<PAGE>
As filed with the Securities and Exchange Commission on April 9, 1998
Registration No. 333-
- ------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------------
UNIONBANCORP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 36-3145350
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
------------------
122 WEST MADISON STREET
OTTAWA, ILLINOIS 61350
(Address of principal executive offices)
------------------
UNIONBANCORP, INC. 401(K) PLAN
(Full title of the plan)
------------------
R. SCOTT GRIGSBY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
UNIONBANCORP, INC.
122 WEST MADISON STREET
OTTAWA, ILLINOIS 61350
(Name and address of agent for service)
(815) 434-3900
(Telephone number, including area code, of agent for service)
WITH COPIES TO:
DOUGLAS J. TUCKER, ESQ.
BARACK FERRAZZANO KIRSCHBAUM PERLMAN & NAGELBERG
333 WEST WACKER DRIVE, SUITE 2700
CHICAGO, ILLINOIS 60606
(312) 984-3100
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered(1)(2) per Share(3) Offering Price(3) Registration Fee(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 Par Value 20,000 $20.50 $410,000.00 $121.00
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the
"Act"), this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the UnionBancorp, Inc. 401(k)
Plan (the "Plan").
(2) Pursuant to Rule 416(a) under the Securities Act, this Registration
Statement also registers such indeterminate number of additional shares as
may be issuable under the Plan in connection with share splits, share
dividends or similar transactions.
(3) Estimated pursuant to Rule 457(h) under the Act solely for the purpose of
calculating the registration fee and based, in accordance with Rule 457(c),
upon the average of the high and low prices of the shares of the
Registrant's Common Stock as reported on the Nasdaq Stock Market on April
3, 1998.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of
Form S-8 will be sent or given to participants in the UnionBancorp, Inc.
401(k) Plan (the "Plan") as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act").
Such document(s) are not being filed with the Commission, but
constitute (along with the documents incorporated by reference into the
Registration Statement pursuant to Item 3 of Part II hereof) a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents previously or concurrently filed by
UnionBancorp, Inc. (the "Company") or the Plan with the Commission are hereby
incorporated by reference into this Registration Statement:
(a) The Company's Annual Report on Form 10-K (File No. 0-28846) filed
with the Commission on March 30, 1998.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of the prospectus referred to in
(a) above.
(c) The description of the Company's Common Stock, par value $1.00
per share, contained in Item 1 of the Company's Registration
Statement on Form 8-A (File No. 0-28846), originally filed with
the Commission on September 4, 1996, and all amendments or
reports filed for the purpose of updating such description.
All documents subsequently filed by the Company or the Plan with the
Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act,
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, shall be deemed incorporated by reference into this
Registration Statement and to be a part thereof from the date of the filing of
such documents. Any statement contained in the documents incorporated, or
deemed to be incorporated, by reference herein or therein shall be deemed to be
modified or superseded for purposes of this Registration Statement and the
prospectus which is a part hereof (the "Prospectus") to the extent that a
statement contained herein or therein or in any other subsequently filed
document which also is, or is deemed to be, incorporated by reference herein or
therein 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 and the Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the General Corporation Law of the State of
Delaware (being Chapter 1 of Title 8 of the Delaware Code), Article XIII of the
Company's Certificate of Incorporation, and Article VII of the Company's bylaws,
provide as follows:
ARTICLE XIII
No director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty by such directors as a director; provided, however, that this Article XIII
shall not eliminate or limit the liability of a director to the extent provided
by applicable law (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware, or (iv) for
any transaction from which the director derived an improper personal benefit.
No amendment to or repeal of this Article XIII shall apply to or have any effect
on the liability or alleged liability of any director of the corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
ARTICLE VII
II-1
<PAGE>
SECTION 7.1 INDEMNIFICATION.
7.1.1 ACTIONS, SUITS OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF
THE CORPORATION. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action alleged to have been taken or omitted in such
capacity, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or
her or on his or her behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed
to be in, or not opposed to, the best interests of the corporation and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
7.1.2 ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. The
corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation or is or was serving or has
agreed to serve at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, against expenses (including attorneys' fees)
actually and reasonably incurred by him or her or on his or her behalf in
connection with the defense or settlement of such action or suit and any
appeal therefrom, if he or she acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
such liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such costs,
charges and expenses which the Court of Chancery or such other court shall
deem proper.
7.1.3 INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF SUCCESSFUL
PARTY. Notwithstanding the other provisions of this Section 7.1, to the
extent that a director, officer, employee or agent has been successful, on
the merits or otherwise, including, without limitation, to the extent
permitted by applicable law, the dismissal of an action without prejudice,
in defense of any action, suit or proceeding referred to in Sections 7.1.1
and 7.1.2, or in defense of any claim, issue or matter therein, he or she
shall be indemnified against all costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or her or on his
or her behalf in connection therewith.
7.1.4 DETERMINATION OF RIGHT TO INDEMNIFICATION. Any indemnification
under Sections 7.1.1 and 7.1.2, (unless ordered by a court) shall be paid
by the corporation, if a determination is made (a) by the board of
directors by a majority vote of the directors who were not parties to such
action, suit or proceeding, or (b) if such majority of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(c) by the stockholders, that indemnification of the director or officer is
proper in the circumstances because he or she has met the applicable
standard of conduct set forth in Sections 7.1.1 and 7.1.2.
7.1.5 ADVANCE OF COSTS, CHARGES AND EXPENSES. Expenses (including
attorneys' fees) incurred by a person referred to in Sections 7.1.1 and
7.1.2 in defending a civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the corporation in advance of
the final disposition of such action, suit or proceeding; PROVIDED,
HOWEVER, that the payment of such costs, charges and expenses incurred by a
director or officer in his or her capacity as a director
II-2
<PAGE>
or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer) in advance of the
final disposition of such action, suit or proceeding shall be made only
upon receipt of an undertaking by or on behalf of the director or officer
to repay all amounts so advanced in the event that it shall ultimately be
determined that such director or officer is not entitled to be indemnified
by the corporation as authorized in this Article VII. Such costs, charges
and expenses incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the majority of the directors deems
appropriate. The majority of the directors may, in the manner set forth
above, and upon approval of such director or officer of the corporation,
authorize the corporation's counsel to represent such person, in any
action, suit or proceeding, whether or not the corporation is a party to
such action, suit or proceeding.
7.1.6 PROCEDURE FOR INDEMNIFICATION. Any indemnification under
Sections 7.1.1, 7.1.2 and 7.1.3, or advance of costs, charges and expenses
under Section 7.1.5, shall be made promptly, and in any event within 60
days, upon the written request of the director, officer, employee or agent.
The right to indemnification or advances as granted by this Article VII
shall be enforceable by the director, officer, employee or agent in any
court of competent jurisdiction, if the corporation denies such request, in
whole or in part, or if no disposition thereof is made within 60 days.
Such person's costs and expenses incurred in connection with successfully
establishing his or her right to indemnification, in whole or in part, in
any such action shall also be indemnified by the corporation. It shall be
a defense to any such action (other than an action brought to enforce a
claim for the advance of costs, charges and expenses under Section 7.1.5,
where the required undertaking, if any, has been received by the
corporation) that the claimant has not met the standard of conduct set
forth in Sections 7.1.1 and 7.1.2, but the burden of proving such defense
shall be on the corporation. Neither the failure of the corporation
(including its board of directors, its independent legal counsel and its
stockholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct
set forth in Sections 7.1.1 and 7.1.2, nor the fact that there has been an
actual determination by the corporation (including its board of directors,
its independent legal counsel and its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
7.1.7 SETTLEMENT. The corporation shall not be obligated to
reimburse the costs of any settlement to which it has not agreed. If in
any action, suit or proceeding, including any appeal, within the scope of
Sections 7.1.1 and 7.1.2, the person to be indemnified shall have
unreasonably failed to enter into a settlement thereof offered or assented
to by the opposing party or parties in such action, suit or proceeding,
then, notwithstanding any other provision hereof, the indemnification
obligation of the corporation to such person in connection with such
action, suit or proceeding shall not exceed the total of the amount at
which settlement could have been made and the expenses incurred by such
person prior to the time such settlement could reasonably have been
effected.
SECTION 7.2 SUBSEQUENT AMENDMENT. No amendment, termination or repeal
of this Article VII or of relevant provisions of the Delaware General
Corporation Law or any other applicable law shall affect or diminish in any way
the rights of any director or officer of the corporation to indemnification
under the provisions hereof with respect to any action, suit or proceeding
arising out of, or relating to, any actions, transactions or facts occurring
prior to the final adoption of such amendment, termination or repeal.
SECTION 7.3 OTHER RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION. The
indemnification provided by this Article VII shall not be deemed exclusive of
any other rights to which a director, officer, employee or agent seeking
indemnification may be entitled under any law (common or statutory), agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in any other capacity while
holding office or while employed by or acting as agent for the corporation, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent, and shall inure to the benefit of the estate, heirs, executors and
administrators of such person. Nothing contained in this Article VII shall be
deemed to prohibit, and the corporation is specifically authorized to enter
into, agreements with officers and directors providing indemnification rights
and procedures different from those set forth herein. All rights to
indemnification under this Article VII shall be deemed to be a contract between
the corporation and each director or officer of the corporation who serves or
served in such capacity at any time while this Article VII is in effect. The
corporation shall not consent to any acquisition, merger, consolidation or other
similar transaction unless the successor corporation assumes by operation of law
or by agreement the obligations set forth in this Article VII.
II-3
<PAGE>
SECTION 7.4 INSURANCE. The corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under this Article VII.
SECTION 7.5 CERTAIN DEFINITIONS. For purposes of this Article VII:
(i) references to "the corporation" shall include, in addition to
the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had the power and
authority to indemnify its directors, officers, employees or agents, so
that any person who is or was a director, officer, employee or agent of
such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprises, shall stand in the same position under this Article VII with
respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued;
(ii) references to "other enterprises" shall include employee
benefit plans;
(iii) references to "fines" shall include any excise taxes assessed
on a person with respect to an employee benefit plan;
(iv) references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and
(v) a person who acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in
a manner "not opposed to the best interests of the corporation," as
referred to in this Article VII.
SECTION 7.6 SAVINGS CLAUSE. If this Article VII or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each director or officer of the
corporation as to any costs, charges, expenses (including attorney's fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the corporation, to the full extent
permitted by any applicable portion of this Article VII that shall not have been
invalidated and to the full extant permitted by applicable law.
SECTION 7.7 SUBSEQUENT LEGISLATION. If the Delaware General Corporation
Law is amended after the date hereof to further expand the indemnification
permitted to directors and officers of the corporation, then the corporation
shall indemnify such person to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
See the Exhibit Index following the signature page in this
Registration Statement, which Exhibit Index is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
II-4
<PAGE>
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement to include:
(i) any prospectus required by Section 10(a)(3) of the Securities Act; (ii)
to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and (iii) any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement, provided however, that provisions (i) and (ii) of this
undertaking are inapplicable if the information to be filed thereunder is
contained in periodic reports filed by the Company pursuant to Sections 13
or 15(d) of the Exchange Act and incorporated by reference into the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provision, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Ottawa, State of Illinois, on April 3, 1998.
UNIONBANCORP, INC.
By: /s/ R. Scott Grigsby
------------------------------------
R. Scott Grigsby
Chairman of the Board, President and
Chief Executive Officer
By: /s/ Charles J. Grako
------------------------------------
Charles J. Grako
Executive Vice President and Chief
Financial and Accounting Officer
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature
appears below constitutes and appoints R. Scott Grigsby and Charles J. Grako,
and each of them, his true and lawful attorney-in-fact and agent, each with
full power of substitution and re-substitution, for him and in his name,
place and stead, in any and all capacities to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any of them, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by each of the following persons in the
capacities indicated on April 3, 1998.
SIGNATURE
---------
TITLE
-----
/s/ R. Scott Grigsby Chairman of the Board, President and Chief
- ---------------------------- Executive Officer
R. Scott Grigsby
/s/ Richard J. Berry Director
- ----------------------------
Richard J. Berry
/s/ Walter E. Breipohl Director
- ----------------------------
Walter E. Breipohl
/s/ L. Paul Broadus Director
- ----------------------------
L. Paul Broadus
S-1
<PAGE>
/s/ John Michael Daw Director
- ----------------------------
John Michael Daw
Director
- ----------------------------
Robert J. Doty
/s/ Jimmie D. Lansford Director
- ----------------------------
Jimmie D. Lansford
/s/ Lawrence J. McGrogan Director
- ----------------------------
Lawrence J. McGrogan
Director
- ----------------------------
I. J. Reinhardt, Jr.
/s/ H. Dean Reynolds Director
- ----------------------------
H. Dean Reynolds
Director
- ----------------------------
John A. Shinkle
Director
- ----------------------------
Scott C. Sullivan
Director
- ----------------------------
John A. Trainor
/s/ Charles J. Grako Executive Vice President and Chief Financial
- ---------------------------- and Accounting Officer
Charles J. Grako
S-2
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
trustee (or other persons who administrator the employee benefit plan) has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Ottawa, State of
Illinois, on April , 1998.
UNIONBANCORP 401(K) PLAN
By: UNIONBANCORP, INC.
------------------
Plan Administrator
By: /s/ R. Scott Grigsby
----------------------------------
Its: Chief Executive Officer
S-3
<PAGE>
UNIONBANCORP, INC.
EXHIBIT INDEX
TO
FORM S-8 REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Incorporated
Herein by Filed Sequential
Exhibit No. Description Reference To Herewith Page No.
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4.1 Certificate of Exhibit 3.1 to the Registration
Incorporation of Statement on Form S-1 filed with the
UnionBancorp, Inc. Commission by UnionBancorp, Inc. on
August 9, 1996, as amended (SEC File
No. 333-9891)
4.2 Bylaws of UnionBancorp, Exhibit 3.2 to the Registration
Inc. Statement on Form S-1 filed with the
Commission by UnionBancorp, Inc. on
August 9, 1996, as amended (SEC File
No. 333-9891)
4.3 Specimen Stock Exhibit 4.1 to the Registration
Certificate of Statement on Form S-1 filed with the
UnionBancorp, Inc. Commission by UnionBancorp, Inc. on
August 9, 1999, as amended (SEC File
No. 333-9891)
5.1 Opinion of Barack, X
Ferrazzano, Kirschbaum &
Perlman
23.1 Consent of Crowe, Chizek X
and Company LLP
23.2 Consent of McGladrey & X
Pullen, LLP
23.2 Consent of Barack Included in
Ferrazzano Kirschbaum Exhibit 5.1
Perlman and Nagelberg
24.1 Power of Attorney Included on
Signature Page to
this Registration
Statement
99.1 UnionBancorp, Inc. X
401(k) Plan
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- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
[LETTERHEAD OF BARACK FERRAZZANO
KIRSCHBAUM PERLMAN & NAGELBERG]
April 8, 1998
UnionBancorp, Inc.
122 W. Madison Street
Ottawa, Illinois 61350
Ladies and Gentlemen:
We have acted as special counsel to UnionBancorp, Inc., a Delaware
corporation (the "Company"), in connection with the proposed offering of 20,000
shares of its common stock, $1.00 par value ("Common Shares") pursuant to the
Company's 401(K) Plan (the "Offering") as described in the Form S-8 Registration
Statement to be filed with the Securities and Exchange Commission (the "SEC") on
or about April 8, 1998 (the "Registration Statement"). Capitalized terms used,
but not defined, herein shall have the meanings given such terms in the
Registration Statement. You have requested our opinion concerning certain
matters in connection with the Offering.
We have made such legal and factual investigation as we deemed necessary
for purposes of this opinion. In our investigation, we have assumed the
genuineness of all signatures, the proper execution of all documents submitted
to us as originals, the conformity to the original documents of all documents
submitted to us as copies and the authenticity of the originals of such copies.
In arriving at the opinions expressed below, we have reviewed and examined
the following documents:
a. the Restated Certificate of Incorporation of the Company filed with
the Secretary of State of the State of Delaware on May 13, 1991, as
amended on March 4, 1994 and July 29, 1996, and the Company's Bylaws;
b. the Registration Statement, including the prospectus constituting a
part thereof (the "Prospectus"); and
c. a form of share certificate representing the Common Shares approved by
the board of directors of the Company (the "Board") relating to the
Offering and the 1993 Stock Option Plan.
We call your attention to the fact that our firm only requires lawyers to
be qualified to practice law in the State of Illinois and, in rendering the
foregoing opinions, we express no opinion with respect to any laws relevant to
this opinion other than the Securities Act of 1933, as amended, and the rules
and regulations thereunder, the laws and regulations of the State of Illinois,
the General Corporation Law of the State of Delaware and United States federal
law.
Based upon the foregoing, but assuming no responsibility for the accuracy
or the completeness of the data supplied by the Company and subject to the
qualifications, assumptions and limitations set forth herein, it is our opinion
that:
1. The Company has been duly organized and is validly existing in good
standing under the laws of the State of Delaware and has due corporate authority
to carry on its business as it is presently conducted.
<PAGE>
2. The Company is authorized to issue up to 10,000,000 Common Shares, of
which approximately 4,135,830 Common Shares have been issued and are presently
outstanding prior to the Offering.
3. When the Registration Statement shall have been declared effective by
order of the SEC and the Common Shares to be sold thereunder shall have been
issued and sold upon the terms and conditions set forth in the Registration
Statement, then such Common Shares will be legally issued, fully paid and
non-assessable.
We express no opinion with respect to any specific legal issues other than
those explicitly addressed herein. We assume no obligation to advise you of any
change in the foregoing subsequent to the date of this opinion (even though the
change may affect the legal conclusions stated in this opinion letter).
We hereby consent (i) to be named in the Registration Statement, and in the
Prospectus, as attorneys who will pass upon the legality of the Common Shares to
be sold thereunder and (ii) to the filing of this opinion as an Exhibit to the
Registration Statement.
Sincerely,
2
<PAGE>
[LETTERHEAD OF CROWE, CHIZEK & COMPANY LLP]
The Board of Directors
UnionBancorp, Inc.
We consent to the incorporation by reference of our report dated February 6,
1998 relating to the consolidated financial statements of UnionBancorp, Inc.
(the "Company") as of December 31, 1997 and for the year then ended in the
Registration Statement on Form S-8 filed by the Company with the Securities and
Exchange Commission on April 8, 1998.
Crowe, Chizek and Company LLP
Oak Brook, Illinois
April 3, 1998
<PAGE>
[LETTERHEAD OF McGLADREY & PULLEN, LLP]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 to be filed on or about April 3, 1998, of our report,
dated February 5, 1997, on the consolidated balance sheets of UnionBancorp, Inc.
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the two
years in the period ending December 31, 1996, which was included in the Annual
Report on Form 10-K for the year ended 1997.
McGLADREY & PULLEN, LLP
Champaign, Illinois
March 27, 1998
<PAGE>
DATAIR MASS-SUBMITTER PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
Plan Name: UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
Employer: UNIONBANCORP, INC.
<PAGE>
PART I
ARTICLE I
INTRODUCTION
1.1.1 Creation and Title. The parties hereby create a Plan and Trust
to be known by the name set forth in the Adoption Agreement.
1.1.2 Effective Date. The provisions of this Plan and Trust shall be
effective as of the Effective Date set forth in the Adoption Agreement.
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 the Adoption Agreement. If the Employer designates the Plan as a Cash or
Deferred Profit Sharing Plan in the Adoption Agreement, 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 and the Plan and Trust are intended to
satisfy the provisions of Section 401(k) of the Internal Revenue Code of 1986,
as amended.
<PAGE>
ARTICLE II
DEFINITIONS
As used in this Plan and the Adoption Agreement, 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": Unless otherwise specified in the Adoption
Agreement, the last day of each Plan Year.
1.2.6 "Beneficiary": The person or persons entitled hereunder 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 five hundred (500) Hours of Service or such lesser number specified in
the Adoption Agreement during any 12 consecutive month 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.
1.2.9 "Code": The Internal Revenue Code of 1986, as amended from
time to time.
1.2.10 "Compensation": The compensation as defined in the Plan and
as specified in the Adoption Agreement (or Earned Income in the case of a
self-employed individual) which is actually paid to the Participant by the
Employer during the Compensation Computation Period; provided that if specified
by the Employer in the Adoption Agreement, compensation shall also include any
amount which is contributed by the Employer pursuant to a salary reduction
agreement and which is not
<PAGE>
includible in the gross income of the Employee under Sections 125, 402(a)(8),
402(h), 403(b) or 457(b) of the Code; provided further that for years beginning
after December 31, 1988, 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 on 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.
1.2.11 "Compensation Computation Period": The period specified as
the Compensation Computation Period in the Adoption Agreement.
1.2.12 "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.
1.2.13 "Date of Hire": The date an Employee first completes an Hour
of Service for the Employer.
1.2.14 "Distributable Benefit": The benefit to which a Participant
is entitled following termination of his employment.
1.2.15 "Distribution Date": The date as of which the Distributable
Benefit of a Participant is determined.
1.2.16 "Early Retirement Age": The age specified as the Early
Retirement Age, if any, in the Adoption Agreement.
<PAGE>
1.2.17 "Early Retirement Date": The date specified as the Early
Retirement Date, if any, in the Adoption Agreement.
1.2.18 "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 to the taxpayer
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.
1.2.19 "Elective Contribution Account": An Account established and
maintained for a Participant to account for the Elective Contributions made on
his behalf.
1.2.20 "Elective Contribution": A contribution to a cash or deferred
profit sharing plan by the Employer on behalf of an electing Employee.
1.2.21 "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.
1.2.22 "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 unless otherwise specified in
the Adoption Agreement, the subsequent eligibility computation periods are each
subsequent twelve (12) consecutive month period commencing on the annual
anniversary of such employment commencement date. If in accordance with the
election in the Adoption Agreement, 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 1,000 Hours of
Service in both the initial eligibility computation period and the first Plan
Year which commences prior to the first anniversary of the Employee's initial
<PAGE>
eligibility computation period shall be credited with two (2) years of service
for purposes of eligibility to participate.
1.2.23 "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 a Leased
Employee subject to section 414(n) of the Code and a self-employed owner of an
unincorporated Employer, but, unless otherwise provided in the Adoption
Agreement, excluding (a) an independent contractor; (b) an employee who is a
non-resident alien (within the meaning of section 7701(b)(1)(B) of the Code)
deriving no earned income (within the meaning of section 911(d)(2) of the Code)
from the Employer which constitutes income from sources within the United States
(within the meaning of section 861(a)(3) of the Code); and (c) employees who are
included in the unit of employees covered by a collective bargaining agreement
between the Employer and employee representatives, provided benefits were the
subject of good faith bargaining and two percent or less of the employees of the
Employer who are covered pursuant to that agreement are professionals as defined
in Treasury Regulation Section 1.410(b)-9(g). For this purpose, the term
"employee representatives" does not include any organization more than half of
whose members are employees who are owners, officers, or executives of the
employer.
1.2.24 "Employer": The Employer that is a party to this Plan, or any
of its affiliates, 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 hereafter changed, a corresponding change shall be deemed to
have been made in the name of the Plan and references herein to the Employer
shall be deemed to refer to the Employer as it is then known.
1.2.25 "Employer Account": An Account established and maintained for
a Participant for accounting purposes to which his share of Employer
contributions and forfeitures are added.
1.2.26 "Employer Contribution": A contribution to a money purchase
pension plan or profit sharing plan other than a cash or deferred profit sharing
plan by the Employer.
1.2.27 "Entry Date": The date or dates specified as the Entry Date
in the Adoption Agreement.
1.2.28 "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
<PAGE>
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.
1.2.29 "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.
1.2.30 "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, unless such amounts are
distributed no later than the first April 15 following the close of the
Participant's taxable year.
1.2.31 "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.
1.2.32 "Family": The spouse and lineal ascendants or descendants of
an Employee and the spouses of such lineal ascendants and descendants.
1.2.33 "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.
1.2.34 "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 employee is one of the 100
employees who received the most compensation from the
<PAGE>
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.
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.
<PAGE>
1.2.35 "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.
Solely for the purposes of determining whether an Employee has incurred a Break
in Service, an Employee shall be credited with the 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.
In the event the Employer does not maintain records of the actual hours for
which an Employee is paid or entitled to payment, credit for
<PAGE>
service shall be given in accordance with the method selected in the Adoption
Agreement.
Service with another business entity that is, along with the Employer, a member
of a controlled group of corporations under Section 414(b) of the Code, an
affiliated service group under Section 414(m) of the Code or trades or
businesses under common control under Section 414(c) 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.
If the Employer maintains the plan of a predecessor employer, service with such
predecessor shall be treated as service for the Employer.
1.2.36 "Insurer": Any insurance company which has issued a Life
Insurance Policy.
1.2.37 "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. The percentage of the
survivor annuity shall be fifty (50%) percent unless a different percentage is
elected by the Employer in the Adoption Agreement.
1.2.38 "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) a nonintegrated employer contribution rate of at least ten (10%) percent of
compensation, as defined in Section 415(c)(3) of the Code and Section
3.2.1(h)(iii) of the Plan, 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 workforce 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.
<PAGE>
1.2.39 "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.
1.2.40 "Limitation Year": Unless otherwise specified in the Adoption
Agreement, the Plan Year; provided that all qualified plans maintained by the
Employer use the same Limitation Year.
1.2.41 "Mass Submitter": DATAIR Employee Benefits Systems Inc.
1.2.42 "Matching Account": An Account established and maintained for
a Participant for accounting purposes to which his share of Matching
Contributions are added.
1.2.43 "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.
1.2.44 "Non-Elective Contribution": A contribution to a cash or
deferred profit sharing plan by the Employer which is neither a Qualified
Non-Elective Contribution, a Matching Contribution nor an Elective Contribution.
1.2.45 "Normal Retirement Age": The earlier of the date specified as
the Normal Retirement Age in the Adoption Agreement or the mandatory retirement
age enforced by the Employer.
1.2.46 "Normal Retirement Date": The date specified in the Adoption
Agreement as the Normal Retirement Date.
1.2.47 "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.
1.2.48 "Participant": Any eligible Employee who becomes entitled to
participate in the Plan.
1.2.49 "Plan": The defined contribution plan for Employees as set
forth in this Agreement and the Adoption Agreement, together with any amendments
or supplements thereto.
1.2.50 "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.
1.2.51 "Plan Sponsor": The Plan Sponsor specified in the Adoption
Agreement.
1.2.52 "Plan Year" or "Year": The 12 consecutive month period
designated by the Employer in the Adoption Agreement.
1.2.53 "Preretirement Survivor Annuity": A survivor annuity for the
life of the surviving spouse of the Participant, the actuarial
<PAGE>
equivalent of which is equal to the portion of the Account balance of the
Participant as of the date of death to which the Participant had a vested and
nonforfeitable right, provided that 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.
1.2.54 "Qualified Non-Elective Contribution": A contribution to a
cash or deferred profit sharing 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.
1.2.55 "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.
1.2.56 "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.
1.2.57 "Segregated Account": An Account established and maintained
for a Participant to account for his interest in a Segregated Fund.
1.2.58 "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.
1.2.59 "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 profits for the taxable year.
1.2.60 "Social Security Integration Level": The Social Security
Integration Level shall be equal to the taxable wage base or such lesser amount
specified in the Adoption Agreement. The "taxable wage base" is the contribution
and benefit base in effect under Section 230 of the Social Security Act on the
first day of the Plan Year for which allocations of Employer contributions and
forfeitures are made (referred to as the Social Security Wage Base). The Social
Security Integration Level shall be deemed to be the full amount of such Social
Security Integration Level, even though a Participant's Compensation may include
less than a full year's compensation because of either his participation
commencing after the first day of the Compensation Computation Period or his
service terminating prior to the end of the Compensation Computation Period.
<PAGE>
1.2.61 "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.
1.2.62 "Trustee": The persons, corporations, associations or
combination of them who shall at the time be acting as such from time to time
hereunder.
1.2.63 "Valuation Date": The date or dates specified as the
Valuation Date in the Adoption Agreement.
1.2.64 "Voluntary Account": An Account established and maintained
for a Participant for accounting purposes to which his voluntary Employee
contributions made prior to Plan Years beginning after 1986 have been added.
1.2.65 "Year of Service": The 12-consecutive month period
(computation period) specified in the Adoption Agreement during which an
employee completes at least one thousand (1,000) Hours of Service or such lesser
number specified in the Adoption Agreement. Unless otherwise specified in the
Adoption Agreement, all Years of Service shall be taken into account.
<PAGE>
PART II
ARTICLE I
PARTICIPATION
2.1.1 Eligibility Requirements. Each Employee shall be eligible to
participate in this Plan and receive an appropriate allocation of contributions
upon satisfying the eligibility requirements set forth in the Adoption
Agreement.
2.1.2 Commencement of Participation. An eligible Employee shall
become a Participant in the Plan on the applicable Entry Date selected in the
Adoption Agreement.
2.1.3 Participation Upon Re-Employment. A Participant whose
employment terminates and who is subsequently re-employed shall re-enter the
Plan as a Participant immediately on the date of his reemployment. In the event
that an Employee completes the eligibility requirements set forth in the
Adoption Agreement, his employment terminates prior to becoming a Participant
and he is subsequently re-employed, 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. Any other
Employee whose employment terminates and who is subsequently reemployed 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
death.
2.1.5 Employer's Determination. In the event any question shall
arise as to the eligibility of any person to become a Participant or the
commencement of participation, the Employer shall determine such question and
the Employer's decision shall be conclusive and binding, except to the extent of
a claimant's right to appeal the denial of a claim.
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.
<PAGE>
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 the
Adoption Agreement.
2.1.8 Election Not to Participate. With respect only to
nonstandardized plans and 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 election does not jeopardize the qualified or
tax-exempt status of the Plan under sections 401(a) and 501(a) of the Code,
respectively. The Employee shall sign such documents as may be reasonably
required by the Employer to evidence the election. If it is subsequently
determined that either the qualified or 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 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 be deemed
not to have completed any "Years of Service" for purposes of Article V
("Benefits") during the period that the Participant is not an Employee for such
reason. Such Participant shall 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.
<PAGE>
ARTICLE II
CONTRIBUTIONS
2.2.1 Employer Contributions.
(a) Amount of Contribution.
(1) Money Purchase Pension Plan. The Employer shall contribute to
the Trust Fund each Plan Year such amount, including any forfeitures
to be applied, set forth in the Adoption Agreement.
(2) Profit Sharing Plan. The Employer shall contribute to the
Trust Fund each Plan Year such amount as it may determine.
(3) Cash or Deferred Profit Sharing Plan.
(i) Amount of Non-Elective Contribution. The Employer
shall contribute to the Trust Fund each Plan Year such amount as
a Non-Elective Contribution as the Employer may determine.
(ii) Amount of Matching Contribution. Subject to
applicable limitations provided by the Plan, 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 determined in the manner set
forth in the Adoption Agreement.
(iii) 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, and to the extent elected by the Employer in
the Adoption Agreement, 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.
(b) 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.
(c) 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
<PAGE>
the Year for which such contribution is made (including any extensions of
time granted by the Internal Revenue Service for filing such return).
(d) 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.
(e) 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. If the Plan is designated in the Adoption
Agreement as a Cash or Deferred Profit Sharing Plan, 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 a reasonable period 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.
<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 shall 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 the
Plan Year in which the prototype Plan is adopted by the Employer. Employee
contributions for Plan Years beginning after 1986 shall be limited so as to
meet the nondiscriminatory test of Section 401(m) of the Code. The Plan
Administrator shall not accept deductible employee contributions which are
made for a taxable year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a separate account which will
be nonforfeitable at all times. The account will share in the gains and
losses of the trust in the same manner as provided in Section 3.1.2 of the
Plan. No part of the deductible voluntary contribution account will be used
to purchase life insurance.
(b) Withdrawal of Contributions. In accordance with the provisions of
the Plan as in effect prior to Plan Years beginning after 1986, all or any
portion of an Employee's contributions may be withdrawn by giving to the
Plan Administrator written notice of any proposed withdrawal. The Plan
Administrator may adopt such procedures with respect to such withdrawals as
may be necessary or appropriate. At the Plan Administrator's direction, the
Trustee shall distribute any such withdrawal to the Participant in
accordance with the procedures adopted by the Plan Administrator. Except in
the case of the voluntary deductible contribution
<PAGE>
account, such withdrawals shall not include any interest or other increment
earned on such contributions. No forfeitures shall occur as a result of
withdrawal of an Employee's contributions. Notwithstanding the foregoing, a
withdrawal of an Employee's contributions must be consented to in writing
by the Participant's spouse.
2.2.4 Return of Contributions. Contributions by the Employer,
including Employer, Qualified Non-Elective, Non-Elective and Matching
Contributions shall be returned to the Employer in the following instances:
(a) If a contribution by the Employer, including an Employer,
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.
(b) If a contribution by the Employer, including an Employer,
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 contribution by the Employer, including an Employer,
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.
<PAGE>
ARTICLE III
ALLOCATIONS
2.3.1 Profit Sharing and Money Purchase Pension Plans. As of each
Anniversary Date, the Employer Contributions made by the Employer with respect
to the preceding Plan Year, and forfeitures shall be allocated among the
Employer Accounts of Participants during the Plan Year in the manner set forth
in the Adoption Agreement; provided that if a Profit Sharing Plan is integrated
with Social Security, Section 2.3.3 shall also apply.
2.3.2 Cash or Deferred Plans.
(a) Non-Elective Contributions. As of each Anniversary Date, the
Non-Elective Contributions made by the Employer with respect to the
preceding Plan Year, and forfeitures, shall be allocated among the Employer
Accounts of Participants during the Plan Year in the manner specified in
the Adoption Agreement; provided that if the Plan is integrated with Social
Security, Section 2.3.3 shall also apply.
(b) Matching Contributions. Unless otherwise specified in the
Adoption Agreement, as of each Anniversary Date, the Matching Contribution
made by the Employer with respect to the preceding Plan Year, and
forfeitures, shall be allocated to the Matching Accounts of Participants
for whom Elective Contributions were made in the manner specified in the
Adoption Agreement.
(c) 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 each
Valuation Date of the Plan Year to which the Elective Contribution
pertains.
(d) Qualified Non-Elective Contributions. As of each Anniversary
Date, the Qualified Non-Elective Contributions made by the Employer with
respect to the preceding Plan Year shall be allocated to the Qualified
Non-Elective Contribution Account of Participants during the Plan Year in
the manner specified in the Adoption Agreement.
2.3.3 Integration with Social Security. If the Employer has elected
in the Adoption Agreement that the Plan shall be integrated with Social
Security, then the applicable contributions and forfeitures shall be allocated
to Participants' accounts as follows (provided that Steps One and Two, below,
shall apply only in years in which the Plan is Top-Heavy):
STEP ONE: Contributions and forfeitures shall be allocated to each
Participant's account in the ratio that each Participant's
<PAGE>
Compensation bears to all Participant's Compensation, but not in
excess of 3% of each Participant's Compensation.
STEP TWO: Any contributions and forfeitures remaining after the
allocation in Step One will be allocated to each Participant's account
in the ratio that each Participant's Compensation for the Plan Year in
excess of the Social Security Integration Level bears to the excess
compensation of all Participants, but not in excess of 3%.
STEP THREE: Any contributions and forfeitures remaining after the
allocation in Step Two shall be allocated to each Participant's
account in the ratio that the sum of each Participant's Compensation
and Compensation in excess of the Social Security Integration Level
bears to the sum of all Participants' Compensation and Compensation in
excess of the Social Security Integration Level, but not in excess of
the maximum profit sharing disparity rate.
STEP FOUR: Any remaining contributions and forfeitures shall be
allocated to each Participant's account in the ratio that each
Participant's Compensation for the Plan Year bears to all
Participants' Compensation for that year.
The maximum profit sharing disparity rate is equal to the lesser of:
(a) 5.7% (minus the percentage of Compensation allocated in Step One,
if any); or,
(b) 5.4% (minus the percentage of Compensation allocated in Step One,
if any) if the Social Security Integration Level (SSIL) is more
than 80% but less than 100% of the taxable wage base under
Section 230 of the Social Security Act at the beginning of the
Plan Year (TWB); or 4.3% (minus the percentage of Compensation
allocated in Step One, if any) if the SSIL is greater than 20% of
the TWB, but not more than 80% of the TWB, and greater than
$10,000.
If the Social Security Integration Level selected by the Employer in
the Adoption Agreement is the taxable wage base under Section 230 of the
Social Security in effect as of the first day of the Plan Year, the
applicable percentage shall be 5.7% (2.7% if the Plan is Top-Heavy).
2.3.4 Limitation. The allocation of Employer contributions must
satisfy the requirements of Section 416 of the Code regardless of how the
Adoption Agreement is completed. Elective Contributions and Matching
Contributions allocated to key employees (as defined in Section 416(i) of the
Code) are taken into account for the purpose of determining the minimum
contribution under Code Section 416. However, Elective Contributions and
Matching Contributions made on behalf of non-key employees (as defined in Code
Section 416(i)) may not be taken
<PAGE>
into account for the purpose of satisfying the minimum contribution requirement
under Code Section 416.
2.3.5 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.
2.3.6 Fail-Safe Allocation. With respect only to nonstandardized
plans and notwithstanding any provision of the Plan or Adoption Agreement 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 Participant 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 Participants who are not employed on the last day of
the Plan Year as are necessary to satisfy 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.
<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 Date. Such Accounts shall include the allocable share of
contributions and forfeitures, if any, which may be allocated to said Accounts
as of such Distribution 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.
(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.
<PAGE>
(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) Early Retirement, 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 vested and have a
nonforfeitable interest in a percentage of his Employer Account and
Matching Account determined by, except as provided below, taking into
account all of his Years of Service as of such termination date in
accordance with the schedule set forth in the Adoption Agreement.
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. Unless otherwise elected by the Employer in the
Adoption Agreement, in the case of a Participant who has five (5) or more
consecutive Breaks in Service, all Years of Service after such Breaks in Service
shall be disregarded for the purposes of vesting the employer-derived account
balance that accrued before such breaks, but both pre-break and post-break
service shall count for the purposes of vesting the employer-derived account
balance that accrues after such breaks. Both accounts shall share in the
earnings and losses of the Trust Fund. In the case of a Participant who does not
have five (5) consecutive Breaks in Service, both the pre-break and post-break
service shall count in vesting both the pre-break and post-break
employer-derived account balance.
2.4.5 Distribution Date. The Distribution Date shall be determined
as hereinafter provided.
(a) General. For purposes of determining the amount to be
distributed, the Distribution Date shall be determined in the manner
specified in the Adoption Agreement.
(b) 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 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
<PAGE>
Distribution Date shall be the Anniversary Date coinciding with or
immediately following the date of such partial termination.
(c) Distributions following Distribution 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 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 in which the Participant's entire vested interest is distributed from
the Plan. 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.
Unless otherwise elected in the Adoption Agreement, 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.
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.
Unless otherwise elected in the Adoption Agreement, such forfeiture shall be
allocated in the same manner as a contribution by the Employer
<PAGE>
for the Year in which said forfeiture occurred. 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 re-employed following a Break in Service and is entitled to
restoration of any amount of his Accounts which was forfeited as a result of
such Break in Service, such amount shall be restored in the manner specified in
the Adoption Agreement.
<PAGE>
ARTICLE V
DISTRIBUTIONS
2.5.1 Commencement of Distribution.
(a) Immediate Distribution. A Participant whose employment is
terminated for any reason, other than resignation or discharge prior to his
Early Retirement Date or his Normal Retirement Date, may elect upon his
termination of employment to begin distribution of his Distributable
Benefit within a reasonable period after the Distribution Date as of which
his Distributable Benefit is determined, or as of the date determined under
subsection (b), below, if that date is earlier. If a Participant does not
so elect, distribution of the Participant's Distributable Benefit shall in
no event begin later than the date determined under subsection (b), below.
(b) Deferred Distribution. Except in the case of amounts subject to
Section 2.5.2(h) for which a Participant's consent is not required, unless
the Employer elects in the Adoption Agreement to permit the Employee to
elect earlier commencement and the Employee so elects or the Employee
elects 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, however, the Employer selects an Early Retirement Date in the Adoption
Agreement, a Participant who terminates employment before satisfying the
age requirement for early retirement but has satisfied any service
requirement shall be entitled to a distribution of his Distributable
Benefit in accordance with subsection (a) above upon attaining such age. 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 Date. Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution
<PAGE>
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.
(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.
(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
<PAGE>
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 spouse 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 had 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.
(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
<PAGE>
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.
(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 (i) 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
<PAGE>
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.
(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 January 1, 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.
<PAGE>
(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.
(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:
(a) In a single distribution, as designated by the Employer in the
Adoption Agreement;
(b) In substantially equal annual, quarterly or monthly installments
over a period of more than one year but which does not exceed the period
designated in the Adoption Agreement, as selected by the Participant
(provided that such period is not greater than the Participant's life
expectancy as of the annuity starting date), plus accrued net income. If
distribution is to be so made in installments, the Plan Administrator shall
cause the undistributed portion of the Distributable Benefit to be
transferred to a Segregated Fund, from which installment payments shall
thereafter be withdrawn from time to time.
(c) By the purchase and delivery of a single premium, nontransferable,
fully refundable, annuity policy issued by a legal reserve life insurance
company providing for payments over such period as may be designated in the
Adoption Agreement as selected by the Participant; provided, however,
unless the Employer has designated a life annuity distribution option in
the Adoption Agreement, in the event of distribution of such an annuity
policy to a Participant, such duration shall be for a fixed duration which
is less than the Participant's life expectancy as of the annuity
<PAGE>
starting date. The refund feature under such annuity policy following the
death of the Participant shall inure to the benefit of the person or
persons designated by the Participant as his Beneficiary.
(d) 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.
(e) Annuity Payments
(1) Requirement of Annuity Payment. The provisions of this
Section 2.5.2(e) shall apply to any Participant who is credited with
at least one Hour of Service with the Employer on or after August 23,
1984, and such other Participants as provided in Section 2.5.2(k).
Unless an optional form of benefit is selected pursuant to a qualified
election within the 90-day period ending on the annuity starting date,
a married Participant's vested Account balance will be paid in the
form of a Joint and Survivor Annuity and an unmarried Participant's
vested Account balance will be paid in the form of a life annuity.
Unless an optional form of benefit has been selected within the
election period pursuant to a qualified election, if a Participant
dies before the annuity starting date then the Participant's vested
Account balance shall be applied toward the purchase of a
Preretirement Survivor Annuity.
Notwithstanding the other provisions of this Section 2.5.2(e), if the
Plan is designated in the Adoption Agreement as a Cash or Deferred
Profit Sharing Plan or a Profit Sharing Plan and the Employer does not
designate a life annuity distribution option in the Adoption
Agreement, the Qualified Joint and Survivor Annuity and Preretirement
Survivor Annuity forms of distribution shall not be available.
However, a Participant's surviving spouse shall be entitled to elect
distribution of the Participant's vested Account balance in the manner
provided by Section 3.8.3.
A Participant's vested Account balance is the aggregate value of the
Participant's vested account balances derived from employer and
employee contributions (including rollovers), whether vested before or
upon death, including the proceeds of insurance contracts, if any, on
the Participant's life. The provisions hereof shall apply to a
Participant who is vested in amounts attributable to employer
contributions, employee contributions (or both) at the time of death
or distribution.
The Participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the Plan. A surviving
spouse may elect to have such annuity distributed within the ninety
(90) day period commencing on the date of the Participant's death.
<PAGE>
(2) Election to Waive Annuity Payment. A Participant may elect
at any time during the applicable election period to waive the Joint
and Survivor Annuity form of benefit or the Preretirement Survivor
Annuity form of benefit (or both) and may revoke any such election at
any time during the applicable election period.
(3) Spousal Consent Required. An election to waive any annuity
form of benefit shall not take effect unless the spouse of the
Participant consents in writing to the election, such election
designates a specific beneficiary, including any class of
beneficiaries or contingent beneficiaries, or, solely in the case of a
waiver of a Joint and Survivor Annuity, a form of benefits which may
not be changed without spousal consent (or the consent of the spouse
expressly permits designations by the Participant without any
requirement of further consent by the spouse), and the spouse's
consent acknowledges the effect of such election and is witnessed by a
Plan representative or a notary public, or it is established to the
satisfaction of the Plan Administrator that such consent cannot be
obtained because there is no spouse or because the spouse cannot be
located. A spouse may not revoke the consent without the approval of
the Participant.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be obtained) shall
be effective only with respect to such spouse. A consent that permits
designations by the Participant without any requirement of further
consent by such spouse must acknowledge that the spouse has the right
to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in subsection (4) below.
(4) Written Explanations. The Plan Administrator shall provide
each Participant no less than 30 days and no more than 90 days before
the annuity starting date a written explanation of -
(a) the terms and conditions of a Joint and Survivor
Annuity;
(b) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity form of benefit;
(c) the rights of the Participant's spouse to consent to
a Participant's election;
<PAGE>
d) the right to make and the effect of a revocation of an
election.
The Plan Administrator shall provide to each Participant within
the applicable period a written explanation of a Preretirement
Survivor Annuity comparable to that provided with respect to a
Joint and Survivor Annuity.
(5) Applicable Period. The applicable period means with respect
to a Participant, whichever of the following periods ends last:
(a) The period beginning with the first day of the Plan
Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35.
(b) A reasonable period ending after the individual
becomes a Participant.
(c) A reasonable period ending after the Plan ceases to
fully subsidize costs.
(d) A reasonable period ending after Section 401(a)(11)
of the Code first applies to the Participant.
(e) A reasonable period ending after separation from
service in case of a Participant who separates before attaining
age 35.
For purposes of applying the foregoing, a reasonable period
ending after the enumerated events described in (b), (c) and (d)
is the end of the two-year period beginning one year prior to the
date the applicable event occurs and ending one year after that
date. In the case of a Participant who separates from service
before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning prior to separation
and ending one year after separation. If such a Participant there
after returns to employment with the Employer, the applicable
period for such Participant shall be redetermined.
(6) Applicable Election Period. The applicable election period
means -
(a) in the case of an election to waive a Joint and Survivor
Annuity, the ninety (90) day period ending on the annuity
starting date; and
(b) in the case of an election to waive a Preretirement
Survivor Annuity, the period which begins on the first day of the
Plan Year in which the Participant attains age
<PAGE>
thirty-five (35) and ends on the date of the Participant's death;
provided that in the case of a Participant who is separated from
service, such period shall not begin later than the date of such
separation from service.
A Participant who will not yet attain age 35 as of the end of any
current Plan Year may make a special qualified election to waive
the Preretirement Survivor Annuity for the period beginning on
the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election
shall not be valid unless the Participant receives a written
explanation of the Preretirement Survivor Annuity in such terms
as are comparable to the explanation required under subsection
(4). Preretirement Survivor Annuity coverage will be
automatically reinstated as of the first day of the Plan Year in
which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this
section.
(7) Annuity Starting Date. The annuity starting date means the
first day of the first period for which an amount is payable as an
annuity or any other form.
(8) Marriage Requirement. Notwithstanding the foregoing, the
benefits under the Plan shall not be provided in the form of a Joint
and Survivor Annuity or a Preretirement Survivor Annuity unless the
Participant and his spouse have been married throughout the one (1)
year period ending on the earlier of the Participant's annuity
starting date or the date of the Participant's death. If a Participant
marries within one (1) year before the annuity starting date and the
Participant and his spouse in such marriage have been married for at
least a one (1) year period ending on or before the date of the
Participant's death, the Participant and such spouse shall be treated
as having been married throughout the required period. A former spouse
shall be treated as the spouse or surviving spouse and a current
spouse will not be treated as the spouse or surviving spouse to the
extent provided under a qualified domestic relations order as
described in Section 414(p) of the Code.
(f) Terms of Annuity Contracts. Any annuity contract distributed from
the Plan must be nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a Participant or spouse shall
comply with the requirements of the Plan. If the Participant's benefit is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the requirements
of Section 401(a)(9) of the Code and the proposed regulations thereunder.
(g) Incidental Death Benefits. For calendar years beginning before
January 1, 1989, if the Participant's spouse is not the
<PAGE>
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.
(h) 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) and if the
Employer or any entity within the same controlled group does not maintain
another defined contribution plan (other than an employee stock ownership
plan as defined in Section 4975(e)(7) of the Code), the Participant's
account balance in the Plan will, without the Participant's consent, be
distributed to the Participant. However, if any entity within the same
controlled group as the Employer maintains another defined contribution
plan (other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code), then the Participant's account balance will be
transferred, without the Participant's consent, to the other Plan if the
Participant does not consent to an immediate distribution.
(i) 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.
(j) 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
<PAGE>
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 of age 62 or the Normal Retirement Age.
(k) 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
<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) the 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.
(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.
<PAGE>
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 2.5.2 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. A
Participant's spouse will be the designated beneficiary of the
proceeds of such Policies unless a qualified election has been made in
accordance with Section 2.5.2(e) of the Plan, if applicable. 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.
2.5.4 Advance Distributions. If the Employer elects in the Adoption
Agreement to permit advance distribution to a Participant or his Beneficiary
after his employment has terminated and before he is otherwise entitled to
distribution of his Distributable Benefit but in no event earlier than a
reasonable period following the Distribution 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.
<PAGE>
If the Employer elects in the Adoption Agreement to forfeit nonvested amounts
immediately upon distribution of the Employee's entire vested account balance on
termination of service, 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 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.
2.5.5 Hardship Distributions. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing
Plan and the Employer elects in the Adoption Agreement to permit 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) Cost of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse,
children or dependents; or
<PAGE>
(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.
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.
2.5.6 In Service Distributions.
(a) Cash or Deferred Profit Sharing Plans. If the Plan is designated
in the Adoption Agreement as a Cash or Deferred Profit Sharing plan and if
the Employer elects in the Adoption Agreement to permit distributions to a
Participant after attaining age 59 1/2 but prior to his termination of
employment, a Participant shall be entitled to receive a distribution of
all or a part of his interest in the Plan upon filing a written request
with the Plan Administrator; provided that no distribution shall be made
unless the interest of the Participant in the Account from which the
distribution is to be made is fully vested and nonforfeitable and the
balance in the Account to be distributed has accumulated for at least two
(2) years or the individual has been a Participant for five (5) or more
Plan Years; and the distribution of Elective Deferrals and Qualified
Non-Elective Contributions satisfy the limitations imposed by Part II,
Article VII. Any distribution shall be subject to the written consent of
the Participant's spouse.
<PAGE>
(b) Profit Sharing Plans. If the Plan is designated in the Adoption
Agreement as a Profit Sharing Plan and if the Employer elects in the
Adoption Agreement to permit distributions to a Participant prior to his
termination of employment, a Participant shall be entitled to receive a
distribution of all or part of his interest in the Plan upon filing a
written request with the Plan Administrator; provided that no distribution
shall be made unless the interest of the Participant in the Account from
which the distribution is to be made is fully vested and nonforfeitable and
the balance in the Account to be distributed has accumulated for at least
two (2) years or the individual has been a Participant for five (5) or more
Plan Years; provided further that in-service distributions shall be
permitted subject to the terms of Section 2.5.5 if the Employer elects in
the Adoption Agreement to have such provision apply. Any distribution shall
be subject to the written consent of the Participant's spouse.
(c) All Plans. Upon attainment of his Normal Retirement Date, a
Participant shall be entitled to receive a distribution of all or a part of
his interest in the Plan upon filing a written request with the Plan
Administrator. In service distributions are permitted at the election of
the Participant for amounts held in a Segregated Account attributable to a
rollover from another plan regardless of age or periods of participation.
Any distribution shall be subject to the written consent of the
Participant's spouse.
<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 Adoption Agreement 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 allocation.
For purposes of computing the minimum allocation, Compensation shall mean a
Participant's compensation as defined in Section 3.2.1(h) of the Plan.
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 Employer has provided in the Adoption Agreement that the
minimum allocation or benefit requirement applicable to top-heavy plans
will be met in the other plan or plans.
(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.
<PAGE>
(c) The vested and nonforfeitable interest of each Participant shall
be equal to the percentage determined under the vesting schedule specified
in the Adoption Agreement if the Plan becomes a Top Heavy Plan, or if no
vesting schedule is specified, the percentage determined under the
following schedule:
<TABLE>
<CAPTION>
Years of Service Percentage
<S> <C>
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
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.
No decrease in a Participant's nonforfeitable percentage may occur in the
event the Plan's status as top-heavy changes for any Plan Year. 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)(l)(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)(l)(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;
(iv) any person who owns directly or indirectly more than one
(1%) percent of the outstanding stock of the Employer or stock
possessing more than one (1%) percent of the total combined voting
power of all stock of the Employer or, in the
<PAGE>
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 excludable 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.
(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
<PAGE>
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.
(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.
<PAGE>
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.
(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 in the
Adoption Agreement as of which account balances or accrued benefits are
valued for purposes of calculating the top-heavy ratio.
(j) "Present Value": Present value shall be based only on the
interest and mortality rates specified in the Adoption Agreement.
(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.
2.6.3 Pairing Requirements. If an Employer adopts two or more
defined contribution plans by executing Adoption Agreements pursuant to this
Plan or another prototype plan for which the Mass Submitter is the same, the
following provisions shall apply:
(a) Only one of the Adoption Agreements may provide for permitted
disparity by integration with Social Security.
(b) For each Plan Year in which the paired plans are top-heavy the
Employer shall provide a minimum contribution equal to three (3%) percent
of Compensation for each Non-Key Employee (i) under the paired plan
designated by the Employer in the Adoption
<PAGE>
Agreement if the plans benefit the same Participants, or in the case of a
plan subject to Code Section 401(k) or 401(m), the same Participants are
eligible to make elective deferrals or employee contributions, or (ii)
under both paired plans if the plans benefit the same participants. Note:
The same eligibility requirements in Section A of the Adoption Agreement
must be selected.
(c) In any Plan Year in which the paired plans are top-heavy, i.e. the
top-heavy ratio exceeds sixty (60%) percent, the denominators of the
defined benefit fraction and defined contribution fraction in Section
3.2.1(d) shall be computed by multiplying the dollar limitation by 1.0
instead of by 1.25.
<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 (whether or not the Employee was a Participant
for the entire Plan Year) 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.
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.
<PAGE>
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. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under regulations under
Section 401(k) of the Code.
(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.
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
<PAGE>
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 whether or not the Employee was a
Participant for the entire Plan Year. 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. Forfeitures of Matching
Contributions shall be included as contribution percentage amounts only to the
extent such forfeitures are used to reduce or supplement the Matching
Contributions, as specified in the Adoption Agreement. If so elected in the
Adoption Agreement, the Employer may include Qualified Non-Elective
Contributions in the contribution percentage amounts. The Employer may also
elect to use Elective Deferrals in the contribution percentage amounts so long
as the ADP test is met before the Elective Deferrals are used in the ACP test
and continues to be met following the exclusion 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.
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
<PAGE>
arrangements described in Section 401(k) of the Code that are maintained by
the Employer, shall be determined as if the total of such contribution
percentage amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate
if mandatorily disaggregated under regulations under section 401(m) of the
Code.
(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.
(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
<PAGE>
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.
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 aggregation
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, 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
<PAGE>
accounts such Excess Aggregate Contributions were allocated for the preceding
Plan Year. Excess Aggregate Contributions of Participants who are subject to
the family member aggregation rules shall be allocated among the family
members in proportion to the Employee and Matching Contributions (or amounts
treated as Matching Contributions) of each family member that is combined to
determine the combined ACP. 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 may either be reallocated to the
accounts of Employees who are not Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in the Adoption
Agreement.
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 Qualified Non-Elective
Contribution Account or Elective Contribution Account).
2.7.8 Limitation on Distributions. Except as otherwise provided in
this Article, Elective Deferrals and Qualified Non-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, other than an employee stock ownership plan (as
defined in Section 4975(e) or Section 409 of the Code) or a simplified
employee pension plan as defined in Section 408(k) of the Code.
(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
<PAGE>
Plan after the disposition, but only with respect to employees who continue
employment with the corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) if such corporation continues to maintain this Plan,
but only with respect to employees who continue employment with such
subsidiary.
(d) The attainment of age 59 1/2.
(e) The Hardship of a Participant in accordance with Section 2.5.5.
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. In addition, distributions after March 31, 1988 that are triggered by any
of the first three events enumerated above must be made in a lump sum.
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.
<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. 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 Employer
or 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.
(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
<PAGE>
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 to Segregated Funds. To the extent that funds in the
Trust Fund attributable to a Participant's Accounts 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.
(h) Transfers From Segregated Funds. 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 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
<PAGE>
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 from the Trust Fund to a Segregated Fund as of any
date other than a Valuation Date pursuant to the terms of the Plan, the
adjustment to be made pursuant to this Section shall be made as of the
date as of which such 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 the adjustments to be
made pursuant to this Section shall be made in the manner specified in the
Adoption Agreement.
<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 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, then 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 not exceed the maximum permissible amount,
which shall equal the lesser of: (a) thirty thousand dollars ($30,000.00) or, if
greater, one-fourth of the dollar limitation 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 Sections 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.
(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;
(iv) Excess Elective Deferrals, Excess Contributions and Excess
Aggregate Contributions; and
(v) Payments 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
<PAGE>
benefit fund as defined in section 419(e) of the Code, maintained by
the Employer.
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. Any Excessive Annual Addition attributable to a
reasonable error in determining the amount of Elective Deferrals that may
be made on behalf of a Participant under the limits of Section 415 of the
Code shall next be returned to the Participant.
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.
(c) Participation in Certain Other Plans. If in addition to this
Plan, the Participant is covered under another qualified regional prototype
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
<PAGE>
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 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
regional prototype defined contribution plans. Any excess amount
attributed to this Plan will be disposed in the manner described in
subsection (b), above
<PAGE>
If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a regional
prototype plan, Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year shall be
limited as provided above as though the other plan were a regional
prototype plan unless the Employer specifies other limitations in the
Adoption Agreement.
For purposes hereof, the excess amount is the excess of the
Participant's annual additions for the Limitation Year over the
maximum permissible amount and a regional prototype plan is a plan the
form of which is the subject of a favorable opinion letter from the
Internal Revenue Service.
If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of
the Participant's defined benefit plan fraction and defined
contribution plan fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's
account under this Plan for any Limitation Year shall be limited in
the manner specified in the Adoption Agreement.
(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. 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 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 the
<PAGE>
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 1, 1987.
The annual addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as annual
additions.
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
<PAGE>
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)(l) 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.
(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 as elected in the
Adoption Agreement by the Employer, Compensation shall mean all of a
Participant's:
(i) Wages, Tips and Other Compensation Box on Form W-2. Wages as
defined in Section 3401(a) and all other payments of compensation to
an employee by the employer (in the course of the employer's trade or
business) for which the employer is required to furnish the employee a
written statement under Sections 6041(d) and 6051(a)(3) of the Code.
Compensation must be determined without regard to any rules under
Section 3401(a) that limit the remuneration included in wages based on
the nature or location of the employment or the services rendered
(such as the exception for agricultural labor in Section 3401(a)(2) of
the Code).
(ii) Section 3401(a) Wages. Wages as defined in section 3401(a)
of the Code for the purposes of income tax withholding at the source
but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or
the services performed (such as
<PAGE>
the exception for agricultural labor in section 3401(a)(2) of the
Code).
(iii) Section 415 Safe-Harbor Compensation. Wages, salaries and
fees for professional services and other amounts received without
regard to whether or not an amount is paid in cash for personal
services actually rendered in the course of employment for the
employer maintaining the Plan to the extent that the amounts are
includible in gross income (including but not limited to commissions
paid salesmen, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in section 1.62-2(c) of the
Regulations), but excluding:
(I) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross
income for the taxable year in which contributed, or employer
contributions under a simplified employee pension plan to the
extent such contributions are 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 contract
described in Section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of
the Employee).
For any self-employed individual, 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 made available during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant who is permanently and totally disabled (as defined
in section 22(e)(3) of the Code) is the compensation such
Participant would have received for the Limitation Year if the
Participant had been paid at the rate of compensation paid
immediately before becoming
<PAGE>
permanently and totally disabled; such imputed compensation for
the disabled Participant may be taken into account only if the
Participant is not a Highly Compensated Employee and
contributions made on behalf of such Participant are
nonforfeitable when made.
(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
(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
<PAGE>
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.
<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.
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 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
<PAGE>
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.
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.
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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.
<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 and the Adoption Agreement. 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.
(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.
<PAGE>
(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.
3.4.3 Information Generally Available. The Plan Administrator shall
make copies of this Plan and Trust, the Adoption Agreement, 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,
<PAGE>
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.
<PAGE>
ARTICLE V
TRUSTEE
3.5.1 Acceptance of Trust. The Trustee, by joining in the execution
of the Adoption Agreement to 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 the Plan
Administrator on any point requiring construction or interpretation of the Plan
documents.
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
<PAGE>
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.
(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.
<PAGE>
(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.
(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
<PAGE>
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.
<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,
real estate or any interest therein, 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 or
other bank 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.
(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.
<PAGE>
(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 in-service distributions to a
Participant prior to his Normal Retirement Date in accordance with
Section 2.5.6(a) or (b) and the Plan does not take into account
contributions to provide benefits under Social Security in the
allocation of contributions by the Employer, 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.
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
<PAGE>
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;
(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.
<PAGE>
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.
3.6.5 Investment Control Option. If the Employer elects in the
Adoption Agreement to permit Participants to direct the investment of their
Accounts, each Participant may elect to have transferred to a Segregated Fund
and exercise investment control by appropriate direction to the Trustee with
respect to funds in the Trust Fund which do not exceed the balances in his
Accounts. 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. 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,
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 as the Trustee deems
<PAGE>
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 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.
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. 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.
<PAGE>
ARTICLE VII
LOANS
3.7.1 Authorization. If the Employer elects in the Adoption
Agreement to permit loans to Participants or Beneficiaries, the Trustee shall
establish a participant loan program in compliance with Labor Regulation section
2550.408b. 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.
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
<PAGE>
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, if any, 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), (m) and (o) of the Code shall be aggregated.
All loans must be adequately secured and bear a reasonable interest rate. No
Participant loan shall exceed the present value of the Participant's vested
Account balance. 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.
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.
<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(e)(3), 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. 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 die 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.
3.8.3 Surviving Spouse Election. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing
Plan and the Employer does not elect a life annuity form of distribution in the
Adoption Agreement, a surviving spouse, who has not consented to an alternate
designation under Section 3.8.1, above, may elect to have distribution of the
Participant's vested Account balance commence within the 90-day period following
the date of the Participant's death. The Account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of account balances for other
types of distributions.
<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
Administrator's adverse determination shall be final, binding and conclusive.
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
<PAGE>
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.
<PAGE>
ARTICLE X
AMENDMENT AND TERMINATION
3.10.1 Right to Amend.
(a) The Employer may at any time or times amend the Plan and the
provisions of the Adoption Agreement, in whole or in part. Subject to subsection
(b), an Employer that amends the Plan shall no longer participate in this
prototype plan and shall be considered to have an individually designed plan.
(b) The Employer may change the choice of options in the Adoption
Agreement, add overriding language in the Adoption Agreement when such language
is necessary to satisfy Section 415 or 416 of the Code because of the required
aggregation of multiple plans and add certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption shall
not cause the Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of the minimum funding
requirements under Section 412(d) of the Code, shall no longer participate in
this prototype plan and shall be considered to have an individually designed
plan.
An Employer that has adopted a standardized regional prototype plan may amend
the trust or custodial account document provided such amendment merely involves
the specifications of the names of the Plan, Employer, trustee or custodian,
Plan Administrator or other fiduciaries, the trust year, or the name of any
pooled trust in which the Plan's trust will participate.
An Employer that has adopted a non-standardized regional prototype plan will not
be considered to have an individually designed plan merely because the Employer
amends administrative provisions of the trust or custodial account document
(such as provisions relating to investments and duties of trustees) so long as
the amended provisions are not in conflict with any other provision of the Plan
and do not cause the Plan to fail to qualify under Section 401(a) of the Code.
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
<PAGE>
diverted to purposes other than the exclusive benefit of Employees or their
Beneficiaries;
(b) Increase the duties or liabilities of the Trustee without 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.
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 or if the Plan is deemed amended by an automatic
change to or from a top-heavy vesting schedule, 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
<PAGE>
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.
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 to Sponsor. The Employer expressly delegates
authority to the Plan Sponsor the right to amend any part of the Plan on its
behalf to the extent necessary to preserve the qualified status of the Plan. For
purposes of amendments by the Plan Sponsor, the Mass Submitter shall be
recognized as the agent of the Plan Sponsor. If the Plan Sponsor does not adopt
the amendments made by the Mass Submitter, the Plan shall no longer be identical
to or a minor modifier of the mass submitter plan. The Plan Sponsor shall submit
a copy of the amendment to each Employer who has adopted the Plan after first
having received a ruling or favorable determination from the Internal Revenue
Service that the Plan as amended satisfies the applicable requirements of the
Code. The Employer may revoke the authority of the Plan Sponsor to amend the
Plan on its behalf by written notice to the Plan Sponsor of such revocation.
<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. In addition, the Employer, by appropriate election in the
Adoption Agreement, 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. 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
<PAGE>
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, 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.
<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 or the Adoption Agreement
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.
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
<PAGE>
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.
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
<PAGE>
(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 (but taking into account only the present
value of the benefits actually accrued and not taking into account the present
value of any Employer subsidy for early retirement) 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 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.
If the Employer so elects in the Adoption Agreement, 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
<PAGE>
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.
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
<PAGE>
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.
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 Adoption Agreement, 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. If the Plan of the
Employer fails to attain or retain qualification, the Plan of the Employer shall
no longer participate in this prototype and shall be considered an individually
designed plan.
<PAGE>
MODEL SECTION 401(a)(31) AMENDMENT TO
UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
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 distributee
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 distributee 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 distributee, 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 distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; 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).
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 rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
Section 2.3. Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former employee's surviving
spouse and the employee's or 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 distributee.
<PAGE>
MODEL SECTION 401(a)(17) AMENDMENT TO
UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
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.
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.
<PAGE>
REVENUE PROCEDURE 93-47 AMENDMENT TO
UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
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
DATAIR Employee Benefit Systems, Inc. Defined Contribution 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."
<PAGE>
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DATAIR MASS-SUBMITTER PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
------------------------------------------------------------
<PAGE>
DATAIR MASS-SUBMITTER PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
ARTICLE DESCRIPTION PAGE
<S> <C> <C>
I INTRODUCTION 0
1.1.1 Creation and Title 0
1.1.2 Effective Date 0
1.1.3 Purpose 0
II DEFINITIONS 0
PART II
I PARTICIPATION 0
2.1.1 Eligibility Requirements 0
2.1.2 Commencement of Participation 0
2.1.3 Participation Upon Re-Employment 0
2.1.4 Termination of Participation 0
2.1.5 Employer's Determination 0
2.1.6 Omission of Eligible Employee 0
2.1.7 Inclusion of Ineligible Participant 0
2.1.8 Election Not to Participate 0
2.1.9 Change in Status 0
2.1.10 Existing Participants 0
II CONTRIBUTIONS 0
2.2.1 Employer Contributions 0
2.2.2 Elective Contributions by the Employer
on Behalf of Electing Employees 0
2.2.3 Employee Contributions 0
2.2.4 Return of Contributions 0
III ALLOCATIONS 0
2.3.1 Profit Sharing and Money Purchase
ARTICLE DESCRIPTION PAGE
Pension Plans 0
2.3.2 Cash or Deferred Plans 0
2.3.3 Integration with Social Security 0
2.3.4 Limitation 0
<PAGE>
2.3.5 Minimum Allocation 0
2.3.6 Fail-Safe Allocation 0
IV BENEFITS 0
2.4.1 Distributable Benefit 0
2.4.2 Vesting 0
2.4.3 Leave of Absence 0
2.4.4 Re-Employment 0
2.4.5 Distribution Date 0
2.4.6 Forfeitures 0
V DISTRIBUTIONS 0
2.5.1 Commencement of Distribution 0
2.5.2 Method of Distribution 0
2.5.3 Nature of Distributions 0
2.5.4 Advance Distributions 0
2.5.5 Hardship Distributions 0
2.5.6 In Service Distributions 0
VI CONTINGENT TOP HEAVY PROVISIONS 0
2.6.1 Top Heavy Requirements 0
2.6.2 Top Heavy Provisions 0
2.6.3 Pairing Requirements 0
VII SPECIAL CODA LIMITATIONS 0
2.7.1 Limitation on Deferral Percentage for
Highly Compensated Employees 0
2.7.2 Multiple Plan Limitations 0
2.7.3 Limitation on Matching Contributions 0
2.7.4 Special Rules 0
2.7.5 Distribution of Excess Elective
Deferrals 0
2.7.6 Distribution of Excess Contributions 0
2.7.7 Distribution of Excess Aggregate
Contributions 0
2.7.8 Limitation on Distributions 0
2.7.9 Limitation on Elective Deferrals 0
ARTICLE DESCRIPTION PAGE
PART III
I ACCOUNTING 0
3.1.1 Accounts 0
3.1.2 Adjustments 0
II LIMITATIONS 0
3.2.1 Limitations on Annual Additions 0
3.2.2 Controlled Businesses 0
III FIDUCIARIES 0
3.3.1 Standard of Conduct 0
3.3.2 Individual Fiduciaries 0
<PAGE>
3.3.3 Disqualification from Service 0
3.3.4 Bonding 0
3.3.5 Prior Acts 0
3.3.6 Insurance and Indemnity 0
3.3.7 Expenses 0
3.3.8 Agents, Accountants and Legal Counsel 0
3.3.9 Investment Manager 0
3.3.10 Finality of Decisions or Acts 0
3.3.11 Certain Custodial Accounts
and Contracts 0
IV PLAN ADMINISTRATOR 0
3.4.1 Administration of Plan 0
3.4.2 Disclosure Requirements 0
3.4.3 Information Generally Available 0
3.4.4 Statement of Accrued Benefit 0
3.4.5 Explanation of Rollover Treatment 0
V TRUSTEE 0
3.5.1 Acceptance of Trust 0
3.5.2 Trustee Capacity - Co-Trustee 0
3.5.3 Resignation, Removal and Successors 0
3.5.4 Consultations 0
3.5.5 Rights, Powers and Duties 0
3.5.6 Trustee Indemnification 0
3.5.7 Changes in Trustee Authority 0
VI TRUST ASSETS 0
3.6.1 Trustee Exclusive Owner 0
ARTICLE DESCRIPTION PAGE
3.6.2 Investments 0
3.6.3 Administration of Trust Assets 0
3.6.4 Segregated Funds 0
3.6.5 Investment Control Option 0
VII LOANS 0
3.7.1 Authorization 0
3.7.2 Spousal Consent 0
3.7.3 Limitations 0
3.7.4 Availability 0
3.7.5 Prohibitions 0
VIII BENEFICIARIES 0
3.8.1 Designation of Beneficiaries 0
3.8.2 Absence or Death of Beneficiaries 0
3.8.3 Surviving Spouse Election 0
IX CLAIMS 0
3.9.1 Claim Procedure 0
3.9.2 Appeal 0
X AMENDMENT AND TERMINATION 0
3.10.1 Right to Amend 0
<PAGE>
3.10.2 Manner of Amending 0
3.10.3 Limitations On Amendments 0
3.10.4 Voluntary Termination 0
3.10.5 Involuntary Termination 0
3.10.6 Withdrawal By Employer 0
3.10.7 Powers Pending Final Distribution 0
3.10.8 Delegation to Sponsor 0
XI PORTABILITY 0
3.11.1 Continuance by Successor 0
3.11.2 Merger With Other Plan 0
3.11.3 Transfer From Other Plans 0
3.11.4 Transfer to Other Plans 0
XII MISCELLANEOUS 0
3.12.1 No Reversion to Employer 0
3.12.2 Employer Actions 0
3.12.3 Execution of Receipts and Releases 0
3.12.4 Rights of Participants Limited 0
ARTICLE DESCRIPTION PAGE
3.12.5 Persons Dealing With Trustee Protected 0
3.12.6 Protection of Insurer 0
3.12.7 No Responsibility for Act of Insurer 0
3.12.8 Inalienability 0
3.12.9 Domestic Relations Orders 0
3.12.10 Authorization to Withhold Taxes 0
3.12.11 Missing Persons 0
3.12.12 Notices 0
3.12.13 Governing Law 0
3.12.14 Severability of Provisions 0
3.12.15 Gender and Number 0
3.12.16 Binding Effect 0
3.12.17 Qualification Under Internal
Revenue Laws 0
</TABLE>
------------------------------------------------------------
ADOPTION AGREEMENT
FOR THE DATAIR MASS-SUBMITTER PROTOTYPE
NON-STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
------------------------------------------------------------
<PAGE>
ADOPTION AGREEMENT
FOR THE DATAIR MASS-SUBMITTER PROTOTYPE
NON-STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
The DATAIR Mass-Submitter Prototype Non-Standardized Cash or Deferred
Profit Sharing Plan and Trust ("the Plan and Trust") is hereby adopted by:
UNIONBANCORP, INC. (the "Employer").
The Plan and Trust as applicable to the Employer shall be known as:
UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
The Plan and Trust is effective as of: January 1, 1998.
(Specify, if applicable.)
( ) a. The Plan and Trust is an amendment of a preexisting Plan which was
originally effective as of:
.
----------------------------
( ) b. The Plan and Trust is an amendment and restatement of a preexisting
Plan which was originally effective as of:
.
----------------------------
*** CAUTION ***
FAILURE TO FILL OUT THE ADOPTION AGREEMENT PROPERLY MAY
RESULT IN DISQUALIFICATION OF THE PLAN
PART I. The following identifying information pertains to the Employer and the
Plan and Trust:
1. Employer Address :122 W. MADISON
OTTAWA, IL 61350
2. Employer Telephone :815-433-7030
3. Employer Tax ID :36-3145350
4. Employer Fiscal Year :January 1 to December 31
5. Three Digit Plan Number:002
6. Trust ID Number :36-7058510
7. Plan Fiscal Year (must :January 1 to December 31
be 12 consecutive mos.)
8. Short Initial Plan Year:N/A
9. Plan Agent :UNIONBANCORP, INC. 122 W. MADISON
<PAGE>
OTTAWA, IL 61350
10. Plan Administrator :UNIONBANCORP, INC. 122 W. MADISON
OTTAWA, IL 61350
11. Plan Administrator :36-3145350
ID Number
12. Plan Trustees :UNION BANK TRUST DEPARTMENT
200 E. MAIN STREET
STREATOR, IL 61364
13. IRS Determination :N/A
Letter Date
(Leave blank for a New Plan)
14. IRS File Folder Number :N/A
(Leave blank for a New Plan)
15. Legal Organization of Employer:
( ) a. Sole Proprietorship
( ) b. Partnership
(X) c. C Corporation
( ) d. S Corporation
( ) e. Not for Profit Corporation
( ) f. Personal Service Corporation
( ) g. Other - Explain :
16. Business Code :6090
17. State of Legal :ILLINOIS
Construction
18. Other Members of a Controlled Group or Affiliated Service Group:
(If any, each member should sign Adoption Agreement or otherwise
satisfy applicable participation requirements. Leave blank if not
applicable)
Controlled Group
(X) a. Not Applicable
( ) b. Other Members
Affiliated Service Group
(X) a. Not Applicable
( ) b. Other Members
<PAGE>
PART II. The Plan contains certain predetermined design features intended
to provide the statutory requirement or most commonly adopted feature but
permits the selection of alternative features. If an Employer desires to
retain the predetermined design feature, select the provision designated
Plan Provision. If an alternative design feature is desired, select the
appropriate provision. Unless specifically provided to the contrary, only
one selection may be made for each design category. Section references are
to relevant Plan Sections. Defined terms have the meanings provided in the
Plan.
A. Eligibility and Service Provisions
1. Eligible Employees - Section 1.2.23 provides that all employees, including
employees of certain related businesses and leased employees are
eligible except for certain union members and non-resident aliens.
(Specify all applicable)
(X) a. Plan Provision
( ) b. Include members of collective bargaining unit
( ) c. Exclude self-employed persons
( ) d. Exclude Employees not employed by the Employer
( ) e. Exclude commissioned Employees
( ) f. Exclude hourly Employees
( ) g. Exclude salaried Employees
( ) h. Other - Specify. (Cannot discriminate in favor of Highly
Compensated Employees).
2. Eligibility Requirements (See Section 2.1.1) - An Employee is eligible to
participate in Non-Elective Contribution portions of the Plan if he
satisfies the following requirements during the Eligibility
Computation Period. (Specify one option or any combination other than
c and d. Selecting more than one option means that an Employee must
meet all indicated requirements for eligibility, except for option e.
Option e overrides all other requirements):
( ) a. Date of hire, i.e. no age or service required (no other choices
may be selected)
(X) b. Minimum Age of 20.5 years (Not to exceed 21, partial years may
be used)
(X) c. Minimum of 6 months of service (Cannot require more than 24
months, or more than 12 months if full vesting after not more
than 2 Years of Service is not selected; if periods other than
whole years are selected an Employee cannot be required to
complete any specified number of Hours of Service to receive
credit for the fractional year)
( ) d. _____ Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only, select an
additional option if this provision is selected)
( ) f. Not applicable. Non-Elective Contributions are not permitted.
3. For the purposes of having Elective Contributions made on the Employee's
behalf, Section 2.1.1 provides that, unless the Employer specifies
otherwise in the Adoption Agreement, an Employee must complete 1000
<PAGE>
Hours of Service during the Eligibility Computation Period. For these
purposes, an Employee is eligible if he satisfies the following
requirements: (Select all applicable. Selecting more than one option
means that an Employee must meet all indicated requirements for
eligibility, except for option e. Option e overrides all other
requirements):
( ) a. Date of hire, i.e. no age or service requirement (No other
choices may be selected)
(X) b. Minimum Age of 20.5 years (Not to exceed 21, partial years may
be specified)
(X) c. Minimum of 6 months of service (Not to exceed 12, if other than
full years are selected hours may not be specified)
( ) d. _____ Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only, select an
additional option if this provision is selected)
4. Matching Eligibility Requirements (See Section 2.1.1) - An Employee is
eligible to participate in the Matching Contributions portion of the
Plan if he satisfies the following requirements during the Eligibility
Computation Period. (Specify one option or any combination other than
c and d. Selecting more than one option means that an Employee must
meet all indicated requirements for eligibility, except for option e.
Option e overrides all other requirements):
( ) a. Date of hire, i.e. no age or service required (No other choices
may be selected)
(X) b. Minimum Age of 20.5 years (Not to exceed 21, partial years may
be used)
(X) c. Minimum of 6 months of service (Cannot require more than 24
months, or more than 12 months if full vesting after not more
than 2 Years of Service is not selected; if periods other than
whole years are selected an Employee cannot be required to
complete any specified number of Hours of Service to receive
credit for the fractional year)
( ) d. _____ Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only, select an
additional option if this provision is selected)
( ) f. Not applicable. Matching Contributions are not permitted.
5. Eligibility Computation Period - Section 1.2.22 provides that the initial
eligibility computation period begins on the date of hire and the
subsequent periods commence on each annual anniversary of such date.
(Select one)
( ) a. Plan Provision
(X) b. The eligibility computation periods subsequent to the initial
eligibility computation period are the Plan Year beginning with
the first Plan Year commencing prior to the first anniversary
of the employment commencement date.
<PAGE>
6. Hour of Service - Section 1.2.35 provides that service will be credited on
the basis of actual hours for which the employee is paid or entitled
to payment. If records of actual hours are not maintained, credit is
given on the basis of: (Select one)
(X) a. Plan Provision - Records are maintained
( ) b. Days Worked - An Employee will be credited with 10 Hours of
Service if he is credited with at least 1 Hour of Service
during the day
( ) c. Weeks Worked - An Employee will be credited with 45 Hours of
Service if he is credited with at least 1 Hour of Service
during the week
( ) d. Semi-Monthly Payroll Period - An Employee will be credited with
95 Hours of Service if he is credited with at least 1 Hour of
Service during the payroll period
( ) e. Months worked - An Employee will be credited with 190 Hours of
Service if he is credited with at least 1 Hour of Service
during the month
7. Service with Predecessor Employers - Section 1.2.35 provides that service
with predecessor employers is treated as service for the Employer.
Where applicable, identify the predecessor employer(s) and any
document(s) which provides for the crediting of service with such
predecessor(s):
(X) a. Not applicable.
( ) b. Service with the following entities shall be credited as
service under this plan:
---------------------------------------------
Service with the above entities has been determined under the
terms of the following documents:
---------------------------------------------
8. Entry Date - Section 2.1.2 provides that an Employee who satisfies any
eligibility requirements enters the Plan on the Entry Date. For this
purpose the Entry Date is the: (Select one)
( ) a. First day of next Plan Year or _____ months (Not to exceed 6)
after satisfying the eligibility requirements, if earlier
( ) b. First day of _____ month (Not more than 6) after satisfying
eligibility requirements or the first day of the next Plan
Year, if earlier
( ) c. Date of satisfying the eligibility requirements
( ) d. First day of Plan Year in which the eligibility requirements
are satisfied
( ) e. First day of Plan Year nearest to the date the eligibility
requirements are satisfied
( ) f. Semiannual - ( ) first or ( ) last day of 6 month periods,
beginning with first of Plan Year, coincident with or after
satisfying eligibility requirements
(X) g. Quarterly - (X) first or ( ) last day of 3 month periods,
beginning with first of Plan Year, coincident with or after
satisfying eligibility requirements
<PAGE>
( ) h. Monthly - ( ) first or ( ) last day of each month of the Plan
Year, coincident with or after satisfying eligibility
requirements
( ) i. First day of the Plan Year coincident with or immediately
following the date the eligibility requirements are satisfied.
(May be selected only if eligibility requirements of Plan do
not require more than 6 months of service (18 months if 100%
immediate vesting) and attainment of age 20 1/2.)
( ) j. Last day of the Plan Year coincident with or after satisfying
the eligibility requirements. (May be selected only if
eligibility requirements of Plan do not require more than 6
months of service (18 months if 100% immediate vesting) and
attainment of age 20 1/2).
NOTE: The Entry Date should be coordinated with the Compensation
Computation Period.
9. Break in Service - Section 1.2.8 provides that a Break in Service occurs if
an Employee fails to complete more than 500 hours of service during
the applicable computation period unless a lesser number is specified.
(Select one)
(X) a. Plan Provision
( ) b. A Break will occur if the Employee fails to complete more
than ____ (Not to exceed 500) Hours of Service
B. Date Provisions
1. Anniversary Date - Section 1.2.5 provides that the Anniversary Date is the
last day of the Plan Year unless another date is specified. (Select
one)
(X) a. Plan Provision - No other date is specified.
( ) b. The first day of the Plan Year.
( ) c. Other - Specify. (Must be at least annually)
2. Valuation Date - Section 1.2.63 provides that the Valuation Date is the date
or dates specified in the Adoption Agreement. (Select one)
( ) a. AnniversaryDate
( ) b. Semiannually on the last day of each 6 month period beginning
with the first of the Plan Year
(X) c. Quarterly on the last day of each 3 month period beginning with
the first of the Plan Year
( ) d. Monthly on the last day of each month of the Plan Year
( ) e. Last day of Plan Year (use option (a) if Anniversary Date is
last day of the Plan Year
( ) f. Other - Specify. (Must be at least annually)
3. Normal Retirement Date - Section 1.2.46 permits the adoption of a Normal
Retirement Date. (Select one)
( ) a. Date Normal Retirement Age is attained
<PAGE>
(X) b. First day of month in which Normal Retirement Age is attained
( ) c. First day of month nearest date Normal Retirement Age is
attained
( ) d. First day of month coincident with or next following the date
Normal Retirement Age is attained
( ) e. Anniversary Date nearest date Normal Retirement Age is attained
( ) f. Anniversary Date coincident with or next following date Normal
Retirement Age is attained
4. Normal Retirement Age - For each Participant the Normal Retirement Age is:
(X) a. Age 65 (not to exceed 65)
( ) b. The later of age ____ (not to exceed 65) or the ____ (not to
exceed the fifth (5th)) anniversary of the participation
commencement date, if later. The participation commencement
date is the first day of the Plan Year in which a Participant
commenced participation in the Plan. Solely for Plan Years
beginning before 1988, if the normal retirement age was
determined by reference to the anniversary of the participation
commencement date, the anniversary for participants who first
commenced participation before the first Plan Year beginning on
or after January 1, 1988 is the earlier of the tenth
anniversary of the date the participant commenced participation
in the Plan (or such anniversary as had been elected by the
Employer if less than ten) or the fifth anniversary of the
first day of the first Plan Year beginning on or after January
1, 1988.
( ) c. Age ____ and the ____ anniversary of the participation
commencement date, if both requirements are met earlier than
the later age of 65 or the fifth (5th) anniversary of
participation
5. Early Retirement Date - Section 1.2.17 permits the adoption of an Early
Retirement Date: (Select one)
( ) a. The Plan does not provide an early retirement date
( ) b. The actual date the Participant attains the Early Retirement
Age
( ) c. The Anniversary Date coincident with or next following the date
the Participant attains the Early Retirement Age
( ) d. The Valuation Date coincident with or next following the date
the Participant attains the Early Retirement Age
(X) e. The (X) first ( ) last day of the month coincident with or next
following the date the Participant attains the Early Retirement
Age
( ) f. Other - Specify. (Cannot discriminate in favor of Highly
Compensated Employees)
6. Early Retirement Age: (Select all applicable. If more than one option is
selected, Early Retirement Age is attained on the first date the requirements of
any option are met.)
<PAGE>
( ) a. Age _____ (not to exceed 65)
(X) b. Age 55 and 10 Years of Service
( ) c. Age ____ and ____ Years of Service while a Participant
( ) d. _____ years prior to the Normal Retirement Age
( ) e. Sum of age and Years of Service equals _____
( ) f. Not Applicable
NOTE: Cannot discriminate in favor of Highly Compensated Employees.
C. Compensation
1. Compensation - See Section 1.2.10. For purposes of the Plan a Participant's
compensation is based on the Compensation Computation Period and
shall: (Select a, b, or c and all of d and e which are applicable)
(X) a. Equal compensation as defined in Section 3401(a) except as
indicated below
( ) b. Equal compensation as defined in Section 415(c)(3) except as
indicated below
( ) c. Equal compensation as defined for the Wages, Tips, and Other
Compensation Box on Form W-2 except as indicated below
(X) d. Include compensation which is not includible in gross income by
reason of Section
( ) Sections 402(h)(1)(B)(SEP deferrals)
(X) 125 (Cafeteria Plan)
(X) 402(a)(8) (401(k) deferrals)
( ) 403(b)
( ) 457(b)
( ) e. Exclude compensation which is for ( ) overtime ( )
discretionary bonuses
( ) Bonuses
( ) taxable employee benefits
( ) in excess of $_______
( ) Other exclusion - Specify. (Cannot discriminate in favor of Highly
Compensated Employees)
NOTE: Exclusions are permissible if the Plan is not integrated with
Social Security. Exclusions may cause the Plan to be
impermissibly discriminatory.
2. The Compensation Computation Period is:
(X) a. The Plan Year
( ) b. The calendar year ending with or within the Plan Year
3. For the initial Plan Year of participation, include Compensation from:
(Select one)
(X) a. Entry Date as a Participant
( ) b. First day of the Compensation Computation Period which ends
during the initial Plan Year of participation
D. Contribution and Allocation
<PAGE>
1. Non-Elective Contribution Formula - The Employer's Non-Elective contribution
to the Plan shall be: (Select one)
( ) a. Discretionary, out of profits
(X) b. Discretionary, but not limited to profits
( ) c. ______% of each Participant's Compensation. (not to exceed 15%)
( ) d. Not applicable. Non-Elective Contributions are not permitted.
2. Allocation Method - The Employer Non-Elective contribution is allocated to
Participants: (Select one)
(X) a. Proportionate to Salary. Based upon each Participant's
Compensation in proportion to the Compensation of all
Participants.
( ) b. Integrated with Social Security. See Sections 2.3.1 and 2.3.3.
(Select one of d. through h., below.)
( ) c. Not applicable - No Non-Elective Contributions.
The Social Security Integration Level is equal to:
( ) d. The taxable wage base under Section 230 of the Social Security
Act in effect as of the first day of the Plan Year.
( ) e. $_____ (Not to exceed the taxable wage base under Section 230
of the Social Security Act in effect as of the first day of the
Plan Year).
( ) f. _____% (Not to exceed 100) of the taxable wage base under
Section 230 of the Social Security act in effect as of the
first day of the Plan Year.
( ) g. The greater of $10,000 or 20% of the taxable wage base under
Section 230 of the Social Security Act in effect as of the
first day of the Plan Year.
( ) h. 80% of the taxable wage base under Section 230 of the Social
Security Act in effect as of the first day of the Plan Year
plus $1.00.
3. Requirement to Share in Non-Elective Contribution Allocation. In order to
share in the allocation of the Employer's Non-Elective Contribution a
Participant: (Select all applicable)
( ) a. must complete ____ Hours (cannot exceed 1000), but
( ) is eligible regardless of Hours if the Employee dies during
the Plan Year
( ) is eligible regardless of Hours of Service if the Employee
retires during the Plan Year
( ) is eligible regardless of Hours of Service if the Employee
becomes totally disabled during the Plan Year
(X) b. must complete 1,000 (cannot exceed 1000) Hours and be employed
at Plan Year end but
(X) is eligible if Employee dies during the plan year,
(X) regardless of Hours of Service.
( ) only if employee meets Hours requirement
(X) is eligible if Employee retires during the Plan Year,
(X) regardless of Hours of Service.
<PAGE>
( ) only if Employee meets Hours requirement.
(X) is eligible if Employee becomes totally disabled during the
Plan Year
(X) regardless of the Hours of Service.
( ) only if Employee meets Hours requirement.
( ) c. Not applicable - No Non-Elective Contributions.
4. Requirement to Share in Matching Contribution Allocation - In order to share
in the allocation of the Employer's Matching Contribution a
Participant: (Select all applicable)
( ) a. must complete ____ Hours (cannot exceed 1000), but
( ) is eligible regardless of Hours if the Employee dies during
the Plan Year
( ) is eligible regardless of Hours of Service if the Employee
retires during the Plan Year
( ) is eligible regardless of Hours of Service if the Employee
becomes totally disabled during the Plan Year
(X) b. must complete 1,000 (cannot exceed 1000) Hours and be employed
at Plan Year end but
(X) is eligible if Employee dies during the plan year,
(X) regardless of Hours of Service.
( ) only if employee meets Hours requirement
(X) is eligible if Employee retires during the Plan Year,
(X) regardless of Hours of Service.
( ) only if Employee meets Hours requirement.
(X) is eligible if Employee becomes totally disabled during the
Plan Year
(X) regardless of the Hours of Service.
( ) only if Employee meets Hours requirement.
( ) c. Not Applicable
5. Matching Contributions - The Matching Contribution by the Employer for the
Plan Year in accordance with Section 2.2.1(a)(3)(ii) is
( ) a. Matching Contributions are not permitted
(X) b. Discretionary each Plan Year
( ) c. Based upon the Allocation Method set forth below
( ) d. Based upon the Allocation Method set forth below plus a
supplemental discretionary Matching contribution
6. Allocation Method for Matching Contributions - Matching Contributions shall
be allocated to eligible Participants in an amount:
(X) a. Proportionate to the Elective Contributions made on behalf of a
Participant
( ) b. Equal to ______% of the Elective Contributions made on behalf
of a Participant
( ) c. Graded based on the dollar amount of the Elective Contribution
of each Participant as follows:
_____% of the first $_____ plus
_____% of the next $_____ plus
_____% of the next $_____ plus
<PAGE>
_____% of the next $_____.
( ) d. Graded based on the percentage of compensation of the Elective
Contribution of each Participant as follows:
_____% of the first _____% plus
_____% of the next _____% plus
_____% of the next _____% plus
_____% of the next _____% .
( ) e. Graded based on the dollar amount of the Elective Contribution
of each Participant as follows:
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more.
( ) f. Graded based on the percentage of compensation of the Elective
Contribution of each Participant as follows:
_____% if contribution is _____% or more
_____% if contribution is _____% or more
_____% if contribution is _____% or more
_____% if contribution is _____% or more
( ) g. Not applicable
NOTE: Graded percentages entered in c. through f. must decrease as
percentage or amount of compensation increases.
7. If a supplemental discretionary Matching Contribution is made, Matching
Contributions shall be allocated to eligible Participants in an
amount:
( ) a. Proportionate to the Elective Contributions made on behalf of a
Participant
( ) b. According to the method selected in 6b.- f. above
(X) c. Not applicable
8. Matching Contribution Allocation Date - Matching Contributions are allocated
as of the Anniversary Date unless an alternate date is selected. For
the purposes of this Plan the Matching Contribution is allocated as
of: (Select one)
(X) a. Plan Provision - the Anniversary Date.
( ) b. The next Valuation Date.
( ) c. Other - Specify. (Must be allocated at least annually)
( ) d. Not applicable
9. Limitations on Matching Contributions - The Employer shall not make Matching
Contributions: (Select all applicable)
( ) a. With respect to Elective Contributions in excess of _____% of a
Participant's Compensation
( ) b. In excess of $______ for any Participant
( ) c. To Key Employees
(X) d. Not applicable.
<PAGE>
10. Allocation of Qualified Non-Elective Contributions - (Select a or b. If a is
selected, do not complete the remainder of this section)
( ) a. Qualified Non-Elective Contributions are not permitted.
(X) b. Qualified Non-Elective Contributions shall be made at the
Employer's discretion.
Qualified Non-Elective Contributions shall be allocated (complete c
and d):
(X) c. On behalf of
( ) All Participants ( ) Solely on behalf of Participants who
are not Highly Compensated Employees
(X) Solely on behalf of Participants who are not Highly
Compensated Employees to the extent necessary to satisfy
the ACP or the ADP test
(X) d. Who are eligible to receive an allocation of
( ) Non-Elective Contributions
(X) Matching Contributions
Qualified Non-Elective Contributions shall be allocated: (Select e
or f; also select g, if applicable)
(X) e. In proportion to a Participant's Compensation.
( ) f. As a uniform dollar amount.
(X) g. To the extent necessary to satisfy the ACP test or the ADP
test.
11. Limitation Year - Section 1.2.40 provides that unless otherwise specified
the Limitation Year for purposes of the limitation imposed by IRC
Section 415 is the Plan Year. (Select one)
(X) a. Plan Provision
( ) b. Calendar year coinciding with or ending within the Plan Year
( ) c. Twelve consecutive month period ending ___/___.
E. Vesting Provisions
1. Years of Service - Section 1.2.65 provides that a Year of Service is the 12
consecutive month period specified in the Adoption Agreement in which
at least 1000 Hours of Service are performed unless a lesser number
is specified. (Select all applicable)
(X) a. Use the Plan Year as the computation period
( ) b. Use Eligibility Computation Period as the computation period
( ) c. Use _____ in lieu of 1000 Hours of Service (Not to exceed
1000 hours)
2. Excluded Years - Section 1.2.65 provides unless otherwise specified all
Years of Service are taken into account.
(X) a. Plan Provision - Include all Years of Service
( ) b. Exclude Plan Years prior to age 18
( ) c. Exclude Plan years prior to adoption of plan or predecessor
plan. Effective date of (prior) plan: ___/___/___
<PAGE>
3. Vesting Schedule - Section 2.4.2(f) provides that benefits will vest in
accordance with the method specified in the Adoption Agreement.
(Select one of a, b, c, d, f, or g. Also select e if applicable.)
Employer Accounts:
(X) a. At the rate of 20% each year after 3 Years of Service. (20%
vested in third year)
( ) b. At the rate of 20% each year after 2 Years of Service. (20%
vested in second year)
( ) c. 100% vesting upon participation.
( ) d. 100% vesting after ____ Year(s) of Service (Not to exceed 5)
( ) e. 100% vesting at Early Retirement Date (Must also select another
alternative)
( ) f. Other: (Optional vesting schedule must be at least as favorable
as a. or d.)
<TABLE>
<CAPTION>
Year(s) of Service Percent Vesting
<S> <C>
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
</TABLE>
( ) g. Not applicable - No Non-Elective Employer Contributions
Matching Accounts:
(X) a. At the rate of 20% each year after 3 Years of Service. (20%
vested in third year)
( ) b. At the rate of 20% each year after 2 Years of Service. (20%
vested in second year)
( ) c. 100% vesting upon participation.
( ) d. 100% vesting after ____ Year(s) of Service (Not to exceed 5)
( ) e. 100% vesting at Early Retirement Date (Must also select another
alternative)
( ) f. Other: (Optional vesting schedule must be at least as favorable
as a. or d.)
<TABLE>
<CAPTION>
Year(s) of Service Percent Vesting
<S> <C>
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
</TABLE>
<PAGE>
( ) g. Not applicable - No Matching Contributions
4. Prior Vesting Schedule - Section 3.10.3 provides that if the Vesting
schedule has been amended to a less favorable schedule, participants
are entitled to have their vested interest calculated under the prior
schedule under certain instances.
(X) a. Not applicable. Either not amended or new schedule is more
favorable.
( ) b. The prior schedule was
<TABLE>
<CAPTION>
Employer
Year(s) of Service Percent Vesting
<S> <C>
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
Matching
Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
</TABLE>
5. Top Heavy Vesting Schedule - Section 2.6.1(c) provides that if the Plan
becomes Top Heavy, unless the Employer specifies otherwise, vesting
will be at a rate of 20% per year beginning with the second Year of
Service.
Employer Accounts:
(X) a. Plan Provision
( ) b. 100% vested after ____ Year(s) of Service (Not to exceed 3)
( ) c. Same as non-Top Heavy vesting schedule (Must be at least as
favorable as a or b)
( ) d. Other: (Optional vesting schedule must be at least as favorable
as a. or b.)
<TABLE>
<CAPTION>
Year(s) of Service Percent Vesting
<S> <C>
Less than 1 _______
1 but less than 2 _______
<PAGE>
<S> <C>
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
</TABLE>
( ) e. Not Applicable - No Employer Non-Elective Contributions
Matching Accounts:
(X) a. Plan Provision
( ) b. 100% vested after ____ Year(s) of Service (Not to exceed 3)
( ) c. Same as non-Top Heavy vesting schedule (Must be at least as
favorable as a or b)
( ) d. Other: (Optional vesting schedule must be at least as favorable
as a. or b.)
<TABLE>
<CAPTION>
Year(s) of Service Percent Vesting
<S> <C>
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
</TABLE>
( ) e. Not Applicable - No Matching Contributions.
6. Re-employment - Section 2.4.4 provides that Years of Service completed
after a Break in Service are not counted for purposes of increasing
the vested percentage attributable to service before the Break unless
reemployed within 5 years.
(X) a. Plan Provision
( ) b. Count all service after the Break
( ) c. Not applicable - 100% immediate vesting
7. Forfeitures - Section 2.4.6 provides that forfeitures are determined as of
the last day of the Plan Year in which the Participant's entire
interest is distributed from the Plan.
( ) a. Plan Provision.
(X) b. Determine in Plan Year of 5th consecutive Break in Service.
( ) c. Determination as of the Valuation Date coincident with or next
following the Distribution Date
( ) d. Not applicable - All benefits are fully vested. Leave the
remaining items in this Section E blank.
8. Forfeitures of Non-Elective Contributions shall be applied to (select all
applicable):
(X) a. Supplement Non-Elective Contributions
<PAGE>
( ) b. Reduce Non-Elective Contributions
( ) c. Reduce Qualified Non-Elective Contributions
( ) d. Supplement Matching Contributions
( ) e. Reduce Matching Contributions
9. Forfeitures of Non-Elective Contributions shall be reallocated to
participants:
(X) a. In the same manner as Non-Elective Contributions
( ) b. In proportion to each participant's Compensation
( ) c. Not applicable. Forfeitures are applied to reduce
contributions.
NOTE: If the Plan provides for permitted disparity, forfeitures must
be allocated under the Plan's allocation formula.
10. Forfeitures of Matching Contributions shall be applied to: (Select all
applicable)
(X) a. Supplement Matching Contributions
( ) b. Reduce Matching contributions
( ) c. Reduce Qualified Non-Elective contributions
( ) d. Supplement Non-Elective Contributions
( ) e. Reduce Non-Elective Contributions
11. Forfeitures of Matching Contributions shall be reallocated to participants:
(X) a. In the same manner as Non-Elective Contributions
( ) b. In proportion to each participant's Compensation
( ) c. In proportion to Matching Contributions
( ) d. In proportion to Elective Contributions
( ) e. Not applicable. Forfeitures are applied to reduce
contributions.
12. Requirement to Share in Allocation of Forfeitures - In order to share in the
allocation of Forfeitures which supplement rather than reduce other
contributions, a Participant: (Select all applicable)
(X) a. Must be eligible to receive an allocation of the respective
type of contribution, i.e. Matching or Non-elective
( ) b. Must be employed on the date the forfeiture is determined.
( ) c. Not applicable. Forfeitures reduce contributions.
13. Restoration of Forfeitures - If a Participant is entitled to a restoration
of a forfeiture, the amount to be restored shall be restored by:
( ) a. An additional contribution by the Employer specifically
allocated to the Participant's Account.
(X) b. Allocating other forfeitures arising in the year of restoration
to the Participant's Account to the extent thereof and an
additional contribution by the Employer specifically allocated
to the Participant's Account to the extent that allocable
forfeitures are insufficient.
<PAGE>
F. CODA Limitation Provisions
1. Actual Deferral Percentages - Qualified Non-Elective Contributions may be
taken into account for purposes of calculating the ADP-Actual Deferral
Percentages. For purposes of the ADP test in Section 2.7.1, the amount
taken into account shall be:
( ) a. All Qualified Non-Elective Contributions.
(X) b. The Qualified Non-Elective Contributions that are needed to
meet the ADP test.
2. Average Contribution Percentage - The amount of Elective Deferrals and
Qualified Non-Elective Contributions taken into account as
contribution percentage amounts for the purpose of calculating the
ACP-Average Contribution Percentage, subject to such other
requirements as may be prescribed by the Secretary of the Treasury,
shall be:
For elective deferrals:
( ) a. All such Elective Deferrals.
(X) b. Only those Elective Deferrals that are needed to meet the
Average Contribution Percentage test.
( ) c. Elective Deferrals are not to be included in the ACP test.
( ) d. Not applicable.
For Qualified Non-Elective Contributions:
( ) e. All such Qualified Non-Elective contributions.
(X) f. Only those Qualified Non-Elective Contributions that are needed
to meet the Average Contribution Percentage test.
( ) g. Qualified Non-Elective Contributions are not to be included in
the ACP test.
( ) h. Not applicable.
3. Excess Aggregate Contributions - Forfeitures of Excess Aggregate
Contributions pursuant to Section 2.7.7 shall be:
( ) a. Applied to reduce Employer contributions.
(X) b. Allocated, after all other forfeitures under the Plan, to each
Participant's Matching Contribution Account in the ratio which
each Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for the Plan Year. Such
forfeitures will not be allocated to the Account of any Highly
Compensated Employee.
G. Distribution Provisions
1. Form of Distributions - Section 2.5.2 provides that the Employer may elect
to permit Plan distributions to be made in the form of: (Select all
applicable)
(X) a. Lump sum without regard to amount.
( ) b. Lump sum but not to exceed $________.
( ) c. Installments over ____ years payable: (Select one or more)
( ) c.1. annually ( ) c.2. quarterly
( ) c.3. monthly
<PAGE>
( ) d. Installments over a period of years certain selected by the
Participant that is less than the life of the Participant
payable (Select one or more.)
( ) d.1. annually ( ) d.2. quarterly
( ) d.3. monthly
( ) e. An annuity for not more than ____
( ) f. An annuity for the life of: (Select one or more)
( ) f.1. the Participant ( ) f.2. the Participant and spouse
( ) f.3. the Participant and a designated beneficiary
( ) g. An annuity for ____ years certain and thereafter for the life
of: (Select one or more)
( ) g.1. the Participant
( ) g.2. the Participant and spouse
( ) g.3. the Participant and a designated beneficiary
( ) h. An annuity for a period certain selected by the Participant
that is less than the life of: (Select one or more)
( ) h.1. the Participant
( ) h.2. the Participant and spouse
( ) h.3. the Participant and a designated beneficiary
NOTE: Any number of options may be selected. Once selected, however,
any option may not thereafter be eliminated.
If an annuity option of life or longer is selected Qualified
Joint and Survivor Annuity provisions are required.
2. Survivor Annuity Percentage - If a Joint and Survivor Annuity is payable,
Section 1.2.37 provides that the normal survivor annuity is 50% of
the amount payable during the joint lives of the participant and
spouse, unless the Employer elects a different percentage (Select
one):
( ) a. Plan Provision - 50%
( ) b. Other Percentage - ____% (Not less than 50% nor more than 100%)
( ) c. Other Percentage selected by the Participant (Not less than 50%
or more than 100%
3. Time of Distribution - Section 2.5.1(b) provides that distributions are
deferred to Participants who resign or are discharged prior to
retirement until the retirement date unless the employer elects to
permit distributions in advance of such date.
( ) a. Plan Provision without advance distribution election.
(X) b. Distributions may be made at the Participant's election within
a reasonable period following the Distribution Date.
4. Distribution Date - Section 2.4.5 provides that, subject to the necessity of
obtaining the consent of a Participant and spouse, for the purposes of
determining the amount to be distributed, the Distribution Date:
For a Participant who is not fully vested, is
<PAGE>
(X) a. The Anniversary Date coinciding with or following the date of
termination.
( ) b. The Valuation Date coinciding with or following the date of
termination
( ) c. As soon as practical but prior to the Anniversary Date
coinciding with or following the date of termination, based
on the preceding Valuation Date.
( ) d. the ( ) Valuation Date ( ) Anniversary Date following ____
consecutive Breaks in Service
( ) e. The Participant's Normal or Early Retirement Date
For a Participant who is fully vested but who terminates employment
prior to death, total and permanent disability or retirement at his
retirement date is:
(X) a. The Anniversary Date coinciding with or following the date of
termination
( ) b. The Valuation Date coinciding with or following the date of
termination
( ) c. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date
( ) d. The Participant's Normal or Early Retirement Date
For a Participant who terminates employment as a result of death,
total and permanent disability or retirement at his retirement date,
is:
(X) a. The Anniversary Date coinciding with or following the date of
termination.
( ) b. The Valuation Date coinciding with or following the date of
termination
( ) c. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date
In the case of a Participant's interest in an Elective Account,
Voluntary Account or Segregated Account attributable to a rollover
contribution from another plan, notwithstanding the foregoing, the
Distribution Date, is:
(X) a. Not applicable - The Distribution Date is determined in the
manner indicated above for the fully vested Participants
( ) b. The Anniversary Date coinciding with or following the date of
termination
( ) c. The Valuation Date coinciding with or following the date of
termination
( ) d. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date.
5. Hardship Distributions - Section 2.5.5 provides that an Employer may permit
distributions to Participants while employed in the event of financial
hardship as specified in the Plan:
( ) a. Hardship distributions are permitted.
(X) b. Hardship distributions are not permitted.
<PAGE>
Hardship Distributions may be made from a Participants Account as
elected below in c and d, provided that Hardship Distributions of
earnings on elective Deferrals may only be made on such earnings
credited to the Participant's account as of the end of the last Plan
Year ending before July 1, 1989. Therefore, subject to such
limitation, Hardship Distributions may be taken from:
( ) c. all of Participant's Accounts.
( ) d. only the Participant's Account balances attributable to the
following accounts:
( ) d.1. Employer Account
( ) d.2. Qualified Non-Elective Contribution Account
( ) d.3. Elective Contribution Account
( ) d.4. Matching Account
( ) d.5. Segregated Account (attributable to a rollover)
( ) d.6. Voluntary Account
6. In Service Distributions - Section 2.5.6 provides that an Employer may
permit distributions to fully vested Participants over the age of
59-1/2 prior to termination of employment if the amounts withdrawn
have been allocated to the Participant for two (2) or more years or
the Participant has been a Participant for at least five (5) years.
(Select all applicable)
( ) a. Plan Provision.
( ) b. Require that amounts have been allocated for ____ years. (Must
be at least 2)
( ) c. Require participation for at least ____ years. (Must be at
least 5)
( ) d. In Service Distributions are permitted upon reaching Normal
Retirement Date
( ) e. In Service Distribution are permitted for amounts attributable
to a rollover from another plan regardless of age or periods
of participation
(X) f. In Service Distributions are not permitted.
7. Qualified Domestic Relations Orders - Section 3.12.9 provides that the
Employer may elect to permit distributions to an alternate payee
pursuant to the terms of a qualified domestic relations order even
if the Participant continues to be employed. (Select one)
( ) a. Distributions to an alternate payee are not permitted while
the Participant continues to be employed.
(X) b. Distributions to an alternate payee are permitted while the
Participant continues to be employed.
H. Other Administrative Provisions
1. Earnings - Section 3.1.2 permits the Employer to specify the manner in which
earnings are allocated to Participants who receive distributions on
any date other than a Valuation Date. Select any of the following:
(X) a. Earnings will be credited solely as of the immediately
preceding Valuation Date.
<PAGE>
( ) b. Actual earnings will be credited to the date of distribution.
( ) c. Earnings will be credited solely as of the immediately
preceding Valuation Date if distribution is within ____ days
of such Valuation Date and will be credited to date of
distribution otherwise.
( ) d. Earnings will be credited to the date of distribution based
upon an estimate of earnings equal to ______% annually.
( ) e. Earnings will be credited to the date of distribution based
upon an estimate of earnings equal to the average rate of
earnings during the preceding
( ) e.1. Valuation Period.
( ) e.2. Plan Year.
( ) e.3. ____ Valuation Periods.
2. Loans - Section 3.7.1 provides that the Employer may elect to permit loans
to Participants and Beneficiaries in accordance with a participant
loan program adopted by the Trustee.
(X) a. Loans are permitted.
( ) b. Loans are not permitted.
3. Rollovers - Section 3.11.3 authorizes the Employer to permit the transfer
of interests in other qualified plans to the Plan.
( ) a. Rollover contributions are not permitted.
( ) b. Rollover contributions are permitted only from other plans of
the Employer
(X) c. Rollover contributions are permitted only by Employees who
have satisfied the conditions for participation.
( ) d. Rollover contributions are permitted from any employee even if
not otherwise eligible to be a Participant.
4. Investment Control - Section 3.6.5 provides that the Employer may elect to
permit Participants to control the investment of their Accounts.
( ) a. Participants may not control their investments.
( ) b. Participants may control the investment of their Accounts if
fully vested in the Account.
( ) c. Participants may control the investment of their Accounts to
the extent vested.
(X) d. Participants may control their investments without regard to
their vested interest.
(X) e. Participants may control their investments solely with respect
to amounts attributable to: (Select all applicable)
(X) e.1. Non-Elective Contributions
(X) e.2. Qualified Non-Elective Contributions
(X) e.3. Elective Contributions
(X) e.4. Matching Contributions
( ) e.5. Voluntary Contributions
(X) e.6. Amounts rolled over and held in a Segregated Account
<PAGE>
5. Top Heavy Assumptions - (This question applies only if the Employer has a
Defined Benefit plan.) The interest rate used to establish the Present
Value of Accrued Benefits in order to calculate the top heavy ratio
under IRC Section 416 shall be ______% and the mortality tables used
shall be ___________________.
6. Valuation Date - For purposes of computing the top-heavy ratio, the
Valuation Date is (Select one):
( ) a. the first day of Plan Year.
(X) b. the last day of the Plan Year.
( ) c. Other - Specify. ___/___ (Must be at least annually)
7. Single Plan Minimum Top-Heavy Allocation - For purposes of minimum top-heavy
allocations, contributions and forfeitures equal to the following
percentage of each non-Key Employee's compensation will be allocated
to the Employee's account when the Plan is top-heavy (Select one):
(X) a. 3% or the highest percentage allocated to any Key Employee if
less.
( ) b. ______% (Must be at least 3).
8. Multiple Plans Provision - The Employer which maintains or ever maintained
another qualified defined benefit plan or welfare benefit fund or
individual medical account in which any participant in the Plan is,
was or could become a participant adds the following optional
provision which it deems necessary to satisfy Section 415 or 416 of
the Code because of the required aggregation of multiple plans:
(Select one)
(X) a. Not applicable (No other plan or other plan terminated prior
to the Effective Date of this Adoption Agreement).
( ) b. A minimum contribution allocation of 5% of each Non-Key
Participant's total compensation shall be provided in a
defined contribution plan of the Employer.
( ) c. A minimum contribution allocation of 7.5% of each Non-Key
Participant's total compensation shall be provided in a defined
contribution plan of the Employer.
( ) d. A minimum benefit of _____ (must be at least the lesser of 2%
times years of service or 20%) of each Non-Key Participant's
total compensation shall be provided in a defined benefit plan
of the Employer.
( ) e. A minimum benefit of _____ (must be the lesser of 2% times
years of service or 20%) of each Non-Key Participant's total
compensation shall be provided in a defined benefit plan of
the Employer but offset by the amount contributed on such
participant's behalf under any defined contribution plan of
the Employer.
( ) f. Other - Specify.
NOTE: The method selected must preclude Employer discretion and the
Employer must obtain a determination letter in order to
continue reliance on the Plan's qualified status.
<PAGE>
9. Multiple Defined Contribution Plans - If the Participant is covered under
another qualified defined contribution plan maintained by the
Employer, other than a master or prototype plan: (Select one)
( ) a. Not applicable.
(X) b. The provisions of this Plan limiting annual additions will
apply as if the other plan is a master or prototype plan.
( ) c. Other - Specify.
NOTE: Specify the method under which the plans will limit total
annual additions to the maximum permissible amount, and will
properly reduce any excess amounts in a manner that precludes
Employer discretion.
10. Top Heavy Duplications - The Employer who maintains two or more Defined
Contribution plans makes the following election:
( ) a. Not applicable.
(X) b. A minimum non-integrated contribution of 3% of each Non-Key
Participant's Compensation shall be provided by:
( ) b.1. this Plan. (X) b.2. the following defined
contribution plan:
UNIONBANCORP, INC. ESOP PLAN
( ) c. Other - Specify.
NOTE: The method selected must preclude Employer discretion and
avoid inadvertent omissions, including any adjustments required
under Code Section 415(e). The Employer must obtain a
determination letter in order to continue reliance on the
Plan's qualified status.
11. Annual Addition Limitation - If a Participant is or has ever been a
participant in a defined benefit pension plan maintained by the
Employer, Section 3.2.1(c) provides that Annual Additions shall be
limited.
(X) a. Not applicable
( ) b. The contribution to the Plan allocable to the Participant shall
be reduced so that the limitations are not exceeded.
( ) c. Other - Specify
NOTE: specify the method under which the plans will limit total
additions to the maximum permissible amount, and will properly
reduce any excess amounts in a manner that precludes employer
discretion.
12. Section 415 Compensation Definition. For purposes of calculating an
Employee's compensation pursuant to Section 3.2.1(h), relating to
limitations on contributions and benefits, Compensation means all of
each Participant's
( ) a. Wages as computed for Wages, Tips, and Other Compensation Box
on Form W-2.
<PAGE>
(X) b. Section 3401(a) wages.
( ) c. Section 415 safe harbor compensation.
<PAGE>
The name, address and telephone number of the Plan Sponsor is:
DATAIR Employee Benefit Systems, Inc.
735 N. Cass Avenue
Westmont, IL 60559-1100
(630)325-2600
Applicable requirements mandate that the use of this Prototype Document be
registered by the Plan Sponsor with the Internal Revenue Service. Unregistered
use may cause the Plan to become disqualified because it may not be maintained
as required by law.
The Plan Sponsor will inform the Employer of any amendments made to the Plan or
of the discontinuance or abandonment of the Plan.
NOTE: An employer may not rely on a notification letter issued by the National
Office of the Internal Revenue Service as evidence that the plan as adopted is
qualified under Section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must apply to the
appropriate key district for a determination letter.
This Adoption Agreement may be used only in conjunction with the DATAIR
Mass-Submitter Defined Contribution Plan and Trust, Revised 05/06/92.
* * *
The Employer and Trustee hereby adopt the Plan and Trust as evidenced by the
foregoing Adoption Agreement on this 4th day of November, 1997.
Employer: Trustee:
UNIONBANCORP, INC.
------------------------- -------------------------------
R. SCOTT GRIGSBY UNION BANK TRUST DEPARTMENT
CHAIRMAN & CEO Trustee
The Following Amendments to the UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
are word-for-word identical to the Model Amendments provided in "IRS Revenue
Procedure 96-49 Model Amendments under Section 414(u) of the Internal Revenue
Code, as it appeared in Internal Revenue Bulletin 1996-43, dated October 8,
1996," and are hereby adopted March 1, 1997.
Uniformed Services Employment and Reemployment Rights Act
Model Amendments
<PAGE>
Amendment 1:
"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."
Amendment 2:
"Loan repayments will be suspended under this plan as permitted under section
414(u)(4) of the Internal Revenue Code."
Warning: This amendment will not be effective if this plan has accepted
transfers from a pension plan subsequent to the plan's most recent determination
letter and the adoption of this amendment. In this case the amendment will be
prospective only and the plan will not have extended reliance. You should read
Rev. Rul. 94-76 and Rev. Proc. 96-55 to develop an understanding how this
amendment works in conjunction with your most recent Determination Letter.
<PAGE>
UNIONBANCORP, INC. 401(K) PROFIT SHARING PLAN
Money Purchase Plan to Profit Sharing Plan Transfers
Model Amendment
(For all Profit Sharing and 401(k) Plans)
The following Model Plan Amendment is word for word identical to the language
provided in IRS Revenue Procedure 96-55.
This amendment is effective March 1, 1997.
Notwithstanding any provision of this plan to the contrary, to the extent that
any optional form of benefit under this plan permits a distribution prior to the
employee's retirement, death, disability, or severance from employment and prior
to plan termination, the optional form of benefit is not available with respect
to benefits attributable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of Section
414(l) of the Internal Revenue Code, to this plan from a money purchase pension
qualified under Section 401(a) of the Internal Revenue Code (other than any
portion of those assets and liabilities attributable to voluntary employee
contributions).
