spouse may only be transferred to an
individual retirement account or individual retirement annuity. For
purposes of subsection (a), a spouse or former spouse who is the
alternate payee under a qualified domestic relations order as defined
in Code section 414(p) will be treated as the Participant.
<PAGE> 12
AMENDMENT TO
THE 401(K) PROFIT SHARING PLAN
FOR EMPLOYEES OF STRAYER COLLEGE, INC.
WHEREAS, Strayer College, Inc., hereinafter referred to as the "Employer", has
established a Retirement Plan, evidenced in writing, executed on the 1st day of
January, 1992; and
WHEREAS, the Employer now desires to amend the said Agreement, said Amendment
to be effective as of the 1st day of August, 1995, in the respects hereinafter
set forth; and
WHEREAS, said Agreement is to remain in full force and effect insofar as all of
its provisions are concerned, except as hereinafter amended;
NOW THEREFORE, the said THE 401(K) PROFIT SHARING PLAN FOR EMPLOYEES OF
STRAYER COLLEGE, INC. shall be, and the same hereby is, amended effective
August 1, 1995 in the respects hereinafter set forth:
ADOPTION AGREEMENT B6 - NAMES OF TRUSTEES
Add: c. Marla Boulter
d. Robert Farmer
e. Piroj Piboolnuruk
IN WITNESS WHEREOF, the Employer has caused this Amendment to be executed by
its owner this 10th day of August, 1995.
/s/ Amy E. Karey BY /s/ Harry T. Wilkins
- ----------------------------- --------------------------------
WITNESS EMPLOYER Director of Finance
<PAGE> 13
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: MAY 18 1993 62 0050740
File Folder Number:
STRAYER COLLEGE INC 521024027
C/O NANCY S NASH Person to Contact:
COASTAL PENSION SERVICES INC EP/CO CUSTOMER SERVICE UNIT
111 N CHARLES STREET SUITE 400 Contact Telephone Number:
BALTIMORE, MD 21201 (410) 962-6058
Plan Name:
THE 401K PROFIT SHARING PLAN FOR
EMPLOYEES OF STRAYER COLLEGE INC
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plans identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
of local statutes.
This determination letter is applicable for the plan adopted on December
07, 1992.
This letter is based upon the certification and demonstrations you
submitted pursuant to Revenue Procedure 91-66. Therefore, the certification
and demonstrations are considered an integral part of this letter.
Accordingly, YOU MUST KEEP A COPY OF THESE DOCUMENTS AS A PERMANENT RECORD OR
YOU WILL NOT BE ABLE TO RELY ON THE ISSUES DESCRIBED IN REVENUE PROCEDURE
91-66.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
<PAGE> 14
- 2 -
STRAYER COLLEGE INC
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ H.J. HIGHTOWER
District Director
Enclosures:
Publication 794
PWBA 515
Addendum
<PAGE> 15
- 3 -
STRAYER COLLEGE INC
Effective January 1, 1993, all qualified plans must comply with Internal
Revenue Code section 401(a)(31). In general, section 401(a)(31) requires plans
to permit participants to elect to have an eligible retirement distribution
paid directly to an eligible retirement plan in direct rollover. This
requirement applies to distributions made on or after January 1, 1993, even if
the plan is not amended to comply with the provisions until the last date
allowed for making such amendments. Because you did not specifically ask that
this issue be considered, the Service did not review this plan for compliance
with section 401(a)(31). Accordingly, the scope of this determination letter
may not be relied upon with respect to that issue. For more details, see
Revenue Procedure 93-12, 1993-3 I.R.B.
<PAGE> 16
COASTAL PENSION SERVICES, INC.
REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
<PAGE> 17
COASTAL PENSION SERVICES, INC.
REGIONAL PROTOTYPE DEFINED CONTRIBUTION
PLAN AND TRUST
(C)1990 COASTAL PENSION SERVICES, INC.
<PAGE> 18
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . 12
2.2 DETERMINATION OF TOP HEAVY STATUS. . . . . . . . . . . . . . . . . . 12
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER. . . . . . . . . . . . . 15
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY. . . . . . . . . . . . . . . 15
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES. . . . . . . . . . . . 15
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . . . . . . . . . 16
2.7 RECORDS AND REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 17
2.8 APPOINTMENT OF ADVISERS. . . . . . . . . . . . . . . . . . . . . . . 17
2.9 INFORMATION FROM EMPLOYER. . . . . . . . . . . . . . . . . . . . . . 17
2.10 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . 17
2.11 MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.12 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.13 CLAIMS REVIEW PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . 18
3.2 EFFECTIVE DATE OF PARTICIPATION. . . . . . . . . . . . . . . . . . . 18
3.3 DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . 19
3.4 TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . 19
3.5 OMISSION OF ELIGIBLE EMPLOYEE. . . . . . . . . . . . . . . . . . . . 19
3.6 INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . 19
3.7 ELECTION NOT TO PARTICIPATE. . . . . . . . . . . . . . . . . . . . . 19
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE. . . . . . . . . . . . . . . . 19
<PAGE> 19
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION. . . . . . . . . . . 20
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . 21
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . . . . . . 21
4.4 MAXIMUM ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . . . . . . 26
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS. . . . . . . . . . . . . . 32
4.6 TRANSFERS FROM QUALIFIED PLANS . . . . . . . . . . . . . . . . . . . 32
4.7 VOLUNTARY CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . 33
4.8 DIRECTED INVESTMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . 34
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS . . . . . . . . . . . . . 34
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . 35
4.11 INTEGRATION IN MORE THAN ONE PLAN. . . . . . . . . . . . . . . . . . 35
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND. . . . . . . . . . . . . . . . . . . . . 35
5.2 METHOD OF VALUATION. . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT. . . . . . . . . . . . . . 36
6.2 DETERMINATION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . . 36
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY . . . . . . . . . . 37
6.4 DETERMINATION OF BENEFITS UPON TERMINATION . . . . . . . . . . . . . 37
6.5 DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . 40
6.6 DISTRIBUTION OF BENEFITS UPON DEATH. . . . . . . . . . . . . . . . . 44
6.7 TIME OF SEGREGATION OR DISTRIBUTION. . . . . . . . . . . . . . . . . 47
6.8 DISTRIBUTION FOR MINOR BENEFICIARY . . . . . . . . . . . . . . . . . 47
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN . . . . . . . . . . . 47
<PAGE> 20
6.10 PRE-RETIREMENT DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . 48
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP. . . . . . . . . . . . . . . . . . 48
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS . . . . . . . . . . . . . 48
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS . . . . . . . . . . . . . . . . . 49
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE. . . . . . . . . . . . . . . . 49
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE. . . . . . . . . . . . . 49
7.3 OTHER POWERS OF THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . 51
7.4 LOANS TO PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . . . 53
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS . . . . . . . . . . . . . . 54
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES. . . . . . . . . . . . 55
7.7 ANNUAL REPORT OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . 55
7.8 AUDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE . . . . . . . . . . . 56
7.10 TRANSFER OF INTREST. . . . . . . . . . . . . . . . . . . . . . . . . 57
7.11 TRUSTEE INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 57
7.12 EMPLOYER SECURITIES AND REAL PROPERTY. . . . . . . . . . . . . . . . 57
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.3 MERGER OR CONSOLIDATION. . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.2 PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . 59
9.3 ALIENATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.4 CONSTRUCTION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . 59
<PAGE> 21
9.5 GENDER AND NUMBER. . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.6 LEGAL ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS . . . . . . . . . . . . . . . 60
9.8 BONDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE . . . . . . . . . . . . . 60
9.10 INSURER'S PROTECTIVE CLAUSE. . . . . . . . . . . . . . . . . . . . . 61
9.11 RECEIPT AND RELEASE FOR PAYMENTS . . . . . . . . . . . . . . . . . . 61
9.12 ACTION BY THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . 61
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY . . . . . . . . . 61
9.14 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.15 APPROVAL BY INTERNAL REVENUE SERVICE . . . . . . . . . . . . . . . . 62
9.16 UNIFORMITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.17 PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER. . . . . . . . . . . . . 62
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS . . . . . . . . . . . . . . 62
10.3 DESIGNATION OF AGENT . . . . . . . . . . . . . . . . . . . . . . . . 63
10.4 EMPLOYEE TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES. . . . . . . . 63
10.6 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.7 DISCONTINUANCE OF PARTICIPATION. . . . . . . . . . . . . . . . . . . 64
10.8 ADMINISTRATOR'S AUTHORITY. . . . . . . . . . . . . . . . . . . . . . 64
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE. . . . . . . . . . 64
<PAGE> 22
ARTICLE XI
CASH OR DEFERRED PROVISIONS
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTIONS . . . . . . . . . . 64
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION. . . . . . . . . . . . . . . 65
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . . . . . . 68
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . 70
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . 72
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . 74
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . 77
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP. . . . . . . . . . . . . . . . . . 79
<PAGE> 23
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context:
1.1 "ACT" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "ADMINISTRATOR" means the person(s) or entity designated by the Employer
pursuant to Section 2.4 to administer the Plan on behalf of the Employer.
1.3 "ADOPTION AGREEMENT" means the separate Agreement which is executed by
the Employer and accepted by the Trustee which sets forth the elective
provisions of this Plan and Trust as specified by the Employer.
1.4 "AFFILIATED EMPLOYER" means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.5 "AGGREGATE ACCOUNT" means with respect to each Participant, the value of
all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.6 "ANNIVERSARY DATE" means the anniversary date specified in C3 of the
Adoption Agreement.
1.7 "BENEFICIARY" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.8 "CODE" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.9 "COMPENSATION" with respect to any Participant means such
Participant's compensation as specified by the Employer in El of the Adoption
Agreement that is paid during the applicable period. Compensation for any
Self-Employed Individual shall be equal to his Earned Income.
In addition, if specified in the Adoption Agreement, Compensation for
all Plan purposes shall also include compensation which is not currently
includible in the Participant's gross income by reason of the application of
Code Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and in such manner as permitted under Code
Section 415(d). In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member aggregation rules of
Code Section 414(q)(6) because such Participant is either a "five percent
owner" of the Employer or one of the ten
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<PAGE> 24
(10) Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this
purpose Family Members shall include only the affected Participant's spouse and
any lineal descendants who have not attained age nineteen (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 is
integrated), the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as determined under this
Section prior to the application of this limitation.
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to Family Member aggregation) shall apply only for Top Heavy
Plan Years and shall not be adjusted.
1.10 "CONTRACT" or "POLICY" means any life insurance policy, retirement income
policy, or annuity contract (group or individual) issued by the Insurer. In
the event of any conflict between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan provisions shall control.
1.11 "DEFERRED COMPENSATION" means, with respect to any Participant, that
portion of the Participant's total Compensation which has been contributed to
the Plan in accordance with the Participant's deferral election pursuant to
Section 11.2.
1.12 "EARLY RETIREMENT DATE" means the date specified in the
Adoption Agreement on which a Participant or Former Participant has satisfied
the age and service requirements specified in the Adoption Agreement (Early
Retirement Age). A Participant shall become fully Vested upon satisfying this
requirement if still employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying the
service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive his benefits under
this Plan.
1.13 "EARNED INCOME" means with respect to a Self-Employed Individual, the net
earnings from self-employment in the trade or business with respect to which
the Plan is established, for which the personal services of the individual are
a material income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions allocable to
such items. Net earnings are reduced by contributions by the Employer to a
qualified Plan to the extent deductible under Code Section 404. In addition,
for Plan Years beginning after December 31, 1989, net earnings shall be
determined with regard to the deduction allowed to the Employer by Code Section
164(f).
1.14 "ELECTIVE CONTRIBUTION" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2. In addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 11.1(b) shall be
considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 11.2(b) and
11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-1(b)(3), the provisions of which are
specifically incorporated herein by reference.
1.15 "ELIGIBLE EMPLOYEE" means any Employee specified in Dl of the Adoption
Agreement.
1.16 "EMPLOYEE" means any person who is employed by the Employer, but excludes
any person who is employed as an independent contractor. The term Employee
shall also include Leased Employees as provided in Code Section 414(n) or (o).
Except as provided in the Non-Standardized Adoption Agreement, all
Employees of all entities which are an Affiliated Employer will be treated as
employed by a single employer.
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<PAGE> 25
1.17 "EMPLOYER" means the entity specified in the Adoption Agreement, any
Participating Employer (as defined in Section 10.1) which shall adopt this
Plan, any successor which shall maintain this Plan and any predecessor which
has maintained this Plan.
1.18 "EXCESS COMPENSATION" means, with respect to a Plan that is integrated
with Social Security, a Participant's Compensation which is in excess of the
amount set forth in the Adoption Agreement.
1.19 "EXCESS CONTRIBUTIONS" means, with respect to a Plan Year, the excess
of Elective Contributions and Qualified Non-Elective Contributions made on
behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 11.4(a).
1.20 "EXCESS DEFERRED COMPENSATION" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference.
1.21 "FAMILY MEMBER" means, with respect to an affected Participant, such
Participant's spouse, and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.22 "FIDUCIARY" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct
or indirect, with respect to any monies or other property of the Plan or has
any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.23 "FISCAL YEAR" means the Employer's accounting year as specified in the
Adoption Agreement.
1.24 "FORFEITURE" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. In addition, the term Forfeiture
shall also include amounts deemed to be Forfeitures pursuant to any other
provision of this Plan.
1.25 "FORMER PARTICIPANT" means a person who has been a Participant, but who
has ceased to be a Participant for any reason.
1.26 "414(s) COMPENSATION" with respect to any Employee means his Compensation
as defined in Section 1.9. However, for purposes of this Section, Compensation
shall be Compensation paid and shall be determined by including, in the case of
a non-standardized Adoption Agreement, any items that are excluded from
Compensation pursuant to the Adoption Agreement. The amount of "414(s)
Compensation" with respect to any Employee shall include "414(s) Compensation"
during the entire twelve (12) month period ending on
3
<PAGE> 26
the last day of such Plan Year, except that for Plan Years be ginning prior to
the later of January 1, 1992, or the date that is sixty (60) days after the date
final Regulations are issued, "414(s) Compensation" shall only be recognized as
of an Employee's effective date of participation.
In addition, if specified in the Adoption Agreement, "414(s)
Compensation" shall also include compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B), or 403(b), plus Elective Contributions
attributable to Deferred Compensation recharacterized as voluntary Employee
contributions pursuant to 11.5(a).
1.27 "415 COMPENSATION" means compensation as defined in Section 4.4(f)(2).
1.28 "HIGHLY COMPENSATED EMPLOYEE" means an Employee described in Code
Section 414(q) and the Regulations thereunder and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year"
or "look-back year" were "five percent owners" as defined in Section
1.35(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-
back year" from the Employer in excess of $50,000 and were in the Top
Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of
the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation" during
the "look-back year" from the Employer greater than 50 percent of the
limit in effect under Code Section 415(b)(1)(A) for any such Plan Year.
The number of officers shall be limited to the lesser of (i) 50 employees;
or (ii) the greater of 3 employees or 10 percent of all employees. If the
Employer does not have at least one officer whose annual "415
Compensation" is in excess of 50 percent of the Code Section 415(b)(1)(A)
limit, then the highest paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e)Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the "determination
year" and are also described in (b), (c) or (d) above when these
paragraphs are modified to substitute "determination year" for "look-back
year".
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding twelve-
month period. However, if the Plan Year is a calendar year, or if another
Plan of the Employer so provides, then the "look-back year" shall be the
calendar year ending with or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable) shall be the period of
time, if any, which extends beyond the "look-back year" and ends on the last
day of the Plan Year for which testing is being performed (the "lag period").
With respect to this election, it shall be applied on a uniform and consistent
basis to all plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415 Compensation" shall be
made by including amounts that would otherwise be excluded from a Participant's
gross income by reason of the application of Code Sections 125, 402(a)(8),
402(h)(1)(B) and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b). Additionally, the dollar
4
<PAGE> 27
threshold amounts specified in (b) and (c) above shall be adjusted at such
time and in such manner as is provided in Regulations. In the case of
such an adjustment, the dollar limits which shall be applied are those for
the calendar year in which the "determination year" or "look back year"
begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning
of Code Section 911(d)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the
Employer. The exclusion of Leased Employees for this purpose shall be
applied on a uniform and consistent basis for all of the Employer's
retirement plans. In addition, Highly Compensated Former Employees shall
be treated as Highly Compensated Employees without regard to whether they
performed services during the "determination year".
1.29 "HIGHLY COMPENSATED FORMER EMPLOYEE" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who
separated from service prior to 1987 will be treated as a Highly Compensated
Former Employee only if during the separation year (or year preceding the
separation year) or any year after the Employee attains age 55 (or the last year
ending before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.28. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code "Section 414(q) definition is applicable.
1.30 "HIGHLY COMPENSATED PARTICIPANT" means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.31 "HOUR OF SERVICE" means (1) each hour for which an Employee is directly
or indirectly compensated or entitled to compensation by the Employer for the
performance of duties during the applicable computation period; (2) each hour
for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour
for which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited both
under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
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<PAGE> 28
For purposes of this Section, a payment shall be deemed to be made by
or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a
Year of Service, a year of participation for purposes of accrued benefits, a
1-Year Break in Service, and employment commencement date (or reemployment
commencement date). The provisions of Department of Labor regulations
2530.200b-2(b) and (c) are incorporated herein by reference.
Hours of Service will be credited for employment with all Affiliated
Employers and for any individual considered to be a Leased Employee pursuant to
Code Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method selected
in the Adoption Agreement.
1.32 "INSURER" means any legal reserve insurance company which shall issue one
or more policies under the Plan.
1.33 "INVESTMENT MANAGER" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.34 "JOINT AND SURVIVOR ANNUITY" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 1/2, nor greater than the amount of the annuity payable
during the joint lives of the Participant and the Participant's spouse. The
Joint and Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's Vested interest in the Plan.
1.35 "KEY EMPLOYEE" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the calendar year in which
such Plan Year ends and owning (or considered as owning within the
meaning of Code Section 318) both more than one-half percent interest
and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in
the
6
<PAGE> 29
Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections
414(b), (c), (m) and (o) shall be treated as separate employers.
However, in determining whether an individual has "415 Compensation"
of more than $150,000, "415 Compensation" from each employer required
to be aggregated under Code Sections 414(b), (c), (m) and (o) shall be
taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise
be excluded from a Participant's gross income by reason of the
application of Code Sections 125, 402(a)(8), 402(h)(1)(B) and, in the
case of Employer contributions made pursuant to a salary reduction
agreement, Code Section 403(b).
1.36 "LATE RETIREMENT DATE" means the date of, or the first day of
the month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a
Participant's actual retirement after having reached his Normal Retirement
Date.
1.37 "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 services performed for the recipient employer shall be treated as provided
by the recipient employer.
A leased employee shall not be considered an Employee of the
recipient if: (i) 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 (ii) leased employees do not constitute more than 20 percent of
the recipient's nonhighly compensated workforce.
1.38 "NET PROFIT" means with respect to any Fiscal Year the Employer's
net income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
1.39 "NON-ELECTIVE CONTRIBUTION" means the Employer's contributions
to the Plan other than those made pursuant to the Participant's deferral
election made pursuant to Section 11.2 and any Qualified Non-Elective
Contribution. In addition, if selected in E3 of the Adoption Agreement, the
Employer's Matching Contribution made pursuant to Section 4.3(b) shall be
considered a Non-Elective Contribution for purposes of the Plan.
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<PAGE> 30
1.40 "NON-HIGHLY COMPENSATED PARTICIPANT" means any Participant who
is neither a Highly Compensated Employee nor a Family Member.
1.41 "NON-KEY EMPLOYEE" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.
1.42 "NORMAL RETIREMENT AGE" means, the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in his
Participant's Account.
1.43 "NORMAL RETIREMENT DATE" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have his benefits
distributed to him.
1.44 "1-YEAR BREAK IN SERVICE" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally have been
credited but for such absence, or, in any case in which the Administrator is
unable to determine such hours normally credited, eight (8) Hours of Service
per day. The total Hours of Service required to be credited for a "maternity
or paternity leave of absence" shall not exceed 501.
1.45 "OWNER-EMPLOYEE" means a sole proprietor who owns the entire
interest in the Employer or a partner who owns more than 10% of either the
capital interest or the profits interest in the Employer and who receives
income for personal services from the Employer.
1.46 "PARTICIPANT" means any Eligible Employee who participates in
the Plan as provided in Section 3.2 and has not for any reason become
ineligible to participate further in the Plan.
1.47 "PARTICIPANT'S ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest under the Plan resulting from (a) the Employer's contributions in the
case of a Profit Sharing Plan or Money Purchase Plan, and (b) the Employer's
Non-Elective Contributions in the case of a 401(k) Profit Sharing Plan.
1.48 "PARTICIPANT'S COMBINED ACCOUNT" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest under the Plan resulting from the Employer's contributions.
1.49 "PARTICIPANT'S ELECTIVE ACCOUNT" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer's Elective
Contributions and Qualified Non-Elective Contributions. A separate accounting
shall be
8
<PAGE> 31
maintained with respect to that portion of the Participant's Elective Account
attributable to Elective Contributions made pursuant to Section 11.2, Employer
matching contributions if they are deemed to be Elective Contributions, and any
Qualified Non-Elective Contributions.
1.50 "PARTICIPANT'S ROLLOVER ACCOUNT" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from amounts transferred from another
qualified plan or "conduit" Individual Retirement Account in accordance with
Section 4.6.
1.51 "PLAN" means this instrument (hereinafter referred to as
Coastal Pension Services, Inc. Regional Prototype Defined Contribution Plan
and Trust Basic Plan Document #01) including all amendments thereto, and the
Adoption Agreement as adopted by the Employer.
1.52 "PLAN YEAR" means the Plan's accounting year as specified in C2 of
the Adoption Agreement.
1.53 "PRE-RETIREMENT SURVIVOR ANNUITY" means an immediate annuity
for the life of the Participant's spouse, the payments under which must be
equal to the actuarial equivalent of 50% of the Participant's Vested interest
in the Plan as of the date of death.
1.54 "QUALIFIED NON-ELECTIVE ACCOUNT" means the account established
hereunder to which Qualified Non-Elective Contributions are allocated.
1.55 "QUALIFIED NON-ELECTIVE CONTRIBUTION" means the Employer's
contributions to the Plan that are made pursuant to E5 of the Adoption
Agreement and Section 11.1(d) which are used to satisfy the "Actual Deferral
Percentage" tests. Qualified Non-Elective Contributions are nonforfeitable
when made and are distributable only as specified in Sections 11.2(c) and 11.8.
In addition, the Employer's contributions to the Plan that are made pursuant to
Section 11.7(h) and which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered Qualified Non-Elective Contributions.
1.56 "QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTION ACCOUNT" means the
account established and maintained by the Administrator for each Participant
with respect to his total interest under the Plan resulting from the
Participant's tax deductible qualified voluntary employee contributions made
pursuant to Section 4.9.
1.57 "REGULATION" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.58 "RETIRED PARTICIPANT" means a person who has been a
Participant, but who has become entitled to retirement benefits under the Plan.
1.59 "RETIREMENT DATE" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date, Early or Late
Retirement Date (see Section 6.1).
1.60 "SELF-EMPLOYED INDIVIDUAL" means an individual who has earned
income for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year. A
Self-Employed Individual shall be treated as an Employee.
1.61 "SHAREHOLDER-EMPLOYEE" means a Participant who owns more than
five percent (5%) of the Employer's outstanding capital stock during any year
in which the Employer elected to be taxed as a Small Business Corporation under
the applicable Code Section.
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1.62 "SHORT PLAN YEAR" means, if specified in the Adoption
Agreement, that the Plan Year shall be less than a 12 month period. If chosen,
the following rules shall apply in the administration of this Plan. In
determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the Short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of days in the
Short Plan Year. The determination of whether an Employee has completed a Year
of Service for vesting and eligibility purposes shall be made in accordance
with Department of Labor Regulation 2530.203-2(c). In addition, if this Plan is
integrated with Social Security, the integration level shall also be
proportionately reduced based on the number of days in the Short Plan Year.
1.63 "SUPER TOP HEAVY PLAN" means a plan described in Section 2.2(b).
1.64 "TAXABLE WAGE BASE" means, with respect to any year, the maximum
amount of earnings which may be considered wages for such year under Code
Section 3121(a)(1).
1.65 "TERMINATED PARTICIPANT" means a person who has been a
Participant, but whose employment has been terminated other than by death,
Total and Permanent Disability or retirement.
1.66 "TOP HEAVY PLAN" means a plan described in Section 2.2(a).
1.67 "TOP HEAVY PLAN YEAR" means a Plan Year commencing after December
31, 1983 during which the Plan is a Top Heavy Plan.
1.68 "TOP PAID GROUP" shall be determined pursuant to Code Section
414(q) and the Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable year,
ranked according to the amount of "415 Compensation" (as determined pursuant to
Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased
Employees shall be treated as Employees pursuant to Code Section 414(n) or (o).
Employees who are non-resident aliens who received no earned income (within
the meaning of Code Section 911(d)(2)) from the Employer constituting United
States source income within the meaning of Code Section 861(a)(3) shall not be
treated as Employees. Additionally, for the purpose of determining the number
of active Employees in any year, the following additional Employees shall also
be excluded, however, such Employees shall still be considered for the purpose
of identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during
a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and
the Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on
a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
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1.69 "TOTAL AND PERMANENT DISABILITY" means the inability to engage
in any substantial gainful activity by reason of any medically determinable
noble physical or mental impairment that can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not less
than 12 months. The disability of a Participant shall be determined by a
licensed physician chosen by the Administrator. However, if the condition
constitutes total disability under the federal Social Security Acts, the
Administrator may rely upon such determination that the Participant is Totally
and Permanently Disabled for the purposes of this Plan. The determination
shall be applied uniformly to all Participants.
1.70 "TRUSTEE" means the person or entity named in B6 of the Adoption
Agreement and any successors.
1.71 "TRUST FUND" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.72 "VESTED" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.73 "VOLUNTARY CONTRIBUTION ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.7.
1.74 "YEAR OF SERVICE" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has
completed at least 1000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service (employment commencement date). The computation
period beginning after a 1-Year Break in Service shall be measured from the
date on which an Employee again performs an Hour of Service. The succeeding
computation periods shall begin with the first anniversary of the Employee's
employment commencement date. However, if one (1) Year of Service or less is
required as a condition of eligibility, then after the initial eligibility
computation period, the eligibility computation period shall shift to the
current Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service. An Employee who is credited with
1,000 Hours of Service in both the initial eligibility computation period and
the first Plan Year which commences prior to the first anniversary of the
Employee's initial eligibility computation period will be credited with two
Years of Service for purposes of eligibility to participate.
For vesting purposes, and all other purposes not specifically
addressed in this Section, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan unless specifically
excluded pursuant to the Adoption Agreement.
Years of Service and breaks in service will be measured on the same
computation period.
Years of Service with any predecessor Employer which maintained this
Plan shall be recognized. Years of Service with any other predecessor Employer
shall be recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be recognized.
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ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.3(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds sixty percent (60%) of
the Present Value of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former Participant has
not performed any services for any Employer maintaining the Plan at
any time during the five year period ending on the Determination Date,
any accrued benefit for such Participant or Former Participant shall
not be taken into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any
Plan Year beginning after December 31, 1983, in which, as of the
Determination Date, (1) the Present Value of Accrued Benefits of Key
Employees and (2) the sum of the Aggregate Accounts of Key Employees
under this Plan and all plans of an Aggregation Group, exceeds ninety
percent (90%) of the Present Value of Accrued Benefits and the
Aggregate Accounts of all Key and Non-Key Employees under this Plan
and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account
as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the
most recent valuation occurring within a twelve (12) month
period ending on the Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any
contributions due as of the Determination Date. Such
adjustment shall be the amount of any contributions actually
made after the valuation date but before the Determination
Date, except for the first Plan Year when such adjustment
shall also reflect the amount of any contributions made after
the Determination Date that are allocated as of a date in that
first Plan Year;
(3) for a Money Purchase Plan, contributions that would
be allocated as of a date not later than the Determination
Date, even though those amounts are not yet made or required
to be made.
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(4) any Plan distributions made within the Plan
Year that includes the Determination Date or within the four
(4) preceding Plan Years. However, in the case of
distributions made after the valuation date and prior to the
Determination Date, such distributions are not included as
distributions for top heavy purposes to the extent that such
distributions are already included in the Participant's
Aggregate Account balance as of the valuation date. In the
case of a distribution of an annuity Contract, the amount of
such distribution is deemed to be the current actuarial value
of the Contract, determined on the date of the distribution.
Notwithstanding anything herein to the contrary, all
distributions, including distributions made prior to January
1, 1984, and distributions under a terminated plan which if it
had not been terminated would have been required to be
included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because
of death shall be treated as a distribution for the purpose of
this paragraph.
(5) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate Account
balance.
(6) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always consider
such rollovers or plan-to-plan transfers as a distribution for
the purposes of this Section. If this Plan is the plan
accepting such rollovers or plan-to-plan transfers, it shall
not consider such rollovers or plan-to-plan transfers accepted
after December 31, 1983 as part of the Participant's Aggregate
Account balance. However, rollovers or plan-to-plan transfers
accepted prior to January 1, 1984 shall be considered as part
of the Participant's Aggregate Account balance.
(7) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made
to a plan maintained by the same employer), if this Plan
provides the rollover or plan-to-plan transfer, it shall not
be counted as a distribution for purposes of this Section. If
this Plan is the plan accepting such rollover or plan-to-plan
transfer, it shall consider such rollover or plan-to-plan
transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(8) For the purposes of determining whether two employers
are to be treated as the same employer in 2.2(c)(6) and
2.2(c)(7) above, all employers aggregated under Code Section
414(b), (c), (m) and (o) are treated as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as hereinafter
determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of the
Employer, including any Simplified Employee Pension Plan, in
which a Key Employee is a participant in the Plan Year
containing the Determination Date or any of the four preceding
Plan Years, and each other qualified plan of the Employer
which enables any qualified plan in which a Key Employee
participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the
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Required Aggregation Group will be considered a Top Heavy Plan
if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan of the Employer, including any
Simplified Employee Pension Plan, not required to be included
in the Required Aggregation Group, provided the resulting
group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410. Such group
shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation
Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are
Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the last five
(5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the
last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee shall be as determined using the
single accrual method used for all plans of the Employer and
Affiliated Employers, or if no such single method exists, using a
method which results in benefits accruing not more rapidly than the
slowest accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall be
determined as of the most recent valuation date that falls within or
ends with the 12-month period ending on the Determination Date, except
as provided in Code Section 416 and the Regulations thereunder for the
first and second plan years of a defined benefit plan.
However, any such determination must include present value of
accrued benefit attributable to any Plan distributions referred to in
Section 2.2(c)(4) above, any Employee contributions referred to in
Section 2.2(c)(5) above or any related or unrelated rollovers referred
to in Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in the
group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group, exceeds
sixty percent (60%) of a similar sum determined for all
Participants.
(h) The Administrator shall determine whether this Plan
is a Top Heavy Plan on the Anniversary Date specified in the Adoption
Agreement. Such determination of the top heavy ratio shall be in
accordance with Code Section 416 and the Regulations thereunder.
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2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan to assure that the
Plan is being operated for the exclusive benefit of the Participants
and their Beneficiaries in accordance with the terms of the Plan, the
Code, and the Act.
(b) The Employer shall establish a "funding policy and
method", i.e., it shall determine whether the Plan has a short run
need for liquidity (e.g., to pay benefits) or whether liquidity is a
long run goal and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its investment
policy. The communication of such a "funding policy and method" shall
not, however, constitute a directive to the Trustee as to investment
of the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the requirements
of Title I of the Act.
(c) The Employer may, in its discretion, appoint an
Investment Manager to manage all or a designated portion of the assets
of the Plan. In such event, the Trustee shall follow the directive of
the Investment Manager in investing the assets of the Plan managed by
the Investment Manager.
(d) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties have been
delegated or allocated by it under the provisions of this Plan or
pursuant to procedures established hereunder. This requirement may be
satisfied by formal periodic review by the Employer or by a qualified
person specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator
may resign by delivering his written resignation to the Employer or be removed
by the Employer by delivery of written notice of removal, to take effect at a
date specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator,
shall promptly designate in writing a successor to this position. If the
Employer does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by Employer and
accepted in writing by each Administrator. In the event that no such
delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
responsibilities of each Administrator. The Trustee thereafter shall accept
and rely upon any documents executed by the appropriate Administrator until
such time as the Employer or the Administrators file with the Trustee a written
revocation of such designation.
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2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion
to construe the terms of the Plan and determine all questions arising in
connection with the administration, interpretation, and application of the
Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry
out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with
the terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to accomplish his
duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all nondiscretionary or otherwise directed disbursements from the
Trust Fund;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are consistent
with the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any Insurer, and to designate the Insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to
be contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan in order
that the Trustee can exercise any investment discretion in a manner
designed to accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure
for notifying Participants and Beneficiaries of their rights to elect
Joint and Survivor Annuities and Pre-Retirement Survivor Annuities if
required by the Code and Regulations thereunder;
(j) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
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2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying
all information and reports to the Internal Revenue Service, Department of
Labor, Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require;
and the Administrator shall advise the Trustee of such of the foregoing facts
as may be pertinent to the Trustee's duties under the Plan. The Administrator
may rely upon such information as is supplied by the Employer and shall have no
duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs
of administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust Fund. However, the Employer may reimburse the Trust
Fund for any administration expense incurred. Any administration expense paid
to the Trust Fund as a reimbursement shall not be considered an Employer
contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event
the claim is denied, the reasons for the denial shall be specifically set forth
in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
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2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give Further consideration to
his claim by filing with the Administrator a written request for a hearing.
Such request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.12. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and expense and at which the claimant shall have
an opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written
notice to the Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the Administrator
which are pertinent to the claim at issue and its disallowance. Either the
claimant or the Administrator may cause a court reporter to attend the hearing
and record the proceedings. In such event, a complete written transcript of
the proceedings shall be furnished to both parties by the court reporter. The
full expense of any such court reporter and such transcripts shall be borne by
the party causing the court reporter to attend the hearing. A final decision
as to the allowance of the claim shall be made by the Administrator within 60
days of receipt of the appeal (unless there has been an extension of 60 days
due to special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day period).
Such communication shall be written in a manner calculated to be understood by
the claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the
date he has satisfied the requirements specified in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant shall
become a Participant effective as of the day specified in the Adoption
Agreement.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a 1-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
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3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to an ineligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted.
Such contribution shall be made regardless of whether or not it is deductible
in whole or in part in any taxable year under applicable provisions of the
Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made,
the Employer shall not be entitled to recover the contribution made with
respect to the ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate
must be communicated to the Employer, in writing, at least thirty (30) days
before the beginning of a Plan Year. For Standardized Plans, a Participant or
an Eligible Employee may not elect not to participate. Furthermore, the
foregoing election not to participate shall not be available with respect to
partners in a partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other entities, this Plan and the plan
established for other trades or businesses must, when looked at as a
single Plan, satisfy Code Sections 401(a) and (d) for the Employees of
this and all other entities.
(b) If the Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must be
included in a plan which satisfies Code Sections 401 (a) and (d) and
which provides contributions and benefits not less favorable than
provided for Owner-Employees under this Plan.
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(c) If an individual is covered as an Owner-Employee under the
plans of two or more trades or business which are not controlled and
the individual controls a trade or business, then the benefits or
contributions of the employees under the plan of the trades or
businesses which are controlled must be as favorable as those provided
for him under the most favorable plan of the trade or business which
is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, will be considered to control an
entity if the Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated entity, or
(2) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
(e) For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or more
Owner-Employees, are considered to control within the meaning of the
preceding sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) The Employer shall make contributions over such period of
years as the Employer may determine on the following basis. On
behalf of each Participant eligible to share in allocations, for
each year of his participation in this Plan, the Employer shall
contribute the amount specified in the Adoption Agreement. All
contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee. The Employer shall be
required to obtain a waiver from the Internal Revenue Service for
any Plan Year in which it is unable to make the full required
contribution to the Plan. In the event a waiver is obtained, this
Plan shall be deemed to be an individually designed plan.
(2) For any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan
Year beginning on or after January 1, 1990, the Employer shall not
contribute on behalf of a Participant who performs less than a Year
of Service during any Plan Year, unless there is a Short Plan Year
or a contribution is required pursuant to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's contribution for
any Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
However, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if
it exceeds the amount which is deductible under Code Section 404.
(b) For a Profit Sharing Plan -
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(1) For each Plan Year, the Employer shall contribute to the Plan
such amount as specified by the Employer in the Adoption Agreement.
Notwithstanding the foregoing, however, the Employer's contribution
for any Fiscal Year shall not exceed the maximum amount allowable
as a deduction to the Employer under the provisions of Code Section
404. All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(2) Except, however, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a contribution
even if it exceeds current or accumulated Net Profit or the amount
which is deductible under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax for the Fiscal
Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall credit
as of each Anniversary Date, or other valuation date, all amounts
allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be allocated to each
Participant's Combined Account in the manner set forth in
Section 4.1 herein and as specified in Section E2 of the
Adoption Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each
Participant's Account, except as provided in Section 4.3(f),
in a dollar amount equal to 5.7% of the sum of each
Participant's total Compensation plus Excess Compensation.
If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of
the contribution in the same proportion that his total
Compensation plus his total Excess Compensation for the Plan
Year bears to the total Compensation plus the total Excess
Compensation of all Participants for that year.
Regardless of the preceding, 4.3% shall be substituted for 5.7% above if
Excess Compensation is based on more than 20% and less than or equal to 80%
of the Taxable Wage Base. If Excess Compensation is based on less than
100% and more than 80% of the Taxable Wage Base, then 5.4% shall be
substituted for 5.7% above.
(ii) The balance of the Employer's contribution over the
amount allocated above, if any, shall be allocated to each
Participant's Combined Account in the same proportion that his
total Compensation for the Year bears to the total
Compensation of all Participants for such year.
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<PAGE> 44
(iii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized
Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who performs less than a
Year of Service during any Plan Year shall not share in the
Employer's contribution for that year, unless there is a Short
Plan Year or a contribution is required pursuant to Section
4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each
Participant's Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
(ii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized
Adoption Agreement for any Plan Year beginning on or after
January 1, 1990, a Participant who performs less than a Year
of Service during any Plan Year shall not share in the
Employer's contribution for that year, unless there is a Short
Plan Year or a contribution is required pursuant to Section
4.3(h).
(c) As of each Anniversary Date or other valuation date, before
allocation of Employer contributions and Forfeitures, any earnings or
losses (net appreciation or net depreciation) of the Trust Fund shall
be allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated accounts as of
such date. If any nonsegregated account of a Participant has been
distributed prior to the Anniversary Date or other valuation date
subsequent to a Participant's termination of employment, no earnings
or losses shall be credited to such account.
Notwithstanding the above, with respect to contributions made
to Plan after the previous Anniversary Date or allocation date, the
method specified in the Adoption Agreement shall be used.
(d) Participants' Accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends or
interest received on insurance contracts.
(e) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 6.4(g)(2) or be used
to satisfy any contribution that may be required pursuant to Section
3.5 and/or 6.9. The remaining Forfeitures, if any, shall be treated in
accordance with the Adoption Agreement. Provided, however, that in
the event the allocation of Forfeitures provided herein shall cause
the "annual addition" (as defined in Section 4.4) to any Participant's
Account to exceed the amount allowable by the Code, the excess shall
be reallocated in accordance with Section 4.5. Except, however, for
any Plan Year beginning prior to January 1, 1990, and if elected in
the non-standardized Adoption Agreement for any Plan Year beginning
on or after January 1, 1990, a Participant who performs less than a
Year of Service during any Plan Year shall not share in the Plan
Forfeitures for that year, unless there is a Short Plan Year or a
contribution required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer's contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal
to at least three percent (3%) of such Non-Key Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group). However, if
(i) the sum of the Employer's contributions and Forfeitures allocated
to the Participant's Combined Account of each Key
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<PAGE> 45
Employee for such Top Heavy Plan Year is less than three
percent (3%) of each Key Employee's "415 Compensation" and (ii) this
Plan is not required to be included in an Aggregation Group to enable
a defined benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account of each
Non-Key Employee shall be equal to the largest percentage allocated to
the Participant's Combined Account of any Key Employee.
However, for each Non-Key Employee who is a Participant in a
paired Profit Sharing Plan or 401(k) Profit Sharing Plan and a
paired Money Purchase Plan, the minimum 3% allocation specified above
shall be provided in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan Year the
Employer's contribution shall be allocated as follows:
(1) An amount equal to 3% multiplied by each Participant's
Compensation for the Plan Year shall be allocated to each
Participant's Account. If the Employer does not contribute such
amount for all Participants, the amount shall be allocated to
each Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation of all
Participants for such year.
(2) The balance of the Employer's contribution over the amount
allocated under subparagraph (1) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 3% multiplied by a
Participant's Excess Compensation. If the Employer does not
contribute such amount for all Participants, each Participant will be
allocated a share of the contribution in the same proportion that his
Excess Compensation bears to the total Excess Compensation of all
Participants for that year.
(3) The balance of the Employer's contribution over the amount
allocated under subparagraph (2) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 2.7% multiplied by
the sum of each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation plus
his total Excess Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of all Participants
for that year.
Regardless of the preceding, 1.3% shall be substituted for 2.7%
above if Excess Compensation is based on more than 20% and less than
or equal to 80% of the Taxable Wage Base. If Excess
Compensation is based on less than 100% and more than 80% of the
Taxable Wage Base, then 2.4% shall be substituted for 2.7% above.
(4) The balance of the Employer's contributions over the amount
allocated above, if any, shall be allocated to each Participant's
Account in the same proportion that his total Compensation for the
Plan Year bears to the total Compensation of all Participants for such
year.
For each Non-Key Employee who is a Participant in this Plan and
another non-paired defined contribution plan maintained by the Employer,
the minimum 3% allocation specified above shall be provided as specified
in F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
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<PAGE> 46
(h) For any Top Heavy Plan Year, the minimum allocations set forth in
this Section shall be allocated to the Participant's Combined Account of
all Non-Key Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Non-Key Employees
who have (1) failed to complete a Year of Service; or (2) declined to make
mandatory contributions (if required) or, in the case of a cash or deferred
arrangement, elective contributions to the Plan.
(i) Notwithstanding anything herein to the contrary, in any Plan Year
in which the Employer maintains both this Plan and a defined benefit
pension plan included in a Required Aggregation Group which is top heavy,
the Employer shall not be required to provide a Non-Key Employee with both
the full separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. Therefore, if the
Employer maintains both a Defined Benefit and a Defined Contribution Plan
that are a Top Heavy Group, the top heavy minimum benefits shall be
provided as follows:
(1) Applies if Flb of the Adoption Agreement is Selected -
(i) The requirements of Section 2.1 shall apply except that each
Non-Key Employee who is a Participant in the Profit Sharing Plan
or Money Purchase Plan and who is also a Participant in the
Defined Benefit Plan shall receive a minimum allocation of five
percent (5%) of such Participant's "415 Compensation" from the
applicable Defined Contribution Plan(s).
(ii) For each Non-Key Employee who is a Participant only in the
Defined Benefit Plan the Employer will provide a minimum
non-integrated benefit equal to 2% of his highest five
consecutive year average "415 Compensation" for each Year of
Service while a Participant in the Plan, in which the Plan is top
heavy, not to exceed ten.
(iii) For each Non-Key Employee who is a Participant only in
this Defined Contribution Plan, the Employer shall provide a
contribution equal to 3% of his "415 Compensation".
(2) Applies if F1c of the Adoption Agreement is Selected -
(i) The minimum allocation specified in Section 4.3(i)(1)(i)
shall be 7 1/2% if the Employer elects in the Adoption Agreement
for years in which the Plan is Top Heavy, but not Super
Top Heavy .
(ii) The minimum benefit specified in Section 4.3(i)(1)(ii)
shall be 3% if the Employer elects in the Adoption
Agreement for years in which the Plan is Top Heavy, but not Super
Top Heavy.
(iii) The minimum allocation specified in Section 4.3(i)(1)(iii)
shall be 4% if the Employer elects in the Adoption Agreement
for years in which the Plan is Top Heavy, but not Super Top
Heavy.
(j) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000 (unless adjusted in such manner as permitted under
Code Section 415(d)). However, for Plan Years beginning prior to January
1, 1989, the $200,000 limit shall apply only for Top Heavy Plan Years and
shall not be adjusted.
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<PAGE> 47
(k) Notwithstanding anything herein to the contrary, any
Participant who terminated employment during the Plan Year for reasons
other than death, Total and Permanent Disability, or retirement shall
or shall not share in the allocations of the Employer's Contributions
and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if
this is a standardized Plan, any such terminated Participant shall
share in the allocations as provided in this Section provided such
Participant completed more than 500 Hours of Service.
(l) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or
retirement shall share in the allocations as provided in this Section
regardless of whether they completed a Year of Service during the Plan
Year.
(m) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall
be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing his employer derived account balance
in the Plan attributable to post-break service.
(n) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail
to meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules
shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be expanded
to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the
applicable test specified above. The specific participants who
shall become eligible under the terms of this paragraph shall be
those who are actively employed on the last day of the Plan Year
and, when compared to similarly situated Participants, have
completed the greatest number of Hours of Service in the Plan
Year.
(2) If after application of paragraph (1) above, the applicable
test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and
Forfeitures for the Plan Year shall be further expanded to include
the minimum number of Participants who are not actively employed
on the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become
eligible to share shall be those Participants, when compared to
similarly situated Participants, who have completed the greatest
number of Hours of Service in the Plan Year before terminating
employment.
Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected Participants
would have received had they been included in the allocations, even if
it exceeds the amount which would be deductible under Code Section
404. Any adjustment to the allocations pursuant to this paragraph
shall be considered a retroactive amendment adopted by the last day of
the Plan Year.
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<PAGE> 48
4.4 MAXIMUM ANNUAL ADDITIONS
(a)(1) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer, or a welfare benefit fund (as defined in Code Section
419(e)), maintained by the Employer, or an individual medical
account (as defined in Code Section 415(1)(2)) maintained by the
Employer, which provides Annual Additions, the amount of Annual
Additions which may be credited to the Participant's accounts for
any Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this
Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts would
cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or allocated
will be reduced so that the Annual Additions for the Limitation
Year will equal the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable
estimation of the Participant's Compensation for the Limitation
Year, uniformly determined for all Participants similarly
situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant's actual compensation for such Limitation Year.
(4) If pursuant to Section 4.4(a)(2) or as a result of the
allocation of Forfeitures, there is an Excess Amount, the
excess will be disposed of as follows:
(i) Any nondeductible Voluntary Employee Contributions, to
the extent they would reduce the Excess Amount, will be
returned to the Participant;
(ii) If, after the application of subparagraph (i), an
Excess Amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the Excess
Amount in the Participant's account will be used to reduce
Employer contributions (including any allocation of
Forfeitures) for such Participant in the next Limitation
Year, and each succeeding Limitation Year if necessary;
(iii) If, after the application of subparagraph (i), an
Excess Amount still exists, and the Participant is not
covered by the Plan at the end of a Limitation Year, the
Excess Amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce
future Employer contributions (including allocation of any
Forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary;
(iv) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section, it will
not participate in the allocation of investment gains and
losses. If a suspense account is in existence at any time
during a particular limitation year, all amounts in the
suspense account must be allocated and reallocated to
participants' accounts before any employer contributions or
any employee contributions may be made to the plan for that
limitation year. Excess amounts may not be distributed to
participants or former participants.
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<PAGE> 49
(b)(1) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified Regional Prototype
defined contribution plan maintained by the Employer, or a
welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer, or an individual medical account (as
defined in Code Section 415(l)(2)) maintained by the Employer,
which provides Annual Additions, any Limitation Year. The Annual
Additions which may be credited to a Participant's accounts under
this Plan for any such Limitation Year shall not exceed the
Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant's accounts under the other plans and
welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained
by the Employer are less than the Maximum Permissible Amount and
the Employer contribution that would otherwise be contributed or
allocated to the Participant's accounts under this Plan would
cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and welfare
benefit funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under such other defined contribution plans and
welfare benefit funds in the aggregate are equal to or greater
than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's account under this
Plan for the Limitation Year.
(2) Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in
Section 4.4(a)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result of the
allocation of Forfeitures, a Participant's Annual Additions under
this Plan and such other plans would result in an Excess Amount
for a Limitation Year, the Excess Amount will be deemed to
consist of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been allocated
first regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan
will be the product of,
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date
under this and all the other qualified defined contribution
plans.
(6) Any Excess Amount attributed to this Plan will be disposed in
the manner described in Section 4.4(a)(4).
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<PAGE> 50
(c) If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not
a Regional Prototype Plan, Annual Additions which may be credited
to the Participant's account under this Plan for any Limitation
Year will be limited in accordance with Section 4.4(b), unless
the Employer provides other limitations in the Adoption
Agreement.
(d) If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in this
Plan the sum of the Participant's Defined Benefit Plan Fraction
and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to
the Participant's account under this Plan for any Limitation Year
will be limited in accordance with the Limitation on Allocations
Section of the Adoption Agreement.
(e) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is
not an "annual addition". In addition, the following are not
Employee contributions for the purposes of Section 4.4(f)(1)(2):
(1) rollover contributions (as defined in Code Sections
402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of
loans made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code
Section 411(a)(7)(B) (cash-outs); (4) repayments of distributions
received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income under
Code Section 408(k)(6).
(f) For purposes of this Section, the following terms shall
be defined as follows:
(1) Annual Additions means the sum credited to a
Participant's accounts for any Limitation Year of (1)
Employer contributions, (2) effective with respect to
"limitation years" beginning after December 31, 1986,
Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2), which is part
of a pension or annuity plan maintained by the Employer and
(5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3)) under a welfare benefit
fund (as defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation"
percentage limitation referred to in paragraph (a)(2) above
shall not apply to: (1) any contribution for medical
benefits (within the meaning of Code Section 419A(f)(2))
after separation from service which is otherwise treated as
an "annual addition", or (2) any amount otherwise treated as
an "annual addition" under Code Section 415(l)(1).
Notwithstanding the foregoing, for "limitation years"
beginning prior to January 1, 1987, only that portion of
Employee contributions equal to the lesser of Employee
contributions in excess of six percent (6%) of "415
Compensation" or one-half of Employee contributions shall be
considered an "annual addition".
For this purpose, any Excess Amount applied under Sections
4.4(a)(4) and 4.4(b)(6) in the Limitation Year to reduce
Employer contributions shall be considered Annual Additions
for such Limitation Year.
(2) Compensation means a Participant's earned income,
wages, salaries, fees for professional services and other
amounts received for personal services actually rendered
in the course of employment with the Employer
maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, and bonuses) and excluding the following:
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<PAGE> 51
(i) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's
gross income for the taxable year in which contributed, or
Employer contributions under a simplified employee pension
plan to the extent such contributions are excludable from
the Employee's gross income, or any distributions from a
plan of deferred compensation;
(ii) contributions made by the Employer to a plan of
deferred compensation to the extent that all or a
portion of such contributions are recharacterized as a
voluntary Employee contribution;
(iii) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by an Employee becomes freely transferable or is no
longer subject to a substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(v) other amounts which received special tax benefits, or
contributions made by an Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether
or not the contributions are excludable from the gross
income of the Employee).
For purposes of applying the limitations of this Section 4.4,
Compensation for any Limitation Year is the Compensation actually
paid or includible in gross income during such year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a profit-sharing plan who is permanently and
totally disabled (as defined in Code Section 22(e)(3)) is
the Compensation such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of
Compensation paid immediately before becoming permanently and
totally disabled; such imputed Compensation for the disabled
Participant may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the numerator of
which is the sum of the Participant's Projected Annual Benefits
under all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for the
Limitation Year under Code Sections 415(b) and (d) or 140 percent
of his Highest Average Compensation including any adjustments
under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant
as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans
maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which
the Participant had accrued as of the end 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.
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<PAGE> 52
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100
shall be substituted for 125 unless the extra minimum allocation
is being made pursuant to the Employer's election in F1 of the
Adoption Agreement. However, for any Plan Year in which this
Plan is a Super Top Heavy Plan, 100 shall be substituted for 125
in any event.
(4) Defined Contribution Dollar Limitation means $30,000, or, if
greater, one-fourth of the defined benefit dollar limitation set
forth in Code Section 415(b)(1) as in effect for the Limitation
Year.
(5) Defined Contribution Fraction means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the
current and all prior Limitation Years, (including the Annual
Additions attributable to the Participant's nondeductible
voluntary employee contributions to any defined benefit plans,
whether or not terminated, maintained by the Employer and the
annual additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts,
as defined in Code Section 415(l)(2), maintained by the
Employer), and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior Limitation Years
of Service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125
percent of the Defined Contribution Dollar Limitation or 35
percent of the Participant's Compensation for such year. For
Limitation Years beginning prior to January 1, 1987, the "annual
addition" shall not be recomputed to treat all Employee
contributions as an Annual Addition.
If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by the
Employer which were in existence on May 5, 1986, the numerator of
this fraction will be adjusted if the sum of this fraction and
the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of
the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of
the plan made after May 5, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year beginning on
or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100
shall be substituted for 125 unless the extra minimum allocation
is being made pursuant to the Employer's election in F1 of the
Adoption Agreement. However, for any Plan Year in which this Plan
is a Super Top Heavy Plan, 100 shall be substituted for 125 in
any event.
(6) Employer means the Employer that adopts this Plan and all
Affiliated Employers, except that for purposes of this
Section, Affiliated Employers shall be determined pursuant to the
modification made by Code Section 415(h).
(7) Excess Amount means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
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(8) Highest Average Compensation means the average Compensation
for the three consecutive Years of Service with the Employer that
produces the highest average. A Year of Service with the
Employer is the 12 consecutive month period defined in Section El
of the Adoption Agreement which is used to determine Compensation
under the Plan.
(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer in the
Adoption Agreement. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12 consecutive month period, the
new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(10) Maximum Permissible Amount means the maximum Annual
Addition that may be contributed or allocated to a
Participant's account under the plan for any Limitation Year,
which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation Limitation referred to in (ii) shall not apply
to any contribution for medical benefits (within the meaning of
Code Sections 401(h) or 419A(f)(2)) which is otherwise treated
as an annual addition under Code Sections 415(l)(1) or
419A(d)(2).
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive month
period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Contribution multiplied by the
following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(11) Projected Annual Benefit means the annual retirement
benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a
straight life annuity or qualified Joint and Survivor Annuity) to
which the Participant would be entitled under the terms of the
plan assuming:
(12) the Participant will continue employment until Normal
Retirement Age (or current age, if later), and
(13) the Participant's Compensation for the current Limitation
Year and all other relevant factors used to determine benefits
under the Plan will remain constant for all future Limitation
Years.
(g) Regional Prototype Plan means a plan the form of which has
been the subject of a favorable notification letter from the Internal
Revenue Service.
(h) Notwithstanding anything contained in this Section to the
Contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
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<PAGE> 54
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual Compensation, or other facts
and circumstances to which Regulation 1.415-6(b)(6) shall be applicable,
the "annual additions" under this Plan would cause the maximum provided
in Section 4.4 to be exceeded, the Administrator shall treat the excess
in accordance with Section 4.4(a)(4).
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the consent of
the Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for the Employer.
The amounts transferred shall be set up in a separate account herein
referred to as a "Participant's Rollover Account". Such account shall be
fully Vested at all times and shall not be subject to forfeiture for any
reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn
by, or distributed to the Participant, in whole or in part, except as
provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Participant's Rollover Account shall be used to
provide additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account shall
be made in a manner which is consistent with and satisfies the provisions
of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant
until such time as the allocations pursuant to this Plan have been made,
at which time they may remain segregated or be invested as part of the
general Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401 (a). The term
"amounts transferred from other qualified plans" shall mean: (i) amounts
transferred to this Plan directly from another qualified plan; (ii)
lump-sum distributions received by an Employee from another qualified
plan which are eligible for tax free rollover to a qualified plan and
which are transferred by the Employee to this Plan within sixty (60) days
following his receipt thereof; (iii) amounts transferred to this Plan
from a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (A)
were previously distributed to the Employee by another qualified plan as
a lump-sum distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof and other
than earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit
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<PAGE> 55
individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan with sixty (60) days
of his receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Employee to establish that the amounts
to be transferred to this Plan meet the requirements of this Section and
may also require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be transferred meet the
requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it will
not result in the elimination or reduction of any "Section 411 (d) (6)
protected benefit" as described in Section 8.1.
4.7 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously allowed
voluntary Employee contributions, then, except as provided in 4.7(b)
below, this Plan will not accept voluntary Employee contributions for
Plan Years beginning after the Plan Year in which this Plan is adopted by
the Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement, each
Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a portion of
his compensation earned while a Participant under this Plan. Such
contributions shall be paid to the Trustee within a reasonable period of
time but in no event later than 90 days after the receipt of the
contribution.
(c) The balance in each Participant's Voluntary Contribution Account
shall be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(d) A Participant may elect to withdraw his voluntary contributions
from his Voluntary Contribution Account and the actual earnings thereon
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder. If the Administrator maintains sub-accounts with respect to
voluntary contributions (and earnings thereon) which were made on or
before a specified date, a Participant shall be permitted to designate
which sub-account shall be the source for his withdrawal. No Forfeitures
shall occur solely as a result of an Employee's withdrawal of Employee
contributions.
In the event such a withdrawal is made, or in the event a
Participant has received a hardship distribution pursuant to
Regulation 1.401(k)-1(d)(2)(iii)(B) from any plan maintained by the
Employer, then such Participant shall be barred from making any
voluntary contributions for a period of twelve (12) months after receipt
of the withdrawal or distribution.
(e) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Voluntary Contribution Account shall be used to
provide additional benefits to the Participant or his Beneficiary.
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<PAGE> 56
(f) The Administrator may direct that voluntary contributions made
after a valuation date be segregated into a separate account until such
time as the allocations pursuant to this Plan have been made, at which
time they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
4.8 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants may direct
the Trustee as to the investment of all or a portion of any one or more
of their individual account balances. Participants may direct the
Trustee in writing to invest their account in specific assets as
permitted by the Administrator provided such investments are in
accordance with the Department of Labor regulations and are permitted by
the Plan. That portion of the account of any Participant so directing
will thereupon be considered a Directed Investment Account.
(b) A separate Directed Investment Account shall be established for
each Participant who has directed an investment. Transfers between the
Participant's regular account and their Directed Investment Account shall
be charged and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund Earnings, but it shall
be charged or credited as appropriate with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in market
value during each Plan Year attributable to such account.
(c) The Administrator shall establish a procedure, to be applied in a
uniform and nondiscriminatory manner, setting forth the permissible
investment options under this Section, how often changes between
investments may be made, and any other limitations that the Administrator
shall impose on a Participant's right to direct investments.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously permitted
deductible voluntary contributions, then each Participant who made a
"Qualified Voluntary Employee Contribution" within the meaning of Code
Section 219(e)(2) as it existed prior to the enactment of the Tax Reform
Act of 1986, shall have his contribution held in a separate Qualified
Voluntary Employee Contribution Account which shall be fully Vested at
all times. Such contributions, however, shall not be permitted if they
are attributable to taxable years beginning after December 31, 1986.
(b) A Participant may, upon written request delivered to the
Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which
is consistent with and satisfies the provisions of Section 6.5,including,
but not limited to, all notice and consent requirements of Code Sections
411 (a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Qualified Voluntary Employee Contribution
Account shall be used to provide additional benefits to the Participant
or his Beneficiary.
(d) Unless the Administrator directs Qualified Voluntary Employee
Contributions made pursuant to this Section be segregated into a separate
account for each Participant, they shall be invested as part of the
general Trust Fund and share in earnings and losses.
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<PAGE> 57
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or mandatory
Employee contributions, then, with respect to Plan Years beginning after
December 31, 1986, such contributions must satisfy the provisions of Code
Section 401(m) and the Regulations thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified
retirement plans integrated with Social Security such that any Participant in
this Plan is covered under more than one of such plans, then such plans will be
considered to be one plan and will be considered to be integrated if the
extent of the integration of all such plans does not exceed 100%. For purposes
of the preceding sentence, the extent of integration of a plan is the ratio,
expressed as a percentage, which the actual benefits, benefit rate, offset
rate, or employer contribution rate, whatever is applicable, under the Plan
bears to the limitation applicable to such Plan. If the Employer maintains two
or more standardized paired plans, only one plan may be integrated with Social
Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary
Date, and at such other date or dates deemed necessary by the Administrator,
herein called "valuation date", to determine the net worth of the assets
comprising the Trust Fund as it exists on the "valuation date". In determining
such net worth, the Trustee shall value the assets comprising the Trust Fund at
their fair market value as of the "valuation date" and shall deduct all
expenses for which the Trustee has not yet obtained reimbursement from the
Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on
such exchange preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the exchange on which
they are traded was not open for business on the "valuation date", then the
securities shall be valued at the prices at which they were last traded prior
to the "valuation date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more
appraisers for that purpose and rely on the values established by such
appraiser or appraisers.
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ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on or after his Normal Retirement Date or Early
Retirement Date. Upon such Normal Retirement Date or Early Retirement Date,
all amounts credited to such Participant's Combined Account shall become
distributable. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Administrator shall direct the distribution of all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with the provisions of Sections
6.6 and 6.7, the distribution of the deceased Participant's accounts to
the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct, in accordance with the provisions of Sections 6.6 and 6.7, the
distribution of any remaining amounts credited to the accounts of such
deceased Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of
the account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6,
the Beneficiary of the Pre-Retirement Survivor Annuity shall be the
Participant's spouse. Except, however, the Participant may designate a
Beneficiary other than his spouse for the Pre-Retirement Survivor Annuity
if:
(1) the Participant and his spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in Section
6.6, and the spouse has waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a
form satisfactory to the Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any
change in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elected to relinquish such right. The
Participant may,
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at any time, designate a Beneficiary for death benefits payable under
the Plan that are in excess of the Pre-Retirement Survivor Annuity. In
the event no valid designation of Beneficiary exists at the time of the
Participant's death, the death benefit shall be payable to his estate.
(e) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which he is entitled
under the Plan is effected, his death benefit from such insurance coverage
shall be limited to the standard rated premium which was or should have
been used for such purpose.
(f) In the event of any conflict between the terms of this Plan and
the terms of any Contract issued hereunder, the Plan provisions shall
control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Administrator,
in accordance with the provisions of Sections 6.5 and 6.7, shall direct the
distribution to such Participant of all amounts credited to such Participant's
Combined Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other valuation date,
coinciding with or subsequent to the termination of a Participant's
employment for any reason other than retirement, death, or Total and
Permanent Disability, the Administrator may direct that the amount of the
Vested portion of such Terminated Participant's Combined Account be
segregated and invested separately. In the event the Vested portion of a
Participant's Combined Account is not segregated, the amount shall remain
in a separate account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a distribution is
made to the Terminated Participant. The amount of the portion of the
Participant's Combined Account which is not Vested may be credited to a
separate account (which will always share in gains and losses of the Trust
Fund) and at such time as the amount becomes a Forfeiture shall be treated
in accordance with the provisions of the Plan regarding Forfeitures.
Regardless of whether distributions in kind are permitted, in the
event that the amount of the Vested portion of the Terminated
Participant's Combined Account equals or exceeds the fair market value of
any insurance Contracts, the Trustee, when so directed by the
Administrator and agreed to by the Terminated Participant, shall assign,
transfer, and set over to such Terminated Participant all Contracts on
his life in such form or with such endorsements, so that the settlement
options and forms of payment are consistent with the provisions of
Section 6.5. In the event that the Terminated Participant's Vested
portion does not at least equal the fair market value of the Contracts,
if any, the Terminated Participant may pay over to the Trustee the sum
needed to make the distribution equal to the value of the Contracts being
assigned or transferred, or the Trustee, pursuant to the Participant's
election, may borrow the cash value of the Contracts from the Insurer so
that the value of the Contracts is equal to the Vested portion of the
Terminated Participant's Combined Account and then assign the Contracts
to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall be
made on the occurrence of an event which would result in the distribution
had the Terminated Participant remained in the employ of the Employer
(upon the Participant's death, Total and Permanent Disability, Early or
Normal Retirement). However, at the election of the Participant, the
Administrator shall direct that the entire Vested portion of the
Terminated Participant's Combined Account to be payable to such
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Terminated Participant provided the conditions, if any, set forth in
the Adoption Agreement have been satisfied. Any distribution under this
paragraph shall be made in a manner which is consistent with and satisfies
the provisions of Section 6.5, including but not limited to, all notice
and consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
Notwithstanding the above, if the value of a Terminated Participant's
Vested benefit derived from Employer and Employee contributions does not
exceed, and at the time of any prior distribution, has never exceeded
$3,500, the Administrator shall direct that the entire Vested benefit be
paid to such Participant in a single lump-sum without regard to the
consent of the Participant or the Participant's spouse. A Participant's
Vested benefit shall not include Qualified Voluntary Employee
Contributions within the meaning of Code Section 72(o)(5)(B) for Plan
Years beginning prior to January 1, 1989.
(b) The Vested portion of any Participant's Account shall be a
percentage of such Participant's Account determined on the basis of the
Participant's number of Years of Service according to the vesting schedule
specified in the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy vesting
schedules as elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The minimum top heavy vesting schedule
applies to all benefits within the meaning of Code Section 411(a)(7)
except those attributable to Employee contributions, including benefits
accrued before the effective date of Code Section 416 and benefits accrued
before the Plan became top heavy. Further, no decrease in a Participant's
Vested percentage may occur in the event the Plan's status as top heavy
changes for any Plan Year. However, this Section does not apply to the
account balances of any Employee who does not have an Hour of Service
after the Plan has initially become top heavy and the Vested percentage of
such Employee's Participant's Account shall be determined without regard
to this Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan,
the Administrator shall continue to use the vesting schedule in effect
while the Plan was a Top Heavy Plan for each Employee who had an Hour of
Service during a Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any
full or partial termination of the Plan, all amounts credited to the
account of any affected Participant shall become 100% Vested and shall not
thereafter be subject to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding the
vesting schedule specified in the Adoption Agreement, the Vested
percentage of a Participant's Account shall not be less than the Vested
percentage attained as of the later of the effective date or adoption date
of this amendment and restatement. The computation of a Participant's
nonforfeitable percentage of his interest in the Plan shall not be reduced
as the result of any direct or indirect amendment to this Article, or due
to changes in the Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is
amended in any way that directly or indirectly affects the computation of
the Participant's nonforfeitable percentage or if the Plan is deemed
amended by an automatic change to a top heavy vesting schedule, then each
Participant with at least 3 Years of Service as of the expiration date of
the election period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment or change.
Notwithstanding the foregoing, for Plan Years beginning before January 1,
1989, or with respect to Employees who fail to complete at least one (1)
Hour of Service in a Plan Year
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beginning after December 31, 1988, five (5) shall be substituted for
three (3) in the preceding sentence. If a Participant fails to make such
election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the
adoption date of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g)(1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service, and such
Former Participant had received a distribution of his entire Vested
interest prior to his reemployment, his forfeited account shall be
reinstated only if he repays the full amount distributed to him before
the earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of 5 consecutive 1-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may not end
earlier than five (5) years after the date of separation. In the event
the Former Participant does repay the full amount distributed to him,
the undistributed portion of the Participant's Account must be restored
in full, unadjusted by any gains or losses occurring subsequent to the
Anniversary Date or other valuation date preceding his termination. If
an Employee receives a distribution pursuant to this Section and the
Employee resumes employment covered under this plan, the Employee's
Employer-derived account balance will be restored to the amount on the
date of distribution if the Employee repays to the Plan the full amount
of the distribution attributable to Employer contributions before the
earlier of 5 years after the first date on which the Participant is
subsequently re-employed by the Employer, or the date the Participant
incurs 5 consecutive 1-Year Breaks in Service following the date of
the distribution. If a non-Vested Former Participant was deemed to
have received a distribution and such Former Participant is reemployed
by the Employer before five (5) consecutive 1-Year Breaks in Service,
then such Participant will be deemed to have repaid the deemed
distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include Years of
Service prior to his 1-Year Break in Service subject to the following
rules:
(i) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits if his consecutive 1-Year
Breaks in Service equal or exceed the greater of (A) five (5) or
(B) the aggregate number of his pre-break Years of Service;
(ii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to
pre-break service shall not be increased as a result of post-break
service;
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<PAGE> 62
(iii) A Former Participant who is reemployed and who has not
had his Years of Service before a 1-Year Break in Service
disregarded pursuant to (i) above, shall participate in the
Plan as of his date of reemployment;
(iv) If a Former Participant completes a Year of Service (a
1-Year Break in Service previously occurred, but employment
had not terminated), he shall participate in the Plan
retroactively from the first day of the Plan Year during which
he completes one (1) Year of Service.
(h) In determining Years of Service for purposes of vesting under
the Plan, Years of Service shall be excluded as specified in the Adoption
Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a Participant
who is married on the "annuity starting date" and who does not die
before the "annuity starting date" shall receive the value of all
of his benefits in the form of a Joint and Survivor Annuity. The
Joint and Survivor Annuity is an annuity that commences immediately
and shall be equal in value to a single life annuity. Such joint
and survivor benefits following the Participant's death shall
continue to the spouse during the spouse's lifetime at a rate equal
to 50% of the rate at which such benefits were payable to the
Participant. This Joint and Survivor Annuity shall be considered
the designated qualified Joint and Survivor Annuity and automatic
form of payment for the purposes of this Plan. However, the
Participant may elect to receive a smaller annuity benefit with
continuation of payments to the spouse at a rate of seventy-five
percent (75%) or one hundred percent (100%) of the rate payable to
a Participant during his lifetime which alternative Joint and
Survivor Annuity shall be equal in value to the automatic Joint and
50% Survivor Annuity. An unmarried Participant shall receive the
value of his benefit in the form of a life annuity. Such unmarried
Participant, however, may elect in writing to waive the life
annuity. The election must comply with the provisions of this
Section as if it were an election to waive the Joint and Survivor
Annuity by a married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity
provided for in this Section distributed upon the attainment of the
"earliest retirement age" under the Plan. The "earliest retirement
age" is the earliest date on which, under the Plan, the Participant
could elect to receive retirement benefits.
(2) Any election to waive the Joint and Survivor Annuity must be
made by the Participant in writing during the election period and
be consented to by the Participant's spouse. If the spouse is
legally incompetent to give consent, the spouse's legal guardian,
even if such guardian is the Participant, may give consent.
Such election shall designate a Beneficiary (or a form of benefits)
that may not be changed without spousal consent (unless the consent
of the spouse expressly permits designations by the Participant
without the requirement of further consent by the spouse). Such
spouse's consent shall be irrevocable and must acknowledge the
effect of such election and be witnessed by a Plan representative
or a notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the
required consent cannot be obtained because there is no spouse, the
spouse cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the Participant
and consented to by his spouse may be revoked by the Participant in
writing without the consent of the spouse at any time during the
election period. The number of revocations shall not be limited.
Any new election must comply with the requirements of this
paragraph. A former spouse's waiver shall not be binding on a new
spouse.
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(3) The election period to waive the Joint and Survivor Annuity
shall be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section and Section 6.6, the "annuity
starting date" means the first day of the first period for which an
amount is paid as an annuity, or, in the case of a benefit not
payable in the form of an annuity, the first day on which all
events have occurred which entitles the Participant to such
benefit.
(5) With regard to the election, the Administrator shall provide
to the Participant no less than 30 days and no more than 90 days
before the "annuity starting date" a written explanation of:
(i) the terms and conditions of the Joint and Survivor
Annuity, and
(ii) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity, and
(iii) the right of the Participant's spouse to consent to any
election to waive the Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such election,
and the effect of such revocation.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a Joint and
Survivor Annuity, or if such Participant is not married, in the form of a life
annuity, the Administrator, pursuant to the election of the Participant, shall
direct the distribution to a Participant or his Beneficiary any amount to which
he is entitled under the Plan in one or more of the following methods which are
permitted pursuant to the Adoption Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such
installment payments, the Administrator may direct that the
Participant's interest in the Plan be segregated and invested
separately, and that the funds in the segregated account be used
for the payment of the installments. The period over which such
payment is to be made shall not extend beyond the Participant's
life expectancy (or the life expectancy of the Participant and his
designated Beneficiary);
(3) Purchase of or providing an annuity. However, such annuity
may not be in any form that will provide for payments over a period
extending beyond either the life of the Participant (or the lives
of the Participant and his designated Beneficiary) or the life
expectancy of the Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(c) The present value of a Participant's Joint and Survivor
Annuity derived from Employer and Employee contributions may not be paid
without his written consent if the value exceeds, or has ever exceeded at the
time of any prior distribution, $3,500. Further, the spouse of a Participant
must consent in writing to any immediate distribution. If the value of the
Participant's benefit derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator may immediately distribute such benefit without
such Participant's consent. No distribution may be made under the preceding
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<PAGE> 64
sentence after the "annuity starting date" unless the Participant and his
spouse consent in writing to such distribution. Any written consent under this
paragraph must be obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded at the time of any prior distribution, $3,500
shall require such Participant's consent if such distribution commences prior
to the later of his Normal Retirement Age or age 62. With regard to this
required consent:
(1) No consent shall be valid unless the Participant has received
a general description of the material features and an explanation
of the relative values of the optional forms of benefit available
under the Plan that would satisfy the notice requirements of Code
Section 417.
(2) The Participant must be informed of his right to defer receipt
of the distribution. If a Participant fails to consent, it shall
be deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required
under Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date."
(4) Written consent of the Participant to the distribution must
not be made before the Participant receives the notice and must
not be made more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to
the distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, made on or after January 1, 1985,
whether under the Plan or through the purchase of an annuity Contract, shall be
made in accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder (including
Regulation Section 1.401(a)(9)- 2), the provisions of which are incorporated
herein by reference:
(1) A Participant's benefits shall be distributed to him not later
than April 1st of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70 1/2 or (ii)
the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during
the five (5) Plan Year period ending in the calendar year in which
he attains age 70 1/2 or, in the case of a Participant who becomes
a "five (5) percent owner" during any subsequent Plan Year, clause
(ii) shall no longer apply and the required beginning date shall be
the April 1st of the calendar year following the calendar year in
which such subsequent Plan Year ends. Alternatively, distributions
to a Participant must begin no later than the applicable April 1st
as determined under the preceding sentence and must be made over
the life of the Participant (or the lives of the Participant and
the Participant's designated Beneficiary) or, if benefits are paid
in the form of a Joint and Survivor Annuity, the life expectancy of
the Participant (or the life expectancies of the Participant and
his designated Beneficiary) in accordance with Regulations. For
Plan Years beginning after December 31, 1988, clause (ii) above
shall not apply to any Participant unless the Participant had
attained
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<PAGE> 65
age 70 1/2 before January 1, 1988 and was not a "five (5) percent
owner" at any time during the Plan Year ending with or within the
calendar year in which the Participant attained age 66 1/2 or any
subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which
provides that the then present value of the payments to be made
over the period of the Participant's life expectancy exceeds fifty
percent (50%) of the then present value of the total payments to be
made to the Participant and his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall be redetermined annually in accordance with Regulations if
permitted pursuant to the Adoption Agreement. If the Participant or the
Participant's spouse may elect whether recalculations will be made, then the
election, once made, shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the Participant and
the Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed using the
return multiples in Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall comply with
all of the requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
retirement benefit paid in an alternative method acceptable under Code Section
401(a) as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who has
not terminated employment is not fully Vested in his Participant's Account and
the Participant may increase the Vested percentage in such account:
(1) A separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) At any relevant time the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by
the formula:
X equals P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested percentage at the
relevant time, AB is the account balance at the relevant time, D is the amount
of distribution, and R is the ratio of the account balance at the relevant time
to the account balance after distribution.
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6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid
to his surviving spouse. The Participant's spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence within a
reasonable period after the Participant's death. If the spouse does
not so direct, payment of such benefit will commence at the time the
Participant would have attained the later of his Normal Retirement Age
or age 62. However, the spouse may elect a later commencement date.
Any distribution to the Participant's spouse shall be subject to the
rules specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in
writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section
6.5(a)(2). Further, the spouse's consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elects
to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's
death. An earlier waiver (with spousal consent) may be made provided
a written explanation of the Pre-Retirement Survivor Annuity is given
to the Participant and such waiver becomes invalid at the beginning of
the Plan Year in which the Participant turns age 35. In the event a
Vested Participant separates from service prior to the beginning of
the election period, the election period shall begin on the date of
such separation from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable period, with respect
to such Participant (and consistent with Regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 6.5(a)(5).
For the purposes of this paragraph, the term "applicable period"
means, with respect to a Participant, whichever of the following
periods ends last:
(1) The period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an
individual who becomes a Participant after age 32, the
explanation must be provided by the end of the three-year period
beginning with the first day of the first Plan Year for which
the individual is a Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity
with respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35.
For this purpose, the Administrator must provide the
explanation beginning one year before the separation from
service and ending one year after separation.
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(e) The Pre-Retirement Survivor Annuity provided for in this
Section shall apply only to Participants who are credited with an
Hour of Service on or after August 23, 1984. Former Participants who
are not credited with an Hour of Service on or after August 23, 1984
shall be provided with rights to the Pre-Retirement Survivor Annuity
in accordance with Section 303(e)(2) of the Retirement Equity Act of
1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived
from Employer and Employee contributions does not exceed $3,500 and
has never exceeded $3,500 at the time of any prior distribution, the
Administrator shall direct the immediate distribution of such amount
to the Participant's spouse. No distribution may be made under the
preceding sentence after the annuity starting date unless the spouse
consents in writing. If the value exceeds, or has ever exceeded at
the time of any prior distribution, $3,500, an immediate distribution
of the entire amount may be made to the surviving spouse, provided
such surviving spouse consents in writing to such distribution. Any
written consent required under this paragraph must be obtained not
more than 90 days before commencement of the distribution and shall be
made in a manner consistent with Section 6.5(a)(2).
(g)(1) In the event there is an election to waive the
Pre-Retirement Survivor Annuity, and for death benefits in
excess of the Pre-Retirement Survivor Annuity, such death
benefits shall be paid to the Participant's Beneficiary by
either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's
death, by his Beneficiary) subject to the rules specified in
Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the
Participant or his Beneficiary. After periodic
installments commence, the Beneficiary shall have the right
to reduce the period over which such periodic installments
shall be made, and the cash amount of such periodic
installments shall be adjusted accordingly.
(iii) If death benefits in excess of the Pre-Retirement
Survivor Annuity are to be paid to the surviving spouse,
such benefits may be paid pursuant to (i) or (ii) above, or
used to purchase an annuity so as to increase the payments
made pursuant to the Pre-Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct that the death benefit
be segregated and invested separately, and that the funds
accumulated in the segregated account be used for the payment of
the installments.
(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January
1, 1985, shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that the
distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed
to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date of
death.
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(2) If a Participant dies before he has begun to receive any
distributions of his interest in the Plan or before
distributions are deemed to have begun pursuant to Regulations,
then his death benefit shall be distributed to his
Beneficiaries in accordance with the following rules subject to
the selections made in the Adoption Agreement and Subsections
6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be distributed to the
Participant's Beneficiaries by December 31st of the
calendar year in which the fifth anniversary of the
Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above shall
not apply to any portion of the deceased Participant's
interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion shall
be distributed over the life of such designated Beneficiary
(or over a period not extending beyond the life expectancy
of such designated Beneficiary) provided such distribution
begins not later than December 31st of the calendar year
immediately following the calendar year in which the
Participant died;
(iii) However, in the event the Participant's spouse
(determined as of the date of the Participant's death) is
his designated Beneficiary, the provisions of (ii) above
shall apply except that the requirement that distributions
commence within one year of the Participant's death shall
not apply. In lieu thereof, distributions must commence on
or before the later of: (1) December 31st of the calendar
year immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year
in which the Participant would have attained age 70 1/2. If
the surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement of
this Section shall apply as if the spouse was the
Participant.
(3) Notwithstanding subparagraph (2) above, or any selections
made in the Adoption Agreement, if a Participant's death
benefits are to be paid in the form of a Pre-Retirement Survivor
Annuity, then distributions to the Participant's surviving
spouse must commence on or before the later of: (1) December
31st of the calendar year immediately following the calendar
year in which the Participant died; or (2) December 31st of the
calendar year in which the Participant would have attained age
70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement (if permitted in the Adoption Agreement) must be made no
later than December 31st of the calendar year following the calendar
year of the Participant's death. Except, however, with respect
to a designated Beneficiary who is the Participant's surviving spouse,
the election must be made by the earlier of: (1) December 31st of the
calendar year immediately following the calendar year in which the
Participant died or, if later, the calendar year in which the
Participant would have attained age 70 1/2; or (2) December 31st of
the calendar year which contains the fifth anniversary of the date of
the Participant's death. An election by a designated Beneficiary must
be in writing and shall be irrevocable as of the last day of the
election period stated herein. In the absence of an election by the
Participant or a designated Beneficiary, the 5-year distribution
requirement shall apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall or shall not be redetermined annually as provided
in the Adoption Agreement and in accordance with Regulations. If the
Participant or the Participant's spouse may elect, pursuant to
the Adoption Agreement, to have life expectancies recalculated, then
the election, once made shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse
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<PAGE> 69
shall not be subject to recalculation. Life expectancy and joint and
last survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's
interest in the Plan is distributed to such Participant's spouse, the
portion of the distribution attributable to the Participant's
Voluntary Contribution Account shall be in the same proportion that
the Participant's Voluntary Contribution Account bears to the
Participant's total interest in the Plan.
(l) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a
Participant has, prior to January 1, 1984, made a written
designation to have his death benefits paid in an alternative method
acceptable under Code Section 401 (a) as in effect prior to the
enactment of the Tax Equity and Fiscal Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a distribution is
to be made, or a series of payments are to commence, on or as of an Anniversary
Date, the distribution or series of payments may be made or begun on such date
or as soon thereafter as is practicable, but in no event later than 180 days
after the Anniversary Date. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall
begin not later than the 60th day after the close of the Plan Year in which the
latest of the following events occurs: (a) the date on which the Participant
attains the earlier of age 65 or the Normal Retirement Age specified herein;
(b) the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates his
service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution pursuant to
Section 6.5(d), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom
the Beneficiary maintains his residence, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such
is permitted by the laws of the state in which said Beneficiary resides. Such
a payment to the legal guardian, custodian or parent of a minor Beneficiary
shall fully discharge the Trustee, Employer, and Plan from further liability on
account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a
Forfeiture pursuant to the Plan. In the event a Participant or Beneficiary is
located subsequent to his benefit being reallocated, such benefit shall be
restored, first from Forfeitures, if any, and then from an additional Employer
contribution if necessary.
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6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if elected in
the Adoption Agreement, at such time as a Participant shall have attained the
age specified in the Adoption Agreement, the Administrator, at the election of
the Participant, shall direct the distribution of up to the entire amount then
credited to the accounts maintained on behalf of the Participant. However, no
such distribution from the Participant's Account shall occur prior to 100%
Vesting. In the event that the Administrator makes such a distribution, the
Participant shall continue to be eligible to participate in the Plan on the
same basis as any other Employee. Any distribution made pursuant to this
Section shall be made in a manner consistent with Section 6.5, including, but
not limited to, all notice and consent requirements of Code Sections 411(a)(11)
and 417 and the Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption
Agreement, the Administrator, at the election of the Participant,
shall direct the distribution to any Participant in any one Plan Year
up to the lesser of 100% of his Participant's Combined Account valued
as of the last Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need of the
Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later,
the valuation date immediately preceding the date of distribution, and
the account from which the distribution is made shall be reduced
accordingly. Withdrawal under this Section shall be authorized only
if the distribution is on account of:
(1) Medical expenses described in Code Section 213(d) incurred
by the Participant, his spouse, or any of his dependents (as
defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Funeral expenses for a member of the Participant's family;
(4) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his spouse,
children, or dependents; or
(5) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's
Account until such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Sections 411(a)(11) and 417
and the Regulations thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate payee"
under a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
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6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply to a
Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan and to any
distribution, made on or after the first day of the first plan year beginning
after December 31, 1988, from or under a separate account attributable solely
to accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and maintained on behalf of a participant in a money purchase
pension plan, (including a target benefit plan):
(a) The Participant shall be prohibited from electing benefits
in the form of a life annuity;
(b) Upon the death of the Participant, the Participant's entire
Vested account balances will be paid to his or her surviving spouse,
or, if there is no surviving spouse or the surviving spouse has
already consented to waive his or her benefit, in accordance with
Section 6.6, to his designated Beneficiary; and
(c) Except to the extent otherwise provided in this Section and
Section 6.5(h), the other provisions of Sections 6.2, 6.5 and 6.6
regarding spousal consent and the forms of distributions shall be
inoperative with respect to this Plan.
This Section shall not apply to any Participant if it is
determined that this Plan is a direct or indirect transferee of a
defined benefit plan or money purchase plan, or a target
benefit plan, stock bonus or profit sharing plan which would otherwise
provide for a life annuity form of payment to the Participant.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined
by the Employer to invest, manage, and control the Plan assets
subject, however, to the direction of an Investment Manager if
the Employer should appoint such manager as to all or a portion of the
assets of the Plan;
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event
of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan
Year a written annual report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them
to sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to
keep the Trust Fund invested without distinction between
principal and income and in such securities or property, real or
personal, wherever situated, as the Trustee shall deem advisable,
including, but not limited to, stocks, common or preferred, bonds and
other evidences of indebtedness or ownership, and real estate or any
interest therein. The Trustee shall at all times in making
investments of the Trust Fund
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consider, among other factors, the short and long-term financial needs of the
Plan on the basis of information furnished by the Employer. In making such
investments, the Trustee shall not be restricted to securities or other property
of the character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any limitations
imposed by the Code or the Act so that at all times this Plan may qualify as a
qualified Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the terms of
its usual and customary bank agency agreement, under which the duties of such
bank or trust company shall be of a custodial, clerical and record-keeping
nature.
(c) The Trustee may from time to time transfer to a common, collective, or
pooled trust fund maintained by any corporate Trustee hereunder pursuant to
Revenue Ruling 81-100, all or such part of the Trust Fund as the Trustee may
deem advisable, and such part or all of the Trust Fund so transferred shall be
subject to all the terms and provisions of the common, collective, or pooled
trust fund which contemplate the commingling for investment purposes of such
trust assets with trust assets of other trusts. The Trustee may withdraw from
such common, collective, or pooled trust fund all or such part of the Trust Fund
as the Trustee may deem advisable.
(d) The Trustee, at the direction of the Administrator and pursuant to
instructions from the individual designated in the Adoption Agreement for such
purpose and subject to the conditions set forth in the Adoption Agreement, shall
ratably apply for, own, and pay all premiums on Contracts on the lives of the
Participants. Any initial or additional Contract purchased on behalf of a
Participant shall have a face amount of not less than $1,000, the amount set
forth in the Adoption Agreement, or the limitation of the Insurer, whichever is
greater. If a life insurance Contract is to be purchased for a participant, the
aggregate premium for ordinary life insurance for each Participant must be less
than 50% of the aggregate contributions and Forfeitures allocated to a
Participant's Combined Account. For purposes of this limitation, ordinary life
insurance Contracts are Contracts with both non-decreasing death benefits and
non-increasing premiums. If term insurance or universal life insurance is
purchased with such contributions, the aggregate premium must be 25% or less of
the aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. If both term insurance and ordinary life insurance are
purchased with such contributions, the amount expended for term insurance plus
one-half of the premium for ordinary life insurance may not in the aggregate
exceed 25% of the aggregate Employer contributions and Forfeitures allocated to
a Participant's Combined Account. The Trustee must distribute the Contracts to
the Participant or convert the entire value of the Contracts at or before
retirement into cash or provide for a periodic income so that no portion of such
value may be used to continue life insurance protection beyond retirement.
Notwithstanding the above, the limitations imposed herein with respect to the
purchase of life insurance shall not apply, in the case of a Profit Sharing
Plan, to the portion of a Participant's Account that has accumulated for at
least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts credited to a
Participant's Qualified Voluntary Employee Contribution Account pursuant to
Section 4.9, shall not be applied to the purchase of life insurance contracts.
(e) The Trustee will be the owner of any life insurance Contract purchased
under the terms of this Plan. The Contract must provide that the proceeds will
be payable to the Trustee; however, the Trustee shall be required to pay over
all proceeds of the Contract to the Participant's designated Beneficiary in
accordance with the distribution provisions of Article VI. A Participant's
spouse will be the designated Beneficiary pursuant to Section 6.2, unless a
qualified election has been made in accordance with Sections 6.5 and 6.6 of the
Plan, if applicable. Under no circumstances shall
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the Trust retain any part of the proceeds. However, the Trustee shall not
pay the proceeds in a method that would violate the requirements of the
Retirement Equity Act, as stated in Article VI of the Plan, or Code Section
401(a)(9) and the Regulations thereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common law,
statutory authority, including the Act, and other provisions of this Plan, shall
have the following powers and authorities to be exercised in the Trustee's sole
discretion:
(a) To purchase, or subscribe for, any securities or other property
and to retain the same. In conjunction with the purchase of securities,
margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase,
or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money
or to inquire into the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or
to consent to, or otherwise participate in, corporate reorganizations or
other changes affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities, or other property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's nominees,
and to hold any investments in bearer form, but the books and records of
the Trustee shall at all times show that all such investments are part of
the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances
as the Trustee may, from time to time, deem to be in the best interests of
the Plan, without liability for interest thereon;
(g) to accept and retain for such time as it may deem advisable any
securities or other property" received or acquired by it as Trustee
hereunder, whether or not such securities or other property would normally
be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or defend
suits or legal or administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
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(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an investment of the
Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at any
time or from time to time, whatever rights and privileges may be granted
under such annuity, or other Contracts; to collect, receive, and settle for
the proceeds of all such annuity, or other Contracts as and when entitled
to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To sell, purchase and acquire put or call options if the options
are traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if
the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or any Affiliated Employer, and to commingle such
assets and make joint or common investments and carry joint accounts on
behalf of this Plan and such other trust or trusts, allocating undivided
shares or interests in such investments or accounts or any pooled assets of
the two or more trusts in accordance with their respective interests;
(q) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
(r) Directed Investment Account. The powers granted to the Trustee
shall be exercised in the sole fiduciary discretion of the Trustee.
However, if elected in the Adoption Agreement, each Participant may direct
the Trustee to separate and keep separate all or a portion of his interest
in the Plan; and further each Participant is authorized and empowered, in
his sole and absolute discretion, to give directions to the Trustee in such
form as the Trustee may require concerning the investment of the
Participant's Directed Investment Account, which directions must be
followed by the Trustee subject, however, to restrictions on payment of
life insurance premiums. Neither the Trustee nor any other persons
including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any securities
or other property, real or personal, or to make any suggestions to the
Participant in connection therewith, and the Trustee shall comply as
promptly as practicable with directions given by the Participant hereunder.
Any such direction may be of a continuing nature or otherwise and may be
revoked by the Participant at any time in such form as the Trustee may
require. The Trustee may refuse to comply with any direction from the
Participant in the event the Trustee, in its sole and absolute discretion,
deems such directions improper by virtue of applicable law, and in such
event, the Trustee shall not be responsible or liable for any loss or
expense which may result. Any costs and expenses related to compliance
with the Participant's directions shall be borne by the Participant's
Directed Investment Account.
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Notwithstanding anything hereinabove to the contrary, the Trustee
shall not, at any time after December 31, 1981, invest any portion of a
Directed Investment Account in "collectibles" within the meaning of that
term as employed in Code Section 408(m).
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee (or, if loans
are treated as Directed Investment pursuant to the Adoption Agreement, the
Administrator) may, in the Trustee's (or, if applicable, the
Administrator's) sole discretion, make loans to Participants or
Beneficiaries under the following circumstances: (1) loans shall be made
available to all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants; (3) loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) shall provide for periodic repayment
over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or
Owner-Employee unless an exemption for such loan is obtained pursuant to
Act Section 408 and further provided that such loan would not be subject to
tax pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement
Date.
(d) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by the Plan to the Participant) shall be
limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan to the Participant during the one year
period ending on the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan to the participant
on the date on which such loan was made, or
(2) the greater of (A) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Employee under the Plan, or
(B), if permitted pursuant to the Adoption Agreement, $10,000.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(e) No Participant loan shall take into account the present value of
such Participant's Qualified Voluntary Employee Contribution Account.
(f) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to exceed five
(5) years. However, loans used to acquire any dwelling unit which, within
a reasonable time, is to be used (determined at the time the loan is made)
as a principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Notwithstanding the foregoing, loans made prior to January 1, 1987 which
are used to acquire, construct, reconstruct or substantially rehabilitate
any dwelling unit which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant or a member of his family
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(within the meaning of Code Section 267(c)(4)) may provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for periodic
payments which are made less frequently than quarterly and which do not
necessarily result in level amortization.
(g) An assignment or pledge of any portion of a Participant's
interest in the Plan and a loan, pledge, or assignment with respect to any
insurance Contract purchased under the Plan, shall be treated as a loan
under this Section.
(h) Any loan made pursuant to this Section after August 18, 1985
where the Vested interest of the Participant is used to secure such loan
shall require the written consent of the Participant's spouse in a manner
consistent with Section 6.5(a) provided the spousal consent requirements of
such Section apply to the Plan. Such written consent must be obtained
within the 90-day period prior to the date the loan is made. Any security
interest held by the Plan by reason of an outstanding loan to the
Participant shall be taken into account in determining the amount of the
death benefit or Pre-Retirement Survivor Annuity. However, no spousal
consent shall be required under this paragraph if the total accrued benefit
subject to the security is not in excess of $3,500.
(i) With regard to any loans granted or renewed on or after the last
day of the first Plan Year beginning after December 31, 1988, a Participant
loan program shall be established which must include, but need not be
limited to, the following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered,
including what constitutes a hardship or financial need if selected
in the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate
of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated by
reference and made a part of this plan. Furthermore, such Participant loan
program may be modified or amended in writing from time to time without the
necessity of amending this Section of the Plan.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
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7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in the
Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in
writing by the Employer and the Trustee . An individual serving as Trustee who
already receives full-time pay from the Employer shall not receive compensation
from this Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary Date
or receipt of the Employer's contribution for each Plan Year, the Trustee, or
its agent, shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust
Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or Administrator deems
appropriate. The Employer, forthwith upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof shall be deemed
an approval thereof. The approval by the Employer of any statement of
account shall be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the account of the
Trustee had been settled by judgment or decree in an action for a judicial
settlement of its account in a court of competent jurisdiction in which the
Trustee, the Employer and all persons having or claiming an interest in the
Plan were parties; provided, however, that nothing herein contained shall
deprive the Trustee of its right to have its accounts judicially settled if
the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator shall
direct the Trustee to engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such accountant shall, after
an audit of the books and records of the Plan in accordance with generally
accepted auditing standards, within a reasonable period after the close of
the Plan Year, furnish to the Administrator and the Trustee a report of his
audit setting forth his opinion as to whether any statements, schedules or
lists, that are required by Act Section 103 or the Secretary of Labor to be
filed with the Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied consistently.
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(b) All auditing and accounting fees shall be an expense of and may,
at the election of the Administrator, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the Administrator
as provided in Act Section 103(b) within one hundred twenty (120) days
after the end of the Plan Year or such other date as may be prescribed
under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer,
at least thirty (30) days before its effective date, a written notice of
his resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at
least thirty (30) days before its effective date, a written notice of his
removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such successor,
upon accepting such appointment in writing and delivering same to the
Employer, shall, without further act, become vested with all the estate,
rights, powers, discretions, and duties of his predecessor with like
respect as if he were originally named as a Trustee herein. Until such a
successor is appointed, the remaining Trustee or Trustees shall have full
authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such designation,
the successor shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his predecessor with the
like effect as if he were originally named as Trustee herein immediately
upon the death, resignation, incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he shall
furnish to the Employer and Administrator a written statement of account
with respect to the portion of the Plan Year during which he served as
Trustee. This statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under Section 7.7 or (ii)
set forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the annual
statement of account for the Plan Year. The procedures set forth in
Section 7.7 for the approval by the Employer of annual statements of
account shall apply to any special statement of account rendered hereunder
and approval by the Employer of any such special statement in the manner
provided in Section 7.7 shall have the same effect upon the statement as
the Employer's approval of an annual statement of account. No successor to
the Trustee shall have any duty or responsibility to investigate the acts
or transactions of any predecessor who has rendered all statements of
account required by Section 7.7 and this subparagraph.
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7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee at
the direction of the Administrator shall transfer the Vested interest, if any,
of such Participant in his account to another trust forming part of a pension,
profit sharing, or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are
made permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee against any
and all claims, losses, damages, expenses and liabilities the Trustee may incur
in the exercise and performance of the Trustee's powers and duties hereunder,
unless the same are determined to be due to gross negligence or willful
misconduct.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act. However, no more than 100%, in the case of a Profit Sharing Plan
or 401(k) Plan or 10%, in the case of a Money Purchase Plan of the fair market
value of all the assets in the Trust Fund may be invested in "qualifying
Employer securities" and "qualifying Employer real property".
ARTICLE VIII
AMENDMENT,TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan
subject to the limitations of this Section. However, any amendment which
affects the rights, duties or responsibilities of the Trustee and
Administrator may only be made with the Trustee's and Administrator's
written consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required to execute
any such amendment unless the amendment affects the duties of the Trustee
hereunder.
(b) The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy Code Sections 415 or 416 because of the
required aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as an
individually designed plan. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirement under Code
Section 412(d), will no longer participate in this Regional Prototype Plan
and will be considered to have an individually designed plan.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by submitting a
copy of the amendment to each Employer who has adopted this Plan after
first having received a ruling or favorable determination from the Internal
Revenue Service that the Plan as amended qualifies under Code Section
401(a) and the Act.
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(d) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to
pay taxes and administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the amount credited to
the account of any Participant; or causes or permits any portion of the
Trust Fund to revert to or become property of the Employer.
(e) Except as permitted by Regulations (including Regulation
1.411(d)-4), no Plan amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar transaction) shall be
effective if it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on such
benefit unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or effective date of
the amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination all amounts credited to
the affected Participants' Combined Accounts shall become 100% Vested and
shall not thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance with
the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets to Participants in a manner which is
consistent with and satisfies the provisions of Section 6.5. Distributions
to a Participant shall be made in cash (or in property if permitted in the
Adoption Agreement) or through the purchase of irrevocable nontransferable
deferred commitments from the Insurer. Except as permitted by Regulations,
the termination of the Plan shall not result in the reduction of "Section
411(d)(6) protected benefits" as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan only if the benefits which
would be received by a Participant of this Plan, in the event of a termination
of the plan immediately after such transfer, merger or consolidation, are at
least equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation and such
merger or consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" as described in Section
8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing
the Adoption Agreement in form satisfactory to the Trustee, and it shall
provide such additional information as the Trustee may require. The
consent of the Trustee to act as such shall be signified by its execution
of the Adoption Agreement.
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(b) Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate and
apart from that of any other employer and its participants hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall
be payable to any person (including a Participant or his Beneficiary) shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same
shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any
such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized except to such
extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of
this Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount to be
distributed as shall equal such indebtedness shall be paid to the Plan, to
apply against or discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written notice by the
Administrator that such indebtedness is to be so paid in whole or part from
his Participant's Combined Account. If the Participant or Beneficiary does
not agree that the indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review of the
validity of the claim in accordance with procedures provided in Sections
2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator under the provisions
of the Retirement Equity Act of 1984. The Administrator shall establish a
written procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders.
Further, to the extent provided under a "qualified domestic relations
order", a former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act
and the laws of the State or Commonwealth in which the Employer's principal
office is located, other than its laws respecting choice of law, to the extent
not pre-empted by the Act.
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9.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants,
Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make a contribution under a
mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the Employer
may demand repayment of such contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount to
the Employer within the one (1) year period. Earnings of the Plan
attributable to the contributions may not be returned to the Employer but
any losses attributable thereto must reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412 (a) (2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the Insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
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9.10 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal of this
Plan. The Insurer shall be protected and held harmless in acting in accordance
with any written direction of the Trustee, and shall have no duty to see to the
application of any funds paid to the Trustee, nor be required to question any
actions directed by the Trustee. Regardless of any provision of this Plan, the
Insurer shall not be required to take or permit any action or allow any benefit
or privilege contrary to the terms of any Contract which it issues hereunder, or
the rules of the Insurer.
9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee, and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the sole authority
to appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend the elective provisions of the
Adoption Agreement or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the administration of the
Plan, which responsibility is specifically described in the Plan. The Trustee
shall have the sole responsibility of management of the assets held under the
Trust, except those assets, the management of which has been assigned to an
Investment Manager, who shall be solely responsible for the management of the
assets assigned to it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan, authorizing
or providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or action.
It is intended under the Plan that each named Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under the Plan. No named Fiduciary shall guarantee the Trust Fund in any manner
against investment loss or depreciation in asset value. Any person or group may
serve in more than one Fiduciary capacity.
9.14 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
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9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if, pursuant to
a timely application filed by or in behalf of the Plan, the Commissioner of
Internal Revenue Service or his delegate should determine that the Plan
does not initially qualify as a tax-exempt plan under Code Sections 401 and
501, and such determination is not contested, or if contested, is finally
upheld, then if the Plan is a new plan, it shall be void ab initio and all
amounts contributed to the Plan, by the Employer, less expenses paid, shall
be returned within one year and the Plan shall terminate, and the Trustee
shall be discharged from all further obligations. If the disqualification
relates to an amended plan, then the Plan shall operate as if it had not
been amended and restated. In the event that a contribution is made to the
Plan conditioned upon qualification of the Plan as amended, such
contribution must be returned to Employer upon the determination that the
amended Plan fails to qualify under the Code.
(b) Except as specifically stated in the Plan, any contribution by
the Employer to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1) year following a
final determination of the disallowance, whether by agreement with the
Internal Revenue Service or by final decision of a court of competent
jurisdiction, demand repayment of such disallowed contribution and the
Trustee shall return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10 and Section
6.11 only upon death, Total and Permanent Disability, normal or early
retirement, termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any Affiliated Employer may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select the same
Adoption Agreement provisions as those selected by the Employer other than
the Plan Year, the Fiscal Year, and such other items that must, by
necessity, vary among employers.
(b) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.
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(c) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating Employers,
as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under
the Plan, and all amounts credited to such Participant's Combined Account
as well as his accumulated service time with the transferor or predecessor,
and his length of participation in the Plan, shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the
credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent.
Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
affect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYERS CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan Year
shall be allocated among all Participants of all Participating Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer.
The Trustee may, but need not, register contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each and
every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
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10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating Employer shall
be permitted to discontinue or revoke its participation in the Plan at any time.
At the time of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts
and other Trust Fund assets allocable to the Participants of such Participating
Employer to such new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate pension plan for its
Employees provided, however, that no such transfer shall be made if the result
is the elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(e). If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating Employer
pursuant to the provisions of Article VII hereof In no such event shall any part
of the corpus or income of the Trust Fund as it relates to such Participating
Employer be used for or diverted for purposes other than for the exclusive
benefit of the Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary rules
or regulations, binding upon all Participating Employers and all Participants,
to effectuate the purpose of this Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from making
a contribution which it would otherwise have made under the Plan by reason of
having no current or accumulated earnings or profits, or because such earnings
or profits are less than the contribution which it would otherwise have made,
then, pursuant to Code Section 404(a)(3)(B), so much of the contribution which
such Participating Employer was so prevented from making may be made, for the
benefit of the Participating Employees of such Participating Employer, by other
Participating Employers who are members of the same affiliated group within the
meaning of Code Section 1504 to the extent of their current or accumulated
earnings or profits, except that such contribution by each such other
Participating Employer shall be limited to the proportion of its total current
and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not be required to reimburse the contributing
Participating Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary the provisions
of this Article shall apply with respect to any 401(k) Profit Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 11.2(a), which amount shall be deemed
an Employer's Elective Contribution, plus
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(b) If specified in E3 of the Adoption Agreement, a matching
contribution equal to the percentage specified in the Adoption Agreement of
the Deferred Compensation of each Participant eligible to share in the
allocations of the matching contribution, which amount shall be deemed an
Employer's Non-Elective or Elective Contribution as selected in the
Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a discretionary
amount, if any, which shall be deemed an Employer's Non-Elective
Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a Qualified
Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is deductible
under Code Section 404.
(g) Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer's general
assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash.
The provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Employer
contributions which are allocable to the Participant's Elective Account for
a Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each Participant may elect
to defer his Compensation which would have been received in the Plan Year,
but for the deferral election, subject to the limitations of this Section
and the Adoption Agreement. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election, or if later, the latest of the date the Employer adopts this cash
or deferred arrangement, or the date such arrangement first became
effective. Any elections made pursuant to this Section shall become
effective as soon as is administratively feasible.
Additionally, if elected in the Adoption Agreement, each Participant
may elect to defer and have allocated for a Plan Year all or a portion of
any cash bonus attributable to services performed by the Participant for
the Employer during such Plan Year and which would have been received by
the Participant on or before two and one-half months following the end of
the Plan Year but for the deferral. A deferral election may not be made
with respect to cash bonuses which are currently available on or before the
date the Participant executed such election. Notwithstanding the
foregoing, cash bonuses attributable to services performed by the
Participant during a Plan Year but which are to be paid to the Participant
later than two and one-half months after the close of such Plan Year will
be subjected to whatever deferral election is in effect at the time such
cash bonus would have otherwise been received.
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The amount by which Compensation and/or cash bonuses are reduced
shall be that Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that Participant's Elective
Account.
Once made, a Participant's election to reduce Compensation shall
remain in effect until modified or terminated. Modifications may be made
as specified in the Adoption Agreement, and terminations may be made at any
time. Any modification or termination of an election will become effective
as soon as is administratively feasible.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any
reason.
(c) Amounts held in the Participant's Elective Account and Qualified
Non-Elective Account may be distributable as permitted under the Plan, but
in no event prior to the earlier of:
(1) a Participant's termination of employment, Total and Permanent
Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to the
limitations of Section 11.8;
(4) the termination of the Plan without the existence at the time of
Plan termination of another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
or the establishment of a successor defined contribution plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)) by the Employer or an Affiliated Employer within the
period ending twelve months after distribution of all assets from the
Plan maintained by the Employer;
(5) the date of the sale by the Employer to an entity that is not an
Affiliated Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) with respect to a Participant who
continues employment with the corporation acquiring such assets; or
(6) the date of the sale by the Employer or an Affiliated Employer of
its interest in a subsidiary (within the meaning of Code Section
409(d)(3)) to an entity that is not an Affiliated Employer with
respect to a Participant who continues employment with such
subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, con or arrangements of the Employer maintaining this Plan shall not
exceed the limitation imposed by Code Section 402(g), as in effect for the
calendar year in which such Plan Year began. This dollar limitation shall
be adjusted annually pursuant to the method provided in Code Section 415(d)
in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
pursuant to Regulation 1.401(k)-l(d)(2)(iii)(B) from any other plan
maintained by the Employer or from his Participant's Elective Account
pursuant to Section 11.8, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following
the taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, made pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
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(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section
408(k)), a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1st following the close of his taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administator shall direct the Trustee to
distribute such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the Participant
which begins after December 31, 1986. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated
as a pro rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year. Any distribution on or before the last
day of the Participant's taxable year must satisfy each of the following
conditions:
(1) the Participant shall designate the distribution as Excess
Deferred Compensation;
(2) the distribution must be made after the date on which the Plan
received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
For the purpose of this Section, "Income" means the amount of
income or loss allocable to a Participant's Excess Deferred Compensation
and shall be equal to the sum of the allocable gain or loss for the taxable
year of the Participant and the allocable gain or loss for the period
between the end of the taxable year of the Participant and the date of
distribution ("gap period"). The income or loss allocable to each such
period is calculated separately and is determined by multiplying the income
or loss allocable to the Participant's Deferred Compensation for the
respective period by a fraction. The numerator of the fraction is the
Participant's Excess Deferred Compensation for the taxable year of the
Participant. The denominator is the balance, as of the last day of the
respective period, of the Participant's Elective Account that is
attributable to the Participant's Deferred Compensation reduced by the gain
allocable to such total amount for the respective period and increased by
the loss allocable to such total amount for the respective period.
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable income or loss for
the "gap period". Under such "safe harbor method", allocable income or
loss for the "gap period" shall be deemed to equal ten percent (10%) of the
income or loss allocable to a Participant's Excess Deferred Compensation
for the taxable year of the Participant multiplied by the number of
calendar months in the "gap period". For purposes of determining the
number of calendar months in the "gap period", a distribution occurring on
or before the fifteenth day of the month shall be treated as having been
made on the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
Income or loss allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the first day of
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the taxable year of the Participant to the date on which the distribution
is made pursuant to either the "fractional method" or the "safe harbor
method".
Notwithstanding the above, for the 1987 calendar year, Income
during the "gap period" shall not be taken into account.
(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section
11.5(a) for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value of
the Participant's Elective Account shall be used to provide benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations
pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for herein.
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer's Elective Contribution made pursuant
to Section 11.1(a), to each Participant's Elective Account in an
amount equal to each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer's Matching Contribution made pursuant
to Section 11.1(b), to each Participant's Account, or Participant's
Elective Account as selected in E3 of the Adoption Agreement, in
accordance with Section 11.1(b).
Except, however, a Participant who is not credited with a Year of
Service during any Plan Year shall or shall not share in the
Employer's Matching Contribution for that year as provided in E3 of
the Adoption Agreement. However, for Plan Years beginning after 1989,
if this is a standardized Plan, a Participant shall share in the
Employer's Matching Contribution regardless of Hours of Service.
(3) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 11.1(c), to each Participant's Account in
accordance with the provisions of Sections 4.3(b)(2) or 4.3(b)(3),
whichever is applicable, 4.3(k) and 4.3(l).
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(4) With respect to the Employer's Qualified Non-Elective Contribution
made pursuant to Section 11.1(d), to each Participant's Qualified Non-
Elective Contribution Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year. However, for any Plan
Year beginning prior to January 1, 1990, and if elected in the
non-standard Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who is not credited with a Year
of Service during any Plan Year shall not share in the Employer's
Qualified Non-Elective Contribution for that year, unless required
pursuant to Section 4.3(h). In addition, the provisions of Sections
4.3(k) and 4.3(l) shall apply with respect to the allocation of the
Employer's Qualified Non-Elective contribution.
(c) Notwithstanding anything in the Plan to the contrary, for Plan
Years beginning after December 31, 1988, in determining whether a
Non-Key Employee has received the required Minimuim allocation pursuant
to Section 4.3(f) such Non-Key Employee's Deferred Compensation and
matching contributions used to satisfy the "Actual Deferral Percentage"
test pursuant to Section 11.4(a) or the "Actual Contribution Percentage"
test of Section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary, Participants who
terminated employment during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary (other than
Sections 11.3(d) and 11.3(g)), any Participant who terminated
employment during the Plan Year for reasons other than death, Total and
Permanent Disability, or retirement shall or shall not share in the
allocations of the Employer's Matching Contribution made pursuant to
Section 11.1(b), the Employer's Non-Elective Contributions made pursuant
to Section 11.1(c), the Employer's Qualified Non-Elective Contribution
made pursuant to Section 11.1(d), and Forfeitures as provided in the
Adoption Agreement. Notwithstanding the foregoing, for Plan Years
beginning after 1989, if this is a standardized Plan, any such terminated
Participant shall share in such allocations provided the terminated
Participant completed more than 500 Hours of Service.
(f) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or
retirement shall share in the allocation of the Employer's Matching
Contribution made pursuant to Section 11.1(b), the Employer's Non-Elective
Contributions made pursuant to Section 11.1(c), the Employer's Qualified
Non-Elective Contribution made pursuant to Section 11.1(d), and Forfeitures
as provided in this Section regardless of whether they completed a Year of
Service during the Plan Year.
(g) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or 410(b)(2)
(A)(i) and the Regulations thereunder because Employer matching
Contributions made pursuant to Section ll.l(b), Employer Non-Elective
Contributions made pursuant to Section 11.1(c) or Employer Qualified
Non-Elective Contributions made pursuant to Section 11.1(d) have not been
allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the respective
contributions for the Plan Year shall be expanded to include the
miniunum number of Participants who would not otherwise be eligible as
are necessary to satisfy the applicable test specified above. The
specific Participants who shall become eligible under the terms of
this paragraph shall be those who are actively employed on the last
day of the Plan Year and, when compared to
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similarly situated Participants, have completed the greatest number of
Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the applicable test
is still not satisfied, then the group of Participants eligible to
share for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on the
last day of the Plan Year as are necessary to satisfy the applicable
test. The specific participants who shall become eligible to share
shall be those Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours of
Service in the Plan Year before terminating employment.
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions and Qualified Non-Elective Contributions to a Participant's
Elective Account and Qualified Non-Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-1(b) are incorporated herein by
reference.
However, for Plan Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described in (2) above and
Code Section 401(m)(9)(A), any Highly Compensated Participant eligible
to make elective deferrals pursuant to Section 11.2 and to make
Employee contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group for a Plan Year, the average of
the ratios, calculated separately for each Participant in such group, of
the amount of Employer Elective Contributions and Qualified Non-Elective
Contributions allocated to each Participant's Elective Account and
Qualified Non-Elective Account for such Plan Year, to such Participant's
"414(s) Compensation" for such Plan Year. The actual deferral ratio for
each Participant and the "Actual Deferral Percentage" for each group, for
Plan Years beginning after December 31, 1988, shall be calculated to the
nearest one-hundredth of one percent of the Participant's "414(s)
Compensation". Employer Elective Contributions allocated to each
Non-Highly Compensated Participant's Elective Account shall be reduced by
Excess Deferred Compensation to the extent such excess amounts are made
under this Plan or any other plan maintained by the Employer.
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(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
the following shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family Members
who are Highly Compensated Participants without regard to family
aggregation; and (ii) the ratio determined by aggregating Employer
Elective Contributions and "414(s) Compensation" of all eligible
Family Members (including Highly Compensated Participants). However,
in applying the $200,000 limit to "414(s) Compensation" for Plan Years
beginning after December 31, 1988, Family Members shall include only
the affected Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer Elective Contributions and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of determining
the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 401(b)(2)(A)(ii) as in effect
for Plan Years beginning after December 31, 1988), the cash or deferred
arrangements included in such plans shall be treated as one arrangement.
In addition, two or more cash or deferred arrangements may be considered as
a single arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In
such a case, the cash or deferred arrangements included in such plans and
the plans including such arrangements shall be treated as one arrangement
and as one plan for purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k). For plan years beginning after December 31, 1989, plans
may be aggregated under this paragraph (e) only if they have the same plan
year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in Code
Section 4975(e)(7) may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code Section 4975(e)(7) for
Plan Years beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of determining
the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan Years beginning after December 31, 1988, if
the cash or deferred arrangements have different Plan Years, this
paragraph shall be applied by treating all cash or deferred arrangements
ending with or within the same calendar year as a single arrangement.
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11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions and Qualified Non-Elective Contributions do not satisfy one of the
tests set forth in Section 11.4, for Plan Years beginning after December 31,
1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the
highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him and/or at his election recharacterized as
a voluntary Employee contribution pursuant to Section 4.7 until one of the
tests set forth in Section 11.4 is satisfied, or until his actual deferral
ratio equals the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio. This process
shall continue until one of the tests set forth in Section 11.4 is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions and Qualified
Non-Elective Contributions made on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this paragraph) by
his "414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to an
affected Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation previously distributed
to such affected Highly Compensated Participant for his taxable year ending
with or within such Plan Year. Any distribution and/or recharacterization
of Excess Contributions shall be made in accordance with the following:
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the Plan
Year following the Plan Year to which they are allocable;
(ii) shall be made first from unmatched Deferred Compensation
and, thereafter, simultaneously from Deferred Compensation which
is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed;
(iii) shall be made from Qualified Non-Elective Contributions
only to the extent that Excess Contributions exceed the balance
in the Participant's Elective Account attributable to Deferred
Compensation and Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
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(ii) for Plan Years ending on or before August 8, 1988, may be
postponed but not later than October 24, 1988;
(iii) shall not exceed the amount of Deferred Compensation on behalf
of any Highly Compensated Participant for any Plan Year;
(iv) shall be treated as voluntary Employee contributions for purposes
of Code Section 401(a)(4) and Regulation 1.401(k)-l(b). However, for
purposes of Sections 2.2 and 4.3(f), recharacterized Excess
Contributions continue to be treated as Employer contributions that
are Deferred Compensation. For Plan Years beginning after December
31, 1988, Excess Contributions recharacterized as voluntary Employee
contributions shall continue to be nonforfeitable and subject to the
same distribution rules provided for in Section 11.2(c);
(v) which relate to Plan Years ending on or before October 24, 1988,
may be treated as either Employer contributions or voluntary Employee
contributions and therefore shall not be subject to the restrictions
of Section 11.2(c);
(vi) are not permitted if the amount recharacterized plus voluntary
Employee contributions actually made by such Highly Compensated
Participant, exceed the maximum amount of voluntary Employee
contributions (determined prior to application of Section 11.6) that
such Highly Compensated Participant is permitted to make under the
Plan in the absence of recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than the entire
amount of Excess Contributions shall be treated as a pro rata distribution
and/or recharacterization of Excess Contributions and Income.
(4) The determination and correction of Excess Contributions of a Highly
Compensated Participant whose actual deferral ratio is determined under the
family aggregation rules shall be accomplished as follows:
(i) If the actual deferral ratio for the Highly Compensated
Participant is determined in accordance with Section 11.4(c)(1)(ii),
then the actual deferral ratio shall be reduced as required herein and
the Excess Contributions for the family unit shall be allocated among
the Family Members in proportion to the Elective Contributions of each
Family Member that were combined to determine the group actual
deferral ratio.
(ii) If the actual deferral ratio for the Highly Compensated
Participant is determined under Section 11.4(c)(1)(i), then the actual
deferral ratio shall first be reduced as required herein, but not
below the actual deferral ratio of the group of Family Members who are
not Highly Compensated Participants without regard to family
aggregation. The Excess Contributions resulting from this initial
reduction shall be allocated (in proportion to Elective Contributions)
among the Highly Compensated Participants whose Elective Contributions
were combined to determine the actual deferral ratio. If further
reduction is still required, then Excess Contributions resulting from
this further reduction shall be determined by taking into account the
contributions of all Family Members and shall be allocated among them
in proportion to their respective Elective Contributions.
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(b) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in Section 11.4(a). Such contribution shall be
allocated to the Participant's Qualified Non-Elective Account of each
Non-Highly Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the income or loss
allocable to Excess Contributions which shall equal the sum of the
allocable gain or loss for the Plan Year and the allocable gain or loss for
the period between the end of the Plan Year and the date of distribution
("gap period"). The income or loss allocable to Excess Contributions for
the Plan Year and the "gap period" is calculated separately and is
determined by multiplying the income or loss for the Plan Year or the "gap
period" by a fraction. The numerator of the fraction is the Excess
Contributions for the Plan Year. The denominator of the fraction is the
total of the Participant's Elective Account attributable to Elective
Contributions and the Participant's Qualified Non-Elective Account as of
the end of the Plan Year or the "gap period", reduced by the gain allocable
to such total amount for the Plan Year or the "gap period" and increased by
the loss allocable to such total amount for the Plan Year or the "gap
period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period".
Under such "safe harbor method", allocable Income for the "gap period"
shall be deemed to equal ten percent (10%) of the Income allocable to
Excess Contributions for the Plan Year of the Participant multiplied by the
number of calendar months in the "gap period". For purposes of determining
the number of calendar months in the "gap period", a distribution occurring
on or before the fifteenth day of the month shall be treated as having been
made on the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
Notwithstanding the above, for Plan Years which began in 1987,
Income during the "gap period" shall not be taken into account.
(d) Any amounts not distributed or recharacterized within 2 1/2
months after the end of the Plan Year shall be subject to the 10% Employer
excise tax imposed by Code Section 4979.
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years beginning
after the later of the Effective Date of this Plan or December 31, 1986,
for the Highly Compensated Participant group shall not exceed the greater
of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for
Plan Years beginning after December 31, 1988, to prevent the multiple
use of the alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant eligible to
make elective deferrals pursuant to Section 11.2 or any other cash or
deferred arrangement maintained by the Employer or an Affiliated
Employer and to make Employee contributions or to receive matching
contributions under any plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions of Code Section 401
(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
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(b) For the purposes of this Section and Section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group,
the average of the ratios (calculated separately for each Participant in
each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 11.1(b) (to the extent such matching contributions are not
used to satisfy the tests set forth in Section 11.4), voluntary
Employee contributions made pursuant to Section 4.7 and Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 11.5 on behalf of each such Participant for such
Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
11.7(d), only Employer matching contributions contributed to the Plan prior
to the end of the succeeding Plan Year shall be considered. In addition,
the Administrator may elect to take into account, with respect to Employees
eligible to have Employer matching contributions made pursuant to Section
11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-l(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation
1.401(m)-l(b)(2) which is incorporated herein by reference. However, for
Plan Years beginning after December 31, 1988, the Plan Year must be the
same as the Plan Year of the Plan to which the elective deferrals and the
qualified non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual contribution ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent such
matching contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members who are Highly
Compensated Participants without regard to family aggregation; and
(ii) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent such
matching contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit to
"414(s) Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19 before the
close of the Plan Year.
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(2) The Employer matching contributions made pursuant to Section
11.1(b) (to the extent such matching contributions are not used to
satisfy the tests set forth in Section 11.4), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and "414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual Contribution
Percentage" of the Non-Highly Compensated Participant group except to
the extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one
plan for purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii) as in effect for
Plan Years beginning after December 31, 1988), such plans shall be treated
as one plan. In addition, two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case,
the aggregated plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single plan. For
plan years beginning after December 31, 1989, plans may be aggregated under
this paragraph only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section 4975(e)(7)
may not be aggregated with this Plan for purposes of determining whether
the employee stock ownership plan or this Plan satisfies this Section and
Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, for Plan Years beginning
after December 31, 1988, if the plans have different plan years, this
paragraph shall be applied by treating all plans ending with or within the
same calendar year as a single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any
Employee eligible to have matching contributions made pursuant to Section
11.1(b) (whether or not a deferred election was made or suspended
pursuant to Section 11.2(e)) allocated to his account for the Plan Year or
to make salary deferrals pursuant to Section 11.2 (if the Employer uses
salary deferrals to satisfy the provisions of this Section) or voluntary
Employee contributions pursuant to Section 4.7 (whether or not voluntary
Employee contributions are made) allocated to his account for the Plan
Year.
(h) For purposes of this Section, "Matching Contribution" shall mean
an Employee contribution made to the Plan, or to a contract described in
Code Section 403(b), on behalf of a Participant on account of an Employee
contribution made by such Participant, or on account of a Participant's
Deferred Compensation, under a plan maintained by the Employer.
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11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December
31, 1986, the "Actual Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Actual Contribution"/
"Percentage" for the Non-Highly Compensated Participant group pursuant
to Section 11.6(a), the Administrator (on or before the fifteenth day
of the third month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct the
Trustee to distribute to the Highly Compensated Participant having the
highest actual contribution ratio, his portion of Excess Aggregate
Contributions (and Income allocable to such contributions) or, if
forfeitable, forfeit such non-Vested Excess Aggregate Contributions
attributable to Employer matching contributions (and Income allocable
to such Forfeitures) until either one of the tests set forth in
Section 11.6(a) is satisfied, or until his actual contribution ratio
equals the actual contribution ratio of the Highly Compensated
Participant having the second highest actual contribution ratio. This
process shall continue until one of the tests set forth in Section
11.6(a) is satisfied. The distribution and/or Forfeiture of Excess
Aggregate Contributions shall be made in the following order:
(1) Employer matching contributions distributed and/or forfeited
pursuant to Section 11.5(a)(1);
(2) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 11.5(a)(2);
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution of Excess Aggregate Contributions
and Income. Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess Aggregate
Contributions (and Income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.3.
However, no such Forfeiture may be allocated to a Highly Compensated
Participant whose contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions attributable to amounts
other than voluntary Employee contributions, including forfeited
matching contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the
Plan.
(d) For the purposes of this Section and Section 11.6, "Excess
Aggregate Contributions" means, with respect to any Plan Year,
the excess of:
(1) the aggregate amount of Employer matching contributions
made pursuant to Section ll.l(a) (to the extent such
contributions are taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any
Qualified Non-Elective Contributions or elective deferrals taken
into account pursuant to Section 11.6(c) actually made on behalf
of the Highly Compensated Participant group for such Plan Year,
over
(2) the maximum amount of such contributions permitted under
the limitations of Section 11.6(a).
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(e) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken
into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) on behalf of
the Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution
ratio (determined after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent for Plan Years beginning after
December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed
the amount of Employer matching contributions made pursuant to Section
11.1 (b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to Section
4.7, Excess Contributions recharaterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) on behalf of such Highly Compensated Participant for
such Plan Year.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as
defined in Code Section 401(k)) maintained by the Employer that ends
with or within the Plan Year or which are treated as voluntary
Employee contributions due to recharacterization pursuant to Section
11.5.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules
shall be accomplished as follows:
(1) If the actual contribution ratio for the Highly Compensated
Participant is determined in accordance with Section 11.6(d)(1),
then the actual contribution ratio shall be reduced and the
Excess Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the sum of
Employer matching contributions made pursuant to Section ll.l(b)
(to the extent taken into account pursuant to Section 11.6(a)),
voluntary Employee contributions made pursuant to Section 4.7,
Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified
Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) of each Family Member that
were combined to determine the group actual contribution ratio.
(2) If the actual contribution ratio for the Highly Compensated
Participant is determined under Section 11.6(d)(2), then the
actual contribution ratio shall first be reduced, as required
herein, but not below the actual contribution ratio of the group
of Family Members who are not Highly Compensated Participants
without regard to family aggregation. The Excess Aggregate
Contributions resulting from this initial reduction shall be
allocated among the Highly Compensated Participants whose
Employer matching contributions made pursuant to Section ll.l(b)
(to the extent taken into account pursuant to Section 11.6(a)),
voluntary Employee contributions made pursuant to Section 4.7,
Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified
Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) were combined to determine
the actual contribution ratio. If further reduction is still
required, then Excess Aggregate Contributions resulting from this
further reduction shall be determined by taking into account the
contributions of all Family Members and shall be allocated among
them in
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proportion to their respective Employer matching contributions
made pursuant to Section ll.l(b) (to the extent taken into account
pursuant to Section 11.6(a)), voluntary Employee contributions
made pursuant to Section 4.7, Excess Contributions recharaterized
as voluntary Employee contributions pursuant to Section 11.5 and
any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c).
(h) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 11.6. Such contribution shall be allocated to the
Participant's Qualified Non-Elective Account of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate
accounting shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests pursuant to
Section 11.4.
(i) For purposes of this Section, "Income" means the income or
loss allocable to Excess Aggregate Contributions which shall equal
the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss for the period between the end of the Plan Year
and the date of distribution ("gap period"). The income or loss
allocable to Excess Aggregate Contributions for the Plan Year and the
"gap period" is calculated separately and is determined by multiplying
the income or loss for the Plan Year or the "gap period" by a
fraction. The numerator of the fraction is the Excess Aggregate
Contributions for the Plan Year. The denominator of the fraction is
the total Participant's Account and Voluntary Contribution Account
attributable to Employer matching contributions subject to Section
11.6, voluntary Employee contributions made pursuant to Section 4.7,
and any Qualified Non-Elective Contributions and elective deferrals
taken into account pursuant to Section 11.6(c) as of the end of the
Plan Year or the "gap period", reduced by the gain allocable to such
total amount for the Plan Year or the "gap period" and increased by
the loss allocable to such total amount for the Plan Year or the "gap
period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for
the "gap period" shall be deemed to equal ten percent (10%) of the
Income allocable to Excess Aggregate Contributions for the Plan Year
of the Participant multiplied by the number of calendar months in the
"gap period". For purposes of determining the number of calendar
months in the "gap period", a distribution occurring on or before the
fifteenth day of the month shall be treated as having been made on the
last day of the preceding month and a distribution occurring after
such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
The Income allocable to Excess Aggregate Contributions resulting
from recharacterization of Elective Contributions shall be determined
and distributed as if such recharacterized Elective Contributions had
been distributed as Excess Contributions.
Notwithstanding the above, for Plan Years which began in 1987,
Income during the "gap period" shall not be taken into account.
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the participant, shall
direct the Trustee to distribute to any Participant in any one Plan
Year up to the lesser of (1) 100% of his accounts as specified in the
Adoption Agreement valued as of the last Anniversary Date or other
valuation date or (2) the amount necessary to satisfy the immediate
and heavy financial need of the Participant. Any
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<PAGE> 102
distribution made pursuant to this Section shall be deemed to be made
as of the first day of the Plan Year or, if later, the valuation date
immediately preceding the date of distribution, and the account from
which the distribution is made shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if the
distribution is on account of one of the following or any other items
permitted by the Internal Revenue Service:
(1) Medical expenses described in Code Section 213(d) incurred
by the Participant, his spouse, or any of his dependents (as
defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's
Account until such Account has become fully Vested.
(c) No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's representation
and such other facts as are known to the Administrator, determines
that all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and voluntary
Employee contributions will be suspended for at least twelve (12)
months after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer,
provide that the Participant may not make elective deferrals for
the Participant's taxable year immediately following the
taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable
year less the amount of such Participant's elective deferrals for
the taxable year of the hardship distribution.
(d) Notwithstanding the above, distributions from the
Participant's Elective Account and Qualified Non-Elective Account
pursuant to this Section shall be limited solely to the
Participant's Deferred Compensation and any income attributable
thereto credited to the Participant's Elective Account as of December
31, 1988.
(e) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
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<PAGE> 103
AMENDMENT NUMBER ONE TO
COASTAL PENSION SERVICES, INC.
Coastal Pension Services, Inc. is hereby amended as follows:
1. Section 1.9 is amended by replacing the first paragraph with the
following paragraphs:
"Compensation" with respect to any Participant means one of the following as
elected in the Adoption Agreement However, compensation for any Self-Employed
Individual shall be equal to his Earned Income.
i. Information required to be reported under sections 6041, 6051 and
6052 (Wages, Tips and Other Compensation Box on Form W-2).
Compensation is defined as wages as defined in section 3401(a)
and all other payments of compensation to an employee by the
employer (in the course of the employer's trade or business) for
which the employer is required to furnish the employee a written
statement under sections 6041(d) and 6051(a)(3) of the Code.
Compensation must be determined without regard to any rules under
section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in
section 3401(a)(2)).
ii. Section 3401(a) wages. Compensation is defined as wages within
the meaning of section 3401(a) for the purposes of income tax
withholding at the source but determined without regard to any
rules that limit the remuneration included in wages based
on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in
section 3401(a)(2)).
iii. 415 safe-harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the
course of employment with the employer maintaining the plan to
the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits and reimbursements or other expense allowances under a
nonaccountable plan (as described in 1.62-2(c)), and excluding
the following:
a. Employer contributions to a plan of deferred
compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are
deductible by the employee, or any distributions from a plan
of deferred compensation;
b. Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the employee either becomes freely transferable or
is no longer subject to a substantial risk of forfeiture;
C. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
d. Other amounts which received special tax benefits,
or contributions made by the employer (whether or not under
a salary reduction agreement) towards the purchase of an
anmiity contract described in section 403(b) of the Code
(whether or not the contributions are actually excludable
from the gross income of the employee).
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<PAGE> 104
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of such amendment
Compensation means compensation determined pursuant to the Plan then in
effect.
2. Section 1.14 is amended in its entirety to read as follows:
"Elective Contribution" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2, excluding any such amounts distributed as "excess annual
additions" pursuant to Section 4.4. In addition, if selected in E3 of the
Adoption Agreement, the Employer's matching contribution shall or shall not be
considered an Elective Contribution for purposes of the Plan, as provided in
Section 11.1(b). Elective Contributions shall be subject to the
requirements of Sections 11.2(b) and 11.2(c) and shall further be required to
satisfy the discrimination requirements of Regulation 1.401(k)-l(b)(3), the
provisions of which are specifically incorporated herein by reference.
3. Section 1.20 is amended in its entirety to read as follows:
"Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.4 when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and, if selected in the Adoption
Agreement, shall only be recognized as of an Employee's effective date of
participation. If, in connection with the adoption of this or any other
amendment, the definition of "414(s) Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of such
amendment, "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
5. Section 1.27 ("415 Compensation") is amended by the addition of the
following paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
the Plan Year which includes the adoption date of such amendment, "415
Compensation" means compensation determined pursuant to the Plan then in
effect.
6. Section 4.4(a)(4) and 4.4(a)(4)(i) are amended to read as follows:
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or Section
4.5, the excess will be disposed of in one of the following manners,
as uniformly determined by the Plan Administrator for all Participants
similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess Amount
will be distributed to the Participant;
7. Section 4.4(f)(2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the
Adoption Agreement. However, regardless of any selection made in the Adoption
Agreement, "415 Compensation" shall exclude compensation
2
<PAGE> 105
which is not currently includible in the Participant's gross income by reason
of the application of Code Sections 125, 402(a)(8), 402(b)(1)(B), or 403(b).
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation year is
the compensation actually paid or made available during such limitation year.
Notwithstanding the preceding sentence, compensation for a participant
in a defined contribution plan who is permanently and totally disabled (as
defined in section 22(e)(3) of the Internal Revenue Code) is the compensation
such participant would have received for the limitation year if the participant
had been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the disabled
participant may be taken into account only if the participant is not a Highly
Compensated Employee and contributions made on behalf of such participant are
nonforfeitable when made.
8. Section 4.5(a) is amended in its entirety to read as follows:
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the limits of
Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
9. Sections 6.11(a)(1) and (a)(4) are amended in their entirety to read
as follows:
(4) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, children,
or dependents;
10. Section 7.10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall be
permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The
Plan provisions otherwise applicable to distributions continue to apply to the
direct transfer option. The Participant shall, in the time and manner
prescribed by the Administrator, specify the amount to be directly transferred
and the "eligible retirement plan" to receive the transfer. Any portion of a
distribution which is not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" any distribution other than a distribution of substantially equal
periodic payments over the life or life expectancy of the Participant (or joint
life or joint life expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a)(9) are not
eligible rollover distributions. The direct transfer option described in
subsection (a) applies only to eligible rollover distributions which would
otherwise be includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan"
means an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 403(a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
3
<PAGE> 106
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however, distributions to the
surviving spouse may only be transferred to an individual retirement account or
individual retirement annuity. For purposes of subsection (a), a spouse or
former spouse who is the alternate payee under a qualified domestic relations
order as defined in Code Section 414(p) will be treated as the Participant.
For purposes of this section, the term "eligible retirement plan" has
the meaning given such term by Code Section 402(c)(8)(B), except that a
qualified trust shall be considered an eligible retirement plan only if it is a
defined contribution plan, the terms of which permit the acceptance of rollover
distributions.
11. Section 11.2(d) is amended in its entirety to read as follows:
(d) In any Plan Year beginning after December 31, 1986, a
Participant's Deferred Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this Plan shall not exceed
the limitation imposed by Code Section 402(g), as in effect for the calendar
year in which such Plan Year began. If such dollar limitation is exceeded
solely from elective deferrals made under this Plan or any other Plan maintained
by the Employer, a Participant will be deemed to have notified the Administrator
of such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
12. Section 11.2(f) is amended by the addition of the following paragraph
after paragraph (f)(3) to read as follows:
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions which are not
Vested shall be forfeited in lieu of being distributed.
13. Section 11.2(f) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
14. Section 11.5(c) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
15. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 11.7(d),
only Employer matching contributions (excluding matching contributions forfeited
or distributed to Section 11.2(f), 11.5(a), or 11.7(a)) contributed to
4
<PAGE> 107
the Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-l(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-l(b)(2) which is
incorporated herein by reference. However, for Plan 1.401 Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions
are made.
16. Section 11.7(i) is amended by the addition of the following paragraph as
the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
Income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
17. Sections 11.8(a)(1) and (a)(3) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, children,
or dependents; or
18. Section 11.8(c)(1) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of the immediate and
heavy financial need may include any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to result from
the distribution.
19. Article IV is amended by the addition of the following:
Notwithstanding anything in this Article to the contrary, effective as
of the Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code Section
414(q)(6).
20. Section E1a. of the Adoption Agreement is amended in its entirety to read
as follows:
Compensation with respect to any Participant means:
1. ( ) Wages, Tips and other Compensation (Box 10 on Form W-2).
2. ( ) Section 3401(a) wages (wages for withholding purposes).
3. ( ) 415 Safe-harbor compensation.
AND Compensation
5
<PAGE> 108
( ) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving
expenses, deferred compensation, and welfare benefits.
21. Section E3 of the 401(k) Adoption Agreement(s) is amended by the
addition of the following:
( ) Notwithstanding anything in the Plan to the contrary, all matching
contributions which relate to distributions of Excess Deferred
Compensation, Excess Contributions and Excess Aggregate
Contributions shall be Forfeited. (Select this option only if it
is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE
PLAN IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION El E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment to be executed
on this day of ,19 .
--- ---------------- ----
EMPLOYER: PARTICIPATING EMPLOYER.
- ------------------------------ -------------------------------
(enter name) (enter name)
By: By:
-------------------------- ------------------------------
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<PAGE> 109
NOTICE TO INTERESTED PARTIES
I. GENERAL INFORMATION
Notice to Employees or Participants. Your Employer has amended your
retirement plan effective as of__________________.
Name of Plan: _______________________________________________________________
Plan Number: _________
Opinion Letter Number: _____________
Name and address of Employer
______________________________________
______________________________________
______________________________________
Employer Identification Number: ___________
Name and Address of Plan Administrator:
______________________________________
______________________________________
______________________________________
( ) No other Employers have adopted the provisions of the Plan.
( ) The following are other Employers who have adopted the provisions of
the Plan:
The Employer does not intend to submit this Plan to the Internal
Revenue Service for an advance determination as to whether the Plan qualifies
under Section 401 and 403(a) of the Internal Revenue Code of 1986, with respect
to its amendment.
A determination letter for the Plan _______________ (has/has not) previously
been issued.
All Employees will be eligible to participate when age and service
requirements, if applicable, are satisfied except for the following (select all
that apply):
( ) Employees who are paid on a salary only basis.
( ) Employees who derive their total compensation in the form of
commissions or sales incentives.
<PAGE> 110
( ) Employees who are paid on an hourly only basis.
( ) Employees whose employment is governed by a collective
bargaining agreement under which retirement benefits were the
subject of good faith bargaining.
( ) Highly Compensated Employees.
( ) Non-resident aliens who have no earned income from sources
within the United States.
( ) Other: ___________________________________
___________________________________
II. RIGHTS OF INTERESTED PARTIES
You have the right to submit to the Key District Director, at the
address below, either individually or jointly with other interested parties,
your comments as to whether this plan meets the qualification requirements of
the Internal Revenue Code. You may instead, individually or jointly with other
interested parties, request the Department of Labor to submit, on your behalf,
comments to the Key District Director regarding qualification of the plan. If
the Department declines to comment on all or some of the matters you raise, you
may, individually, or jointly if your request was made to the Department
jointly, submit your comments on these matters directly to the Key District
Director.
III. REQUESTS FOR COMMENTS BY THE DEPARTMENT OF LABOR
The Department of Labor may not comment on in behalf of interested
parties unless requested to do so by the lesser of 10 employees or 10 percent of
the employees who qualify as interested parties. The number of persons needed
for the Department to comment with respect to this plan is _______. If you
request the Department to comment, your comment must be in writing and must
specify the matters upon which comments are requested, and must also include:
(a) the name, address and I.D. Number of the applicant;
(b) the opinion letter number,
(c) the name of the plan, the plan identification number,
and the name and address of the plan administrator,
and
(d) the number of persons needed for the Department to
comment.
A request to the Department to comment should be addressed as follows:
Deputy Assistant Secretary
Pension and Welfare Benefits Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ATTN: 3001 Comment Request
IV. COMMENTS TO THE INTERNAL REVENUE SERVICE
Comments submitted by you to the Key District Director must be in
writing and received by him by ___________________ (the 75th day after the plan
or amendment is adopted). However, if there are matters that you request the
Department of Labor to comment upon your behalf, and the Department declines,
you may
<PAGE> 111
submit comments on these matters to the Key District to be received by him
within 15 days from the time the Department notifies you that it will not
comment on a particular matter, or by __________________ (the 75th day after the
plan or amendment is adopted), whichever is later, but in no event later than
__________________ (the 90th day after the plan or amendment is adopted). A
request to the Department of Labor to comment on your behalf must be received by
___________________ (the 45th day after the plan or amendment is adopted) if you
wish to preserve your right to comment on a matter upon which the Department
declines to comment, or by __________ (the 55th day after the plan or amendment
is adopted) if you wish to waive that right.
V. ADDITIONAL INFORMATION
Detailed instructions regarding the requirements for notification of
interested parties may be found in Sections 16, 17, and 18 of Revenue Procedure
92-6. Additional information concerning this amendment (including where
applicable, a description of the circumstances which may result in ineligibility
or loss of benefits; a description of the source of financing of the plan; and
copies of Section 16 of Revenue Procedure 92-6) is available at the company's
principal and/or local office during the hours of 10:00 a.m to 3:00 p.m. for
inspection and copying. (There is a nominal charge for copying and/or mailing.)
Key District Having Jurisdiction Over Plan:
( ) Internal Revenue Service
EP/EO Division
P.O. Box 941
Atlanta, GA 30370
( ) Internal Revenue Service
EP/EO Division
P.O. Box 17010
Room 713
Baltimore, Md 21203
( ) Internal Revenue Service
EP/EO Division
P.O. Box 1680, GPO
Brooklyn, NY 11202
( ) Internal Revenue Service
EP/EO Division
P.O. Box 3159
Cincinnati, OH 45201
( ) Internal Revenue Service
EP/EO Division
230 S. Dearborn Street
Chicago, IL 60604
( ) Internal Revenue Service
EP/EO Division
1100 Commerce Street
Dallas, TX 75242
<PAGE> 112
( ) Internal Revenue Service
EP Application Receiving
2 Cupania Circle
Monterey Park, CA 91754
<PAGE> 113
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of _______________________________ (the
Corporation) hereby certifies that the following resolutions were duly adopted
by the board of directors of the Corporation on ____________________, and that
such resolutions have not been modified or rescinded as of the date hereof:
RESOLVED, that the amendment to the___________________________________
_______________ (Name of Plan) is hereby approved and adopted.
The undersigned further certifies that attached hereto as Exhibit A is
a true copy of the amendment approved and adopted in the foregoing resolution.
____________________________
Secretary
Date:_______________________
<PAGE> 114
SUMMARY OF MATERIAL MODIFICATIONS
Your Employer has amended your retirement plan. This a summary of the
modifications that were made. It should be read in conjunction with the
Summary Plan Description that has already been distributed to you.
The definition of Compensation has been modified as selected below. However,
except as provided below, any exclusions from Compensation that are set forth
in the Summary Plan Description will still apply.
( ) Your total wages for the applicable period that are subject to
withholding taxes.
( ) Your total wages for the applicable period that are subject to
federal income tax.
In addition, Compensation
( ) will
( ) will not
exclude expense allowances, fringe benefits, moving expenses, deferred
compensation, and welfare benefits.
The hardship provisions of the plan have been modified as follows:
( ) N/A plan does not permit hardship distributions.
( ) The amount of a hardship distribution may include the amount
of any applicable taxes and penalties which may apply because
of the distribution.
In addition, the events which may qualify for a hardship
include the payment of tuition and related education fees for
the next 12 months of post-secondary education for you, your
spouse, your children, or any of your dependents and payments
for medical expenses (or to obtain medical care) for you or
your dependents.
<PAGE> 115
AMENDMENT NUMBER TWO TO
COASTAL PENSION SERVICES, INC.
1. Section 1.9 is amended by the addition of the following:
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
on 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 plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2. Section 6.13 is amended by the addition of the following:
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the plan administrator clearly informs the participant that
the participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and
(2) the participant, after receiving the notice, affirmatively
elects a distribution.
3. Section 7.10 is amended by the addition of the following:
(a) Notwithstanding any provision of the plan to the contrary,
with respect to distributions made after December 31, 1992, a Participant shall
be permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The
Plan provisions otherwise applicable to distributions continue to apply to the
direct transfer option. The Participant shall, in the time and manner
prescribed by the Administrator, specify the amount to be directly transferred
and the "eligible retirement plan" to receive the transfer. Any portion of a
distribution which is not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of substantially
equal periodic payments over the life or life expectancy of the Participant (or
joint life or joint life expectancies of the Participant and the designated
<PAGE> 116
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a)(9) are not eligible
rollover distributions. The direct transfer option described in subsection (a)
applies only to eligible rollover distributions which would otherwise be
includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement
plan" means an individual retirement account as described in Code Section
408(a), an individual retirement annuity as described in Code Section 408(b),
an annuity plan as described in Code Section 403(a), or a defined contribution
plan as described in Code Section 401(a) which is exempt from tax Under Code
Section 501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however, distributions to the
surviving spouse may only be transferred to an individual retirement account or
individual retirement annuity. For purposes of subsection (a), a spouse or
former spouse who is the alternate payee under a qualified domestic relations
order as defined in Code Section 414(p) will be treated as the Participant.
<PAGE> 117
SUMMARY OF MATERIAL MODIFICATIONS
Your Employer has amended your retirement plan. This a summary of the
modifications that were made. It should be read in conjunction with the
Summary Plan Description that has already been distributed to you.
1. Compensation
Effective as of the first day of the 1994 Plan Year, the definition of
Compensation has been modified to exclude compensation in excess of
$150,000.
2. Treatment of Distributions from Your Plan
Whenever you receive a distribution from your Plan, it will normally
be subject to income taxes. You may, however, reduce, or defer
entirely, the tax due on your distribution through use of one of the
following methods:
(a) The rollover of all or a portion of the distribution to an
individual Retirement Account (IRA) or another qualified
employer plan. This will result in no tax being due until you
begin withdrawing funds from the IRA or other qualified
employer plan. The rollover of the distribution, however, MUST
be made within strict time frames (normally, within 60 days
after you receive your distribution). Under certain
circumstances all or a portion of a distribution may not for
this rollover treatment. In addition, most distributions made
after December 31, 1992 will be subject to mandatory federal
income tax withholding at a rate of 20%. This will reduce the
amount you actually receive. For this reason, if you wish to
rollover all or a portion of your distribution amount, the
direct transfer option described in paragraph (b) below would
be the better choice.
(b) You may request for most distributions made after December 31,
1992, that a direct transfer of all or a portion of your
distribution amount be made to either an Individual Retirement
Account (IRA) or another qualified employer plan willing to
accept the transfer. A direct transfer will result in no tax
being due until you withdraw funds from the IRA or other
qualified employer plan. Like the rollover, under certain
circumstances all or a portion of the amount to be distributed
may not qualify for this direct transfer. If you elect to
actually receive the distribution rather than request a direct
transfer, then in most cases 20% of the distribution amount
will be withheld for federal income tax purposes.
(c) The election of favorable income tax treatment under "10-year
forward averaging", "5-year forward averaging" or, if you
qualify, "capital gains" method of taxation.
WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO
YOU A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES
WHICH DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE
VERY COMPLEX. YOU SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE
MAKING A CHOICE.
<PAGE> 118
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Date: APR 19 1993 Employer Identification Number:
52 1053735
File Folder Number:
COASTAL PENSION SERVICES INC 521000506
C/O ROBERT M RICHTER Person to Contact:
CORBEL & CO EP/CO CUSTOMER SERVICE UNIT
1660 PRUDENTIAL DRIVE Contact Telephone Number:
JACKSONVILLE, FL 32207 (410) 962-6088
Plan Name:
NONSTANDARDIZED PROFIT-SHARING
Plan Number: 001
Basic Plan Document Number:
01
Letter Serial Number:
D8625079
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under section 401(a) or 403(a) of the Internal Revenue Code. This letter
relates only to the amendment to the form of the plan. It is not a
determination of any other amendment or of the form of the plan as a whole, or
on the effect of other federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter,
a copy of the approved form of the plan, and any approved amendments and
related documents to each key District Director of the Internal Revenue Service
in whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). To adopt the form of the plan, the employer should apply for a
determination letter by filing an application with the key District Director of
the Internal Revenue Service on Form 5307, Application for Determination of
Adopters of Master or Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1
C.B. 801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated
in your Power of Attorney.
<PAGE> 119
-2-
COASTAL PENSION SERVICES INC
If you have any questions on our processing of this case, please call
the above telephone number. If you write, please provide your telephone number
and the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosures(s)
Publication 1488
<PAGE> 120
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Date: APR 19 1993 Employer Identification Number:
52 1053735
File Folder Number:
COASTAL PENSION SERVICES INC 521000506
C/O ROBERT M RICHTER Person to Contact:
CORBEL & CO EP/CO CUSTOMER SERVICE UNIT
1660 PRUDENTIAL DRIVE Contact Telephone Number:
JACKSONVILLE, FL 32207 (410) 962-6058
Plan Name:
STANDARDIZED PROFIT SHARING
Plan Number: 002
Basic Plan Document Number:
01
Letter Serial Number:
D7625080
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under sections 401(a) or 403(a) of the Internal Revenue Code. This letter
relates only to the amendment to the form of the plan. It is not a
determination on the acceptability of any other amendment or of the form of the
plan as a whole, or on the effect of other Federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter,
a copy of the approved form of the plan, and any approved amendments and
related documents to each key District Director of the Internal Revenue Service
in whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination on whether an employer's plan qualifies under Code section
401(a). However, an employer who adopts this plan will be considered to have a
plan qualified under Code section 401(a) provided all the terms of the plan are
followed and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees.
Except as stated below, the key District Director will not issue a
determination letter for this plan.
This letter does not apply to the form of the plan for purposes of
Code section 401(a)(16) if: (1) an employer ever maintained another qualified
plan for one or more employees who are covered by the plan, other than a
specified paired plan within the meaning of section 4.12 of Rev. Proc. 89-13,
1989-1 C.B. 801; or (2) after December 31, 1985, the employer maintained a
welfare benefit fund described in Code section 419(e), which provides
postretirement medical benefits allocated to separate accounts for key
employees as defined in Code section 419(d)(3).
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1
C.B.
<PAGE> 121
-2-
COASTAL PENSION SERVICES INC
801, you application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
An employer that has adopted a standardized plan may not rely on the
letter with respect to: (1) whether any amendment or series of amendment is
nondiscriminatory in effect; or (2) whether the plan satisfies the effective
availability requirement of Q & A - 2(a)(3) of section 401(a)-4 of the
regulations with respect to any benefit, right or feature; or (3) whether any
provision or amendment granting past service credit has the effect of
discriminating significantly in favor of highly compensated employees, except
to the extent the provision or amendment satisfies the safe harbor in
1.401(a)-5 of the proposed regulations and is not part of a pattern of
amendments that discriminates in favor of highly compensated employees.
An employer that has adopted a standardized plan as an amendment to a
plan other than a standardized plan may not rely on this letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of Reg. 1.401(a)-4 Q &
A-2(a)(2)(ii).
The employer may request a determination: (1) as to whether the plan,
considered with all related qualified plans and, if appropriate, welfare
benefit funds, satisfies the requirements of Code section 401(a)(16) as to
limitations on benefits and contributions in Code section 418; (2) regarding
the nondiscriminatory effect of grants of past service; and (3) with respect
to whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
We have sent a copy of this letter to your representative as indicated
in your power of attorney.
<PAGE> 122
-3-
COASTAL PENSION SERVICES INC
If you have any questions on the IRS processing on this case, please
call the above telephone number. If you write, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosure(s)
Publication 1488
<PAGE> 123
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Date: APR 19 1993 Employer Identification Number:
52 1053735
File Folder Number:
COASTAL PENSION SERVICES INC 521000506
C/O ROBERT M RICHTER Person to Contact:
CORBEL & CO EP/EO CUSTOMER SERVICE UNIT
1660 PRUDENTIAL DRIVE Contact Telephone Number:
JACKSONVILLE, FL 32207 (410) 962-6058
Plan Name:
NONSTANDARDIZED MONEY PURCHASE
Plan Number: 003
Basic Plan Document Number:
01
Letter Serial Number:
D8625076
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under section 401(a) or 403(a) of the Internal Revenue Code. This letter
relates only to the amendment to the form of the plan. It is not a
determination of any other amendment or of the form of the plan as a whole, or
on the effect of other federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter,
a copy of the approved form of the plan, and any approved amendments and
related documents to each key District Director of the Internal Revenue Service
in whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). To adopt the form of the plan, the employer should apply for a
determination letter by filing an application with the key District Director of
the Internal Revenue Service on Form 5307, Application for Determination for
Adopters of Master or Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1
C.B. 801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated
in your Power of Attorney.
<PAGE> 124
-2-
COASTAL PENSION SERVICES INC
If you have any questions on our processing of this case, please call
the above telephone number. If you write, please provide your telephone number
and the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosures(s)
Publication 1488
<PAGE> 125
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Date: APR 19 1993 Employer Identification Number:
52 1053735
File Folder Number:
COASTAL PENSION SERVICES INC 521000506
C/O ROBERT M RICHTER Person to Contact:
CORBEL & CO EP/CO CUSTOMER SERVICE UNIT
1660 PRUDENTIAL DRIVE Contact Telephone Number:
JACKSONVILLE, FL 32207 (410) 962-6058
Plan Name:
STANDARDIZED MONEY PURCHASE
Plan Number: 004
Basic Plan Document Number:
01
Letter Serial Number:
D7625077
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under sections 401(a) or 403(a) of the Internal Revenue Code. This letter
relates only to the amendment to the form of the plan. It is not a
determination on the acceptability of any other amendment or of the form of the
plan as a whole, or on the effect of other Federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter,
a copy of the approved form of the plan, and any approved amendments and
related documents to each key District Director of the Internal Revenue Service
in whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination on whether an employer's plan qualifies under Code section
401(a). However, an employer who adopts this plan will be considered to have a
plan qualified under Code section 401(a) provided all the terms of the plan are
followed and the eligibility requirements and contributions or benefit
provisions are not more favorable for highly compensated employees than for
other employees.
Except as stated below, the key District Director will not issue a
determination letter for this plan.
This letter does not apply to the form of the plan for purposes of
Code section 401(a)(16) if: (1) an employer ever maintained another qualified
plan for one or more employees who are covered by the plan, other than a
specified paired plan within the meaning of section 4.12 of Rev. Proc. 89-13,
1989-1 C.B. 801; or (2) after December 31, 1985, the employer maintained a
welfare benefit fund described in Code section 419(e), which provides
postretirement medical benefits allocated to separate accounts for key
employees as defined in Code section 419(d)(3).
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1
C.B.
<PAGE> 126
-2-
COASTAL PENSION SERVICES INC
801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
An employer that has adopted a standardized plan may not rely on this
letter with respect to: (1) whether any amendment or series of amendments is
nondiscriminatory in effect; or (2) whether the plan satisfies the effective
availability requirement of Q & A - 2(a)(3) of section 401(a)-4 of the
regulations with respect to any benefit, right or feature; or (3) whether any
provision or amendment granting past service credit has the effect of
discriminating significantly in favor of highly compensated employees, except
to the extent the provision or amendment satisfies the safe harbor in 401(a)-5
of the proposed regulations and is not part of a pattern of amendments that
discriminates in favor of highly compensated employees.
An employer that has adopted a standardized plan as an amendment to a
plan other than a standardized plan may not rely on this letter with respect to
whether a benefit, right of other feature that is prospectively eliminated
satisfies the current availability requirements of Reg. 1.401(a) 4 Q & A-
2(a)(2)(ii).
The employer may request a determination: (i) as to whether the plan,
considered with all related qualified plans and, if appropriate, welfare
benefit funds, satisfies the requirements of Code section 401(a)(16) as to
limitations on benefits and contributions in Code section 416; (2) regarding
the nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
We have sent a copy of this letter to your representative as
indicated in your power of attorney.
<PAGE> 127
-3-
COASTAL PENSION SERVICES INC
If you have any questions on the IRS processing of this case, please
call the above telephone number. If you write, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosure(s)
Publication 1488
<PAGE> 128
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: APR 19 1993 52-1053785
File Folder Number:
COASTAL PENSION SERVICES INC 52-000506
C/O ROBERT M RICHTER Person to Contact:
CORBEL & CO EP/EO CUSTOMER SERVICE UNIT
1660 PRUDENTIAL DRIVE Contact Telephone Number:
JACKSONVILLE, FL 32207 (410) 962-6058
Plan Name:
NONSTANDARDIZED 401K
Plan Number: 005
Basic Plan Document Number:
01
Letter Serial Number:
D8525076
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under section 401(a) or 403(a) of the Internal Revenue Code. This letter
relates only to the amendment to the form of the plan. It is not a
determination of any other amendment or of the form of the plan as a whole,
or on the effect of other federal or local statutes.
You must furnish a copy of this letter and the enclosed publication
to each employer who adopts this plan. You must also send a copy of this
letter, a copy of the approved form of the plan, and any approved amendments
and related documents to each key District Director of the Internal Revenue
Service in whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). To adopt the form of the plan, the employer should apply for a
determination letter by filing an application with the key District Director of
the Internal Revenue Service on Form 5307, Application for Determination for
Adopters of Master or Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-18, 1989-1
C.B. 801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated
in your Power of Attorney.
<PAGE> 129
-2-
COASTAL PENSION SERVICES INC
If you have any questions on our processing of this case, please call
the above telephone number. If you write, please provide your telephone number
and the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosure(s)
Publication 1488
<PAGE> 130
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: APR 19 1993 52-1053785
File Folder Number:
COASTAL PENSION SERVICES INC 52-000506
C/O ROBERT M RICHTER Person to Contact:
CORBEL & CO EP/EO CUSTOMER SERVICE UNIT
1660 PRUDENTIAL DRIVE Contact Telephone Number:
JACKSONVILLE, FL 32207 (410) 962-6058
Plan Name:
STANDARDIZED 401K
Plan Number: 006
Basic Plan Document Number:
01
Letter Serial Number:
D7625075
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under sections 401(a) or 403(a) of the Internal Revenue Code. This letter
relates only to the amendment to the form of the plan. It is not a
determination on the acceptability of any other amendment or of the form of the
plan as a whole, or on the effect of other Federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter,
a copy of the approved form of the plan, and any approved amendments and
related documents to each key District Director of the Internal Revenue Service
in whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination on whether an employer's plan qualifies under Code section
401(a). However, an employer who adopts this plan will be considered to have a
plan qualified under Code section 401(a) provided all the terms of the plan are
followed and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employers than for
other employees.
Except as stated below, the key District Director will not issue a
determination letter for this plan.
This letter does not apply to the form of the plan for purposes of
Code section 401(a)(16) if: (1) an employer ever maintained another qualified
plan for one or more employees who are covered by the plan, other than a
specified paired plan within the meaning of section 4.12 of Rev. Proc. 89-13,
1989-1 C.B. 801; or (2) after December 31, 1985, the employer maintained a
welfare benefit fund described in Code section 419(e), which provides
postretirement medical benefits allocated to separate accounts for key
employees as defined in Code section 419(d)(3).
For purposes of sections 15.02 and 5.03 of Rev. proc. 89-13, 1989-1
C.B.
<PAGE> 131
-2-
COASTAL PENSION SERVICES INC
801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
An employer that has adopted a standardized plan may not rely on this
letter with respect to: (1) whether any amendment or series of amendments is
nondiscriminatory in effect; or (2) whether the plan satisfies the effective
availability requirement of Q & A - 2(a)(3) of section 401(a)-4 of the
regulations with respect to any benefit, right or feature; or (3) whether any
provision or amendment granting past service credit has the effect of
discriminating significantly in favor of highly compensated employees, except
to the extent the provision or amendment satisfies the safe harbor in
1.401(a)-5 of the proposed regulations and is not part of a pattern of
amendments that discriminates in favor of highly compensated employees.
An employer that has adopted a standardized plan as an amendment to a
plan other than a standardized plan may not rely on this letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of Reg. 1.401(a)-4 Q &
A-2(a)(2)(ii).
The employer may request a determination: (1) as to whether the plan,
considered with all related qualified plans and, if appropriate, welfare
benefit funds, satisfies the requirements of Code section 401(a)(16) as to
limitations on benefits and contributions in Code section 415; (2) regarding
the nondiscriminatory effect of grants of past service; and (3) with respect
to whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
We have sent a copy of this letter to your representative as indicated
in your power of attorney.
<PAGE> 132
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COASTAL PENSION SERVICES INC
If you have any questions on the IRS processing of this case, please
call the above telephone number. If you write, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
District Director
Enclosure(s)
Publication 1488
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Strayer Education, Inc. on Form S-8 of our report dated May 15, 1996, on our
audit of the balance sheet of Strayer Education, Inc. as of May 15, 1996, and
our report dated May 14, 1996, on our audits of the combined balance sheets of
Strayer College, Inc. and Affiliate as of December 31, 1995 and 1994, and the
related combined statements of income, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1995, appearing in the
registration statement on Form S-1 (No. 333-3967) of Strayer Education, Inc.
Coopers & Lybrand L.L.P.
Washington, D.C.
October 3, 1996
<PAGE> 1
EXHIBIT 24
Strayer Education, Inc.
KNOW ALL MEN BY THESE PRESENTS that the undersigned Directors of
Strayer Education, Inc., a Maryland corporation, hereby constitute and appoint
Ron K. Bailey and Harry T. Wilkins, and each of them, the true and lawful
agents and attorneys-in-fact of the undersigned with full power and authority in
said agents and attorneys-in-fact, and any one or more of them, to sign for the
undersigned and in their respective names as Directors of the Corporation the
Registration Statement on Form S-8 of the Corporation to be filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933, as amended, and any amendment or amendments to such Registration
Statement, relating to securities of the Corporation acquired under or to be
offered under the the Strayer College, Inc. 401(k) Profit Sharing Plan, and the
undersigned hereby ratify and confirm all acts taken by such agents and
attorneys-in-fact, or anyone or more of them, as herein authorized.
Date: September 28, 1996
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
/s/ RON K. BAILEY Director
- -----------------------------------
Ron K. Bailey
/s/ STANLEY G. ELMORE Director
- -----------------------------------
Stanley G. Elmore
/s/ TODD A. MILANO Director
- -----------------------------------
Todd A. Milano
/s/ JENNIE D. SEATON Director
- -----------------------------------
Jennie D. Seaton
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
/s/ ROLAND CAREY Director
- -----------------------------------
Roland Carey
/s/ DONALD T. BENSON Director
- -----------------------------------
Donald T. Benson
/s/ G. THOMAS WAITE Director
- -----------------------------------
G. Thomas Waite
/s/ DONALD STODDARD Director
- -----------------------------------
Donald Stoddard
/s/ CHARLOTTE BEASON Director
- -----------------------------------
Charlotte Beason
</TABLE>
-2-
