<PAGE>
As filed with the Securities and Exchange Commission
on July 25, 1997
Registration No. 333-
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
CCC INFORMATION SERVICES GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 54-124269
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
444 Merchandise Mart
Chicago, Illinois 60654
(312) 222-4636
(Address, including ZIP code, and telephone number, including area code,
of registrant's principal executive offices)
CCC INFORMATION SERVICES INC.
401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
(Full title of plan)
GERALD P. KENNEY, ESQ. Copy to:
Vice President and LELAND E. HUTCHINSON, ESQ.
General Counsel Winston & Strawn
CCC Information Services Group Inc. 35 West Wacker Drive
444 Merchandise Mart Chicago, Illinois 60601
Chicago, Illinois 60654 (312) 558-7336
(312) 222-4636
(Name, address, including ZIP code, and
telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered (1) registered (1) price per share (2) offering price (2) registration fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 200,000 shs. $17.125 $3,425,000 $1,037.88
par value
$0.10 per share
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plans
described herein.
(2) Calculated pursuant to Rule 457(h) of the Securities Act of 1933, as
amended, based upon the average of the bid and ask price of the common
stock, par value $0.10 per share, of CCC Information Services Group Inc.
on the Nasdaq National Market System on July 24, 1997.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by CCC Information Services Group Inc.
(the "Company") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K/A as filed with the
Commission on April 3, 1997 (file no. 0-28600) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), containing audited financial
statements for the Company's latest fiscal year.
(b) The Plan's Annual Report on Form 11-K as filed with the
Commission (file no. 0-28600) on July 25, 1997 under the Exchange Act,
containing audited financial statements for the Plan's latest fiscal year.
(c) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report on
Form 10-K referenced above.
(d) The description of the Company's common stock, par value $0.10
per share (the "Common Stock"), which is contained in the registration
statement on Form 8-A filed with the Commission (file no. 0-28600) on July 1,
1996 under the Exchange Act, including any subsequent amendment or any report
filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold are deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the respective dates of
filing of such documents (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document 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 other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
II-1
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the Delaware Law ("Section 145") provides that a Delaware
corporation may indemnify any persons who are, or are threatened to be made,
parties 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 such corporation), by reason of the fact that such person
was an officer, director, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action or proceeding, if he
acted in good faith and in a manner he reasonably believed to be in or not
appeared to the best interests of the corporation, and, with respect to any
criminal action, had no reasonable cause to believe that this his conduct was
illegal. A Delaware corporation may indemnify any persons who are, or are
threatened to be made, a party to any threatened, pending or completed action or
suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except that
no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director has actually and reasonably incurred.
The Company's Bylaws provide for the indemnification of directors and
officers of the Company to the fullest extent permitted by Section 145.
As permitted by Section 102(b)(7) of the Delaware Law, the Certificate
of Incorporation provides that directors of the Company shall have no personal
liability to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except (i) for any breach of a director's duty of
loyalty to the Company or its stockholders, (ii) for acts or
II-2
<PAGE>
omissions not in good faith or which involve intentional misconduct or
knowing violations of law, (iii) under Section 174 of the Delaware Law, or
(iv) for any transaction from which a director derived an improper personal
benefit.
The Company maintains directors' and officers' liability insurance
which insures the directors and officers of the Company against certain
liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Exhibit
Number Description of Exhibit
- ------- -----------------------
4.01 Certificate of Incorporation of the Company filed as Exhibit 3.1
to the Company's Annual Report on Form 10-K (filed with the
Commission (file no. 0-28600) on March 7, 1997, (the "Annual
Report"), and hereby incorporated by reference).
4.02 By-laws of the Company (filed as Exhibit 3.2 to the Annual Report
and hereby incorporated by reference).
4.03 Specimen Common Stock Certificate of the Company (filed as
Exhibit 4.1 to the Company's Registration Statement (file no.
333-07287) on Form S-1 filed August 15, 1996 and hereby
incorporated by reference).
*4.04 CCC Information Services Inc. 401(K) Retirement Savings &
Investment Plan.
*5.01 Undertaking re: Submission of Plan
*23.01 Consent of Price Waterhouse LLP.
25.01 Powers of Attorney (included on signature page).
_____________________
* Filed herewith.
II-3
<PAGE>
ITEM 9. UNDERTAKINGS
(a) The undersigned Company 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 this 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 this
Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
PROVIDED, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-8 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for purposes 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 Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company'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
II-4
<PAGE>
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 Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company 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.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Chicago, State of Illinois, on July 25, 1997.
CCC INFORMATION SERVICES GROUP INC.
By: /s/ David M. Phillips
--------------------------------------
David M. Phillips
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois on the 25 day of July, 1997.
CCC INFORMATION SERVICES INC.
401(K) RETIREMENT SAVINGS
& INVESTMENT PLAN
By: /s/ Richard W. Steel
--------------------------------------
Trustee
POWER OF ATTORNEY
The undersigned directors and executive officers of CCC Information
Services Group Inc. do hereby constitute and appoint David M. Phillips and
Leonard L. Ciarrocchi and each of them, with full power of substitution, our
true and lawful attorneys-in-fact and agents to do any and all acts and things
in our name and behalf in our capacities as directors and officers, and to
execute any and all instruments for us and in our names in the capacities
indicated below which such person may deem necessary or advisable to enable CCC
Information Services Group Inc. to comply with the Securities Act of 1933, as
amended (the "Securities Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission, in connection with this Registration
Statement, including specifically, but not limited to, power and authority to
sign for us, or any of us, in the capacities indicated below and any and all
amendments (including pre-effective and post-effective amendments) hereto; and
we do hereby ratify and confirm all that such person or persons shall do or
cause to be done by virtue hereof.
II-6
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on July 25, 1997.
Signature Title
--------- -----
/s/ David M. Phillips
- ------------------------------- Director, Chairman, President
David M. Phillips and Chief Executive Officer,
(Principal Executive Officer)
/s/ Leonard L. Ciarrocchi
- ------------------------------- Executive Vice President - Chief
Leonard L. Ciarrocchi Financial Officer
(Principal Financial Officer)
/s/ Donald J. Hallagan
- ------------------------------- Vice President - Controller
Donald J. Hallagan (Principal Accounting Officer)
/s/ John J. Byrne
- ------------------------------- Director
John J. Byrne
/s/ Morgan Davis
- ------------------------------- Director
Morgan Davis
/s/ Thomas L. Kempner
- ------------------------------- Director
Thomas L. Kempner
/s/ Gordon S. Macklin
- ------------------------------- Director
Gordon S. Macklin
/s/ Robert T. Marto
- ------------------------------- Director
Robert T. Marto
/s/ Michael R. Stanfield
- ------------------------------- Director
Michael R. Stanfield
II-7
<PAGE>
INDEX TO EXHIBITS TO REGISTRATION STATEMENT ON FORM S-8
Exhibit
Number Description of Document
- ------- -----------------------
4.01 Certificate of Incorporation of the
Company filed as Exhibit 3.1 to the
Company's Annual Report on Form 10-K
(filed with the Commission (file no.
0-28600) on March 7, 1997, (the
"Annual Report"), and hereby
incorporated by reference.
4.02 By-laws of the Company (filed as
Exhibit 3.2 to the Annual Report and
hereby incorporated by reference).
4.03 Specimen Common Stock Certificate of
the Company (filed as Exhibit 4.1 to
the Company's Registration Statement
(file no. 333-07287) on Form S-1
filed August 15, 1996 and hereby
incorporated by reference).
*4.04 CCC Information Services Inc. 401(K)
Retirement Savings & Investment Plan.
*5.01 Undertaking re: Submission of Plan
*23.01 Consent of Price Waterhouse LLP.
25.01 Powers of Attorney (included on
signature page).
______________________
* Filed herewith.
<PAGE>
Exhibit 4.04
CCC Information Services Inc.
401(K) Retirement Savings & Investment Plan
<PAGE>
----------------------------------------------------------------------------
CCC INFORMATION SERVICES, INC.
401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
----------------------------------------------------------------------------
<PAGE>
CCC INFORMATION SERVICES, INC.
401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
I N D E X
PART I
ARTICLE DESCRIPTION PAGE
I INTRODUCTION 1
1.1.1 Adoption and Title 1
1.1.2 Effective Date 1
1.1.3 Purpose 1
II DEFINITIONS 2
PART II
I PARTICIPATION 15
2.1.1 Eligibility Requirements 15
2.1.2 Commencement of Participation 15
2.1.3 Participation Upon Re-Employment 16
2.1.4 Termination of Participation 16
2.1.5 Determination of Eligibility 16
2.1.6 Omission of Eligible Employee 17
2.1.7 Inclusion of Ineligible Participant 17
2.1.8 Election Not to Participate 17
2.1.9 Change in Status 17
2.1.10 Existing Participants 18
II CONTRIBUTIONS 19
2.2.1 Employer Contributions 19
2.2.2 Elective Contributions by the Employer
on Behalf of Electing Employees 20
2.2.3 Employee Contributions 21
2.2.4 Return of Contributions 21
III ALLOCATIONS 23
2.3.1 Non-Elective Contribution 23
2.3.2 Minimum Allocation 23
2.3.3 Fail-Safe Allocation 23
2.3.4 Matching Contributions 24
2.3.5 Elective Contributions 24
2.3.6 Qualified Non-Elective Contributions 25
2.3.7 Limitation 25
Effective: August 1, 1995
<PAGE>
ARTICLE DESCRIPTION PAGE
IV BENEFITS 26
2.4.1 Distributable Benefit 26
2.4.2 Vesting 26
2.4.3 Leave of Absence 27
2.4.4 Re-Employment 27
2.4.5 Distribution Determination Date 28
2.4.6 Forfeitures 29
V DISTRIBUTIONS 31
2.5.1 Commencement of Distribution 31
2.5.2 Method of Distribution 37
2.5.3 Nature of Distributions 41
2.5.4 Advance Distributions 42
2.5.5 In Service Distributions 43
2.5.6 Hardship Distributions 43
VI CONTINGENT TOP HEAVY PROVISIONS 45
2.6.1 Top Heavy Requirements 45
2.6.2 Top Heavy Definitions --- 46
VII SPECIAL CODA LIMITATIONS 51
2.7.1 Limitation on Deferral Percentage
for Highly Compensated Employees 51
2.7.2 Multiple Plan Limitations 52
2.7.3 Limitation on Matching Contribution 53
2.7.4 Special Rules 54
2.7.5 Distribution of Excess Elective
Deferrals 55
2.7.6 Distribution of Excess Contribution 56
2.7.7 Distribution of Excess Aggregate
Contributions 56
2.7.8 Limitation on Distributions 57
2.7.9 Limitation on Elective Deferrals 58
PART III
I ACCOUNTING 59
3.1.1 Accounts 59
3.1.2 Adjustments 59
II LIMITATIONS 62
3.2.1 Limitations on Annual Additions 62
3.2.2 Controlled Businesses 69
Effective: August 1, 1995
<PAGE>
ARTICLE DESCRIPTION PAGE
III FIDUCIARIES 71
3.3.1 Standard of Conduct 71
3.3.2 Individual Fiduciaries 71
3.3.3 Disqualification from Service 71
3.3.4 Bonding 71
3.3.5 Prior Acts 71
3.3.6 Insurance and Indemnity 72
3.3.7 Expenses 72
3.3.8 Agents, Accountants and Legal Counsel 73
3.3.9 Investment Manager 73
3.3.10 Finality of Decisions or Acts 73
3.3.11 Certain Custodial Accounts and
Contracts 73
IV PLAN ADMINISTRATOR 74
3.4.1 Administration of Plan 74
3.4.2 Disclosure Requirements 75
3.4.3 Information Generally Available 76
3.4.4 Statement of Accrued Benefit 76
3.4.5 Explanation of Rollover Treatment 76
V TRUSTEE 77
3.5.1 Acceptance of Trust 77
3.5.2 Trustee Capacity - Co-Trustee 77
3.5.3 Resignation, Removal and Successors 77
3.5.4 Consultations 77
3.5.5 Rights, Powers and Duties 78
3.5.6 Trustee Indemnification 80
3.5.7 Changes in Trustee Authority 80
VI TRUST ASSETS 81
3.6.1 Trustee Exclusive Owner 81
3.6.2 Investments 81
3.6.3 Administration of Trust Assets 83
3.6.4 Segregated Funds 84
3.6.5 Investment Control Option 85
VII LOANS 87
3.7.1 Authorization 87
3.7.2 Spousal Consent 87
3.7.3 Limitations 88
3.7.4 Availability 88
3.7.5 Prohibitions 89
Effective: August 1, 1995
<PAGE>
ARTICLE DESCRIPTION PAGE
VIII BENEFICIARIES 90
3.8.1 Designation of Beneficiaries 90
3.8.2 Absence or Death of Beneficiaries 90
IX CLAIMS 91
3.9.1 Claim Procedure 91
3.9.2 Appeal 92
X AMENDMENT AND TERMINATION 93
3.10.1 Right to Amend 93
3.10.2 Manner of Amending 93
3.10.3 Limitations on Amendments 93
3.10.4 Voluntary Termination 94
3.10.5 Involuntary Termination 94
3.10.6 Withdrawal By Employer 94
3.10.7 Powers Pending Final Distribution 95
3.10.8 Delegation 95
XI PORTABILITY 96
3.11.1 Continuance by Successor 96
3.11.2 Merger With Other Plan 96
3.11.3 Transfer From Other Plans 96
3.11.4 Transfer to Other Plans 97
XII MISCELLANEOUS 98
3.12.1 No Reversion to Employer 98
3.12.2 Employer Actions 98
3.12.3 Execution of Receipts and Releases 98
3.12.4 Rights of participants Limited 98
3.12.5 Persons Dealing With Trustee Protected 98
3.12.6 Protection of Insurer 99
3.12.7 No Responsibility for Act of Insurer 99
3.12.8 Inalienability 99
3.12.9 Domestic Relations Orders 100
3.12.10 Authorization to Withhold Taxes 102
3.12.11 Missing Persons 102
3.12.12 Notices 102
3.12.13 Governing Law 103
3.12.14 Severability of Provisions 103
3.12.15 Gender and Number 103
3.12.16 Binding Effect 103
3.12.17 Qualification Under Internal
Revenue Laws 103
Effective: August 1, 1995
<PAGE>
ARTICLE DESCRIPTION PAGE
XIII EXECUTION OF AGREEMENT 104
3.13.1 Counterparts 104
3.13.2 Acceptance by Trustee 104
3.13.3 Execution 104
Effective: August 1, 1995
<PAGE>
CCC INFORMATION SERVICES, INC.
401(K)RETIREMENT SAVINGS & INVESTMENT PLAN
THIS AGREEMENT is made this 22nd day of December, 1995, by and
between CCC Information Services, Inc. ("the Employer") and
Richard Steel (collectively "the Trustee").
PART I
ARTICLE I
INTRODUCTION
1.1.1 Adoption and Title. The Employer and Trustee hereby adopt
and restate the Plan and Trust to be known as CCC Information Services, Inc.
401(K) Retirement Savings & Investment Plan.
1.1.2 Effective Date. The provisions of this amended and restated
Plan and Trust which was originally effective January 1, 1990 shall be effective
as of August 1, 1995, hereinafter the Effective Date.
1.1.3 Purpose. This Plan and Trust is established for the purpose
of providing retirement benefits to eligible employees in accordance with the
Plan and Trust. If the Plan is a cash or deferred profit sharing plan, the Plan
is also intended to enable eligible Employees to supplement their retirement by
electing to have the Employer contribute amounts to the Plan and Trust in lieu
of payments to such Employees in cash. Under such circumstances, the Plan and
Trust are intended to satisfy the provisions of Section 401(k) of the Internal
Revenue Code of 1986, as amended.
-1-
<PAGE>
ARTICLE II
DEFINITIONS
As used in this Plan and the Trust, the following terms
shall have the following meanings:
1.2.1 "Account": The Employer Account, Controlled Account,
Elective Contribution Account, Matching Account, Qualified Non-Elective
Contribution Account, Voluntary Account or Segregated Account of a Participant,
as the context requires, established and maintained for accounting purposes.
1.2.2 "ACP": The average contribution percentage
determined in accordance with the provisions of Part II, Article
VII.
1.2.3 "Act": The Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.2.4 "ADP": The actual deferral percentage determined
in accordance with the provisions of Part II, Article VII.
1.2.5 "Anniversary Date": The last day of each Plan Year.
1.2.6 "Beneficiary": The person or persons entitled to receive the
benefits which may be payable upon or after a Participant's death.
1.2.7 "Board of Directors": The board of directors of an
incorporated Employer.
1.2.8 "Break in Service": The failure of a Participant to complete
more than 500 Hours of Service during any twelve (12) consecutive month
Eligibility Computation Period beginning with a Participant's first computation
period after becoming a Participant. A Year of Service and a Break in Service
for vesting purposes shall be measured on the same computation period. The
Eligibility Computation Period and a Break in Service for eligibility purposes
shall be measured on the same computation period.
-2-
<PAGE>
1.2.9 "Code": The Internal Revenue Code of 1986, as
amended from time to time.
1.2.10 "Compensation": All of a Participant's W-2 compensation (or
Earned Income in the case of a self-employed individual) which is actually paid
to the Participant by the Employer during the Limitation Year; provided that
compensation shall also include any amount which is contributed by the Employer
pursuant to a salary reduction agreement and which is not includible in the
gross income of the Employee under Sections 402(h)(1)(B)(SEP Deferrals), 125,
402(a)(8) (401(k) deferrals), 403(b) and 457(b) of the Code; provided further
that the annual gross compensation taken into account for purposes of the Plan
shall not exceed $200,000, as such amount may be adjusted by the Secretary of
the Treasury 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 years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effected on January 1, 1990. If the
plan determines compensation for a period of time that contains less than twelve
(12) calendar months, then the annual compensation limit is an amount equal to
the annual compensation limit for the calendar year in which the compensation
period begins multiplied by the ratio obtained by dividing the number of full
months in the period by 12. For purposes of this dollar limitation, the rules
of Section 414(q)(6) of the Code requiring the aggregation of the compensation
of family members shall apply, except that in applying such rules, the term
"family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age nineteen (19) before
the close of the year. If, as a result of the application of such rules the
adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of compensation up to the Social Security 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 plan year is taken into account in
determining an employee's contributions or benefits for the current year, the
compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
For the initial year of participation, Compensation from the
Participant's Entry Date shall be considered.
-3-
<PAGE>
1.2.11 "Controlled Account": An account established and maintained
for a Participant to account for his interest in a Segregated Fund over which he
exercises investment control.
1.2.12 "Distributable Benefit": The benefit to which a.
Participant is entitled following termination of his employment.
1.2.13 "Distribution Determination Date": The date as of
which the Distributable Benefit of a Participant is determined.
1.2.14 "Early Retirement Age": The Plan does not provide
an Early Retirement Age.
1.2.15 "Early Retirement Date": The Plan does not
provide an Early Retirement Date.
1.2.16 "Earned Income": 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 Participant are a material income-producing factor.
Net earnings shall be determined without regard to items not included in gross
income and the deductions allocable to such items but, in the case of taxable
years beginning after 1989, with regard to the deduction allowed by Section
164(f) of the Code. Net earnings shall be reduced by contributions to a
qualified plan to the extent deductible under Section 404 of the Code.
1.2.17 "Elective Contribution Account": An Account established and
maintained for a Participant to account for the Elective Contributions made on
his behalf.
1.2.18 "Elective Contribution": A contribution to the
Plan by the Employer on behalf of an electing Employee.
-4-
<PAGE>
1.2.19 "Elective Deferrals": Any Employer contributions made to the
Plan at the election of the Participant, in lieu of cash compensation, including
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 the 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 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.
1.2.20 "Eligibility Computation Period": For purposes of determining
Years of Service and Breaks in Service for purposes of eligibility, the initial
eligibility computation period is the twelve (12) consecutive month period
beginning with the employment commencement date on which the Employee first
renders an Hour of Service for the Employer and the subsequent eligibility
computation periods are each Plan Year commencing with the first Plan Year which
commences prior to the first anniversary of the Employee's employment
commencement date regardless of whether the Employee is entitled to be credited
with an Hour of Service during the initial eligibility computation period. If
the subsequent periods commence with the first Plan Year which commences prior
to the first anniversary of the Employee's employment commencement date, an
Employee who is credited with an Hour of Service in both the initial eligibility
computation period and the first Plan Year which commences prior to the first
anniversary of the Employee's initial eligibility computation period shall be
credited with two (2) Years of Service for purposes of eligibility to
participate.
1.2.21 "Employee": A person who is currently or hereafter employed by
the Employer, or by any other employer aggregated under Section 414(b), (c), (m)
or (o) of the Code and the regulations thereunder, including
- self-employed individuals;
- employees paid on a commissioned basis;
- employees paid on an hourly basis;
- employees paid on a salaried basis.
-5-
<PAGE>
but excluding:
- employees who are included in the unit of employees covered by a
collective bargaining agreement, provided that retirement benefits
were the subject of good faith negotiations;
- an employee who is a non-resident alien deriving no earned income from
the Employer which constitutes income from sources within the United
States and
- independent contractors.
1.2.22 "Employer": The Employer and, except where the context expressly
indicates to the contrary, each Affiliate Employer that is a party to this
Agreement, or any of their respective successors or assigns which adopt the
Plan; provided, however, that no mere change in the identity, form or
organization of the Employer shall affect its status under the Plan in any
manner, and, if the name of the Employer is hereinafter changed, references
herein to the Employer shall be deemed to refer to the Employer as it is then
known.
1.2.23 "Employer Account": An Account established and maintained for a
Participant for accounting purposes to which his share of Employer contributions
and forfeitures are added.
1.2.24 "Entry Date": The first day of the successive three (3) month
periods beginning with the first day of the Plan Year.
1.2.25 "Excess Aggregate Contributions": 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 and then determining Excess Contributions.
-6-
<PAGE>
1.2.26 "Excess Contributions": 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.
1.2.27 "Excessive Annual Addition": The portion of the allocation
of contributions and forfeitures that cannot be added to a Participant's
Accounts due to the limitations on annual additions contained in the Plan.
1.2.28 "Excess Elective Deferrals": 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.
1.2.29 "Family": The spouse and lineal ascendants or descendants of
an Employee and the spouses of such lineal ascendants and descendants.
1.2.30 "Fiduciary": The Plan Administrator, the Trustee and any
other person who has discretionary authority or control in the management of the
Plan or the disposition of Trust assets.
1.2.31 "Highly Compensated Employee": A highly compensated active
employee and a highly compensated former employee. 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: (i) received compensation
from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (ii) 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 the
top-paid group for such year; or (iii) was an officer of the Employer and
received compensation during such year that is greater than 50 percent of the
dollar limitation as in effect under Section 415(b)(1)(A) of the Code. The term
highly compensated employee also includes: (i) employees who are both described
in the preceding sentence if the term "determination year" is substituted for
the term "look-back year', and the
-7-
<PAGE>
employee is one of the 100 employees who received the most compensation from the
Employer during the determination year; and (ii) employees who are 5 percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a highly compensated employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year and compensation is as defined in Section 415(c)(3) of the Code including
amounts contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in gross income under Sections 125, 402(a)(8), 402 (h)
or 403 (b) of the Code.
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 Plan Year or the preceding Plan Year, a family
member of either a 5 percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving compensation and plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated employee. For purposes
of this 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.
An Employee is in the top-paid group of employees for any year if the Employee
is in the group consisting of the top twenty (20%) percent of the employees when
ranked on the basis of compensation paid during such year.
For purposes of determining whether an Employee is a Highly Compensated
Employee, Sections 414(b), (c), (m), (n) and (o) of the Code shall be applied.
-8-
<PAGE>
The determination of who is a highly compensated employee, including the
determination 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.
1.2.32 "Hour of Service": An hour for which (a) the Employee is
paid, or entitled to payment by the Employer for the performance of duties, (b)
the Employee is paid or entitled to payment by the Employer 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, or (c) back
pay, irrespective of mitigation of damages, has been either awarded or agreed to
by the Employer. Hours of Service shall be credited to the Employee under (a),
above, for the period in which the duties are performed, under (b), above, in
the period in which the period during which no duties are performed occurs,
beginning with the first Hour of Service to which the payment relates, and under
(c), above, for the period to which the award or agreement pertains rather than
the period in which the award, agreement or payment is made; provided, however,
that Hours of Service shall not be credited under both (a) and (b), above, as
the case may be, and under (c) above. Notwithstanding the preceding sentences,
(i) no more than five hundred one (501) Hours of Service shall be credited under
(b), above, on account of any single continuous period during which the Employee
performs no duties whether or not such period occurs in a single computation
period, (ii) no Hours of Service shall be credited to the Employee by reason of
a payment made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, or unemployment compensation or
disability insurance laws, and (iii) no Hours of Service shall be credited by
reason of a payment which solely reimburses an Employee for medical or medically
related expenses incurred by the Employee. The determination of Hours of
Service for reasons other than the performance of duties and the crediting of
Hours of Service to computation periods shall be made in accord with the
provisions of Labor Regulation Sections 2530.200b-2(b) and (c) which are
incorporated herein by reference.
-9-
<PAGE>
Solely for purposes of determining whether an Employee has incurred a Break in
Service, an Employee shall be credited with number of Hours of Service which
would otherwise have been credited to such individual but for the absence or in
any case in which such Hours cannot be determined with eight (8) Hours of
Service for any day that the Employee is absent from work by reason of the
Employee's pregnancy, the birth of a child of the Employee, the placement of a
child with the Employee in connection with the adoption of such child by the
Employee or for purposes of caring for such child for a period beginning
immediately following such birth or placement. Such Hours of Service shall be
credited only in the computation period in which the absence from work begins if
the Employee would be prevented from incurring a Break in Service in such
computation period solely because credit is given for such period of absence
and, in any other case, in the immediately following computation period.
Notwithstanding the foregoing, no credit shall be given for such service unless
the Employee furnishes to the Plan Administrator information to establish that
the absence from work is for the reasons indicated and the number of days for
which there was such an absence.
Service with another business entity that is, along with the Employer, a member
of a controlled group of corporations, an affiliated service group or trades or
businesses under common control, as defined in the applicable sections of the
Code, or which is otherwise required to be aggregated with the Employer pursuant
to Section 414(o) of the Code and the regulations issued thereunder shall be
treated as service for the Employer. Hours of Service shall be credited for any
individual considered an employee for purposes of this Plan under Section 414(n)
or Section 414(o) of the Code and the regulations issued thereunder.
1.2.33 "Insurer": Any insurance company which has issued a Life
Insurance Policy.
1.2.34 "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 fifty (50%) percent and not more than one hundred (100%)
percent 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 balances.
-10-
<PAGE>
1.2.35 "Leased Employee": Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person 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 (1) year and such
services are of a type historically performed by employees in the business field
of the recipient employer; provided that any such person shall not be taken into
account if (a) such person is covered by a money purchase pension plan providing
(i) nonintegrated employer contribution rate of at least ten (10%) percent of
compensation, as defined in Section 415(c)(3) of the Code, but including amounts
contributed by the employer pursuant to a salary reduction agreement which are
excludable from the person's gross income under Sections 125, 402(a)(8), 402(h)
or 403(b) of the Code; (ii) immediate participation; and (iii) full and
immediate vesting; and (b) leased employees do not constitute more than twenty
(20%) percent of the work force of the recipient who are not Highly Compensated
Employees. 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.
1.2.36 "Life Insurance Policy": A life insurance, annuity or
endowment policy or contract which is owned by the Trust and is on the life of a
Participant.
1.2.37 "Limitation Year": The Plan Year; provided that
all qualified plans maintained by the Employer must use the same
Limitation Year.
1.2.38 "Matching Account": An Account established and maintained
for a Participant for accounting purposes to which his share of Matching
Contributions are added.
1.2.39 "Matching Contribution": A contribution to the
Plan by the Employer which matches in whole or in part an Elective Contribution
on behalf of an electing Employee.
1.2.40 "Non-Elective Contribution": A contribution to the Plan or
any other Related Plan by the Employer which is neither a Qualified Non-Elective
Contribution, a Matching Contribution nor an Elective Contribution.
-11-
<PAGE>
1.2.41 "Normal Retirement Age": The date the Employee
attains age 65.
1.2.42 "Normal Retirement Date": The date the Participant attains
his Normal Retirement Age.
1.2.43 "Owner-Employee": An individual who is a sole proprietor or
who is a partner owning more than ten percent (10%) of either the capital or
profits interest of the partnership.
1.2.44 "Participant": Any eligible Employee who becomes entitled to
participate in the Plan.
1.2.45 "Plan": The profit sharing plan for Employees as set forth
in this Agreement, together with any amendments or supplements thereto.
1.2.46 "Plan Administrator": The person, persons or entity
appointed by the Employer to administer the Plan or, if the Employer fails to
make such appointment, the Employer.
1.2.47 "Plan Year" or "Year": The calendar year.
1.2.48 "Preretirement Survivor Annuity": A survivor annuity for the
life of the surviving spouse of the Participant under which
(a) the payments to the surviving spouse are not less than the
amounts which would be payable under a Joint and Survivor Annuity (or the
actuarial equivalent thereof) if -
(i) in the case of a Participant who dies after the date on
which the Participant attained the earliest retirement age under the
Plan on which he could elect to receive retirement benefits, such
Participant had retired with an immediate Joint and Survivor Annuity
on the day before the Participant's date of death; or
-12-
<PAGE>
(ii) in the case of a Participant who dies on or before such
date, such Participant had separated from service on the date of death
(except that a Participant who had actually separated from service
prior to death shall be treated as separating on the actual date of
separation), survived to the earliest retirement age, retired with an
immediate Joint and Survivor Annuity at the earliest retirement age
and died on the day after the day on which such Participant would have
attained the earliest retirement age, and
(b) The earliest period for which the surviving spouse may receive a
payment under such annuity is not later than the month in which the
Participant would have attained the earliest retirement age under the Plan;
and
(c) Any security interest held by the Plan by reason of a loan
outstanding to the Participant for which a valid spousal consent has been
obtained, if necessary, shall be taken into account.
1.2.49 "Qualified Non-Elective Contribution": A contribution to the
Plan by the Employer which is neither a Matching Contribution nor an Elective
Contribution, is one hundred percent (100%) vested and nonforfeitable when made,
which a Participant may not elect to have paid in cash instead of being
contributed to the Plan and which may not be distributed from the Plan (except
in the case of a hardship distribution) prior to the termination of employment
or death of the Participant, attainment of age 59-1/2 by the Participant or
termination of the Plan without establishment of a successor plan.
1.2.50 "Qualified Non-Elective Contribution Account": An Account
established and maintained for a Participant to account for the Qualified
Non-Elective Contributions made on his behalf.
1.2.51 "Qualifying Employer Securities or Real Property":
Securities or real property of the Employer which the Trustee may acquire and
hold pursuant to the applicable provisions of the Code and the Act.
1.2.52 "Segregated Account": An Account established and maintained
for a Participant to account for his interest in a Segregated Fund.
-13-
<PAGE>
1.2.53 "Segregated Fund": Assets held in the name of the Trustee
which have been segregated from the Trust Fund in accordance with any of the
provisions of the Plan.
1.2.54 "Self-Employed Individual": An individual who has Earned
Income for the taxable year from the trade or business for which the Plan is
established or who would have had Earned Income but for the fact that the trade
or business had no net profit for the taxable year.
1.2.55 "Social Security Integration Level": Not applicable. This
Plan does not provide for integration with Social Security.
1.2.56 "Trust Fund": All money and property of every kind and
character held by the Trustee pursuant to the Plan, excluding assets held in
Segregated Funds.
1.2.57 "Trustee": The persons, corporations, associations or
combination of them who shall at the time be acting as such from time to time
hereunder.
1.2.58 "Valuation Date": The Valuation Date(s) shall be each day in
the Plan Year the exchange on which the assets in such Accounts are traded is
open for business.
1.2.59 "Voluntary Account": An Account established and maintained
for a Participant for accounting purposes to which his voluntary Employee
contributions have been added.
1.2.60 "Year of Service": Each 12-consecutive month Plan Year
during which the Employee completes at least 1,000 Hours of Service, including
years prior to the Effective Date.
-14-
<PAGE>
PART II
ARTICLE I
PARTICIPATION
2.1.1A Eligibility Requirements - Non-Elective. Each Employee shall
be eligible to receive an allocation of Non-Elective Contributions upon the
later of the following dates, provided that he is an Employee on such date:
(a) Non-elective Contributions are not permitted.
2.1.1B Eligibility Requirements - Elective. Each Employee shall be
eligible to have Elective Contributions made on his behalf upon the later of the
following dates, provided that he is an Employee on such date:
(a) the date he attains age 20; or
(b) the date he completes a minimum of 6 months of service.
2.1.1C Eligibility Requirements - Matching. Each Employee shall be
eligible to receive an allocation of Matching Contributions upon the later of
the following dates, provided that he is an Employee on such date:
(a) the date he attains age 20; or
(b) the date he completes a minimum of 6 months of service.
2.1.2 Commencement of Participation. An eligible Employee shall
become a Participant in the Plan on the applicable Entry Date.
-15-
<PAGE>
2.1.3 Participation Upon Re-Employment. A Participant whose
employment terminates and who is subsequently re-employed prior to incurring a
break in service, shall re-enter the Plan as a Participant immediately on the
date of his re-employment. In the event that an Employee completes the
eligibility requirements set forth in Section 2.1.1 above, his employment
terminates prior to becoming a Participant and he is subsequently re-employed
prior to incurring a break in service, such Employee shall be deemed to have met
the eligibility requirements as of the date of his re-employment and shall
become a Participant on the date of his re-employment; provided, however, that
if he is re-employed prior to the date he would have become a Participant if his
employment had not terminated, he shall become a Participant as of the date he
would have become a Participant if his employment had not terminated.
In the case of a Participant who does not have any vested and nonforfeitable
right under the Plan to an accrued benefit derived from Employer contributions,
Years of Service before any period of consecutive Breaks in Service shall not be
taken into account in the event of re-employment if the number of consecutive
Breaks in Service within the period equals or exceeds the greater of five (5) or
the aggregate number of Years of Service before such period. Any Years of
Service which are not taken into account by reason of such period of Breaks in
Service shall not be taken into account in applying the foregoing to a
subsequent period of Breaks in Service.
Any other Employee whose employment terminates and who is subsequently
re-employed shall become a Participant in accordance with the provisions of
Sections 2.1.1 and 2.1.2.
2.1.4 Termination of Participation. An Employee who has become a
Participant shall remain a Participant until the entire amount of his
Distributable Benefit is distributed to him or his Beneficiary in the event of
his death.
2.1.5 Determination of Eligibility. In the event any question
shall arise as to the eligibility of any person to become a Participant or the
commencement of participation, the Plan Administrator shall determine such
question from information provided by the Employer and the Plan Administrator's
decision shall be conclusive and binding, except to the extent of a claimant's
right to appeal the denial of a claim.
-16-
<PAGE>
2.1.6 Omission of Eligible Employee. If an Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery of
the omission is made after the contribution by the Employer is made and
allocated, the Employer shall make an additional contribution on behalf of the
omitted Employee in the amount which the Employer would have contributed on his
behalf had he not been omitted.
2.1.7 Inclusion of Ineligible Participant. If any person is
erroneously included as a Participant in the Plan and discovery of the erroneous
inclusion is made after the contribution by the Employer is made and allocated,
the Employer may elect to treat the amount contributed on behalf of the
ineligible person plus any earnings thereon as a forfeiture for the Plan Year in
which the discovery is made and apply such amount in the manner specified in
Section 2.4.6.
2.1.8 Election Not to Participate. Notwithstanding anything
contained in the Plan to the contrary, an Employee may elect with the approval
of the Employer not to participate in the Plan if the tax-exempt status of the
Plan is not jeopardized by the election. The Employee shall sign such documents
as may be reasonably required by the Employer to evidence the election. If it
is subsequently determined that the tax-exempt status of the Plan has been
jeopardized, the Employer may elect to treat such Employee as having been
erroneously omitted. An Employee may revoke the election only with respect to
any subsequent Plan Year by written notice of revocation to the Employer prior
to the end of the Plan Year for which the revocation is effective.
2.1.9 Change in Status. If any Participant continues in the
employ of the Employer or an affiliate for which service is required to be taken
into account but ceases to be an Employee by becoming a member of any ineligible
class for any reason (such as becoming covered by a collective bargaining
agreement unless the collective bargaining agreement otherwise provides) the
Participant shall continue to be a Participant until the entire amount of his
benefit is distributed but the individual shall not be entitled to receive an
allocation of contributions or forfeitures during the period that the
Participant is not an Employee for such reason. Such Participant shall
-17-
<PAGE>
continue to receive credit for Years of Service completed during the period for
purposes of determining his vested and nonforfeitable interest in his Accounts.
In the event that the individual subsequently again becomes a member of an
eligible class of employees, the individual shall participate immediately upon
the date of such change in status. If such Participant incurs a Break in
Service and is subsequently reemployed, eligibility to participate shall be
determined in accordance with Section 2.1.3. In the event that an individual who
is not a member of an eligible class of employees becomes a member of an
eligible class, the individual shall participate immediately if such individual
has satisfied the eligibility requirements and would have otherwise previously
become a participant.
2.1.10 Existing Participants. An Employee who, on the Effective
Date, was a Participant under the provisions of the Plan as in effect
immediately prior to the Effective Date shall be a Participant on the Effective
Date and the provisions of Sections 2.1.1 and 2.1.2. pertaining to
participation, shall not be applicable to such Employee. The rights of a
Participant whose employment terminated prior to the Effective Date shall be
determined under the provisions of the Plan as in effect at the time of such
termination.
-18-
<PAGE>
ARTICLE II
CONTRIBUTIONS
2.2.1 Employer Contribution.
(a) Amount of Non-Elective Contribution. The Employer shall
contribute to the Trust Fund each Plan Year No Non-Elective contributions
are permitted.
(b) Amount of Matching Contribution. The Employer shall contribute
to the Trust Fund each Plan Year with respect to the amount of Elective
Contributions on behalf of. each electing Employee a Matching Contribution
equal to 33 percent of the Elective Contributions made on behalf of a
Participant. However, the Employer shall not make Matching contributions on
behalf of a Participant for any Plan Year in excess of $1,000.00 for any
Participant.
(c) Amount of Qualified Non-Elective Contribution. The Employer shall
contribute to the Trust Fund each Plan Year such amount as a Qualified
Non-Elective Contribution as the Employer may determine. In addition, in
lieu of distributing Excess Contributions or Excess Aggregate Contributions
as provided in Article VII, below, the Employer may make Qualified
Non-Elective Contributions on behalf of Employees who are not Highly
Compensated Employees that are sufficient to satisfy either the ADP test or
the ACP test or both, pursuant to regulations under the Code.
(d) Limitation. The contribution for any Plan Year by the Employer
shall not exceed the maximum amount deductible from the Employer's income
for such Year for federal income tax purposes under the applicable sections
of the Code.
(e) Time of Contribution. All contributions by the Employer shall be
delivered to the Trustee not later than the date fixed by law for the
filing of the Employer's federal income tax return for the Year for which
such contribution is made (including any extensions of time granted by the
Internal Revenue Service for filing such return).
(f) Determination of Amount to be Final. The determination by the
Employer as to the amount to be contributed by the Employer hereunder shall
be in all respects final, binding, and conclusive on all persons or parties
having or claiming any rights under this agreement or under the Plan and
Trust created hereby. Under no circumstances and in no event shall any
Participant, Beneficiary, or other person or party have any right to
examine the books or records of the Employer.
-19-
<PAGE>
(g) Rights of Trustee as to Contributions. The Trustee shall have no
duty to report any contribution to be made or to determine whether
contributions delivered to the Trustee by the Employer comply with the
provisions of this Agreement. The Trustee shall be accountable only for
funds actually received by the Trustee.
2.2.2 Elective Contributions by the Employer on Behalf
of Electing Employees.
(a) Amount of Contribution. Each Employee may elect to have the
Employer contribute to the Trust on his behalf for any Plan Year during
which he is a Participant such amounts expressed either in dollars or in
whole percentages of his Compensation as he may elect which would otherwise
be payable by the Employer as Compensation (but not to exceed the dollar
limitation provided by Section 402(g) of the Code as in effect at the
beginning of the taxable year); provided that the Employer may impose
reasonable limitations in a uniform, nondiscriminatory manner on the
amounts which may be so contributed in order to satisfy applicable legal
requirements and to assure the deductibility of amounts contributed by the
Employer to the Plan and any other qualified plan of deferred compensation.
(b) Election. The Plan Administrator shall determine the manner in
which a Participant may elect to have Elective Contributions made to the
Plan on his behalf. The Plan Administrator shall establish reasonable
periods during which the election may be made, modified or revoked. Unless
the Plan Administrator establishes another period during which the election
may be made, modified or revoked, any such election may be made, modified
or revoked during the first and last months of the Plan Year. An election
by an Employee may not be made retroactively and once made shall remain in
effect until modified or terminated.
(c) Payment of Contribution. Elective Contributions shall be
remitted by the Employer within two and one-half months after such amount
would have otherwise been payable to the Participant. The Employer shall
designate, in accordance with the Participant's election, the Plan Year to
which any such contributions which are made after the end of the Plan Year
pertain.
20
<PAGE>
(d) Segregated Fund. Unless an Elective Contribution on behalf of a
Participant is received by the Trustee within the time prescribed by the
Plan Administrator prior to a Valuation Date, the Plan Administrator shall
direct the Trustee to establish a Segregated Fund with respect to such
contribution. The funds contained in such Segregated Fund shall be
transferred to the Trust Fund in accordance with the instructions of the
Plan Administrator and such transfer shall be deemed to have been made as
of such next succeeding Valuation Date. If an Elective Contribution on
behalf of a Participant is received by the Trustee within the period
prescribed by the Plan Administrator, such contribution shall be added to
the Trust Fund. Notwithstanding the foregoing, if the Trust Fund is
invested in such a manner that the Plan Administrator can determine, with a
reasonable degree of certainty, that portion of the adjustment to fair
market value which is attributable to Elective Contributions received by
the Trustee other than within such period, then the Plan Administrator
shall direct the Trustee to add any such Elective Contributions to the
Trust Fund at the time the Trustee receives such Elective Contributions.
(e) Hardship Distributions. An Employee may not have Elective
Contributions made on his or her behalf for the taxable year following the
taxable year of a hardship distribution in excess of the applicable limit
under Section 402(g) of the Code for such taxable year less the amount of
the Employee's Elective Deferrals for the taxable year of the hardship
distribution.
2.2.3 Employee Contributions.
(a) Amount of Contribution. An Employee is neither required nor
permitted to contribute to the Plan for any Plan Year beginning after 1986.
The Plan Administrator shall not accept deductible employee contributions
attributable to any Plan Year.
2.2.4 Return of Contributions. Qualified Non-Elective,
Non-Elective and Matching Contributions shall be returned to the
Employer in the following instances:
(a) If a Qualified Non-Elective, Non-Elective or Matching
Contribution is made by the Employer by mistake of fact, then the
contribution shall be returned within one year after its payment upon the
Employer's written request.
-21-
<PAGE>
(b) If a Qualified Non-Elective, Non-Elective or Matching
Contribution is conditioned on initial qualification of the Plan under the
applicable sections of the Code, and the Commissioner of Internal Revenue
determines that the Plan does not qualify, then the contribution made
incident to the initial qualification by the Employer shall be returned
within one year after the date of denial of initial qualification of the
Plan; provided that the application for initial qualification is made by
the time prescribed by law for filing the Employer's tax return for the
taxable year in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe.
(c) Each Qualified Non-Elective, Non-Elective and Matching
Contribution is conditioned upon the deductibility of the contribution
under the applicable sections of the Code and to the extent of a
disallowance of the deduction for part or all of the contribution, the
contribution shall be returned within one year after such disallowance upon
the Employer's written request.
- 22 -
<PAGE>
ARTICLE III
ALLOCATIONS
2.3.1 Non-Elective Contribution. As of each Anniversary Date, the
Non-Elective Contribution made by the Employer including any forfeitures with
respect to the preceding Plan year shall be allocated among the Employer
Accounts of Participants who have completed at least an Hour of Service during
the Plan Year, in the following manner:
(a) Non-Elective Contributions are not permitted.
2.3.2 Minimum Allocation. In the event the Plan becomes a
Top-Heavy Plan during any Plan Year, the provisions of Section 2.6.1(a) shall
apply.
2.3.3 Fail-Safe Allocation. Notwithstanding any provision of the
Plan to the contrary, for Plan Years beginning after December 31, 1989, if the
Plan would otherwise fail to satisfy the requirements of Section 401(a)(26),
410(b)(1) or 410(b)(2)(A)(i) of the Code and the regulations thereunder because
Employer contributions have not been allocated to a sufficient number or
percentage of Participants for the Plan Year, an additional contribution shall
be made by the Employer and shall be allocated to the Employer Accounts of
affected Participants subject to the following provisions:
(a) The Participants eligible to share in the allocation of the
Employer's contribution shall be expanded to include the minimum number of
Participants who are not otherwise eligible to the extent necessary to
satisfy the applicable test under the relevant Section of the Code. The
specific Participants who shall become eligible are those Participants who
are actively employed on the last day of the Plan Year who have completed
the greatest number of Hours of Service during the Plan Year.
(b) If the applicable test is still not satisfied, the Participants
eligible to share in the allocation shall be further expanded to include
the minimum number of
- 23 -
<PAGE>
Participants who are not employed on the last day of the Plan Year as are
necessary to satisf the applicable test. The specific Participants who
shall become eligible are those Participants who have completed the
greatest number of Hours of Service during the Plan Year.
(c) A Participant's accrued benefit shall not be reduced by any
reallocation of amounts that have previously been allocated. To the extent
necessary, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received if they had
originally shared in the allocations without regard to the deductibility of
the contribution. Any adjustment to the allocations pursuant to this
paragraph shall be considered a retroactive amendment adopted by the last
day of the Plan Year.
2.3.4 Matching Contributions. As of each month, the Matching
Contribution made by the Employer with respect to the preceding month, and
forfeitures with respect to the preceding Plan Year, shall be allocated in the
following manner:
(a) The Matching Contribution, including any forfeitures shall be
allocated among the Matching Accounts of Participants who have completed at
least an Hour of Service during the month and for whom Elective
Contributions were made in an amount equal to 33 percent of the Elective
Contributions made on behalf of each Participant.
(b) Notwithstanding anything contained in this Section to the
contrary, if the employment of a Participant is terminated during a month
by reason of death, retirement, disability, resignation or discharge as
provided in Section 2.4.2(f), an allocation of Matching Contributions or
forfeitures shall be made to the Employer Account of such Participant for
the month during which his employment is terminated.
2.3.5 Elective Contributions. The Elective
Contributions by the Employer on behalf of an electing Employee shall be
allocated to the Elective Contribution Account of such
electing Employee as of the Anniversary Date of the Plan Year to which the
Elective Contribution pertains.
- 24 -
<PAGE>
2.3.6 Qualified Non-Elective Contributions. Qualified
Non-Elective Contributions are not permitted.
2.3.7 Limitation. The allocation of Employer contributions must
satisfy the requirements of Section 416 of the Code. Neither Elective
Contributions nor Matching Contributions may be taken into account for the
purpose of satisfying the minimum top-heavy contribution requirement imposed by
Section 416.
- 25 -
<PAGE>
ARTICLE IV
BENEFITS
2.4.1 Distributable Benefit. At such time that the employment of
a Participant terminates for any reason, he or his Beneficiary shall be entitled
to a benefit equal to the vested and nonforfeitable interest in his Accounts as
of the Distribution Determination Date. The Accounts shall include the
allocable share of contributions and forfeitures, if any, which may be allocated
to the Accounts as of such Distribution Determination Date, and shall be
determined after making the adjustments for which provision is made in the Plan.
2.4.2 Vesting. A Participant shall at all times be one hundred
percent (100%) vested and have a nonforfeitable interest in his Elective
Contribution Account, Qualified Non-Elective Contribution Account, Voluntary
Account and Segregated Account. The vested and nonforfeitable interest of the
Participant in his Controlled Account shall be determined by reference to the
Account from which the funds were originally transferred. The vested and
nonforfeitable interest in a Participant's Employer Account and Matching Account
shall be determined as hereinafter provided.
(a) Normal Retirement. If a Participant terminates employment at his
Normal Retirement Age, he shall be one hundred percent (100%) vested and
have a nonforfeitable interest in his Employer Account and Matching
Account.
(b) Deferred Retirement. If a Participant continues in active
employment following his Normal Retirement Age, he shall continue to
participate under the Plan. From and after his Normal Retirement Age, he
shall be one hundred percent (100%) vested and have a nonforfeitable
interest in his Employer Account and Matching Account.
(c) Disability. If the employment of a Participant is terminated
prior to his Normal Retirement Age as a result of a medically determinable
physical or mental impairment which may be expected to result in death or
to last for a continuous period of not less than twelve (12) months and
which renders him incapable of performing his duties, he shall be one
hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account and Matching Account. All determinations in connection
with the permanence and degree of such disability shall be made by the Plan
Administrator in a uniform, nondiscriminatory manner on the basis of
medical evidence.
- 26 -
<PAGE>
(d) Death. In the event of the death of a Participant, he shall be
one hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account and Matching Account.
(e) Termination of Plan. In the event of termination of the Plan
(including termination resulting from a complete discontinuance of
contributions by the Employer), each Participant shall be one hundred
percent (100%) vested and have a nonforfeitable interest in his Employer
Account and Matching Account. In the event of a partial termination of the
Plan, each Participant with respect to whom such partial termination has
occurred shall be one hundred percent (100%) vested and have a
nonforfeitable interest in his Employer Account and Matching Account.
(f) Resignation or Discharge. If the employment of a Participant
terminates by reason of early retirement, resignation or discharge prior to
his Normal Retirement Age, he shall be one hundred percent (100%) vested
and have a nonforfeitable interest in his Employer Account and Matching
Account.
2.4.3 Leave of Absence. A temporary cessation from active
employment with the Employer pursuant to an authorized leave of absence in
accordance with the nondiscriminatory policy of the Employer, whether occasioned
by illness, military service or any other reason shall not be treated as either
a termination of employment or a Break in Service provided that the Employee
returns to employment prior to the end of the authorized leave of absence.
2.4.4 Re-Employment. In the event that the Participant is
re-employed during a Plan Year subsequent to the Plan Year encompassing the
Distribution Determination Date, he shall be given credit for Years of Service
preceding the Break in Service for the purpose of determining his vested and
nonforfeitable interest in his share of Employer contributions and forfeitures
allocated to his Employer Account after such re-employment. Years of Service
completed by the Participant after such re-employment shall not increase his
vested and nonforfeitable interest in his Employer Account on the Distribution
Determination Date as of which his Distributable Benefit is determined preceding
such re-employment unless the Participant is re-employed before he incurs five
(5) consecutive Breaks in Service.
- 27 -
<PAGE>
In the case of a Participant who does not have any vested and nonforfeitable
right under the Plan to an accrued benefit derived from Employer contributions,
Years of Service before any period of consecutive Breaks in Service shall not be
taken into account in the event of re-employment if the number of consecutive
Breaks in Service within the period equals or exceeds the greater of five (5) or
the aggregate number of Years of Service before such period. Any Years of
Service which are not taken into account by reason of such period of Breaks in
Service shall not be taken into account in applying the foregoing to a
subsequent period of Breaks in Service.
2.4.5 Distribution Determination Date. The Distribution
Determination Date shall be determined as hereinafter provided.
(a) Less Than 100% Vested. If the employment of a Participant
terminates and the Participant has less than a one hundred percent (100%)
vested and nonforfeitable interest in his Employer Account as of the date
of such termination, the Distribution Determination Date shall be as soon
as practical following the date of termination, based on the Valuation Date
coinciding with the distribution, provided that he is not re-employed on
the last day of such Plan Year.
(b) Fully Vested. For a Participant who is fully vested but who
terminates employment prior to death, total and permanent disability or
retirement at his retirement date, the Distribution Determination Date
shall be as soon as practical following the date of termination.
For a Participant who terminates employment as a result of death, total and
permanent disability or retirement at his retirement date, the Distribution
Determination Date shall be as soon as practical following the date of
termination.
In the case of a Participant's interest in a Voluntary Account or a
Segregated Account attributable to a rollover contribution from another
plan, the Distribution Determination Date is as soon as practical following
the date of termination.
(c) Termination of Plan. In the event of termination of the Plan
(including termination resulting from a complete discontinuance of
contributions by the Employer), the Distribution Determination Date shall
be the date of such termination. In the event of a partial termination of
the Plan, as to each Participant with respect to whom such partial
termination has occurred, the Distribution Determination Date shall be the
Anniversary Date coinciding with or immediately following the date of such
partial termination.
- 28 -
<PAGE>
(d) Other. Except as provided above, the Distribution Determination
Date shall be the Anniversary Date coinciding with or next following the
termination of employment of the Participant.
(e) Distributions Following Distribution Determination Date. Subject
to the necessity, if any, of obtaining the consent of a Participant and
spouse, distribution of a Participant's Distributable Benefit shall
commence within a reasonable period after the Distribution Determination
Date, unless otherwise elected by the Participant in accordance with the
provisions of the Plan or as required by the provisions of the Plan.
2.4.6 Forfeitures. If an Employee terminates service, and the
value of the Employee's vested account balance derived from employer and
employee contributions is not greater than $3,500 and the Employee receives a
distribution of the value of the entire vested portion of such account balance,
the nonvested portion shall be treated as a forfeiture as of the last day of the
Plan Year of termination of employment. If the value of an Employee's vested
account balance is zero, the Employee shall be deemed to have received a
distribution of such vested account balance. A participant's vested 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.
If an Employee terminates service, and elects, in accordance with the provisions
of the Plan, to receive the value of the employee's vested account balance, the
nonvested portion shall be treated as a forfeiture. If the Employee elects to
have distributed less than the entire vested portion of the account balance
derived from employer contributions, the part of the nonvested portion that will
be treated as a forfeiture is the total nonvested portion multiplied by a
fraction, the numerator of which is the amount of the distribution attributable
to employer contributions and the denominator of which is the total value of the
vested employer derived account balance.
- 29 -
<PAGE>
If an Employee receives a distribution and the Employee resumes employment
covered under the Plan, the Employee's employer-derived account balance shall be
restored to the amount on the date of distribution if the Employee repays to the
plan the full amount of the distribution attributable to Employer contributions
before the earlier of five (5) years after the first date on which the
Participant is subsequently re-employed by the Employer, or the date the
Participant incurs five (5) consecutive Breaks in Service following the date of
the distribution. If an Employee is deemed to receive a distribution pursuant
to this section, and the Employee resumes employment covered under the Plan
before the date the Participant incurs five (5) consecutive Breaks in Service,
upon the reemployment of such Employee, the employer-derived account balance of
the Employee will be restored to the amount on the date of such deemed
distribution.
Any portion of a Participant's Employer or Matching Account with respect to
which he is not vested shall be deemed a forfeiture as of the last day of the
Plan Year of termination of employment.
Forfeitures from the Employer Account shall be allocated to the Employer Account
of Participants who are entitled by reason of re-employment to restoration of a
prior forfeiture and any remaining forfeitures shall be allocated in the same
manner as a contribution by the Employer.
Forfeitures from the Matching Account shall be allocated to the Matching Account
of Participants who are entitled by reason of re-employment to restoration of a
prior forfeiture and any remaining forfeitures shall be allocated in proportion
to each Participant's Matching Contribution.
Notwithstanding any provision herein to the contrary, forfeitures resulting from
contributions by an Employer shall not be reallocated for the benefit of another
adopting Employer. If a Participant is entitled to a restoration of a
forfeiture which has not otherwise been provided for, the amount to be restored
shall be restored by allocating forfeitures arising in the Plan Year of
restoration to the Participant's Account to the extent thereof and an additional
contribution by the Employer allocated to the Participant's Account to the
extent that allocable forfeitures are insufficient.
- 30 -
<PAGE>
ARTICLE V
DISTRIBUTIONS
2.5.1 Commencement of Distribution.
(a) Immediate Distribution. If the employment of a Participant is
terminated for any reason other than resignation or discharge prior to his
Normal Retirement Date, distribution of his Distributable Benefit shall
begin in accordance with the Participant's election at any time after the
earlier of the date determined under subsection (b) below or within a
reasonable period after the Distribution Determination Date as of which his
Distributable Benefit is determined; provided that, if he has not incurred
a Break in Service, he is not reemployed prior to the date of the
commencement of distributions.
(b) Deferred Distribution. Unless the Participant elects either
earlier commencement in accordance with the provisions of the Plan or to
further defer distribution, if the employment of a Participant is
terminated by reason of resignation or discharge prior to either his Early
Retirement Date or his Normal Retirement Date, distribution of his
Distributable Benefit shall be deferred and commenced on the sixtieth
(60th) day after the close of the later of the following Plan Years:
(i) The Plan Year during which the Participant attains the
earlier of age sixty-five (65) or the Normal Retirement Age;
(ii) The Plan Year during which the tenth (10th) anniversary of
the commencement of the Participant's participation in the Plan
occurs; or
(iii) The Plan Year during which the Participant terminates
service with the Employer.
If distribution is so deferred, unless otherwise determined by the Plan
Administrator, the Trustee at the Plan Administrator's direction shall transfer
the Distributable Benefit to a Segregated Fund from which distribution shall
thereafter be made. Such transfer shall be made as of the Distribution
Determination Date. 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 2.5.2(j), shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to satisfy
this section.
- 31 -
<PAGE>
(c) Required Distribution. Notwithstanding anything herein to the
contrary, unless the Participant has made an appropriate election by
December 31, 1983 to defer distribution which has not been revoked or
modified, the Participant's benefit shall be distributed to the Participant
not later than April 1 of the calendar year following the calendar year in
which he attains age 70-1/2 (the required beginning date) or shall be
distributed, commencing not later than April 1 of such calendar year in
accordance with regulations prescribed by the Secretary of the Treasury
over a period not extending beyond the life expectancy of the Participant
or the life expectancy of the Participant and a beneficiary designated by
the Participant. 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 life expectancy. Unless otherwise
elected by the Participant (or spouse, if distributions begin after death
and the spouse is the designated beneficiary), by the time distributions
are required to begin, the life expectancy of the Participant and the
Participant's spouse shall be recalculated annually. Other than for a life
annuity, such election shall be irrevocable as to the Participant or spouse
and shall apply to all subsequent years. The life expectancy of a
non-spouse beneficiary may not be recalculated. Life expectancy and joint
and last survivor expectancy shall be computed by use of the expected
return multiples in Tables V and VI of Section 1.72-9 of the Treasury
Regulations. 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 then determined from the
table set forth in Q&A- 4 of Section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the Participant shall be
distributed using the applicable life expectancy as the relevant divisor
without regard to Proposed Regulations Section 1.401(a)(9)- 2. The minimum
distribution for subsequent calendar years, including the minimum
distribution for the distribution calendar year in which the Participant's
required beginning date occurs, must be made on or before December 31 of
that distribution calendar year.
- 32 -
<PAGE>
(d) Distribution After Death. Unless the Participant has made an
appropriate election by December 31, 1983 to extend the period of
distribution after his death and the election has not been revoked or
modified, the following provisions shall apply. If distribution of the
Participant's benefit has begun and the Participant dies before his entire
benefit has been distributed to him, the remaining portion of such benefit
shall be distributed at least as rapidly as under the method of
distribution being used as of the date of the Participant's death.
If the Participant dies before the distribution of his benefit has begun,
the entire interest of the Participant shall be distributed by December 31
of the calendar year containing the fifth (5th) anniversary of the death of
such Participant, provided that if any portion of the Participant's benefit
is payable to or for the benefit of a designated beneficiary and such
portion is to be distributed in accordance with regulations issued by the
Secretary of the Treasury over the life of, or over a period not extending
beyond the life expectancy of such designated beneficiary, such
distributions shall begin not later than December 31 of the calendar year
immediately following the calendar year of the Participant's death or such
later date as may be provided by regulations issued by the Secretary of the
Treasury. If the designated beneficiary is the surviving sl?ouse of the
Participant the date on which the distributions are required to begin shall
not be earlier than the later of December 31 of the calendar year
immediately following the calendar year in which the Participant died and
December 31 of the calendar year in which the Participant would have
attained age 70-1/2. If the surviving spouse thereafter dies before the
distributions to such spouse begin and any benefit is payable to a
contingent beneficiary, the date on which distributions are required to
begin shall be determined as if the surviving spouse were the Participant.
If the Participant has not specified the manner in which benefits are
payable 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, 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.
- 33 -
<PAGE>
(e) Payments to Children. In accordance with regulations issued by
the Secretary of the Treasury, any amount paid to a child shall be treated
as if it had been paid to the surviving spouse if such amount shall become
payable to the surviving spouse upon such child reaching majority (or other
designated event permitted under such regulations).
(f) Incidental Death Benefit Distributions. Any distribution
required by the rules applicable to incidental death benefits shall be
treated as a distribution required by this Section. All distributions
required under this Section shall be determined and made in accordance with
the proposed regulations under Section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
(g) Distributions. For the purposes of this section, distribution of
a Participant's interest is considered to begin on the Participant's
required beginning date or the date distribution is required to begin to
the surviving spouse. If distribution in the form of an annuity
irrevocably commences to the Participant before the required beginning
date, the date distribution is considered to begin is the date distribution
actually commences.
(h) 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)
and the proposed regulations thereunder.
- 34 -
<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.
(4) Participant's benefit.
(i) The account balance as of the last valuation date in
the calendar year immediately preceding the distribution calendar
year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the account balance as
of dates in the valuation calendar year after the valuation date
and decreased by distributions made in the valuation calendar
year after the valuation date.
(ii) Exception for second distribution calendar year. For
purposes of paragraph W 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.
(5) Required beginning date.
(i) 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
(ii) 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 (I) or (II) below:
(I) Non-5-percent owners. The required beginning
date of a Participant who is not a 5-percent owner is the
first day of April of the calendar year following the
calendar year in which the later of retirement or attainment
of age 70 1/2 occurs.
- 35 -
<PAGE>
(II) 5-percent owners. The required beginning date
of a Participant who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day of April
following the later of:
(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-percent owner, or the calendar
year in which the Participant retires.
The required beginning date of a Participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and who has
not retired as of 2 January 11 1989, is April 1, 1990.
(iii) 5-percent owner. A Participant is treated as a
5-percent owner for purposes of this section if such Participant is a
5-percent owner as defined in 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.
(iv) Once distributions have begun to a 5-percent owner
under this section, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent year.
(i) Transitional rule.
(1) Notwithstanding the other requirements of this Section and
subject to the requirements of Section 2.5.2, distribution on behalf of any
employee, including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of when such distribution
commences):
(a) The distribution by the trust is one which would not
have disqualified such trust under Section 401(a)(9) of the
Internal Revenue Code as in effect prior to amendment by the
Deficit Reduction Act of 1984.
- 36 -
<PAGE>
(b) The distribution is in accordance with a method of
distribution designated by the employee whose interest in the
trust 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.
2.5.2 Method of Distribution. Subject to the provisions of
Section 2.5.1 above and any security interest in a loan from the Plan for which
any necessary spousal consent has been obtained (to the extent such security
interest is used as repayment of the loan), distribution shall be made by one of
the following methods, as determined in accordance with the election of the
Participant (or in the case of death, his Beneficiary) with such spousal
consents as may be required by law in any of the following methods:
(a) In a single distribution; provided that if the Employer has
applied a consistent policy since the first Plan Year beginning after 1988,
the Employer may require a Participant who is a Highly Compensated Employee
or who is otherwise entitled to receive a lump sum distribution in excess
of $25,000.00 to execute a covenant not to compete with the Employer which
shall provide that the Participant agrees that he shall not solicit the
business of any person or entity doing business with the Employer at any
time within the twelve month period prior to the date of termination of his
employment and, in addition, shall not engage in any business, whether as a
sole proprietor, partner, joint venturer, shareholder, employee,
independent contractor, agent or otherwise, which is in competition with
the business of the Employer for a period not exceeding two (2) years from
the date of such distribution within fifty (50) miles of the principal
offices of the Employer or containing such alternative provisions as
determined by the Employer.
(b) Any alternative method of equivalent value contained in the Plan
at any time on or after the first day of the first Plan Year beginning
after 1988 to which the Participant consents.
(c) Incidental Death Benefits. 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
fifty (50%) percent of the present value of the amount available for
distribution is paid within the life expectancy of the Participant.
- 37 -
<PAGE>
(d) Consents. If the value of a Participant's vested account balance
derived from Employer and Employee contributions does not exceed (and at
the time of any prior distribution did not exceed) $3,500, the consent of
the Participant and his or her spouse shall not be required; provided that
if such value exceeds $3,500, the Participant and spouse (or where either
has died, the survivor) must consent to any distribution of such account
balance. The consent shall be obtained in writing within the 90 day period
ending on the annuity starting date. 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 the Plan if the Plan does
not offer an annuity option (purchased from a commercial provider), the
Participant's account balance in the Plan 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.
(e) Zero Benefits. If the value of the Participant's vested and
nonforfeitable interest in the Plan at the time of his termination of
employment is zero, the Participant shall be deemed to have received a
distribution of such interest.
(f) Restrictions on Immediate Distributions. The Plan Administrator
shall notify the Participant and the Participant's spouse of the right to
defer any distribution until the Participant's account balance in the Plan
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. 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 Participant's
account balance in the Plan is immediately distributable. Furthermore, if
payment in the form of a qualified joint and survivor annuity is not
required with respect to the Participant pursuant to the Plan, only the
Participant need consent to the distribution of an account balance that is
immediately distributable. The Participant's account balance is
immediately distributable if any part of the Participant's account balance
could be distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later
- 38 -
<PAGE>
of age 62 or the Normal Retirement Age.
(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 sections of the article must be given the opportunity to
elect to have the prior sections of this article apply if such
Participant is credited with at least one hour of service under this
Plan or a predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant has 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 (4) below.
(3) The respective opportunities to elect (as described 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 (2)
above and any Participant who does not elect under Section (1) or who
meets the requirements of Section (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:
(i) Automatic joint and survivor annuity. If benefits in
the form 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
- 39 -
<PAGE>
(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 end 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.
(ii) 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 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.
(iii) For purposes of this Section (4):
(1) Qualified early retirement age is the
later of:
(i) earliest date, under the Plan, on which
the Participant may elect to receive retirement
benefits,
(ii) the first day of the 120th month
beginning before the Participant reaches normal
retirement age, or
(iii) the date the Participant begins
participation.
- 40 -
<PAGE>
(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
otherwise described in the Plan.
2.5.3 Nature of Distributions. The nature of the
distribution of a Participant's Distributable Benefit shall be as
hereinafter provided.
(a) Trust Fund and Segregated Funds. Subject to the
Joint and Survivor Annuity requirements, except as provided
in subsection (b) with regard to Life Insurance Policies,
distribution of a Participant's Distributable Benefit shall
consist of cash or property, or an annuity contract as
provided in Section 5.2 above.
(b) Insurance Policies. In the event that the Trustee
has purchased Life Insurance Policies on the life of the
Participant, the values and benefits available with respect
to each such Policy shall be distributed as follows:
(i) If the Participant's employment terminates for
any reason other than death, then the Trustee shall
either surrender the Life Insurance Policy for its
available cash value and distribute the proceeds as
provided in subsection (a) above or, at the election of
the Participant, distribute the Life Insurance Policy to
the Participant, provided the Participant has a vested
and nonforfeitable interest in his Accounts in an amount
at least equal to the cash value thereof.
(ii) If the Participant's employment terminates by
reason of death, the beneficiary designated by the
Participant in accordance with the terms of the Plan
shall be entitled to receive from the Trustee the full
amount of the proceeds thereof.
The Trustee shall apply for and be the owner of any Policies
purchased under the terms of the Plan. The Policies must
provide that the proceeds are payable to the Trustee subject
to the Trustee's obligation to pay over the proceeds to the
designated Beneficiary. Under no circumstances shall the
trust retain any part of the proceeds. In the event of any
conflict between the terms of the Plan and the terms of any
Policies purchased hereunder, the Plan provisions shall
control.
- 41 -
<PAGE>
2.5.4 Advance Distributions. After a Participant's
employment has terminated and before he is otherwise entitled to
distribution of his Distributable Benefit, but in no event
earlier than the Distribution Determination Date, the Trustee
upon the request of the Participant or Beneficiary shall make
advance distributions to him or to his Beneficiary. The
aggregate of such an advance distribution shall not exceed the
sum of the vested and nonforfeitable interest in the
Participant's Accounts.
An Employee who terminates service and elects to receive the
value of the Employee's vested account balance shall forfeit the
nonvested portion. If the Employee elects to have distributed
less than the entire vested portion of the account balance
derived from Employer contributions, the part of the nonvested
portion that is treated as a forfeiture is the total nonvested
portion multiplied by a fraction, the numerator of which is the
amount of the distribution attributable to Employer contributions
and the denominator of which is the total value of the vested
Employer derived account balance.
Except as otherwise provided in the preceding paragraph, if a
Participant receives a distribution which reduces the balance in
his Employer Account when he has less than a one hundred percent
(100%) vested and nonforfeitable interest in the Account, the
amount, if any, of the Participant's vested and nonforfeitable
interest in the undistributed balance of said Account on his
Accrual Date shall be transferred to a Segregated Account and
shall not be less than an amount ("X") determined by the
formula: X = P (AB + (R x D)) - (R x D). For purposes of
applying the formula: P is the vested percentage at the relevant
time; AB is the account balance at the relevant time; and D is
the amount of the distribution; and R is the ratio of the Account
balance at the relevant time to the Account balance after
distribution.
A Participant who terminates employment and receives a
distribution of an amount deducted from his Account when he has
less than a one hundred percent (100%) vested and nonforfeitable
interest in the Account and who subsequently again becomes an
Employee may repay the full amount of such distribution before he
incurs five (5) consecutive Breaks in Service following the date
of the distribution but in no event later than the fifth (5th)
anniversary of the date of his reemployment; provided, however,
that in the event of repayment neither the Trust nor the Employer
shall be liable for any federal or state income tax resulting
from the distribution and the Participant shall
- 42 -
<PAGE>
indemnify and hold harmless the Trust and the Employer for and
from any such liability. In the event of such repayment, the
Employer Account of the Participant shall be credited with the
full amount of such repayment and the previously undistributed
balance. In the event the Participant fails to repay the full
amount of such distribution within the time permitted for
repayment, the non-vested and forfeitable portion of the
previously undistributed balance of his Employer Account which
had been transferred to a Segregated Account shall be deemed a
forfeiture as of the last day of such period. If a Participant
is deemed to receive a distribution because his vested and
nonforfeitable interest at the time of his termination of
employment is zero and the Participant resumes employment covered
under the Plan before the date the Participant incurs five (5)
consecutive Breaks in Service, upon the reemployment of such
Participant, the employer-derived account balance of the
Participant shall be restored to the amount on the date of the
deemed distribution.
2.5.5 In Service Distributions. In Service
Distributions are not permitted.
2.5.6 Hardship Distributions. A Participant may request
a distribution from the Plan as a result of immediate and heavy
financial needs of the Participant to the extent that the
distribution is necessary to satisfy such financial needs.
Hardship distributions are subject to the spousal consent
requirements contained in Sections 401(a)(11) and 417 of the
Code. The determination of whether a Participant has an
immediate and heavy financial need shall be made by the Plan
Administrator on the basis of all relevant facts and
circumstances. A distribution shall be deemed to be made on
account of an immediate and heavy financial need if the
distribution is on account of:
(a) Deductible medical expenses described in Section
213(d) of the Code incurred or necessary for medical care of
the Participant, his spouse or dependents;
(b) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(c) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Participant, his spouse, children or dependents; or
(d) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage
of the Participant's principal residence.
- 43 -
<PAGE>
A distribution shall be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if:
(a) The Participant 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
Participant's elective Deferrals and employee contributions
shall be suspended for twelve (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
Participant may not make Elective Deferrals for the
Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable
limit under Section 402(g) of the Code for such taxable year
less the amount of such Participant's Elective Deferrals for
the taxable year of the hardship distribution.
In the event of such distribution, when a Participant is less
than one hundred percent (100%) vested in his Employer Account or
Matching Account, the vested interest in the Employer Account or
Matching Account shall thereafter be determined in accordance
with Section 2.5.4 of the Plan.
- 44 -
<PAGE>
ARTICLE VI
CONTINGENT TOP HEAVY PROVISIONS
2.6.1 Top Heavy Requirements. If the Plan becomes a Top
Heavy Plan during any Plan Year, the following provisions shall
supersede any conflicting provisions in the Plan or Trust and
apply for such Plan Year:
(a) Except as otherwise provided 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 three percent 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 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. 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 (i) the Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the plan), or (ii) the
Participant's failure to make mandatory employee
contributions to the plan, or (iii) compensation less than a
stated amount. Neither Elective Deferrals nor Matching
Contributions may be taken into account for the purpose of
satisfying the minimum allocations.
For purposes of computing the minimum allocation,
Compensation shall mean a Participant's W-2 compensation.
The minimum allocation provided above shall not apply to any
Participant who was not employed by the Employer on the last
day of the Plan Year.
The minimum allocation provided 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 that the minimum allocation or benefit requirement
applicable to top-heavy plans will be met in the other plan
or plans.
- 45 -
<PAGE>
(b) References in Section 3.2.1(d), pertaining to
combined plan limitations, to "1.25" shall be applied by
substituting "1.0" for "1.25" therein. Reference in
Section 3.2.1(e), pertaining to a special transition rule, to
"$51,875" shall be applied by substituting "$41,500" for
"$51,875" therein.
(c) As provided under Section 2.4.2, each Participant
shall be one hundred percent (100%) vested and have a
nonforfeitable interest in his Employer Account.
The top-heavy minimum vesting schedule applies to all
benefits within the meaning of Section 411(a)(7) of the Code,
except those attributable to employee contributions,
including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the Plan
becomes top-heavy.
If the Plan ceases to be a Top Heavy Plan, the vesting which
occurs while the Plan is a Top Heavy Plan shall not be
cutback. Any minimum allocation required (to the extent
required to be nonforfeitable under Section 416(b)) may not
be forfeited under Section 411(a)(3)(B) or (D) of the Code.
2.6.2 Top Heavy Definitions. The following terms, as
used in this Plan, shall have the following meaning:
(a) "Key Employee": An Employee or former employee who,
at any time during the Determination Period is either:
(i) an officer of the Employer having an Annual
Compensation greater than fifty (50%) percent of the
amount in effect under Section 415(b)(1)(A) of the Code;
(ii) an owner (or a person considered an owner under
Section 318 of the Code) of one of the ten largest
interests in the Employer if such individual's Annual
Compensation from the Employer is more than the
limitation in effect under Section 415(c)(1)(A) of the
Code;
(iii) any person who owns directly or indirectly more
than five (5%) percent of the outstanding stock of the
Employer or stock possessing more than five (5%) percent
of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated Employer,
the capital or profits interest in the Employer;
- 46 -
<PAGE>
(iv) any person who owns directly or indirectly more
than one(1%) percent of the outstanding stock of the
Employer stock possessing more than one (1%) percent of
the total combined voting power of all stock of the
Employer or, in the case of an unincorporated Employer,
the capital or profits interest in the Employer and
having an Annual Compensation from the Employer of more
than $150,000; or
(v) any beneficiary of a Key Employee.
The determination of who is a Key Employee shall be made
in accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
(b) "Aggregation Group": Each qualified retirement plan
of the Employer in which a Key Employee is a participant and
each other qualified retirement plan of the Employer which
enables any plan in which a Key Employee is a participant to
meet the requirements of Section 401(a)(4) or Section 410 of
the Code.
(c) "Annual Compensation": Compensation as defined in
Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the Employee's gross
income under Section 125, Section 402(a)(8), Section 402(h)
or Section 403(b) of the Code.
(d) "Top-Heavy Plan": For any Plan Year beginning after
December 31, 1983, the plan is top-heavy if any of the
following conditions exists:
(i) If the top-heavy ratio for the plan exceeds 60
percent and the plan is not part of any required
aggregation group or permissive aggregation group of
plans.
(ii) If the plan is a 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 percent.
(iii) If the 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 percent.
- 47 -
<PAGE>
(e) "Top-Heavy Ratio":
(i) 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 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
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.
(ii) 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 (i) 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 (i) 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 five-year period ending on the Determination Date.
- 48 -
<PAGE>
(iii) For purposes of (i) and (ii) 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 (1) who is not a Key Employee
but was a Key Employee in a prior year, or (2) 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.
(f) "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.
(g) "Required Aggregation Group":
(i) 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).
(ii) Any other qualified plan of the Employer which
enables a plan described in (i) to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
- 49 -
<PAGE>
(h) "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.
(i) "Valuation Date": The date elected by the
Employer. as of which account balances or accrued
benefits are valued for purposes of calculating the
top-heavy ratio. The top-heavy valuation date shall be
the last day of the Plan Year.
(j) "Present Value": Present value shall be based only on
the interest and mortality rates.
(k) "Determination Period": The Plan Year containing the
Determination Date and the four (4) preceding Plan Year.
(l) "Non-Key Employee": An Employee who is not a Key
Employee.
- 50 -
<PAGE>
ARTICLE VII
SPECIAL CODA LIMITATIONS
2.7.1 Limitation on Deferral Percentage for Highly
Compensated Employees. Notwithstanding any provision herein to
the contrary, the actual deferral percentage for all Highly
Compensated Employees for each Plan Year must not exceed the
actual deferral percentage for all other Employees eligible to
participate by more than the greater of:
(a) the actual deferral percentage of such other
Employees multiplied by 1.25; or
(b) the actual deferral percentage of such other
Employees multiplied by 2.0, but in no event more than two
(2) percentage points greater than the actual deferral
percentage of such other Employees.
For purposes hereof, the actual deferral percentages for a
Plan Year for all Highly Compensated Employees and for all
other Employees respectively are the averages of the ratios,
calculated separately for each Employee in the respective
group, of the amount of Elective Contributions and Qualified
Non-Elective Contributions paid under the Plan on behalf of
each such Employee for such Plan Year including Excess
Elective Deferrals to the Employee's Compensation for such
Plan Year or the portion of such Plan Year during which the
Employee was a Participant in the Plan, but excluding
Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of those Elective
Deferrals). An Employee who would be a Participant but for
the failure to have Elective Contributions made on his behalf
shall be treated as a Participant on whose behalf no Elective
Contributions are made. For purposes of calculating the
actual deferral percentages of Highly Compensated Employees
who are 5 percent owners or among the ten most highly paid
Employees, Elective Contributions and Qualified Non-Elective
Contributions on behalf of a member of the Family of such
Highly Compensated Employees shall be taken into account and
Compensation of such Employees shall include the Elective
Deferrals and Qualified Non-Elective Contributions and
Compensation for the Plan Year of members of his Family (as
determined in Section 414(q)(6) of the Code). A member of
the Family of such Highly Compensated Employees shall be
disregarded as a separate Employee in determining the actual
deferral percentage both for Participants who are Highly
Compensated Employees and for all other Employees.
- 51 -
<PAGE>
For purposes of determining the actual deferral percentage
test, Elective Contributions and Qualified Non-Elective
Contributions must be made before the last day of the twelve
month period immediately following the Plan Year to which the
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the actual deferral percentage test and the
amount of Qualified Non-Elective Contributions used in such
test.
The determination and treatment of the actual deferral
percentage amounts of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of
the Treasury.
2.7.2 Multiple Plan Limitations.
(a) The actual deferral percentage for any Participant
who is a Highly Compensated Employee for the Plan Year and
who is eligible to have Elective Contributions (and Qualified
Non-Elective Contributions if treated as Elective Deferrals
for purposes of the actual deferral percentage test)
allocated to his or her 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
Non-Elective Contributions) 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.
(b) In the event that this Plan satisfies the
requirements of Section 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 shall be applied by determining the actual
deferral 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(k) of the Code only if they have the same Plan Year.
- 52 -
<PAGE>
2.7.3 Limitation on Matching Contributions.
Notwithstanding any provision herein to the contrary, the average
contribution percentage for all Highly Compensated Employees for
each Plan Year must not exceed the average contribution
percentage for all other Employees eligible to participate by
more than the greater of:
(a) the average contribution percentage of such other
Employees multiplied by 1.25; or
(b) the average contribution percentage of such other
Employees multiplied by 2.0, but in no event more than two
(2) percentage points greater than the average contribution
percentage of such other Employees.
For purposes hereof, the average contribution percentages for
a Plan Year for all Highly Compensated Employees and for all
other Employees respectively are the averages of the ratios,
calculated separately for each Employee in the respective
group, of the amount of Matching Contributions paid under the
Plan on behalf of each such Employee for such Plan Year, to
the Employee's Compensation for such Plan Year or the portion
of such Plan Year during which the Employee was a Participant
in the Plan. Such contribution percentage amounts shall not
include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Elective
Deferrals, Excess Contributions, or Excess Aggregate
Contributions. Such contribution percentage amounts shall
include forfeitures of Excess Aggregate Contributions or
Matching Contributions allocated to the Participant's
Accounts which shall be taken into account in the Plan Year
in which such forfeiture is allocated. The Employer shall
include only those Qualified Non-Elective Contributions that
are needed to meet the ACP test.
The Employer may also 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 of those
Elective Deferrals that are used to meet the ACP test. If an
Elective Contribution or other contribution by an Employee is
required as a condition of participation in the Plan, any
Employee who would be a Participant if such Employee made
such a contribution shall be treated as an eligible
Participant on behalf of whom no such contributions are made.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the average contribution percentage test and
the amount of Qualified Non-Elective Contributions used in
such test.
- 53 -
<PAGE>
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.
2.7.4 Special Rules.
(a) 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 the
ACP of those Highly Compensated Employees who also
participate in a CODA shall be reduced (beginning with such
Highly Compensated Employee whose ACP is the highest) so that
the limit is not exceeded. The amount by which each Highly
Compensated Employee's contribution percentage amounts is
reduced shall be treated as an Excess Aggregate Contribution.
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 either the ADP or
ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Employees who are not
Highly Compensated Employees.
(b) 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
Accounts 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.
(c) 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
percentages 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.
- 54 -
<PAGE>
(d) For purposes of determining the contribution
percentage of a Participant who is a five-percent owner or
one of the ten most highly-paid Highly Compensated Employees,
the contribution percentage amounts and Compensation of such
participant shall include the contribution percentage amounts
and Compensation for the Plan Year of members of the Family
of such Highly Compensated Employees. Family members, with
respect to Highly Compensated Employees, shall be disregarded
as separate employees in determining the contribution
percentage both for Participants who are Highly Compensated
Employees and for all other Employees.
(e) For purposes of determining the contribution
percentage test, Employee Contributions are considered to
have been made in the Plan Year in which contributed to the
trust. Matching Contributions and Qualified Non-Elective
Contributions shall be considered made for a Plan Year if
made no later than the end of the twelve month period
beginning of the day after the close of the Plan Year.
2.7.5 Distribution of Excess Elective Deferrals. A
Participant may assign to the Plan any Excess Elective Deferrals
made during a taxable year of the Participant by notifying the
Plan Administrator on or before March 15 of each calendar year 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 account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such
taxable year.
Excess Elective Deferrals distributed under this section shall be
adjusted for any income or loss based on a reasonable method of
computing the allocable income or loss. The method selected must
be applied consistently to all Participants and used for all
corrective distributions under the Plan for the Plan Year, and
must be the same method that is used by the Plan for allocating
income or loss to Participants' Accounts. Income or loss
allocable to the period between the end of the taxable year and
the date of distribution may be disregarded in determining income
or loss.
- 55 -
<PAGE>
2.7.6 Distribution of Excess Contributions.
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 Accounts such Excess
Contributions were allocated for the preceding Plan Year. If
such excess amounts are distributed more than 2-1/2 months after
the last day of the Plan Year in which such excess amounts arose,
a ten (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees. Excess Contributions of
Participants who are subject to the family member agareqation
rules shall be allocated among the family members in proportion
to the Elective deferrals (and any amounts treated as Elective
Deferrals) of each family member that is combined to determine
the combined ADP.
Excess Contributions distributed under this section shall be
adjusted for any income or loss based on a reasonable method of
computing the allocable income or loss. The method selected must
be applied consistently to all Participants and used for all
corrective distributions under the Plan for the Plan Year, and
must be the same method that is used by the Plan for allocating
income or loss to Participants' Accounts. Income or loss
allocable to the period between the end of the taxable year and
the date of distribution may be disregarded in determining income
or loss.
Excess Contributions shall be distributed from the Participant's
Elective Contribution Account in proportion to the Participant's
Elective Deferrals for the Plan Year. Excess Contributions
attributable to Qualified Non-Elective Contributions shall be
distributed from the Participant's Qualified Non-Elective
Contribution Account only to the extent that such Excess
Contributions exceed the balance in the Participant's Elective
Contribution Account.
2.7.7 Distribution of Excess Aggregate Contributions.
Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions (including both Elective Contributions
and the Employer's Matching Contributions as well as any
Voluntary 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
- 56 -
<PAGE>
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. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective
portions of the Excess Aggregate Contributions attributable to
each of such Employees. If such Excess Aggregate Contributions
are distributed more than 2-1/2 months after the last day of the
Plan Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the Employer maintaining the Plan
with respect to those amounts.
Excess Aggregate Contributions distributed under this section
shall be adjusted for any income or loss based on a reasonable
method of computing the allocable income or loss. The method
selected must be applied consistently to all Participants and
used for all corrective distributions under the Plan for the Plan
Year, and must be the same method that is used by the Plan for
allocating income or loss to Participants' Accounts. Income or
loss allocable to the period between the end of the taxable year
and the date of distribution may be disregarded in determining
income or loss.
Forfeitures of Excess Aggregate Contributions shall be applied
to reduce Employer Contributions.
Excess Aggregate Contributions shall be forfeited, if forfeitable
or distributed on a pro-rata basis from the Participant's
Matching Account and Voluntary Account (and, if applicable, the
Participant's Elective Contribution Account).
2.7.8 Limitation on Distributions. Except as otherwise provided
in this Article, Elective Deferrals and Non-Qualified Elective Contributions
and income allocable thereto are not distributable to a Participant or his or
her Beneficiary in accordance with such Participant's or Beneficiary's
election prior to separation from service, death or disability. Such amounts
may, however, be distributed upon:
(a) Termination of the Plan without the establishment of
another defined contribution plan.
(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.
- 57 -
<PAGE>
(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
(e) The Hardship of a Participant in accordance with
Section 2.5.6.
All such distributions are subject to the spousal and
Participant consent requirements, if applicable, contained in
Sections 401(a)(11) and 417 of the Code.
2.7.9 Limitation on Elective Deferrals. 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.
- 58 -
<PAGE>
PART III
ARTICLE I
ACCOUNTING
3.1.1 Accounts. All income, profits, recoveries,
contributions and any and all monies, securities and properties
of any kind at any time received or held by the Trustee shall be
held as a commingled Trust Fund, except to the extent such assets
are transferred to a Segregated Fund or Controlled Fund. For
accounting purposes, the Plan Administrator shall establish and
maintain certain Accounts for each Participant. An Employer
Account shall be established and maintained for each Participant
to which shall be added the Participant's share of Non-Elective
Contributions and forfeitures. A Matching Account shall be
established and maintained for each Participant to which shall be
added the Participant's share of Matching Contributions and
forfeitures. A Qualified Non-Elective Contribution Account shall
be established and maintained for each Participant to which shall
be added the Participant's share of Qualified Non-Elective
Contributions. If a Participant has previously made voluntary
nondeductible employee contributions, the Plan Administrator
shall establish and maintain a Voluntary Account for the
Participant. If, in accordance with any of the provisions of the
Plan, assets are either deposited initially or transferred to a
Segregated Fund for the benefit of a Participant, the Plan
Administrator shall establish and maintain a Segregated Account
for the Participant. If a Participant elects to exercise
investment control over all or a portion of his Accounts, the
Plan Administrator shall establish and maintain a Controlled
Account for the Participant.
3.1.2 Adjustments. As of each Valuation Date each
Participant's Accounts shall be adjusted in the following order
and manner.
(a) Distributions. Any distribution made to or on behalf
of a Participant since the last preceding Valuation Date
shall be deducted from the Participant's Account from which
the distribution was made.
(b) Insurance Premiums. Payments made since the last
preceding Valuation Date for Life Insurance Policies on the
life of a Participant (including without limitation payments
of premiums and interest on policy loans) shall be deducted
from the Account of the Participant from which the payment
was made.
- 59 -
<PAGE>
(c) Adjustment to Fair Market Value. The value of all monies,
securities and other property in the Trust Fund, excluding Life Insurance
Policies, shall be appraised by the Trustee at the then fair market value.
In determining such value, all income and contributions, if any, received
by the Trustee from the Employer or Participants on account of such year
calculated under the method of accounting of the Trust shall be included
and there shall be deducted all expenses determined in accordance with the
method of accounting adopted by the Plan Administrator.
If the total net value of the Trust Fund so determined exceeds (or is less
than) the total amount in the affected Accounts of all Participants, the
excess (or deficiency) shall be added to (or deducted from) the respective
Accounts of all Participants in the ratio that each such Participant's
Account bears to the total amount in all such Accounts.
(d) Adjustment of Segregated and Controlled Accounts. The value of
all monies, securities and other property in each Participant's Segregated
Account or Controlled Account, if any, but exclusive of Life Insurance
Policies, shall be appraised by the Trustee at the then fair market value.
In determining such value, all income calculated under the method of
accounting of the Trust shall be included and all expenses shall be
deducted.
If the total net value of a Participant's Segregated Account or Controlled
Account, as the case may be, so determined exceeds (or is less than) the
previous balance in such Account, the excess (or deficiency) shall be added
to (or deducted from) the Participant's respective Account.
(e) Insurance Dividends. Dividends or credits received since the
last preceding Valuation Date on any Life Insurance Policy on the life of a
Participant shall be added to the Account of the Participant from which the
premiums for such Life Insurance Policy have been paid.
(f) Contributions and Forfeitures. Each Participant's Account shall
be increased by that portion of the contribution and forfeitures which is
allocated to him.
(g) Transfers from Trust Fund. To the extent that funds in the Trust
Fund attributable to a Participant's Account were transferred since the
last preceding Valuation Date or are to be transferred to a Segregated Fund
pursuant to any of the provisions of the Plan, the Account from which the
funds were transferred shall be decreased and the Account to which the
funds were transferred shall be increased.
- 60 -
<PAGE>
(h) Transfers to Trust Fund. To the extent that funds are
transferred from a Segregated Fund of a Participant to the Trust Fund
pursuant to any of the provisions of the Plan, the Account from which the
funds were transferred shall be decreased and the Account of the
Participant to which the funds were transferred shall be increased.
(i) Time of Adjustments. Every adjustment to be made pursuant to
this Section shall be considered as having been made as of the applicable
Valuation Date regardless of the actual dates of entries, receipt by the
Trustee of contributions by the Participant or the Employer for such Year,
or the transfers of funds to or from Segregated Funds. The Trustee's
determination as to valuation of trust assets and charges or credits to the
individual Accounts of the respective Participants shall be conclusive and
binding on all persons. If funds are transferred to a Segregated Fund as
of any date other than a Valuation Date pursuant to the terms of the Plan,
the adjustments to be made pursuant to this Section shall be made as of the
date as of which the transfer is made, as if such date is a Valuation Date.
If any Participant receives a distribution pursuant to the terms of the
Plan as of any date other than a Valuation Date, then actual earnings will
be credited to the date of distribution.
- 61 -
<PAGE>
ARTICLE II
LIMITATIONS
3.2.1 Limitations on Annual Additions. If the Participant does
not participate in, and has never participated in another qualified plan
maintained by the Employer, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the Employer, which provides an
annual addition, subject to the adjustments hereinafter set forth, the amount of
annual additions which may be credited to a Participant's Accounts during any
Limitation Year shall in no event exceed the lesser of (a) thirty thousand
dollars ($30,000.00) or, if greater, one-fourth of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code as in effect for the Limitation
Year or (b) twenty-five percent (25%) of the Participant's Compensation for the
Plan 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 the Employer contribution
that would otherwise be contributed or allocated to the Participant's Account
would cause the annual additions for the Limitation Year to exceed the maximum
permissible amount, the amount contributed or allocated shall be reduced so that
the annual additions for the Limitation Year shall equal the maximum permissible
amount. For these purposes, the maximum permissible amount is the maximum
annual additions permitted on behalf of a Participant.
(a) Annual Additions. The term "annual additions" shall mean, the
sum of the following amounts credited to a Participant's Accounts for the
Limitation Year:
(i) Employer contributions;
(ii) Employee contributions;
(iii) Forfeitures; and
(iv) Amounts allocated after March 31, 1984, to an individual
medical account, as defined in Section 415(l)(2) of the Code, which is
part of a pension or annuity plan maintained by the Employer and
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.
- 62 -
<PAGE>
Any excess amounts applied under subsections (b) and (c) below to reduce
Employer contributions are considered annual additions for such Limitation
Year.
(b) Excessive Annual Additions. Prior to determining a Participant's
actual Compensation for a Limitation Year, the Employer may determine the
maximum permissible Annual Addition for the Participant on the basis of a
reasonable estimation of the Participant's Compensation for the Limitation
Year, uniformly determined for all Participants similarly situated. As
soon as is administratively feasible after the end of the Limitation Year,
the maximum permissible amount for the Limitation Year shall be determined
on the basis of the Participant's actual Compensation for the Limitation
Year. Any Excessive Annual Addition attributable to nondeductible
voluntary employee contributions made by a Participant to the extent they
reduce the excess amount shall be returned to the Participant before any
other adjustments are made.
If an excess amount still exists, and the Participant is covered by the
Plan at the end of the Limitation Year, the excess amount in the
Participant's Account shall 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. If an
excess amount still exists, and the Participant is not covered by the Plan
at the end of a Limitation Year, the excess amount shall be held
unallocated in a suspense account. The suspense account shall be applied
to reduce future Employer contributions for all remaining Participants in
the next Limitation Year, and each succeeding Limitation Year, if
necessary.
If a suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer or any Employee
contributions may be made to the Plan for that Limitation Year. Excess
amounts may not be distributed to Participants or former Participants. If
a suspense account is in existence at any time during a Limitation Year, it
shall not participate in the allocation of the Trust's investment gains and
losses.
- 63 -
<PAGE>
(c) Participation in Certain Other Plans. If in addition to this
Plan, the Participant is covered under another qualified defined
contribution plan maintained by the Employer, a welfare benefit fund, as
defined in Section 419(e) of the code maintained by the Employer, or an
individual medical account, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, which provides an Annual Addition during any
Limitation Year, the annual additions which may be credited to a
Participant's account under this Plan for any such Limitation Year shall
not exceed the maximum permissible amount reduced by the Annual Additions
credited to a Participant's Account under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual Additions with
respect to the Participant under other defined contribution plans and
welfare benefit funds maintained by the Employer are less than the maximum
permissible amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated shall be reduced so that
the Annual Additions under all such plans and funds for the Limitation Year
shall equal the maximum permissible amount. If the Annual Additions with
respect to the Participant under such other defined contribution plans and
welfare benefit funds in the aggregate are equal to or greater than the
maximum permissible amount, no amount will be contributed or allocated to
the Participant's Account under this Plan for the Limitation Year.
Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the maximum permissible amount
for a Participant in the manner described in subsection (b) above. As soon
as is administratively feasible after the end of the Limitation Year, the
maximum permissible amount for the Limitation Year shall be determined on
the basis of the Participant's actual Compensation for the Limitation Year.
If a Participant's Annual Additions under this Plan and such other plans
would result in an excess amount for a Limitation Year, the excess amount
shall be deemed to consist of the Annual Additions last allocated, except
that Annual Additions attributable to a welfare benefit fund or individual
medical account will be deemed to have been allocated first regardless of
the actual allocation date.
If the excess amount was allocated to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan, the
excess amount attributed to this Plan will be the product of:
(i) the total excess amount allocated as of such
- 64 -
<PAGE>
date, times
(ii) 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 Year as of such date under this and all the other qualified
defined contribution plans. Any excess amount attributed to this Plan
will be disposed in the manner described in subsection (b), above.
For purposes hereof, the excess amount is the excess of the
Participant's annual additions for the Limitation Year over the
maximum permissible amount.
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.
(d) Combined Plan Limitation. In the event that a Participant in
this Plan participates in a defined benefit plan (as defined in the
applicable sections of the Code) maintained by the Employer, the sum of the
"defined benefit plan fraction" plus the "defined contribution plan
fraction" shall at no time exceed 1.0. Except to the extent that applicable
law permits greater amounts to be provided on behalf of a Participant, in
which event such law is hereby incorporated by reference, the foregoing
fractions are defined as follows. The "defined benefit plan fraction" for
any year is a fraction (i) the numerator of which is the projected annual
benefit of the Participant under all the defined benefit plans (whether or
not terminated) maintained by the Employer (determined as of the close of
the year), and (ii) the denominator of which is the lesser of (A) the
product of 1.25 multiplied by the dollar limitation determined for the
Limitation Year under Sections 415(b) and (d) of the Code, or (B) the
product of 1.4 multiplied by one hundred (100%) percent of the
Participant's average compensation for the three (3) consecutive Years of
Service with the Employer that produces the highest average, 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 shall not be less than 125 percent
of the sum of the annual benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions of
the Plan after May 5, 1986. The preceding
- 65 -
<PAGE>
sentence applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415 for all Limitation
Years beginning before January 1, 1987. The "defined contribution fraction"
for any year is a fraction (i) the numerator of which is the sum of he
annual additions to the Participant's accounts 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 and individual medical accounts (as defined in
Sections 419(e) and 415(l)(2) of the Code) maintained by the Employer,
and (ii) the denominator of which is the sum of the lesser of the following
amounts determined for the current year and for all prior limitation years
of service with the Employer, regardless of whether a defined contribution
plan was maintained by the Employer: (A) the product of 1.25 multiplied by
the dollar limitation determined under Sections 415(b) and (d) of the Code
in effect under Section 415(c)(1)(A) of the Code, or (B) thirty-five (35%)
percent of the Participant's compensation from the Employer for such plan
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, shall 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 11 1987.
The annual addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all employee contributions as
annual additions.
- 66 -
<PAGE>
The projected annual benefits under a defined benefit plan is 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 the
Participant continues employment until normal retirement age under the plan
(or current age, if later), and the Participant's compensation for the
current Limitation Year and all other relevant factors used to determine
benefits under the Plan remain constant for all future Limitation Years.
(e) Special Transition Rule for Defined Contribution Fraction. At
the election of the Plan Administrator, in applying the provisions of
subsection (d) above with respect to the defined contribution plan fraction
for any year ending after December 31, 1982, the amount taken into account
for the denominator for each Participant for all years ending before
January 1, 1983 shall be an amount equal to the product of the amount of
the denominator determined under subsection (d) above for the year ending
in 1982, multiplied by the "transition fraction". The "transition
fraction" is a fraction (i) the numerator of which is the lesser of (A)
$51,875 or (B) 1.4 multiplied by twenty-five (25%) percent of the
Participant's compensation for the year ending in 1981, and (ii) the
denominator of which is the lesser of (A) $41,500 or (B) twenty-five (25%)
percent of the Participant's compensation for the year ending in 1981.
(f) Special Transition Rule for Excess Benefits. Provided that the
Plan satisfied the requirements of Section 415 of the Code for the last
Plan Year beginning before January 1, 1983, an amount shall be subtracted
from the numerator of the defined contribution plan fraction (not exceeding
such numerator) so that the sum of the defined benefit plan fraction and
the defined contribution fraction computed in accordance with Section
415(e)(1) of the Code (as amended by the Tax Equity and Fiscal
Responsibility Act of 1982) does not exceed 1.0 for such year, in
accordance with regulations issued by the Secretary of the Treasury
pursuant to the applicable provisions of the Code.
- 67 -
<PAGE>
(g) Employer. For purposes of this Section, employer shall mean the
Employer that adopts this Plan and all members of a group of employers
which constitutes a controlled group of corporations or trades or
businesses under common control (as defined in Sections 414(b) and (c) of
the Code, as modified by Section 415(h) of the Code), or an affiliated
service group (as defined in Section 414(m) of the Code) of which the
adopting employer is part and any other entity required to be aggregated
with the Employer under Section 414(o) of the Code and the regulations
issued thereunder.
(h) Compensation. For purposes of this Section, Compensation shall
mean all of a Participant's: Section 415 Safe-harbor Compensation. Wages,
salaries and fees for professional services and other amounts received for
personal services actually rendered in the course of employment for the
Employer (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 benefit,
reimbursements and expense allowances), but excluding:
(I) Employer contributions to a plan of deferred compensation
which are not includable 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;
(II) Amounts realized from the exercise of a non-qualified stock
option or when restricted stock or property held by the Employee is no
longer subject to a substantial risk of forfeiture or becomes freely
transferable.
(III) Amounts realized from the sale, exchange or other
disposition of stock acquired under an incentive stock option; and
(IV) 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 described in
Section 403(b) of the Code (whether or not the amounts are actually
excludable from the gross income of the Employee).
- 68 -
<PAGE>
For any self-employed individual, compensation shall mean earned income.
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this Article, Compensation for a Limitation
Year is the Compensation actually paid or includible in gross income during
such Limitation Year.
(i) Short Limitation Year. If the Limitation Year is amended to a
different twelve (12) consecutive month period, the new Limitation Year
must begin within the Limitation Year in which the amendment is made. If a
short Limitation Year is created because of an amendment changing the
Limitation Year to a different twelve (12) consecutive month period, the
maximum annual addition shall not exceed the defined contribution dollar
limitation determined in accordance with Section 415(c)(1)(A) of the Code
then in effect multiplied by a fraction, the numerator of which is the
number of months in the short Limitation Year and the denominator of which
is twelve (12).
3.2.2 Controlled Businesses. 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) for the employees of this
and all other 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) 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 trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
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:
(a) own the entire interest in an unincorporated trade or business, or
- 69 -
<PAGE>
(b) in the case of a partnership, own more than 50 percent of either
the capital interest or the profits 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.
- 70 -
<PAGE>
ARTICLE III
FIDUCIARIES
3.3.1 Standard of Conduct. The duties and responsibilities of the
Plan Administrator and the Trustee with respect to the Plan shall be discharged
(a) in a non-discriminatory manner; (b) for the exclusive benefit of
Participants and their Beneficiaries; (c) by defraying the reasonable expenses
of administering the Plan; (d) with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; (e) by diversifying the
investments of the Plan so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so; and (f) in accordance with
the documents and instruments governing the Plan insofar as such documents and
instruments are consistent with the provisions of the Act.
3.3.2 Individual Fiduciaries. At any time that a group of
individuals is acting as Plan Administrator or Trustee, the number of such
persons who shall act in such capacity from time to time shall be determined by
the Employer. Such persons shall be appointed by the Employer and may or may
not be Participants or Employees of the Employer. Any action taken by a group
of individuals acting as either Plan Administrator or Trustee shall be taken at
the direction of a majority of such persons, or, if the number of such persons
is two (2), by unanimous consent.
3.3.3 Disqualification from Service. No person shall be permitted
to serve as a Fiduciary, custodian, counsel, agent or employee of the Plan or as
a consultant to the Plan who has been convicted of any of the criminal offenses
specified in the Act.
3.3.4 Bonding. Except as otherwise permitted by law, each
Fiduciary or person who handles funds or other property or assets of the Plan
shall be bonded in accordance with the requirements of the Act.
3.3.5 Prior Acts. No Fiduciary shall be liable for any acts
occurring prior to the period of time during which the Fiduciary was actually
serving in such capacity with respect to the Plan.
- 71 -
<PAGE>
3.3.6 Insurance and Indemnity. The Employer may purchase or cause
the Trustee to purchase and keep current as an authorized expense liability
insurance for the Plan, its Fiduciaries, and any other person to whom any
financial or other administrative responsibility with respect to the Plan and
Trust is allocated or delegated, from and against any and all liabilities, costs
and expenses incurred by such persons as a result of any act or omission to act
in connection with the performance of the duties, responsibilities and
obligations under the Plan and under the Act; provided that any such insurance
policy purchased with Plan assets permits subrogation by the Insurer against the
Fiduciary in the case of breach by such Fiduciary. Unless otherwise determined
and communicated to affected parties by the Employer, the Employer shall
indemnify and hold harmless each such person, other than a corporate trustee,
for and from any such liabilities, costs and expenses which are not covered by
any such insurance, except to the extent that any such liabilities, costs or
expenses are judicially determined to be due to the gross negligence or willful
Misconduct of such person. No Plan assets may be used for any such
indemnification.
3.3.7 Expenses. Expenses incurred by the Plan Administrator or
the Trustee in the administration of the Plan and the Trust, including fees for
legal services rendered, such compensation to the Trustee as may be agreed upon
in writing from time to time between the Employer and the Trustee, and all other
proper charges and expenses of the Plan Administrator or the Trustee and of
their agents and counsel shall be paid by the Employer, or at its election at
any time or from time to time, may be charged against the assets of the Trust,
but until so paid shall constitute a charge upon the assets of the Trust. The
Trustee shall have the authority to charge the Trust Fund for its compensation
and reasonable expenses unless paid or contested by written notice by the
Employer within sixty (60) days after mailing of the written billing by the
Trustee. All taxes of any and all kinds whatsoever which may be levied or
assessed under existing or future laws upon the assets of the Trust or the
income thereof shall be paid from such assets. Notwithstanding the foregoing,
no compensation shall be paid to any Employee for services rendered under the
Plan and Trust as a Trustee.
- 72 -
<PAGE>
3.3.8 Agents, Accountants and Legal Counsel. The Plan
Administrator shall have authority to employ suitable agents, custodians,
investment counsel, accountants and legal counsel who may, but need not be,
legal counsel for the Employer. The Plan Administrator and the Trustee shall be
fully protected in acting upon the advice of such persons. The Trustee shall at
no time be obliged to institute any legal action or to become a party to any
legal action unless the Trustee has been indemnified to the Trustee's
satisfaction for any fees, costs and expenses to be incurred in connection
therewith.
3.3.9 Investment Manager. The Employer may employ as an
investment manager or managers to manage all or any part of the Trust Fund
any (i) investment advisor registered under the Investment Advisors Act of
1940; (ii) bank as defined in said Act; or (iii) insurance company qualified
to perform investment management services in more than one state. Any
investment manager shall have all powers of the Trustee in the management of
such part of the Trust Fund, including the power to acquire or dispose of
assets. In the event an investment manager is so appointed, the Trustee
shall not be liable for the acts or omissions of such investment manager or
be under any obligation to invest or otherwise manage that part of the Trust
Fund which is subject to the management of the investment manager. The
Employer shall notify the Trustee in writing of any appointment of an
investment manager, and shall provide the Trustee with the investment
manager's written acknowledgment that it is a fiduciary with respect to the
Plan.
3.3.10 Finality of Decisions or Acts. Except for the right of a
Participant or Beneficiary to appeal the denial of a claim, any decision or
action of the Plan Administrator or the Trustee made or done in good faith upon
any matter within the scope of authority and discretion of the Plan
Administrator or the Trustee shall be final and binding upon all persons. In
the event of judicial review of actions taken by any Fiduciary within the scope
of his duties in accordance with the terms of the Plan and Trust, such actions
shall be upheld unless determined to have been arbitrary and capricious.
3.3.11 Certain Custodial Accounts and Contracts. The term
"Trustee" as used herein will also include a person holding the assets of a
custodial account, an annuity contract or other contract which is treated as a
qualified trust pursuant to Section 401(f) of the Code and references to the
Trust Fund shall be construed to apply to such custodial account, annuity
contract or other contract.
- 73 -
<PAGE>
ARTICLE IV
PLAN ADMINISTRATOR
3.4.1 Administration of Plan. The Plan Administrator shall be
designated by the Employer from time to time. The primary responsibility of the
Plan Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the
Plan. The Plan Administrator shall administer the Plan and shall construe and
determine all questions of interpretation or policy in a manner consistent with
the Plan. The Plan Administrator may correct any defect, supply any omission,
or reconcile any inconsistency in such manner and to such extent as he shall
deem necessary or advisable to carry out the purpose of the Plan; provided,
however, that 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 a qualified Plan pursuant to the Code, and shall comply
with the terms of the Act. The Plan Administrator shall have all powers
necessary or appropriate to accomplish his duties under the Plan.
(a) 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 relating to the eligibility of an
Employee to participate in the Plan or to remain a Participant
hereunder.
(2) To compute, certify and direct the Trustee with respect to
the amount and kind of benefits to which any Participant shall be
entitled hereunder.
(3) To authorize and direct the Trustee with respect to all
disbursements from the Trust Fund.
(4) To maintain all the necessary records for the administration
of the Plan.
(5) To interpret the provisions of the Plan and to make and
publish rules and regulations for the Plan as the Plan Administrator
may deem reasonably necessary for the proper and efficient
administration of the Plan and consistent with its terms.
(6) To select the Insurer to provide any Life Insurance Policy
to be purchased for any Participant hereunder.
- 74 -
<PAGE>
(7) To advise the Fiduciary with investment authority regarding
the short and long-term liquidity needs of the Plan in order that the
Fiduciary might direct its investment accordingly.
(8) To advise, counsel and assist any Participant regarding any
rights, benefits or elections available under the Plan.
(9) To instruct the Trustee as to the management, investment and
reinvestment of the Trust Fund unless the investment authority has
been delegated to the Trustee or an Investment Manager.
(b) The Plan Administrator shall also be responsible for preparing
and filing such annual disclosure reports and tax forms as may be required
from time to time by the Secretary of Labor, the Secretary of the Treasury
or other governmental authorities.
(c) Whenever it is determined by the Plan Administrator to be in the
best interest of the Plan and its Participants or Beneficiaries, the Plan
Administrator may request such variances, deferrals, extensions, or
exemptions or make such elections for the Plan as may be available under
the law.
(d) The Plan Administrator shall be responsible for procuring bonding
for all persons dealing with the Plan or its assets as may be required by
law.
(e) In the event this Plan is required to file reports or pay
premiums to the Pension Benefit Guaranty Corporation, the Plan
Administrator shall have the duty to prepare and make such filings, to pay
any premiums required, whether for basic or contingent liability coverage,
and shall be charged with the responsibility of notifying all necessary
parties of such events and under such circumstances as may be required by
law.
3.4.2 Disclosure Requirements. Every Participant covered under
the Plan and every Beneficiary receiving benefits under the Plan shall receive
from the Plan Administrator a summary plan description, and such other
information as may be required by law or by the terms of the Plan.
- 75 -
<PAGE>
3.4.3 Information Generally Available. The Plan Administrator
shall make copies of this Plan and Trust, the summary plan description, latest
annual report, Life Insurance Policies, or other instruments under which the
Plan was established or is operated available for examination by any Participant
or Beneficiary in the principal office of the Plan Administrator and such other
locations as may be necessary to make such information reasonably accessible to
all interested parties. Subject to a reasonable charge to defray the cost of
furnishing such copies, the Plan Administrator shall, upon written request of
any Participant or Beneficiary, furnish a copy of any of the above documents to
the respective party.
3.4.4 Statement of Accrued Benefit. Upon written request to the
Plan Administrator once during any twelve (12) month period, a Participant or
Beneficiary shall be furnished with a written statement, based on the latest
available information, of his then vested accrued benefit and the earliest date
upon which the same will become fully vested and nonforfeitable. The statement
shall also include a notice to the Participant of any benefits which are
forfeitable if the Participant dies before a certain date.
3.4.5 Explanation of Rollover Treatment. The Plan Administrator
shall, when making a distribution eligible for rollover treatment, provide a
written explanation to the recipient of the provisions under which such
distribution will not be subject to tax if transferred to an eligible retirement
plan within sixty (60) days after the date on which the recipient received the
distribution and, if applicable, the provisions of law pertaining to the tax
treatment of lump sum distributions.
- 76 -
<PAGE>
ARTICLE V
TRUSTEE
3.5.1 Acceptance of Trust. The Trustee, by joining in the
execution of the Plan, agrees to act in accordance with the express terms and
conditions hereof.
3.5.2 Trustee Capacity - Co-Trustees. The Trustee may be a bank,
trust company or other corporation possessing trust powers under applicable
state or federal law or one or more individuals or any combination thereof.
When there are two or more Trustees, they may allocate specific
responsibilities, obligations or duties among themselves by their written
agreement. An executed copy of such written agreement shall be delivered to and
retained by the Plan Administrator.
3.5.3 Resignation, Removal, and Successors. Any Trustee may
resign at any time by delivering to the Employer a written notice of resignation
to take effect at a date specified therein, which shall not be less than thirty
(30) days after the delivery thereof; the Employer may waive such notice. The
Trustee may be removed by the Employer with or without cause, by tendering to
the Trustee a written notice of removal to take effect at a date specified
therein. Upon such removal or resignation of a Trustee, the Employer shall
either appoint a successor Trustee who shall have the same powers and duties as
those conferred upon the resigning or discharged Trustee, or, if a group of
individuals is acting as Trustee, determine that a successor shall not be
appointed and the number of Trustees shall be reduced by one (1).
3.5.4 Consultations. The Trustee shall be entitled to advice of
counsel, which may be counsel for the Plan or the Employer, in any case in which
the Trustee shall deem such advice necessary. The Trustee shall not be liable
for any action taken or omitted in good faith reliance upon the advice of such
counsel. With the exception of those powers and duties specifically allocated
to the Trustee by the express terms of the Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan and the Trustee
may request, and is entitled to receive, guidance and written direction from t e
Plan Administrator on any point requiring construction or interpretation of the
Plan documents.
- 77 -
<PAGE>
3.5.5 Rights, Powers and Duties. The rights, powers and
duties of the Trustee shall be as follows:
(a) The Trustee shall be responsible for the safekeeping of the
assets of the Trust Fund in accordance with the provisions of the Plan and
any amendments hereto. The duties of the Trustee under the Plan shall be
determined solely by the express provisions hereof and no other further
duties or responsibilities shall be implied. Subject to the terms of this
Plan, the Trustee shall be fully protected and shall incur no liability in
acting in reliance upon the written instructions or directions of the
Employer, the Plan Administrator, a duly designated investment manager, or
any other named Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for the
orderly and efficient performance of its duties hereunder, including but
not limited to those specified in this Section. The Trustee shall have the
power generally to do all acts, whether or not expressly authorized, which
the Trustee in the exercise of its fiduciary responsibility may deem
necessary or desirable for the protection of the Trust Fund and the assets
thereof.
(c) The Trustee shall have the power to collect and receive any and
all monies and other property due hereunder and to give full discharge and
release therefore; to settle, compromise or submit to arbitration any
claims, debts or damages due to or owing to or from the Trust Fund; to
commence or defend suits or legal proceedings wherever, in the Trustee's
judgment, any interest of the Trust Fund requires it; and to represent the
Trust Fund in all suits or legal proceedings in any court of law or equity
or before any other body or tribunal.
(d) The Trustee shall cause any Life Insurance Policies or assets of
the Trust Fund to be registered in its name as Trustee and shall be
authorized to exercise any and all ownership rights regarding these assets,
subject to the terms of the Plan.
(e) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any funds received in a bank account in the name of the
Trust Fund in any bank selected by the Trustee, including the banking
department of a corporate Trustee, if any, pending disposition of such
funds in accordance with the Plan. Any such deposit may be made with or
without interest.
- 78 -
<PAGE>
(f) The Trustee shall pay the premiums and other charges due and
payable at any time on any Life Insurance Policies as it may be directed by
the Plan Administrator, provided funds for such payments are then available
in the Trust. The Trustee shall be responsible only for such funds and
Life Insurance Policies as shall actually be received by it as . Trustee
hereunder, and shall have no obligation to make payments other than from
such funds and cash values of Life Insurance Policies.
(g) If the whole or any part of the Trust Fund shall become liable
for the payment of any estate, inheritance, income or other tax which the
Trustee shall be required to pay, the Trustee shall have full power and
authority to pay such tax out of any monies or other property in its hands
for the account of the person whose interest hereunder is so liable. Prior
to making any payment, the Trustee may require such releases or other
documents from any lawful taxing authority as it shall deem necessary. The
Trustee shall not be liable for any nonpayment of tax when it distributes
an interest hereunder on instructions from the Plan Administrator.
(h) The Trustee shall keep' a full, accurate and detailed record of
all transactions of the Trust which the Employer and the Plan Administrator
shall have the right to examine at any time during the Trustee's regular
business hours. As of the close of each Plan Year, the Trustee shall
furnish the Plan Administrator with a statement of account setting forth
all receipts, disbursements and other transactions effected by the Trustee
during the year. The Plan Administrator shall promptly notify the Trustee
in writing of his approval or disapproval of the account. The Plan
Administrator's failure to disapprove the account within sixty (60) days
after receipt shall be considered an approval. Except as otherwise
required by law, the approval by the Plan Administrator shall be binding as
to all matters embraced in any statement to the same extent as if the
account of the Trustee had been settled by judgment or decree of a court of
competent jurisdiction under which the Trustee, Employer and all persons
having or claiming any interest in the Trust Fund were parties; provided,
however, that the Trustee may have its account judicially settled if it so
desires.
(i) The Trustee is hereby authorized to execute all necessary
receipts and releases to any parties concerned; and shall be under a duty,
upon being advised by the Plan Administrator that the proceeds of any Life
Insurance Policies are payable, to give reasonable assistance to the
Beneficiary designated therein in collecting such sums as may appear to be
due.
- 79 -
<PAGE>
(j) If, at any time, as the result of the death of the Participant
there shall be a dispute as to the person to whom payment or delivery of
monies or property should be made by the Trustee, or regarding any action
to be taken by the Trustee, the Trustee may postpone such payment, delivery
or action, retaining the funds or property involved, until. such dispute
shall have been resolved in a court of competent jurisdiction or the
Trustee shall have been indemnified to its satisfaction or until it has
received written direction from the Plan Administrator.
(k) Anything in this instrument to the contrary notwithstanding, the
Trustee shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any Employee to
become or remain a Participant hereunder, the amount of benefit to which
any Participant or Beneficiary shall be entitled hereunder, or the size and
type of any Life Insurance Policy to be purchased from any Insurer for any
Participant hereunder; all such responsibilities being vested in the Plan
Administrator.
3.5.6 Trustee Indemnification. The Employer shall indemnify and
hold harmless the Trustee for and from the assertion or occurrence of any
liability to a Participant or Beneficiary for any action taken or omitted by the
Trustee pursuant to any written direction to the Trustee from the Employer or
the Plan Administrator. Such indemnification obligation of the Employer shall
not be applicable to the extent that any such liability is covered by insurance.
3.5.7 Changes in Trustee Authority. If a successor Trustee is
appointed, neither an Insurer nor any other person who has previously had
dealings with the Trustee shall be chargeable with knowledge of such appointment
or such change until furnished with notice thereof. Until such notice, the
Insurer and any other such party shall be fully protected in relying on any
action taken or signature presented which would have been proper in accordance
with that information previously received.
- 80 -
<PAGE>
ARTICLE VI
TRUST ASSETS
3.6.1 Trustee Exclusive Owner. All assets held by the Trustee,
whether in the Trust Fund or Segregated Funds, shall be owned exclusively by the
Trustee and no Participant or Beneficiary shall have any individual ownership
thereof. Participants and their Beneficiaries shall share in the assets of the
Trust, its net earnings, profits and losses, only as provided in this Plan.
3.6.2 Investments. The Trustee shall invest and reinvest the
Trust Fund without distinction between income or principal in one or more of the
following WAYS as the Trustee shall from time to time determine:
(a) The Trustee may invest the Trust Fund or any portion thereof in
obligations issued or guaranteed by the United States of America or of any
instrumentalities thereof, or in other bonds, notes, debentures, mortgages,
preferred or common stocks, options to buy or sell stocks or other
securities, mutual fund shares, limited partnership interests, commodities,
or in such other property, real or personal, as the Trustee shall
determine.
(b) The Trustee may cause the Trust Fund or any portion thereof to be
invested in a common trust fund established and maintained by a national
bank or other for the collective investment of fiduciary funds even though
the bank is acting as the Trustee or Investment Manager, providing such
common trust fund is a qualified trust under the applicable section of the
Code, or corresponding provisions of future federal internal revenue laws
and is exempt from income tax under the applicable section of the Code. In
the event any assets of the Trust Fund are invested in such a common trust
fund, the Declaration of Trust creating such common trust fund, as it may
be amended from time to time, shall be incorporated into this Plan by
reference and made a part hereof.
(c) The Trustee may deposit any portion of the Trust Fund in savings
accounts in federally insured banks or savings and loan associations or
invest in certificates of deposit issued by any such bank or savings and
loan association. The Trustee may, without liability for interest, retain
any portion of the Trust Fund in cash balances pending investment thereof
or payment of expenses.
- 81 -
<PAGE>
(d) The Trustee may buy and sell put and call options, covered or
uncovered, engage in spreads, straddles, ratio writing and other forms of
options trading, including sales of options against convertible bonds, and
sales of Standard & Poor futures contracts, and trade in and maintain a
brokerage account on a cash or margin basis.
(e) The Trustee may invest any portion or all of the assets of the
Trust Fund which are attributable to the vested and nonforfeitable interest
in the Accounts of a Participant in the purchase of group or individual
Life Insurance Policies issued on the life of and for the benefit of the
Participant with the consent of the Participant, subject to the following
conditions:
(i) The aggregate premiums paid for ordinary whole Life
Insurance Policies with both nondecreasing death benefits and
nonincreasing premiums on the life of any Participant shall not at any
time exceed forty-nine percent (49%) of the aggregate amount of
Employer contributions which have been allocated to the Accounts of
such Participant.
(ii) The aggregate Premiums paid for Life Insurance Policies on
the life of any Participant which are either term, universal or any
other contracts which are not ordinary whole life policies shall not
at any time exceed twenty-five percent (25%) of the aggregate amount
of Employer contributions which have been allocated to the Accounts of
such Participant.
(iii)The sum of one-half of the aggregate premiums for ordinary
whole Life Insurance Policies and all premiums for other Life
Insurance Policies shall not at any time exceed twenty-five percent
(25%) of the aggregate amount of Employer contributions which have
been allocated to the Accounts of such Participant.
(iv) If the Plan permits distributions to a Participant prior to
his termination of employment in accordance with Section 2.5.5 and the
Plan does not take into account contributions to provide Social
Security Benefits in the allocation of Employer contributions, the
amount which may be distributed to the Participant may be applied to
the purchase of Life Insurance Policies.
(f) The Trustee may invest the Trust Fund or any portion thereof to
acquire or hold Qualifying Employer Securities or Real Property, provided
that the portion so invested shall not exceed the amount allowed as an
investment under the Act.
- 82 -
<PAGE>
3.6.3 Administration of Trust Assets. Subject to the limitations
herein expressly set forth, the Trustee shall have the following powers and
authority in connection with the administration of the assets of the Trust:
(a) To hold and administer all contributions made by the Employer to
the Trust Fund and all income or other property derived therefrom as a
single Trust Fund, except as otherwise provided in the Plan.
(b) To manage, control, sell, convey, exchange, petition, divide,
subdivide, improve, repair, grant options, sell upon deferred payments,
lease without limit as determined for any purpose, compromise, arbitrate or
otherwise settle claims in favor of or against the Trust Fund, institute,
compromise and defend actions and proceedings, and to take any other action
necessary or desirable in connection with the administration of the Trust
Fund.
(c) To vote any stock, bonds, or other securities of any corporation
or other issuer; otherwise consent to or request any action on the part of
any such corporation or other issuer; to give general or special proxies or
powers of attorney, with or without power of substitution; to participate
in any reorganization, recapitalization, consolidation, merger or similar
transaction with respect to such securities; to deposit such stocks or
other securities in any voting trusts, or with any protective or like
committee, or with the trustee, or with the depositories designated
thereby; to exercise any subscription rights and conversion privileges or
other options and to make any payments incidental thereto; and generally to
do all such acts, execute all such instruments, take all such proceedings
and exercise all such rights, powers and privileges with respect to the
stock or other securities or property constituting the Trust Fund as if the
Trustee were the absolute owner thereof.
(d) To apply for and procure, at the election of any Participant,
Life Insurance Policies on the life of the Participant; to exercise
whatever rights and privileges may be granted to the Trustee under such
Policies, and to cash in, receive and collect such Policies or the proceeds
therefrom as and when entitled to do so under the provisions thereof;
(e) 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;
- 83 -
<PAGE>
(f) To register any investment held in the Trust in the Trustee's own
name or in the name of a nominee and to hold any investment in bearer form,
but the books and records of the Trustee shall at all times show that all
such investments are part of the Trust;
(g) To borrow money for the purposes of the Plan in such amounts and
upon such terms and conditions as the Trustee deems appropriate;
(h) To commingle the assets of the Trust Fund with the assets of
other similar trusts which are exempt from income tax, whether sponsored by
the Employer, an affiliate of the Employer or an unrelated employer,
provided that the books and records of the Trustee shall at all times show
the portion of the commingled assets which are part of the Trust; and
(i) To do all acts whether or not expressly authorized which the
Trustee may deem necessary or proper for the protection of the property
held hereunder.
3.6.4 Segregated Funds. Unless otherwise determined by the
Trustee to be prudent, the Trustee shall invest and reinvest each Segregated
Fund without distinction between income or principal in one or more
appropriately identified interest-bearing accounts or certificates of deposit in
the name of the Trustee and subject solely to the dominion of the Trustee in a
banking institution (which may or may not be the Trustee, if the Trustee is a
banking institution) or savings and loan association. Any such account or
certificate shall bear interest at a rate not less than the rate of interest
currently being paid upon regular savings accounts by that banking corporation
principally situated in the community in which the Employer has its principal
business location, which has capital, surplus and undivided profits exceeding
those of any other bank so situated. Such accounts shall be held for the
benefit of the Participant for whom such Segregated Fund is established in
accordance with the terms of the Plan and the Segregated Account of the
Participant shall be credited with any interest earned in connection with such
accounts. If the Trustee determines that an alternative investment is
appropriate, the Trustee may invest the Segregated Fund in any manner permitted
with respect to the Trust Fund and such Segregated Fund shall be credited with
the net income or loss or net appreciation or depreciation in value of such
investments. No Segregated Fund shall share in any Employer contributions or
forfeitures, any net income or loss from, or net appreciation or depreciation in
value of, any investments of the Trust Fund, or any allocation for which
provision is made in this Plan which is not specifically attributable to the
Segregated Fund.
- 84 -
<PAGE>
3.6.5 Investment Control Option. Each Participant may elect to
have transferred to a Segregated Fund and exercise investment control with
respect to funds in the Trust Fund which do not exceed the balances in his
Accounts. Participants may control their investments solely with respect to
amounts attributable to Rollover, Elective and Matching contributions.
To the extent that the balance in the Participant's Account with respect to
which a transfer is to be made includes his share of an Employer contribution
which has not been received by the Trustee, such transfer shall not be made
until such contribution is received by the Trustee. In addition to the
foregoing election, each Participant who has a Segregated Fund may elect to
exercise investment control over any portion or all of such Segregated Fund.
Funds so transferred to a Segregated Fund on behalf of the Participant shall be
thereafter invested by the Trustee in such bonds, notes, debentures,
commodities, mortgages, mutual funds, equipment trust certificates, investment
trust certificates, preferred or common stocks, partnership interests, life
insurance policies, including universal life insurance policies, or in such
other property, real or personal (other than collectibles), wherever situated,
as the Participant shall direct from time to time in writing; provided, however,
that the Participant may not direct the Trustee to make loans to himself, nor to
make loans to the Employer; and provided further that the Trustee may limit the
investment alternatives available to the Participant in a uniform and
nondiscriminatory manner but taking into account whether the interest of the
Participant is fully vested and nonforfeitable. Any such election shall be made
by the Participant giving notice thereof to the Trustee notice as the Trustee
deems necessary and such notice shall specify the amount of such funds to be
transferred and the Account from which the transfer is to be made. Any such
election with respect to a Segregated Fund shall be made by the Participant
giving the Trustee notice as the Trustee deems necessary and such notice shall
specify the date the transfer is to take place and the amount of funds to be
transferred. Any such election shall be at the absolute discretion of the
Individual Participant and shall be binding upon the Trustee. Upon any such
election being made, the amount of such funds to be transferred shall be
deducted from his Account as appropriate and added to a Controlled Account of
the Participant. All dividends and interest thereafter received with respect to
such transferred funds, as well as any appreciation or depreciation in his
investments, shall be added to or deducted from his Controlled Account.
- 85 -
<PAGE>
If a Participant wishes to make such an election to transfer funds from the
Trust Fund to a Segregated Fund as of a date other than a Valuation Date, the
Trustee may defer such transfer until the next succeeding Valuation Date or, in
the Trustee's discretion, make such transfer, provided that the Trustee
determines that the nature of the assets in the Trust Fund is such that it is
feasible and practical to make, as of the date of such transfer, the adjustments
to Participants' Accounts for which provision is made in the Plan, as if such
date is a Valuation Date.
The Trustee shall not have any investment responsibility with respect to a
Participant's Segregated Fund over which he exercises investment control. In
the event that a Participant elects to have any such funds transferred to a
Segregated Fund and invested in particular securities or assets pursuant to this
Section, the Trustee shall not be liable for any loss or damage resulting from
the investment decision of the Participant. As of any Valuation Date, the
Participant may elect to have all or any portion of any cash contained in his
Segregated Fund transferred back to the Trust Fund, in which case such cash
shall be invested BY the Trustee together with other assets held in the Trust
Fund. Any such election shall be made BY giving notice thereof to the Trustee
as the Trustee deems necessary, and the notice shall specify the amount of cash
to be transferred.
As of the said Valuation Date, the amount of such funds to be so transferred
which is attributable to the balance in the Participant's Controlled Account
shall be deducted from such Account and added to the appropriate Account of the
Participant.
- 86 -
<PAGE>
ARTICLE VII
LOANS
3.7.1 Authorization. If the Employer elects to permit. loans to
Participants or Beneficiaries, the Plan Administrator shall establish a
participant loan program in compliance with Labor Regulation S2550.408b. The
terms of such participant loan program shall be in writing and shall constitute
part of the Plan. Such terms shall include:
(a) The identity of the person or positions authorized to administer
the participant loan program;
(b) A procedure for applying for loans;
(c) The basis on which loans will be approved or denied;
(d) Limitations (if any) on the types and amount of loans offered;
(e) The procedure under the program for determining a reasonable rate
of interest;
(f) The types of collateral which may secure a participant loan; and
(g) The events constituting default and the steps that will be taken
to preserve plan assets in the event of default.
3.7.2 Spousal Consent. A Participant must obtain the written
consent of his spouse, if any, to the use of the Participant's interest in the
Plan as security for the loan within ninety (90) days before the date on which
the loan is to be so secured. A new consent must be obtained whenever the
amount of the loan is increased or if the loan is renegotiated, extended,
renewed or otherwise revised. The form of the consent must acknowledge the
effect of such consent and be witnessed by a Plan representative or a notary
public but shall be deemed to meet any such requirements relating to the consent
of any subsequent spouse. Such consent shall thereafter be binding with respect
to the consenting spouse or any subsequent spouse with respect to that loan.
- 87 -
<PAGE>
If a valid spousal consent has been obtained, then notwithstanding any other
provision of the Plan, the portion of the Participant's vested Account balance
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 the entire
amount of the Participant's vested Account balance (determined without regard to
the preceding sentence) is payable to the surviving spouse, the Account balance
shall be adjusted by first reducing the vested Account balance by the amount of
the security used as repayment of the loan and then determining the benefit
payable to the surviving spouse.
3.7.3 Limitations. Except to the extent provided in the
participant loan program, in no event shall the amount loaned to any Participant
or Beneficiary exceed the lesser of (a) fifty thousand dollars ($50,000.00)
(reduced by the excess of the highest outstanding balance of loans from the
Plan) during the one year period ending on the day before the date on which the
loan was made over the outstanding balance of loans from the Plan on the date on
which such loan was made) or (b) one-half of the sum of the vested and
nonforfeitable interest in his Accounts, determined as of the Valuation Date
coinciding with or immediately preceding such loan. For the purposes hereof,
all loans from all plans of the Employer and other members of a group of
employers described in Sections 414(b), (c) and (m) of the Code shall be
aggregated. All loans must be adequately secured and bear a reasonable interest
rate. In the event of a default foreclosure on the note evidencing the loan and
attachment of the security shall not occur until a distributable event occurs.
3.7.4 Availability. Loans, if any, must be available to all
Participants and Beneficiaries without regard to any individual's race, color,
religion, sex, age or national origin. Loans shall be made available to all
Participants and Beneficiaries and loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other employees.
- 88 -
<PAGE>
3.7.5 Prohibitions. A loan shall not be made to a five (5%)
percent or greater shareholder-employee of an S corporation, an owner of more
than ten (10%) percent of either the capital interest or the profits interest of
an unincorporated Employer, a family member (as defined in Section 267(c)(4) of
the Code) of such persons, or a corporation controlled by such persons through
the ownership, directly or indirectly, of fifty (50%) percent or more of the
total voting power or value of all shares of all classes of stock of the
corporation, unless an exemption for the loan is obtained pursuant to Section
408 of the Act.
- 89 -
<PAGE>
ARTICLE VIII
BENEFICIARIES
3.8.1 Designation of Beneficiaries. Each Participant shall have
the right to designate a Beneficiary or Beneficiaries and contingent or
successive Beneficiaries to receive any benefits provided by this Plan which
become payable upon the Participant's death. The Beneficiaries may be changed
at any time or times by the filing of a new designation with the Plan
Administrator, and the most recent designation shall govern. Notwithstanding
the foregoing and subject to the provisions of Section 2.5.2, the designated
Beneficiary shall be the surviving spouse of the Participant, unless such
surviving spouse consents in writing to an alternate designation and the terms
of such consent acknowledge the effect of such alternate designation and the
consent is witnessed by a representative of the Plan or by a notary public. A
spouse may not revoke the consent without the approval of the Participant. The
designation of a Beneficiary other than the spouse of the Participant or a form
of benefits with the consent of such spouse may not be changed without the
consent of such spouse and any consent must acknowledge the specific non-spouse
Beneficiary, including any class of Beneficiaries or any contingent
Beneficiaries.
3.8.2 Absence or Death of Beneficiaries. Except with respect to
the process of life insurance payable upon the death of the Participant, if a
Participant dies without having a beneficiary designation then in force, or if
all of the Beneficiaries designated by a Participant predecease him, his
Beneficiary shall be his surviving spouse, or if none, his surviving children,
equally, or if none, such other heirs, or the executor or administrator of his
estate, as the Plan Administrator shall select.
If a Participant dies survived by Beneficiaries designated by him and if all
such surviving Beneficiaries thereafter dies before complete distribution of
such deceased Participant's interest, the estate of the last of such designated
Beneficiaries to survive shall be deemed to be the Beneficiary of the
undistributed portion of such interest.
- 90 -
<PAGE>
ARTICLE IX
CLAIMS
3.9.1 Claim Procedure. Any Participant or Beneficiary. who is
entitled to a payment of a benefit for which provision is made in this Plan
shall file a written claim with the Plan Administrator on such forms as shall be
furnished to him by the Plan Administrator and shall furnish such evidence of
entitlement to benefits as the Plan Administrator may reasonably require. The
Plan Administrator shall notify the Participant or Beneficiary in writing as to
the amount of benefit to which he is entitled, the duration of such benefit, the
time the benefit is to commence and other pertinent information concerning his
benefit. If a claim for benefit is denied by the Plan Administrator, in whole
or in part, the Plan Administrator shall provide adequate notice in writing to
the Participant or Beneficiary whose claim for benefit has been denied within
ninety (90) days after receipt of the claim unless special circumstances require
an extension of time for processing the claim. If such an extension of time for
processing is required, written notice indicating the special circumstances and
the date by which a final decision is expected to be rendered shall be furnished
to the Participant or Beneficiary. In no event shall the period of extension
exceed one hundred eighty (180) days after receipt of the claim. The notice of
denial of the claim shall set forth (a) the specific reason or reasons for the
denial; (b) specific reference to pertinent Plan provisions on which the denial
is based; (c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and (d) a statement that any appeal of the denial must
be made by giving to the Plan Administrator, within sixty (60) days after
receipt of the notice of the denial, written notice of such appeal, such notice
to include a full description of the pertinent issues and basis of the claim.
The Participant or Beneficiary (or his duly authorized representative) may
review pertinent documents and submit issues and comments in writing to the Plan
Administrator. If the Participant or Beneficiary fails to appeal such action to
the Plan Administrator in writing within the prescribed period of time, the Plan
Administratorts adverse determination shall be final, binding and conclusive.
- 91 -
<PAGE>
3.9.2 Appeal. If the Plan Administrator receives from a
Participant or a Beneficiary, within the prescribed period of time, a notice of
an appeal of the denial of a claim for benefit, such notice and all relevant
materials shall immediately be submitted to the Employer. The Employer may hold
a hearing or otherwise ascertain such facts as it deems necessary and shall
render a decision which shall be binding upon both parties. The decision of the
Employer shall be made within sixty (60) days after the receipt by the Plan
Administrator of the notice of appeal, unless special circumstances require an
extension of time for processing, in which case a decision of the Employer shall
be rendered as soon as possible but not later than one hundred twenty (120) days
after receipt of the request for review. If such an extension of time is
required, written notice of the extension shall be furnished to the claimant
prior to the commencement of the extension. The decision of the Employer shall
be in writing, shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, as well as specific
references to the pertinent Plan provisions on which the decision is based and
shall be promptly furnished to the claimant.
- 92 -
<PAGE>
ARTICLE X
AMENDMENT AND TERMINATION
3.10.1 Right to Amend. The Employer may at any time or times amend
the Plan and Trust, in whole or in part. The Employer specifically reserves the
right to amend the Plan retroactively.
3.10.2 Manner of Amending. Each amendment of this Plan shall be
made by delivery to the Trustee of a copy of the resolution of the Employer
which sets forth such amendment.
3.10.3 Limitations On Amendments. No amendment shall be
made to this Plan which shall:
(a) Directly or indirectly operate to give the Employer any interest
whatsoever in the assets of the Trust or to deprive any Participant or
Beneficiary of his vested and nonforfeitable interest in the assets of the
Trust as then constituted, or cause any part of the income or corpus of the
Trust to be used for, or diverted to purposes other than the exclusive
benefit of Employees or their Beneficiaries;
(b) Increase the duties or liabilities of the Trusteewithout the
Trustee's prior written consent;
(c) Change the vesting schedule under the Plan if the nonforfeitable
percentage of the accrued benefit derived from Employer contributions
(determined as of the later of the date such amendment is adopted or the
date such amendment becomes effective) of any Participant is less than such
nonforfeitable percentage computed without regard to such amendment; or
(d) Reduce the accrued benefit of a Participant within the meaning of
Section 411(d)(6) of the Code, except to the extent permitted under Section
412(c)(8) of the Code. An amendment which has the effect of decreasing a
Participant's account balance or eliminating an optional form of benefit
with respect to benefits attributable to service before the amendment shall
be treated as reducing an accrued benefit.
- 93 -
<PAGE>
If a Plan amendment changes the vesting schedule or the Plan is amended in
any way that directly or indirectly affects the computation of the
Participant's nonforfeitable percentage, each Participant who has completed
three (3) or, in the case of Participants who do not have at least one (1)
Hour of Service in any Plan Year beginning after 1988, five (5) or more
Years of Service may elect within a reasonable period after the adoption of
such amendment to have his nonforfeitable percentage computed without
regard to such amendment or change. 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 on the latest of sixty (60) days after:
(i) the amendment is adopted;
(ii) the amendment becomes effective; or
(iii) the Participant is issued written notice of the amendment
by the Employer or Plan Administrator.
3.10.4 Voluntary Termination. The Employer may terminate the Plan
at any time by delivering to the Trustee an instrument in writing which
designates such termination. Following termination of the Plan, the Trust will
continue until the Distributable Benefit of each Participant has been
distributed.
3.10.5 Involuntary Termination. The Plan shall terminate if (a)
the Employer is dissolved or adjudicated bankrupt or insolvent in appropriate
proceedings, or if a general assignment is made by the Employer for the benefit
of creditors, or (b) the Employer loses its identity by consolidation or merger
into one or more corporations or organizations, unless within ninety (90) days
after such consolidation or merger, such corporations or organizations elect to
continue the Plan.
3.10.6 Withdrawal By Employer. The Employer may withdraw from
participation under the Plan without terminating the Trust upon making a
transfer of the Trust assets to another Plan which shall be deemed to constitute
an amendment in its entirety of the Trust.
- 94 -
<PAGE>
3.10.7 Powers Pending Final Distribution. Until final distribution
of the assets of the Trust, the Plan Administrator and Trustee shall continue to
have all the powers provided under this Plan as are necessary for the orderly
administration, liquidation and distribution of the assets of the Trust.
3.10.8 Delegation. Each Affiliate Employer expressly delegates
authority to the Employer the right to amend any part of the Plan on its behalf.
The Employer shall submit a copy of the amendment to each Affiliate Employer who
has adopted the Plan. An Affiliate Employer may revoke the authority of the
Employer to amend the Plan on its behalf by written notice to the Employer of
such revocation.
- 95 -
<PAGE>
ARTICLE XI
PORTABILITY
3.11.1 Continuance by Successor. In the event of the dissolution,
consolidation or merger of the Employer, or the sale by the Employer of its
assets, the resulting successor person or persons, firm or corporations may
continue this Plan by (a) adopting the Plan by appropriate resolution; (b)
appointing a new Trustee as though the Trustee (including all members of a group
of individuals acting as Trustee) had resigned; and (c) executing a proper
agreement with the new Trustee. In such event, each Participant in this Plan
shall have an interest in the Plan after the dissolution, consolidation, merger,
or sale of assets, at least equal to the interest which he had in the Plan
immediately before the dissolution, consolidation, merger or sale of assets.
Any Participants who do not accept a position with such successor within a
reasonable time shall be deemed to be terminated. If, within ninety (90) days
from the effective date of such dissolution, consolidation, merger, or sale of
assets, such successor does not adopt this Plan, as provided herein, the Plan
shall automatically be terminated and deemed to be an involuntary termination.
3.11.2 Merger With Other Plan. In the event of the merger or
consolidation with, or transfer of assets or liabilities to, any other deferred
compensation plan and trust, each Participant shall have an interest in such
other plan which is equal to or greater than the interest which he had in this
Plan immediately before such merger, consolidation or transfer, and if such
other plan thereafter terminates, each Participant shall be entitled to a
Distributable Benefit which is equal to or greater than the Distributable
Benefit to which he would have been entitled immediately before such merger,
consolidation or transfer if this Plan had then been terminated.
3.11.3 Transfer From Other Plans. The Employer may cause all or
any of the assets held in connection with any other plan or trust which is
maintained by the Employer for the benefit of its employees and satisfies the
applicable requirements of the Code relating to qualified plans and trusts to be
transferred to the Trustee, whether such transfer is made pursuant to a merger
or consolidation of this Plan with such other plan or trust or for any other
allowable purpose.
- 96 -
<PAGE>
In addition, the Employer, may permit rollover to the Trustee of assets held for
the benefit of an Employee in a conduit Individual Retirement Account, a
terminated plan of the Employer, or any other plan or trust which is maintained
by some other employer for the benefit of its employees and satisfies the
applicable requirements of the Code relating to qualified plans and trusts even
if the employee has not satisfied the conditions for participation in the Plan.
Any such assets so transferred to the Trustee shall be accompanied by written
instructions from the employer, or the trustee, custodian or individual holding
such assets, setting forth the name of each Employee for whose benefit such
assets have been transferred and showing separately the respective contributions
by the employer and by the Employee and the current value of the assets
attributable thereto. Upon receipt by the Trustee of such assets, the Trustee
shall place such assets in a Segregated Fund for the Participant and the
Employee shall be deemed to be one hundred percent (100%) vested and have a
nonforfeitable interest in any such assets. Notwithstanding any provisions
herein to the contrary, unless the Plan provides a life annuity distribution
option or the Participant and his spouse have signed a written waiver of their
rights to the annuity options in a form which satisfies the waiver requirements
of Section 417 of the Code, the Plan shall not be a direct or indirect
transferee of a defined benefit pension plan, money purchase pension plan,
target benefit pension 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.
3.11.4 Transfer to Other Plans. The Trustee, upon written
direction by the Employer, shall transfer some or all of the assets held under
the Trust to another plan or trust of the Employer meeting the requirements of
the Code relating to qualified plans and trusts, whether such transfer is made
pursuant to a merger or consolidation of this Plan with such other plan or trust
or for any other allowable purpose. In addition, upon the termination of
employment of any Participant and receipt by the Plan Administrator of a request
in writing, the Participant may request that any distribution from the Trust to
which he is entitled shall be transferred to an Individual Retirement Account,
an Individual Retirement Annuity, or any other plan or trust which is maintained
by some other employer for the benefit of its employees and satisfies the
applicable requirements of the Code relating to qualified plans and trusts.
Upon receipt of any such written request, the Plan Administrator shall cause the
Trustee to transfer the assets so directed and, as appropriate, shall direct the
Insurer to transfer to the new trustee any applicable insurance policies issued
by it.
- 97 -
<PAGE>
ARTICLE XII
MISCELLANEOUS
3.12.1 No Reversion to Employer. Except as specifically provided
in the Plan, no part of the corpus or income of the Trust shall revert to the
Employer or be used for, or diverted to purposes other than for the exclusive
benefit of Participants and their Beneficiaries.
3.12.2 Employer Actions. Any action by the Employer pursuant to
the provisions of the Plan shall be evidenced by appropriate resolution or by
written instrument executed by any person authorized by the Employer to take
such action.
3.12.3 Execution of Receipts and Releases. Any payment to any
person eligible to receive benefits under this Plan, in accordance with the
provisions of the Plan, shall, to the extent thereof, be in full satisfaction of
all claims hereunder. The Plan Administrator may require such person, as a
condition precedent to such payment, to execute a receipt and release therefore
in such form as he shall determine.
3.12.4 Rights of Participants Limited. Neither the creation of
this Plan and Trust nor anything contained in this Plan shall be construed as
giving any Participant, Beneficiary or Employee any equity or other interest in
the assets, business or affairs of the Employer, or the right to complain about
any action taken by or about any policy adopted or pursued by, the Employer, or
as giving any Employee the right to be retained in the service of the Employer;
and all Employees shall remain subject to discharge to the same extent as if the
Plan had never been executed. Prior to the time that distributions are made in
conformity with the provisions of the Plan, neither the Participants, nor their
spouses, Beneficiaries, heirs-at-law, or legal representatives shall receive or
be entitled to receive cash or any other thing of current exchangeable value,
from either the Employer or the Trustee as a result of the Plan or the Trust.
3.12.5 Persons Dealing With Trustee Protected. No person dealing
with the Trustee shall be required or entitled to see to the application of any
money paid or property delivered to the Trustee, or determine whether or not the
Trustee is acting pursuant to the authorities granted to the Trustee hereunder
or to authorizations or directions herein required. The certificate of the
Trustee that the Trustee is acting in accordance with the Plan shall protect any
person relying thereon.
- 98 -
<PAGE>
3.12.6 Protection of the Insurer. An Insurer shall not be
responsible for the validity of the Plan or Trust and shall have no
responsibility for action taken or not taken by the Trustee, for determining the
propriety of accepting premium payments or other contributions, for making
payments in accordance with the direction of the Trustee, or for the application
of such payments. The Insurer shall be fully protected in dealing with any
representative of the Employer or any one of a group of individuals acting as
Trustee. Until written notice of a change of Trustee has been received by an
Insurer at its home office, the Insurer shall be fully protected in dealing with
any party acting as Trustee according to the latest information received by the
Insurer at its home office.
3.12.7 No Responsibility for Act of Insurer. Neither the Employer,
the Plan Administrator nor the Trustee shall be responsible for any of the
following, nor shall they be liable for instituting action in connection with:
(a) The validity of policies or policy provisions;
(b) Failure or refusal by the Insurer to provide benefits under a
policy;
(c) An act by a person which may render a policy invalid or
unenforceable; or
(d) Inability to perform or delay in performing an act, which
inability or delay is occasioned by a provision of a policy or a
restriction imposed by the Insurer.
3.12.8 Inalienability. The right of any Participant or his
Beneficiary in any distribution hereunder or to any separate Account shall not
be subject to alienation, assignment or transfer, voluntarily or involuntarily,
by operation of law or otherwise, except as may be expressly permitted herein.
No Participant shall assign, transfer, or dispose of such right nor shall any
such right be subjected to attachment, execution, garnishment, sequestration, or
other legal, equitable, or other process. The preceding shall also apply to the
creation, assignment, or recognition of a right 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, or any domestic relations order entered before
January 1, 1985.
- 99 -
<PAGE>
In the event a Participant's benefits are attached by order of any court, the
Plan Administrator may bring an action for a declaratory judgment in a court of
competent jurisdiction to determine the proper recipient of the benefits to be
paid by the Plan. During the pendency of the action, the Plan Administrator
shall cause any benefits payable to be paid to the court for distribution by the
court as it considers appropriate.
3.12.9 Domestic Relations Orders. The Plan Administrator shall
adhere to the terms of any judgment, decree or order (including approval of a
property settlement agreement) which relates to the provision of child support,
alimony payments, or marital property rights to a spouse, former spouse, child
or other dependent of a Participant and is made pursuant to a state domestic
relations law (including a community property law) and which creates or
recognizes the existence of an alternate payee's right to, or assigns to an
alternate payee the right to, receive all or a portion of the benefits payable
with respect to a Participant.
Any such domestic relations order must clearly specify the name and last known
mailing address of the Participant and the name and mailing address of each
alternate payee covered by the order, the amount or percentage of the
Participant's benefit to be paid by the Plan to each such alternate payee, or
the manner in which such amount or percentage is to be determined, the number of
payments or period to which such order applies, and each plan to which such
order applies.
Any such domestic relations order shall not require the Plan to provide any type
or form of benefit, or any option not otherwise provided under the Plan, to
provide increased benefits (determined on the basis of actuarial value) or the
payment of benefits to an alternate payee which are required to be paid to
another alternate payee under another order previously determined to be a
qualified domestic relations order. Notwithstanding the foregoing sentence, a
domestic relations order may require the payment of benefits to an alternate
payee before the Participant has separated from service on or after the date on
which the Participant attains or would have attained the earliest retirement age
under the Plan as if the Participant had retired on the date on which such
payment is to begin under such order and in any form in which such benefits may
be paid under the Plan to the Participant (other-than the form of a joint and
survivor annuity with respect to the alternate payee and his or her subsequent
spouse). The interest rate
- 100 -
<PAGE>
assumption used in determining the present value shall be five (5%-) percent.
For these purposes, the earliest retirement age under the Plan means the earlier
of: (a) the date on which the Participant is entitled to a distribution under
the Plan, or (b) the later of the date the Participant attains age 50, or the
earliest date on which the Participant could begin receiving benefits under the
Plan if the Participant separated from service.
Distributions may be made to an alternate payee even though the Participant may
not receive a distribution because he continues to be employed by the Employer.
To the extent provided in the qualified domestic relations order, the former
spouse of a Participant shall be treated as a surviving spouse of such
Participant for purposes of Sections 401(a)(11) and 417 of the Code (and any
spouse of the Participant shall not be treated as a spouse of the Participant
for such purposes) and if married for at least one (1) year, the surviving
former spouse shall be treated as meeting the requirements of Section 417(d) of
the Code.
The Plan Administrator shall promptly notify the Participant and each alternate
payee of the receipt of a domestic relations order by the Plan and the Plan's
procedures for determining the qualified status of domestic relations orders.
Within a reasonable period after receipt of a domestic relations order, the Plan
Administrator shall determine whether such order is a qualified domestic
relations order and shall notify the Participant and each alternate payee of
such determination. If the Participant or any affected alternate payee
disagrees with the determinations of the Plan Administrator, the disagreeing
party shall be treated as a claimant and the claims procedure of the Plan shall
be followed. The Plan Administrator may bring an action for a declaratory
judgment in a court of competent jurisdiction to determine the proper recipient
of the benefits to be paid by the Plan.
During any period in which the issue of whether a domestic relations order is a
qualified domestic relations order is being determined (by the Plan
Administrator, by a court of competent jurisdiction or otherwise), the Plan
Administrator shall separately account for the amounts which would have been
payable to the alternate payee during such period if the order had been
determined to be a qualified domestic relations order. If, within the eighteen
(18) month period beginning on the date on which the first payment would be
required to be made under the domestic relations order, the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Plan Administrator shall pay the segregated amounts, including any interest
thereon, to the person or persons entitled thereto. If within such eighteen
(18) month period it is determined that the order is not a qualified domestic
relations order or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Plan Administrator shall pay the
segregated amounts, including any interest thereon, to the person or persons who
would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is
made after the close of the eighteen (18) month period shall be applied
prospectively only.
- 101 -
<PAGE>
3.12.10 Authorization to Withhold Taxes. The Trustee is authorized
in accordance with applicable law to withhold from distribution to any payee
such sums as may be necessary to cover federal and state taxes which may be due
with respect to such distributions.
3.12.11 Missing Persons. If the Trustee mails by registered or
certified mail, postage prepaid, to the last known address of a Participant or
Beneficiary, a notification that the Participant or Beneficiary is entitled to a
distribution and if (a) the notification is returned by the post office because
the addressee cannot be located at such address and if neither the Employer, the
Plan Administrator nor the Trustee shall have any knowledge of the whereabouts
of such Participant or Beneficiary within three (3) years from the date such
notification was mailed, or (b) within three (3) years after such notification
was mailed to such Participant or Beneficiary, he does not respond thereto by
informing the Trustee of his whereabouts, the ultimate disposition of the then
undistributed balance of the Distributable Benefit of such Participant or
Beneficiary shall be determined in accordance with the then applicable Federal
laws, rules and regulations. If any portion of the Distributable Benefit is
forfeited because the Participant or Beneficiary cannot be found, such portion
shall be reinstated if a claim is made by the Participant or Beneficiary.
3.12.12 Notices. Any notice or direction to be given in accordance
with the Plan shall be deemed to have been effectively given if hand delivered
to the recipient or sent by certified mail, return receipt requested, to the
recipient at the recipient's last known address. At any time that a group of
individuals is acting as Trustee, notice to the Trustee may be given by giving
notice to any one or more of such individuals.
- 102 -
<PAGE>
3.12.13 Governing Law. The provisions of this Plan shall be
construed, administered and enforced in accordance with the provisions of the
Act and, to the extent applicable, the laws of the state in which the Employer
has its principal place of business. All contributions to the Trust shall be
deemed to take place in such state.
3.12.14 Severability of Provisions. In the event that any provision
of this Plan shall be held to be illegal, invalid or unenforceable for any
reason, said illegality, invalidity or unenforceability shall not affect the
remaining provisions, but shall be fully severable and the Plan shall be
construed and enforced as if said illegal, invalid or unenforceable provisions
had never been inserted herein.
3.12.15 Gender and Number. Whenever appropriate, words used in the
singular shall include the plural, and the masculine gender shall include the
feminine gender.
3.12.16 Binding Effect. The Plan, and all actions and decisions
hereunder, shall be binding upon the heirs, executors, administrators,
successors and assigns of any and all parties hereto and Participants, present
and future.
3.12.17 Qualification Under Internal Revenue Laws. The Employer
intends that the Trust qualify under the applicable provisions of the Code.
Until advised to the contrary, the Trustee may assume that the Trust is so
qualified and is entitled to tax exemption under the Code.
- 103 -
<PAGE>
ARTICLE XIII
EXECUTION OF AGREEMENT
3.13.1 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be considered an original, and no other
counterparts need be produced.
3.13.2 Acceptance by Trustee. The Trustee, by joining
in the execution of this Agreement, hereby signifies the
Trustee's acceptance thereof.
3.13.3 Execution. To record the adoption of this Plan the Employer
and each Affiliate Employer, if any, has caused this Agreement to be executed by
its duly qualified officers and the Trustee has executed this Agreement, as of
the day and year first above written.
Employer: Trustee:
CCC Information Services,
Inc.
/s/Richard W. Steel /s/ Richard W. Steel
- --------------------------- ---------------------------
Richard W. Steel Richard W. Steel
Trustee
- 104 -
<PAGE>
MODEL SECTION 401(a)(31) AMENDMENT TO THE CCC INFORMATION
SERVICES, INC. 401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
WHEREAS, CCC Information Services, Inc. (the "Employer") currently
maintains the CCC Information Services, Inc. 401(K) Retirement Savings &
Investment Plan, (the "Plan"); and,
WHEREAS, the Unemployment Compensation Amendments of 1992 added
section 401(a)(31) to the Internal Revenue Code to require a plan to permit the
direct rollover of eligible rollover distributions made after December 31, 1992;
and,
WHEREAS, the Internal Revenue Service issued Revenue Procedure 93-12
providing a simplified method to amend plans using a Model Section 401(a)(31)
Amendment, as set forth below.
THEREFORE, the Plan is hereby amended effective January 1, 1993 to
incorporate the Model Section 401(a)(31) Amendment as follows:
Section 1. This Article 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 Article, a
distributes may elect, at the time and in the manner prescribed by the plan
administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributes
in a direct rollover.
Section 2. Definitions.
Section 2.1. Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to
the credit of the distributes, except that an eligible rollover
distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributes or the joint
lives (or joint life expectancies) of the distributes and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
- 105 -
<PAGE>
Section 2.2. 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 retirement plan to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
Section 2.3. Distributee: A distributes includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or the 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.
Section 2.4. Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributes.
IN WITNESS WHEREOF, the undersigned has executed this
Model Section 401(a)(31) Amendment to the Plan on this 22nd day of December,
1995.
For the Employer:
By: /s/ Richard W. Steel
------------------------
WITNESS:
/s/ Judi A. Torrez
- --------------------------
- 106 -
<PAGE>
MODEL SECTION 401(a)(17) AMENDMENT TO THE CCC INFORMATION
SERVICES, INC. 401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
WHEREAS, CCC Information Services, Inc. (the "Employer") currently
maintains the CCC Information Services, Inc. 401(K) Retirement Savings &
Investment Plan, (the "Plan"); and,
WHEREAS, the Omnibus Budget Reconciliation Act of 1993 amended section
401(a)(17) of the Internal Revenue Code to limit compensation taken into account
under a plan in any year to $150,000, as adjusted for increases in the cost of
living; and,
WHEREAS, the Internal Revenue Service issued Revenue Procedure 94-13
providing a simplified method to amend plans using a Model Section 401(a)(17)
Amendment, as set forth below.
THEREFORE, the Plan is hereby amended effective as of the first day of
the Plan Year beginning on or after January 1, 1994, to incorporate the Model
Section 401(a)(17) Amendment as follows:
SECTION 401(a)(17) LIMITATION
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to
contrary, for plan years beginning on or after January 1, 1994,
the annual compensation of each employee taken into account under
the plan shall not exceed the OBRA '93 annual compensation limit.
The OBRA '93 annual compensation limit is $150,000, as adjusted
by the Commissioner for increases in the cost of living in
accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in
such calendar year. If a determination period consist of fewer
than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which
is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in the provision.
- 107 -
<PAGE>
If compensation for any prior determination period is
taken into account in determining an employee's benefits accruing
in the current plan year, the compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the
first day of the first plan year beginning on or after January 1,
1994, the OBRA '93 annual compensation limit is $150,000.
IN WITNESS WHEREOF, the undersigned has executed this Model Section
401(a)(17) Amendment to the Plan on this 22nd day of December, 1995.
For the Employer:
By: /s/ Richard W. Steel
------------------------
WITNESS:
/s/ Judi A. Torrez
- --------------------------
- 108 -
<PAGE>
REVENUE PROCEDURE 93-47 AMENDMENT TO THE CCC INFORMATION
SERVICES, INC. 401(K) RETIREMENT SAVINGS & INVESTMENT PLAN
WHEREAS, CCC Information Services, Inc. (the "Employer") currently
maintains the CCC Information Services, Inc. 401(K) Retirement Savings &
Investment Plan, (the "Plan"); and,
WHEREAS, the Unemployment Compensation Amendments of 1992 added
section 401(a)(31) to the Internal Revenue Code to require a plan to permit the
direct rollover of eligible rollover distributions made after December 31, 1992;
and,
WHEREAS, the Internal Revenue Service subsequently issued Notice 93-26
modifying the 30-day notice requirement under section 1.411(a)-11(c); and,
WHEREAS, the Internal Revenue Service issued Revenue Procedure 93-47
providing a simplified method to amend plans using a Model Amendment, as set
forth below.
THEREFORE, the Plan is hereby amended effective January 11, 1993 to
incorporate the Revenue Procedure 93-47 Model Amendment as follows:
The following language, applicable to distributions made on or after January 1,
1993, is hereby inserted following the final sentence of section 2.5.2(j) of the
CCC INFORMATION SERVICES, INC. 401(K) RETIREMENT SAVINGS & INVESTMENT PLAN Plan
and Trust.
"If a distribution is one to which sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence
less than 30 days after the notice required under section
1.411(a)-11(c) of the Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and if applicable, a particular distribution
option), and
(2) the participant, after receiving the notice, affirmatively elects
a distribution."
- 109 -
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
Model Amendment to the Plan on this 22nd day of December, 1995.
For the Employer:
By: /s/ Richard W. Steel
------------------------
WITNESS:
/s/ Judi A. Torrez
- --------------------------
- 110 -
<PAGE>
AMENDMENT
TO THE
CCC INFORMATION SERVICES INC.
401(k) RETIREMENT SAVINGS & INVESTMENT PLAN
The CCC Information Services Inc. 401(k) Retirement Savings & Investment Plan
(the "Plan") is amended as follows, effective as of the dates set forth herein:
1. SECTION 1.2.21 OF THE PLAN IS AMENDED TO READ AS FOLLOWS, EFFECTIVE
JANUARY 1, 1997:
1.2.21 "Employee": Any person who is employed by the
Employer or by any other employer aggregated with the Employer
under Section 414(b), (c), (m) or (o) of the Code (an "Affiliate
Employer"), other than
- a Leased Employee;
- an employee who is included in the unit of
employees covered by a collective bargaining
agreement, provided that retirement benefits were
the subject of good faith negotiations, unless
such collective bargaining agreement makes this
Plan applicable to such employee;
- a person who is a non-resident alien and derives
no earned income from the Employer that
constitutes income from sources within the United
States;
- an individual providing services to the Employer
or an Affiliate Employer in the capacity of, or
who is or was designated by the Employer as, an
independent contractor or a temporary or seasonal
employee;
2. PARAGRAPH (b) OF SECTION 2.2.1 OF THE PLAN IS AMENDED TO READ AS
FOLLOWS, EFFECTIVE AS OF APRIL 1, 1997:
(b) Amount of Matching Contribution. The Employer shall
contribute to the Trust Fund each Plan Year with respect to the amount
of Elective Contributions on behalf of each electing Employee a
Matching Contribution equal to 50 percent of the Elective
Contributions (33 percent, for Elective Contributions made prior to
April 1, 1997) made on behalf of a Participant. However, the Employer
shall not make Matching Contributions on behalf of a Participant for
any Plan Year in excess of $1,000.00 for any Participant.
<PAGE>
3. PARAGRAPH (a) OF SECTION 2.3.4 OF THE PLAN IS AMENDED TO READ AS FOLLOWS,
EFFECTIVE AS OF APRIL 1, 1997:
(a) The Matching Contribution, including any forfeitures
shall be allocated among the Matching Accounts of Participants
who have completed at least an Hour of Service during the month
and for whom Elective Contributions were made in an amount equal
to 50 percent of the Elective Contributions (33 percent, for
Elective Contributions made prior to April 1, 1997) made on
behalf of each Participant.
4. SECTION 3.6.5 IS AMENDED TO READ AS FOLLOWS, EFFECTIVE AS OF APRIL 1,
1997:
3.6.5 Investment Control Option. Each Participant may elect
to have transferred to a Segregated Fund and exercise investment
control with respect to funds in the Trust Fund which do not exceed
the balances in his Accounts. Participants may control their
investments solely with respect to amounts attributable to Rollover,
Elective and Matching contributions.
To the extent that the balance in the Participant's Account with
respect to which a transfer is to be made includes his share of an
Employer contribution which has not been received by the Trustee, such
transfer shall not be made until such contribution is received by the
Trustee. In addition to the foregoing election, each Participant who
has a Segregated Fund may elect to exercise investment control over
any portion or all of such Segregated Fund. Funds so transferred to a
Segregated Fund on behalf of the Participant shall be thereafter
invested by the Trustee in such bonds, notes, debentures, commodities,
mortgages, mutual funds, equipment trust certificates, investment
trust certificates, preferred or common stocks (including securities
issued by the Employer), partnership interests, life insurance
policies, including universal life insurance policies, or in such
other property, real or personal (other than collectibles), wherever
situated, as the Participant shall direct from time to time in
writing; provided, however, that the Participant may not direct the
Trustee to make loans to himself, nor to make loans to the Employer;
provided further that the Trustee may limit the timing and
availability of investment alternatives in a uniform and
nondiscriminatory manner but taking into account whether the interest
of the Participant is fully vested and non-forfeitable; and provided
further that the Participant may not invest more than 25% of current
Elective Contributions and Matching Contributions in securities issued
by CCC Information Services Group Inc. Any such election shall be
made by the Participant giving notice thereof to the Trustee notice as
the Trustee deems necessary and such notice shall specify the amount
of such funds to be transferred and the Account from which the
transfer is to be made. Any such election with respect to a
Segregated Fund shall be made by the Participant giving the Trustee
notice as the Trustee deems necessary and such notice shall specify
the date the transfer is to take place and the amount of funds to be
transferred. Any such election shall be at the absolute discretion of
the Individual Participant and shall be binding upon the Trustee.
Upon any such election being made, the amount of such funds to be
transferred shall be deducted from his account as appropriate and
added to a Controlled Account of the Participant. All dividends and
interest thereafter received with
2
<PAGE>
respect to such transferred funds, as well as any appreciation or
depreciation in his investments, shall be added to or deducted from
his Controlled Account.
5. ARTICLE VI IS AMENDED TO ADD THE FOLLOWING NEW SECTION 3.6.6 AT THE
END THEREOF, EFFECTIVE AS OF APRIL 1, 1997:
3.6.6 Voting of Common Stock. A Participant shall be
entitled to direct the Trustee as to the manner in which voting and
other rights will be exercised with respect to the shares of CCC
Information Services Group Inc.'s common stock allocated to the
Participant's Accounts. All Participants whose Accounts include
investments in CCC Information Services Group Inc.'s common stock
shall be notified within a reasonable time before such rights are to
be exercised. Such notification shall include all information
distributed by the Employer to shareholders regarding the exercise of
such rights. To the extent a Participant fails to provide the Trustee
with directions, the Trustee shall abstain from voting or otherwise
exercising such rights. The Plan Administrator may establish such
additional procedures with respect to voting and other rights as it,
in its discretion, deems appropriate.
6. THE FOLLOWING AMENDMENT IS ADDED TO THE PLAN, EFFECTIVE AS OF JANUARY
1, 1997:
Notwithstanding any provision of this plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Internal Revenue Code.
Loan repayments will be suspended under this plan as permitted under
Section 414(u)(4) of the Internal Revenue Code.
IN WITNESS WHEREOF, the undersigned has executed this Model Amendment to
the Plan on this 30 day of December, 1996.
For the Employer:
By:/s/ Richard W. Steel
-----------------------------
WITNESS:
/s/ Rodney Christo
- -----------------------------
3
<PAGE>
Exhibit 5.01
Undertaking re: Submission of Plan
The registrant hereby undertakes that it will submit or has submitted
the CCC Information Services Inc. 401(K) Retirement Savings & Investment
Plan and any amendment thereto to the Internal Revenue Services ("IRS") in a
timely manner and has made or will make all changes required by the IRS in
order to qualify the plan.
<PAGE>
Exhibit 23.01
Consent of Price Waterhouse LLP
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 22, 1997, which appears on
page 22 of the CCC Information Services Group Inc. Annual Report on Form 10-K
for the year ended December 31, 1996. We also consent to the incorporation
by reference in this Registration Statement of our report dated June 25, 1997
appearing on page 1 of the Annual Report of CCC Information Services Inc.
401(k) Retirement Savings & Investment Plan on Form 11-K for the year ended
December 31, 1996.
Price Waterhouse LLP
Chicago, Illinois
July 23, 1997
