AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
CORNELL CORRECTIONS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 4801 WOODWAY, SUITE 400W
(State or Other Jurisdiction of HOUSTON, TEXAS
Incorporation or Organization) (Address of Principal Executive Offices)
76-0433642 77056
(I.R.S. Employer (Zip Code)
Identification No.)
- --------------------------------------------------------------------------------
CORNELL CORRECTIONS, INC.
401(K) PROFIT SHARING PLAN
(Full title of the plan)
- --------------------------------------------------------------------------------
DAVID M. CORNELL
CHIEF EXECUTIVE OFFICER
CORNELL CORRECTIONS, INC.
4801 WOODWAY, SUITE 400W
HOUSTON, TEXAS 77056
(Name and Address of Agent for Service)
Telephone Number, Including Area Code,
of Agent for Service:
(713) 623-0790
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================= ================ ===================== ================== ==============
Proposed
Title of Amount Proposed Maximum Maximum Amount of
Securities to be to be Offering Price Per Aggregate Registration
Registered Registered Share(1) Offering Price(1) Fee
========================= ================ ===================== ================== ==============
<S> <C> <C> <C> <C>
Common Stock (par value
$.001 per share) 200,000 $ 9.1875 $ 1,837,500.00 $557.00
========================= ================ ===================== ================== ==============
</TABLE>
(1) Estimated in accordance with Rule 457(c) and (h) solely for the purpose
of calculating the registration fee and based upon the average of the
high and low sales price of the shares of Common Stock of Cornell
Corrections, Inc. quoted on the American Stock Exchange on December 24,
1996.
- --------------------------------------------------------------------------------
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document(s) containing the information concerning the Cornell
Corrections, Inc. 401(k) Profit Sharing Plan (the "Plan") specified in Items 1
and 2 of Part I of Form S-8 will be provided to participants under the Plan as
specified by Rule 428 of the Securities Act of 1933, as amended (the "Securities
Act") and, in accordance with the requirements of Part I of Form S-8 of the
Securities Act, are not being filed with the Securities and Exchange Commission
(the "Commission") as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 under the Securities Act. The
registrant shall maintain a file of such documents in accordance with the
provisions of Rule 428. Upon request, the registration shall furnish to the
Commission or its staff a copy or copies of all of the documents included in
such file.
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which the registrant, Cornell Corrections,
Inc. (the "Company") has filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (File No. 1-14472), are incorporated by reference and shall be
deemed to be a part hereof:
1. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996;
2. The Company's prospectus dated October 3, 1996, as filed with the
Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended
(the "Securities Act"); and
3. The description of the Company's common stock, par value $.001 per
share ("Common Stock") contained in the Company's Registration Statement on Form
8-A, as filed with the Commission on September 10, 1996, pursuant to the
Exchange Act.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement, in an amendment
hereto or in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed supplement to
this Registration Statement or in any document that also is incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
The audited financial statements included in the Company's prospectus
dated October 3, 1996 and incorporated by reference in this Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm as experts in accounting and auditing.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
DELAWARE GENERAL CORPORATION LAW
Section 145(a) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in subsections (a) and (b) of Section 145. Such determination shall be
made (1) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no such
directors, by independent legal counsel in a written opinion, or (3) by the
stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in Section 145. Such
expenses (including attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
Section 145(f) of the DGCL states that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of Section 145 shall not be deemed exclusive of any other rights to
which
II-2
<PAGE>
those seeking indemnification or advancement of expenses may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of Section 145.
Section 145(j) of the DGCL states that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
CERTIFICATE OF INCORPORATION
The Restated Certificate of Incorporation of the Company provides that
a director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit. If the DGCL is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Company, in addition to the limitation on
personal liability described above, shall be limited to the fullest extent
permitted by the amended DGCL. Further, any repeal or modification of such
provision of the Restated Certificate of Incorporation by the stockholders of
the Company shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Company existing at
the time of such repeal or modification. Additionally, the Restated Certificate
of Incorporation provides that the Company will indemnify its officers and
directors to the fullest extent permitted by the DGCL.
BYLAWS
The Amended and Restated Bylaws of the Company (the "Bylaws") provide
that each person who was or is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or she or a
person of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Company or is or was serving or has agreed
to serve at the request of the Company as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Company to the fullest extent authorized by the DGCL, as the same exists or may
thereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) against all expense, liability and loss (including without
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue as
to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity thereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Company shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Company. The
Bylaws further provide that the right to indemnification conferred thereby shall
be a contract right and shall include the right to be paid by the Company the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the DGCL requires, the payment of such
expenses incurred by a current, former or proposed director or officer in his or
her capacity as a director or officer or proposed director or officer (and not
in any other capacity in which service was or is or has been agreed to be
rendered
II-3
<PAGE>
by such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Company of an undertaking,
by or on behalf of such indemnified person, to repay all amounts so advanced if
it shall ultimately be determined that such indemnified person is not entitled
to be indemnified under the Bylaws or otherwise. In addition, the Bylaws provide
that the Company may, by action of its board of directors, provide
indemnification to employees and agents of the Company, individually or as a
group, with the same scope and effect as the indemnification of directors and
officers provided for in the Bylaws.
INDEMNIFICATION AGREEMENTS
The Company has entered into Indemnification Agreements with each of
its officers and directors. The Indemnification Agreements provide that the
Company shall indemnify the officer or director and hold him harmless from any
losses and expenses which, in type or amount, are not insured under the
directors and officers' liability insurance maintained by the Company, and
generally indemnifies the officer or director against losses and expenses as a
result of a claim or claims made against him for any breach of duty, neglect,
error, misstatement, misleading statement, omission or other act done or
wrongfully attempted by the officer or director or any of the foregoing alleged
by any claimant or any claim against the officer or director solely by reason of
him being an officer or director of the Company, subject to certain exclusions.
The Indemnification Agreements also provide certain procedures regarding the
right to indemnification and for the advancement of expenses.
UNDERWRITING AGREEMENT
The Underwriting Agreement dated October 3, 1996 among the Company, the
Selling Stockholders referred to therein and the underwriters listed in Schedule
A thereto, a form of which Underwriting Agreement was filed as Exhibit 1.1 to
the Company's Registration Statement on Form S-1 (Registration No. 33-08243),
provides for the indemnification of the directors and officers of the Company in
certain circumstances.
INSURANCE
The Company has obtained a policy of liability insurance to insure its
officers and directors against losses resulting from certain acts committed by
them in their capacities as officers and directors of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
The following documents are filed as a part of this registration
statement or incorporated by reference herein:
Exhibit
No. Description
--- -----------
4.1* -- Form of Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No.
333-08243))
4.2* -- Form of Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (Registration No.
333-08243))
4.3* -- Form of Certificate representing Common Stock (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-1 (Registration No. 333-08243))
II-4
<PAGE>
4.4 -- Cornell Corrections, Inc. 401(k) Profit Sharing Plan
23 -- Consent of Arthur Andersen LLP
24 -- Powers of Attorney
* Incorporated herein by reference as indicated.
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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act
if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that the undertakings set forth in paragraphs (a)(1)(i)
and (a)(1)(ii) above 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 the 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, where applicable, each filing of an employee benefit 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) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, 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
II-5
<PAGE>
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to submit the Plan and
any amendment thereto to the Internal Revenue Service (the "IRS") in a timely
manner and to make all changes required by the IRS in order to qualify the Plan
under Section 401 of the Internal Revenue Code.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on December 31, 1996.
CORNELL CORRECTIONS, INC.
By:/s/ DAVID M. CORNELL
David M. Cornell
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on December 31, 1996.
Signature Title
/s/ DAVID M. CORNELL President, Chief Executive Officer and Director
David M. Cornell (Principal Executive Officer)
/s/ STEVEN W. LOGAN Chief Financial Officer, Treasurer and Secretary
Steven W. Logan (Principal Financial and Accounting Officer)
/s/ CAMPBELL A. GRIFFIN, JR.* Director
Campbell A. Griffin, Jr.
/s/ RICHARD T. HENSHAW III * Director
Richard T. Henshaw III
/s/ PETER A. LEIDEL * Director
Peter A. Leidel
/s/ TUCKER TAYLOR * Director
Tucker Taylor
* By: /s/ DAVID M. CORNELL
David M. Cornell
Attorney-in-Fact
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the trustees
of the Cornell Corrections, 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 Houston, State of Texas, on December
31, 1996.
/s/ DAVID M. CORNELL
David M. Cornell
TRUSTEE, CORNELL CORRECTIONS, INC.
401(K) PROFIT SHARING PLAN
/s/ STEVEN W. LOGAN
Steven W. Logan
TRUSTEE, CORNELL CORRECTIONS, INC.
401(K) PROFIT SHARING PLAN
/s/ MARVIN H. WIEBE
Marvin H. Wiebe
TRUSTEE, CORNELL CORRECTIONS, INC.
401(K) PROFIT SHARING PLAN
II-8
<PAGE>
EXHIBIT INDEX
Exhibit DESCRIPTION
NO.
4.1* -- Form of Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No.
333-08243))
4.2* -- Form of Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (Registration No.
333-08243))
4.3* -- Form of Certificate representing Common Stock (incorporated by
reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-1 (Registration No. 333-08243))
4.4 -- Cornell Corrections, Inc. 401(k) Profit Sharing Plan
23 -- Consent of Arthur Andersen LLP
24 -- Powers of Attorney
- --------------------------------------
* INCORPORATED HEREIN BY REFERENCE AS INDICATED.
II-9
EXHIBIT 4.4
COMPREHENSIVE NONSTANDARDIZED SAFE HARBOR 401(K) PROFIT SHARING PLAN
ADOPTION AGREEMENT
================================================================================
SECTION 1. EMPLOYER INFORMATION
Name of Employer CORNELL CORRECTIONS, INC.
Address 4801 WOODWAY, SUITE 400W
City HOUSTON State TX Zip 77056
Telephone 713-623-0790 Employer's Federal Tax Identification Number 76-0433642
Type of Business (CHECK ONLY ONE) [ ]Sole Proprietorship [ ]Partnership
[X] C Corporation [ ]S Corporation
[ ] Other (SPECIFY)
[X] Check here if Related Employers may participate in this Plan and attach a
Related Employer Participation Agreement for each Related Employer who will
participate in this Plan.
Business Code 8361
Name of Plan CORNELL CORRECTIONS, INC. 401(K) PROFIT SHARING PLAN
Name of Trust (IF DIFFERENT FROM PLAN NAME)
Plan Sequence Number 001 (ENTER 001 IF THIS IS THE FIRST QUALIFIED PLAN THE
EMPLOYER HAS EVER MAINTAINED, ENTER 002 IF IT IS THE
SECOND, ETC.)
Trust Identification Number(IF APPLICABLE) ____ Account Number(Optional) 777027
SECTION 2. EFFECTIVE DATES
COMPLETE PARTS A AND B
PART A. GENERAL EFFECTIVE DATES (CHECK AND COMPLETE OPTION I OR 2):
Option 1: [ ] This is the initial adoption of a profit sharing plan
by the Employer.
The Effective Date of this Plan is_________________.
NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF
THE PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT
IS SIGNED.
Option 2: [X] This is an amendment and restatement of an existing
profit sharing plan (a Prior Plan).
The Prior Plan was initially effective on 01-01-1993.
The Effective Date of this amendment and restatement
is 01-01-1997.
NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF
THE PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT
IS SIGNED.
PART B. SPECIFIC EFFECTIVE DATES:
The provisions of the Plan will generally be effective as of the
Effective Date specified in Section 2, Part A. However, the following
provisions will be effective on the dates indicated below. (SPECIFY
EFFECTIVE DATE ONLY IF LATER THAN THE GENERAL EFFECTIVE DATE
DESCRIBED IN SECTION 2, PART A):
PROVISION EFFECTIVE DATE
--------- --------------
1. Commencement of Elective Deferrals* ______________
2. Matching Contributions (Section 7) ______________
3. Qualified Nonelective Contributions
(Section 8) ______________
4. Qualified Matching Contributions
(Section 9) ______________
5. In-Service Withdrawals (Section 15,
Part A, Item 6) ______________
6. Hardship Withdrawals of Elective
Deferrals (Section 15, Part A, Item 5) ______________
7. Hardship Withdrawals (Section 15,
Part A, Item 8) ______________
8. Loans (Section 17, Item A) ______________
9. Participant Direction of Investments
(Section 18) ______________
*NOTE: ELECTIVE DEFERRALS MAY COMMENCE NO EARLIER THAN THE DATE THIS
ADOPTION AGREEMENT IS SIGNED BECAUSE ELECTIVE DEFERRALS CANNOT BE
MADE RETROACTIVELY.
<PAGE>
Page 2
SECTION 3. RELEVANT TIME PERIODS
COMPLETE PARTS A THROUGH D
PART A. EMPLOYER'S FISCAL YEAR:
The Employer's fiscal year ends (SPECIFY MONTH AND DATE) 12-31
PART B. PLAN YEAR MEANS:
OPTION 1: [ ] The 12-consecutive month period which coincides
with the Employer's fiscal year.
OPTION 2: [X] The calendar year.
OPTION 3: [ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
If the initial Plan Year is less than 12 months (a short Plan
Year) specify such Plan Year's beginning and ending dates
_______________________________________________________________
PART C. LIMITATION YEAR MEANS:
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year.
OPTION 3: [ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART D. MEASURING PERIOD FOR VESTING:
Years of Vesting Service shall be measured over the following
12-consecutive month period:
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The 12-consecutive month period
commencing with the Employee's Employment
Commencement Date and each successive
12-month period commencing on the
anniversaries of the Employee's Employment
Commencement Date.
OPTION 3: [ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
SECTION 4. ELIGIBILITY REQUIREMENTS
COMPLETE PARTS A THROUGH G
PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENT:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing
Participant in the Plan (and thus be eligible to make Elective
Deferrals) after completing 1 (ENTER 0, 1 OR ANY FRACTION LESS
THAN 1) Years of Eligibility Service.
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions,
if applicable) will be made to the Plan, a Contributing
Participant will be eligible to receive Matching Contributions
(or Qualified Matching Contributions, if applicable) after
completing 1 (ENTER 0, 1, 2 OR ANY FRACTION LESS THAN 2) Years
of Eligibility Service.
<PAGE>
Page 3
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan
for purposes of receiving an allocation of any Employer Profit
Sharing Contribution made pursuant to Section 11 of the Adoption
Agreement after completing 1 (ENTER 0, 1, 2 OR ANY FRACTION LESS
THAN 2) Years of Eligibility Service.
NOTE: IF MORE THAN 1 YEAR IS SELECTED FOR ITEM 2 OR ITEM 3, THE
IMMEDIATE 100% VESTING SCHEDULE OF SECTION 13 WILL AUTOMATICALLY
APPLY FOR CONTRIBUTIONS DESCRIBED IN SUCH ITEM. IF ANY ITEM IS LEFT
BLANK, THE YEARS OF ELIGIBILITY SERVICE REQUIRED FOR SUCH ITEM WILL
BE DEEMED TO BE 0. IF A FRACTION IS SELECTED, AN EMPLOYEE WILL NOT BE
REQUIRED TO COMPLETE ANY SPECIFIED NUMBER OF HOURS OF SERVICE TO
RECEIVE CREDIT FOR A FRACTIONAL YEAR. IF A SINGLE ENTRY DATE IS
SELECTED IN SECTION 4, PART G FOR AN ITEM, THE YEARS OF ELIGIBILITY
SERVICE REQUIRED FOR SUCH ITEM CANNOT EXCEED 1 1/2 (1/2 FOR ELECTIVE
DEFERRALS).
PART B. AGE REQUIREMENT:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing
Participant (and thus be eligible to make Elective Deferrals)
after attaining age ______ (NO MORE THAN 21).
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions,
if applicable) will be made to the Plan, a Contributing
Participant will be eligible to receive Matching Contributions
(or Qualified Matching Contributions, if applicable) after
attaining age ____ (NO MORE THAN 21).
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan
for purposes of receiving an allocation of any Employer Profit
Sharing Contribution made pursuant to Section 11 of the Adoption
Agreement after attaining age _____ (NO MORE THAN 21).
NOTE: IF ANY OF THE ABOVE ITEMS IN THIS SECTION 4, PART B IS LEFT
BLANK, IT WILL BE DEEMED THERE IS NO AGE REQUIREMENT FOR SUCH ITEM.
IF A SINGLE ENTRY DATE IS SELECTED IN SECTION 4, PART G FOR AN ITEM,
NO AGE REQUIREMENT CAN EXCEED 20 1/2 FOR SUCH ITEM.
PART C. EMPLOYEES EMPLOYED AS OF EFFECTIVE DATE:
1. ELECTIVE DEFERRALS.
Will all Employees employed as of the date that Elective
Deferrals may commence as specified in Section 2, Part B who
have not otherwise met the Years of Eligibility Service and age
requirements specified above for Elective Deferrals be
considered to have met those requirements as of the Elective
Deferral commencement date? [ ] Yes X No
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions,
if applicable) will be made to the Plan, will all Employees
employed as of the date that Elective Deferrals may commence as
specified in Section 2, Part B who have not otherwise met the
Years of Eligibility Service and age requirements specified
above for Matching Contributions be considered to have met those
requirements as of the Elective Deferral commencement date?
Yes [X] No [ ]
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
Will all Employees employed as of the Effective Date of this
Plan who have not otherwise met the Years of Eligibility Service
and age requirements specified above for Employer Profit Sharing
Contributions be considered to have met those requirements as of
the Effective Date? [ ] Yes [X] No
NOTE: IF A BOX IS NOT CHECKED FOR ANY ITEM IN THIS SECTION 4,
PART C, "NO" WILL BE DEEMED TO BE SELECTED FOR THAT ITEM.
<PAGE>
Page 4
PART D. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES:
1. ELECTIVE DEFERRALS.
All Employees will be eligible to become Contributing
Participants (and thus eligible to make Elective Deferrals except:
a. [X] Those Employees included in a unit of Employees covered
by a collective bargaining agreement between the Employer
and Employee representatives, if retirement benefits were
the subject of good faith bargaining and if two percent or
less of the Employees who are covered pursuant to that
agreement are professionals as defined in Section
1.410(b)-9 of the regulations. For this purpose, the term
"employee representatives" does not include any
organization more than half of whose members are Employees
who are owners, officers, or executives of the Employer.
b. [ ] Those Employees who are non-resident aliens (within the
meaning of Section 7701(b)(1)(B) of the Code) and who
received no earned income (within the meaning of Section 91
l(d)(2) of the Code) from the Employer which constitutes
income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has not
executed a Related Employer Participation Agreement.
d. [X] Other (DEFINE) LEASED EMPLOYEES.
2. MATCHING CONTRIBUTIONS.
All Contributing Participants will be eligible to receive
Matching Contributions (or Qualified Matching Contributions) if
applicable, except:
a. [X] Those Employees included in a unit of Employees covered
by a collective bargaining agreement between the Employer
and Employee representatives, if retirement benefits were
the subject of good faith bargaining and if two percent or
less of the Employees who are covered pursuant to that
agreement are professionals as defined in Section
1.410(b)-9 of the regulations. For this purpose, the term
"employee representatives" does not include any
organization more than half of whose members are Employees
who are owners, officers, or executives of the Employer.
b. [ ] Those Employees who are non-resident aliens (within the
meaning of Section 7701(b)(1)(B) of the Code) and who
received no earned income (within the meaning of Section
91l(d)(2) of the Code) from the Employer which constitutes
income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has not executed
a Related Employer Participation Agreement.
d. [X] Other (DEFINE) LEASED EMPLOYEES.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
All Employees will be eligible to become a Participant in the
Plan for purposes of receiving an allocation of any Employer
Profit Sharing Contribution made pursuant to Section 11 of the
Adoption Agreement except:
a. [X] Those Employees included in a unit of Employees covered
by a collective bargaining agreement between the Employer
and Employee representatives, if retirement benefits were
the subject of good faith bargaining and if two percent or
less of the Employees who are covered pursuant to that
agreement are professionals as defined in Section
1.410(b)-9 of the regulations. For this purpose, the term
"employee representatives" does not include any
organization more than half of whose members are Employees
who are owners, officers, or executives of the Employer.
b. [ ] Those Employees who are non-resident aliens (within the
meaning of Section 7701(b)(1)(B) of the Code) and who
received no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer which constitutes
income from sources within the United States (within the
meaning of Section 861 (a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has not executed
a Related Employer Participation Agreement.
d. [X] Other (DEFINE) LEASED EMPLOYEES.
<PAGE>
Page 5
PART E. ELECTION NOT TO PARTICIPATE:
May an Employee or a Participant elect not to participate in this
Plan pursuant to Section 2.08 of the Plan?
OPTION 1: [ ] Yes.
OPTION 2: [X] No
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL BE DEEMED TO BE
SELECTED.
PART F. HOURS REQUIRED FOR ELIGIBILITY PURPOSES:
1. 1000 Hours of Service (NO MORE THAN 1,000) shall be required
to constitute a Year of Eligibility Service.
2. 500 Hours of Service (NO MORE THAN 500 BUT LESS THAN THE
NUMBER SPECIFIED IN SECTION 4, PART F, ITEM 1, ABOVE) must be
exceeded to avoid a Break in Eligibility Service.
3. For purposes of determining Years of Eligibility Service,
Employees shall be given credit for Hours of Service with the
following predecessor employer(s) (COMPLETE IF APPLICABLE)
THE EMPLOYEES OF ANY BUSINESS ACQUIRED BY CORNELL CORRECTIONS,
INC. AND ANY RELATED EMPLOYERS THAT HAVE ADOPTED THE PLAN.
PART G: ENTRY DATES:
1. ELECTIVE DEFERRALS.
The Entry Dates for purposes of making Elective Deferrals shall
be (CHOOSE ONE):
OPTION 1: [X] The first day of the Plan Year and the first day
of the seventh month of the Plan Year.
OPTION 2: [ ] The first day of the Plan Year and the first day
of the fourth, seventh and tenth months of the
Plan Year.
OPTION 3: [ ] The first day of the Plan Year.
OPTION 4: [ ] Other (SPECIFY)
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions)
will be made to the Plan, the Entry Dates for purposes of
Matching Contributions (or Qualified Matching Contributions, if
applicable) shall be (CHOOSE ONE):
OPTION 1: [X] The first day of the Plan Year and the first day
of the seventh month of the Plan Year.
OPTION 2: [ ] The first day of the Plan Year and the first day
of the fourth, seventh and tenth months of the
Plan Year.
OPTION 3: [ ] The first day of the Plan Year.
OPTION 4: [ ] Other (SPECIFY)
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
The Entry Dates for purposes of Employer Profit Sharing
Contributions shall be (CHOOSE ONE):
OPTION 1: [X] The first day of the Plan Year and the first day
of the seventh month of the Plan Year.
OPTION 2: [ ] The first day of the Plan Year and the first day
of the fourth, seventh and tenth months of the
Plan Year.
OPTION 3: [ ] The first day of the Plan Year.
OPTION 4: [ ] Other (SPECIFY)
<PAGE>
Page 6
NOTE: IF NO OPTION IS SELECTED FOR AN ITEM, OPTION 1 WILL BE DEEMED
TO BE SELECTED FOR THAT ITEM. OPTION 3 OR OPTION 4 CAN BE SELECTED
FOR AN ITEM ONLY IF THE ELIGIBILITY REQUIREMENTS AND ENTRY DATES ARE
COORDINATED SUCH THAT EACH EMPLOYEE WILL BECOME A PARTICIPANT IN THE
PLAN NO LATER THAN THE EARLIER OF: (1) THE FIRST DAY OF THE PLAN YEAR
BEGINNING AFTER THE DATE THE EMPLOYEE SATISFIES THE AGE AND SERVICE
REQUIREMENTS OF SECTION 410(A) OF THE CODE; OR (2) 6 MONTHS AFTER THE
DATE THE EMPLOYEE SATISFIES SUCH REQUIREMENTS.
SECTION 5. METHOD OF DETERMINING SERVICE
COMPLETE PART A OR B
PART A. HOURS OF SERVICE EQUIVALENCIES:
Service will be determined on the basis of the method selected below.
Only one method may be selected. The method selected will be applied
to all Employees covered under the Plan. (CHOOSE ONE):
OPTION 1: [X] On the basis of actual hours for which an Employee is
paid or entitled to payment.
OPTION 2: [ ] On the basis of days worked. An Employee will be
credited with 10 Hours of Service if under Section
1.24 of the Plan such Employee would be credited with
at least 1 Hour of Service during the day.
OPTION 3: [ ] On the basis of weeks worked. An Employee will be
credited with 45 Hours of Service if under Section
1.24 of the Plan such Employee would be credited with
at least 1 Hour of Service during the week.
OPTION 4: [ ] On the basis of months worked. An Employee will be
credited with 190 Hours of Service if under Section
1.24 of the Plan such Employee would be credited with
at least 1 Hour of Service during the month.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED. THIS SECTION 5, PART A WILL NOT APPLY IF THE ELAPSED TIME
METHOD OF SECTION 5, PART B IS SELECTED.
PART B. ELAPSED TIME METHOD:
In lieu of tracking Hours of Service of Employees, will the elapsed
time method described in Section 2.07 of the Plan be used? (CHOOSE
ONE)
OPTION 1: [ ] No.
OPTION 2: [ ] Yes.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
SECTION 6. ELECTIVE DEFERRALS
PART A. AUTHORIZATION OF ELECTIVE DEFERRALS:
Will Elective Deferrals be permitted under this Plan? (CHOOSE ONE)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED. COMPLETE THE REMAINDER OF SECTION 6 ONLY IF
OPTION 1 IS SELECTED.
PART B. LIMITS ON ELECTIVE DEFERRALS:
If Elective Deferrals are permitted under the Plan, a Contributing
Participant may elect under a salary reduction agreement to have his
or her Compensation reduced by an amount as described below (CHOOSE
ONE):
OPTION 1: [X] An amount equal to a percentage of the Contributing
Participant's Compensation from 1% to 15% in
increments of 1%.
<PAGE>
Page 7
OPTION 2: [ ] An amount of the Contributing Participant's
Compensation not less than and not more than _______
and not more than _______.
The amount of such reduction shall be contributed to the Plan by the
Employer on behalf of the Contributing Participant. For any taxable
year, a Contributing Participant's Elective Deferrals shall not
exceed the limit contained in Section 402(g) of the Code in effect at
the beginning of such taxable year.
PART C. ELECTIVE DEFERRALS BASED ON BONUSES:
Instead of or in addition to making Elective Deferrals through
payroll deduction, may a Contributing Participant elect to contribute
to the Plan, as an Elective Deferral, part or all of a bonus rather
than receive such bonus in cash? (CHOOSE ONE)
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL BE DEEMED TO BE
SELECTED.
PART D. CEASING ELECTIVE DEFERRALS:
A Contributing Participant may prospectively revoke a salary
reduction agreement to cease Elective Deferrals (CHOOSE ONE):
OPTION 1: [X] As of the first day of any payroll period.
OPTION 2: [ ] As of the first day of any month.
OPTION 3: [ ] As of the first day of any quarter.
OPTION 4: [ ] As of any Entry Date.
OPTION 5: [ ] As of such times established by the Plan
Administrator in a uniform and nondiscriminatory
manner.
OPTION 6: [ ] Other (SPECIFY. MUST BE AT LEAST ONCE PER YEAR.)
NOTE: IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE
SELECTED.
PART E. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS:
A Participant who ceases Elective Deferrals by revoking a salary
reduction agreement may return as a Contributing Participant (CHOOSE
ONE):
OPTION 1: [ ] No sooner than as of the first day of the Plan Year.
OPTION 2: [ ] As of any subsequent Entry Date.
OPTION 3: [ ] As of the first day of any subsequent quarter.
OPTION 4: [X] As of such times established by the Plan Administrator
in a uniform and nondiscriminatory manner.
OPTION 5: [ ] Other (SPECIFY. MUST BE AT LEAST ONCE PER YEAR.)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 8
PART F. CHANGING ELECTIVE DEFERRAL AMOUNTS:
A Contributing Participant may modify a salary reduction agreement to
prospectively increase or decrease the amount of his or her Elective
Deferrals (CHOOSE ONE):
OPTION 1: [ ] As of the first day of any payroll period.
OPTION 2: [ ] As of the first day of any month.
OPTION 3: [ ] As of the first day of any quarter.
OPTION 4: [ ] As of any Entry Date.
OPTION 5: [X] As of such times established by the Plan Administrator
in a uniform and nondiscriminatory manner.
OPTION 6: [ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE
SELECTED.
PART G. CLAIMING EXCESS ELECTIVE DEFERRALS:
Participants who claim Excess Elective Deferrals for the preceding
calendar year must submit their claims in writing to the Plan
Administrator by (CHOOSE ONE):
OPTION 1: [X] March 1.
OPTION 2: [ ] Other (SPECIFY A DATE NOT LATER THAN APRIL 15)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART H. ONE-TIME IRREVOCABLE ELECTIONS:
May an Employee make a one-time irrevocable election, as described in
Section 11.205 of the Plan, upon first becoming eligible to
participate in the Plan to have the Employer make contributions to
the Plan on such Employee's behalf? (CHOOSE ONE)
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL BE DEEMED TO BE
SELECTED.
SECTION 7. MATCHING CONTRIBUTIONS
PART A. AUTHORIZATION OF MATCHING CONTRIBUTIONS:
Will the Employer make Matching Contributions to the Plan on behalf
of Qualifying Contributing Participants? (CHOOSE ONE)
OPTION 1: [X] Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: [ ] Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: [ ] Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: [ ] No.
NOTE: IF NO OPTION IS SELECTED, OPTION 4 WILL BE DEEMED TO BE
SELECTED. COMPLETE THE REMAINDER OF SECTION 7 ONLY IF OPTION 1, 2
OR 3 IS SELECTED.
<PAGE>
Page 9
PART B. MATCHING CONTRIBUTION FORMULA:
If the Employer will make Matching Contributions, then the amount of
such Matching Contributions made on behalf of a Qualifying
Contributing Participant each Plan Year shall be (CHOOSE ONE):
OPTION 1: [ ] An amount equal to _____ % of such Contributing
Participant's Elective Deferral (and/or Nondeductible
Employee Contribution, if applicable).
OPTION 2: [ ] An amount equal to the sum of _____% of the portion of
such Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable) which does not exceed _____% of the
Contributing Participant's Compensation plus _____% of
the portion of such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee Contribution,
if applicable) which exceeds _____% of the Contributing
Participant's Compensation.
OPTION 3: [X] Such amount, if any, equal to that percentage of each
Contributing Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if applicable)
which the Employer, in its sole discretion, determines
from year to year.
OPTION 4: [ ] Other Formula. (SPECIFY)
NOTE: IF OPTION 4 IS SELECTED, THE FORMULA SPECIFIED CAN ONLY ALLOW
MATCHING CONTRIBUTIONS TO BE MADE WITH RESPECT TO A CONTRIBUTING
PARTICIPANT'S ELECTIVE DEFERRALS (AND/OR NONDEDUCTIBLE EMPLOYEE
CONTRIBUTION, IF APPLICABLE).
PART C. LIMIT ON MATCHING CONTRIBUTIONS:
Notwithstanding the Matching Contribution formula specified above, no
Matching Contribution will be made with respect to a Contributing
Participant's Elective Deferrals (and/or Nondeductible Employee
Contributions, if applicable) in excess of or 6 % of such
Contributing Participant's Compensation.
PART D. QUALIFYING CONTRIBUTING PARTICIPANTS:
A Contributing Participant who satisfies the eligibility requirements
described in Section 4 will be a Qualifying Contributing Participant
and thus entitled to share in Matching Contributions for any Plan
Year only if the Participant is a Contributing Participant and
satisfies the following additional conditions (CHECK ONE OR MORE
OPTIONS):
OPTION 1: [X] No Additional Conditions.
OPTION 2: [ ] Hours of Service Requirement. The Contributing
Participant completes at least _____ Hours of Service
during the Plan Year. However, this condition will be
waived for the following reasons (CHECK AT LEAST ONE):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of
Employment after having incurred a Disability.
[ ] The Contributing Participant's Termination of
Employment after having reached Normal Retirement Age.
[ ] This condition will not be waived.
OPTION 3: [ ] Last Day Requirement: The Participant is an Employee of
the Employer on the last day of the Plan Year. However,
this condition will be waived for the following reasons
(CHECK AT LEAST ONE):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of
Employment after having incurred a Disability.
[ ] The Contributing Participant's Termination of
Employment after having reached Normal Retirement Age.
[ ] This condition will not be waived.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 10
SECTION 8. QUALIFIED NONELECTIVE CONTRIBUTIONS
PART A. AUTHORIZATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will the Employer make Qualified Nonelective Contributions to the
Plan? (CHOOSE ONE)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
If the Employer elects to make Qualified Nonelective Contributions,
then the amount, if any, of such contribution to the Plan for each
Plan Year shall be an amount determined by the Employer.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED. COMPLETE THE REMAINDER OF SECTION 8 ONLY IF
OPTION 1 IS SELECTED.
PART B. PARTICIPANTS ENTITLED TO QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions shall be made to
the Individual Accounts of (CHOOSE ONE):
OPTION 1: [X] Only Participants who are not Highly Compensated
Employees.
OPTION 2: [ ] All Participants.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART C. ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions to Participants
entitled thereto shall be made (CHOOSE ONE):
OPTION 1: [X] In the ratio which each Participant's Compensation for
the Plan Year bears to the total Compensation of all
Participants for such Plan Year.
OPTION 2: [ ] In the ratio which each Participant's Compensation not
in excess of __________ for the Plan Year bears to the
total Compensation of all Participants not in excess
of _____________ for such Plan Year.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
PART A. AUTHORIZATION OF QUALIFIED MATCHING CONTRIBUTIONS:
Will the Employer make Qualified Matching Contributions to the Plan
on behalf of Qualifying Contributing Participants? (CHOOSE ONE)
OPTION 1: [X] Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: [ ] Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: [ ] Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: [ ] No.
NOTE: IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE
SELECTED. COMPLETE THE REMAINDER OF SECTION 9 ONLY IF
OPTION 1, 2 OR 3 IS SELECTED.
<PAGE>
Page 11
PART B. QUALIFIED MATCHING CONTRIBUTION FORMULA:
If the Employer will make Qualified Matching Contributions, then the
amount of such Qualified Matching Contributions made on behalf of a
Qualifying Contributing Participant each Plan Year shall be (CHOOSE
ONE):
OPTION 1: [ ] An amount equal to _____% of such Contributing
Participant's Elective Deferral (and/or Nondeductible
Employee Contribution, if applicable).
OPTION 2: [ ] An amount equal to the sum of ______% of the portion of
such Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable) which does not exceed ______% of the
Contributing Participant's Compensation plus ______% of
the portion of such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee Contribution,
if applicable) which exceeds _____% of the Contributing
Participant's Compensation.
OPTION 3: [X] Such amount, if any, as determined by the Employer in
its sole discretion, equal to that percentage of the
Elective Deferrals (and/or Nondeductible Employee
Contribution, if applicable) of each Contributing
Participant entitled thereto which would be sufficient
to cause the Plan to satisfy the Actual Contribution
Percentage tests (described in Section 11.402 of the
Plan) for the Plan Year.
OPTION 4: [ ] Other Formula. (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE
SELECTED.
PART C. PARTICIPANTS ENTITLED TO QUALIFIED MATCHING CONTRIBUTIONS:
Qualified Matching Contributions, if made to the Plan, will be made
on behalf of? (CHOOSE ONE)
OPTION 1: [X] Only Contributing Participants who make Elective
Deferrals who are not Highly Compensated Employees.
OPTION 2: [ ] All Contributing Participants who make Elective
Deferrals.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART D. LIMIT ON QUALIFIED MATCHING CONTRIBUTIONS:
Notwithstanding the Qualified Matching Contribution formula specified
above, the Employer will not match a Contributing Participant's
Elective Deferrals (and/or Nondeductible Employee Contribution, if
applicable) in excess of _________________ or _________________% of
such Contributing Participant's Compensation.
SECTION 10. ADP AND ACP TESTING OPTIONS
PART A. ACP TEST AND ELECTIVE DEFERRALS:
Will Elective Deferrals under this Plan (and any other plan of the
Employer, as provided by regulations) be taken into account, and
included as Contribution Percentage Amounts for purposes of
performing the Average Contribution Percentage (ACP) test? (CHOOSE
ONE):
OPTION 1: [ ] No.
OPTION 2: [X] Yes, in the following amounts (CHOOSE ONE):
SUBOPTION (A): [X] Only such Elective Deferrals that are
needed to meet the Average Contribution
Percentage test.
SUBOPTION (B): [ ] All Elective Deferrals.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 12
PART B. ACP TEST AND QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will Qualified Nonelective Contributions under this Plan (and any
other plan of the Employer, as provided by regulations) be taken into
account, and included as Contribution Percentage Amounts for purposes
of performing the Average Contribution Percentage (ACP) test?
(CHOOSE ONE):
OPTION 1: [ ] No.
OPTION 2: [X] Yes, in the following amounts (CHOOSE ONE):
SUBOPTION (A): [X] Only such Qualified Nonelective
Contributions that are needed to meet
the Average Contribution Percentage
test.
SUBOPTION (B): [ ] All Qualified Nonelective Contributions.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART C. ADP TEST AND QUALIFIED MATCHING CONTRIBUTIONS:
Will Qualified Matching Contributions under this Plan (or any other
plan of the Employer, as provided by regulations) be taken into
account as Elective Deferrals for purposes of calculating Actual
Deferral Percentages when performing the Actual Deferral Percentage
(ADP) test? (CHOOSE ONE)
OPTION 1: [ ] No.
OPTION 2: [X] Yes, in the following amounts (CHOOSE ONE):
SUBOPTION (A): [X] Only such Qualified Matching
Contributions that are needed to meet
the ADP test.
SUBOPTION (B): [ ] All such Qualified Nonelective
Contributions.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART D. CORRECTION OF AGGREGATE LIMIT:
If the Aggregate Limit described in Section 11. 102 of the Plan is
exceeded, the following adjustments will be made in accordance with
Section 11.402(B)(1) of the Plan (CHOOSE ONE):
OPTION 1: [X] The ACP of Highly Compensated Employees will be
reduced.
OPTION 2: [ ] The ADP of Highly Compensated Employees will be
reduced.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
SECTION 11. EMPLOYER PROFIT SHARING CONTRIBUTIONS
Complete Parts A, B and C
PART A. CONTRIBUTION FORMULA (CHOOSE ONE):
OPTION 1: [X] Discretionary Formula. For each Plan Year the Employer
will contribute an amount to be determined from year
to year.
OPTION 2: [ ] Fixed Formula. _____% of the Compensation of all
Qualifying Participants under the Plan for the Plan
Year.
OPTION 3: [ ] Fixed Percent of Profits Formula. ___________% of the
Employer's profits that are in excess of __________.
OPTION 4: [ ] Frozen Plan. This Plan is frozen effective ________
and the Employer will not make additional contributions
to the Plan after such date.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 13
PART B. ALLOCATION FORMULA (CHOOSE ONE):
OPTION 1: [X] Pro Rata Formula. Employer Profit Sharing Contributions
shall be allocated to the Individual Accounts of
Qualifying Participants in the ratio that each
Qualifying Participant's Compensation for the Plan Year
bears to the total Compensation of all Qualifying
Participants for the Plan Year.
OPTION 2: [ ] Flat Dollar Formula. Employer Profit Sharing
Contributions allocated to the Individual Accounts of
Qualifying Participants for each Plan Year shall be the
same dollar amount for each Qualifying Participant.
OPTION 3: [ ] Integrated Formula. Employer Profit Sharing
Contributions shall be allocated as follows (START WITH
STEP 3 IF THIS PLAN IS NOT A TOP-HEAVY PLAN):
Step 1. Employer Profit Sharing Contributions shall
first be allocated pro rata to Qualifying
Participants in the manner described in Section
11, Part B, Option 1. The percent so allocated
shall not exceed 3% of each Qualifying
Participant's Compensation.
Step 2. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 1 shall
be allocated to each Qualifying Participant's
Individual Account in the ratio that each
Qualifying Participant's Compensation for the
Plan Year in excess of the integration level
bears to all Qualifying Participants'
Compensation in excess of the integration
level, but not in excess of 3%.
Step 3. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 2 shall
be allocated to each Qualifying Participant's
Individual Account in the ratio that the sum of
each Qualifying Participant's total
Compensation and Compensation in excess of the
integration level bears to the sum of all
Qualifying Participants' total Compensation and
Compensation in excess of the integration
level, but not in excess of the profit sharing
maximum disparity rate as described in Section
3.01(B)(3) of the Plan.
Step 4. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 3 shall
be allocated pro rata to Qualifying
Participants in the manner described in Section
11, Part B, Option 1.
The integration level shall be (CHOOSE ONE):
SUBOPTION (A): [ ] The Taxable Wage Base.
SUBOPTION (B): [ ] ____________ (A DOLLAR AMOUNT LESS
THAN THE TAXABLE WAGE BASE).
SUBOPTION (C): [ ] ____________ % (NOT MORE THAN 100%)
OF THE TAXABLE WAGE BASE.
NOTE: IF NO OPTION IS SELECTED, SUBOPTION (A) WILL BE
DEEMED TO BE SELECTED.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART C. QUALIFYING PARTICIPANTS:
A Participant will be a Qualifying Participant and thus entitled to
share in the Employer Profit Sharing Contribution for any Plan Year
only if the Participant is a Participant on at least one day of such
Plan Year and satisfies the following additional conditions (CHECK
ONE OR MORE OPTIONS):
OPTION 1: [ ] No Additional Conditions.
OPTION 2: [X] Hours of Service Requirement. The Participant completes
at least 1,000 Hours of Service during the Plan Year.
However, this condition will be waived for the
following reasons (CHECK AT LEAST ONE):
[X] The Participant's Death.
[X] The Participant's Termination of Employment after
having incurred a Disability.
[X] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] This condition will not be waived.
<PAGE>
Page 14
OPTION 3: [X] Last Day Requirement. The Participant is an Employee
of the Employer on the last day of the Plan Year.
However, this condition will be waived for the
following reasons (CHECK AT LEAST ONE):
[X] The Participant's Death.
[X] The Participant's Termination of Employment after
having incurred a Disability.
[X] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] This condition will not be waived.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
SECTION 12. COMPENSATION
COMPLETE PARTS A THROUGH E
PART A. BASIC DEFINITION:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, Compensation will mean all
of each Participant's (CHOOSE ONE):
OPTION 1: [X] W-2 wages.
OPTION 2: [ ] Section 3401(a) wages.
OPTION 3: [ ] 415 safe-harbor compensation.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, Compensation will mean
all of each Participant's (CHOOSE ONE):
OPTION 1: [X] W-2 wages.
OPTION 2: [ ] Section 3401(a) wages.
OPTION 3: [ ] 415 safe-harbor compensation.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions,
Compensation will mean all of each Participant's (CHOOSE ONE):
OPTION 1: [X] W-2 wages.
OPTION 2: [ ] Section 3401(a) wages.
OPTION 3: [ ] 415 safe-harbor compensation.
NOTE: IF NO OPTION IS SELECTED FOR AN ITEM, OPTION 1 WILL BE DEEMED
TO BE SELECTED FOR THAT ITEM.
PART B. MEASURING PERIOD FOR COMPENSATION:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, Compensation shall be
determined over the following applicable period (CHOOSE ONE):
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year ending with or within the Plan
Year.
<PAGE>
Page 15
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, Compensation shall be
determined over the following applicable period (CHOOSE ONE):
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year ending with or within the Plan
Year.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions,
Compensation shall be determined over the following applicable
period (CHOOSE ONE):
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year ending with or within the Plan
Year.
NOTE: IF NO OPTION IS SELECTED FOR AN ITEM, OPTION 1 WILL BE
DEEMED TO BE SELECTED FOR THAT ITEM.
PART C. INCLUSION OF ELECTIVE DEFERRALS:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, does Compensation include
Employer Contributions made pursuant to a salary reduction
agreement which are not includible in the gross income of the
Employee under any of the following Sections of the Code?
(ANSWER "INCLUDED" OR "EXCLUDED" FOR EACH OF THE FOLLOWING
ITEMS.)
<TABLE>
<CAPTION>
<S> <C> <C>
Section 125 (cafeteria plans) [X] Included [ ] Excluded
Section 402(e)(3) (401(k) plans) [X] Included [ ] Excluded
Section 402(h)(1)(B)(salary deferral SEP plans) [X] Included [ ] Excluded
Section 403(b) (tax-sheltered plans) [X] Included [ ] Excluded
</TABLE>
NOTE: IF A BOX IS NOT CHECKED FOR AN ITEM, "INCLUDED" WILL BE
DEEMED TO BE SELECTED FOR THAT ITEM.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, does Compensation
include Employer Contributions made pursuant to a salary
reduction agreement which are not includible in the gross income
of the Employee under any of the following Sections of the Code?
(ANSWER "INCLUDED" OR "EXCLUDED" FOR EACH OF THE FOLLOWING
ITEMS.)
<TABLE>
<CAPTION>
<S> <C> <C>
Section 125 (cafeteria plans) [X] Included [ ] Excluded
Section 402(e)(3) (401(k) plans) [X] Included [ ] Excluded
Section 402(h)(1)(B)(salary deferral SEP plans) [X] Included [ ] Excluded
Section 403(b) (tax-sheltered plans) [X] Included [ ] Excluded
</TABLE>
NOTE: IF A BOX IS NOT CHECKED FOR AN ITEM, "INCLUDED " WILL BE
DEEMED TO BE SELECTED FOR THAT ITEM.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions, does
Compensation include Employer Contributions made pursuant to a
salary reduction agreement which are not includible in the gross
income of the Employee under any of the following Sections of
the Code? (ANSWER "INCLUDED" OR "EXCLUDED" FOR EACH OF THE
FOLLOWING ITEMS.)
<TABLE>
<CAPTION>
<S> <C> <C>
Section 125 (cafeteria plans) [X] Included [ ] Excluded
Section 402(e)(3) (401(k) plans) [X] Included [ ] Excluded
Section 402(h)(1)(B)(salary deferral SEP plans) [X] Included [ ] Excluded
Section 403(b) (tax-sheltered plans) [X] Included [ ] Excluded
</TABLE>
NOTE: IF A BOX IS NOT CHECKED FOR AN ITEM, "INCLUDED" WILL BE
DEEMED TO BE SELECTED FOR THAT ITEM.
<PAGE>
Page 16
PART D. PRE-ENTRY DATE COMPENSATION:
1. ADP AND ACP TESTING PURPOSES.
For the Plan Year in which an Employee enters the Plan, the
Employee's Compensation which shall be taken into account for
purposes of Actual Deferral Percentage (ADP) and Actual
Contribution Percentage (ACP) testing shall be (CHOOSE ONE):
OPTION 1: [ ] The Employee's Compensation only from the time the
Employee became a Participant in the Plan.
OPTION 2: [X] The Employee's Compensation for the whole of such
Plan Year.
NOTE: IF NO OPTION IS SELECTED FOR AN ITEM, OPTION 1 WILL BE
DEEMED TO BE SELECTED.
2. OTHER PURPOSES.
For the Plan Year in which an Employee enters the Plan, the
Employee's Compensation which shall be taken into account for
purposes of the Plan (other than ADP or ACP testing) shall be
(CHOOSE ONE):
OPTION 1: [ ] The Employee's Compensation only from the time
the Employee became a Participant in the Plan.
OPTION 2: [X] The Employee's Compensation for the whole of such
Plan Year.
NOTE: IF NO OPTION IS SELECTED FOR AN ITEM, OPTION 1 WILL BE
DEEMED TO BE SELECTED.
PART E. EXCLUSIONS FROM COMPENSATION:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, Compensation shall not
include the following (CHECK ANY THAT APPLY):
[ ] Bonuses [ ] Commissions
[ ] Overtime [ ] Other (SPECIFY)
NOTE: NO EXCLUSIONS FROM COMPENSATION ARE PERMITTED IF THE
INTEGRATED ALLOCATION FORMULA IN SECTION 11, PART B IS
SELECTED.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, Compensation shall not
include the following (CHECK ANY THAT APPLY):
[ ] Bonuses [ ] Commissions
[ ] Overtime [ ] Other (SPECIFY)
NOTE: NO EXCLUSIONS FROM COMPENSATION ARE PERMITTED IF THE
INTEGRATED ALLOCATION FORMULA IN SECTION 11, PART B IS
SELECTED.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions,
Compensation shall not include the following (CHECK ANY THAT APPLY):
[ ] Bonuses [ ] Commissions
[ ] Overtime [ ] Other (SPECIFY)
NOTE: NO EXCLUSIONS FROM COMPENSATION ARE PERMITTED IF THE
INTEGRATED ALLOCATION FORMULA IN SECTION 11, PART B IS
SELECTED.
<PAGE>
Page 17
SECTION 13. VESTING AND FORFEITURES
COMPLETE PARTS A THROUGH H
PART A. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS. A
Participant shall become Vested in his or her Individual Account
derived from Profit Sharing Contributions made pursuant to Section 11
of the Adoption Agreement as follows (CHOOSE ONE):
VESTED PERCENTAGE
<TABLE>
<CAPTION>
YEARS OF
VESTING SERVICE Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [X] (COMPLETE IF CHOSEN)
- ------------------- ------------ ------------ ------------ ------------ ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 0% 0% 100% 0% 0%
2 0% 20% 100% 0% 20%
3 0% 40% 100% 20% 40% (not less than 20%)
4 0% 60% 100% 40% 60% (not less than 40%)
5 100% 80% 100% 60% 100% (not less than 60%)
6 100% 100% 100% 80% 100% (not less than 80%)
7 100% 100% 100% 100% 100% (not less than 100%)
</TABLE>
NOTE: IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE SELECTED.
- ------------------------------
PART B. VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS. A Participant shall become
Vested in his or her Individual Account derived from Matching
Contributions made pursuant to Section 7 of the Adoption Agreement as
follows (CHOOSE ONE):
VESTED PERCENTAGE
<TABLE>
<CAPTION>
YEARS OF
VESTING SERVICE Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [X] (COMPLETE IF CHOSEN)
- ----------------- ------------ ------------ ------------ ------------ ---------------------------------
<S> <C> <C> <C> <C> <C>
1 0% 0% 100% 0% 0%
2 0% 20% 100% 0% 20%
3 0% 40% 100% 20% 40% (not less than 20%)
4 0% 60% 100% 40% 60% (not less than 40%)
5 100% 80% 100% 60% 100% (not less than 60%)
6 100% 100% 100% 80% 100% (not less than 80%)
7 100% 100% 100% 100% 100% (not less than 100%)
</TABLE>
NOTE: IF NO OPTION IS SELECTED, OPTION 3 WILL BE DEEMED TO BE SELECTED.
- ------------------------------
PART C. HOURS REQUIRED FOR VESTING PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required
to constitute a Year of Vesting Service.
2. 500 Hours of Service (NO MORE THAN 500 BUT LESS THAN THE
NUMBER SPECIFIED IN SECTION 13, PART C, ITEM 1 ABOVE) must be
exceeded to avoid a Break in Vesting Service.
3. For purposes of determining Years of Vesting Service,
Employees shall be given credit for Hours of Service with the
following predecessor employer(s) (COMPLETE IF APPLICABLE)
_____________________________________________________________
_____________________________________________________________
PART D. EXCLUSION OF CERTAIN YEARS OF VESTING SERVICE:
All of an Employee's Years of Vesting Service with the Employer are
counted to determine the vesting percentage in the Participant's
Individual Account except (CHECK ANY THAT APPLY):
[ ] Years of Vesting Service before the Employee reaches age 18.
[ ] Years of Vesting Service before the Employer maintained this Plan
or a predecessor plan.
<PAGE>
Page 18
PART E. FULLY VESTED UNDER CERTAIN CIRCUMSTANCES:
Will a Participant be fully Vested under the following circumstances?
(ANSWER "YES" OR "NO" TO EACH OF THE FOLLOWING ITEMS BY CHECKING THE
APPROPRIATE BOX)
1. The Participant dies. [X] Yes [ ] No
2. The Participant incurs a Disability. [X] Yes [ ] No
3. The Participant satisfies the conditions
for Early Retirement Age (IF APPLICABLE). [X] Yes [ ] No
NOTE: IF A BOX IS NOT CHECKED FOR AN ITEM, "YES" WILL BE DEEMED TO
BE SELECTED FOR THAT ITEM.
PART F. ALLOCATION OF FORFEITURES OF EMPLOYER PROFIT SHARING CONTRIBUTIONS:
Forfeitures of Employer Profit Sharing Contributions shall be (CHOOSE
ONE):
OPTION 1: [ ] Allocated to the Individual Accounts of the
Participants specified below in the manner as described
in Section 11, Part B (for Employer Profit Sharing
Contributions).
The Participants entitled to receive allocations of
such Forfeitures shall be (CHOOSE ONE):
SUBOPTION (A): [ ] Only Qualifying Participants.
SUBOPTION (B): [ ] All Participants.
OPTION 2: [ ] Applied to reduce Employer Profit Sharing Contributions
(CHOOSE ONE):
SUBOPTION (A): [ ] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
OPTION 3: [X] Applied first to the payment of the Plan's
administrative expenses and any excess applied to
reduce Employer Profit Sharing Contributions (CHOOSE
ONE):
SUBOPTION (A): [X] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeitures
arises.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 AND SUBOPTION (A) WILL BE
DEEMED TO BE SELECTED.
PART G. ALLOCATION OF FORFEITURES OF MATCHING CONTRIBUTIONS:
Forfeitures of Matching Contributions shall be (CHOOSE ONE):
OPTION 1: [ ] Allocated, after all other Forfeitures under the Plan,
to each Participant's Individual Account in the ratio
which each Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for
such Plan Year.
The Participants entitled to receive allocations of
such Forfeitures shall be (CHOOSE ONE):
SUBOPTION (A): [ ] Only Qualifying Contributing
Participants.
SUBOPTION (B): [ ] Only Qualifying Participants.
SUBOPTION (C): [ ] All Participants.
OPTION 2: [ ] Applied to reduce Matching Contributions (CHOOSE ONE):
SUBOPTION (A): [ ] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
<PAGE>
Page 19
OPTION 3: [X] Applied first to the payment of the Plan's
administrative expenses and any excess applied to
reduce Matching Contributions (CHOOSE ONE):
SUBOPTION (A): [X] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeitures
arises.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 AND SUBOPTION (A) WILL BE
DEEMED TO BE SELECTED.
PART H. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS:
Forfeitures of Excess Aggregate Contributions shall be (CHOOSE ONE):
OPTION 1: [ ] Allocated, after all other Forfeitures under the Plan,
to each Contributing Participant's Matching
Contribution account in the ratio which each
Contributing Participant's Compensation for the Plan
Year bears to the total Compensation of all
Contributing Participants for such Plan Year. Such
Forfeitures will not be allocated to the account of any
Highly Compensated Employee.
OPTION 2: [ ] Applied to reduce Matching Contributions (CHOOSE ONE):
SUBOPTION (A): [ ] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
OPTION 3: [X] Applied first to the payment of the Plan's
administrative expenses and any excess applied to
reduce Matching Contributions (CHOOSE ONE):
SUBOPTION (A): [ ] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): [X] For any Plan Year subsequent to the Plan
Year for which the Forfeitures arises.
NOTE: IF NO OPTION IS SELECTED, OPTION 2 AND SUBOPTION (A) WILL BE
DEEMED TO BE SELECTED.
SECTION 14. NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
PART A. THE NORMAL RETIREMENT AGE UNDER THE PLAN SHALL BE (CHECK AND COMPLETE
ONE OPTION):
OPTION 1: [X] Age 65.
OPTION 2: [ ] Age _____ (NOT TO EXCEED 65).
OPTION 3: [ ] The later of age ______ (NOT TO EXCEED 65) or the
______ (NOT TO EXCEED 5TH) anniversary of the first day
of the first Plan Year in which the Participant
commenced participation in the Plan.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART B. EARLY RETIREMENT AGE (CHOOSE ONE OPTION):
OPTION 1: [X] An Early Retirement Age is not applicable under the
Plan.
OPTION 2: [ ] Age _____ (NOT LESS THAN 55 NOR MORE THAN 65).
OPTION 3: [ ] A Participant satisfies the Plan's Early Retirement Age
conditions by attaining age _____(NOT LESS THAN 55) and
completing _____ Years of Vesting Service.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 20
SECTION 15. DISTRIBUTIONS
Complete Parts A and B
PART A. DISTRIBUTABLE EVENTS. ANSWER EACH OF THE FOLLOWING ITEMS.
1. Termination of Employment Before Normal Retirement Age. May a
Participant who has not reached Normal Retirement Age request a
distribution from the Plan of that portion of the Participant's
Individual Account attributable to the following types of
contributions upon Termination of Employment?
Elective Deferrals [X] Yes [ ] No
Matching Contributions (IF MADE) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
2. Disability. May a Participant who has incurred a Disability
request a distribution from the Plan of that portion of the
Participant's Individual Account attributable to the following
types of contributions?
Elective Deferrals [X] Yes [ ] No
Matching Contributions (IF MADE) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
3. Attainment of Normal Retirement Age. May a Participant who has
attained Normal Retirement Age but has not incurred a
Termination of Employment request a distribution from the Plan
of that portion of the Participant's Individual Account
attributable to the following types of contributions?
Elective Deferrals [X] Yes [ ] No
Matching Contributions (IF MADE) [ ] Yes [X] No
Employer Profit Sharing Contributions [ ] Yes [X] No
4. Attainment of Age 59 1/2. Will Participants who
have attained age 59 1/2 be permitted to withdraw
Elective Deferrals while still employed by the
Employer? [X] Yes [ ] No
5. Hardship Withdrawals of Elective Deferrals: Will
Participants be permitted to withdraw Elective
Deferrals on account of hardship pursuant to
Section 11.503 of the Plan? [X] Yes [ ] No
6. In-Service Withdrawals. Will Participants be permitted to
request a distribution of that portion of the Participant's
Individual Account attributable to the following types of
contributions during service pursuant to Section 6.01(A)(3) of
the Plan?
Matching Contributions (IF MADE) [ ] Yes [X] No
Employer Profit Sharing Contributions [ ] Yes [X] No
7. One-Time In-Service Withdrawal Option. Will the one-time
in-service withdrawal provisions described in Section 6.01(A)(5)
of the Plan apply to the following types of contributions?
Matching Contributions (IF MADE) [ ] Yes [X] No
Employer Profit Sharing Contributions [ ] Yes [X] No
If the answer is "Yes," specify percentage that a Participant
may withdraw: __________%
<PAGE>
Page 21
8. Hardship Withdrawals. Will Participants be permitted to make
hardship withdrawals of that portion of the Participant's
Individual Account attributable to the following types of
contributions pursuant to Section 6.01(A)(4) of the Plan?
Matching Contributions (IF MADE) [ ] Yes [X] No
Employer Profit Sharing Contributions [ ] Yes [X] No
9. Withdrawals of Rollover or Transfer Contributions. Will
Employees be permitted to withdraw their Rollover or Transfer
Contributions at any time? [ ] Yes [X] No
NOTE: IF A BOX IS NOT CHECKED FOR AN ITEM, "YES" WILL BE DEEMED TO BE
SELECTED FOR THAT ITEM. SECTION 411(D)(6) OF THE CODE PROHIBITS THE
ELIMINATION OF PROTECTED BENEFITS. IN GENERAL, PROTECTED BENEFITS
INCLUDE THE FORMS AND TIMING OF PAYOUT OPTIONS. IF THE PLAN IS BEING
ADOPTED TO AMEND AND REPLACE A PRIOR PLAN THAT PERMITTED A
DISTRIBUTION OPTION DESCRIBED ABOVE, YOU MUST ANSWER "YES" TO THAT
ITEM.
PART B. TIMING OF DISTRIBUTIONS:
1. Termination of Employment. Where a Participant who is entitled
to a distribution under the Plan has a Termination of Employment
(for reasons other than death, Disability or attainment of
Normal Retirement Age), distributions shall commence (CHECK
ONE):
OPTION (A): [X] As soon as administratively feasible following
the date the Participant requests a
distribution.
OPTION (B): [ ] As soon as administratively feasible following
the close of the Plan Year within which the
Participant requests a distribution.
OPTION (C): [ ] As soon as administratively feasible following
the close of the Plan Year within which the
Participant requests a distribution or the
Participant incurs _____ (NOT MORE THAN 5)
consecutive one-year Breaks in Vesting Service,
whichever is later.
NOTE: IF NO OPTION IS SELECTED, OPTION (A) WILL BE DEEMED TO
BE SELECTED.
2. Death, Disability or Attainment of Normal Retirement Age. Where
a Participant dies, incurs a Disability or attains Normal
Retirement Age, and a distributable event has occurred,
distributions shall commence (CHECK ONE):
OPTION (A): [X] As soon as administratively feasible following
the date the Participant (or Beneficiary of a
deceased Participant) requests a distribution.
OPTION (B): [ ] As soon as administratively feasible following
the close of the Plan Year within which the
Participant (or Beneficiary of a deceased
Participant) requests a distribution.
OPTION (C): [ ] As soon as administratively feasible following
the close of the Plan Year within which the
Participant (or Beneficiary of a deceased
Participant) requests a distribution or the
Participant incurs _____ (NOT MORE THAN 5)
consecutive one-year Breaks in Vesting Service,
whichever is later.
NOTE: IF NO OPTION IS SELECTED, OPTION (A) WILL BE DEEMED TO BE
SELECTED.
SECTION 16. JOINT AND SURVIVOR ANNUITY
PART A. RETIREMENT EQUITY ACT SAFE HARBOR:
Will the safe harbor provisions of Section 6.05(F) of the Plan apply?
(CHOOSE ONLY ONE OPTION)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: YOU MUST SELECT "NO" IF YOU ARE ADOPTING THIS PLAN AS AN
AMENDMENT AND RESTATEMENT OF A PRIOR PLAN THAT WAS SUBJECT TO THE
JOINT AND SURVIVOR ANNUITY REQUIREMENTS.
<PAGE>
Page 22
PART B. SURVIVOR ANNUITY PERCENTAGE: (COMPLETE ONLY IF YOUR ANSWER IN
SECTION 16, PART A IS "NO".)
The survivor annuity portion of the Joint and Survivor Annuity shall
be a percentage equal to _____% (AT LEAST 50% BUT NO MORE THAN 100%)
of the amount paid to the Participant prior to his or her death.
SECTION 17. OTHER OPTIONS
ANSWER"YES" OR "NO" TO EACH OF THE FOLLOWING QUESTIONS BY CHECKING THE
APPROPRIATE BOX. IF A BOX IS NOT CHECKED FOR A QUESTION, THE ANSWER
WILL BE DEEMED TO BE "NO."
A. Loans: Will loans to Participants pursuant to
Section 6.08 of the Plan be permitted? [X] Yes [ ] No
B. Insurance: Will the Plan allow for the investment
in insurance policies pursuant to Section 5.13
of the Plan? [ ] Yes [X] No
C. Employer Securities: Will the Plan allow for the
investment in qualifying Employer securities or
qualifying Employer real property? [X] Yes [ ] No
D. Rollover Contributions: Will Employees be permitted
to make rollover contributions to the Plan pursuant
to Section 3.03 of the Plan? [X] Yes [ ] No
[ ] Yes, but only after
becoming a
Participant.
E. Transfer Contributions: Will Employees be permitted
to make transfer contributions to the Plan pursuant
to Section 3.04 of the Plan? [ ] Yes [X] No
[ ] Yes, but only after
becoming a
Participant.
F. Nondeductible Employee Contributions: Will
Employees be permitted to make Nondeductible
Employee Contributions pursuant to Section 11.305
of the Plan? [ ] Yes [X] No
Check here if such contributions will be mandatory. [ ]
SECTION 18. PARTICIPANT DIRECTION OF INVESTMENTS
PART A. AUTHORIZATION:
Will Participants be permitted to direct the investment of their Plan
assets pursuant to Section 5.14 of the Plan? (CHOOSE ONE)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL BE DEEMED TO BE
SELECTED. COMPLETE THE REMAINDER OF SECTION 18 ONLY IF
OPTION 1 IS SELECTED.
PART B. INVESTMENT OPTIONS:
Participants can direct the investment of their Plan assets among the
following investments (CHOOSE ONE):
OPTION 1: [X] Only those investment options designated by the Plan
Administrator or other fiduciary.
OPTION 2: [ ] Any allowable investment.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 23
PART C. ACCOUNTS SUBJECT TO PARTICIPANT DIRECTION:
Participants can direct the following portions of their Individual
Accounts (CHOOSE ONE):
OPTION 1: [ ] Those accounts that the Plan Administrator may
designate from time to time in a uniform and
nondiscriminatory manner.
OPTION 2: [X] Entire Individual Account.
OPTION 3: [ ] The following accounts (CHECK ALL THAT APPLY):
[ ] Elective Deferral Account.
[ ] Matching Contribution Account.
[ ] Employer Profit Sharing Account.
[ ] Rollover Contribution Account.
[ ] Transfer Contribution Account.
[ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART D. FREQUENCY OF INVESTMENT CHANGES:
Participants may make changes to the investments within their
Individual Accounts with the following frequency (CHOOSE ONE):
OPTION 1: [ ] In accordance with uniform and nondiscriminatory rules
established by the Plan Administrator or other
fiduciary.
OPTION 2: [ ] Daily.
OPTION 3: [ ] Monthly.
OPTION 4: [X] Quarterly.
OPTION 5: [ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED. ALSO NOTE THAT THE PLAN'S VALUATION DATES MUST BE
AT LEAST AS OFTEN AS THE FREQUENCY CHOSEN HERE.
SECTION 19. MISCELLANEOUS DEFINITIONS
COMPLETE PARTS A AND B
PART A. VALUATION DATE:
The Plan Valuation Date shall be (CHOOSE ONE):
OPTION 1: [ ] The last day of the Plan Year and each other date
designated by the Plan Administrator which is selected
in a uniform and nondiscriminatory manner.
OPTION 2: [X] Daily.
OPTION 3: [ ] The last day of each Plan quarter.
OPTION 4: [ ] The last day of each month.
OPTION 5: [ ] Other (SPECIFY)
<PAGE>
Page 24
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART B. DISABILITY:
For purposes of this Plan, Disability shall mean (CHOOSE ONE):
OPTION 1: [ ] The inability to engage in any substantial, gainful
activity by reason of any medically determinable
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.
OPTION 2: [X] The inability to engage in any substantial, gainful
activity in the Employee's trade or profession for
which the Employee is best qualified through training
or experience.
OPTION 3: [ ] Other (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
SECTION 20. LIMITATION ON ALLOCATIONS
MORE THAN ONE PLAN
If you maintain or ever maintained another qualified plan in which
any Participant in this Plan is (or was) a Participant or could
become a Participant, you must complete this section. You must also
complete this section if you maintain a welfare benefit fund, as
defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which
amounts are treated as annual additions with respect to any
Participant in this Plan.
PART A. INDIVIDUALLY DESIGNED DEFINED CONTRIBUTION PLAN:
If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a master or
prototype plan:
1. [X] The provisions of Section 3.05(B)(1) through 3.05(B)(6) of the
Plan will apply as if the other plan were a master or
prototype plan.
2. [ ] Other method. (PROVIDE THE METHOD UNDER WHICH THE PLANS WILL
LIMIT TOTAL ANNUAL ADDITIONS TO THE MAXIMUM PERMISSIBLE
AMOUNT, AND WILL PROPERLY REDUCE ANY EXCESS AMOUNTS, IN A
MANNER THAT PRECLUDES EMPLOYER DISCRETION.)
PART B. DEFINED BENEFIT PLAN:
If the Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer, the Employer will provide
below the language which will satisfy the 1.0 limitation of Section
415(e) of the Code.
1. [X] If the projected annual addition to this Plan to the account
of a Participant for any limitation year would cause the 1.0
limitation of Section 415(e) of the Code to be exceeded, the
annual benefit of the defined benefit plan for such limitation
year shall be reduced so that the 1.0 limitation shall be
satisfied.
If it is not possible to reduce the annual benefit of the
defined benefit plan and the projected annual addition to this
Plan to the account of a Participant for a limitation year
would cause the 1.0 limitation to be exceeded, the Employer
shall reduce the Employer Contribution which is to be
allocated to this Plan on behalf of such Participant so that
the 1.0 limitation will be satisfied. (The provisions of
Section 415(e) of the Code are incorporated herein by
reference under the authority of Section 1106(h) of the Tax
Reform Act of 1986.)
2. [ ] Other method. (PROVIDE LANGUAGE DESCRIBING ANOTHER METHOD.
SUCH LANGUAGE MUST PRECLUDE EMPLOYER DISCRETION.)
<PAGE>
Page 25
SECTION 21. TOP-HEAVY MINIMUM
COMPLETE PARTS A, B, C AND D
PART A. MINIMUM ALLOCATION OR BENEFIT:
For any Plan Year with respect to which this Plan is a Top-Heavy
Plan, any minimum allocation required pursuant to Section 3. 01(E) of
the Plan shall be made (CHOOSE ONE):
OPTION 1: [X] To this Plan.
OPTION 2: [ ] To the following other plan maintained by the Employer
(SPECIFY NAME AND PLAN NUMBER OF PLAN)
OPTION 3: [ ] In accordance with the method described on an
attachment to this Adoption Agreement. (ATTACH LANGUAGE
DESCRIBING THE METHOD THAT WILL BE USED TO SATISFY
SECTION 416 OF THE CODE. SUCH METHOD MUST PRECLUDE
EMPLOYER DISCRETION.)
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART B. PARTICIPANTS ENTITLED TO RECEIVE MINIMUM ALLOCATION:
Any minimum allocation required pursuant to Section 3.01(E) of the
Plan shall be allocated to the Individual Accounts of (CHOOSE ONE):
OPTION 1: [X] Only Participants who are not Key Employees.
OPTION 2: [ ] All Participants.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
PART C. TOP-HEAVY RATIO:
For purposes of establishing the present value of benefits under a
defined benefit plan to compute the top-heavy ratio as described in
Section 10.08(C) of the Plan, any benefit shall be discounted only
for mortality and interest based on the following (CHOOSE ONE):
OPTION 1: [X] Not applicable because the Employer has not maintained
a defined benefit plan.
OPTION 2: [ ] The interest rate and mortality table specified for
this purpose in the defined benefit plan.
OPTION 3: [ ] Interest rate of _____% and the following mortality
table (SPECIFY)
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL BE DEEMED TO BE
SELECTED.
PART D. TOP-HEAVY VESTING SCHEDULE:
Pursuant to Section 6.0 1 (C) of the Plan, the vesting schedule that
will apply when this Plan is a Top-Heavy Plan (unless the Plan's
regular vesting schedule provides for more rapid vesting) shall be
(CHOOSE ONE):
OPTION 1: [X] 6 Year Graded.
OPTION 2: [ ] 3 Year Cliff.
NOTE: IF NO OPTION IS SELECTED, OPTION 1 WILL BE DEEMED TO BE
SELECTED.
<PAGE>
Page 26
SECTION 22. PROTOTYPE SPONSOR
Name of Prototype Sponsor AETNA LIFE INSURANCE AND ANNUITY COMPANY
Address 151 FARMINGTON AVENUE, HARTFORD, CT 06156
Telephone Number 860-273-1000
PERMISSIBLE INVESTMENTS
The assets of the Plan shall be invested only in those investments described
below (TO BE COMPLETED BY THE PROTOTYPE SPONSOR):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 23. TRUSTEE OR CUSTODIAN
OPTION A: [ ] Financial Organization as Trustee or Custodian
CHECK ONE: [ ] Custodian, [ ] Trustee without full trust powers, or
[ ] Trustee with full trust powers
Financial Organization _________________________________________________
Signature ______________________________________________________________
Type Name ______________________________________________________________
COLLECTIVE OR COMMINGLED FUNDS
List any collective or commingled funds maintained by the financial organization
Trustee in which assets of the Plan may be invested (COMPLETE IF APPLICABLE).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Option B: [X] Individual Trustee(s)
Signature /s/ STEVEN W. LOGAN Signature _______________________
Type Name STEVEN W. LOGAN Type Name _______________________
Signature ____________________ Signature _______________________
Type Name ____________________ Type Name _______________________
SECTION 24. RELIANCE
The Employer may not rely on an opinion letter issued by the National Office of
the Internal Revenue Service as evidence that the Plan is qualified under
Section 401 of the Internal Revenue Code. In order to obtain reliance with
respect to plan qualification, the Employer must apply to the appropriate Key
District office for a determination letter.
This Adoption Agreement may be used only in conjunction with Basic Plan Document
No. 04.
SECTION 25. EMPLOYER SIGNATURE
IMPORTANT: PLEASE READ BEFORE SIGNING
I am an authorized representative of the Employer named above and I state the
following:
1. I acknowledge that I have relied upon my own advisors regarding the
completion of this Adoption Agreement and the legal tax implications of
adopting this Plan.
2. 1 understand that my failure to properly complete this Adoption
Agreement may result in disqualification of the Plan.
<PAGE>
Page 27
3. 1 understand that the Prototype Sponsor will inform me of any
amendments made to the Plan and will notify me should it discontinue or
abandon the Plan.
4. I have received a copy of this Adoption Agreement and the corresponding
Basic Plan Document.
Signature for Employer /s/ STEVEN W. LOGAN Date Signed 12/19/96
Type Name STEVEN W. LOGAN Title CHIEF FINANCIAL OFFICER
<PAGE>
ooo
------------------------
QUALIFIED
RETIREMENT
PLAN
------------------------
BASIC PLAN
DOCUMENT
------------------------
ooo
<PAGE>
TABLE OF CONTENTS
SECTION ONE DEFINITIONS...................................................1
1.01 ADOPTION AGREEMENT............................................1
1.02 BASIC PLAN DOCUMENT...........................................1
1.03 BENEFICIARY...................................................1
1.04 BREAK IN ELIGIBILITY SERVICE..................................1
1.05 BREAK IN VESTING SERVICE......................................1
1.06 CODE..........................................................1
1.07 COMPENSATION..................................................1
1.08 CUSTODIAN.....................................................3
1.09 DISABILITY....................................................4
1.10 EARLY RETIREMENT AGE..........................................4
1.11 EARNED INCOME.................................................4
1.12 EFFECTIVE DATE................................................4
1.13 ELIGIBILITY COMPUTATION PERIOD................................4
1.14 EMPLOYEE......................................................4
1.15 EMPLOYER......................................................5
1.16 EMPLOYER CONTRIBUTION.........................................5
1.17 EMPLOYMENT COMMENCEMENT DATE..................................5
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION..........................5
1.19 ENTRY DATES...................................................5
1.20 ERISA.........................................................5
1.21 FORFEITURE....................................................5
1.22 FUND..........................................................5
1.23 HIGHLY COMPENSATED EMPLOYEE...................................5
1.24 HOURS OF SERVICE - Means......................................6
1.25 INDIVIDUAL ACCOUNT............................................7
1.26 INVESTMENT FUND...............................................7
1.27 KEY EMPLOYEE..................................................7
1.28 LEASED EMPLOYEE...............................................8
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS..........................8
1.30 NORMAL RETIREMENT AGE.........................................8
1.31 OWNER - EMPLOYEE..............................................8
1.32 PARTICIPANT...................................................8
1.33 PLAN..........................................................8
1.34 PLAN ADMINISTRATOR............................................8
1.35 PLAN YEAR.....................................................9
1.36 PRIOR PLAN....................................................9
1.37 PROTOTYPE SPONSOR.............................................9
1.38 QUALIFYING PARTICIPANT........................................9
<PAGE>
1.39 RELATED EMPLOYER..............................................9
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT......................9
1.41 SELF-EMPLOYED INDIVIDUAL......................................9
1.42 SEPARATE FUND.................................................9
1.43 TAXABLE WAGE BASE.............................................9
1.44 TERMINATION OF EMPLOYMENT....................................10
1.45 TOP-HEAVY PLAN...............................................10
1.46 TRUSTEE......................................................10
1.47 VALUATION DATE...............................................10
1.48 VESTED.......................................................10
1.49 YEAR OF ELIGIBILITY SERVICE..................................10
1.50 YEAR OF VESTING SERVICE......................................10
SECTION TWO ELIGIBILITY AND PARTICIPATION................................11
2.01 ELIGIBILITY TO PARTICIPATE...................................11
2.02 PLAN ENTRY...................................................11
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS.........................11
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY
SERVICE......................................................12
2.05 DETERMINATIONS UNDER THIS SECTION............................12
2.06 TERMS OF EMPLOYMENT..........................................12
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING
USED.........................................................12
2.08 ELECTION NOT TO PARTICIPATE..................................13
SECTION THREE CONTRIBUTIONS................................................14
3.01 EMPLOYER CONTRIBUTIONS.......................................14
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.........................17
3.03 ROLLOVER CONTRIBUTIONS.......................................17
3.04 TRANSFER CONTRIBUTIONS.......................................18
3.05 LIMITATION ON ALLOCATIONS....................................18
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND
VALUATION....................................................23
4.01 INDIVIDUAL ACCOUNTS..........................................23
4.02 VALUATION OF FUND............................................24
4.03 VALUATION OF INDIVIDUAL ACCOUNTS.............................24
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL
ACCOUNTS.....................................................25
4.05 SEGREGATION OF ASSETS........................................25
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS.............................25
<PAGE>
SECTION FIVE TRUSTEE OR CUSTODIAN.........................................25
5.01 CREATION OF FUND.............................................25
5.02 INVESTMENT AUTHORITY.........................................25
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE
WITHOUT FULL TRUST POWERS....................................25
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST
POWERS AND INDIVIDUAL TRUSTEE ...............................27
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS.......................29
5.06 COMPENSATION AND EXPENSES....................................29
5.07 NOT OBLIGATED TO QUESTION DATA...............................29
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS...................29
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN).............29
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY....................30
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE
(OR CUSTODIAN)...............................................30
5.12 INVESTMENT MANAGERS..........................................31
5.13 [Intentionally Omitted]......................................31
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT......................31
SECTION SIX VESTING AND DISTRIBUTION.....................................32
6.01 DISTRIBUTION TO PARTICIPANT..................................32
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT........................37
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT................38
6.04 FORM OF DISTRIBUTION TO BENEFICIARY..........................39
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS......................39
6.06 DISTRIBUTION REQUIREMENTS....................................44
6.07 ANNUITY CONTRACTS............................................49
6.08 LOANS TO PARTICIPANTS........................................49
6.09 DISTRIBUTION IN KIND.........................................51
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER
DISTRIBUTIONS................................................51
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR
BENEFICIARIES................................................52
SECTION SEVEN CLAIMS PROCEDURE.............................................52
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS........................52
7.02 DENIAL OF CLAIM..............................................52
7.03 REMEDIES AVAILABLE...........................................52
SECTION EIGHT PLAN ADMINISTRATOR...........................................53
8.01 EMPLOYER IS PLAN ADMINISTRATOR...............................53
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR..................53
<PAGE>
8.03 EXPENSES AND COMPENSATION....................................54
8.04 INFORMATION FROM EMPLOYER....................................54
SECTION NINE AMENDMENT AND TERMINATION....................................55
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN.................55
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN..........................55
9.03 LIMITATION ON POWER TO AMEND.................................55
9.04 AMENDMENT OF VESTING SCHEDULE................................56
9.05 PERMANENCY...................................................56
9.06 METHOD AND PROCEDURE FOR TERMINATION.........................56
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER....................57
9.08 FAILURE OF PLAN QUALIFICATION................................57
SECTION TEN MISCELLANEOUS................................................57
10.01 STATE COMMUNITY PROPERTY LAWS................................57
10.02 HEADINGS.....................................................57
10.03 GENDER AND NUMBER............................................57
10.04 PLAN MERGER OR CONSOLIDATION.................................57
10.05 STANDARD OF FIDUCIARY CONDUCT................................57
10.06 GENERAL UNDERTAKING OF ALL PARTIES...........................58
10.07 AGREEMENT BINDS HEIRS, ETC...................................58
10.08 DETERMINATION OF TOP-HEAVY STATUS............................58
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES......................60
10.10 INALIENABILITY OF BENEFITS...................................60
10.11 CANNOT ELIMINATE PROTECTED BENEFITS..........................61
SECTION ELEVEN 401(k) PROVISIONS............................................61
11.01 DEFINITIONS..................................................61
11.02 ACTUAL DEFERRAL PERCENTAGE (ADP).............................61
11.03 AGGREGATE LIMIT..............................................62
11.04 AVERAGE CONTRIBUTION PERCENTAGE (ACP)........................62
11.05 CONTRIBUTING PARTICIPANT.....................................62
11.06 CONTRIBUTION PERCENTAGE......................................62
11.07 CONTRIBUTION PERCENTAGE AMOUNTS..............................62
11.08 ELECTIVE DEFERRALS...........................................62
11.09 ELIGIBLE PARTICIPANT.........................................63
11.10 EXCESS AGGREGATE CONTRIBUTIONS...............................63
11.11 EXCESS CONTRIBUTIONS.........................................63
11.12 EXCESS ELECTIVE DEFERRALS....................................64
11.13 MATCHING CONTRIBUTION........................................64
11.14 QUALIFIED NONELECTIVE CONTRIBUTIONS..........................64
11.15 QUALIFIED MATCHING CONTRIBUTIONS.............................64
11.16 QUALIFYING CONTRIBUTING PARTICIPANT..........................64
<PAGE>
11.17 CONTRIBUTING PARTICIPANT.....................................64
11.18 REQUIREMENTS TO ENROLL AS A CONTRIBUTING
PARTICIPANT..................................................64
11.19 CHANGING ELECTIVE DEFERRAL AMOUNTS...........................65
11.20 CEASING ELECTIVE DEFERRALS...................................65
11.21 RETURN AS A CONTRIBUTING PARTICIPANT AFTER
CEASING ELECTIVE DEFERRALS...................................65
11.22 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS.......................65
11.23 CONTRIBUTIONS................................................66
11.24 CONTRIBUTIONS BY EMPLOYER....................................66
11.25 MATCHING CONTRIBUTIONS.......................................66
11.26 QUALIFIED NONELECTIVE CONTRIBUTIONS..........................66
11.27 QUALIFIED MATCHING CONTRIBUTIONS.............................66
11.28 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.........................66
11.29 NONDISCRIMINATION TESTING....................................67
11.30 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)........................67
11.31 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
AND MATCHING CONTRIBUTIONS...................................68
11.32 DISTRIBUTION PROVISIONS......................................70
11.33 GENERAL RULE.................................................70
11.34 DISTRIBUTION REQUIREMENTS....................................70
11.35 HARDSHIP DISTRIBUTION........................................71
11.36 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS....................71
11.37 DISTRIBUTION OF EXCESS CONTRIBUTIONS.........................72
11.38 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS...............73
11.39 RECHARACTERIZATION...........................................74
11.40 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS
ANNUAL ADDITIONS.............................................74
11.41 VESTING......................................................74
11.42 100% VESTING ON CERTAIN CONTRIBUTIONS........................74
11.43 FORFEITURES AND VESTING OF MATCHING
CONTRIBUTIONS................................................74
<PAGE>
QUALIFIED RETIREMENT PLAN AND TRUST
Defined Contribution Basic Plan Document 04
---------------------------------------------------------------------
SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with initial
capital letters shall, for the purpose of this Plan, have the
meanings set forth below unless the context indicates that other
meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it adopts
the Plan and Trust and thereby agrees to be bound by all terms and
conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to Section
6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12-consecutive-month period which coincides with an
Eligibility Computation Period during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for this
purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period described in
Section 1.50) during which an Employee fails to complete more than
500 Hours of Service (or such lesser number of Hours of Service
specified in this Adoption Agreement for this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from time to time.
1.07 COMPENSATION
A. BASIC DEFINITION
For Plan Years beginning on or after January 1, 1989, the
following definition of Compensation shall apply:
As elected by the Employer in the Adoption Agreement (and
if no election is made, W-2 wages will be deemed to have
been selected), Compensation shall mean one of the
following:
1. W-2 wages. Compensation is defined as information
required to be reported under Sections 6041,
6051, and 6052 of the Code (Wages, tips and other
compensation as reported on Form W-2).
Compensation is defined as wages within the
meaning of Section 3401(a) of the Code and all
other payments of compensation to an Employee by
the Employer (in the
-1-
<PAGE>
course of the Employer's trade or business) for
which the Employer is required to furnish the
Employee a statement under Sections 6041(d) and
6051(a)(3), and 6052 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)).
2. Section 3401(a) wages. Compensation is defined as
wages within the meaning of Section 3401(a) of
the Code, 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)).
3. 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 nonqualified 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).
For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income.
B. DETERMINATION PERIOD AND OTHER RULES
Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in this Plan the
determination period shall be the Plan Year unless the
Employer has selected another period in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement
and which is not
-2-
<PAGE>
includible in the gross income of the Employee under
Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the
Code.
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance with the
Tax Reform Act of 1986, such Prior Plan's definition of
Compensation shall apply for Plan Years beginning before
January 1, 1989.
C. LIMITS ON COMPENSATION
For years beginning after December 31,1988 and before
January 1, 1994, the annual Compensation of each
Participant taken into account for determining all benefits
provided under the Plan for any determination period shall
not exceed $200,000. This limitation shall be adjusted by
the Secretary at the same time and in the same manner as
under Section 415(d) of the Code, except that the dollar
increase in effect on January 1 of any calendar year is
effective for Plan Years beginning in such calendar year
and the first adjustment to the $200,000 limitation is
effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for
any Plan Year shall not exceed $150,000, as adjusted 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 determination period beginning in such
calendar year.
If the period for determining Compensation used in
calculating an Employee's allocation for a determination
period is a short Plan Year (I.E., shorter than 12 months),
the annual Compensation limit is an amount equal to the
otherwise applicable annual Compensation limit multiplied
by a fraction, the numerator of which is the number of
months in the short Plan Year, and the denominator of which
is 12.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section 414(q)(6)
of the Code shall apply, except in applying such rules, the
term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant
who have not attained age 19 before the close of the year.
If, as a result of the application of such rules the
adjusted $200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to
the integration level, if this Plan provides for permitted
disparity), the limitation shall be prorated among the
affected individuals in proportion to each such
individual's Compensation as determined under this Section
prior to the application of this limitation.
If Compensation for any prior determination period is taken
into account in determining an Employee's allocations or
benefit for the current determination period, the
Compensation for such prior determination period is subject
to the applicable annual Compensation limit in effect for
that prior period. For this purpose, in determining
allocations in Plan Years beginning on or after January l,
1989, the annual Compensation limit in effect for
determination periods beginning before that date is
$200,000. In addition, in determining allocations in Plan
Years beginning on or after January 1, 1994, the annual
Compensation limit in effect for determination periods
beginning before that date is $150,000.
1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as Custodian or
any duly appointed successor as provided in Section 5.09.
-3-
<PAGE>
1.09 DISABILITY
Unless the Employer has elected a different definition in the
Adoption Agreement, Disability means the inability to engage in any
substantial, gainful activity by reason of any medically determinable
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 permanence and degree of such
impairment shall be supported by medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan will not
have an Early Retirement Age if none is specified in the Adoption
Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or business
with respect to which the Plan is established, for which 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 Section 404 of the Code.
Net earnings shall be determined with regard to the deduction allowed
to the Employer by Section 164(f) of the Code for taxable years
beginning after December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreement However, as indicated in the Adoption Agreement,
certain provisions may have specific effective dates. Further, where
a separate date is stated in the Plan as of which a particular Plan
provision becomes effective, such date will control with respect to
that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be the
12-consecutive-month period commencing on the Employee's Employment
Commencement Date. The Employee's subsequent Eligibility Computation
Periods shall be the 12-consecutive-month periods commencing on the
anniversaries of his or her Employment Commencement Date; provided,
however, if pursuant to the Adoption Agreement, an Employee is
required to complete one or less Years of Eligibility Service to
become a Participant, then his or her subsequent Eligibility
Computation Periods shall be the Plan Years commencing with the Plan
Year Eligibility Service before the end of the 12-consecutive-month
period regardless of when during such period the Employee completes
the required number of Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the Plan or of
any other employer required to be aggregated with such Employer under
Sections 414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to be
an Employee of any Employer described in the previous paragraph as
provided in Section 414(n) or (o) of the Code.
-4-
<PAGE>
1.15 EMPLOYER
Means any corporation, partnership, sole proprietorship or other
entity named in the Adoption Agreement and any successor who by
merger, consolidation, purchase or otherwise assumes the obligations
of the Plan. A partnership is considered to be the Employer of each
of the partners and a sole proprietorship is considered to be the
Employer of a sole proprietor. Where this Plan is being maintained by
a union or other entity that represents its member Employees in the
negotiation of collective bargaining agreements, the term Employer
shall mean such union or other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as determined
under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the
Employee first performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of the
Adoption Agreement titled "Employer Profit Sharing Contributions."
The Employer may make Employer Profit Sharing Contributions without
regard to current or accumulated earnings or profits.
1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of the seventh
month of the Plan Year, unless the Employer has specified different
dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as amended
from time to time.
1.21 FORFEITURE
Means that portion of a Participant's Individual Account derived from
Employer Contributions which he or she is not entitled to receive
(I.E., the nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the Participants'
exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly compensated
active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (a) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (b) received Compensation from the Employer in excess
of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and
was a member of
-5-
<PAGE>
the top-paid group for such year; or (c) was an officer of the
Employer and received Compensation during such year that is greater
than 50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code. The term Highly Compensated Employee also
includes: (a) Employees who are both described in the preceding
sentence if the term "determination year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees who
received the most Compensation from the Employer during the
determination year; and (b) Employees who are 5% owners at any time
during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c) above
during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated
Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the 12 month period immediately preceding
this determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active employee for
either the separation year or any determination year ending on or
after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5% owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation paid
by the Employer during such year, then the family member and the 5%
owner or top 10 Highly Compensated Employee shall be aggregated. In
such case, the family member and a 5% owner or top 10 Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of
such Compensation and contributions or benefits of the family member
and 5% owner or top 10 Highly Compensated Employee. For purposes of
this Section, family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees
treated as officers and the Compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the
regulations thereunder.
1.24 HOURS OF SERVICE - MEANS
A. Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer.
These hours will be credited to the Employee for the
computation period in which the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence. No more than 501 Hours of Service will be credited
under this paragraph for any single continuous period
(whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and
credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations which is incorporated herein by this
reference; and
C. Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer.
The same Hours of Service will not be credited both under
paragraph (A) or paragraph (B), as the case may be, and
under this paragraph (C). These hours will be credited to
the
-6-
<PAGE>
Employee for the computation period to which the award or
agreement pertains rather than the computation period or
periods to which the award, agreement, or payment is made.
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has
occurred in a computation period (the computation period
for purposes of determining whether a Break in Vesting
Service has occurred is the Plan Year or other vesting
computation period described in Section 1.50), an
individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such
individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day
of such absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the individual,
(2) by reason of a birth of a child of the individual, (3)
by reason of the placement of a child with the individual
in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child
for a period beginning immediately following such birth or
placement. The Hours of Service credited under this
paragraph shall be credited (1) in the Eligibility
Computation Period or Plan Year or other vesting
contribution period described in Section 1.50 in which the
absence begins if the crediting is necessary to prevent a
Break in Eligibility Service or a Break in Vesting Service
in the applicable period, or (2) in all other cases, in the
following Eligibility Computation Period or Plan Year or
other vesting computation period described in Section 1.50.
E. Hours of Service will be credited for employment with other
members of an affiliated service group (under Section
414(m) of the Code), a controlled group of corporations
(under Section 414(b) of the Code), or a group of trades or
businesses under common control (under Section 414(c) of
the Code) of which the adopting Employer is a member, and
any other entity required to be aggregated with the
Employer pursuant to Section 414(o) of the Code and the
regulations thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code
Section 414(n) or 414(o) and the regulations thereunder.
F. Where the Employer maintains the plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer.
G. The above method for determining Hours of Service may be
altered as specified in the Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan for each
Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under Section
10.08.
-7-
<PAGE>
1.28 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
Section 414(n)(6) of the Code) on a substantially full time basis for
a period of at least one year, and such services are 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: (1) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer contribution
rate of at least 10% of compensation, as defined in Section 415(c)(3)
of the Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross
income under Section 125, Section 402(e)(34), Section 402(h)(1)(B) or
Section 4093(b) of the Code, (b) immediate participation, and (c)
full and immediate vesting; and (2) Leased Employees do not
constitute more than 20% of the recipient's nonhighly compensated
work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross income in the
year in which made and that is maintained under a separate account to
which earnings and losses are allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if the
Employer enforces a mandatory retirement age which is less than the
Normal Retirement Age, such mandatory age is deemed to be the Normal
Retirement Age. If no age is specified in the Adoption Agreement, the
Normal Retirement Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who is a partner
owning more than 10% of either the capital or profits interest of the
partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who has met the
Plan's eligibility requirements, has entered the Plan and who is or
may become eligible to receive a benefit of any type from this Plan
or whose Beneficiary may be eligible to receive any such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of the Basic Plan Document plus the
corresponding Adoption Agreement as completed and signed by the
Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan Administrator
in accordance with Section 8.01.
-8-
<PAGE>
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with the
Employer's fiscal year or such other 12 consecutive month period as
is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this Plan
document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that makes this
prototype plan available to employers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements described in
Section 3.01(B)(2) to be entitled to share in any Employer
Contribution (and Forfeitures, if applicable) for a Plan Year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with the
Employer adopting this Plan for certain qualification requirements
under Section 414(b), (c), (m) or (o) of the Code (or any other
employer that has ownership in common with the Employer). A Related
Employer may participate in this Plan if so indicated in the Section
of the Adoption Agreement titled "Employer Information" or if such
Related Employer executes a Related Employer Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related Employer
may execute to participate in this Plan.
1.41 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; 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.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular
Participant representing certain assets held for that Participant.
The assets which comprise a Participant's Separate Fund are those
assets earmarked for him or her and those assets subject to the
Participant's individual direction pursuant to Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and benefit
base in effect under Section 230 of the Social Security Act at the
beginning of the Plan Year.
-9-
<PAGE>
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer shall occur
whenever his or her status as an Employee of such Employer ceases for
any reason other than death. An Employee who does not return to work
for the Employer on or before the expiration of an authorized leave
of absence from such Employer shall be deemed to have incurred a
Termination of Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is determined
to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in the
Adoption Agreement as Trustee or any duly appointed successor as
provided in Section 5.09. Trustee shall mean Custodian in the event
the financial organization named as Trustee does not have full trust
powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption Agreement. If no
date is specified in the Adoption Agreement, the Valuation Date shall
be the last day of the Plan Year and each other date designated by
the Plan Administrator which is selected in a uniform and
nondiscriminatory manner when the assets of the Fund are valued at
their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is unconditional and
legally enforceable against the Plan obtained by a Participant or the
Participant's Beneficiary to that part of an immediate or deferred
benefit under the Plan which arises from a Participant's Years of
Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee completes at
least 1,000 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose). An
Employee does not complete a Year of Eligibility Service before the
end of the 12 consecutive month period regardless of when during such
period the Employee completes the required number of Hours of
Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least 1,000
Hours of Service (or such lesser number of Hours of Service specified
in the Adoption Agreement for this purpose). Notwithstanding the
preceding sentence, where the Employer so indicates in the Adoption
Agreement, vesting shall be computed by reference to the 12
consecutive month period beginning with the Employee's Employment
Commencement Date and each successive 12 month period commencing on
the anniversaries thereof.
In the case of a Participant who has 5 or more consecutive Breaks in
Vesting Service, all Years of Vesting Service after such Breaks in
Vesting Service will be disregarded for the purpose of determining
the Vested portion of his or her Individual Account derived from
Employer Contributions that accrued before such breaks. Such
Participant's prebreak service will count in vesting the postbreak
Individual Account derived from Employer Contributions only if
either:
-10-
<PAGE>
(A) such Participant had any Vested right to any portion of his
or her Individual Account derived from Employer
Contributions at the time of his or her Termination of
Employment; or
(B) upon returning to service, the number of consecutive Breaks
in Vesting Service is less than his or her number of Years
of Vesting Service before such breaks.
Separate subaccounts will be maintained for the Participant's
prebreak and postbreak portions of his or her Individual Account
derived from Employer Contributions. Both subaccounts will share in
the gains and losses of the Fund.
Years of Vesting Service shall not include any period of time
excluded from Years of Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a new 12-month period,
Employees shall receive credit for Years of Vesting Service, in
accordance with the preceding provisions of this definition, for each
of the Plan Years (the old and new Plan Years) which overlap as a
result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who belong to a
class of Employees which is excluded from participation as indicated
in the Adoption Agreement, shall be eligible to participate in this
Plan upon the satisfaction of the age and Years of Eligibility
Service requirements specified in the Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by amendment
or restatement, each Employee of the Employer who was a
Participant in said Prior Plan before the Effective Date
shall continue to be a Participant in this Plan.
B. An Employee will become a Participant in the Plan as of the
Effective Date if the Employee has met the eligibility
requirements of Section 2.01 as of such date. After the
Effective Date, each Employee shall become a Participant on
the first Entry Date following the date the Employee
satisfies the eligibility requirements of Section 2.01
unless otherwise indicated in the Adoption Agreement.
C. The Plan Administrator shall notify each Employee who
becomes eligible to be a Participant under this Plan and
shall furnish the Employee with the application form,
enrollment forms or other documents which are required of
Participants. The eligible Employee shall execute such
forms or documents and make available such information as
may be required in the administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to
participate because he or she is no longer a member of an eligible
class of Employees, but has not incurred a Break in Eligibility
Service, such Employee shall participate immediately upon his or her
return to an eligible class of Employees. If such Employee incurs a
Break in Eligibility Service, his or her eligibility to participate
shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of Employees
will become a Participant immediately upon becoming a member of the
eligible class provided such Employee has satisfied the age and Years
of
-11-
<PAGE>
Eligibility Service requirements. If such Employee has not satisfied
the age and Years of Eligibility Service requirements as of the date
he or she becomes a member of the eligible class, such Employee shall
become a Participant on the first Entry Date following the date he or
she satisfies those requirements unless otherwise indicated in the
Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. EMPLOYEE NOT PARTICIPANT BEFORE BREAK - If an Employee
incurs a Break in Eligibility Service before satisfying the
Plan's eligibility requirements, such Employee's Years of
Eligibility Service before such Break in Eligibility
Service will not be taken into account.
B. NONVESTED PARTICIPANTS - In the case of a Participant who
does not have a Vested interest in his or her Individual
Account derived from Employer Contributions, Years of
Eligibility Service before a period of consecutive Breaks
in Eligibility Service will not be taken into account for
eligibility purposes if the number of consecutive Breaks in
Eligibility Service in such period equals or exceeds the
greater of 5 or the aggregate number of Years of
Eligibility Service before such break. Such aggregate
number of Years of Eligibility Service will not include any
Years of Eligibility Service disregarded under the
preceding sentence by reason of prior breaks.
If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such
Participant will be treated as a New Employee for
eligibility purposes. If a Participant's Years of
Eligibility Service may not be disregarded pursuant to the
preceding paragraph, such Participant shall continue to
participate in the Plan, or, if terminated, shall
participate immediately upon reemployment.
C. VESTED PARTICIPANTS - A Participant who has sustained a
Break in Eligibility Service and who had a Vested interest
in all or a portion of his or her Individual Account
derived from Employer Contributions shall continue to
participate in the Plan, or, if terminated, shall
participate immediately upon reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be conclusive
and binding upon all persons except as otherwise provided herein or
by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact that a
common law Employee has become a Participant shall give to that
common law Employee any right to continued employment; nor shall
either fact limit the right of the Employer to discharge or to deal
otherwise with a common law Employee without regard to the effect
such treatment may have upon the Employee's rights under the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated in the
Adoption Agreement that the elapsed time method will be used. When
this Section applies, the definitions of year of service, break in
service and hour of service in this Section will replace the
definitions of Year of Eligibility Service, Year of Vesting Service,
Break in Eligibility Service, Break in Vesting Service and Hours of
Service found in the Definitions Section of the Plan (Section One).
-12-
<PAGE>
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest in the
Participant's Individual Account balance derived from Employer
Contributions (except for periods of service which may be disregarded
on account of the "rule of parity " described in Sections 1.50 and
2.04) an Employee will receive credit for the aggregate of all time
period(s) commencing with the Employee's first day of employment or
reemployment and ending on the date a break in service begins. The
first day of employment or reemployment is the first day the Employee
performs an hour of service. An Employee will also receive credit for
any period of severance of less than 12 consecutive months.
Fractional periods of a year will be expressed in terms of days.
For purposes of this Section, hour of service will mean each hour for
which an Employee is paid or entitled to payment for the performance
of duties for the Employer. Break in service is a period of severance
of at least 12 consecutive months. Period of severance is a
continuous period of time during which the Employee is not employed
by the Employer. Such period begins on the date the Employee retires,
quits or is discharged, or if earlier, the 12 month anniversary of
the date on which the Employee was otherwise first absent from
service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12 consecutive month period beginning on the
first anniversary of the first date of such absence' shall not
constitute a break in service. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual, (2) by reason of
the birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately following
such birth or placement.
Each Employee will share in Employer Contributions for the period
beginning on the date the Employee commences participation under the
Plan and ending on the date on which such Employee severs employment
with the Employer or is no longer a member of an eligible class of
Employees.
If the Employer is a member of an affiliated service group (under
Section 414(m) of the Code), a controlled group of corporations
(under Section 414(b) of the Code), a group of trades or businesses
under common control (under Section 414(c) of the Code), or any other
entity required to be aggregated with the Employer pursuant to
Section 414(o) of the Code, service will be credited for any
employment for any period of time for any other member of such group.
Service will also be credited for any individual required under
Section 414(n) or Section 414(o) to be considered an Employee of any
Employer aggregated under Section 414(b), (c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a nonstandardized plan
and the Adoption Agreement so provides. If this Section applies, then
an Employee or a Participant may elect not to participate in the Plan
for one or more Plan Years. The Employer may not contribute for an
Employee or Participant for any Plan Year during which such
Employee's or Participant's election not to participate is in effect.
Any election not to participate must be in writing and filed with the
Plan Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable to carry
out the terms of this Section, including, but not limited to, rules
prescribing the timing of the filing of elections not to participate
and the procedures for electing to re-participate in the Plan.
An Employee or Participant continues to earn credit for vesting and
eligibility purposes for each Year of Vesting Service or Year of
Eligibility Service he or she completes and his or her Individual
Account (if any) will share in the gains or losses of the Fund during
the periods he or she elects not to participate.
-13-
<PAGE>
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. OBLIGATION TO CONTRIBUTE - The Employer shall make
contributions to the Plan in accordance with the
contribution formula specified in the Adoption Agreement.
If this Plan is a profit sharing plan, the Employer shall,
in its sole discretion, make contributions without regard
to current or accumulated earnings or profits.
B. ALLOCATION FORMULA AND THE RIGHT TO SHARE IN THE EMPLOYER
CONTRIBUTION -
1. General - The Employer Contribution for any Plan
Year will be allocated or contributed to the
Individual Accounts of Qualifying Participants in
accordance with the allocation or contribution
formula specified in the Adoption Agreement. The
Employer Contribution for any Plan Year will be
allocated to each Participant's Individual
Account as of the last day of that Plan Year.
Any Employer Contribution for a Plan Year must
satisfy Section 401(a)(4) and the regulations
thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a
Qualifying Participant and is entitled to share
in the Employer Contribution for any Plan Year if
the Participant was a Participant on at least one
day during the Plan Year and satisfies any
additional conditions specified in the Adoption
Agreement. If this Plan is a standardized plan,
unless the Employer specifies more favorable
conditions in the Adoption Agreement, a
Participant will not be a qualifying Participant
for a Plan Year if he or she incurs a Termination
of Employment during such Plan Year with not more
than 500 Hours of Service if he or she is not an
Employee on the last day of the Plan Year. The
determination of whether a Participant is
entitled to share in the Employer Contribution
shall be made as of the last day of each Plan
Year.
3. Special Rules for Integrated Plans - This Plan
may not allocate contributions based on an
integrated formula if the Employer maintains any
other plan that provides for allocation of
contributions based on an integrated formula that
benefits any of the same Participants. If the
Employer has selected the integrated contribution
or allocation formula in the Adoption Agreement,
then the maximum disparity rate shall be
determined in accordance with the following
table.
MAXIMUM DISPARITY RATE
<TABLE>
<CAPTION>
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
- -------------------------------------- -------------------------- -------------------------- -------------------------------------
<S> <C> <C> <C>
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more 5.7% 2.7% 5.7%
than 20% of TWB
More than 20% of TWB but 4.3% 1.3% 4.3%
not more than 80% of TWB
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
</TABLE>
-14-
<PAGE>
C. ALLOCATION OF FORFEITURES - Forfeitures for a Plan Year
which arise as a result of the application of Section
6.01(D) shall be allocated as follows:
1. Profit Sharing Plan - If this is a profit sharing
plan, unless the Adoption Agreement indicates
otherwise, Forfeitures shall be allocated in the
manner provided in Section 3.01(B) (for Employer
Contributions) to the Individual Accounts of
Qualifying Participants who are entitled to share
in the Employer Contribution for such Plan Year.
Forfeitures shall be allocated as of the last day
of the Plan Year during which the Forfeiture
arose (or any subsequent Plan Year if indicated
in the Adoption Agreement).
2. Money Purchase Pension and Target Benefit Plan -
If this Plan is a money purchase plan or a target
benefit plan, unless the Adoption Agreement
indicates otherwise, Forfeitures shall be applied
towards the reduction of Employer Contributions
to the Plan. Forfeitures shall be allocated as of
the last day of the Plan Year during which the
Forfeiture arose (or any subsequent Plan Year if
indicated in the Adoption Agreement).
D. TIMING OF EMPLOYER CONTRIBUTION - The Employer Contribution
for each Plan Year shall be delivered to the Trustee (or
Custodian, if applicable not later than the due date for
filing the Employer's income tax return for its fiscal year
in which the Plan Year ends, including extensions thereof.
E. MINIMUM ALLOCATION FOR TOP-HEAVY PLANS - The contribution
and allocation provisions of this Section 3.01(E) shall
apply for any Plan Year with respect to which this Plan is
a Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4)
below, the Employer Contributions and Forfeitures
allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser
of 3% of such Participant's Compensation or (in
the case where the Employer has no defined
benefit plan which designates this Plan to
satisfy Section 401 of the Code) the largest
percentage of Employer Contributions and
Forfeitures, as a percentage of the first
$200,000 ($150,000 for Plan Years beginning after
December 31, 1993), (increased by any cost of
living adjustment made by the Secretary of
Treasury or the Secretary's delegate) of the Key
Employee's Compensation, allocated on behalf of
any Key Employee for that year. The minimum
allocation is determined without regard to any
Social Security contribution. The Employer may,
in the Adoption Agreement, limit the Participants
who are entitled to receive the minimum
allocation. This minimum allocation shall be made
even though under other Plan provisions, the
Participant would not otherwise be entitled to
receive an allocation, or would have received a
lesser allocation for the year because of (a) the
Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan),
or (b) the Participant's failure to make
mandatory Nondeductible Employee Contributions to
the Plan, or (c) Compensation less than a stated
amount.
2. For purposes of computing the minimum allocation,
Compensation shall mean Compensation as defined
in Section 1.07 of the Plan and shall include any
amounts contributed by the Employer pursuant to a
salary reduction agreement and which is not
includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code even if the Employer has
elected to exclude such contributions in the
definition of Compensation used for other
purposes under the Plan.
3. The provision in (1) above shall not apply to any
Participant who was not employed by the Employer
on the last day of the Plan Year.
-15-
<PAGE>
4. The provision in (1) above shall not apply to any
Participant to the extent the Participant is
covered under any other plan or plans of the
Employer and the Employer has provided in the
adoption agreement that the minimum allocation or
benefit requirement applicable to Top-Heavy Plans
will be met in the other plan or plans.
5. The minimum allocation required under this
Section 3.01(E) and Section 3.01(F)(1) (to the
extent required to be nonforfeitable under Code
Section 416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
F. SPECIAL REQUIREMENTS FOR PAIRED PLANS - The Employer
maintains paired plans if the Employer has adopted both a
standardized profit sharing plan and a standardized money
purchase pension plan using this Basic Plan Document.
1. Minimum Allocation - When the paired plans are
top-heavy, the top-heavy requirements set forth
in Section 3.01(E)(1) of the Plan shall apply.
a. Same eligibility requirements. In
satisfying the top-heavy minimum
allocation requirements set forth in
Section 3.01(E) of the Plan, if the
Employees benefiting under each of the
paired plans are not identical, the
top-heavy minimum allocation shall be
made to the money purchase pension
plan.
b. Different eligibility requirements. In
satisfying the top-heavy minimum
allocation requirements set forth in
Section 3.01(E) of the Plan, if the
Employees benefiting under each of the
paired plans are not identical, the
top-heavy minimum allocation will be
made to both of the paired plans.
A Participant is treated as benefiting
under the Plan for any Plan Year
during which the Participant received
or is deemed to receive an allocation
in accordance with Section
1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the Employer
maintains paired plans, only one of the Plans may
provide for the disparity in contributions which
is permitted under Section 401(l) of the Code. In
the event that both Adoption Agreements provide
for such integration, only the money purchase
pension plan shall be deemed to be integrated.
G. RETURN OF THE EMPLOYER CONTRIBUTION TO THE EMPLOYER UNDER
SPECIAL CIRCUMSTANCES - Any contribution made by the
Employer because of a mistake of fact must be returned to
the Employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under
the Code, any contributions made incident to that initial
qualification by the Employer must be returned to the
Employer within one year after the date the initial
qualification is denied, but only if the application for
qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe.
In the event that a contribution made by the Employer under
this Plan is conditioned on deductibility and is not
deductible under Code Section 404, the contribution, to the
extent of the amount disallowed, must be returned to the
Employer within one year after the deduction is disallowed.
-16-
<PAGE>
H. OMISSION OF PARTICIPANT
1. If the Plan is a money purchase plan or a target
benefit plan and, if in any Plan Year, any
Employee who should be included as a Participant
is erroneously omitted and discovery of such
omission is not made until after a contribution
by the Employer for the year has been made and
allocated, the Employer shall make a subsequent
contribution to include earnings thereon, with
respect to the omitted Employee in the amount
which the Employer would have contributed with
respect to that Employee had he or she not been
omitted.
2. If the Plan is a profit sharing plan, and if in
any Plan Year, any Employee who should be
included as a Participant is erroneously omitted
and discovery of such omission is not made until
after the Employer Contribution has been made and
allocated, then the Plan Administrator must re-do
the allocation (if a correction can be made) and
inform the Employee. Alternatively, the Employer
may choose to contribute for the omitted Employee
the amount to include earnings thereon, which the
Employer would have contributed for the Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee Contributions and
matching contributions for Plan Years beginning after the Plan Year
in which this Plan is adopted by the Employer. Nondeductible Employee
Contributions for Plan Years beginning after December 31, 1986,
together with any matching contributions as defined in Section 401(m)
of the Code, will be limited so as to meet the nondiscrimination test
of Section 401(m) of the Code.
A separate account will be maintained by the Plan Administrator for
the Nondeductible Employee Contributions of each participant.
A Participant may, upon a written request submitted to the Plan
Administrator withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible Employee
Contributions or the amount he or she contributed as Nondeductible
Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occur solely as a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986. Contributions made prior to that date will be
maintained in a separate account which will be nonforfeitable at all
times. The account will share in the gains and losses of the Fund in
the same manner as described in Section 4.03 of the Plan. No part of
the deductible employee contribution account will be used to purchase
life insurance. Subject to Section 6.05, joint and survivor annuity
requirements (if applicable), the Participant may withdraw any part
of the deductible employee contribution account by making a written
application to the Plan Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may contribute
a rollover contribution to the Plan. The Plan Administrator may
require the Employee to submit a written certification that the
contribution qualifies as a rollover contribution under the
applicable provisions of the Code. If it is later determined that all
or part of a rollover contribution was ineligible to be rolled into
the Plan, the Plan Administrator shall direct that any ineligible
amounts, plus earnings attributable thereto, be distributed from the
Plan to the Employee as soon as administratively feasible.
-17-
<PAGE>
A separate account shall be maintained by the Plan Administrator for
each Employee's Rollover contributions which will be nonforfeitable
at all times. Such account will share in the income and gains and
losses of the Fund in the manner described in Section 4.03 and shall
be subject to the Plan's provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or Custodian,
if applicable) may receive any amounts transferred to it from the
trustee or custodian of another plan qualified under Code Section
401(a). If it is later determined that all or part of a transfer
contribution was ineligible to be transferred into the Plan, the Plan
Administrator shall direct that any ineligible amounts, plus earnings
attributable thereto, be distributed from the Plan to the Employee as
soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator for
each Employee's transfer contributions which will be nonforfeitable
at all times. Such account will share in the income and gains and
losses of the Fund in the manner described in Section 4.03 and shall
be subject to the Plan's provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
rollover contributions.
3.05 LIMITATION ON ALLOCATIONS
A. 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 Section
419(3) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(1)(2)
of the Code, or a simplified employee pension plan, as
defined in Section 408(k) of the Code, maintained by the
Employer, which provides an annual addition as defined in
Section 3.08(E)(1), the following rules shall apply:
1. The amount of annual additions which may be
credited to the Participant's Individual Account
for any limitation year will 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
Individual Account 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 the limitation year will
be determined on the basis of the Participant's
actual Compensation for the limitation year.
-18-
<PAGE>
4. If pursuant to Section 3.05(A)(3) or as a result
of the allocation of Forfeitures there is an
excess amount, the excess will be disposed of as
follows:
a. Any Nondeductible Employee
Contributions, to the extent they
would reduce the excess amount, will
be returned to the Participant;
b. If after the application of paragraph
(a) 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
Individual 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;
c. If after the application of paragraph
(b) 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;
d. 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 the
Fund's 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'
Individual Accounts before any
Employer Contributions or any
Nondeductible Employee Contributions
may be made to the Participants or
former Participants.
B. If, in addition to this Plan, the Participant is covered
under another qualified master or prototype defined
contribution plan maintained by the Employer, a welfare
benefit fund maintained by the Employer, an individual
medical account maintained by the Employer, or a simplified
employee pension maintained by the Employer that provides
an annual addition as defined in Section 3.05(E)(1), during
any limitation year, the following rules apply:
1. The annual additions which may be credited to a
Participant's Individual Account under this Plan
for any such limitation year will not exceed the
maximum permissible amount reduced by the annual
additions credited to a Participant's Individual
Account under the other qualified master or
prototype plans, welfare benefit funds,
individual medical accounts and simplified
employee pensions for the same limitation year.
If the annual additions with respect to the
Participant under other qualified master or
prototype defined contribution plans, welfare
benefit funds, individual medical accounts and
simplified employee pensions 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 Individual Account 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 funds for the limitation year will equal the
maximum permissible amount. If the annual
additions with respect to the Participant under
such other qualified master or prototype defined
contribution plans, welfare benefit funds,
individual medical accounts and simplified
employee pensions in the aggregate are equal to
or greater than the maximum permissible amount,
no amount will be contributed or allocated to the
Participant's Individual Account under this Plan
for the limitation year.
-19-
<PAGE>
2. Prior to determining the Participants actual
Compensation for the limitation year, the
Employer may determine the maximum permissible
amount for a Participant in the manner described
in Section 3.05(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 3.05(B)(3) or as a result
of the allocation of Forfeitures a Participants
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 simplified employee pension
will be deemed to have been allocated first,
followed by annual additions to a welfare benefit
fund or individual medical account, regardless of
the actual allocation data.
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,
a. the total excess amount allocated as
of such date, times
b. the ratio of (i) the annual additions
allocated to the Participant for the
limitation year as of such date under
this Plan to (ii) the total annual
additions allocated to the Participant
for the limitation years of such date
under this and all the other qualified
prototype defined contribution plans.
6. Any excess amount attributed to this Plan will be
disposed in the manner described in Section
3.05(A)(4).
C. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which
is not a master or prototype plan, annual additions which
may be credited to the Participant's Individual Account
under this Plan for any limitation year will be limited in
accordance with Sections 3.05(B)(l) through 3.05(B)(6) as
though the other plan were a master or prototype plan
unless the Employer provides other limitations in the
Section of the Adoption Agreement titled "Limitation on
Allocation - More Than One Plan."
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 Individual
Account under this Plan for any limitation year will be
limited in accordance with the Section of the Adoption
Agreement titled "Limitation on Allocation -
More Than One Plan."
E. The following terms shall have the following meanings when
used in this Section 3.05:
1. Annual additions: The sum of the following
amounts credited to a Participant's Individual
Account for the limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
-20-
<PAGE>
c. Forfeitures,
d. amounts allocated, after March
31,1984, to an individual medical
account, as defined in Section
415(1)(2) of the Code, which is part
of a pension or annuity plan
maintained by the Employer are treated
as annual additions to a defined
contribution plan. Also 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 Section
419A(d)(3) of the Code, under a
welfare benefit fund, as defined in
Section 419(e) of the Code, maintained
by the Employer are treated as annual
additions to a defined contribution
plan, and
e. allocations under a simplified
employee pension.
For this purpose, any excess amount applied under
Section 3.05(A)(4) or 3.05(B)(6) in the
limitation year to reduce Employer Contributions
will be considered annual additions for such
limitation year.
2. Compensation: Means Compensation as defined in
Section 1.07 of the Plan except that Compensation
for purposes of this Section 3.05 shall not
include any amounts contributed by the Employer
pursuant to a salary reduction agreement and
which is not includible in the gross income of
the Employee under Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code even if the
Employer has elected to include such
contributions in the definition of Compensation
used for other purposes under the Plan. Further,
any other exclusion the Employer has elected
(such as the exclusion of certain types of pay or
pay earned before the Employee enters the Plan)
will not apply for purposes of this Section.
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
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 (as defined in
Section 414(q) of the Code) and contributions
made on behalf of such Participant are
nonforfeitable when made.
3. Defined benefit fraction: 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% of the
dollar limitation determined for the limitation
year under Section 415(b) and (d) of the Code or
140% of the highest average compensation,
including any adjustments under Section 415(b) of
the Code.
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% of the sum of the annual
benefits under such ans which the Participant had
accrued as of the close of the last limitation
year beginning before January 1, 1987,
disregarding any changes in the terms and
conditions of the plan after May 5,1986. The
preceding sentence applies only if the defined
benefit plans individually and
-21-
<PAGE>
in the aggregate satisfied the requirements of
Section 415 of Code for all limitation years
beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000
or if greater, one-fourth of the defined benefit
dollar limitation set forth in Section 415(b)(1)
of the Code as in effect for the limitation year.
5. Defined contribution fraction: A fraction, the
numerator of which is the sum of the annual
additions to the Participant's account under all
defined contribution plans (whether or not
terminated) maintained by the Employer for the
current and all prior limitation years (including
the annual additions attributable to the
Participant's nondeductible employee
contributions to all defined benefit plans,
whether or not terminated, maintained by the
Employer, and the annual additions attributable
to all welfare benefit funds, as defined in
Section 419(e) of the Code, individual medical
accounts, and simplified employee pensions,
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% of the dollar limitation
determined under Section 415(b) and (d) of the
Code in effect under Section 415(c)(1)(A) of the
Code or 35% of the Participant's Compensation for
such year.
If the Employee was a Participant as of the end
of the first day of the first limitation year
beginning after December 31, 1986, in one or more
defined contribution plans maintained by the
Employer which were in existence on May 6,1986,
the numerator of this fraction will be adjusted
if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under
the terms of this Plan. Under the adjustment, an
amount equal to the product of (1) the excess of
the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently
subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions
as they would be computed as of the end of the
last limitation year beginning before January 1,
1987, and disregarding any changes in the terms
and conditions of the Plan made after May 5,1986,
but using the Section 415 limitation applicable
to the first limitation year beginning on or
after January 1, 1987.
The annual addition for any limitation year
beginning before January 1, 1987, shall not be
recomputed to treat all Nondeductible Employee
Contributions as annual additions.
6. Employer: For purposes of this Section 3.05,
Employer shall mean the Employer that adopts this
Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the
Code as modified by Section 415(h)), all commonly
controlled trades or businesses (as defined in
Section 414(c) as modified by Section 415(h)) or
affiliated service groups (as defined in Section
414(m)) of which the adopting Employer is a part,
and any other entity required to be aggregated
with the Employer pursuant to regulations under
Section 414(o) of the Code.
7. Excess amount: The excess of the Participant's
annual additions for the limitation year over the
maximum permissible amount.
8. Highest average compensation: The average
compensation for the three consecutive years of
service with the Employer that produces the
highest average.
-22-
<PAGE>
9. Limitation year. A calendar year, or the
12-consecutive month period 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. Master or prototype plan: A plan the form of
which is the subject of a favorable opinion
letter from the Internal Revenue Service.
11. Maximum permissible amount: The maximum annual
addition that may be contributed or allocated to
a Participant's Individual Account under the Plan
for any limitation year shall not exceed the
lesser of:
a. the defined contribution dollar limitation, or
b. 25% of the Participant's Compensation for
the limitation year.
The compensation limitation referred to in (b)
shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is
otherwise treated as an annual addition under
Section 415(l)(1) or 419A(d)(2) of the Code.
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 limitation multiplied
by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
12. Projected annual benefit: 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:
a. the Participant will continue
employment until Normal Retirement Age
under the Plan (or current age, if
later), and
b. 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 future limitation years.
Straight life annuity means an annuity
payable in equal installments for the
life of the Participant that
terminates upon the Participants's
death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain an
Individual Account in the name of each Participant to
reflect the total value of his or her interest in the Fund.
Each Individual Account established hereunder shall consist
of such subaccounts as may be needed for each Participant
including:
-23-
<PAGE>
1. a subaccount to reflect Employer Contributions
and Forfeitures allocated on behalf of a
Participant;
2. a subaccount to reflect a Participant's rollover
contributions;
3. a subaccount to reflect a Participant's transfer
contributions;
4. a subaccount to reflect a Participant's
Nondeductible Employee Contributions; and
5. a subaccount to reflect a Participant's
deductible employee contributions.
B. The Plan Administrator may establish additional accounts as
it may deem necessary for the proper administration of the
Plan, including, but not limited to, a suspense account for
Forfeitures as required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for the
Participant, then the value of that portion of such
Participant's Individual Account at any relevant time
equals the sum of the fair market values of the assets in
such Separate Fund, less any applicable charges or
penalties.
B. The fair market value of the remainder of each Individual
Account is determined in the following manner:
1. First, the portion of the Individual Account
invested in each Investment Fund as of the
previous Valuation Date is determined. Each such
portion is reduced by any withdrawal made from
the applicable Investment Fund to or for the
benefit of a Participant or the Participant's
Beneficiary, further reduced by any amounts
forfeited by the Participant pursuant to Section
6.01(D) and further reduced by any transfer to
another Investment Fund since the previous
Valuation Date and is increased by any amount
transferred from another Investment Fund since
the previous Valuation Date. The resulting
amounts are the net Individual Account portions
invested in the Investment Funds.
2. Secondly, the net Individual Account portions
invested in each Investment Fund are adjusted
upwards or downwards, pro rata (I.E., ratio of
each net Individual Account portion to the sum of
all net Individual Account portions) so that the
sum of all the net Individual Account portions
invested in an Investment Fund will equal the
then fair market value of the Investment Fund.
Notwithstanding the previous sentence, for the
first Plan Year only, the net Individual Account
portions shall be the sum of all contributions
made to each Participant's Individual Account
during the first Plan Year.
3. Thirdly, any contributions to the Plan and
Forfeitures are allocated in accordance with the
appropriate allocation provisions of Section 3.
For purposes of Section 4, contributions made by
the Employer for any Plan Year but after that
Plan Year will be considered to have been made on
the last day of that Plan Year regardless of when
paid to the Trustee (or Custodian, if
applicable).
-24-
<PAGE>
Amounts contributed between Valuation Dates will
not be credited with investment gains or losses
until the next following Valuation Date.
4. Finally, the portions of the Individual Account
invested in each Investment Fund (determined in
accordance with (1), (2) and (3) above) are added
together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may establish
different or additional procedures (which shall be uniform and
nondiscriminatory) for determining the fair market value of the
Individual Account.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a lump sum,
the Plan Administrator may place that Participant's account balance
into a segregated Investment Fund for the purpose of maintaining the
necessary liquidity to provide benefit installments on a periodic
basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the Plan
Administrator shall furnish a statement to each Participant
indicating the Individual Account balances of such Participant as of
the last Valuation Date in such Plan Year.
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which shall
consist of the assets of the Plan held by the Trustee (or Custodian,
if applicable) pursuant to this Section 5. Assets within the Fund may
be pooled on behalf of all Participants, earmarked on behalf of each
Participant or be a combination of pooled and earmarked. To the
extent that assets are earmarked for a particular Participant, they
will be held in a Separate Fund for that Participant.
No part of the corpus or income of the Fund may be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual direction
of investments by Participants), the Employer, not the Trustee (or
Custodian, if applicable), shall have exclusive management and
control over the investment of the Fund into any permitted
investment. Notwithstanding the preceding sentence, Trustee may make
an agreement with the Employer whereby the Trustee will manage the
investment of all or a portion of the Fund. Any such agreement shall
be in writing and set forth such matters as the Trustee deems
necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with respect
to this Plan, as Custodian or as Trustee without full trust powers
(under applicable law). Hereinafter, a financial organization Trustee
without full trust powers (under applicable law) shall be referred
-25-
<PAGE>
to as a Custodian. The Custodian shall have no discretionary
authority with respect to the management of the Plan or the Fund but
will act only as directed by the entity who has such authority.
A. PERMISSIBLE INVESTMENTS - The assets of the Plan shall be
invested only in those investments which are available
through the Custodian in the ordinary course of business
which the Custodian may legally hold in a qualified plan
and which the Custodian chooses to make available to
Employers for qualified plan investments. Notwithstanding
the preceding sentence, the Prototype Sponsor may, as a
condition of making the Plan available to the Employer,
limit the types of property in which the assets of the Plan
may be invested.
B. RESPONSIBILITIES OF THE CUSTODIAN - The responsibilities of
the Custodian shall be limited to the following:
1. To receive Plan contributions and to hold, invest
and reinvest the Fund without distinction between
principal and interest; provided, however, that
nothing in this Plan shall require the Custodian
to maintain physical custody of stock
certificates (or other indicia of ownership of
any type of asset) representing assets within the
Fund;
2. To maintain accurate records of contributions,
earnings, withdrawals and other information the
Custodian deems relevant with respect to the
Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the proper
authorization of the Plan Administrator; and
4. To furnish to the Plan Administrator a statement
which reflects the value of the investments in
the hands of the Custodian as of the end of each
Plan Year and as of any other times as the
Custodian and Plan Administrator may agree.
C. POWERS OF THE CUSTODIAN - Except as otherwise provided in
this Plan, the Custodian shall have the power to take any
action with respect to the Fund which it deems necessary or
advisable to discharge its responsibilities under this Plan
including, but not limited to, the following powers:
1. To invest all or a portion of the Fund (including
idle cash balances) in time deposits, savings
accounts, money market accounts or similar
investments bearing a reasonable rate of interest
in the Custodian's own savings department or the
savings department of another financial
organization;
2. 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 or subscription rights 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 pay any
assessment or charges in correction therewith;
and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities
or other property;
3. To hold securities or other property of the Fund
in its own name, in the name of its nominee or in
bearer form; and
4. 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.
-26-
<PAGE>
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND INDIVIDUAL
TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as Trustee
with full trust powers. This Section also applies where one or more
individuals are named in the Adoption Agreement to serve as
Trustee(s).
A. PERMISSIBLE INVESTMENTS - The Trustee may invest the assets
of the Plan in property of any character, real or personal,
including, but not limited to the following: stocks,
including shares of open-end investment companies (mutual
funds); bonds; notes; debentures; options; limited
partnership interests; mortgages; real estate or any
interests therein; unit investment trusts; Treasury Bills,
and other U.S. Government obligations; common trust funds,
combined investment trusts, collective trust funds or
commingled funds maintained by a bank or similar financial
organization (whether or not the Trustee hereunder);
savings accounts, time deposits or money market accounts of
a bank or similar financial organization (whether or not
the Trustee hereunder); annuity contracts; life insurance
policies; or in such other investments as is deemed proper
without regard to investments authorized by statute or rule
of law governing the investment of trust funds but with
regard to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan available to
the Employer, limit the types of property in which the
assets of the Plan may be invested.
B. RESPONSIBILITIES OF THE TRUSTEE - The responsibilities of
the Trustee shall be limited to the following:
1. To receive Plan contributions and to hold, invest
and reinvest the Fund without distinction between
principal and interest; provided, however, that
nothing in this Plan shall require the Trustee to
maintain physical custody of stock certificates
(or other indicia of ownership) representing
assets within the Fund;
2. To maintain accurate records of contributions,
earnings, withdrawals and other information the
Trustee deems relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the proper
authorization of the Plan Administrator; and
4. To furnish to the Plan Administrator a statement
which reflects the value of the investments in
the hands of the Trustee as of the end of each
Plan Year and as of any other times as the
Trustee and Plan Administrator may agree.
C. POWERS OF THE TRUSTEE - Except as otherwise provided in
this Plan, the Trustee shall have the power to take any
action with respect to the Fund which it deems necessary or
advisable to discharge its responsibilities under this Plan
including, but not limited to, the following powers:
1. To hold any securities or other property of the
Fund in its own name, in the name of its nominee
or in bearer form;
2. To purchase or subscribe for securities issued,
or real property owned, by the Employer or any
trade or business under common control with the
Employer but only if the prudent investment and
diversification requirements of ERISA are
satisfied;
-27-
<PAGE>
3. To sell, exchange, convey, transfer 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;
4. 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 or subscription rights 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;
5. To invest any part or all of the Fund (including
idle cash balances) in certificates of deposit,
demand or time deposits, savings accounts, money
market accounts or similar investments of the
Trustee (if the Trustee is a bank or similar
financial organization), the Prototype Sponsor or
any affiliate of such Trustee or Prototype
Sponsor, which bear a reasonable rate of
interest;
6. To provide sweep services without the receipt by
the Trustee of additional compensation or other
consideration (other than reimbursement of direct
expenses properly and actually incurred in the
performance of such services);
7. To hold in the form of cash for distribution or
investment such portion of the Fund as, at any
time and from time-to-time, the Trustee shall
deem prudent and deposit such cash in interest
bearing or noninterest bearing accounts;
8. 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;
9. 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;
10. To employ suitable agents and counsel, to
contract with agents to perform administrative
and recordkeeping duties and to pay their
reasonable expenses, fees and compensation, and
such agent or counsel may or may not be agent or
counsel for the Employer;
11. To cause any part or all of the Fund, without
limitation as to amount, to be commingled with
the funds of other trusts (including trusts for
qualified employee benefit plans) by causing such
money to be invested as a part of any pooled,
common, collective or commingled trust fund
(including any such fund described in the
Adoption Agreement) heretofore or hereafter
created by any Trustee (if the Trustee is a
bank), by the Prototype Sponsor, by any affiliate
bank of such a Trustee or by such a Trustee or
the Prototype Sponsor, or by such an affiliate in
participation without others; the instrument or
instruments establishing such trust fund or
funds, as amended, being made part of this Plan
and trust so long as any portion of the Fund
shall be invested through the medium thereof; and
-28-
<PAGE>
12. Generally to do all such acts, execute all such
instruments, initiate such proceedings, and
exercise all such rights and privileges with
relation to property constituting the Fund as if
the Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian) from time to time
to divide and redivide the Fund into one or more Investment Funds.
Such Investment Funds may include, but not be limited to, Investment
Funds representing the assets under the control of an investment
manager pursuant to Section 5.12 and Investment Funds representing
investment options available for individual direction by Participants
pursuant to Section 5.14. Upon each division or redivision, the
Employer may specify the part of the Fund to be allocated to each
such Investment Fund and the terms and conditions, if any, under
which the assets in such Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee (or
Custodian) and the Employer. The Trustee (or Custodian) shall be
entitled to reimbursement by the Employer for all proper expenses
incurred in carrying out his or her duties under this Plan, including
reasonable legal, accounting and actuarial expenses. If not paid by
the Employer, such compensation and expenses may be charged against
the Fund.
All taxes of any kind that may be levied or assessed under existing
or future laws upon, or in respect of, the Fund or the income thereof
shall be paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if applicable)
and Plan Administrator the information which each party deems
necessary for the administration of the Plan including, but not
limited to, changes in a Participant's status, eligibility, mailing
addresses and other such data as may be required. The Trustee (or
Custodian) and Plan Administrator shall be entitled to act on such
information as is supplied them and shall have no duty or
responsibility to further verify or question such information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding federal
income taxes from distributions from the Plan, unless the Participant
(or Beneficiary, where applicable) elects not to have such taxes
withheld. The Trustee (or Custodian) or other payor may act as agent
for the Plan Administrator to withhold such taxes and to make the
appropriate distribution reports, if the Plan Administrator furnishes
all the information to the Trustee (or Custodian) or other payor it
may need to do withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any time by
giving 30 days advance written notice to the Employer. The
resignation shall become effective 30 days after receipt of such
notice unless a shorter period is agreed upon.
The Employer may remove any Trustee (or Custodian) at any time by
giving written notice to such Trustee (or Custodian) and such removal
shall be effective 30 days after receipt of such notice unless a
shorter period is agreed upon. The Employer shall have the power to
appoint a successor Trustee (or Custodian).
-29-
<PAGE>
Upon such resignation or removal, if the resigning or removed Trustee
(or Custodian) is the sole Trustee (or Custodian), he or she shall
transfer all of the assets of the Fund then held by such Trustee (or
Custodian) as expeditiously as possible to the successor Trustee (or
Custodian) after paying or reserving such reasonable amount as he or
she shall deem necessary to provide for the expense in the settlement
of the accounts and the amount of any compensation due him or her and
any sums chargeable against the Fund for which he or she may be
liable. If the Funds as reserved are not sufficient for such purpose,
then he or she shall be entitled to reimbursement from the successor
Trustee (or Custodian) out of the assets in the successor Trustee's
(or Custodian's) hands under this Plan. If the amount reserved shall
be in excess of the amount actually needed, the former Trustee (or
Custodian) shall return such excess to the successor Trustee (or
Custodian).
Upon receipt of the transferred assets, the successor Trustee (or
Custodian) shall thereupon succeed to all of the powers and
responsibilities given to the Trustee (or Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall render an
accounting to the Employer and unless objected to by the Employer
within 30 days of its receipt, the accounting shall be deemed to have
been approved and the resigning or removed Trustee (or Custodian)
shall be released and discharged as to all matters set forth in the
accounting. Where a financial organization is serving as Trustee (or
Custodian) and it is merged with or bought by another organization
(or comes under the control of any federal or state agency), that
organization shall serve as the successor Trustee (or Custodian) of
this Plan, but only if it is the type of organization that can so
serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank trustee or
custodian pursuant to Section 1.401-12(n) of the Income Tax
Regulations, the Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of Internal Revenue
that such substitution is required because the Trustee (or Custodian)
has failed to comply with the requirements of Section 1.401-12(n) or
is not keeping such records or making such returns or rendering such
statements as are required by forms or regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any losses
incurred by the Fund by any direction to invest communicated by the
Employer, Plan Administrator, investment manager appointed pursuant
to Section 5.12 or any Participant or Beneficiary. The Trustee (or
Custodian) shall be under no liability for distributions made or
other action taken or not taken at the written direction of the Plan
Administrator. It is specifically understood that the Trustee (or
Custodian) shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any
Employee to become a Participant or remain a Participant hereunder,
the amount of benefit to which a Participant or Beneficiary shall be
entitled to receive hereunder, whether a distribution to Participant
or Beneficiary is appropriate under the terms of the Plan or the size
and type of any policy to be purchased from any insurer for any
Participant hereunder or similar matters; it being understood that
all such responsibilities under the Plan are vested in the Plan
Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
Notwithstanding any other provision herein, and except as may be
otherwise provided by ERISA, the Employer shall indemnify and hold
harmless the Trustee (or Custodian, if applicable) and the Prototype
Sponsor, their officers, directors, employees, agents, their heirs,
executors, successors and assigns, from and against any and all
liabilities, damages, judgments, settlements, losses, costs, charges,
or expenses (including legal expenses) at any time arising out of or
incurred in connection with any action taken by such parties in the
performance of their duties with respect to this Plan, unless there
has been a final adjudication of gross negligence or willful
misconduct in the performance of such duties.
-30-
<PAGE>
Further, except as may be otherwise provided by ERISA, the Employer
will indemnify the Trustee (or Custodian) and Prototype Sponsor from
any liability, claim or expense (including legal expense) which the
Trustee (or Custodian) and Prototype Sponsor shall incur by reason of
or which results, in whole or in part, from the Trustee's (or
Custodian's) or Prototype Sponsor's reliance on the facts and other
directors and elections the Employer communicates or fails to
communicate.
5.12 INVESTMENT MANAGERS
A. DEFINITION OF INVESTMENT MANAGER - The Employer may appoint
one or more investment managers to make investment
decisions with respect to all or a portion of the Fund. The
investment manager shall be any firm or individual
registered as an investment adviser under the Investment
Advisers Act of 1940, a bank as defined in said Act or an
insurance company qualified under the laws of more than one
state to perform services consisting of the management,
acquisition or disposition of any assets of the Plan.
B. INVESTMENT MANAGER'S AUTHORITY - A separate Investment Fund
shall be established representing the assets of the Fund
invested at the direction of the investment manager. The
investment manager so appointed shall direct the Trustee
(or Custodian, if applicable) with respect to the
investment of such Investment Fund. The investments which
may be acquired at the direction of the investment manager
are those described in Section 5.03(A) (for Custodians) or
Section 5.04(A) (for Trustees).
C. WRITTEN AGREEMENT - The appointment of any investment
manager shall be by written agreement between the Employer
and the investment manager and a copy of such agreement
(and any modification or termination thereof) must be given
to the Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment and
an acknowledgment by the investment manager that it is a
fiduciary of the Plan under ERISA.
D. CONCERNING THE TRUSTEE (OR CUSTODIAN) - Written notice of
each appointment of an investment manager shall be given to
the Trustee (or Custodian) in advance of the effective date
of such appointment. Such notice shall specify which
portion of the Fund will constitute the Investment Fund
subject to the investment manager's direction. The Trustee
(or Custodian) shall comply with the investment direction
given to it by the investment manager and will not be
liable for any loss which may result by reason of any
action (or inaction) it takes at the direction of the
investment manager.
5.13 [INTENTIONALLY OMITTED]
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant may
individually direct the Trustee (or Custodian, if applicable)
regarding the investment of part or all of his or her Individual
Account. To the extent so directed, the Employer, Plan Administrator,
Trustee (or Custodian) and all other fiduciaries are relieved of
their fiduciary responsibility under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his or her Individual Account. Each
Separate Fund shall be charged or credited (as appropriate) with the
earnings, gains, losses or expenses attributable to such Separate
Fund. No fiduciary shall be liable for any loss which results from a
Participant's individual direction. The assets subject to individual
direction shall not be invested in collectibles as that term is
defined in Section 408(m) of the Code.
-31-
<PAGE>
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it deems
necessary or advisable including, but not limited to, rules
describing (1) which portions of Participant's Individual Account can
be individually directed; (2) the frequency of investment changes;
(3) the forms and procedures for making investment changes; and (4)
the effect of a Participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory
manner, limit the available investments for Participants' individual
direction to certain specified investment options (including, but not
limited to, certain mutual funds, investment contracts, deposit
accounts and group trusts). The Plan Administrator may permit, in a
uniform and nondiscriminatory manner, a Beneficiary of a deceased
Participant or the alternate payee under a qualified domestic
relations order (as defined in Section 414(p) of the Code) to
individually direct in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution - The Vested portion
of a Participant's Individual Account shall be
distributable to the Participant upon (1) the
occurrence of any of the distributable events
specified in the Adoption Agreement; (2) the
Participant's Termination of Employment after
attaining Normal Retirement Age; (3) the
termination of the Plan; and (4) the
Participant's Termination of Employment after
satisfying any Early Retirement Age conditions.
If a Participant separates from service before
satisfying the Early Retirement Age requirement,
but has satisfied the service requirement, the
Participant will be entitled to elect an early
retirement benefit upon satisfaction of such age
requirement.
2. Written Request: When Distributed - A Participant
entitled to distribution who wishes to receive a
distribution must submit a written request to the
Plan Administrator. Such request shall be made
upon a form provided by the Plan Administrator.
Upon a valid request, the Plan Administrator
shall direct the Trustee (or Custodian, if
applicable) to commence distribution no later
than the time specified in the Adoption Agreement
for this purpose and, if not specified in the
Adoption Agreement, then no later than 90 days
following the later of:
a. the close of the Plan Year within
which the event occurs which entitles
the Participant to distribution; or
b. the close of the Plan Year in which
the request is received.
3. Special Rules for Withdrawals During Service - If
this is a profit sharing plan and the Adoption
Agreement so provides, a Participant may elect to
receive a distribution of all or part of the
Vested portion of his or her Individual Account,
subject to the requirements of Section 6.05 and
further subject to the following limits:
a. Participant for 5 or more years. An
Employee who has been a Participant in
the Plan for 5 or more years may
withdraw up to the entire Vested
portion of his or her Individual
Account.
-32-
<PAGE>
b. Participant for less than 5 years. An
Employee who has been a Participant in
the Plan for less than 5 years may
withdraw only the amount which has
been in his or her Individual Account
attributable to Employee Contributions
for at least 2 full Plan Years,
measured from the date such
contributions were allocated. However,
if the distribution is on account of
hardship, the Participant may withdraw
up to his or her entire Vested portion
of the Participant's Individual
Account. For this purpose, hardship
shall have the meaning set forth in
Section 6.01(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals - If this
is a profit sharing plan and the Adoption
Agreement so provides, a Participant may elect to
receive a hardship distribution of all or part of
the Vested portion of his or her Individual
Account, subject to the requirements of Section
6.05 and further subject to the following limits:
a. Participant for 5 or more years. An
Employee who has been a Participant in
the Plan for 5 or more years may
withdraw up to the entire Vested
portion of his or her Individual
Account.
b. Participant for less than 5 years. An
Employee who has been a Participant in
the Plan for less than 5 years may
withdraw only the amount which has
been in his or her Individual Account
attributable to Employer Contributions
for at least 2 full Plan Years,
measured from the date such
contributions were allocated.
For purposes of this Section
6.01(A)(4) and Section 6.01(A)(3)
hardship is defined as an immediate
and heavy financial need of the
Participant where such Participant
lacks other available resources. The
following are the only financial needs
considered immediate and heavy:
expenses incurred or necessary for
medical care, described in Section
213(d) of the Code, of the Employee,
the Employee's spouse or dependents;
the purchase (excluding mortgage
payments) of a principal residence for
the Employee; payment of tuition and
related educational fees for the next
12 months of post-secondary education
for the Employee, the Employee's
spouse, children or dependents; or the
need to prevent the eviction of the
Employee from, or a foreclosure on the
mortgage of, the Employee's principal
residence.
A distribution will be considered as
necessary to satisfy an immediate and
heavy financial need of the Employee
only if:
1) The employee has obtained
all distributions, other
than hardship distributions,
and all nontaxable loans
under all plans maintained
by the Employer;
2) The distribution is not in
excess of the amount of an
immediate and heavy
financial need (including
amounts necessary to pay any
federal, state or local
income taxes or penalties
reasonably anticipated to
result from the
distribution).
5. One-Time In-Service Withdrawal Option - If this
is a profit sharing plan and the Employer has
elected the one-time in-service withdrawal option
in the Adoption Agreement, then Participants will
be permitted only one in-service withdrawal
during the course of such Participants employment
with the Employer. The amount which the
Participant can withdraw will be limited to the
lesser of the amount determined under the limits
set forth in
-33-
<PAGE>
Section 6.01(A)(3) or the percentage of the
Participant's Individual Account specified by the
Employer in the Adoption Agreement. Distributions
under this Section will be subject to the
requirements of Section 6.05.
6. Commencement of Benefits - Notwithstanding any
other provisions, unless the Participant elects
otherwise, distribution of benefits will begin no
later than the 60th day after the latest of the
close of the Plan Year in which:
a. the Participant attains Normal
Retirement Age;
b. occurs the 10th anniversary of the
year in which the Participant
commenced participation in the Plan;
or
c. the Participant incurs a Termination
of Employment.
Notwithstanding the foregoing, the
failure of a Participant and spouse to
consent to a distribution while a
benefit is immediately distributable,
within the meaning of Section 6.02(B)
of the Plan, shall be deemed to be an
election to defer commencement of
payment of any benefit sufficient to
satisfy this Section.
B. DETERMINING THE VESTED PORTION - In determining the Vested
portion of a Participant's Individual Account, the
following rules apply:
1. Employer Contributions and Forfeitures - The
Vested portion of a Participant's Individual
Account derived from Employer Contributions and
Forfeitures is determined by applying the vesting
schedule selected in the Adoption Agreement (or
the vesting schedule described in Section 6.01(C)
if the Plan is a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A
Participant is fully Vested in his or her
rollover contributions and transfer
contributions.
3. Fully Vested Under Certain Circumstances - A
Participant is fully Vested in his or her
Individual Account if any of the following
occurs:
a. the Participant reaches Normal
Retirement Age;
b. the Plan is terminated or partially
terminated; or
c. there exists a complete discontinuance
of contributions under the Plan.
Further, unless otherwise indicated in the
Adoption Agreement, a Participant is fully Vested
if the Participant dies, incurs a Disability, or
satisfies the conditions for Early Retirement Age
(if applicable).
4. Participants in a Prior Plan - If a Participant
was a participant in a Prior Plan on the
Effective Date, his or her Vested percentage
shall not be less than it would have been under
such Prior Plan as computed on the Effective
Date.
C. MINIMUM VESTING SCHEDULE FOR TOP-HEAVY PLANS - The
following vesting provisions apply for any Plan Year in
which this Plan is a Top-Heavy Plan.
-34-
<PAGE>
Notwithstanding the other provisions of this Section 6.01
or the vesting schedule selected in the Adoption Agreement
(unless those provisions or that schedule provide for more
rapid vesting), a Participant's Vested portion of his or
her Individual Account attributable to Employer
Contributions and Forfeitures shall be determined in
accordance with the vesting schedule elected by the
Employer in the Adoption Agreement (and if no election is
made the 6 year graded schedule will be deemed to have been
elected) as described below:
<TABLE>
<CAPTION>
6 YEAR GRADED 3 YEAR CLIFF
Years of Vesting Service Vested Percentage Years of Vesting Service Vested Percentage
<S> <C> <C> <C> <C>
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
</TABLE>
This minimum vesting schedule applies to all benefits
within the meaning of Section 411(a)(7) of the Code, except
those attributable to Nondeductible Employee Contributions
including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the
Plan became a Top-Heavy Plan. Further, no decrease in a
Participant's Vested percentage may occur in the event the
Plan's status as a Top-Heavy Plan changes for any Plan
Year. However, this Section 6.01(C) does not apply to the
Individual Account of any Employee who does not have an
Hour of Service after the Plan has initially become a
Top-Heavy Plan and such Employee's Individual Account
attributable to Employer Contributions and Forfeitures will
be determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in
accordance with the above restrictions, the vesting
schedule as selected in the Adoption Agreement will govern.
If the vesting schedule under the Plan shifts in or out of
top-heavy status, such shift is an amendment to the vesting
schedule and the election in Section 9.04 applies.
D. BREAK IN VESTING SERVICE AND FORFEITURES - If a Participant
incurs a Termination of Employment, any portion of his or
her Individual Account which is not Vested shall be held in
a suspense account. Such suspense account shall share in
any increase or decrease in the fair market value of the
assets of the Fund in accordance with Section 4 of the
Plan. The disposition of such suspense account shall be as
follows:
1. Breaks in Vesting Service - If a Participant
neither receives nor is deemed to receive a
distribution pursuant to Section 6.01(D)(3) or
(4) and the Participant returns to the service of
the Employer before incurring 5 consecutive
Breaks in Vesting Service, there shall be no
Forfeiture and the amount in such suspense
account shall be recredited to such Participant's
Individual Account.
2. Five Consecutive Breaks in Vesting Service - If a
Participant neither receives nor is deemed to
receive a distribution pursuant to Section
6.01(D)(3) or (4) and the Participant does not
-35-
<PAGE>
return to the service of the Employer before
incurring 5 consecutive Breaks in Vesting
Service, the portion of the Participant's
Individual Account which is not Vested shall be
treated as a Forfeiture and allocated in
accordance with Section 3.01(C).
3. Cash-out of Certain Participants - If the value
of the Vested portion of such Participant's
Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions
does not exceed $3,500, the Participant shall
receive a distribution of the entire Vested
portion of such Individual Account and the
portion which is not Vested shall be treated as a
Forfeiture and allocated in accordance with
Section 3.01(C). For purposes of this Section, if
the value of the Vested portion of a
Participant's Individual Account is zero, the
Participant shall be deemed to have received a
distribution of such Vested Individual Account. A
Participant's Vested Individual Account balance
shall not include accumulated deductible employee
contributions within the meaning of Section
72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
4. Participants Who Elect to Receive Distributions -
If such Participant elects to receive a
distribution, in accordance with Section 6.02(B),
of the value of the Vested portion of his or her
Individual Account derived from Nondeductible
Employee Contributions and Employer
Contributions, the portion which is not Vested
shall be treated as a Forfeiture and allocated in
accordance with Section 3.01(C).
5. Re-employed Participants - If a Participant
receives or is deemed to receive a distribution
pursuant to Section 6.01(D)(3) or (4) above and
the Participant resumes employment covered under
this Plan, the Participant's Employer-derived
Individual Account balance will be restored to
the amount on the date of distribution if the
Participant 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 Breaks
in Vesting Service following the date of the
distribution.
Any restoration of a Participant's Individual
Account pursuant to Section 6.01(D)(5) shall be
made from other Forfeitures, income or gain to
the Fund or contributions made by the Employer.
E. DISTRIBUTION PRIOR TO FULL VESTING - If a distribution is
made to a Participant who was not then fully Vested in his
or her Individual Account derived from Employer
Contributions and the Participant may increase his or her
Vested percentage in his or her Individual Account, then
the following rules shall apply:
1. a separate account will 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 will be equal to
an amount ("X") determined by the formula: X=P
(AB + (R x D)) - (R x D) where "P" is the Vested
percentage at the relevant time, "AB" is the
separate account balance at the relevant time.
"D" is the amount of the distribution; and "R" is
the ratio of the separate account balance at the
relevant time to the separate account balance
after distribution
-36-
<PAGE>
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed $3,500 - If the
value of the Vested portion of a Participant's Individual
Account derived from Nondeductible Employee Contributions
and Employer Contributions does not exceed $3,500,
distribution from the Plan shall be made to the Participant
in a single lump sum in lieu of all other forms of
distribution from the Plan as soon as administratively
feasible.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a
Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the
Individual Account is immediately distributable,
the Participant and the Participant's spouse (or
where either the Participant or the spouse died,
the survivor) must consent to any distribution of
such Individual Account. The consent of the
Participant and the Participant's spouse shall be
obtained in writing within the 90-day period
ending on the annuity starting date. The annuity
starting date is the first day of the first
period for which an amount is paid as an annuity
or any other form. The Plan Administrator shall
notify the Participant and the Participant's
spouse of the right to defer any distribution
until the Participant's Individual Account is no
longer immediately distributable. Such
notification shall include a general description
of the material features, and an explanation of
the relative values of, the optional forms of
benefit available under the Plan in a manner that
would satisfy the notice requirements of Section
417(a)(3) of the Code, and shall be provided no
less than 30 days and no more than 90 days prior
to the annuity starting date.
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:
a. 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
b. the Participant, after receiving the
notice, affirmatively elects a
distribution.
Notwithstanding the foregoing, only
the Participant need consent to the
commencement of a distribution in the
form of a qualified joint and survivor
annuity while the Individual Account
is immediately distributable. Neither
the consent of the Participant nor the
Participant's spouse shall be required
to the extent that a distribution is
required to satisfy Section 401(a)(9)
or Section 415 of the Code. In
addition, upon termination of this
Plan if the Plan does not offer an
annuity option (purchased from a
commercial provider), the
Participant's Individual Account may,
without the Participant's consent, be
distributed to the Participant or
transferred to another defined
contribution plan (other than an
employee stock ownership plan as
defined in Section 4975(e)(7) of the
Code) within the same controlled
group.
An Individual Account is immediately
distributable if any part of the
Individual Account could be
distributed to the Participant (or
surviving spouse) before the
-37-
<PAGE>
Participant attains or would have
attained (if not deceased) the later
of Normal Retirement Age or age 62.
2. For purposes of determining the applicability of
the foregoing consent requirements to
distributions made before the first day of the
first Plan Year beginning after December 31,
1988, the Vested portion of a Participant's
Individual Account shall not include amounts
attributable to accumulated deductible employee
contributions within the meaning of Section
72(o)(5)(B) of the Code.
C. OTHER FORMS OF DISTRIBUTION TO PARTICIPANT - If the value
of the Vested portion of a Participant's Individual Account
exceeds $3,500 and the Participant has properly waived the
joint and survivor annuity, as described in Section 6.05,
the Participant may request in writing that the Vested
portion of his or her Individual Account be paid to him or
her in one or more of the following forms of payment: (1)
in a lump sum; (2) in installment payments over a period
not to exceed the life expectancy of the Participant or the
joint and last survivor life expectancy of the Participant
and his or her designated Beneficiary; or (3) applied to
the purchase of an annuity contract
Notwithstanding anything in this Section 6.02 to the
contrary, a Participant cannot elect payments in the form
of an annuity if the Retirement Equity Act safe harbor
rules of Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. DESIGNATION OF BENEFICIARY - SPOUSAL CONSENT - Each
Participant may designate, upon a form provided by and
delivered to the Plan Administrator, one or more primary
and contingent Beneficiaries to receive all or a specified
portion of the Participant's Individual Account in the
event of his or her death. A Participant may change or
revoke such Beneficiary designation from time to time by
completing and delivering the proper form to the Plan
Administrator.
In the event that a Participant wishes to designate a
primary Beneficiary who is not his or her spouse, his or
her spouse must consent in writing to such designation, and
the spouse's consent must acknowledge the effect of such
designation and be witnessed by a notary public or plan
representative. Notwithstanding this consent requirement,
if the Participant establishes to the satisfaction of the
Plan Administrator that such written consent may not be
obtained because there is no spouse or the spouse cannot be
located, no consent shall be required. Any change of
Beneficiary will require a new spousal consent.
B. PAYMENT TO BENEFICIARY - If a Participant dies before the
Participant's entire Individual Account has been paid to
him or her, such deceased Participant's Individual Account
shall be payable to any surviving Beneficiary designated by
the Participant, or, if no Beneficiary survives the
Participant, to the Participant's estate.
C. WRITTEN REQUEST: WHEN DISTRIBUTED - A Beneficiary of a
deceased Participant entitled to a distribution who wishes
to receive a distribution must submit a written request to
the Plan Administrator. Such request shall be made upon a
form provided by the Plan Administrator. Upon a valid
request, the Plan Administrator shall direct the Trustee
(or Custodian) to commence distribution no la ter than the
time specified in the Adoption Agreement for this purpose
and if not specified in the Adoption Agreement, then no
later than 90 days following the later of:
1. the close of the Plan Year within which the
Participant dies; or
2. the close of the Plan Year in which the request
is received.
-38-
<PAGE>
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If the
value of the Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions does not exceed $3,500, the Plan
Administrator shall direct the Trustee (or Custodian, if
applicable) to make a distribution to the Beneficiary in a
single lump sum in lieu of all other forms of distribution
from the Plan.
B. VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500 - If the value
of a Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions exceeds $3,500 the preretirement survivor
annuity requirements of Section 6.05 shall apply unless
waived in accordance with that Section or unless the
Retirement Equity Act safe harbor rules of Section 6.05(F)
apply. However, a surviving spouse Beneficiary may elect
any form of payment allowable under the Plan in lieu of the
preretirement survivor annuity. Any such payment to the
surviving spouse must meet the requirements of Section
6.06.
C. OTHER FORMS OF DISTRIBUTION TO BENEFICIARY - If the value
of a Participant's Individual Account exceeds $3,500 and
the Participant has properly waived the preretirement
survivor annuity, as described in Section 6.05 (if
applicable) or if the Beneficiary is the Participant's
surviving spouse, the Beneficiary may, subject to the
requirements of Section 6.06, request in writing that the
Participant's Individual Account be paid as follows: (1) in
a lump sum; or (2) in installment payments over a period
not to exceed the life expectancy of such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any
Participant who is credited with at least one Hour of
Eligibility Service with the Employer on or after August
23, 1984, and such other Participants as provided in
Section 6.05(G).
B. QUALIFIED JOINT AND SURVIVOR ANNUITY - Unless an optional
form of benefit is selected pursuant to a qualified
election within the 90-day period ending on the annuity
starting date, a married Participant's Vested account
balance will be paid in the form of a qualified joint and
survivor annuity and an unmarried Participant's Vested
account balance will be paid in the form of a life annuity.
The Participant may elect to have such annuity distributed
upon attainment of the earliest retirement age under the
Plan.
C. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - Unless an
optional form of benefit has been selected within the
election period pursuant to a qualified election, if a
Participant dies before the annuity starting date then the
Participant's Vested account balance shall be applied
toward the purchase of an annuity for the life of the
surviving spouse. The surviving spouse may elect to have
such annuity distributed within a reasonable period after
the Participant's death.
D. DEFINITIONS
1. Election Period - The period which begins on the
first day of the Plan Year in which the
Participant attains age 35 and ends on the date
of the Participant's death. If a Participant
separates from service prior to the first day of
the Plan Year in which a e 35 is attained, with
respect to the account balance as of the date of
separation, the election period shall begin on
the date of separation.
-39-
<PAGE>
Pre-age 35 waiver - A Participant who will not
yet attain age 35 as of the end of any current
Plan Year may make special qualified election to
waive the qualified preretirement survivor
annuity for the period beginning on the date of
such election and ending on the first day of the
Plan Year in which the Participant will attain
age 35. Such election shall not be valid unless
the Participant receives a written explanation of
the qualified preretirement survivor annuity in
such terms as are comparable to the explanation
required under Section 6.05(E)(1). Qualified
preretirement survivor annuity coverage will be
automatically reinstated as of the first day of
the Plan Year in which the Participant attains
age 35. Any new waiver on or after such date
shall be subject to the full requirements of this
Section 6.05.
2. Earliest Retirement Age - The earliest date on
which, under the Plan, the Participant could
elect to receive retirement benefits.
3. Qualified Election - A waiver of a qualified
joint and survivor annuity or a qualified
preretirement survivor annuity. Any waiver of a
qualified joint and survivor annuity or a
qualified preretirement survivor annuity shall
not be effective unless: (a) the Participant's
spouse consents in writing to the election, (b)
the election designates a specific Beneficiary,
including any class of beneficiaries or any
contingent beneficiaries, which may not be
changed without spousal consent (or the spouse
expressly permits designations by the Participant
without any further spousal consent); (c) the
spouse's consent acknowledges the effect of the
election; and (d) the spouse's consent is
witnessed by a plan representative or notary
public. Additionally, a Participant's waiver of
the qualified joint and survivor annuity shall
not be effective unless the election designates a
form of benefit payment which may not be changed
without spousal consent (or the spouse expressly
permits designations by the Participant without
any further spousal consent). If it is
established to the satisfaction of a plan
representative that there is no spouse or that
the spouse cannot be located, a waiver will be
deemed a qualified election.
Any consent by a spouse obtained under this
provision (or establishment that the consent of a
spouse may not be obtained) shall be effective
only with respect to such spouse. A consent that
permits designations by the Participant without
any requirement of further consent by such spouse
must acknowledge that the spouse has the right to
limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and
that the spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a
prior waiver may be made by a Participant without
the consent of the spouse at any time before the
commencement of benefits. The number of
revocations shall not be limited. No consent
obtained under this provision shall be valid
unless the Participant has received notice as
provided in Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity - An
immediate annuity for the life of the Participant
with a survivor annuity for the life of the
spouse which is not less than 50% and not more
than 100% of the amount of the annuity which is
payable during the joint lives of the Participant
and the spouse and which is the amount of benefit
which can be purchased with the Participant's
vested account balance. The percentage of the
survivor annuity under the Plan shall be 50%
(unless a different percentage is elected by the
Employer in the Adoption Agreement).
5. Spouse (surviving spouse) - The spouse or
surviving spouse of the Participant, provided
that a former spouse will be treated as the
spouse or surviving spouse and a current spouse
will
-40-
<PAGE>
not be treated as the spouse or surviving spouse
to the extent provided under a qualified domestic
relations order as described in Section 414(p) of
the Code.
6. Annuity Starting Date - The first day of the
first period for which an amount is paid as an
annuity or any other form.
7. Vested Account Balance - The aggregate value of
the Participant's Vested account balances derived
from Employer and Nondeductible Employee
Contributions (including rollovers), whether
Vested before or upon death, including the
proceeds of insurance contracts, if any, on the
Participant's life. The provisions of this
Section 6.05 shall apply to a Participant who is
Vested in amounts attributable to Employer
Contributions, Nondeductible Employee
Contributions (or both) at the time of death or
distribution.
E. NOTICE REQUIREMENTS
1. In the case of a qualified joint and survivor
annuity, the Plan Administrator shall no less
than 30 days and not more than 90 days prior to
the annuity starting date provide each
Participant a written explanation of: (a) the
terms and conditions of a qualified joint and
survivor annuity; (b) the Participant's right to
make and the effect of an election to waive the
qualified joint and survivor annuity form of
benefit; (c) the rights of a Participant's
spouse; and (d) the right to make, and the effect
of, a revocation of a previous election to waive
the qualified joint and survivor annuity.
2. In the case of a qualified preretirement annuity
as described in Section 6.05(C), the Plan
Administrator shall provide each Participant
within the applicable period for such Participant
a written explanation of the qualified
preretirement survivor annuity in such terms and
in such manner as would be comparable to the
explanation provided for meeting the requirements
of Section 6.05(E)(1) applicable to a qualified
joint and survivor annuity.
The applicable period for a Participant is
whichever of the following periods ends last: (a)
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; (b) a reasonable period ending
after the individual becomes a Participant; (c) a
reasonable period ending after Section 6.05(E)(3)
ceases to apply to the Participant; and (d) a
reasonable period ending after this Section 6.05
first applies to the Participant. Notwithstanding
the foregoing, notice must be provided within a
reasonable period ending after separation from
service in the case of a Participant who
separates from service before attaining age 35.
For purposes of applying the preceding paragraph,
a reasonable period ending after the enumerated
events described in (b), (c) and (d) is the end
of the two-year period beginning one year prior
to the date the applicable event occurs, and
ending one year after that date. In the case of a
Participant who separates from service before the
Plan Year in which age 35 is attained, notice
shall be provided within the two-year period
beginning one year prior to separation and ending
one year after separation. If such a Participant
thereafter returns to employment with the
Employer, the applicable period for such
Participant shall be redetermined.
3. Notwithstanding the other requirements of this
Section 6.05(E), the respective notices
prescribed by this Section 6.05(E), need not be
given to a Participant if (a) the Plan "fully
subsidizes" the costs of a qualified joint and
survivor annuity or qualified preretirement
-41-
<PAGE>
survivor annuity, and (b) the Plan does not allow
the Participant to waive the qualified joint and
survivor annuity or qualified preretirement
survivor annuity and does not allow a married
Participant to designate a nonspouse beneficiary.
For purposes of this Section 6.05(E)(3), a plan
fully subsidizes the costs of a benefit if no
increase in cost, or decrease in benefits to the
Participant may result from the Participant's
failure to elect another benefit.
F. RETIREMENT EQUITY ACT SAFE HARBOR RULES
1. If the Employer so indicates in the Adoption
Agreement, this Section 6.05(F) shall apply to a
Participant in a profit sharing plan, and shall
always apply 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 Section 72(o)(5)(B) of the Code, and
maintained on behalf of a Participant in a money
purchase pension plan, (including a target
benefit plan) if the following conditions are
satisfied:
a. the Participant does not or cannot
elect payments in the form of a life
annuity; and
b. on the death of a Participant, the
Participant's Vested account balance
will be paid to the Participant's
surviving spouse, but if there is no
surviving spouse, or if the surviving
spouse has consented in a manner
conforming to a qualified election,
then to the Participant's designated
Beneficiary. The surviving spouse may
elect to have distribution of the
Vested account balance commence within
the 90-day period following the date
of the Participant's death. The
account balance shall be adjusted for
gains or losses occurring after the
Participant's death in accordance with
the provisions of the Plan governing
the adjustment of account balances for
other types of distributions. This
section 6.05(F) shall not be operative
with respect to a Participant in a
profit sharing plan if the plan is a
direct or indirect transferee of a
defined benefit plan, money purchase
plan, a target benefit plan, stock
bonus, or profit sharing plan which is
subject to the survivor annuity
requirements of Section 401(a)(11) and
Section 417 of the code. If this
Section 6.05(F) is operative, then the
provisions of this Section 6.05 other
than Section 6.05(G) shall be
inoperative.
2. The Participant may waive the spousal death
benefit described in this Section 6.05(F) at any
time provided that no such waiver shall be
effective unless it satisfies the conditions of
Section 6.05(D)(3) (other than the notification
requirement referred to therein) that would apply
to the Participant's waiver of the qualified
preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested
account balance shall mean, in the case of a
money purchase pension plan or a target benefit
plan, the Participant's separate account balance
attributable solely to accumulated deductible
employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a
profit sharing plan, Vested account balance shall
have the same meaning as provided in Section
6.05(D)(7).
G. TRANSITIONAL RULES
1. Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive
the benefits prescribed by the previous
subsections of this Section 6.05 must be given
the opportunity to elect to have the prior
subsections of this Section apply if such
Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan
-42-
<PAGE>
in a Plan Year beginning on or after January 1,
1976, and such Participant had at least 10 Years
of Vesting Service when he or she separated from
service.
2. Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least
one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any
service in a Plan Year beginning on or after
January 1, 1976, must be given the opportunity to
have his or her benefits paid in accordance with
Section 6.05(G)(4).
3. The respective opportunities to elect (as
described in Section 6.05(G)(1) and (2) above)
must be afforded to the appropriate Participants
during the period commencing on August 23,1984,
and ending on the date benefits would otherwise
commence to said Participants.
4. Any Participant who has elected pursuant to
Section 6.05(G)(2) and any Participant who does
not elect under Section 6.05(G)(1) or who meets
the requirements of Section 6.05(G)(1) except
that such Participant does not have at least 10
Years of Vesting Service when he or she separates
from service, shall have his or her benefits
distributed in accordance with all of the
following requirements if benefits would have
been payable in the form of a life annuity:
a. Automatic Joint and Survivor Annuity -
If benefits in the form of a life
annuity become payable to a married
Participant who:
(1) begins to receive payments
under the Plan on or after
Normal Retirement Age; or
(2) dies on or after Normal
Retirement Age while still
working for the Employer; or
(3) begins to receive payments
on or after the qualified
early retirement age; or
(4) separates from service on or
after attaining Normal
Retirement Age (or the
qualified early retirement
age) and after satisfying
the eligibility requirements
for the payment of benefits
under the Plan and
thereafter dies before
beginning to receive such
benefits;
then such benefits will be received
under this Plan in the form of a
qualified joint and survivor annuity,
unless the Participant has elected
otherwise during the election period.
The election period must begin at
least 6 months before the Participant
attains qualified early retirement age
and ends not more than 90 days before
the commencement of benefits. Any
election hereunder will be in writing
and may be changed by the Participant
at any time.
b. Election of Early Survivor Annuity - A
Participant who is employed after
attaining the qualified early
retirement age will be given the
opportunity to elect, during the
election period, to have a survivor
annuity payable on death. If the
Participant elects the survivor
annuity, payments under such annuity
must not be less than the payments
which would have been made to the
spouse under the qualified joint and
survivor annuity if the Participant
had retired on the day before his or
her death. Any election under this
provision will be in writing and may
be changed by the
-43-
<PAGE>
Participant at any time. The election
period begins on the later of (1) the
90th day before the Participant
attains the qualified early retirement
age, or (2) the date on which
participation begins, and ends on the
date the Participant terminates
employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement
age is the latest of:
a. the earliest date,
under the Plan, on
which the
Participant may
elect to receive
retirement benefits,
b. the first day of the
120th month
beginning before the
Participant reaches
Normal Retirement
Age, or
c. the date the
Participant begins
participation.
2. Qualified joint and survivor
annuity is an annuity for
the life of the Participant
with a survivor annuity for
the life of the spouse as
described in Section
6.05(D)(4) of this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. GENERAL RULES
1. Subject to Section 6.05 Joint and Survivor
Annuity Requirements, the requirements of this
Section shall apply to any distribution of a
Participant's interest and will take precedence
over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of
this Section 6.06 apply to calendar years
beginning after December 31, 1984.
2. All distributions required under this Section
6.06 shall be determined and made in accordance
with the Income Tax Regulations under Section
401(a)(9), including the minimum distribution
incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
B. REQUIRED BEGINNING DATE - The entire interest of a
Participant must be distributed or begin to be distributed
no later than the Participant's required beginning date.
C. LIMITS ON DISTRIBUTION PERIODS - As of the first
distribution calendar year, distributions, if not made in a
single sum, may only be made over one of the following
periods (or a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated
Beneficiary,
3. a period certain not extending beyond the life
expectancy of the Participant, or
4. a period certain not extending beyond the joint
and last survivor expectancy of the Participant
and a designated Beneficiary.
-44-
<PAGE>
D. DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR - If
the Participant's interest is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be
distributed over (1) a period not
extending beyond the life expectancy
of the Participant or the joint life
and last survivor expectancy of the
Participant and the Participants
designated Beneficiary or (2) a period
not extending beyond the life
expectancy of the designated
Beneficiary, the amount required to be
distributed for each calendar year,
beginning with distributions for the
first distribution calendar year, must
at least equal the quotient obtained
by dividing the Participant's benefit
by the applicable fife expectancy.
b. For calendar years beginning before
January 1, 1989, if the Participant's
spouse is not the designated
Beneficiary, the method of
distribution selected must assure that
at least 50% of the present value of
the amount available for distribution
is paid within the life expectancy of
the Participant.
c. For calendar years beginning after
December 31, 1988, the amount to be
distributed each year, beginning with
distributions for the first
distribution calendar year shall not
be less than the quotient obtained by
dividing the Participant's benefit by
the lesser of (1) the applicable life
expectancy or (2) if the Participant's
spouse is not the designated
Beneficiary, the applicable divisor
determined from the table set forth in
Q&A-4 of Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations.
Distributions after the death of the
Participant shall be distributed using
the applicable life expectancy in
Section 6.05(D)(1)(a) above as the
relevant divisor without regard to
proposed regulations 1.401(a)(9)-2.
d. The minimum distribution required for
the Participant's first distribution
calendar year must be made on or
before the Participant's required
beginning date. The minimum
distribution for other calendar years,
including the minimum distribution for
the distribution calendar year in
which the Employee's required
beginning date occurs, must be made on
or before December 31 of that
distribution calendar year.
2. Other Forms - If the Participant's benefit is
distributed in the form of an annuity purchased
from an insurance company, distributions
thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and
the regulations thereunder.
E. DEATH DISTRIBUTION PROVISIONS
1. Distribution Beginning Before Death - If the
Participant dies after distribution of his or her
interest has begun, the remaining portion of such
interest will continue to be distributed at least
as rapidly as under the method of distribution
being used prior to the Participant's death.
2. Distribution Beginning After Death - If the
Participant dies before distribution of his or
her interest begins, distribution of the
Participant's entire interest shall be completed
by December 31 of the calendar year containing
the fifth anniversary of the Participant's death
except to the extent that an election is made to
receive distributions in accordance with (a) or
(b) below:
-45-
<PAGE>
a. if any portion of the Participant's
interest is payable to a designated
Beneficiary, distributions may be made
over the life or over a period certain
not greater than the life expectancy
of the designated Beneficiary
commencing on or before December 31 of
the calendar year immediately
following the calendar year in which
the Participant died;
b. if the designated Beneficiary is the
Participant's surviving spouse, the
date distributions are required to
begin in accordance with (a) above
shall not be earlier than the later of
(1) December 31 of the calendar year
immediately following the calendar
year in which the Participant dies or
(2) December 31 of the calendar year
in which the Participant would have
attained age 701/2. If the Participant
has not made an election pursuant to
this Section 6.05(E)(2) by the time of
his or her death, the Participant's
designated Beneficiary must elect the
method of distribution no later than
the earlier of (1) December 31 of the
calendar year in which distributions
would be required to begin under this
Section 6.05(E)(2), or (2) December 31
of the calendar Year which contains
the fifth anniversary of the date of
death of the Participant. If the
Participant has no designated
Beneficiary, or if the designated
Beneficiary does not elect a method of
distribution, distribution of the
Participant's entire interest must be
completed by December 31 of the
calendar year containing the fifth
anniversary of the Participant's
death.
3. For purposes of Section 6.06(E)(2) above, if the
surviving spouse dies after the Participant, but
before payments to such spouse begin, the
provisions of Section 6.06(E)(2), with the
exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the
Participant.
4. For purposes of this Section 6.06(E), any amount
paid to a child of the Participant will be
treated as if it had been paid to the surviving
spouse if the amount becomes payable to the
surviving spouse when the child reaches the age
of majority.
5. For purposes of this Section 6.06(E),
distribution of a Participant's interest is
considered to begin on the Participant's required
beginning date (or, if Section 6.06(E)(3) above
is applicable, the date distribution is required
to begin to the surviving spouse pursuant to
Section 6.06(E)(2) above). If distribution in the
form of an annuity irrevocably commences to the
Participant before the required beginning date,
the date distribution is considered to begin is
the data distribution actually commences.
F. DEFINITIONS
1. Applicable Life Expectancy - The life expectancy
(or joint and last survivor expectancy)
calculated using the attained age of the
Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's)
birthday in the applicable calendar year reduced
by one for each calendar year which has elapsed
since the date life expectancy was first
calculated. If life expectancy is being
recalculated, the applicable life expectancy
shall be the life expectancy as so recalculated.
The applicable calendar year shall be the first
distribution calendar year, and if life
expectancy is being recalculated such succeeding
calendar year.
2. Designated Beneficiary - The individual who is
designated as the Beneficiary under the Plan in
accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
-46-
<PAGE>
3. Distribution Calendar Year - A calendar year for
which a minimum distribution is required. For
distributions beginning before the Participant's
death, the first distribution calendar year is
the calendar year immediately preceding the
calendar year which contains the Participant's
required beginning date. For distributions
beginning after the Participant's death, the
first distribution calendar year is the calendar
year in which distributions are required to begin
pursuant to Section 6.05(E) above.
4. Life Expectancy - Life expectancy and joint and
last survivor expectancy are computed by use of
the expected return multiples in Tables V and VI
of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or
spouse, in the case of distributions described in
Section 6.05(E)(2)(b) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Such
election shall be irrevocable as to the
Participant (or spouse) and shall apply to all
subsequent years. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last
valuation date in the valuation
calendar year (the calendar year
immediately preceding the distribution
calendar year) increased by the amount
of any Contributions or Forfeitures
allocated to the account balance as of
dates in the valuation calendar year
after the valuation date and decreased
by distributions made in the valuation
calendar year after the valuation
date.
b. Exception for second distribution
calendar year. For purposes of
paragraph (a) above, if any portion of
the minimum distribution for the first
distribution calendar year is made in
the second distribution calendar year
on or before the required beginning
date, the amount of the minimum
distribution made in the second
distribution calendar year shall be
treated as if it had been made in the
immediately preceding distribution
calendar year.
6. Required Beginning Date
a. General Rule - The required beginning
date of a Participant is the first day
of April of the calendar year
following the calendar year in which
the Participant attains age 70 1/2.
b. Transitional Rules - The required
beginning date of a Participant who
attains age 70 1/2 before January 1,
1988, shall be determined in
accordance with (1) or (2) below:
(1) Non 5% Owners - The required
beginning date of a
Participant who is not a 5%
owner is the first day of
April of the calendar year
following the calendar year
in which the later of
retirement or attainment of
age 70 1/2 occurs.
(2) 5% Owners - The required
beginning date of a
Participant who is a 5%
owner during any year
beginning after December 31,
1979, is the first day of
April following the later
of:
-47-
<PAGE>
(a) the calendar year in
which the
Participant attains
age 70 1/2, or
(b) the earlier of the
calendar year with
or within which ends
the Plan Year in
which the
Participant becomes
a 5% owner, or the
calendar year in
which the
Participant retires.
The required
beginning date of a
Participant who is
not a 5% owner who
attains age 70 1/2
during 1988 and who
has not retired as
of January 1, 1989,
is April 1, 1990.
c. 5% Owner - A Participant is
treated as a 5% owner for
purposes of this Section
6.06(F)(6) if such
Participant is a 5% owner as
defined in Section 416(i) of
the Code (determined in
accordance with Section 416
but without regard to
whether the Plan is
top-heavy) at any time
during the Plan Year ending
with or within the calendar
year in which such owner
attains age 66 1/2 or any
subsequent Plan Year.
d. Once distributions have
begun to a 5% owner under
this Section 6.06(F)(6) they
must continue to be
distributed, even if the
Participant ceases to be a
5% owner in a subsequent
year.
G. TRANSITIONAL RULE
1. Notwithstanding the other requirements of this
Section 6.06 and subject to the requirements of
Section 6.05, Joint and Survivor Annuity
Requirements, distribution on behalf of any
Employee, including a 5% owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
a. The distribution by the Fund is one
which would not have qualified such
Fund under Section 401(a)(9) of the
Code as in effect prior to amendment
by the Deficit Reduction Act of 1984.
b. The distribution is in accordance with
a method of distribution designated by
the Employee whose interest in the
Fund is being distributed or, if the
Employee is deceased, by a Beneficiary
of such Employee.
c. Such designation was in writing, was
signed by the Employee or the
Beneficiary, and was made before
January 1, 1984.
d. The Employee had accrued a benefit
under the Plan as of December 31,
1983.
e. The method of distribution designated
by the Employee or the Beneficiary
specifies the time at which
distribution will commence, the period
over which distributions will be made,
and in the case of any distribution
upon the Employee's death, the
Beneficiaries of the Employee listed
in order of priority.
2. A distribution upon death will not be covered by
this transitional rule unless the information in
the designation contains the required information
described above with respect to the distributions
to be made upon the death of the Employee.
-48-
<PAGE>
3. For any distribution which commences before
January 1, 1984, but continues after December 31,
1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be presumed
to have designated the method of distribution
under which the distribution is being made if the
method of distribution was specified in writing
and the distribution satisfies the requirements
in Section 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent
distribution must satisfy the requirements of
Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked
subsequent to the date distributions are required
to begin, the Plan must distribute by the end of
the calendar year following the calendar year in
which the revocation occurs the total amount not
yet distributed which would have been required to
have been distributed to satisfy Section
401(a)(9) of the Code and the regulations
thereunder, but for the Section 242(b)(2)
election. For calendar years beginning after
December 31, 1988, such distributions must meet
the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations. Any changes in
the designation will be considered to be a
revocation of the designation. However, the mere
substitution or addition of another Beneficiary
(one not named in the designation) under the
designation will not be considered to be a
revocation of the designation, so long as such
substitution or addition does not alter the
period over which distributions are to be made
under the designation, directly or indirectly
(for example, by altering the relevant measuring
life). In the case in which an amount is
transferred or roller over from one plan to
another plan, the rules in Q&A J-2 and Q&A J-3
shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted or
required by this Section 6) must be nontransferable. The terms of any
annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may receive a
loan from the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in an
amount greater than the amount made available Co other
Employees.
C. Loans must be adequately secured and bear a reasonable
interest rate.
D. No Participant loan shall exceed the present value of the
Vested portion of a Participant's Individual Account.
E. A Participant must obtain the consent of his or her spouse,
if any, to the use of the Individual Account as security
for the loan. Spousal consent shall be obtained no earlier
than the beginning of the 90 day period that ends on the
date on which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect of the
loan, and must be witnessed by a plan representative or
notary public. Such consent shall thereafter be binding
with respect to the consenting spouse or any subsequent
spouse with respect to that loan. A new consent shall be
required if the account balance is used for renegotiation,
extension, renewal, or other revision of the loan.
Notwithstanding the
-49-
<PAGE>
foregoing, no spousal consent is necessary if, at the time
the loan is secured, no consent would be required for a
distribution under Section 417(a)(2)(B). In addition,
spousal consent is not required if the Plan or the
Participant is not subject to Section 401(a)(11) at the
time the Individual Account is used as security, or if the
total Individual Account subject to the security is less
than or equal to $3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan. Notwithstanding the preceding
sentence, a Participant's default on a loan will be treated
as a distributable event and as soon as administratively
feasible after the default, the Participant's Vested
Individual Account will be reduced by the lesser of the
amount in debt (plus accrued interest) or the amount
secured. If this Plan is a 401(k) plan, then to the extent
the loan is attributable to a Participant's Elective
Deferrals, Qualified Nonelective Contributions or Qualified
Matching Contributions, the Participant's Individual
Account will not be reduced unless the Participant has
attained age 59 1/2or has another distributable event. A
Participant will be deemed to have consented to the
provision at the time the loan is made to the Participant
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year
of such corporation, more than 5% of the outstanding stock
of the corporation.
If a valid spousal consent has been obtained in accordance
with 6.08(E), then, notwithstanding any other provisions of
this Plan, the portion of the Participant's Vested
Individual Account used as a security interest held by the
Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the
amount of the account balance payable at the time of death
or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the
Participant's Vested Individual Account (determined without
regard to the preceding sentence) is payable to the
surviving spouse, then the account balance shall be
adjusted by first reducing the Vested Individual Account by
the amount of the security used as repayment of the loan,
and then determining the benefit payable to the surviving
spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (a) $50,000 reduced
by the excess (if any) of the highest outstanding balance
of loans during the one year period ending on the day
before the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made, or (b)
50% of the present value of the nonforfeitable Individual
Account of the Participant or, if greater, the total
Individual Account up to $10,000. For the purpose of the
above limitation, all loans from all plans of the Employer
and other members of a group of employers described in
Sections 414(b), 414(c), and 414(m) of the Code are
aggregated. Furthermore, any loan shall by its terms
require that repayment (principal and interest) be
amortized in level payments, not less frequently than
quarterly over a period not extending beyond 5 years from
the date of the loan, unless such loan is used to acquire a
dwelling unit which within a reasonable time (determined at
the time the loan is made) will be used as the principal
residence of the Participant. An assignment or pledge of
any portion of the Participant's interest in the Plan and a
loan, pledge, or assignment with respect to any insurance
contract purchased under the Plan, will be treated as a
loan under this paragraph.
The Plan Administrator shall administer the loan program in
accordance with a written document. Such written document
shall include, at a minimum, the following: (i) the
identity of the person or positions authorized to
administer the Participant loan program; (ii) the procedure
for applying for
-50-
<PAGE>
loans; (iii) the basis on which loans will be approved or
denied; (iv) limitations (if any) on the types and amounts
of loans offered; (v) the procedure under the program for
determining a reasonable rate of interest; (vi) the types
of collateral which may secure a Participant loan; and
(vii) the events constituting default and the steps that
will be taken to preserve Plan assets in the event of such
default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this Plan to
be made either in a form actually held in the Fund, or in cash by
converting assets other than cash into cash, or in any combination of
the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution that is equal to at least $500 paid directly
to an eligible retirement plan specified by the distributee
in a direct rollover.
B. Definitions
1. Eligible rollover distribution - An eligible
rollover distribution is any distribution of all
or any portion of the balance to the credit of
the distributee, except that an eligible rollover
distribution does not include:
a. any distribution that is one of a
series of substantially equal periodic
payments (not less frequently than
annually) made for the life (or life
expectancy) of the distribution of the
joint lives (or joint life
expectancies) of the distributee and
the distributee's designated
Beneficiary, or for a specified period
of ten years or more;
b. any distribution to the extent such
distribution is required under Section
401(a)(9) of the Code;
c. the portion of any other distribution
that is not includible in gross income
(determined without regard to the
exclusion for net unrealized
appreciation with respect to employer
securities); and
d. any other distribution(s) that is
reasonably expected to total less than
$200 during a year.
2. Eligible retirement plan - An eligible retirement
plan is an individual retirement account
described in Section 408(a) of the Code, an
individual retirement annuity described in
Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an
eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an
individual retirement account or individual
retirement annuity.
-51-
<PAGE>
3. Distributee - A distributee includes an Employee
or former Employee. In addition, the Employee's
or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former
spouse who is the alternate payee under a
qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former
spouse.
4. Direct rollover - A direct rollover is a payment
by the Plan to the eligible retirement plan
specified by the distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to
locate Participants or Beneficiaries who are entitled to
distributions from the Plan. In the event that the Plan
Administrator cannot locate a Participant or Beneficiary
who is entitled to a distribution from the Plan after using
all reasonable measures to locate him or her, the Plan
Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any
reasonable procedure to dispose of distributable plan
assets, including any of the following: (1) establish a
bank account for and in the name of the Participant or
Beneficiary and transfer the assets to such bank account,
(2) purchase an annuity contract with the assets in the
name of the expiration of Participant or Beneficiary, or
(3) after the expiration of 5 years after the benefit
becomes payable, treat the amount distributable as a
Forfeiture and allocate it in accordance with the terms of
the Plan and if the Participant or Beneficiary is later
located, restore such benefit to the Plan.
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for the
Vested portion of the Participant's Individual Account shall file a
written request with the Plan Administrator on a form to be furnished
to him or her by the Plan Administrator for such purpose. The request
shall set forth the basis of the claim. The Plan Administrator is
authorized to conduct such examinations as may be necessary to
facilitate the payment of any benefits to which the Participant or
Beneficiary may be entitled under the terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary written
notice of the denial within 60 days of the date the original claim
was filed. This notice shall set forth the specific reasons for the
denial, specific reference to pertinent Plan provisions on which the
denial is based, a description of any additional information or
material needed to perfect the claim, an explanation of why such
additional information or material is necessary and an explanation of
the procedures for appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt of the
denial notice in which to make written application for review by the
Plan Administrator. The Participant or Beneficiary may request that
the review be in the nature of a hearing. The Participant or
Beneficiary shall have the right to representation, to review
pertinent documents and to submit comments in writing. The Plan
Administrator shall issue a decision on such review within 60 days
after receipt of an application for review as provided for in Section
7.02. Upon a decision unfavorable to the Participant or Beneficiary,
such Participant or Beneficiary shall be entitled to bring
-52-
<PAGE>
such actions in law or equity as may be necessary or appropriate to
protect or clarify his or her right to benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless the
managing body of the Employer designates a person or
persons other than the Employer as the Plan Administrator
and so notifies the Trustee (or Custodian, if applicable).
The Employer shall also be the Plan Administrator if the
person or persons so designated cease to be the Plan
Administrator. The Employer may establish an administrative
committee that will carry out the Plan Administrator's
duties. Members of the administrative committee may
allocate the Plan Administrator's duties among themselves.
B. If the managing body of the Employer designates a person or
persons other than the Employer as Plan Administrator, such
person or persons shall serve at the pleasure of the
Employer and shall serve pursuant to such procedures as
such managing body may provide. Each such person shall be
bonded as may be required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate the
duties of the Plan Administrator among several individuals
or entities. Such appointments shall not be effective until
the party designated accepts such appointment in writing.
B. The Plan Administrator shall have the authority to control
and manage the operation and administration of the Plan.
The Plan Administrator shall administer the Plan for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the specific terms of the
Plan.
C. The Plan Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to the following:
1. To determine all questions of interpretation or
policy in a manner consistent with the Plan's
documents and the Plan Administrator's
construction or determination in good faith shall
be conclusive and binding on all persons except
as otherwise provided herein or by law. Any
interpretation or construction shall be done in a
nondiscriminatory manner and shall be consistent
with the intent that the Plan shall continue to
be deemed a qualified plan under the terms of
Section 401 (a) of the Code, as amended from time
to time, and shall comply with the terms of
ERISA, as amended from time to time;
2. To determine all questions relating to the
eligibility of Employees to become or remain
Participants hereunder;
3. To compute the amounts necessary or desirable to
be contributed to the Plan;
4. To compute the amount and kind of benefits to
which a Participant or Beneficiary shall be
entitled under the Plan and to direct the Trustee
(or Custodian, if applicable) with respect to all
disbursements under the Plan, and, when requested
by the Trustee (or Custodian), to furnish the
Trustee (or Custodian) with instructions, in
writing, on matters pertaining to the Plan and
the Trustee (or Custodian) may rely and act
thereon;
-53-
<PAGE>
5. To maintain all records necessary for the
administration of the Plan;
6. To be responsible for preparing and filing such
disclosure and tax forms as may be required from
time to time by the Secretary of Labor or the
Secretary of the Treasury; and
7. To furnish each Employee, Participant or
Beneficiary such notices, information and reports
under such circumstances as may be required by
law.
D. The Plan Administrator shall have all of the powers
necessary or appropriate to accomplish his or her duties
under the Plan, including, but not limited to, the
following:
1. To appoint and retain such persons as may be
necessary to carry out the functions of the Plan
Administrator;
2. To appoint and retain counsel, specialists or
other persons as the Plan Administrator deems
necessary or advisable in the administration of
the Plan;
3. To resolve all questions of administration of the
Plan;
4. To establish such uniform and nondiscriminatory
rules which it deems necessary to carry out the
terms of the Plan;
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems necessary
to correct any arithmetical or accounting errors
which may have been made for any Plan Year; and
6. To correct any defect, supply any omission 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.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not limited
to, those involved in retaining necessary professional assistance may
be paid from the assets of the Fund. Alternatively, the Employer may,
in its discretion, pay any or all such expenses. Pursuant to uniform
and nondiscriminatory rules that the Plan Administrator may establish
from time to time, administrative expenses and expenses unique to a
particular Participant may be charged to a Participant's Individual
Account or the Plan Administrator may allow Participants to pay such
fees outside of the Plan. The Employer shall furnish the Plan
Administrator with such clerical and other assistance as the Plan
Administrator may need in the performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her duties, the
Employer shall supply full and timely information to the Plan
Administrator (or his or her designated agents) on all matters
relating to the Compensation of all Participants, their regular
employment, retirement, death, Disability or Termination of
Employment, and such other pertinent facts as the Plan Administrator
(or his or her agents) may require. The Plan Administrator shall
advise the Trustee (or Custodian, if applicable) of such of the
foregoing facts as may be pertinent to the Trustee's (or Custodian's)
duties under the Plan. The Plan Administrator (or his or her agents)
is entitled to rely on such information as is supplied by the
Employer and shall have no duty or responsibility to verify such
information.
-54-
<PAGE>
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates to
the Prototype Sponsor the power, but not the duty, to amend
the Plan without any further action or consent of the
Employer as the Prototype Sponsor deems necessary for the
purpose of adjusting the Plan to comply with all laws and
regulations governing pension or profit sharing plans.
Specifically, it is understood that the amendments may be
made unilaterally by the Prototype Sponsor. However, it
shall be understood that the Prototype Sponsor shall be
under no obligation to amend the Plan documents and the
Employer expressly waives any rights or claims against the
Prototype Sponsor for not exercising this power to amend.
For purposes of Prototype Sponsor amendments, the mass
submitter shall be recognized as the agent of the Prototype
Sponsor. If the Prototype Sponsor does not adopt the
amendments made by the mass submitter, it will no longer be
identical to or a minor modifier of the mass submitter
plan.
B. An amendment by the Prototype Sponsor shall be accomplished
by giving written notice to the Employer of the amendment
to be made. The notice shall set forth the text of such
amendment and the date such amendment is to be effective.
Such amendment shall take effect unless within the 30 day
period after such notice is provided, or within such
shorter period as the notice may specify, the Employer
gives the Prototype Sponsor written notice of refusal to
consent to the amendment. Such written notice of refusal
shall have the effect of withdrawing the Plan as a
prototype plan and shall cause the Plan to be considered an
individually designed plan. The right of the Prototype
Sponsor to cause the Plan to be amended shall terminate
should the Plan cease to conform as a prototype plan as
provided in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
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 Section 415 or Section 416 of
the Code 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 individually designed. An Employer that
amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d) of the Code, will no
longer participate in this prototype plan and will be considered to
have an individually designed plan.
An Employer who wishes to amend the Plan to change the options it has
chosen in the Adoption Agreement must complete and deliver a new
Adoption Agreement to the Prototype Sponsor and Trustee (or
Custodian, if applicable). Such amendment shall become effective upon
execution by the Employer and Trustee (or Custodian).
The Employer further reserves the right to replace the Plan in its
entirety by adopting another retirement plan which the Employer
designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's Individual
Account may be reduced to the extent permitted under Section
412(c)(8) of the Code. For purposes of this paragraph, a plan
amendment which has the effect of decreasing a Participant's
Individual Account or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment
shall be treated as reducing an accrued
-55-
<PAGE>
benefit. Furthermore, if the vesting schedule of a Plan is amended,
in the case of an Employee who is a Participant as of the later of
the date such amendment is adopted or the date it becomes effective,
the Vested percentage (determined as of such date) of such Employee's
Individual Account derived from Employer Contributions will not be
less than the percentage computed under the Plan without regard to
such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is amended in
any way that directly or indirectly affects the computation of the
Participant's Vested percentage, or if the Plan is deemed amended by
an automatic change to or from a top-heavy vesting schedule, each
Participant with at least 3 Years of Vesting Service with the
Employer may elect, within the time set forth below, to have the
Vested percentage computed under the- Plan without regard to such
amendment.
For Participants who do not have at least 1 Hour of Service in any
Plan Year beginning after December 31, 1988, the preceding sentence
shall be applied by substituting "5 Years of Vesting Service" for "3
Years of Vesting Service" where such language appears.
The Period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end
the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the necessary
contributions thereto indefinitely, but such continuance and payment
is not assumed as a contractual obligation. Neither the Adoption
Agreement nor the Plan nor any amendment or modification thereof nor
the making of contributions hereunder shall be construed as giving
any Participant or any person whomsoever any legal or equitable right
against the Employer, the Trustee (or Custodian, if applicable) the
Plan Administrator or the Prototype Sponsor except as specifically
provided herein, or as provided by law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by appropriate
action of its managing body. Such termination shall be effective on
the date specified by the Employer. The Plan shall terminate if the
Employer shall be dissolved, terminated, or declared bankrupt.
Written notice of the termination and effective date thereof shall be
given to the Trustee (or Custodian), Plan Administrator, Prototype
Sponsor, Participants and Beneficiaries of deceased Participants, and
the required filings (such as the Form 5500 series and others) must
be made with the Internal Revenue Service and any other regulatory
body as required by current laws and regulations. Until all of the
assets have been distributed from the Fund, the Employer must keep
the Plan in compliance with current laws and regulations by (a)
making appropriate amendments to the Plan and (b) taking such other
measures as may be required.
-56-
<PAGE>
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the
Employer may continue the Plan and be substituted in the place of the
present Employer. The successor and the present Employer (or, if
deceased, the executor of the estate of a deceased Self-Employed
Individual who was the Employer) must execute a written instrument
authorizing such substitution and the successor must complete and
sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan will no
longer be considered to be part of a prototype plan, and such
Employer can no longer participate under this prototype. In such
event, the Plan will be considered are individually designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable without
regard to the community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of the
provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender they shall
be construed as though they were also used in the feminine gender in
all cases where they would so apply, and whenever any words are used
herein in the singular form they shall be construed as though they
were also used in the plural form in all cases where they would so
apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or
transfer of assets or liabilities of such Plan to, any other plan,
each Participant shall be entitled to receive benefits immediately
after the merger, consolidation, or transfer (if the Plan had then
terminated) which are equal to or greater than the benefits he or she
would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated). The
Trustee (or Custodian) has the authority to enter into merger
agreements or agreements to directly transfer the assets of this Plan
but only if such agreements are made with trustees or custodians of
other retirement plans described in Section 401 (a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other fiduciary
under this Plan shall discharge their duties with respect to this
Plan solely in the interests of Participants and their Beneficiaries
and with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims. No fiduciary
shall cause the Plan to engage in any transaction known as a
"prohibited transaction" under ERISA.
-57-
<PAGE>
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatsoever hereunder agree to perform any and all acts and execute
any and all documents and papers which may be necessary or desirable
for the carrying out of this Plan and any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors, administrators,
successors and assigns, as those terms shall apply to any and all
parties hereto, present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31,1983, this
Plan is a Top-Heavy Plan if any of the following conditions
exist:
1. If the top-heavy ratio for this Plan exceeds 60%
and this Plan is not part of any required
aggregation group or permissive aggregation group
of plans.
2. If this Plan is part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top-heavy ratio for the
group of plans exceeds 60%.
3. If this Plan is a part of a required aggregation
group and part of a permissive aggregation group
of plans and the top-heavy ratio for the
permissive aggregation group exceeds 60%.
For purposes of this Section 10.08, the following terms shall have
the meanings indicated below:
B. KEY EMPLOYEE - Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner
(or considered an owner under Section 318 of the Code) of
one of the 10 largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5%
owner of the Employer, or a 1% owner of the Employer who
has an annual compensation of more than $150,000. Annual
compensation means compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed
bathe Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under
Section 125, Section 402(e)(3), Section 402(h)(1)(B) or
Section 403(b) of the Code. The determination period is the
Plan Year containing the determination date and the 4
preceding Plan Years.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
C. TOP-HEAVY RATIO
1. If the Employer maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Employer has not
maintained any defined benefit plan which during
the 5-year period ending on the determination
date(s) has or has had accrued benefits, the
top-heavy ratio for this Plan alone or for the
required or permissive aggregation group as
appropriate is a fraction, the numerator of which
is the sum of the account balances of all Key
Employees as of the determination date(s)
(including any part of any account
-58-
<PAGE>
balance distributed in the 5-year period ending
on the determination date(s)), and the
denominator of which is the sum of all account
balances (including any part of any account
balance distributed in the 5-year period ending
on the determination date(s)), both computed in
accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and
the denominator of the top-heavy ratio are
increased to reflect any contribution not
actually made as of the determination date, but
which is required to be taken into account on
that date under Section 416 of the Code and the
regulations thereunder.
2. If the Employer maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Employer maintains
or has maintained one or more defined benefit
plans which during the 5-year period ending on
the determination date(s) has or has had any
accrued benefits, the top-heavy ratio for any
required or permissive aggregation group as
appropriate is a fraction, the numerator of which
is the sum of account balances under the
aggregated defined contribution plan or plans for
all Key Employees, determined in accordance with
(1) above, and the present value of accrued
benefits under the aggregated defined benefit
plan or plans for all Key Employees as of the
determination date(s), and the denominator of
which is the sum of the account balances under
the aggregated defined contribution plan or plans
for all Participants, determined in accordance
with (1) above, and the present value of accrued
benefits under the defined benefit plan or plans
for all Participants as of the determination
date(s), all determined in accordance with
Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined
benefit plan in both the numerator and
denominator of the top-heavy ratio are increased
for any distribution of an accrued benefit made
in the 5-year period ending on the determination
date.
3. For purposes of (1) and (2) above, the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
valuation date that falls within or ends with the
12-month period ending on the determination date,
except as provided in Section 416 of the Code and
the regulations thereunder for the first and
second plan years of a defined benefit plan. The
account balances and accrued benefits of a
Participant (a) who is not a Key Employee but who
was a Key Employee in a Prior Year, or (b) who
has not been credited with at least one Hour of
Service with any employer maintaining the plan at
any time during the 5-year period ending on the
determination date will be disregarded. The
calculation of the top-heavy ratio, and the
extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee
contributions will not be taken into account for
purposes of computing the top-heavy ratio. When
aggregating plans the value of account balances
and accrued benefits will be calculated with
reference to the determination dates that fall
within the same calendar year.
The accrued benefit of a Participant other than a
Key Employee shall be determined under (a) the
method, if any, that uniformly applies for
accrual purposes under all defined benefit plans
maintained by the Employer, or (b) if there is no
such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C)
of the Code.
4. Permissive aggregation group: The required
aggregation group of plans plus any other plan or
plans of the Employer which, when considered as a
group with the required aggregation group, would
continue to satisfy the requirements of Sections
401(a)(4) and 410 of the Code.
-59-
<PAGE>
5. Required aggregation group: (a) Each qualified
plan of the Employer in which at least one Key
Employee participates or participated at any time
during the determination period (regardless of
whether the Plan has terminated), and (b) any
other qualified plan of the Employer which
enables a plan described in (a) to meet the
requirements of Sections 401(a)(4) or 410 of the
Code.
6. Determination date: For any Plan Year subsequent
to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of
the Plan, the last day of that year.
7. Valuation date: For purposes of calculating the
top-heavy ratio, the valuation date shall be the
last day of each Plan Year.
8. Present value: For purposes of establishing the
"present value" of benefits under a defined
benefit plan to compute the top-heavy ratio, any
benefit shall be discounted only for mortality
and interest based on the interest rate and
mortality table specified for this purpose in the
defined benefit plan, unless otherwise indicated
in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
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 trades or businesses, this Plan and
the plan established for other trades or businesses must, when looked
at as a single plan, satisfy Sections 401(a) and (d) of the Code for
the employees of those trades or businesses.
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 Sections 401(a) and (d) of the Code and which
provides contributions and benefits not less favorable than provided
for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of
two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trade or business
which is controlled must be as favorable as those provided for him or
her under the most favorable plan of the trade or business which is
not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two
or more Owner-Employees, will be considered to control a trade or
business if the Owner-Employee, or two or more Owner-Employees,
together:
(1) own the entire interest in a unincorporated trade
or business, or
(2) in the case of a partnership, own more than 50%
of either the capital interest or the profit
interest in the partnership.
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.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall also apply to the creation, assignment, or
recognition of a right
-60-
<PAGE>
to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a
qualified domestic relations order, as defined in Section 414(p) of
the Code.
Generally, a domestic relations order cannot be a qualified domestic
relations order until January 1, 1985. However, in the case of a
domestic relations order entered before such date, the Plan
Administrator:
(1) shall treat such order as a qualified domestic
relations order if such Plan Administrator is
paying benefits pursuant to such order on such
date, and
(2) may treat any other such order entered before
such date as a qualified domestic relations order
even if such order does not meet the requirements
of Section 414(p) of the Code.
Notwithstanding any provision of the Plan to the contrary, a
distribution to an alternate payee under a qualified domestic
relations order shall be permitted even if the Participant affected
by such order is not otherwise entitled to a distribution and even if
such Participant has not attained earliest retirement age as defined
in Section 414(p) of the Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the regulations
thereunder, the Employer cannot reduce, eliminate or make subject to
Employer discretion any Section 411(d)(6) protected benefit. Where
this Plan document is being adopted to amend another plan that
contains a protected benefit not provided for in this document, the
Employer may attach a supplement to the Adoption Agreement that
describes such protected benefit which shall become part of the Plan.
SECTION ELEVEN 401(K) PROVISIONS
In addition to Sections 1 through 10, the provisions of this
Section 11 shall apply if the Employer has established a 401(k)
cash or deferred arrangement (CODA) by completing and signing the
appropriate Adoption Agreement.
11.01 DEFINITIONS
The following words and phrases when used in the Plan with initial
capital letters shall, for the purposes of this Plan, have the
meanings set forth below unless the context indicates that other
meanings are intended.
11.02 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year, the
average of the ratios (calculated separately for each Participant
in such group) of (1) the amount of Employer Contributions actually
paid over to the Fund on behalf of such Participant for the Plan
Year to (2) the Participant's Compensation for such Plan Year
(taking into account only that Compensation paid to the Employee
during the portion of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the Adoption Agreement).
For purposes of calculating the ADP, Employer Contributions on
behalf of any Participant shall include: (1) any Elective Deferrals
made pursuant to the Participant's deferral election, (including
Excess Elective Deferrals of Highly Compensated Employees), but
excluding (a) Excess Elective Deferrals of Non-highly Compensated
Employees that arise solely from Elective Deferrals made under the
Plan or plans of this Employer and (b) Elective Deferrals that are
taken into account in the Contribution Percentage test (provided
the ADP test is satisfied both with and without exclusion of these
Elective Deferrals); and (2) at the election of the Employer,
Qualified Nonelective Contributions and Qualified Matching
Contributions. For purposes of
-61-
<PAGE>
computing Actual Deferral Percentages, an Employee who would be a
Participant but for the failure to make Elective Deferrals shall be
treated as a Participant on whose behalf no Elective Deferrals are
made.
11.03 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for the Plan
Year or the ACP of the Participants who are not Highly Compensated
Employees under the Plan subject to Code Section 401(m) for the
Plan Year beginning with or within the Plan Year of the CODA; and
(2) the lesser of 200% or two plus the lesser of such ADP or ACP.
"Lesser" is substituted for "greater" in "(1)" above, and "greater"
is substituted for "lesser" after "two plus the" in "(2)" if it
would result in a larger Aggregate Limit.
11.04 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the Eligible
Participants in a group.
11.05 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing Participant
pursuant to Section 11.201 and on whose behalf the Employer is
contributing Elective Deferrals to the Plan (or is making
Nondeductible Employee Contributions).
11.06 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the Participant's
Contribution Percentage Amounts to the Participant's Compensation
for the Plan Year (taking into account only the Compensation paid
to the Employee during the portion of the Plan Year he or she was
an eligible Participant, unless otherwise indicated in the Adoption
Agreement).
11.07 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions, Matching
Contributions, and Qualified Matching Contributions made under the
Plan on behalf of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are
Excess Deferrals, Excess Contributions, Excess Aggregate
Contributions or excess annual additions which are distributed
pursuant to Section 11.508. If so elected in the Adoption
Agreement, the Employer may include Qualified Nonelective
Contributions in the Contribution Percentage Amount. The Employer
also may elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to be met
following the exclusion or those Elective Deferrals that are used
to meet the ACP test.
11.08 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the election
of the Participant, in lieu of cash compensation, and shall include
contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a
Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an
election to defer under any qualified CODA as described in Section
401(k) of the Code, any simplified employee pension cash or
deferred arrangement as described in Section 402(h)(1)(B), any
eligible deferred compensation plan under Section 457, any plan as
described under Section 501(c)(18), and any Employer contributions
made on the
-62-
<PAGE>
behalf of a Participant for the purchase of an annuity contract
under Section 403(b) pursuant to a salary reduction agreement.
Elective Deferrals shall not include any deferrals properly
distributed as excess annual additions.
No Participant shall be permitted to have Elective Deferrals made
under this Plan, or any other qualified plan maintained by the
Employer, during any taxable year, in excess of the dollar
limitation contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
Elective Deferrals may not be taken into account for purposes of
satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.09 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible Employee
Contribution or an Elective Deferral (if the Employer takes such
contributions into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution (including
Forfeitures thereof) or a Qualified Matching Contribution.
If a Nondeductible Employee Contribution is required as a condition
of participation in the Plan, any Employee who would be a
Participant in the Plan if such Employee made such a contribution
shall be treated as an Eligible Participant on behalf of whom no
Nondeductible Employee Contributions are made.
11.10 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
B. The maximum Contribution Percentage Amounts permitted by
the ACP test determined by reducing contributions made on
behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining
Excess Elective Deferrals pursuant to Section 11.111 and
then determining Excess Contributions pursuant to Section
11.110.
11.11 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually
taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
B. The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of the
ADPs, beginning with the highest of such percentages).
-63-
<PAGE>
11.12 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code to the
extent such Participant's Elective Deferrals for a taxable year
exceed the dollar limitation under such Code section. Excess
Elective Deferrals shall be treated as annual additions under the
Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
11.13 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other defined
contribution plan on behalf of a Participant on account of an
Elective Deferral or a Nondeductible Employee Contribution made by
such Participant under a plan maintained by the Employer.
Matching Contributions may not be taken into account for purposes
of satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.14 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or Qualified
Matching Contributions) made by the Employer and allocated to
Participants' Individual Accounts that the Participants may not
elect to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are applicable to
Elective Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.15 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the distribution
and nonforfeitability requirements under Section 401(k) of the Code
when made.
11.16 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the requirements
described in Section 11.302 to be entitled to receive a Matching
Contribution (and Forfeitures, if applicable) for a Plan Year.
11.17 CONTRIBUTING PARTICIPANT
11.18 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility requirements
specified in the Adoption Agreement may enroll as a
Contributing Participant as of any subsequent Entry Date
(or earlier if required by Section 2.03) specified in the
Adoption Agreement for this purpose. A Participant who
wishes to enroll as a Contributing Participant must
complete, sign and file a salary reduction agreement (or
agreement to make Nondeductible Employee Contributions)
with the Plan Administrator.
B.
Notwithstanding the times set forth in Section 11.201(A) as
of which a Participant may enroll as a Contributing
Participant, the Plan Administrator shall have the
authority to designate, in a nondiscriminatory manner,
additional enrollment times during the 12 month period
beginning on the
-64-
<PAGE>
Effective Date (or the date that Elective Deferrals may
commence, if later) in order that an orderly first
enrollment might be completed. In addition, if the Employer
has indicated in the Adoption Agreement that Elective
Deferrals may be based on bonuses, then Participants shall
be afforded a reasonable period of time prior to the
issuance of such bonuses to elect to defer them into the
Plan.
11.19 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary reduction
agreement (or agreement to make Nondeductible Employee
Contributions) to increase or decrease (within the limits placed on
Elective Deferrals (or Nondeductible Employee Contributions) in the
Adoption Agreement) the amount of his or her Compensation deferred
into the Plan. Such modification may only be made as of the dates
specified in the Adoption Agreement for this purpose, or as of any
other more frequent date(s) if the Plan Administrator permits in a
uniform and nondiscriminatory manner. A Contributing Participant
who desires to make such a modification shall complete, sign and
file a new salary reduction agreement (or agreement to make
Nondeductible Employee Contribution) with the Plan Administrator.
The Plan Administrator may prescribe such uniform and
nondiscriminatory rules it deems appropriate to carry out the terms
of this Section.
11.20 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thus withdraw as a Contributing
Participant as of the dates specified in the Adoption Agreement for
this purpose (or as of any other date if the Plan Administrator so
permits in a uniform and nondiscriminatory manner) by revoking the
authorization to the Employer to make Elective Deferrals (or
Nondeductible Employee Contributions) on his or her behalf. A
Participant who desires to withdraw as a Contributing Participant
shall give written notice of withdrawal to the Plan Administrator
at least thirty days (or such lesser period of days as the Plan
Administrator shall permit in a uniform and nondiscriminatory
manner) before the effective date of withdrawal. A Participant
shall cease to be a Contributing Participant upon his or her
Termination of Employment, or an account of termination of the
Plan.
11.21 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who has withdrawn as a Contributing Participant under
Section 11.203 (or because the Participant has taken a hardship
withdrawal pursuant to Section 11.503) may not again become a
Contributing Participant until the dates set forth in the Adoption
Agreement for this purpose, unless the Plan Administrator, in a
uniform and nondiscriminatory manner, permits withdrawing
Participants to resume their status as Contributing Participants
sooner.
11.22 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated in the
Adoption Agreement that an Employee may make a onetime irrevocable
election to have the Employer make contributions to the Plan on
such Employee's behalf. In such event, an Employee may elect, upon
the Employee's first becoming eligible to participate in the Plan,
to have contributions equal to a specified amount or percentage of
the Employee's Compensation (including no amount of Compensation)
made by the Employer on the Employee's behalf to the Plan (and to
any other plan of the Employer) for the duration of the Employee's
employment with the Employer. Any contributions made pursuant to a
one-time irrevocable election described in this Section are not
treated as made pursuant to a cash or deferred election, are not
Elective Deferrals and are not includible in an Employee's gross
income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or advisable to
administer this provision.
-65-
<PAGE>
11.23 CONTRIBUTIONS
11.24 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in accordance
with the contribution formulas specified in the Adoption Agreement.
11.25 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under the
Plan on behalf of Qualifying Contributing Participants as provided
in the Adoption Agreement. To be a Qualifying Contributing
Participant for a Plan Year, the Participant must make Elective
Deferrals (or Nondeductible Employee Contributions, if the Employer
has agreed to match such contributions) for the Plan Year, satisfy
any age and Years of Eligibility Service requirements that are
specified for Matching Contributions in the Adoption Agreement and
also satisfy any additional conditions set forth in the Adoption
Agreement for this purpose. In a uniform and nondiscriminatory
manner, the Employer may make Matching Contributions at the same
time as it contributes Elective Deferrals or at any other time as
permitted by laws and regulations.
11.26 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective Contributions
under the Plan on behalf of Participants as provided in the
Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and to the
extent elected by the Employer in the Adoption Agreement, the
Employer may make Qualified Nonelective Contributions on behalf of
Participants who are not Highly Compensated Employees that are
sufficient to satisfy either the Actual Deferral Percentage test or
the Average Contribution Percentage test, or both, pursuant to
regulations under the Code.
11.27 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching Contributions
under the Plan on behalf of Participants as provided in the
Adoption Agreement.
11.28 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in the
Adoption Agreement, a Participant may contribute Nondeductible
Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement that
Nondeductible Employee Contributions will be mandatory, then the
Employer shall establish uniform and nondiscriminatory rules and
procedures for Nondeductible Employee Contributions as it deems
necessary and advisable including, but not limited to, rules
describing in amounts or percentages of Compensation Participants
may or must contribute to the Plan.
A separate account will be maintained by the Plan Administrator for
the Nondeductible Employee Contributions for each Participant.
A Participant may, upon a written request submitted to the Plan
Administrator, withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible
Employee Contributions or the amount he or she contributed as
Nondeductible Employee Contributions.
-66-
<PAGE>
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occur solely as a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
11.29 NONDISCRIMINATION TESTING
11.30 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Actual
Deferral Percentage (hereinafter "ADP") for Participants
who are Highly Compensated Employees for each Plan Year and
the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
1. The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ADP for Participants who are not
Highly Compensated Employees for the same Plan
Year multiplied by 1.25; or
2. The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ADP for Participants who are not
Highly Compensated Employees for the same Plan
Year multiplied by 2.0 provided that the ADP for
Participants who are Highly Compensated Employees
does not exceed the ADP for Participants who are
not Highly Compensated Employees by more than 2
percentage points.
B. SPECIAL RULES
1. The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals (and
Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test)
allocated to his or her Individual Accounts under
two or more arrangements described in Section
401(k) of the Code, that are maintained by the
Employer, shall be determined as if such Elective
Deferrals (and, if applicable, such Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all
cash or deferred arrangements ending with or
within the same calendar year shall be treated as
a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under
regulations under Section 401(k) of the Code.
2. In the event that this Plan satisfies the
requirements of Sections 401(k), 401(a)(4), or
410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this
Section 11.401 shall be applied by determining
the ADP of Employees as if all such plans were a
single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in
order to satisfy Section 401(k) of the Code only
if they hive the same Plan Year.
3. For purposes of determining the ADP of a
Participant who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees,
the Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching
Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include
the Elective Deferrals (and, if applicable,
Qualified Nonelective Contributions and
-67-
<PAGE>
Qualified Matching Contributions, or both) and
Compensation for the Plan Year of family members
(as defined in Section 414(q)(6) of the Code).
Family members, with respect to such Highly
Compensated Employees, shall be disregarded as
separate Employees in determining the ADP both
for Participants who are not Highly Compensated
Employees and for Participants who are Highly
Compensated Employees.
4. For purposes of determining the ADP test,
Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching
Contributions must be made before the last day of
the 12 month period immediately following the
Plan Year to which contributions relate.
5. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the
amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used
in such test.
6. The determination and treatment of the ADP
amounts of any Participant shall satisfy such
other requirements as may be prescribed by the
Secretary of the Treasury.
7. If the Employer elects to take Qualified Matching
Contributions into account as Elective Deferrals
for purposes of the ADP test, then (subject to
such other requirements as may be prescribed by
the Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only the
amount of such Qualified Matching Contributions
that are needed to meet the ADP test shall be
taken into account.
8. In the event that the Plan Administrator
determines that it is not likely that the ADP
test will be satisfied for a particular Plan Year
unless certain steps are taken prior to the end
of such Plan Year, the Plan Administrator may
require Contributing Participants who are Highly
Compensated Employees to reduce their Elective
Deferrals for such Plan Year in order to satisfy
that requirement. Said reduction shall also be
required by the Plan Administrator in the event
that the Plan Administrator anticipates that the
Employer will not be able to deduct all Employer
Contributions from its income for Federal income
tax purposes.
11.31 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND
MATCHING CONTRIBUTIONS
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Average
Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each
Plan Year and the ACP for Participants who are not Highly
Compensated Employees for the same Plan Year must satisfy
one of the following tests:
1. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ACP for Participants who are not
Highly Compensated Employees for the same Plan
Year multiplied by 1.25; or
2. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ACP for Participants who are not
Highly Compensated Employees f6r the same Plan
Year multiplied by 2, provided that the ACP f6r
the Participants who are Highly Compensated
Employees does not exceed the ACP for
Participants who are not Highly Compensated
Employees by more than 2 percentage points.
-68-
<PAGE>
B. SPECIAL RULES
1. Multiple Use - If one or more Highly Compensated
Employees participate in both a CODA and a plan
subject to the ACP test maintained by the
Employer and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or
both tests exceeds the Aggregate Limit, then, as
elected in the Adoption Agreement, the ACP or the
ADP of those Highly Compensated Employees who
also participate in a CODA will be reduced
(beginning with such Highly Compensated Employee
whose ACP (or ADP, if elected) is the highest) so
that the limit is not exceeded. The amount by
which each Highly Compensated Employee's
Contribution Percentage Amounts (or ADP, if
elected) is reduced shall be treated as an Excess
Aggregate Contribution (or Excess Contribution,
if elected). The ADP and ACP of the Highly
Compensated Employees are determined after any
corrections required to meet the ADP and ACP
tests. Multiple use does not occur if the ADP and
ACP of the Highly Compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the
Participants who are not Highly Compensated
Employees.
2. For purposes of this Section 11.402, the
Contribution Percentage for any Participant who
is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts
allocated to his or her Individual Account under
two or more plans described in Section 401(a) of
the Code, or arrangements described in Section
401(k) of the Code that are maintained by the
Employer, shall be determined as if the total of
such Contribution Percentage Amounts was made
under each plan. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different plan years, all
cash or deferred arrangements ending with or
within the same calendar year shall be treated as
a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under
regulations under Section 401(m) of the Code.
3. In the event that this Plan satisfies the
requirements of Sections 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such Sections of the
Code only if aggregated with this Plan, then this
Section shall be applied by determining the
Contribution Percentage of Employees as if all
such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of
the Code only if they have the same Plan Year.
4. For purposes of determining the Contribution
Percentage of a Participant who is a 5% owner or
one of the 10 most highly paid Highly Compensated
Employees, the Contribution Percentage Amounts
and Compensation of such Participant shall
include the Contribution Percentage Amounts and
Compensation for the Plan Year of family members,
(as defined in Section 414(q)(6) of the Code).
Family members, with respect to Highly
Compensated Employees, shall be disregarded as
separate Employees in determining the
Contribution Percentage both for Participants who
are not Highly Compensated Employees and for
Participants who are Highly Compensated
Employees.
5. For purposes of determining the Contribution
Percentage test, Nondeductible Employee
Contributions are considered to have been made in
the Plan Year in which contributed to the Fund.
Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan
Year if made no later than the end of the 12
month period beginning on the day after the close
of the Plan Year.
-69-
<PAGE>
6. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the
amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used
in such test.
7. The determination and treatment of the
Contribution Percentage of any Participant shall
satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
8. If the Employer elects to take Qualified
Nonelective Contributions into account as
Contribution Percentage Amounts for purposes of
the ACP test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only the
amount of such Qualified Nonelective
Contributions that are needed to meet the ACP
test shall be taken into account.
9. If the Employer elects to take Elective Deferrals
into account as Contribution Percentage Amounts
for purposes of the ACP test, then (subject to
such other requirements as may be prescribed by
the Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only the
amount of such Elective Deferrals that are needed
to meet the ACP test shall be taken into account.
11.32 DISTRIBUTION PROVISIONS
11.33 GENERAL RULE
Distributions from the Plan are subject to the provisions of
Section 6 and the provisions of this Section 11. In the event of a
conflict between the provisions of Section 6 and Section 11, the
provisions of Section 11 shall control.
11.34 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each are
not distributable to a Participant or his or her Beneficiary or
Beneficiaries, in accordance with such Participant's or Beneficiary
or Beneficiaries' election, earlier than upon separation from
service, death or disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of
another defined contribution plan, other than an employee
stock ownership plan (as defined in Section 4975(e) or
Section 409 of the Code) or a simplified employee pension
plan as defined in Section 408(k).
B. The disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the
meaning of Section 409(d)(2) of the Code used in a trade or
business of such corporation if such corporation continues
to maintain this Plan after the disposition, but only with
respect to Employees who continue employment with the
corporation acquiring such assets.
C. The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code) if such
corporation continues to maintain this Plan, but only with
respect to Employees who continue employment with such
subsidiary.
D. The attainment of age 59 1/2 in the case of a profit
sharing plan.
-70-
<PAGE>
E. If the Employer has so elected in the Adoption Agreement,
the hardship of the Participant as described in Section
11.503.
All distributions that may be made pursuant to one or more
of the foregoing distributable events are subject to the
spousal and Participant consent requirements (if
applicable) contained in Section 401(a)(11) and 417 of the
Code. In addition, distributions after March 31, 1988, that
are triggered by any of the first three events enumerated
above must be made in a lump sum.
11.35 HARDSHIP DISTRIBUTION
A. GENERAL - If the Employer has so elected in the Adoption
Agreement, distribution of Elective Deferrals (and any
earnings credited to a Participant's account as of the end
of the last Plan Year, ending before July 1, 1989) may be
made to a Participant in the event of hardship. For the
purposes of this Section, hardship is defined as an
immediate and heavy financial need of the Employee where
such Employee lacks other available resources. Hardship
distributions are subject to the spousal consent
requirements contained in Sections 401(a)(11) and 417 of
the Code.
B. SPECIAL RULES
1. The following are the only financial needs
considered immediate and heavy: expenses incurred
or necessary for medical care, described in
Section 213(d) of the Code, of the Employee, the
Employee's spouse or dependents; the purchase
(excluding mortgage payments) of a principal
residence for the Employee; payment of tuition
and related educational fees for the next 12
months of post-secondary education for the
Employee, the Employee's spouse, children or
dependents; or the need to prevent the eviction
of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
2. A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of
the Employee only if:
a. The Employee has obtained all
distributions, other than hardship
distributions, and all nontaxable
loans under all plans maintained by
the Employer;
b. All plans maintained by the Employer
provide that the Employee's Elective
Deferrals (and Nondeductible Employee
Contributions) will be suspended for
12 months after the receipt of the
hardship distribution;
c. The distribution is not in excess of
the amount of an immediate and heavy
financial need (including amounts
necessary to pay any Federal, state or
local income taxes or penalties
reasonably anticipated to result from
the distribution); and
d. All plans maintained by the Employer
provide that the Employee may not make
Elective Deferrals for the Employee's
taxable year immediately following the
taxable year of the hardship
distribution in excess of the
applicable limit under Section 402(g)
of the Code for such taxable year less
the amount of such Employee's Elective
Deferrals for the taxable year of the
hardship distribution.
11.36 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. GENERAL RULE - A Participant may assign to this Plan any
Excess Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator on or
before the date specified in
-71-
<PAGE>
the Adoption Agreement of the amount of the Excess Elective
Deferrals to be assigned to the Plan. A Participant is
deemed to notify the Plan Administrator of any Excess
Elective Deferrals that arise by taking into account only
those Elective Deferrals made to this Plan and any other
plans of the Employer.
Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than April
15 to any Participant to whose Individual Account Excess
Elective Deferrals were assigned for the preceding year and
who claims Excess Elective Deferrals for such taxable year.
B. Determination of Income or Loss - Excess Elective Deferrals
shall be adjusted for any income or loss up to the date of
distribution. The income of loss allocable to Excess
Elective Deferrals is the sum of: (1) income or loss
allocable to the Participant's Elective Deferral account
for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Elective Deferrals
for the year and the denominator is the Participant's
Individual Account balance attributable to Elective
Deferrals without regard to any income or loss occurring
during such taxable year; and (2) 10% of the amount
determined under (1) multiplied by the number of whole
calendar months between the end of the Participant's
taxable year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th
of such month. Notwithstanding the preceding sentence, the
Plan Administrator may compute the income or loss allocable
to Excess Elective Deferrals in the manner described in
Section 4 (I.E., the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently for
all Participants and for all corrective distributions under
the Plan for the Plan Year.
11.37 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this
Plan, Excess Contributions, plus any income and minus any
loss allocable thereto, shall be distributed no later than
the last day of each Plan Year to Participants to whose
Individual Accounts such Excess Contributions were
allocated for the preceding Plan Year. If such excess
amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts
arose, a 10% excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees
on the basis of the respective portions of the Excess
Contributions attributable to each of such Employees.
Excess Contributions of Participants who are subject to the
family member aggregation rules shall be allocated among
the family members in proportion to the Elective Deferrals
(and amounts treated as Elective Deferrals) of each family
member that is combined to determine the combined ADP.
Excess Contributions (including the amounts
recharacterized) shall be treated as annual additions under
the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Contributions
shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss allocable
to Participant's Elective Deferral account (and, if
applicable, the Qualified Nonelective Contribution account
or the Qualified Matching Contributions account or both)
for the Plan Year multiplied by a fraction, the numerator
of which is such Participant's Excess Contributions for the
year and the denominator is the Participant's Individual
Account balance attributable to Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or
loss occurring during such Plan Year; and (2) 10% of the
amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year and
the date of distribution,
-72-
<PAGE>
counting the month of distribution if distribution occurs
after the 15th of such month. Notwithstanding the preceding
sentence, the Plan Administrator may compute the income or
loss allocable to Excess Contributions in the manner
described in Section 4 (I.E., the usual manner used by the
Plan for allocating income or loss to Participants'
Individual Accounts), provided such method is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess Contributions
shall be distributed from the Participant's Elective
Deferral account and Qualified Matching Contribution
account (if applicable) in proportion to the Participant's
Elective Deferrals and Qualified Matching Contributions (to
the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's
Qualified Nonelective Contribution account only to the
extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferral account and Qualified
Matching Contribution account.
11.38 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. General Rule - Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to
whose accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate
Contributions of Participants who are subject to the family
member aggregation rules shall be allocated among the
family members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching
Contributions) of each family member that is combined to
determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2 1/2 months after
the last day of the Plan Year in which such excess amounts
arose, a 10% excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual
additions under the Plan.
B. Determination of Income or Loss - Excess Aggregate
Contributions shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable
to Excess Aggregate Contributions is the sum of: (1) income
or loss allocable to the Participant's Nondeductible
Employee Contribution account, Matching Contribution
account (if any, and if all amounts therein are not used in
the ADP test) and, if applicable, Qualified Nonelective
Contribution account and Elective Deferral account for the
Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Aggregate Contributions for
the year and the denominator is the Participant's
Individual Account balance(s) attributable to Contribution
Percentage Amounts without regard to any income or loss
occurring during such Plan Year; and (2) 10% of the amount
determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the
date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss allocable to
Excess Aggregate Contributions in the manner described in
Section 4 (I.E., the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently for
all Participants and for all corrective distributions under
the Plan for the Plan Year.
C. FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS - Forfeitures
of Excess Aggregate Contributions may either be reallocated
to the accounts of Contributing Participants who are not
Highly Compensated Employees or applied to reduce Employer
Contributions, as elected by the Employer in the Adoption
Agreement.
-73-
<PAGE>
D. ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS - Excess
Aggregate Contributions shall be forfeited, if forfeitable
or distributed on a pro rata basis from the Participant's
Nondeductible Employee Contribution account, Matching
Contribution account, and Qualified Matching Contribution
account (and, if applicable, the Participant's Qualified
Nonelective Contribution account
or Elective Deferral account, or both).
11.39 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as an
amount distributed to the Participant and then contributed by the
Participant to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements as
Elective Deferrals. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in combination
with other Nondeductible Employee Contributions made by that
Employee would exceed any stated limit under the Plan on
Nondeductible Employee Contributions.
Recharacterization must occur no later than two and one-half months
after the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the date
the last Highly Compensated Employee is informed in writing of the
amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the
Participant's tax year in which the Participant would have received
them in cash.
11.40 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a Participant's
Elective Deferrals shall be distributed to him or her to the extent
that the distribution will reduce an excess annual addition (as
that term is described in Section 3.05 of the Plan).
11.41 VESTING
11.42 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective Deferrals,
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, and Qualified Matching Contributions is
nonforfeitable. Separate accounts for Elective Deferrals, Qualified
Nonelective Contributions, Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching Contributions will
be maintained for each Participant. Each account will be credited
with the applicable contributions and earnings thereon.
11.43 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the
vesting schedule for Matching Contributions in the Adoption
Agreement. In any event, Matching Contributions shall be fully
Vested at Normal Retirement Age, upon the complete or partial
termination of the profit sharing plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any other
provisions of the Plan, Matching Contributions or Qualified
Matching Contributions must be forfeited if the contributions to
which they relate are Excess Elective Deferrals, Excess
Contributions, Excess Aggregate Contributions or excess annual
additions which are distributed pursuant to Section 11.508. Such
Forfeitures shall be allocated in accordance with Section 3.01(C).
When a Participant incurs a Termination of Employment, whether a
Forfeiture arises with respect to Matching Contributions shall be
determined in accordance with Section 6.01(D).
-74-
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 15, 1996
(except as to Notes 1 and 7, for which the date is July 16, 1996) included in
Cornell Corrections, Inc. Form S-1 for the year ended December 31, 1995 and to
all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
December 31, 1996
Houston, Texas
POWER OF ATTORNEY
WHEREAS, Cornell Corrections, Inc., a Delaware corporation (the
"Company") intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-8 (the "Registration Statement"), relating to the Cornell
Corrections, Inc. 401(k) Profit Sharing Plan (the "Plan") and the common stock,
par value $.001 per share, of the Company issuable pursuant to the Plan, with
such amendments thereto as may be necessary or appropriate, together with any
and all exhibits and other documents having relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director of
the Company, does hereby appoint DAVID M. CORNELL and STEVEN W. LOGAN, and each
of them severally, his true and lawful attorney or attorneys with power to act
with or without the other and with full power of substitution and
resubstitution, to execute in his name, place and stead, in his capacity as a
director of the Company, the Registration Statement and any and all amendments
thereto as said attorneys or either of them shall deem necessary or appropriate,
together with all instruments, exhibits or other documents necessary or
incidental in connection therewith, and to file the same or cause the same to be
filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done in
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on this 17th day of December, 1996.
/s/ CAMPBELL A. GRIFFIN, JR.
Campbell A. Griffin, Jr.
<PAGE>
POWER OF ATTORNEY
WHEREAS, Cornell Corrections, Inc., a Delaware corporation (the
"Company") intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-8 (the "Registration Statement"), relating to the Cornell
Corrections, Inc. 401(k) Profit Sharing Plan (the "Plan") and the common stock,
par value $.001 per share, of the Company issuable pursuant to the Plan, with
such amendments thereto as may be necessary or appropriate, together with any
and all exhibits and other documents having relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director of
the Company, does hereby appoint DAVID M. CORNELL and STEVEN W. LOGAN, and each
of them severally, his true and lawful attorney or attorneys with power to act
with or without the other and with full power of substitution and
resubstitution, to execute in his name, place and stead, in his capacity as a
director of the Company, the Registration Statement and any and all amendments
thereto as said attorneys or either of them shall deem necessary or appropriate,
together with all instruments, exhibits or other documents necessary or
incidental in connection therewith, and to file the same or cause the same to be
filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done in
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on this 17th day of December, 1996.
/s/ RICHARD T. HENSHAW III
Richard T. Henshaw III
<PAGE>
POWER OF ATTORNEY
WHEREAS, Cornell Corrections, Inc., a Delaware corporation (the
"Company") intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-8 (the "Registration Statement"), relating to the Cornell
Corrections, Inc. 401(k) Profit Sharing Plan (the "Plan") and the common stock,
par value $.001 per share, of the Company issuable pursuant to the Plan, with
such amendments thereto as may be necessary or appropriate, together with any
and all exhibits and other documents having relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director of
the Company, does hereby appoint DAVID M. CORNELL and STEVEN W. LOGAN, and each
of them severally, his true and lawful attorney or attorneys with power to act
with or without the other and with full power of substitution and
resubstitution, to execute in his name, place and stead, in his capacity as a
director of the Company, the Registration Statement and any and all amendments
thereto as said attorneys or either of them shall deem necessary or appropriate,
together with all instruments, exhibits or other documents necessary or
incidental in connection therewith, and to file the same or cause the same to be
filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done in
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on this 17th day of December, 1996.
/s/ PETER A. LEIDEL
Peter A. Leidel
<PAGE>
POWER OF ATTORNEY
WHEREAS, Cornell Corrections, Inc., a Delaware corporation (the
"Company") intends to file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-8 (the "Registration Statement"), relating to the Cornell
Corrections, Inc. 401(k) Profit Sharing Plan (the "Plan") and the common stock,
par value $.001 per share, of the Company issuable pursuant to the Plan, with
such amendments thereto as may be necessary or appropriate, together with any
and all exhibits and other documents having relation thereto;
NOW, THEREFORE, the undersigned, in his capacity as a director of
the Company, does hereby appoint DAVID M. CORNELL and STEVEN W. LOGAN, and each
of them severally, his true and lawful attorney or attorneys with power to act
with or without the other and with full power of substitution and
resubstitution, to execute in his name, place and stead, in his capacity as a
director of the Company, the Registration Statement and any and all amendments
thereto as said attorneys or either of them shall deem necessary or appropriate,
together with all instruments, exhibits or other documents necessary or
incidental in connection therewith, and to file the same or cause the same to be
filed with the Commission. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in any
and all capacities, every act whatsoever necessary or desirable to be done in
the premises, as fully and to all intents and purposes as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on this 17th day of December, 1996.
/s/ TUCKER TAYLOR
Tucker Taylor
