<PAGE> 1
As filed with the Securities and Exchange Commission on January 5, 1999
Registration Statement No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
BRIGHAM EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 75-2692967
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
6300 BRIDGE POINT PARKWAY, BUILDING 2, SUITE 500
AUSTIN, TEXAS
(Address of principal executive offices)
78730
(Zip Code)
-------------
BRIGHAM, INC.
401(k) PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1999)
(Full title of the Plan)
-------------
Ben. M. Brigham
President, Chief Executive Officer
and Chairman of the Board
Brigham Exploration Company
6300 Bridge Point Parkway, Building 2, Suite 500
Austin, Texas 78730
(512) 427-3300
(Name, address and telephone number of agent for service)
Copy to:
Joe Dannenmaier
Thompson & Knight, P.C.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
(214) 969-1700
-------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of securities to be Amount to be Proposed maximum offering Proposed maximum Amount of
registered registered price per share(1) aggregate offering price(1) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share .... 300,000 shares (2) $4.88 $1,464,000 $407
- ------------------------------------------------------------------------------------------------------------------------------------
Interests in the 401(k) Plan of
Brigham, Inc. ............................. (3) (4) (4) (4)
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933 (the
"Securities Act") and based on the average of the high and low prices
of the common stock reported on The Nasdaq Stock Markets' National
Market on December 30, 1998.
(2) If, as a result of stock splits, stock dividends or similar
transactions, the number of securities purported to be registered on
this Registration Statement changes, the provisions of Rule 416 shall
apply to this Registration Statement, and this Registration Statement
shall be deemed to cover the additional securities resulting from the
split of, or the dividend on, the securities covered by this
Registration Statement.
(3) Pursuant to Rule 416(c) under the Securities Act, this Registration
Statement also covers an indeterminate amount of plan interests to be
offered or sold pursuant to the Brigham Inc. 401(k) Plan.
(4) Pursuant to Rule 457(h)(2) under the Securities Act, no separate fee is
required to register plan interests.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
- -------------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been filed by the Registrant with the
Securities and Exchange Commission and are incorporated by reference in this
Registration Statement:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
(4) The Company's Current Report on Form 8-K (Date of Event: November
12, 1997) filed January 23, 1998;
(5) The description of the Company's Common Stock, $.01 par value per
share, contained in the Registration Statement on Form 8-A
(Registration No. 000-22433) of the Company heretofore filed with
the Commission, including any amendments or reports filed for the
purpose of updating such description.
In addition, all documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement. Upon the written or oral request of any person
to whom a copy of this Registration Statement has been delivered, the Company
will provide without charge to such person a copy of any and all documents
(excluding exhibits thereto unless such exhibits are specifically incorporated
by reference into such documents) that have been incorporated by reference into
this Registration Statement but not delivered herewith. Requests for such
documents should be addressed to Brigham Exploration Company, 6300 Bridge Point
Parkway, Building 2, Suite 500, Austin, Texas 78730, Attention: Corporate
Secretary, (512) 427-3300.
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 Section 102(b)(7) of the Delaware General Corporation
Law ("DGCL") the Registrant's Certificate of Incorporation includes a provision
that, to the fullest extent permitted by law, eliminates the personal liability
of members of its board of directors to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. Such provision does
not eliminate or limit the liability of a director (1) for any breach of a
director's duty of loyalty to the corporation or its stockholders, (2) for acts
or omissions not in good faith or which involve intentional misconduct or a
II-1
<PAGE> 4
knowing violation of a law, (3) for paying an unlawful dividend or approving an
illegal stock repurchase (as provided in Section 174 of the DGCL), or (4) for
any transaction from which the director derived an improper personal benefit.
Under Section 145 of the DGCL, the Registrant has the power to 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 (other than an
action by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement and reasonably incurred in connection with such action, suit or
proceeding. The power to indemnify applies only if the person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was
unlawful.
In the case of an action by or in the right of the Registrant, no
indemnification may be made with respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court of chancery or the court in which
such action or suit was brought shall determine that despite the adjudication of
liability such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 of the DGCL further
provides that to the extent a director or officer of the Registrant has been
successful in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
The Registrant also has the power to purchase and maintain insurance on
behalf of any person covering any liability incurred by such person in his
capacity as a director, officer, employee or agent of the corporation, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability.
The Certificate of Incorporation and Bylaws provide that the Registrant
will indemnify its officers and directors and former officers and directors
against any expenses, judgments or settlement payments sustained or paid by such
persons as a result of having acted as an officer or director of the Registrant,
or, at the request of the Registrant, as an officer, director, agent or employee
of another business entity. The Certificate of Incorporation and Bylaws further
provide that the Registrant may, by action of its Board of Directors, provide
indemnification to employees and agents of the Registrant, individually or as a
group, with the same scope and effect as the indemnification of directors and
officers.
The Registrant has entered into an Indemnity Agreement with each of its
executive officers which provides for the indemnification in certain instances
against liability and expenses incurred in connection with proceedings brought
by or in the right of the Registrant or by third parties by reason of the person
serving as an officer or direction of the Registrant.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following documents are filed as exhibits to this Registration
Statement:
4.1 Brigham, Inc. 401(k) Plan.
5.1 Opinion of Thompson & Knight, A Professional Corporation.
23.1 Consent of Thompson & Knight, A Professional Corporation
(included in the opinion of Thompson & Knight, P.C. filed
herewith as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
II-2
<PAGE> 5
Item 9. Undertakings.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the Form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 6
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 Austin and State of Texas on the 31 day of December,
1998.
BRIGHAM EXPLORATION COMPANY
By: /s/ Ben M. Brigham
-------------------------------------
Ben M. Brigham, President,
Chief Executive Officer
and Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of Brigham Exploration Company, a Delaware corporation, which is filing
a Registration Statement on Form S-8 with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended, hereby
constitute and appoint Ben M. Brigham and Anne L. Brigham, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign such Registration Statement and any or all amendments to the
Registration Statement, and all other documents in connection therewith to be
filed with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact as agents or any of them, or their 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 the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Ben M. Brigham President, Chief Executive December 31, 1998
- ---------------------------------------------------- Officer and Chairman of
Ben M. Brigham the Board (principal
executive officer)
/s/ Anne L. Brigham Executive Vice President December 31, 1998
- ---------------------------------------------------- and Director
Anne L. Brigham
/s/ Jon L. Glass Vice President - December 31, 1998
- ---------------------------------------------------- Exploration and Director
Jon L. Glass
/s/ Craig M. Fleming Chief Financial Officer December 31, 1998
- ---------------------------------------------------- (principal financial and
Craig M. Fleming accounting officer)
</TABLE>
II-4
<PAGE> 7
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Harold D. Carter Director December 31, 1998
- -----------------------------------------------------
Harold D. Carter
/s/ Alexis M. Cranberg Director December 31, 1998
- ----------------------------------------------------
Alexis M. Cranberg
/s/ W. Craig Childers Director December 31, 1998
- ----------------------------------------------------
W. Craig Childers
/s/ Stephen P. Reynolds Director December 31, 1998
- -----------------------------------------------------
Stephen P. Reynolds
</TABLE>
II-5
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4.1 Brigham, Inc. 401(k) Plan.
5.1 Opinion of Thompson & Knight, A Professional Corporation.
23.1 Consent of Thompson & Knight, A Professional Corporation
(included in the opinion of Thompson & Knight, P.C. filed
herewith as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
</TABLE>
II-6
<PAGE> 1
EXHIBIT 4.1
PLAN DATA, INC. REGIONAL PROTOTYPE
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
(PLAN 001)
NON-STANDARDIZED ADOPTION AGREEMENT
The undersigned Employer hereby adopts a profit sharing plan in the form of the
Plan Data, Inc. Regional Prototype Profit Sharing Plan and Trust With Employee
Contributions, which is attached hereto, and agrees that the following
definitions, elections and terms shall be part of such Plan and Trust:
1. Name and address of Employer:
Brigham, Inc.
-----------------------------------------------------------------------
6300 Bridge Point Parkway, Building 2, Suite 500
-----------------------------------------------------------------------
Austin, Texas 78730
-----------------------------------------------------------------------
2. Employer Identification Number: 75-2354099
----------------------------------------
Plan Number: 001
-----------------
3. Other employers authorized to adopt the same Plan:
Brigham Exploration; Brigham Holdings I, L.L.C.; Brigham Holdings II,
-----------------------------------------------------------------------
L.L.C.; Brigham Oil & Gas, L.P.
-----------------------------------------------------------------------
4. Name of Plan: Brigham, Inc.
----------------------------------------------------------
401(k) Plan
-----------------------------------------------------------------------
5. Name(s) and address(es) of Trustee(s):
( ) a. The following persons or entity are named as Trustees:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
( ) b. The Employer names Founders Trust Company as Trustee and
elects that the Trust will be the Founders Trust Company
Prototype Plan Collective Trust and hereby accepts all the
terms and provisions thereof. The provisions of the trust
agreement in Article X of the plan document will not apply
with respect to this Plan unless the Employer elects below to
appoint a second Trustee for this Plan:
<PAGE> 2
( ) i. No second Trustee is appointed. Article X of the plan
document does not apply.
( ) ii. The Employer designates that the assets of the Trust will
be divided with a portion to be determined by the Employer
held in the Founders Trust Company Prototype Plan
Collective Trust and a portion held by the following
person(s) or entity as a second Trustee under the
provisions of Article X of the plan document (enter name
and address of second Trustee):
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
(X) c. The following person(s) or entity is (are) named as Trustee(s)
(enter name and address), the provisions of the trust
agreement in Article X of the plan document will not apply
with respect to this Plan, and the provisions of the trust
shall be set forth in a separate trust document:
The Charles Schwab Trust Company
--------------------------------------------------------------
One Montgomery Street, 7th Floor
--------------------------------------------------------------
San Francisco, California 94104
--------------------------------------------------------------
6. Plan Administrator:
(X) a. Employer
( ) b. A Committee appointed by the Employer pursuant to the
provisions of section 9.03 of the Plan
( ) c.
--------------------------------------------------------------
7. Employer has completed and signed this Adoption Agreement in order to:
( ) a. establish a new plan. The effective date of the Plan is
__________________, 19__.
( ) b. restate a plan previously adopted by the Employer in the form
of this Plan. The effective date of this restatement is
___________________, 19__. The original effective date of the
plan was ___________________, 19__.
(X) c. restate a plan previously adopted by the Employer as a master
or prototype plan, thereby canceling participation in such
master or prototype plan. The effective date of this
restatement is January 1, 1999. The original effective date
of the plan was September 16, 1996.
( ) d. amend a plan previously adopted by the Employer by making a
different choice in the Adoption Agreement. The effective date
of this amendment is _________________, 19__. The original
effective date of the plan was __________________, 19__.
2
<PAGE> 3
( ) e. merge, amend and restate the _________________________________
______________________________________________________________
and the ______________________________________________________
______________________________________________________________
into the _____________________________________________________
_____________________________________________________________.
The effective date of the merger is _________________________,
19__, and the effective date of the restatement is __________,
19__. The original effective date of the surviving plan was
______________, 19__.
( ) f. restate a plan previously adopted by the Employer as a wasting
trust to which no further contributions will be allowed or
required. The effective date of this restatement is
_______________, 19__. The original effective date of the
plan was ________________, 19__.
8. The Employer's Taxable Year is:
(X) a. the calendar year.
( ) b. the twelve-consecutive month period beginning on
__________________ and ending on __________________.
9. a. The Plan Year is:
(X) i. the calendar year.
( ) ii. the twelve-consecutive month period beginning on _____________
and ending on ______________.
b. The initial/amended Plan Year is:
(X) i. the period specified in Item 9.a.
( ) ii. the shorter period beginning on _______________, 19__, and
ending on ________________ , 19__.
10. a. The Limitation Year is:
(X) i. the calendar year.
( ) ii. the twelve-consecutive month period beginning on _____________
and ending on _______________.
b. The initial/amended Limitation Year is:
(X) i. the period specified in Item 10.a.
( ) ii. the shorter period beginning on _________________, 19__,
and ending on ________________, 19__.
11. Valuation Date(s) is (are):
( ) a. The last day of the Plan Year.
( ) b. The last day of the sixth and twelfth months of the Plan Year.
3
<PAGE> 4
( ) c. The last day of the third, sixth, ninth, and twelfth months of
the Plan Year.
( ) d. The last day of the following months of the Plan Year:
.
-----------------------------------------------
(X) e. Each business day (daily).
12. ELIGIBLE EMPLOYEES
The Employer extends eligibility under the Plan to all Employees
except:
( ) a. Employees included in a unit of Employees covered by a
Collective Bargaining Agreement.
( ) b. Nonresident Aliens.
( ) c. employees of the following employer(s) aggregated with
Employer under section 414(b), (c) or (m) of the Code:
-------------------------------------------------------------
.
-------------------------------------------------------------
(X) d. other [specify]: Employees not employed by the Employer.
---------------------------------------
( ) e. No exclusions.
13. ELIGIBILITY REQUIREMENTS
An otherwise eligible Employee must complete the following minimum age
and service requirements before becoming eligible to participate in the
Plan:
a. If elected below, the age and service requirements specified must
be satisfied for an Employee to become eligible for any and all
types of benefits under this Plan:
( ) i. An Employee must have attained age .**
( ) ii. An Employee must have completed _______ Year(s) of
Service.*
( ) iii. No age or service requirement.
(X) iv. Not applicable (see b. below).
b. If a general eligibility requirement has not been selected in a.
above, then an Employee must satisfy the following age and service
requirements for purposes of eligibility to share in each of the
contributions listed:
<TABLE>
<CAPTION>
SERVICE* AGE**
CONTRIBUTION REQUIREMENT REQUIREMENT
------------ ----------- -----------
<S> <C> <C>
Employee Elective Deferral and
Employer Qualified Non-Elective 6 Months 21 Years
----------- -----------
Employee Post-Tax Voluntary N/A N/A
----------- -----------
Employer Profit Sharing 6 Months 21 Years
----------- -----------
Employer Matching and
Employer Qualified Matching 6 Months 21 Years
----------- -----------
Employee Rollover/Transfer None None
----------- -----------
</TABLE>
4
<PAGE> 5
* The service requirement for Employee Elective Deferral
Contributions and Employer Qualified Non-Elective
Contributions cannot exceed 1 year of service. The service
requirement for any other purpose cannot exceed 1 year unless
the plan provides a nonforfeitable right to 100% of the
participant's account balance derived from employer
contributions after not more than 2 years of service in which
case up to 2 years is permissible. If the Year(s) of Service
selected is or includes a fractional year, an employee will
not be required to complete any specified number of hours of
service to receive credit for such fractional year.
** The age requirement cannot exceed age 21.
c. If elected below, the age and service requirements described for
each purpose above are waived for Employees in the employ of the
Employer on the later of the Effective Date or the Entry Date
selected in item 17.b.i. (if applicable) and who are members of
the eligible class of Employees.
i. Service requirements:
( ) A. are waived initially.
(X) B. are not waived initially.
ii. Age requirements:
( ) A. are waived initially.
(X) B. are not waived initially.
14. SERVICE
Service under the Plan shall be computed on the basis of the method
selected below:
(X) a. on the basis of Hours of Service completed.
( ) b. on the basis of Regular Time Hours completed.
( ) c. on the basis of elapsed time, as provided for in section
1.121(b) of the Plan.
15. HOURS OF SERVICE
If Item 14.a. or 14.b. is elected, Hours of Service shall be credited
on the basis of the method indicated below. The method selected will be
applied to all Employees.
( ) a. on the basis of Hours of Service for which an Employee is paid
or entitled to payment.
( ) b. on the basis of Regular Time Hours for which an Employee is
paid or entitled to payment.
( ) c. on the basis of days worked: An Employee shall be credited
with ten (10) Hours of Service if, under section 1.71 of the
Plan, such Employee would be credited with at least one Hour
of Service during the day.
( ) d. on the basis of weeks worked: An Employee shall be credited
with forty-five (45) Hours of Service if, under section 1.71
of the Plan, such Employee would be credited with at least one
Hour of Service during the week.
5
<PAGE> 6
( ) e. on the basis of semi-monthly payroll periods: An Employee
shall be credited with ninety-five (95) Hours of Service if,
under section 1.71 of the Plan, such Employee would be
credited with at least one Hour of Service during the
semi-monthly payroll period.
(X) f. on the basis of months worked: An Employee shall be credited
with one hundred- ninety (190) Hours of Service if, under
section 1.71 of the Plan, such Employee would be credited with
at least one Hour of Service during the month.
( ) g. Not applicable (elapsed time only).
16. PREDECESSOR EMPLOYER SERVICE
Service for eligibility and vesting purposes will include:
( ) a. All Years of Service with the following named predecessor
employer(s):
-------------------------------------------------
.
-------------------------------------------------------------
( ) b. Years of Service with the following named predecessor
employer(s) _________________________________________________
during the time a qualified plan was maintained.
( ) c. No predecessor employer service credit.
(X) d. Not applicable (no predecessor employer).
17. ENTRY DATE
a. Entry Date for an eligible Employee (as determined under 12.
above) who has completed the eligibility requirements) as
determined under 13. above) will be:
( ) i. the first day of the Plan Year or the first day of the
seventh month of the Plan Year, coincident with or next
following the date the Employee satisfies the
eligibility requirements.
( ) ii. the first day of the Plan Year coincident with or next
following the date the Employee satisfies the
eligibility requirements. [The age requirement of Item
13 may not exceed 20 1/2. The service requirement of
Item 13 may not exceed 6 months.]
( ) iii. the first day of the month coincident with or next
following the date the Employee satisfies the
eligibility requirements.
( ) iv. the first day of the Plan Year in which the Employee
satisfies the eligibility requirements.
( ) v. the Employee's date of employment.
(X) vi. the first day of each of the following months of the
Plan Year:
first, fourth, seventh and tenth .
-------------------------------------------------------
b. Notwithstanding the option selected in a. above, the following
exception(s) apply with respect to the Entry Date:
6
<PAGE> 7
( ) i. an employee who has completed the eligibility
requirements as of _______ will be eligible to begin
participation on that date.
(X) ii. notwithstanding the option selected above, if an
Employee is eligible to make a Rollover/Transfer
Contribution, his Entry Date will be the earlier of the
date the Rollover/Transfer Contribution is made or the
Entry Date selected above.
( ) iii. No exceptions.
18. COMPENSATION
a. Compensation for a Participant will be all of the Participant's:
(X) i. Compensation as defined for the Wages, Tips and Other
Compensation Box on Form W-2, except for any
Self-Employed individual covered under the plan, in
which case Compensation shall mean Earned Income.
( ) ii. Compensation as defined in Section 3401(a).
( ) iii. Compensation as defined for the section 415 safe harbor.
b. If elected below, Compensation shall include Employer
contributions made pursuant to a salary reduction agreement which
are not includable in the gross income of the employee under the
following sections of the Code:
(X) i. Section 125 (Cafeteria plan deferrals).
(X) ii. Section 402(a)(8) (401(k) deferrals).
(X) iii. Section 402(h) (government pick-up contributions).
(X) iv. Section 457.
(X) v. 403(b).
( ) vi. no amounts included.
c. Compensation paid prior to the date the Employee's participation
under this Plan commenced:
( ) i. will be included.
(X) ii. will not be included.
d. The following amounts are excluded from Compensation:
( ) i. Overtime.
( ) ii. All bonuses.
( ) iii. Discretionary bonuses only.
( ) iv. Taxable employee benefits.
( ) v. Compensation in excess of $_________.
( ) vi. Other _______________________.
(X) vii. No exclusions (must be elected if allocation is
integrated with Social Security).
NOTE: If exclusions are elected, the special nondiscrimination rule
described in the last paragraph of section 1.19(a) of the Plan must be
satisfied annually.
7
<PAGE> 8
e. The Compensation Determination Period is as selected below:
(X) i. The Plan Year.
( ) ii. The calendar year ending with or within the Plan Year.
19. EMPLOYEE ELECTIVE DEFERRALS
( ) a. Employee Elective Deferrals are not permitted.
(X) b. Employee Elective Deferrals are permitted subject to the
following [the provision to permit Employee Elective
Deferrals cannot be made effective prior to the first
day of the Plan Year in which the provision is adopted]:
i. The minimum allowable deferral per Participant is:
(X) A. No minimum amount.
( ) B. $________ per _______________ (week, etc.).
( ) C. ________ % of Compensation.
ii. The maximum allowable deferral is:
(X) A. Maximum permitted under the Code.
( ) B. $________ per _______________ (week, etc.).
( ) C. ________ % of Compensation.
iii. The Participant will be permitted to change the amount
of his deferral election effective the beginning of the
pay period coincident with or next following the Change
Date(s) elected below:
( ) A. First day of the first month of the Plan Year.
( ) B. First day of the first or the seventh month of
the Plan Year.
(X) C. First day of the first, fourth, seventh and
tenth months of the Plan Year.
( ) D. First day of each month.
( ) E. Each: _________________________________________.
iv. If a Participant elects to stop his Employee Elective
Deferrals at a time other than on a Change Date, he will
be permitted to start again on:
(X) A. The Change Date next following the date Employee
Elective Deferrals were stopped.
( ) B. The Change Date following ______________________
after Employee Elective Deferrals were stopped.
20. EMPLOYEE POST-TAX VOLUNTARY CONTRIBUTIONS
(X) a. Employee Post-Tax Voluntary Contributions are not
permitted.
( ) b. Employee Post-Tax Voluntary Contributions are permitted
subject to the following:
i. The minimum contribution per Participant is:
( ) A. No minimum amount.
( ) B. $________ per ____________________ (week, month,
etc.).
( ) C. ________% of Compensation.
ii. The maximum contribution is ________% of Compensation
[Not to exceed 10%].
8
<PAGE> 9
iii. The Participant will be permitted to change the amount
of his Employee Post-Tax Voluntary Contribution election
effective the beginning of the pay period coincident
with or next following the:
( ) A. First day of the first month of the Plan Year.
( ) B. First day of the first or the seventh month of
the Plan Year.
( ) C. First day of the first, fourth, seventh and
tenth months of the Plan Year.
( ) D. First day of each month.
( ) E. Each: _________________________________________.
iv. If elected below, a Participant will be permitted to
withdraw all or a portion of his Employee Post Tax
Voluntary Contribution Account in accordance with the
provisions of 7.01(c) of the Plan.
( ) A. Withdrawals from the Employee Post-Tax Voluntary
Contribution Account are permitted.
( ) B. Withdrawals from the Employee Post-Tax Voluntary
Contribution Account are not permitted.
( ) c. Employee Post-Tax Voluntary Contributions are no longer
permitted, but Employee Post-Tax Voluntary Contribution
Accounts may be maintained on behalf of Participants who
have previously made such contributions. If elected
below, a Participant will be permitted to withdraw all
or a portion of his Employee Post-Tax Voluntary
Contribution Account in accordance with the provisions
of 7.01(c) of the Plan.
( ) i. Withdrawals from the Employee Post-Tax Voluntary
Contribution Account are permitted.
( ) ii. Withdrawals from the Employee Post-Tax Voluntary
Contribution Account are not permitted.
21. EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTIONS
a. Employer Qualified Non-Elective Contributions will be
allocated as of the final Valuation Date in a Plan Year on
behalf of the following Participants:
( ) i. All eligible Participants.
(X) ii. Only eligible Nonhighly Compensated Participants.
( ) iii. Only eligible Participants who are not Self-Employed
individuals, shareholders or owners (or considered
one of these under section 318 of the Code) of the
Employer.
( ) iv. Only eligible Participants who are not Self-Employed
individuals, shareholders or owners (or considered
one of these under section 318 of the Code) of the
Employer having an ownership interest of at least
_________% at any time during the Plan Year.
( ) v. Not applicable (No Employer Qualified Non-Elective
Contributions).
9
<PAGE> 10
b. Employer Qualified Non-Elective Contributions for a Plan Year
will be allocated to all eligible Participants as elected in
21.a above except as provided below:
(X) i. Participants who terminated employment during the
Plan Year for reasons other than retirement on or
after attainment of Normal Retirement Age, death or
Disability shall not share in the allocation.
(X) ii. Participants employed on the Valuation Date who did
not complete a minimum of 1,000 Hours of Service
during the Plan Year shall not share in the
allocation.
( ) iii. Participants who terminated employment before the
Valuation Date for reasons other than death,
Disability or attainment of Normal Retirement Age
who did not complete a minimum of _____ Hours of
Service during the Plan Year shall not share in the
allocation.
( ) iv. Participants who terminated employment during the
Plan Year for reasons other than retirement on or
after attainment of Normal Retirement Age, death or
Disability and who had not more than 500 Hours of
Service during the Plan Year shall not share in the
allocation.
( ) v. No exceptions.
Note: If 21.b.i, 21.b.ii, or 21.b.iii has been elected and
the plan fails to satisfy the minimum coverage
requirements of Code section 410(b) or the minimum
participation requirements of Code section 401(a)(26)
for a given Plan Year because of the operation of
these exceptions, the provisions of section 4.06 of
the Plan shall apply.
22. EMPLOYER MATCHING CONTRIBUTIONS
a. If elected below, Employer Matching Contributions will be
permitted:
(X) i. Employer Matching Contributions are permitted.
( ) ii. Employer Matching Contributions are not permitted.
b. If Employer Matching Contributions are permitted,
contributions to the following accounts will be eligible to be
matched:
(X) i. Employee Elective Deferral Contributions.
( ) ii. Employee Post-Tax Voluntary Contributions.
c. If Employer Matching Contributions are permitted:
i. The amount of the Matching Contribution to be allocated on
behalf of any Participant eligible to share in the Employer
Matching Contribution will be determined as follows:
( ) A. _____% of each Participant's Contribution as elected
in b. above.
(X) B. Declared annually at the discretion of the Employer.
( ) C. Declared annually at the discretion of the Employer,
but with a minimum of _____% and a maximum of _____%
of each Participant's contribution as elected in b.
above.
10
<PAGE> 11
EXHIBIT 4.1
PART II
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
<PAGE> 12
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ELIGIBILITY AND PARTICIPATION
<TABLE>
<S> <C> <C>
2.01 Initial Eligibility 30
2.02 Change in Employee Classification 30
2.03 Eligibility Upon Reemployment 31
2.04 Participation During an Authorized Leave of Absence 31
2.05 Limitations with Regard to Owner-Employees 31
</TABLE>
ARTICLE III
CONTRIBUTIONS
<TABLE>
<S> <C> <C>
3.01 Employee Elective Deferrals 33
3.02 Terms of Deferral Agreement 33
3.03 Employer Matching and Qualified Matching Contributions 33
3.04 Employer Profit Sharing Contributions 34
3.05 Employer Qualified Non-Elective Contributions 34
3.06 Employee Post-Tax Voluntary Contributions 34
3.07 Employee Rollover/Transfer Contributions 34
3.08 Payment of Employer Contributions to Trustee 34
</TABLE>
<PAGE> 13
ARTICLE IV
ACCOUNTING AND ALLOCATION
<TABLE>
<S> <C> <C>
4.01 Accounting Procedure 36
4.02 Allocation of Employer Profit Sharing Contributions and
Forfeitures 38
4.03 Timing of Employer Contributions 40
4.04 Valuation and Allocation of Contracts 41
4.05 Correction of Allocations 41
4.06 Additional Eligible Employees 41
</TABLE>
ARTICLE V
LIMITATION ON ALLOCATIONS, DEFERRALS AND CONTRIBUTIONS
<TABLE>
<S> <C> <C>
5.01 Limitation on Allocations 43
5.02 Limitation on Employee Elective Deferrals 45
5.03 Limitations on Employer Matching Contributions and Employer
Post-Tax Voluntary Contributions 47
5.04 Procedure for Distribution of Excess Elective Deferrals 48
5.05 Distribution of Excess Contributions 49
5.06 Distribution of Excess Matching Contributions or Employee
Post-Tax Voluntary Contributions 50
5.07 Multiple Use Limitation 50
</TABLE>
ARTICLE VI
VESTING AND FORFEITURES
<TABLE>
<S> <C> <C>
6.01 Nonforfeitable Accounts 52
6.02 Accounts Subject to Vesting Schedule 52
6.03 Vesting at Termination 52
6.04 Forfeitures 53
6.05 Buyback 53
</TABLE>
<PAGE> 14
ARTICLE VII
PAYMENT OF BENEFITS
<TABLE>
<S> <C> <C>
7.01 Payment of Benefits 54
7.02 Commencement of Benefits 55
7.03 Joint and Survivor Requirements 56
7.04 Minimum Distribution Requirements 56
7.05 Payment at Death 57
7.06 Optional Form of Payment of Benefits 59
7.07 Designation of Beneficiary 59
7.08 Restrictions on Immediate Distributions 60
7.09 Notice Requirements 61
7.10 Special Rule for Elective Plans 62
7.11 Transitional Joint and Survivor Annuity Rules 62
7.12 Hardship Withdrawals 63
7.13 Transitional Minimum Distribution Rules 65
7.14 In-Service Distributions 66
7.15 Distributions Under Qualified Domestic Relations Order 66
7.16 Direct Rollover 67
</TABLE>
ARTICLE VIII
SPECIAL TOP-HEAVY PLAN RULES
<TABLE>
<S> <C> <C>
8.01 Applicability of Article 68
8.02 Minimum Allocations 68
8.03 Minimum Vesting 69
8.04 Super Top-Heavy Plans 69
</TABLE>
<PAGE> 15
ARTICLE IX
ADMINISTRATION OF PLAN
<TABLE>
<S> <C> <C>
9.01 Responsibilities of Employer 70
9.02 Rights and Responsibilities of Plan Administrator 70
9.03 Administrative Committee 71
9.04 Benefit Claims Procedure 72
9.05 Multiple Roles 74
</TABLE>
ARTICLE X
TRUST AGREEMENT
<TABLE>
<S> <C> <C>
10.01 Trust Agreement 75
10.02 Basic Responsibilities of Trustee 75
10.03 Investment 75
10.04 Rights and Powers of the Trustee 77
10.05 Administration and Payment 79
10.06 Compensations and Expenses 80
10.07 Accounts of the Trustee 80
10.08 Co-Trustees 81
10.09 Resignation and Removal of Trustee 81
10.10 Successor Trustee 81
</TABLE>
ARTICLE XI
LOANS TO PARTICIPANTS
<TABLE>
<S> <C> <C>
11.01 Loans to Participants 82
11.02 Terms and Conditions 82
11.03 Protection of Trustee 84
</TABLE>
<PAGE> 16
ARTICLE XII
INSURANCE CONTRACTS
<TABLE>
<S> <C> <C>
12.01 Investment in Insurance Contracts 85
12.02 Investment Limitations 85
12.03 General Provisions 85
12.04 Insurance as General Investment 87
12.05 Insurance Company Not a Party 87
</TABLE>
ARTICLE XIII
EXCLUSIVE BENEFIT
<TABLE>
<S> <C> <C>
13.01 Exclusive Benefit 88
13.02 Mistake of Fact 88
13.03 Requirement of Qualification 88
13.04 Requirement of Deductibility 88
</TABLE>
ARTICLE XIV
AMENDMENT, TERMINATION, AND MERGER
<TABLE>
<S> <C> <C>
14.01 Amendment 89
14.02 Plan Termination 90
14.03 Distribution Upon Plan Termination 90
14.04 Merger 90
</TABLE>
ARTICLE XV
MISCELLANEOUS
<TABLE>
<S> <C> <C>
15.01 This Plan is not an Employment Contract 91
15.02 Limitations on the Obligations of the Employer 91
15.03 Agreement Binding 91
15.04 Assignment, Alienation, or Encumbrance 91
15.05 Retroactive Effect 91
15.06 Construction 92
</TABLE>
<PAGE> 17
<TABLE>
<S> <C> <C>
15.07 Headings 92
15.08 Governing Law 92
</TABLE>
ARTICLE XVI
PARTICIPATING EMPLOYERS
<TABLE>
<S> <C> <C>
16.01 Adoption by Other Employers 93
16.02 Requirements of Participating Employers 93
16.03 Designation of Agent 94
16.04 Employee Transfers 94
16.05 Participating Employers Contribution 94
16.06 Amendment 94
16.07 Discontinuance of Participation 95
16.08 Administrator's Authority 95
</TABLE>
<PAGE> 18
PLAN DATA, INC. REGIONAL PROTOTYPE
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
(PLAN 001)
The Employer whose name and signature appear on the attached Adoption Agreement
hereby adopts a profit sharing plan in the form of this Plan Data, Inc. Regional
Prototype Profit Sharing Plan and Trust With Employee Contributions, as modified
by the information provided and selections made in the Adoption Agreement.
The Employer hereby establishes the Plan and creates the Trust for the exclusive
benefit of Participants and their Beneficiaries, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases, when used herein, shall have the meanings
indicated below, unless a different meaning is clearly indicated by the context.
All references to sections herein pertain to sections of the Plan unless
otherwise indicated by the text or context.
1.01 Actual Deferral Percentage ("ADP"):
For a specified group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant in such group)
of (1) the amount of Employer contributions actually paid over to the
trust on behalf of such Participant for the Plan Year to (2) the
Participant's Compensation for such Plan Year.
For purposes of the preceding sentence, "Employer contributions" on
behalf of any Participant shall include: (1) any Employee Elective
Deferrals made pursuant to the Participant's Deferral Agreement,
including Excess Elective Deferrals, 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
these Employee Elective Deferrals); and (2) Employer Qualified
Non-Elective Contributions and Employer Qualified Matching
Contributions. The amounts of Employer Qualified Matching Contributions
and Employer Qualified Non-Elective Contributions taken into account
for purposes of calculating the Actual Deferral Percentage, subject to
such other requirements as may be prescribed by the Secretary of the
Treasury, shall be such amounts as are needed to meet the Actual
Deferral Percentage test in section 5.02(a) of the Plan.
For purposes of computing Actual Deferral Percentages, "Participant"
shall include an Employee who would be a Participant (with respect to
eligibility to make Employee Elective Deferrals) but for the failure to
make Employee Elective Deferrals. Such Employee shall be treated as a
Participant on whose behalf no Employee Elective Deferrals are made.
1.02 Administrator, Plan Administrator:
The person or Committee named to administer the Plan on behalf
of the Employer, as specified in the Adoption Agreement. If no person
or Committee is named, the Employer shall be the Administrator.
1.03 Adoption Agreement:
1
<PAGE> 19
The instrument, completed and executed by the Employer and accepted by
the Trustee, in which the Employer adopts the Plan and Trust and
selects its options under this Plan. Such agreement may be amended by
the Employer from time to time.
1.04 Affiliated Employer:
Any corporation which is a member of a controlled group of corporations
(as defined in Section 414(b) of the Code) which includes the Employer;
any trade or business (whether or not incorporated) which is under
common control (as defined in Section 414(c) of the Code) with the
Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Section 414(m) of
the Code) which includes the Employer; and any other entity required to
be aggregated with the Employer pursuant to regulations under 414(o) of
the Code.
1.05 Aggregate Limit:
The sum of (a) 125 percent of the greater of the ADP of the Non-highly
Compensated Employees for the Plan Year or the ACP of Non-highly
Compensated Employees under the Plan subject to section 401(m) of the
Code for the Plan Year beginning with or within the Plan Year of the
cash or deferred arrangement and (b) the lesser of 200% or two plus the
lesser of such ADP or ACP.
1.06 Anniversary Date:
The last day of the Plan Year.
1.07 Annual Additions:
The sum of the following amounts allocated on behalf of a Participant
for the Limitation Year:
(a) all employer contributions,
(b) all forfeitures,
(c) all employee contributions.
For purposes of this subsection, amounts reapplied to reduce employer
contributions under section 5.01 shall also be included as Annual
Additions. Excess Elective Deferrals and Excess Contributions shall be
treated as Annual Additions under the Plan.
Amounts allocated, after March 31, 1984, to an individual medical
account, as defined in section 415(l)(2) of the Code, which is part of
a pension or annuity plan maintained by the Employer, are treated as
Annual Additions to a defined contribution plan. Also, amounts derived
from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee,
as defined in section 419A(d)(3) of the Code, under a welfare benefit
fund, as defined in section 419(e), maintained by the Employer, are
treated as Annual Additions to a defined contribution plan.
1.08 Annuity Starting Date:
Annuity Starting Date is the first day of the first period for which an
amount is paid as an annuity or any other form.
2
<PAGE> 20
1.09 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.
Life expectancy and joint and last survivor expectancy are computed by
use of the expected return multiples in Tables V and VI of section
1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in section 7.05(c)(2)(B)) by the time
distributions are required to begin, life expectancies shall not be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse beneficiary may not be recalculated.
1.10 Applicable Period:
The Applicable Period for notice in the case of a Preretirement
Survivor Annuity is whichever of the following periods ends last:
(a) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Participant
attains age 35;
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after section 7.03 first applies to
the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation from
service in the case of a Participant who separates from service
before attaining age 35.
For purposes of the above, a reasonable period ending after the
enumerated events described in (b) and (c) is the end of the two-year
period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a
Participant who separates from service before the Plan Year in which
age 35 is attained, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after
separation. If such a Participant thereafter returns to employment with
the Employer, the Applicable Period for such Participant shall be
redetermined.
1.11 Authorized Leave of Absence:
Any absence authorized by the Employer under the Employer's standard
personnel practices, so long as all persons under similar circumstances
will have such practices uniformly applied to them, and further
provided that the Participant either returns or retires within the
period of the Authorized Leave of Absence. An absence due to service in
the armed forces of the United States or of any state shall be
considered an Authorized Leave of Absence if that absence is caused by
war or other emergency or if the Participant is required to serve under
the laws of conscription in time of peace, and the Participant returns
to employment within the time provided by law.
1.12 Average Contribution Percentage ("ACP"):
3
<PAGE> 21
The average of the Contribution Percentages of the Eligible
Participants in a specified group.
1.13 Beneficiary:
The person or persons designated pursuant to Article VII of the Plan to
receive a Participant's benefits upon the Participant's death, subject
to the restrictions of Article VII.
1.14 Break in Service:
(a) Hour of Service Method - If the Employer has specified in the
Adoption Agreement that the Hour of Service method shall be used,
then a Break in Service shall mean a Plan Year during which an
Employee does not complete more than 500 Hours of Service with
the Employer. However, in determining the Break in Service
referenced in section 1.121(a)(2), the computation period shall
be the same as that which is used to determine a Year of Service
for eligibility purposes.
Solely for purposes of determining whether a Break in Service for
eligibility and vesting purposes has occurred in a computation
period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such individual but
for such absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. The Hours
of Service credited under this paragraph shall be credited in the
computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period, or, in
all other cases, in the following computation period.
(b) Regular Time Hours Method - If the Employer has specified in the
Adoption Agreement that the Regular Time Hours Method shall be
used, then a Break in Service will be determined under the Hour
of Service Method described in (a) above, except that 375 Regular
Time Hours will be substituted for 500 Hours of Service.
(c) Elapsed Time Method - If the Employer has specified in the
Adoption Agreement that the elapsed time method shall be used,
then a Break in Service shall mean a Period of Severance of at
least twelve-consecutive months.
In the case of an individual who is absent from work for
maternity or paternity reasons, the twelve-consecutive month
period beginning on the first anniversary of the first date of
such absence shall not constitute a Break in Service.
(d) For purposes of sections 1.14(a) and (c) above, an absence from
work for maternity or paternity reasons means an absence (1) by
reason of the pregnancy of the individual, (2) by reason of the
birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately
following such birth or placement.
1.15 Change Date:
The date or dates elected in Item 19 of the Adoption Agreement as of
which a Participant will be able to change the amount deferred pursuant
to his Deferral Agreement.
4
<PAGE> 22
1.16 Code:
The Internal Revenue Code of 1986 and the regulations thereunder, as
heretofore or hereafter amended. Reference to a section of the Code
shall include that section and any comparable section or sections, or
any future statutory provision which amends, supplements or supersedes
that section.
1.17 Collective Bargaining Agreement:
An agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and one or more
employers, if there is evidence that retirement benefits were the
subject of good faith bargaining. 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.
1.18 Committee:
If the Employer so designates in the Adoption Agreement, the person or
persons appointed by the Employer to have the responsibilities set
forth in Article IX.
1.19 Compensation:
(a) Compensation shall mean one of the following amounts as elected
by the Employer in item 18. of the Adoption Agreement:
(1) Wages, Tips and Other Compensation Box on Form W-2
Compensation is defined as wages as defined in section
3401(a) of the Code 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
section 6041(d) and 6051(a)(3) of the Code. Compensation
must be determined without regard to any rules under
section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or
the services performed (such as the exception for
agricultural labor in section 3401(a)(2)).
(2) Section 3401(a) Wages
Compensation is defined as wages within the meaning of
section 3401(a) for the purposes of income tax withholding
at the source but determined without regard to any rules
that limit the remuneration included in wages based on the
nature or location of the employment or the services
performed (such as the exception for agricultural labor in
section 3401(a)(2)).
(3) 415 Safe-Harbor Compensation.
Compensation is defined as wages, salaries, and fees for
professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the employer maintaining the plan to the
extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan (as described in
1.62-2(c)), and excluding the following:
i) Employer contributions to a plan of deferred
compensation which are not includable in the employee's
gross income for the taxable
5
<PAGE> 23
years 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 either becomes freely transferable
or is no longer subject to a substantial risk of
forfeiture;
iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified 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).
Notwithstanding the above, if elected by the employer in the
Adoption Agreement item 18., compensation shall include any
amount which is contributed by the Employer pursuant to a salary
reduction agreement and which is not includable in the gross
income of the employee under sections 125, 402(a)(8), 402(h) or
403(b) of the Code.
For plan years beginning on or after January 1, 1989, and before
January 1, 1994, the annual Compensation of each Participant
taken into account for determining all benefits provided under
the Plan for any Compensation Determination Period shall not
exceed $200,000, as adjusted by the Secretary at the same time
and in the same manner as under section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any
calendar year is effective for plan years beginning in such
calendar year and the first adjustment to the $200,000 limitation
is effective on January 1, 1990.
For plan years beginning on or after January 1, 1994, the annual
compensation of each participant taken into account for
determining all benefits provided under the plan for any
Compensation Determination Period shall not exceed $150,000, as
adjusted for increases in the cost-of-living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies
to any determination period beginning in such calendar year.
If the determination period consists of fewer than 12 months, the
annual compensation limit is an amount equal to the otherwise
applicable annual compensation limit multiplied by a fraction,
the numerator of which is the number of months in the short
determination period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of section 414(q)(6) of the Code shall
apply, except that in applying such rules, the term "family"
shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of application of
such rules, the adjusted annual compensation limitation is
exceeded, then (except for purposes of determining the portion of
Compensation up to the Integration Level if this Plan provides
for permitted disparity), the limitation shall be prorated among
the affected
6
<PAGE> 24
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 Compensation Determination Period
is taken into account in determining an employee's allocations or
benefits for the current Plan Year, the Compensation for such
prior Compensation Determination Period is subject to the
applicable annual compensation limit in effect for that prior
period. For this purpose, for years beginning on or after January
1, 1989, the annual compensation limit in effect for Compensation
Determination Periods beginning before that date is $200,000 (as
adjusted). In addition, in determining allocations in plan years
beginning on or after January 1, 1994, the annual compensation
limit in effect for Compensation Determination Periods beginning
on or after that date is $150,000 (as adjusted).
If so elected in Item 18.c. of the Adoption Agreement,
Compensation for purposes of allocating Employer Contributions
shall not include Compensation prior to the date the Employee's
participation in this Plan commenced. For purposes of determining
the Compensation of a Self-Employed, Compensation shall be deemed
to have been earned at a uniform rate throughout the year, and
shall include a pro rata amount based on the number of complete
months of participation in this Plan.
If so elected in Item 18.d. of the Adoption Agreement,
Compensation for purposes of allocating Employer Contributions
shall not include any of the amounts specified in Item 18.d.
However, these amounts can be excluded for a Compensation
Determination Period only if the "compensation percentage" for
the Employer's Highly Compensated Employees is not greater than
the "compensation percentage" for the Employer's Nonhighly
Compensated Employees by more than a de minimis amount. The
compensation percentage for a group of Employees is calculated by
averaging the separately calculated compensation ratios for each
Employee in the group. An Employee's compensation ratio is
calculated by dividing the amount of the Employee's Compensation
taking Item 18.d. into account by the amount of the Employee's
Compensation without regard to Item 18.d.
(b) When the Plan refers to "_415 Compensation," such term shall mean
the amount as elected by the Employer in item 18.a of the
Adoption Agreement determined without regard to the additional
amounts included or excluded under items 18.b., or 18.c., or
18.d. of the Adoption Agreement.
_415 Compensation for a Limitation Year is the Compensation
actually paid or includable in gross income during such
Limitation Year.
(c) For purposes of determining the Actual Contribution Percentage
and the Actual Deferral Percentage and testing under 410(b) and
401(a)(4), Compensation shall mean an amount elected by the
Employer which satisfies the requirements of Code Section 414(s)
and the regulations thereunder. Further, the Employer may elect
to exclude from Compensation considered for this purpose any
Compensation paid prior to the time the Employee became a
Participant in the Plan.
(d) When the Plan refers to "_414(q) Compensation", such term shall
mean the amount elected by the Employer in item 18.a of the
Adoption Agreement and shall include salary deferral
contributions under sections 125, 402(a)(8), 402(h)(1)(B), and
403(b) of the Code.
7
<PAGE> 25
1.20 Compensation Determination Period: The Compensation Determination
Period is the period selected by the Employer in the Adoption Agreement
over which Compensation is determined.
1.21 Contract:
A life insurance policy or annuity contract (group or individual)
issued by an insurer.
1.22 Contribution Percentage:
The ratio (expressed as a percentage) of the Participant's Contribution
Percentage Amounts to the Participant's Compensation for the Plan Year
(whether or not the Employee was a Participant for the entire Plan
Year).
1.23 Contribution Percentage Amounts:
The sum of the Employee Contributions, Matching Contributions, and
Employer Qualified Non-Elective Contributions (to the extent not taken
into account for purposes of the ADP test) made under the Plan on
behalf of the Participant for the Plan Year. The Employer may include
Employee Elective Deferrals in the Contribution Percentage Amounts so
long as the ADP test is met before the Employee Elective Deferrals are
used in the ACP test and continues to be met following the exclusion of
those Employee Elective Deferrals that are used to meet the ACP test.
1.24 Deferral Agreement:
A written agreement between an Employee who has otherwise satisfied the
participation requirements of Section 2.01 and the Employer which
provides that the Participant's cash compensation will be reduced in
accordance with Item 19 of the Adoption Agreement and that the Employer
will contribute an equivalent amount to the Trust as an Employee
Elective Deferral on behalf of such Participant. Under no circumstances
shall a Deferral Agreement be adopted retroactively.
1.25 Defined Benefit Fraction:
A fraction, the numerator of which is the sum of the Participant's
Projected Annual Benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined
for the Limitation Year under sections 415(b) and (d) of the Code or
140 percent of the Highest Average Compensation, including any
adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31,
1986, in one or more defined benefit plans maintained by the Employer
which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 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.
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<PAGE> 26
1.26 Defined Contribution Dollar Limitation:
$30,000 or if greater, one-fourth of the defined benefit dollar
limitation set forth in section 415(b)(1) of the Code as in effect for
the Limitation Year.
1.27 Defined Contribution Fraction:
A fraction, the numerator of which is the sum of the Annual Additions
to the Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the current
and all prior Limitation Years, (including the Annual Additions
attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by
the Employer and the Annual Additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(l)(2) of the Code,
maintained by the Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior Limitation
Years of service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent of
the dollar limitation determined under sections 415(b) and (d) of the
Code in effect under section 415(c)(1)(A) of the Code or 35 percent of
the Participant's _415 Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed
as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
plan made after May 5, 1986, but using the section 415 limitation
applicable to the first Limitation Year beginning on or after January
1, 1987. The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
1.28 Designated Beneficiary:
The individual who is designated as the Beneficiary under the Plan in
accordance with section 401(a)(9) of the Code and the regulations
thereunder.
1.29 Determination Date:
For the first Plan Year of the Plan, the last day of that year. For any
subsequent Plan Year, the last day of the preceding Plan Year.
1.30 Direct Rollover:
A Direct Rollover is a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
1.31 Disability:
A medically determinable physical or mental condition resulting from
bodily injury, disease, or mental disorder which is expected to be of
long and indefinite duration and which renders a Participant incapable
of continuing his usual and customary employment with the Employer.
Disability shall be determined by a licensed physician selected by the
Administrator.
1.32 Distributee:
A Distributee is a Participant or a former Participant who is eligible
to receive a
9
<PAGE> 27
distribution from this Plan. In addition, a Distributee includes a
Participant's or former Participant'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 with regard to the interest of
the Spouse or former Spouse.
1.33 Distribution Calendar Year:
A calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately preceding
the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the
first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to section 7.05(c).
1.34 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 Self-Employed are a material income-producing factor. Net
earnings will be determined without regard to items not included in
gross income and the deductions allocable to such items. Net earnings
are reduced by contributions by the Employer to a qualified plan to the
extent deductible under section 404 of the Code. Net earnings shall be
determined with regard to the deduction allowed to the Employer by
section 164(f) of the Code for taxable years beginning after December
31, 1989.
1.35 Eligible Participant:
Any Employee who is eligible to make an Employee Contribution, or an
Employee Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution Percentage), or to
receive an Employer Matching Contribution (including forfeitures) or an
Employer Qualified Matching Contribution.
1.36 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.
1.37 Eligible Rollover Distribution:
Any distribution of all or any portion of the balance to the credit of
the Distributee, except:
(a) a distribution that is one of a series of substantially equal
periodic payments, made not less frequently than annually, that
is made over the life or life expectancy of the Distributee, or
the joint lives of the Distributee and the Distributee's
designated Beneficiary, the joint life and last survivor
expectancy of the Distributee and the Distributee's designated
Beneficiary, or a specified period of ten years or more; or,
(b) any distribution to the extent the distribution is required under
section 401(a)(9) of the Code; or,
(c) the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities); or,
10
<PAGE> 28
(d) such other distributions the Secretary or Commissioner designates
ineligible for treatment as Eligible Rollover Distributions in
regulations, rulings, notices or other guidance of general
applicability.
1.38 Employee:
Any employee of the Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under sections
414(b), (c), (m) or (o) of the Code. The term "Employee" shall also
include any "Leased Employee" deemed to be an employee of any employer
described in the previous sentence as provided in sections 414(n) or
(o) of the Code.
A Leased Employee shall not be considered an employee of the recipient
if: (a) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least
10 percent of compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income under
section 125, section 402(a)(8), section 402(h) or section 403(b) of the
Code, (2) immediate participation, and (3) full and immediate vesting;
and (b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
1.39 Employee Contribution:
Any contribution made to the Plan by or on behalf of a Participant that
is included in the Participant's gross income in the year in which made
and that is maintained under a separate account to which earnings and
losses are allocated.
1.40 Employee 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 Deferral Agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Employee Elective
Deferrals is the sum of all employer contributions made on behalf of
such Participant pursuant to an election to defer under any qualified
cash or deferred arrangement 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.
1.41 Employee Elective Deferral Account:
The account maintained with respect to a Participant in which is
recorded his Employee Elective Deferrals under this Plan and any
adjustments thereto.
1.42 Employee Post-Tax Voluntary Contributions:
Amounts contributed by a Participant pursuant to section 3.06 of the
Plan.
1.43 Employee Post-Tax Voluntary Contribution Account:
The account maintained with respect to a Participant in which is
recorded his Employee Post-Tax Voluntary Contributions and adjustments
thereto.
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<PAGE> 29
1.44 Employee Rollover/Transfer Contributions:
Amounts received by the Trustee which either -
(a) Were received by a Participant from another Qualified Deferred
Compensation Plan and were then contributed to the Trustee of
this Plan in such manner that the requirements for deferral of
income pursuant to section 402(a)(5), 403(a)(4),
408(d)(3)(A)(ii), or other applicable provision of the Code
dealing with rollover contributions are met; or
(b) Were transferred on behalf of a Participant directly to the
Trustee of this Plan by the Trustee of another Qualified Deferred
Compensation Plan, provided such transfer meets any applicable
requirements of law.
1.45 Employee Rollover/Transfer Account:
The account maintained with respect to a Participant in which is
recorded his Employee Rollover/Transfer Contributions and any
adjustments thereto.
1.46 Employee VDEC Contributions:
Amounts received by the Trustee which are voluntary deductible employee
contributions. This Plan will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986.
1.47 Employee VDEC Account:
The account maintained with respect to a Participant in which is
recorded his Employee VDEC Contributions and any adjustments thereto.
The account will be nonforfeitable at all times. The account will share
in the gains and losses of the trust in the same manner as described in
section 4.01(h) of the Plan. No part of the account will be used to
purchase life insurance.
1.48 Employer:
The sole proprietorship, partnership, corporation or other entity whose
name appears on the Adoption Agreement executed by it, any successor
which elects to continue the Plan, and any predecessor which has
maintained this Plan.
For purposes of section 5.01, "Employer" shall include not only the
Employer adopting this Plan, but also all Affiliated Employers.
1.49 Employer Contribution Account:
The account maintained with respect to a Participant which consists of
his Employer Profit Sharing Account, Employer Matching Account,
Employer Qualified Matching Account, and Employer Qualified
Non-Elective Account.
1.50 Employer Matching Contributions:
Amounts contributed to the Plan by the Employer for a Plan Year
pursuant to section 3.03(a) of the Plan.
1.51 Employer Matching Contribution Account:
The account maintained with respect to a Participant in which is
recorded his Employer Matching Contributions under this Plan and any
adjustments thereto.
1.52 Employer Profit Sharing Contributions:
Amounts contributed to the Plan by the Employer for a Plan Year
pursuant to section 3.04 of the Plan.
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<PAGE> 30
1.53 Employer Profit Sharing Contribution Account:
The account maintained with respect to a Participant in which is
recorded his Employer Profit Sharing Contributions and any adjustments
thereto.
1.54 Employer Qualified Matching Contributions:
Amounts contributed to the Plan by the Employer for a Plan Year and
designated as such pursuant to section 3.03(b) of the Plan. Such
contributions are nonforfeitable when made and are distributable only
in accordance with the distribution provisions that are applicable to
Employee Elective Deferrals. These amounts will be determined in
accordance with the provisions of Section 1.401(k)-1(b)(5) of the Code,
which are incorporated herein by this reference.
1.55 Employer Qualified Matching Contribution Account:
The account maintained with respect to a Participant in which is
recorded his Employer Qualified Matching Contributions and any
adjustments thereto.
1.56 Employer Qualified Non-Elective Contributions:
Amounts contributed to the Plan by the Employer for a Plan Year and
designated as such pursuant to section 3.05 of the Plan. Participants
shall have no right to elect to receive such contributions in cash
until such amounts are otherwise distributable under the Plan. Such
contributions are nonforfeitable when made and are distributable only
in accordance with the distribution provisions that are applicable to
Employee Elective Deferrals. These amounts will be determined in
accordance with the provisions of Section 1.401(k)-1(b)(5) and Section
1.401(m)-1(b)(5) of the Code, which are incorporated herein by this
reference.
1.57 Employer Qualified Non-Elective Contribution Account:
The account maintained with respect to a Participant in which is
recorded his Employer Qualified Non-Elective Contributions and any
adjustments thereto.
1.58 Entry Date:
The date or dates set out in the Adoption Agreement as of which an
Employee who has satisfied the eligibility requirements may enter this
Plan and become a Participant hereunder.
1.59 ERISA:
Public Law No. 93-406, known as the "Employee Retirement Income
Security Act of 1974," as amended from time to time.
1.60 Excess Aggregate Contributions:
With respect to any Plan Year, the excess of:
(a) The aggregate Contribution Percentage Amounts taken into account
in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such
Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to section 5.04 and then determining Excess
Contributions pursuant to section 5.05.
1.61 Excess Amount:
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<PAGE> 31
The excess of the Participant's Annual Additions for the Limitation
Year over the Maximum Permissible Amount.
1.62 Excess Compensation:
A Participant's Compensation in excess of the Integration Level.
1.63 Excess Compensation Percentage:
The percentage in Item 24 of the Adoption Agreement, which shall not
exceed the percentage equal to the portion of the rate of tax under
section 3111(a) of the Code in effect at the beginning of the Plan Year
which is attributable to old-age insurance. If the Integration Level is
less than the Taxable Wage Base, the Excess Compensation Percentage
shall not exceed the following applicable percentage:
If the Integration Level is:
<TABLE>
<CAPTION>
more than but not more than the applicable percentage is
--------- ----------------- ----------------------------
<S> <C> <C>
$0 X* 5.7%
X* of TWB 80% of the TWB 4.3%
80% of TWB Y** 5.4%
</TABLE>
X* = the greater of $10,000 or 20% of the TWB
Y** = any amount more than 80% but less than 100% of the TWB
1.64 Excess Contributions:
With respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions (as defined in
section 1.01) 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).
1.65 Excess Elective Deferrals:
Those Employee Elective Deferrals that are includable in a
Participant's gross income under section 402(g) of the Code to the
extent such Participant's Employee Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section.
1.66 Family Member:
An individual described in Section 414(q)(6)(B) of the Code. Generally,
this term includes, with respect to a Participant, such Participant's
spouse and lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants.
14
<PAGE> 32
1.67 Forfeiture:
That portion of a Participant's Employer Contribution Account which is
not vested and thus becomes a Forfeiture on the earlier of:
(a) the date of the distribution (or deemed distribution pursuant to
section 7.08(a)) of the Vested Percentage of a Participant's
Employer Contribution Account; or
(b) the last day of the Plan Year in which the Participant incurs
five consecutive 1-year Breaks in Service.
1.68 Former Participant:
A Participant whose employment with the Employer has terminated or who
ceased to be a Participant for any reason.
1.69 Highest Average Compensation:
The average _415 Compensation for the three consecutive years of
service with the Employer that produces the highest average. A year of
service with the Employer is the Limitation Year specified in the
Adoption Agreement.
1.70 Highly Compensated Employee:
Any Employee who is a "highly compensated active employee" or a "highly
compensated former employee."
(a) Unless otherwise elected in the Adoption Agreement, a "highly
compensated active employee" is any Employee who performed
service for the Employer during the determination year and who,
during the look-back year:
(1) received _414(q) Compensation from the Employer in excess
of $75,000 (as adjusted pursuant to section 415(d) of the
Code).
(2) received _414(q) Compensation from the Employer in excess
of $50,000 (as adjusted pursuant to section 415(d) of the
Code) and who was in the Top Paid Group of Employees for
such Plan Year.
(3) was an officer of the Employer and received _414(q)
Compensation greater than 50% of the amount in effect under
Code Section 415(b)(1)(A) during such year. If none of the
officers of the Employer meet the compensation requirement
of the preceding sentence, then the most highly compensated
officer will be treated as a Highly Compensated Employee,
regardless of the level of _414(q) Compensation.
(4) was both described in (1), (2), or (3) above if the term
"determination year" is substituted for the term "look-back
year" and was one of the 100 Employees who received the
most _414(q) Compensation from the Employer during the
determination year.
(5) was a "five percent owner" of the Employer at any time
during the look- back year or the determination year. "Five
percent owner" means any person who owns (or is considered
as owning within the meaning of section 318 of the Code)
more than five percent (5%) of the outstanding stock of the
Employer or possessing more than five percent (5%) of the
capital or profits interest in the Employer. In determining
percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c) and
(m) shall be treated as separate employers.
15
<PAGE> 33
(b) 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
birthdate.
(c) If an Employee is, during a determination year or look-back year,
a Family Member of either a 5 percent owner who is an active or
former employee or a Highly Compensated Employee who is one of
the 10 most highly compensated employees ranked on the basis of
_414(q) 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.
(d) For purposes of this section, the determination year shall be the
Plan Year. The look-back year shall be the twelve-month period
immediately preceding the determination year unless the Employer,
in its sole and absolute discretion, elects to make the look-back
year calculation for a determination year on the basis of the
calendar year ending with or within the applicable determination
year (or, in the case of a determination year that is shorter
than 12 months, the calendar year ending with the end of the
determination year in question). If the applicable period for
which the determination is being made is the calendar year, the
Employer may still elect to make the calendar year calculation.
In order for such calendar year election to be effective, it must
apply with respect to all plans, entities and arrangements of the
Employer and must be made pursuant to the requirements of
Treasury Regulation section 1.414(q)-1T, Q&A-14, or any final
regulations or rulings issued with respect thereto.
(e) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation that
is considered, will be made in accordance with section 414(q) of
the Code and the regulations thereunder.
(f) If the Employer has elected in the Adoption Agreement to
determine the Highly Compensated Employees under the method
described in section 414(q)(12) of the Code, paragraph (a)(1) of
this section will be modified by substituting $50,000 for $75,000
and paragraph (a)(2) will be disregarded. This simplified
definition of Highly Compensated Employee will apply only to
Employers that maintain significant business activities (and
employ Employees) in at least two significantly separate
geographic areas, and in compliance with section 414(q)(12) of
the Code.
1.71 Hour of Service:
(a) (1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer.
These hours shall be credited to the Employee for the
computation period in which the duties are performed;
(2) Each hour for which an Employee is paid, or is entitled to
payment, on account of a period during which no duties have
been performed
16
<PAGE> 34
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including Disability), layoff, jury duty, military duty,
maternity or paternity leave (as described in section
1.14(d)) or Authorized Leave of Absence. No more than 501
Hours of Service shall be credited under this paragraph for
any single continuous period (whether or not such period
occurs in a single computation period). Hours shall be
calculated and credited under this paragraph pursuant to
section 2530.200b-2 of the Department of Labor Regulations,
which are incorporated herein by this reference; and
(3) Each hour for which back pay, without regard to mitigation
of damages, is either awarded or agreed to by the Employer.
The same Hours of Service shall not be credited both under
paragraph (1) or (2), as the case may be, and under this
paragraph (3). These hours shall be credited to the
Employee for the eligibility computation period or periods
to which the award or agreement pertains, rather than to
the eligibility computation period in which the award,
agreement or payment is made.
(b) Hours of Service will be credited for employment with an
Affiliated Employer.
(c) Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under section
414(n) or 414(o) of the Code.
(d) Hours of Service shall be determined from the records of the
Employer. However, if the Employer elects an alternative method
of crediting service in the Adoption Agreement, then in lieu of
crediting on the basis of hours actually completed, Hours of
Service shall be credited on the basis of the method selected.
(e) Where the Employer maintains the plan of a predecessor employer,
service for such predecessor shall be treated as service for the
Employer.
(f) The provisions of this section shall be construed so as to
resolve any ambiguities in favor of crediting Employees with
Hours of Service.
1.72 Integration Level:
The amount specified in Item 24 of the Adoption Agreement, which shall
not exceed the Taxable Wage Base.
1.73 Investment Manager:
Any person, firm or corporation who is a registered investment advisor
under the Investment Advisors Act of 1940, a bank or an insurance
company, who has the power to manage, acquire or dispose of Plan
assets, and who acknowledges in writing his fiduciary responsibility to
the Plan.
1.74 Joint and Survivor Annuity:
An immediate annuity for the life of the Participant with a survivor
annuity for the life of the Participant's Spouse equal to 50% of the
amount of the annuity payable during the joint lives of the Participant
and the Participant's Spouse, and which is the amount of benefit which
can be purchased with the Vested Percentage of the Participant's
Account.
1.75 Key Employee:
Any Employee or former Employee (and the beneficiaries of such Employee
if such Employee has died) who, at any time during the Plan Year or the
four preceding Plan Years (including Plan Years before 1984), is:
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(a) One of the ten Employees who are owners (as defined in section
318 of the Code) of both more than one-half percent (1/2%)
interest and the largest interests in the Employer, if such
Employee's compensation exceeds the dollar amount under section
415(c)(1)(A) of the Code for the calendar year in which such Plan
Year ends;
(b) An owner of more than five percent (5%) of the Employer;
(c) An owner of more than one percent (1%) of the Employer having an
annual compensation from the Employer of more than $150,000.00;
or
(d) An officer of the Employer, if such individual's annual
compensation exceeds 50% of the dollar limitation under section
415(b)(1)(A) of the Code for the calendar year in which such Plan
Year ends. For Plan Years beginning prior to February 28, 1985,
an officer shall only be considered a Key Employee if the
Employer is a corporation.
"Compensation" means _415 Compensation, 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.
Determination of who is a Key Employee will be made in accordance with
section 416(i)(l) of the Code.
1.76 Leased Employee:
Any person (other than an employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period
of at least one year, and such services are of a type historically
performed by employees in the business field of the recipient employer.
Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the
recipient employer shall be treated as provided by the recipient
employer.
1.77 Limitation Year:
A calendar year or the 12-consecutive month period elected by the
Employer in Item 10 of the Adoption Agreement. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12-consecutive month period,
the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
1.78 Master or Prototype Plan:
A master or prototype plan the form of which is the subject of a
favorable opinion letter or a regional prototype plan which receives a
notification letter from the Internal Revenue Service.
1.79 Matching Contribution:
An Employer contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Employee Contribution
made by such Participant, or on account of a Participant's Employee
Elective Deferral, under a plan maintained by the Employer.
1.80 Maximum Permissible Amount:
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The maximum Annual Addition that may be contributed or allocated to a
Participant's account under the Plan for any Limitation Year shall not
exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25 percent of the Participant's _415 Compensation for the
Limitation Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of section 401(h)
or section 419A(f)(2) of the Code) which is otherwise treated as an
Annual Addition under section 415(1)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the
Maximum Permissible Amount will not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
1.81 Nonhighly Compensated Employee:
An Employee who is neither a Highly Compensated Employee nor a Family
Member of a Highly Compensated Employee.
1.82 Nonresident Alien:
A nonresident alien who receives no earned income from the Employer
which constitutes income from sources within the United States (with
the meaning of section 861(a)(3) of the Code).
1.83 Normal Retirement Age:
The age specified in the Adoption Agreement, which may not exceed age
65. Normal Retirement Age may not exceed any mandatory retirement age
enforced by the Employer.
1.84 Normal Retirement Date:
The day on which a Participant attains the Normal Retirement Age
specified in the Adoption Agreement.
1.85 Owner-Employee:
An individual who is a sole proprietor or who is a partner who owns
more than 10% of either the capital or profits interest of the
partnership.
1.86 Participant:
An Employee who has satisfied the eligibility requirements contained in
the Adoption Agreement and in section 2.01 of the Plan with respect to
a particular type of contribution, and who was employed by the Employer
on the Entry Date. Such Employee is a Participant only with respect to
the type(s) of contribution for which the eligibility and Entry Date
requirements have been satisfied.
1.87 Participant's Account:
The individual account established and maintained for each Participant,
Former Participant or Beneficiary who has an interest in the Trust
Fund. A Participant's Account shall be comprised of the following
accounts, if applicable: Employer Profit Sharing Contribution Account,
Employer Matching Contribution Account, Employer Qualified Matching
Contribution Account, Employer Qualified Non-Elective Contribution
Account, Employee Elective Deferral Account, Employee Post-Tax
Voluntary
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Contribution Account, Employee Rollover/Transfer Contribution Account,
and Employee VDEC Account.
1.88 Participant's Benefits:
The balance of the Participant's Account 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 Participant's 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. However, if any portion of the minimum
distribution for the first Distribution Calendar Year is made in the
second Distribution Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had been made in
the immediately preceding Distribution Calendar Year.
1.89 Period of Service:
The period running from the date an Employee first completes an Hour of
Service upon employment or reemployment and ending on the date a Period
of Severance begins. For purposes of eligibility and vesting, a Period
of Service shall include a Period of Severance of less than 12
consecutive months.
1.90 Period of Severance:
The period beginning on the earlier of (a) the date on which an
Employee quits, retires, is discharged or dies, or (b) the first
anniversary of the first date of a period in which an Employee remains
absent from service with the Employer for any reason other than quit,
retirement, discharge or death.
1.91 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.
1.92 Plan:
This Profit Sharing Plan and Trust adopted by the Employer, as provided
herein and on the Adoption Agreement executed by the Employer. Unless
otherwise indicated, any reference to the Plan shall also include the
Adoption Agreement.
1.93 Plan Year:
The 12-consecutive month period specified by the Employer in the
Adoption Agreement.
1.94 Preretirement Survivor Annuity:
An annuity for the life of the Participant's Spouse in an amount which
can be purchased with the entire balance of the Participant's Account.
1.95 Present Value:
Present Value shall be based on the interest and mortality rates
specified in the Adoption Agreement.
1.96 Projected Annual Benefit:
The annual retirement benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in a form other than
a straight life annuity) or qualified joint and survivor annuity to
which the Participant would be entitled under the terms of the Plan
assuming:
(a) the Participant will continue employment until Normal Retirement
Age under the Plan (or current age, if later), and
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(b) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under
the Plan will remain constant for all future Limitation Years.
1.97 Qualified Deferred Compensation Plan:
Any pension, profit sharing, stock bonus, or other plan which meets the
requirements of section 401 of the Code, which includes a trust exempt
from tax under section 501(a) of the Code; any annuity plan described
in section 403(a) of the Code; and any such plan established for its
employees by the United States or by a state or political division
thereof, or by an agency or instrumentality of any of the foregoing.
1.98 Qualified Early Retirement Age:
The latest of:
(a) The earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits,
(b) The first day of the 120th month beginning before the Participant
reaches Normal Retirement Age, or
(c) The date the Participant begins participation.
1.99 Qualified Election:
An election to waive a Joint and Survivor Annuity or a Preretirement
Survivor Annuity which meets the following requirements:
(a) the Participant's Spouse consents in writing to the election;
(b) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may
not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further
spousal consent);
(c) the Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a Plan representative or
notary public.
A Participant's waiver of the Joint and Survivor Annuity shall not be
effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of a Plan
representative that there is no Spouse or that the Spouse cannot be
located, a waiver will be deemed a Qualified Election. A Participant
may elect to or revoke an election to waive a Joint and Survivor
Annuity at any time any number of times within the applicable election
period.
1.100 Qualified Preretirement Survivor Annuity Election Period:
The period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant's
death. If a Participant separates from service prior to the first day
of the Plan Year in which age 35 is attained, the election period shall
begin on the date of separation. 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
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required under section 7.09. The Preretirement Survivor Annuity will
automatically become applicable 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 article VI.
1.101 Regular Employee:
Any Employee (or former Employee) who is not a Key Employee.
1.102 Regular Time Hour:
(a) (1) Each hour, except those hours described in (3.) below, for
which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer. These hours shall
be credited to the Employee for the computation period in
which the duties are performed;
(2) Each hour, except those hours described in (3.) below, for
which back pay, without regard to mitigation of damages, is
either awarded or agreed to by the Employer. The same
Regular Time Hour shall not be credited both under
paragraph (1) and this paragraph (2). These hours shall be
credited to the Employee for the computation period or
periods to which the award or agreement pertains, rather
than to the computation period in which the award,
agreement or payment is made.
(3) Regular Time Hours shall not include:
i) Hours for which a premium rate is paid because such
hours are in excess of the maximum workweek applicable
to an Employee under section 7(a) of the Fair Labor
Standards Act of 1938, as amended, or because such
hours are in excess of a bona fide standard workweek
or workday.
ii) Hours for which an Employee is paid, or is entitled to
payment, on account of a period during which no duties
have been performed due to vacation, holiday, illness,
incapacity (including Disability), layoff, jury duty,
military duty, maternity or paternity leave or
Authorized Leave of Absence.
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1.103 Required Aggregation Group:
(a) Each qualified plan of the Employer in which at least one Key
Employee is participating or participated at any time during the
Plan Year containing the Determination Date or any of the four
preceding Plan Years (regardless of whether the plan has
terminated); and
(b) Any other qualified plan of the Employer which enables a plan
described in (a) above to meet the requirements of sections
401(a)(4) or 410 of the Code.
1.104 Required Beginning Date:
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, except as follows:
(a) The Required Beginning Date of a Participant who attains age
70-1/2 before January 1, 1988, shall be determined in accordance
with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date for 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.
(2) 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.
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.
Once distributions have begun to a 5-percent owner
under this section, they must continue to be
distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.
(b) The 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.
1.105 Self-Employed:
An individual who has Earned Income for the Taxable Year from the trade
or business for which the Plan is established, and an individual who
would have had Earned Income except for the fact that the trade or
business had no net profits for the Taxable Year.
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<PAGE> 41
1.106 Sponsor:
Plan Data, Inc., the sponsor of this regional prototype plan.
1.107 Spouse, Surviving Spouse:
The Spouse or Surviving Spouse of the Participant, provided that a
former Spouse will be treated as the Spouse or Surviving Spouse and a
current spouse will not be treated as the Spouse or the Surviving
Spouse to the extent provided under a qualified domestic relations
order as described in section 414(p) of the Code.
1.108 Super Top-Heavy Plan:
A Top-Heavy Plan in which the Top-Heavy Ratio is more than 90 percent.
1.109 Taxable Wage Base:
The taxable wage base under section 230 of the Social Security Act in
effect on the first day of the Plan Year.
1.110 Taxable Year:
The Employer's taxable year for federal income tax purposes indicated
on the Adoption Agreement.
1.111 Top-Heavy Plan:
For any Plan Year beginning after December 31, 1983, this Plan is
Top-Heavy if any of the following conditions exists:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(b) If this 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.
(c) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60 percent.
1.112 Top-Heavy Plan Year:
A Plan Year commencing after December 31, 1983, for which the Plan is a
Top-Heavy Plan.
1.113 Top-Heavy Ratio:
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
has not maintained any defined benefit plan which during the
5-year period ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan alone or for
the Required or Permissive Aggregation Group, as appropriate, is
a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the
5-year period ending on the Determination Date(s)), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed in the
5-year period ending on the Determination Date(s)), both computed
in accordance with section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the Top-Heavy
Ratio are adjusted 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.
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<PAGE> 42
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans
which during the 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 plans for all
Key Employees determined in accordance with (1) above, and the
Present Value of accrued benefits under the aggregated defined
benefit 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 plans for all
Participants determined in accordance with (1) above, and the
Present Value of accrued benefits under the defined benefit 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 the denominator of the
Top-Heavy Ratio are increased for any distribution of an accrued
benefit made in the 5-year period ending on the Determination
Date.
(c) For purposes of (a) and (b) above, the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent Top-Heavy 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 who is a Regular Employee but who was a Key Employee
in a prior year, or a Participant 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 voluntary employee contributions will not
be taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the Employer, or 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.
1.114 Top-Heavy Valuation Date:
The date elected by the Employer in Item 29 of the Adoption Agreement
as of which account balances or accrued benefits are valued for
purposes of calculating the Top-Heavy Ratio.
1.115 Top Paid Group:
An Employee is in the Top Paid Group of Employees for a Plan Year if
such Employee is in the group consisting of the top 20 percent of the
Employees when ranked on the basis of Compensation paid during such
Plan Year. For purposes of determining the number of Employees to be
considered, the following Employees shall be excluded, unless an
election has been made to modify the exclusions in the Adoption
Agreement:
(a) Employees who have not completed six (6) months of service,
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<PAGE> 43
(b) Employees who normally work less than 17-1/2 hours per week,
(c) Employees who normally work during not more than six (6) months
during any Plan Year,
(d) Employees who have not attained age 21,
(e) Employees who are included in a bona fide collective bargaining
agreement, except to the extent provided in regulations, and
(f) Employees who are nonresident aliens and who receive no earned
income (within the meaning of Code Section 911(d)(2)) from the
Employer which constitutes income from sources within the United
States (within the meaning of Code Section 861(a)(3)).
1.116 Trust:
The legal relationship created under Article X between the Employer,
the Trustee, and the Participants and their Beneficiaries.
1.117 Trust Fund:
The fund maintained in accordance with Article X and the property held
therein.
1.118 Trustee:
The person or persons named in the Adoption Agreement and accepting the
Trust, or any successor or successors appointed by the Employer and
accepting the Trust.
1.119 Valuation Date:
The last day of each Plan Year, any additional dates specified in the
Adoption Agreement, and such other dates as shall be directed by the
Plan Administrator.
1.120 Vested Percentage:
The nonforfeitable amount of each Participant's Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account
determined in accordance with the vesting schedule specified by the
Employer in the Adoption Agreement and Article VI, and 100% of each of
the following accounts: Employer Qualified Matching Contribution
Account, Employer Qualified Non-Elective Contribution Account, Employee
Elective Deferral Account, Employee Post-Tax Voluntary Contribution
Account, Employee Rollover/Transfer Account, and Employee VDEC Account.
1.121 Year of Service:
Except where specifically excluded under sections 1.121(a), 1.121(b),
and 1.121(c) below, all of an Employee's Years of Service shall be
taken into account for eligibility and vesting purposes, including: (1)
Years of Service with the predecessor employer, if so specified in the
Adoption Agreement; (2) Years of Service with the predecessor employer
during the time a qualified plan was maintained, if so specified in the
Adoption Agreement; (3) Years of Service for employment with an
Affiliated Employer; and (4) Years of Service for an employee required
under section 414(n) or 414(o) of the Code to be considered an employee
of any employer aggregated with the Employer pursuant to section
414(b), (c), or (m) of the Code.
(a) Hours of Service Method.
(1) Crediting Year of Service - An Employee will be credited
with a Year of Service upon completion of at least 1,000
Hours of Service during the applicable twelve-consecutive
month computation period.
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(2) For Eligibility Purposes - In the determination of Years of
Service for purposes of eligibility, the initial
twelve-consecutive month computation period shall commence
on the date an Employee first completes an Hour of Service.
The succeeding twelve-consecutive month periods shall begin
with the Plan Year which commences prior to the end of the
initial twelve-consecutive month period, regardless of
whether the Employee is entitled to be credited with at
least 1000 Hours of Service during the initial eligibility
computation period. An Employee who is credited with at
least 1,000 Hours of Service in both the initial
eligibility computation period and the first Plan Year
which commences prior to the end of the initial twelve-
consecutive month period will be credited with two Years of
Service for purposes of eligibility.
If an Employee is required to complete more than one Year
of Service in order to become eligible to participate in
the Plan, the initial and all subsequent twelve-consecutive
month computation periods shall begin on the date an
Employee first completes an Hour of Service and
anniversaries thereof. However, if, in such case, the
Employee fails to complete a Year of Service in the initial
twelve-consecutive month period, all subsequent periods
shall be Plan Years beginning with the Plan Year that
includes his first anniversary of employment. In addition,
if such an Employee incurs a 1-year Break in Service prior
to satisfaction of the Plan's eligibility requirements,
then service prior to such 1-year Break in Service shall
not be taken into account in the determination of the
Employee's eligibility to participate in the Plan.
If any fractional Year of Service is specified in the
Adoption Agreement as a service requirement to become a
Participant under the Plan, an Employee shall not be
required to complete any specified number of Hours of
Service to receive credit for such fractional year.
(3) For Vesting Purposes - In the determination of Years of
Service for purposes of computing a Participant's Vested
Percentage, the twelve-consecutive month computation
period shall be the Plan Year. If a Participant fails to
complete 1,000 Hours of Service in either of the Plan Years
which overlap the eligibility computation period in which
he becomes a Participant, he shall nevertheless be credited
with a Year of Service for determining his Vested
Percentage.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year
of Service for vesting purposes shall be made in accordance
with Department of Labor regulation 2530.203-2(c).
In the determination of a Participant's Vested Percentage,
the following service shall be disregarded:
(A) Service excluded as specified in Item 34 of the
Adoption Agreement.
(B) Service after five (5) consecutive 1-year Breaks in
Service shall be disregarded for purposes of
determining a Participant's Vested Percentage in any
portion of his Employer Contribution Account
attributable to Employer Contributions contributed
prior to the time such five (5) consecutive 1-year
Breaks in Service occurred;
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<PAGE> 45
however, both pre-break and post-break service will
be counted for purposes of determining a
Participant's Vested Percentage in any portion of his
Employer Contribution Account attributable to
Employer Contributions contributed after such breaks.
Separate Employer Contribution Accounts will be
maintained for the Participant's pre-break and
post-break derived Employer Contributions. Both
pre-break and post-break Employer Contribution
Accounts will share in the earnings and losses of the
Trust Fund. In the case of a Participant who does not
have five (5) consecutive 1-year Breaks in Service,
both pre-break and post-break service will be counted
for purposes of determining such Participant's Vested
Percentage in both the pre-break and the post-break
derived Employer Contribution Accounts.
(b) Regular Time Hours Method.
If the Employer has specified in the Adoption Agreement that the
Regular Time Hours Method shall be used, then a Year of Service
will be determined under the Hour of Service Method described in
(a) above, except that 750 Regular Time Hours will be substituted
for 1,000 Hours of Service.
(c) Elapsed Time Method.
(1) Crediting Year of Service - If the Employer has specified
in the Adoption Agreement that the elapsed time method
shall be used to determine Years of Service, a Period of
Service of 365 days shall represent a Year of Service.
Periods of Service of less than one year shall be expressed
in terms of days. An Employee shall also receive credit for
any Period of Severance of less than twelve consecutive
months.
(2) For Eligibility Purposes - If an Employee is required to
complete more than one Year of Service in order to become
eligible to participate in the Plan, and such an Employee
incurs a 1-year Break in Service prior to satisfaction of
the Plan's eligibility requirements, then service prior to
such 1-year Break in Service shall not be taken into
account in the determination of the Employee's eligibility
to participate in the Plan.
(3) For Vesting Purposes - In the determination of a
Participant's Vested Percentage, the following service
shall be disregarded:
(A) Service excluded as specified in Item 34 of the
Adoption Agreement.
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<PAGE> 46
(B) Service after five (5) consecutive 1-year Breaks in
Service shall be disregarded for purposes of
determining a Participant's Vested Percentage in any
portion of his Employer Contribution Account
attributable to Employer Contributions contributed
prior to the time such five (5) consecutive 1-year
Breaks in Service occurred; however, both pre-break
and post-break service will be counted for purposes
of determining a Participant's Vested Percentage in
any portion of his Employer Contribution Account
attributable to Employer Contributions contributed
after such breaks. Separate Employer Contribution
Accounts will be maintained for the Participant's
pre-break and post-break derived Employer
Contributions. Both pre-break and post-break Employer
Contribution Accounts will share in the earnings and
losses of the Trust Fund.
In the case of a Participant who does not have five
(5) consecutive 1-year Breaks in Service, both
pre-break and post-break service will be counted for
purposes of determining a Participant's Vested
Percentage in both the pre-break and the post-break
derived Employer Contribution Accounts.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Initial Eligibility:
Any Employee of the Employer to whom eligibility has been extended
pursuant to Item 12 of the Adoption Agreement and who is still employed
by the Employer shall become a Participant on the Entry Date specified
in Item 17 of the Adoption Agreement, as follows:
(a) With respect to eligibility to make Employee Elective Deferrals,
after having attained the minimum age and completed the minimum
Years of Service specified in Item 13 of the Adoption Agreement.
(b) With respect to eligibility to make Employee Post-Tax Voluntary
Contributions, after having attained the minimum age and
completed the minimum Years of Service specified in Item 13 of
the Adoption Agreement.
(c) With respect to eligibility to receive an allocation of Employer
Profit Sharing Contributions, after having attained the minimum
age and completed the minimum Years of Service specified in Item
13 of the Adoption Agreement.
(d) With respect to eligibility to receive an allocation of Employer
Matching Contributions, after having attained the minimum age and
completed the minimum Years of Service specified in Item 13 of
the Adoption Agreement.
(e) With respect to eligibility to receive an allocation of Employer
Qualified Matching Contributions, after having attained the
minimum age and completed the minimum Years of Service specified
in Item 13 of the Adoption Agreement.
(f) With respect to eligibility to receive an allocation of Employer
Qualified Non-Elective Contributions, after having attained the
minimum age and completed the minimum Years of Service specified
in Item 13 of the Adoption Agreement.
(g) With respect to eligibility to make Employee Rollover/Transfer
Contributions, after having attained the minimum age and
completed the minimum Years of Service specified in Item 13 of
the Adoption Agreement.
2.02 Change in Employee Classification:
(a) If a Participant is no longer a member of an eligible class of
Employees and therefore becomes ineligible to participate, but
has not incurred a Break in Service, such Employee will
participate immediately upon returning to an eligible class of
Employees. If such Participant does incur a Break in Service,
eligibility will be determined under the Break in Service rules
of the Plan.
(b) If an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee
may participate immediately if such Employee has satisfied the
Plan's minimum age and service requirements, and would have
otherwise previously become a Participant.
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2.03 Eligibility Upon Reemployment:
(a) A Former Participant will become a Participant immediately upon
returning to the employ of the Employer if such Former
Participant had a nonforfeitable right to all or a portion of his
Employer Contribution Account at the time of termination from
service.
(b) For a Former Participant who did not have a nonforfeitable right
to any portion of his Employer Contribution Account or for a
former Employee (other than an Employee required to complete more
than one Year of Service in order to become eligible to
participate in the Plan) who had not yet become a Participant at
the time of termination from service, the Participant's Years of
Service prior to the Break(s) in Service will be disregarded if
the number of consecutive 1-year Breaks in Service equal or
exceed the greater of five (5) or the aggregate number of Years
of Service before such Breaks in Service.
(c) A Former Participant whose Years of Service before termination
from service cannot be disregarded pursuant to section 2.03(b)
shall participate immediately upon reemployment.
(d) A former Employee who had met the eligibility requirements of
section 2.01 before termination from service but who had not
become a Participant and whose Years of Service before
termination from service cannot be disregarded pursuant to
section 2.03(b) will become a Participant as of the later of:
(1) his date of reemployment, and
(2) the Entry Date next following his date of termination from
service.
(e) A former Employee who had not met the eligibility requirements of
section 2.01 and whose prior Years of Service cannot be
disregarded pursuant to section 2.03(b) will be eligible to
participate subject to the provisions of section 2.01 above.
(f) A former Employee (including a Former Participant) whose Years of
Service before termination from service can be disregarded
pursuant to section 2.03(b) will be treated as a new Employee for
eligibility purposes and will be eligible to participate once he
has met the requirements of section 2.01 above following his most
recent date of reemployment.
2.04 Participation During an Authorized Leave of Absence:
All contributions on behalf of a Participant shall be suspended, but
membership in the Plan shall be deemed to be continuous, unless
otherwise terminated, for the period of any Authorized Leave of
Absence, provided that the Employee returns to work for the Employer
upon completion of such Authorized Leave of Absence.
2.05 Limitations With Regard to Owner-Employees:
Notwithstanding the provisions of this Article:
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business with respect to
which this Plan is established and one or more other trades or
businesses, this Plan and any plan established with respect to
such other trades or businesses must, when looked at as a single
plan, satisfy sections 401(a) and (d) of the Code with respect to
the employees of this and all such other trades or businesses.
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(b) If this Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of each such other trade or business
must be included in a plan which satisfies sections 401(a) and
(d) of the Code and which provides contributions and benefits not
less favorable than provided for such Owner-Employees under this
Plan.
(c) 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 for the employees under the plan of the
trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade
or business which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, shall be considered to control a
trade or business if such Owner-Employee or such two or more
Owner-Employees together:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than 50% of either
the capital interest or the profits interest in such
partnership.
For purposes of the preceding sentence, an Owner-Employee, or two
or more Owner-Employees, shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or more
Owner-Employees, are considered to control within the meaning of
the preceding sentence.
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ARTICLE III
CONTRIBUTIONS
3.01 Employee Elective Deferrals:
(a) If the Adoption Agreement provides for Employee Elective
Deferrals, the Employer shall contribute on behalf of any
Participant with whom there is in effect a binding Deferral
Agreement, for any full pay period, an amount equal to the amount
by which the Participant's Compensation for such pay period was
reduced pursuant to the Deferral Agreement. Each such Employee
Elective Deferral will be paid in cash to the Trustee in
accordance with section 3.08 and shall be credited to the
Participant's Employee Elective Deferral Account in accordance
with section 4.01.
(b) Notwithstanding (a) above, no Participant shall be permitted to
have Employee Elective Deferrals made under this Plan, or any
other qualified plan maintained by the Employer, during any
taxable year of the Participant, in excess of the dollar
limitation contained in section 402(g) of the Code in effect at
the beginning of such taxable year.
3.02 Terms of Deferral Agreement:
An eligible Participant who is not currently having his cash
compensation reduced under the terms of a Deferral Agreement with the
Employer may enter into a Deferral Agreement as of any Entry Date. A
Participant who is currently having or has previously had his cash
compensation reduced under the terms of a Deferral Agreement with the
Employer may amend such agreement to increase or decrease the amount by
which his cash compensation is reduced only in accordance with Item 19
of the Adoption Agreement. The Deferral Agreement shall be in a form
prescribed or approved by the Administrator and shall be (a)
irrevocable while the agreement is in effect with respect to
compensation already earned, but (b) revocable as to the first and
subsequent pay periods commencing at least 15 days after written notice
is given by the Participant to the Employer. Notwithstanding the
foregoing, the Plan Administrator in its sole discretion may, at any
time and with or without notice, permit a temporary or permanent change
in or a suspension of the terms of any Deferral Agreement if it deems
such a change or suspension to be justified by circumstances of the
Employees or an individual Employee.
3.03 Employer Matching and Qualified Matching Contributions:
(a) If the Adoption Agreement provides for Employer Matching
Contributions, the Employer shall make such contributions in
accordance with the provisions of Item 22 of the Adoption
Agreement. Employer Matching Contributions, if any, will be
credited to the Participants' Matching Contribution Accounts in
accordance with section 4.01 of the Plan.
(b) The Employer may designate that all or any portion of the
Employer Matching Contributions shall instead be Employer
Qualified Matching Contributions. Employer Qualified Matching
Contributions, if any, will be credited to the Participants'
Employer Qualified Matching Contribution Accounts in accordance
with section 4.01 of the Plan.
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3.04 Employer Profit Sharing Contributions:
Employer Profit Sharing Contributions shall be in amounts, if any,
determined annually in the sole discretion of the Employer. The
Employer's determination of the amount of any such contribution shall
be binding on all Participants, the Employer, and the Trustee. Employer
Profit Sharing Contributions shall be credited to Participants'
Employer Profit Sharing Contribution Accounts in accordance with
section 4.01 and 4.02 of the Plan.
3.05 Employer Qualified Non-Elective Contributions:
(a) The Employer may designate that all or any portion of the Employer
Profit Sharing Contributions shall instead be Employer Qualified
Non-Elective Contributions. Employer Qualified Non-Elective
Contributions shall be credited to Participants' Employer Qualified
Non-Elective Contribution Accounts in accordance with section 4.01 of
the Plan.
(b) In the Employer's discretion, the Employer may make Employer Qualified
Non-Elective Contributions in accordance with section 4.01 of the Plan
that are at least sufficient to satisfy either the Actual Deferral
Percentage test or the Average Contribution Percentage test, or both,
in lieu of distributing Excess Contributions as provided in section
5.05 or Excess Aggregate Contributions as provided in section 5.06 of
the Plan.
3.06 Employee Post-Tax Voluntary Contributions:
(a) If the Employer provides in the Adoption Agreement, a Participant
may elect to make Employee Post-Tax Voluntary Contributions to
this Plan. The maximum total Employee Post-Tax Voluntary
Contributions which may be made by any Participant under this and
all other qualified plans of this Employer is 10% of the
Participant's Compensation for the Limitation Year.
(b) Unless otherwise authorized by the Employer, Employee Post-Tax
Voluntary Contributions shall be made only by payroll deductions
pursuant to written direction of the Participant, filed with the
Employer on such form as may be prescribed by it. All such
contributions shall be made in accordance with section 3.08.
Amounts deposited in the Trust pursuant to this section shall be
credited to the Participant's Employee Post-Tax Voluntary
Contribution Account.
3.07 Employee Rollover/Transfer Contributions:
If so elected by the Employer in the Adoption Agreement, the Plan and
Trust may accept Employee Rollover/Transfer Contributions. The Plan
Administrator may require appropriate evidence that the contribution
would qualify as an Employee Rollover/Transfer Contribution, and such
evidence may include an opinion of legal counsel acceptable to the Plan
Administrator. Employee Rollover/Transfer Contributions may be made
without regard to the limitations on allocations under Article V.
Amounts deposited in the Trust pursuant to the provisions of this
section shall be credited to the Participant's Employee
Rollover/Transfer Account.
3.08 Payment of Employer Contributions to Trustee:
(a) All Employer Contributions for each Taxable Year shall be paid to
the Trustee not later than the date prescribed by law for filing
the Employer's federal income tax return for such Taxable Year,
including extensions.
(b) Employee Elective Deferrals and Employee Post-Tax Voluntary
Contributions shall be paid to the Trustee as soon as such
amounts can reasonably be segregated from the general assets of
the Employer, and in any event will be paid by the end of the
succeeding month following the month in which the payroll
deductions or
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reductions occurred or the month in which the amount of the
deferral was determined.
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ARTICLE IV
ACCOUNTING AND ALLOCATION
4.01 Accounting Procedure:
As of each Valuation Date, the Plan Administrator shall determine from
the Trustee the current market value of Trust assets and determine the
allocation of such value among the total Participant's Accounts; in
doing so, the Plan Administrator shall, in the following order:
(a) Charge to the proper Participant's Account all payments and
distributions made from such account since the last preceding
Valuation Date that have not been previously charged. Such
charges shall include the payment of any premiums on life
insurance Contracts purchased on behalf of specified
Participants.
(b) Allocate any Employee Elective Deferrals directly to the Employee
Elective Deferral Account of the Participant on whose behalf the
contributions were made.
(c) Allocate any Employee Post-Tax Voluntary Contributions directly
to the Employee Post-Tax Voluntary Contribution Account of the
Participant on whose behalf the contributions were made.
(d) Allocate any Employee Rollover/Transfer Contributions directly to
the respective Employee Rollover/Transfer Account of the
Participant on whose behalf the contribution was made.
(e) If the Valuation Date is a Valuation Date specified in Item
22.c.iii. of the Adoption Agreement, allocate any Employer
Matching Contributions, Employer Qualified Matching
Contributions, and any Forfeitures which were used to reduce
Matching Contributions to the respective Employer Matching
Contribution Accounts and/or Employer Qualified Matching
Contribution Accounts of those Participants eligible to share in
the Matching Contributions in accordance with Items 22 and 23 of
the Adoption Agreement.
(f) Allocate any Employer Qualified Non-Elective Contributions to the
respective Employer Qualified Non-Elective Contribution Accounts
of Participants entitled to receive them in accordance with Item
21 of the Adoption Agreement, pro rata on the basis of
Compensation.
(g) If the Valuation Date is the final Valuation Date of the Plan
Year, allocate any Employer Profit Sharing Contributions and any
amounts which became Forfeitures during the Plan Year and which
may be allocated in accordance with section 6.04(d) among the
Employer Profit Sharing Contribution Accounts in accordance with
section 4.02.
(h) (1) Except as provided in section 4.01(h)(2), allocate any
earnings or losses (net increase or net decrease in the
market value) of the Trust Fund among the total
Participant's Accounts in one of the following methods
selected by the Employer in Item 30 of the Adoption
Agreement:
(A) Pro rata among Participant's Accounts on the basis of
account balances as of the preceding Valuation Date,
less distributions, withdrawals, insurance premium
payments, and Forfeitures from the respective
accounts, and if Item 38.b.i.A. is elected in the
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Adoption Agreement, less any loans outstanding, plus
one-half of Employee Rollover/Transfer Contributions
if such Employee Rollover/Transfer Contribution was
deposited prior to the mid-point of the period
commencing on the immediately preceding Valuation
Date and ending on the current Valuation Date.
(B) Pro rata among Participant's Accounts on the basis of
account balances as of the preceding Valuation Date,
less distributions, withdrawals, insurance premium
payments, and Forfeitures from the respective
accounts, and if Item 38.b.i.A. is elected in the
Adoption Agreement, less any loans outstanding, plus
one-half of any contributions allocated to the
account pursuant to section 4.01(b) or (c) since the
preceding Valuation Date, plus one-half of Employee
Rollover/Transfer Contributions if such Employee
Rollover/Transfer Contribution was deposited prior to
the mid-point of the period commencing on the
immediately preceding Valuation Date and ending on
the current Valuation Date.
(C) Pro rata among Participant's Accounts on the basis of
account balances as of the preceding Valuation Date,
less distributions, withdrawals, insurance premium
payments, and Forfeitures from the respective
accounts, and if Item 38.b.i.A. is elected in the
Adoption Agreement, less any loans outstanding, plus
one-half of any contributions allocated to the
account pursuant to section 4.01(b) or (c) and any
Employer Matching Contributions allocated to the
account pursuant to section 4.01(e) since the
preceding Valuation Date, plus one-half of Employee
Rollover/Transfer Contributions if such Employee
Rollover/Transfer Contribution was deposited prior to
the mid-point of the period commencing on the
immediately preceding Valuation Date and ending on
the current Valuation Date.
(D) Pro rata among Participant's Accounts on the basis of
account balances as of the preceding Valuation Date,
adjusted on a nondiscriminatory time-weighted basis
which recognizes the actual dates of deposit of
contributions to and of distributions and payment of
insurance premiums from such accounts.
(2) The following special rules apply:
(A) Each segregated account maintained on behalf of a
Participant (such as a segregated account for
Participant-directed investments) shall be credited
or charged with its separate earnings and losses.
(B) If Item 38.b.i.A. is elected in the Adoption
Agreement, the interest with respect to a
Participant's loan shall be credited to the
Participant's Account.
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(C) The earnings or losses with respect to investments in
which funds from some Participant-directed accounts
have been commingled (pursuant to section 10.04(t))
shall be allocated among the accounts of Participants
who have directed such investment in accordance with
the method elected under section 4.01(h)(1). Such
allocation will be made separately with respect to
each investment fund in which Participant-directed
accounts have been commingled.
(i) Allocate any expenses of the Trust directly to
a Participant's Account if the Plan
Administrator so directs after determining that
such expenses are directly attributable to the
Participant or the Participant's Account.
4.02 Allocation of Employer Profit Sharing Contributions and Forfeitures:
(a) Non-Integrated Plan -
If the Employer has elected in Item 24 of the Adoption Agreement
that allocation of Employer Profit Sharing Contributions and
Forfeitures shall not be integrated with Social Security, then
Employer Profit Sharing Contributions plus any Forfeitures which
may be allocated in accordance with section 6.04(d) will be
allocated to the Employer Profit Sharing Contribution Account of
each Participant entitled to share in the Employer Profit Sharing
Contributions for that Plan Year (as provided in Item 24 of the
Adoption Agreement) as follows:
(1) If the Employer has elected in Item 24 of the Adoption
Agreement that the allocation will be based on the ratio of
each Participant's Compensation to total Participants'
Compensation, then the allocation will be made as follows:
(A) In a year which is not a Top-Heavy Plan Year, the
Employer Profit Sharing Contributions and Forfeitures
will be allocated in the ratio that each
Participant's Compensation bears to the total
Compensation of all Participants.
(B) In a Top-Heavy Plan Year:
(i) First, Employer Profit Sharing Contributions
and Forfeitures will be allocated to all
Participants who are not Key Employees in the
ratio that each such Participant's
Compensation bears to all such Participants'
Compensation, but not in excess of the minimum
allocation amount described in section 8.02.
Such minimum allocation percentage shall be
reduced by the lowest percentage of
Compensation contributed by the Employer as an
Employer Qualified Nonelective Contribution on
behalf of any non-Key Employee otherwise
eligible to share in the Employer Profit
Sharing Plan Contribution. If the Employer has
so elected in Item 18 of the Adoption
Agreement, Compensation shall not include
Compensation prior to the Participant's Entry
Date.
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(ii) Next, Employer Profit Sharing Contributions
and Forfeitures will be allocated to all
Participants who are Key Employees in the
ratio that each such Participant's
Compensation bears to all such Participants'
Compensation, but not in excess of the minimum
allocation amount described in section 8.02.
Such minimum allocation percentage shall be
reduced by the lowest percentage of
Compensation contributed by the Employer as an
Employer Qualified Nonelective Contribution on
behalf of any non-Key Employee otherwise
eligible to share in the Employer Profit
Sharing Plan Contribution. If the Employer has
so elected in Item 18 of the Adoption
Agreement, Compensation shall not include
Compensation prior to the Participant's Entry
Date.
(iii) Finally, any remaining Employer Profit Sharing
Contributions and Forfeitures will be
allocated in the ratio that each Participant's
Compensation bears to the total Compensation
of Participants.
(2) If the Employer has elected in Item 24 of the Adoption
Agreement that the allocation will be an equal dollar
amount for each Participant, then the Employer Profit
Sharing Contributions and Forfeitures will be allocated to
each eligible Participant's account in an amount equal to
the total Employer Profit Sharing Contributions and
Forfeitures divided by the number of Participants entitled
to share in the allocation.
(b) Integrated Plan -
If the Employer has elected in Item 24 of the Adoption Agreement
that allocation of Employer Profit Sharing Contributions and
Forfeitures shall be integrated with Social Security, then
Employer Profit Sharing Contributions for the Plan Year plus any
Forfeitures which may be allocated in accordance with section
6.04(d) will be allocated to the Employer Profit Sharing
Contribution Account of each Participant entitled to share in
them for that Plan Year as follows:
(1) In a year which is not a Top-Heavy Plan Year:
(A) First, Employer Profit Sharing Contributions and
Forfeitures will be allocated simultaneously as
follows so that the allocation percentage for each
allocation will be equal:
(i) In the ratio that each Participant's
Compensation bears to the Compensation of all
Participants; and
(ii) In the ratio that each Participant's Excess
Compensation bears to Excess Compensation of
all Participants.
The allocation percentage shall not exceed the
Excess Compensation Percentage set out in Item
24 of the Adoption Agreement.
(B) Finally, any remaining Employer Profit Sharing
Contributions will be allocated in the ratio that
each Participant's Compensation bears to total
Compensation of all Participants.
(2) In a Top-Heavy Plan Year:
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(A) First, Employer Profit Sharing Contributions and
Forfeitures will be allocated to all Participants who
are not Key Employees in the ratio that each such
Participant's Compensation bears to all such
Participants' Compensation, but not in excess of the
minimum allocation amount described in section 8.02.
Such minimum allocation percentage shall be reduced
by the lowest percentage of Compensation contributed
by the Employer as an Employer Qualified Nonelective
Contribution on behalf of any non-Key Employee
otherwise eligible to share in the Employer Profit
Sharing Plan Contribution. If the Employer has so
elected in Item 18 of the Adoption Agreement,
Compensation shall not include Compensation prior to
the Participant's Entry Date.
(B) Next, Employer Profit Sharing Contributions and
Forfeitures will be allocated to all Participants who
are Key Employees in the ratio that each such
Participant's Compensation bears to all such
Participants' Compensation, but not in excess of the
minimum allocation amount described in section 8.02.
Such minimum allocation percentage shall be reduced
by the lowest percentage of Compensation contributed
by the Employer as an Employer Qualified Nonelective
Contribution on behalf of any non-Key Employee
otherwise eligible to share in the Employer Profit
Sharing Plan Contribution. If the Employer has so
elected in Item 18 of the Adoption Agreement,
Compensation shall not include Compensation prior to
the Participant's Entry Date.
(C) Next, Employer Profit Sharing Contributions and
Forfeitures will be allocated in the same ratio that
each Participant's Excess Compensation bears to the
Excess Compensation of all Participants for the Plan
Year, but not in excess of the minimum allocation
percentage determined under section 8.02. Such
percentage shall be reduced by the lowest percentage
of Compensation contributed by the Employer as an
Employer Qualified Nonelective Contribution on behalf
of any non-Key Employee otherwise eligible to share
in the Employer Profit Sharing Plan Contribution.
(D) Next, Employer Profit Sharing Contributions and
Forfeitures will be allocated simultaneously as
follows, so that the allocation percentage for each
allocation will be equal:
(i) In the ratio that each Participant's
Compensation bears to the Compensation of all
Participants; and
(ii) In the ratio that each Participant's Excess
Compensation bears to Excess Compensation of
all Participants.
The allocation percentage shall not exceed the
difference between the Excess Compensation
Percentage and the allocation percentage used
in (b)(2)(B) above.
(E) Finally, any remaining Employer Profit Sharing
Contributions and Forfeitures will be allocated in
the ratio that each Participant's Compensation bears
to total Compensation of Participants.
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(c) Notwithstanding the provisions of 4.02(a) and 4.02(b), if a
Participant is eligible to share in the allocation of the
Employer Profit Sharing Contributions and Forfeitures solely
because the plan is a Top-Heavy Plan and the Participant is
entitled to the minimum allocation described in 8.02(a), the
allocation to such Participant will not exceed the minimum
allocation required under section 8.02.
4.03 Timing of Employer Contributions:
For purposes of this Article IV, any Employer Contributions to the Plan
for a given Plan Year made after the close of the Plan Year but by the
due date of the Employer's federal income tax return, including
extensions, will be considered to have been made on the last Valuation
Date of such Plan Year.
4.04 Valuation and Allocation of Contracts:
The value of any Contracts issued under the Plan as of a given date
shall be the cash values of such Contracts as of such date. All
Contracts held by the Trustee shall be allocated to the accounts of
those Participants on whose behalf such Contracts are maintained.
Unallocated Contracts shall be valued at cash value and shall be part
of the general Trust Fund.
4.05 Correction of Allocations:
(a) In the event that the Plan Administrator learns that allocations
have not been made on behalf of an Employee for whom allocations
should have been made pursuant to the terms of this Plan, the
Participant's Account for such Employee shall be restored to its
proper balance as soon as is reasonably possible. Restoration
shall be accomplished by allocating to the account amounts
necessary to restore the account from the following sources:
(1) First, from Forfeitures for the Plan Year in which the
account is restored;
(2) Next, from income for the Plan Year in which the account is
restored; and
(3) Next, from Employer Contributions for the Plan Year in
which the account is restored.
(4) Finally, from additional Employer Contributions.
(b) In the event that the Plan Administrator learns that
contributions or allocations have been made on behalf of an
Employee for whom allocations should not have been made pursuant
to the terms of this Plan:
(1) If such contributions were made pursuant to a mistake of
fact, such contributions shall be returned to the Employer
within one year of the contributions, if possible. Earnings
attributable to the mistaken contribution shall not be
returned to the Employer, but losses attributable to the
mistaken contribution shall reduce the amount to be
returned to the Employer.
(2) In other cases, the erroneous contributions or allocations
plus earnings or less losses attributable thereto, shall be
deemed to be Forfeitures and shall be allocated pursuant to
section 6.04.
4.06 Additional Eligible Employees
Notwithstanding anything to the contrary, if this Plan would otherwise
fail to meet the requirements of Code Section 401(a)(26) and the
Regulations thereunder because
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Employer contributions would not be allocated to a sufficient number or
percentage of Participants for a Plan Year, then the rules described in
(a) and (b) below shall apply. Notwithstanding anything to the
contrary, if this Plan would otherwise fail to meet the requirements of
Code Sections 410(b)(1)(A) and 410(B)(1)(B) and the Regulations
thereunder because Employer contributions would not be allocated to a
sufficient number or percentage of Participants for a Plan Year, then
the rules described in (a) and (b) below shall apply:
(a) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be expanded
to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the applicable
test specified above. The specific Participants who shall become
eligible under the terms of this paragraph shall be those who are
actively employed on the last day of the Plan Year, and, when
compared to similarly situated Participants, have completed the
greatest number of Hours of Service in the Plan Year.
(b) If after the application of paragraph (a) above, the applicable
test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and Forfeitures
for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on
the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become
eligible to share shall be those Participants, when compared to
similarly situated Participants, who have completed the greatest
number of Hours of Service in the Plan Year before terminating
employment.
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ARTICLE V
LIMITATION ON ALLOCATIONS, DEFERRALS AND CONTRIBUTIONS
5.01 Limitation on Allocations:
(a) (1) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer or a welfare benefit fund, as defined in section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in section 415(1)(2)
of the Code, maintained by the Employer, which provides an
Annual Addition as defined in section 1.07, the amount of
Annual Additions which may be credited to the Participant's
account for any Limitation Year will not exceed the lesser
of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer contribution that
would otherwise be contributed or allocated to the
Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible
Amount, the amount contributed or allocated will be reduced
so that the Annual Additions for the Limitation year will
equal the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual _415
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant
on the basis of a reasonable estimation of the
Participant's _415 Compensation for the Limitation Year,
uniformly determined for all Participants similarly
situated.
(3) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Permissible amount for the
Limitation Year will be determined on the basis of the
Participant's actual _415 Compensation for the Limitation
Year.
(4) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's
Compensation, a reasonable error in determining the amount
of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant
hereunder or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, there is an
Excess Amount, the excess will be disposed of as follows:
(A) Any elective deferrals (within the meaning of Code
Section 402(g)(3)) or any nondeductible voluntary
employee contributions, to the extent they would
reduce the Excess Amount, will be returned to the
Participant;
(B) If after the application of paragraph (A) an Excess
Amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the
Excess Amount in the Participant's account will be
used to reduce Employer Contributions (including any
allocation of forfeitures) for such Participant in
the next Limitation Year, and each succeeding
Limitation Year if necessary.
(C) If after the application of paragraph (A) an Excess
Amount still exists, and the Participant is not
covered by the Plan at the end of a
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Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future Employer
Contributions (including allocation of any
Forfeitures) for all remaining Participants in the
next Limitation Year, and each succeeding Limitation
Year if necessary.
(D) If a suspense account is in existence at any time
during a Limitation Year pursuant to this section, it
will not participate in the allocation of the trust's
investment gains and losses. If a suspense account is
in existence at any time during a particular
Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participant's
Accounts before any Employer Contributions or any
employee contributions may be made to the Plan for
that Limitation Year. Excess Amounts may not be
distributed to Participants or Former Participants.
(b) (1) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified master or
prototype defined contribution plan maintained by the
Employer, a welfare benefit fund, as defined in section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in section 415(1)(2)
of the Code, maintained by the Employer, which provides an
Annual Addition as defined in section 1.07, during any
Limitation Year. The Annual Additions which may be credited
to a Participant's account under this Plan for any such
Limitation Year will not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to a
Participant's 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 plan 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 will be reduced so that the
Annual Additions under all such plans and funds for the
Limitation Year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant
under such other defined contribution plans and welfare
benefit funds in the aggregate are equal to or greater than
the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's account under
this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual _415
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant
in the manner described in section 5.01(a)(2).
(3) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual _415 Compensation for the Limitation
Year.
(4) If, pursuant to section 5.01(b)(3) or as a result of the
allocation of Forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an
Excess Amount for a Limitation Year, the Excess Amount will
be deemed to consist of the Annual Additions last
allocated, except that Annual Additions attributed to a
welfare benefit fund or
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<PAGE> 62
individual medical account will be deemed to have been
allocated first regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of -
(A) the total Excess Amount allocated as of such date,
times
(B) the ratio of (i) the Annual Additions allocated to
the participant for the Limitation Year as of such
date under this Plan to (ii) the total Annual
Additions allocated to the Participant for the
Limitation Year as of such date under this and all
the other qualified master or prototype defined
contribution plans.
(6) Any Excess Amount attributed to this Plan will be disposed
in the manner described in section 5.01(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be credited
to the Participant's account under this Plan for any Limitation
Year will be limited in accordance with section 5.01(b)(1)
through (6) as though the other plan were a Master or Prototype
Plan unless the Employer provides other limitations in Item 43 of
the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to
the Participant's account under this Plan for any Limitation Year
will be limited in accordance with Item 43 of the Adoption
Agreement.
5.02 Limitations on Employee Elective Deferrals:
(a) The Actual Deferral Percentage (hereinafter sometimes "ADP") for
Participants who are Highly Compensated Employees for each Plan
Year and the ADP for Participants who are Nonhighly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
(1) The Actual Deferral Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participants who
are Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25; or
(2) The Actual Deferral Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participants who
are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, provided that the Actual Deferral
Percentage for Participants who are Highly Compensated
Employees does not exceed the Actual Deferral Percentage
for Participants who are Nonhighly Compensated Employees by
more than two (2) percentage points.
(b) Special Rules
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(1) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Employee Elective Deferrals (and Employer Qualified Non-
Elective Contributions or Employer Qualified Matching
Contributions, or both, if treated as Employee Elective
Deferrals for purposes of the ADP 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 Employee Elective
Deferrals (and, if applicable such Employer Qualified
Nonelective Contributions or Employer Qualified Matching
Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be
treated as a single arrangements.
(2) In the event that this Plan satisfies the requirements of
sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of
the Code only if aggregated with this Plan, then this
section shall be applied by determining the ADP of
employees as if all such plans were a single plan. For Plan
Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(k) of the Code
only if they have the same Plan Year.
(3) For purposes of determining the ADP of a Participant who is
a 5-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Employee Elective Deferrals (and
Employer Qualified Non-elective Contributions or Employer
Qualified Matching Contributions, or both, if treated as
Employee Elective Deferrals for purposes of the ADP test)
and Compensation of such Participant shall include the
Employee Elective Deferrals (and, if applicable, Employer
Qualified Non-elective Contributions and Employer Qualified
Matching Contributions, or both) and Compensation for the
Plan Year of Family Members (as defined in section
414(g)(6) of the Code). Family Members, with respect to
such Highly Compensated Employees, shall be disregarded as
separate employees in determining the ADP both for
Participants who are Nonhighly Compensated Employees and
for Participants who are Highly Compensated Employees.
(4) For purposes of determining the ADP test, Employee Elective
Deferrals, Employer Qualified Non-elective Contributions
and Employer Qualified Matching Contributions must be made
before the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(5) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
Employer Qualified Non-Elective Contributions or Employer
Qualified Matching Contributions, or both, used in such
test.
(6) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
5.03 Limitations on Employer Matching Contributions and Employee Post-Tax
Voluntary Contributions:
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(a) The Average Contribution Percentage (hereinafter sometimes "ACP")
for Participants who are Highly Compensated Employees for each
Plan Year and the ACP for Participants who are Non-highly
Compensated Employees for the same Plan Year must satisfy one of
the following tests:
(1) The Average Contribution Percentage for Participants who
are Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for
Participants who are Nonhighly Compensated Employees for
the Plan Year multiplied by 1.25; or
(2) The Average Contribution Percentage for Participants who
are Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for
Participants who are Nonhighly Compensated Employees for
the Plan Year multiplied by 2, provided that the Average
Contribution Percentage for Participants who are Highly
Compensated Employees does not exceed the Average
Contribution Percentage for Participants who are Nonhighly
Compensated Employees by more than two (2) percentage
points.
(b) Special Rules
(1) For purposes of this section, 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 account under two or more plans
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.
(2) In the event that this Plan satisfies the requirements of
sections 401(m), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of
the Code only if aggregated with this Plan, then this
section shall be applied by determining the Contribution
Percentage of employees as if all such plans were a single
plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy section 401(m)
of the Code only if they have the same Plan Year.
(3) 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 Family
Members (as defined in section 414(q)(6) of the Code).
Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in
determining the Contribution Percentage both for
Participants who are Nonhighly Compensated Employees and
for Participants who are Highly Compensated Employees.
(4) 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.
Employer Matching Contributions, Employer
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<PAGE> 65
Qualified Matching Contributions, and Employer Qualified
Non-elective Contributions will be considered made for a
Plan Year if made no later than the end of the twelve-month
period beginning on the date after the close of the Plan
Year.
(5) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Employer Qualified Non-elective Contributions or Employer
Qualified Matching Contributions, or both, used in such
test.
(6) For purposes of the ACP test, the Plan will take into
account the Contribution Percentages of all eligible
employees. For this purpose, an eligible employee is any
employee who is directly or indirectly eligible to receive
an allocation of Employer Matching Contributions,
including: an employee who would be a Participant but for
the failure to make required contributions; an employee
whose right to make Employee Contributions or to receive
Employer Matching Contributions has been suspended because
of an election (other than certain one-time elections) not
to participate; and an employee who is unable to make an
Employee Contribution or receive an Employer Matching
Contribution because his Compensation is less than a stated
dollar amount. In the case of an eligible employee who
makes no Employee Contributions and receives no Employer
Matching Contributions, the Contribution Percentage to be
included in determining the Average Contribution Percentage
is zero.
(7) For Plan Years beginning before the later of January 1,
1992 or the date that is 60 days after publication of final
regulations, "Compensation" for purposes of computing an
Employee's Contribution Percentage shall be limited to
Compensation (as defined in section 1.19) received by the
Employee while a Participant in the Plan.
(8) 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.
5.04 Procedure for Distribution of Excess Elective Deferrals:
(a) Notwithstanding any other provision of this Plan, Excess Elective
Deferrals assigned to this Plan, plus any income and minus any
losses allocable thereto, shall be distributed no later than
April 15 to Participants who claim Excess Elective Contributions
for the preceding taxable year and assign them to the Plan for
such preceding year.
(b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant by
notifying the Plan Administrator on or before March 15 of the
amount of the Excess Elective Deferrals to be assigned to the
Plan. The Participant's notice shall be in writing, shall specify
the Participant's Excess Elective Deferrals for the preceding
taxable year, and shall be accompanied by the Participant's
written statement that if such amounts are not distributed, such
Excess Elective Deferrals when added to amounts deferred under
other plans or arrangements described in sections 401(k), 408(k)
or 403(b) of the Code, exceed the limit imposed on the
Participant by section 402(g) of the Code for the year in which
the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable
to Excess Elective Deferrals is the
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<PAGE> 66
income or loss allocable to the Participant's Employee Elective
Deferral account for the taxable year multiplied by a fraction,
the numerator of which is such Participant's Excess Elective
Deferrals for the year and the denominator is the Participant's
account balance attributable to Employee Elective Deferrals
without regard to any income or loss occurring during such
taxable year. There shall be no further adjustment for income or
loss allocable to the period between the end of the taxable year
and the date of distribution.
5.05 Distribution of Excess Contributions:
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income or 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
shall be allocated to Participants who are subject to the Family
Member aggregation rules of section 414(q)(6) of the Code in the
manner prescribed by the regulations.
(b) Distribution of Excess Contributions shall include any income or
loss up to the date of distribution. The income or loss allocable
to Excess Contributions is the sum of: (1) income or loss
allocable to the Participant's Employee Elective Deferral Account
(and, if applicable, the Employer Qualified Non-elective
Contribution Account or the Employer Qualified Matching
Contributions Account or both) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Contributions for the year and the denominator is the
Participant's account balance attributable to Employee Elective
Deferrals (and Employer Qualified Non-Elective Contributions or
Employer Qualified Matching Contributions, or both, if any of
such contributions are included in the ADP test) without regard
to any income or loss occurring during such Plan Year. There
shall be no further adjustment for income or loss allocable to
the period between the end of the Plan Year and the date of the
distribution.
(c) Excess Contributions shall be first distributed from the
Participant's Employee Elective Deferral Account until exhausted
and then from the Employer Qualified Matching Contribution
Account (to the extent used in the ADP test) for the Plan Year.
Excess Contributions shall be distributed from the Participant's
Employer Qualified Non-Elective Contribution account only to the
extent that such Excess Contributions exceed the balance in the
Participant's Employee Elective Deferral Account and Employer
Qualified Matching Contribution Account.
5.06 Distribution of Excess Matching Contributions or Employee Post-Tax
Voluntary Contributions:
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate 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 Aggregate Contributions were allocated for the preceding
Plan Year. Excess Aggregate Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of section 414(q)(6) of the Code in the manner prescribed
by the regulations.
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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.
(b) The amount of Excess Aggregate Contributions to be distributed
shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Aggregate
Contributions is the income or loss allocable to the
Participant's Employee Post-Tax Voluntary Contribution Account,
Employer Matching Contribution Account (if any, and if all
amounts therein are not used in the ADP test) and, if applicable,
Employer Qualified Non-Elective Contribution Account, Employer
Qualified Matching Account, and Employee Elective Deferral
Account for the Plan Year multiplied by a fraction, the numerator
of which is such Participant's Excess Aggregate Contributions for
the year and the denominator is the Participant's account
balance(s) attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such Plan
Year. There shall be no further adjustment for income or loss
allocable to the period between the end of the Plan Year and the
date of distribution.
(c) Excess Aggregate Contributions shall be distributed on a pro rata
basis from the Participant's Employee Post-Tax Voluntary
Contribution Account, Employer Matching Contribution Account,
Employer Qualified Matching Contribution Account (and, if
applicable, from the Participant's Employer Qualified
Non-elective Contribution Account or Employee Elective Deferral
Account, or both).
5.07 Multiple Use Limitation:
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement 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 ADP of those Highly Compensated Employees who
also participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employee whose ADP 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 both ADP and ACP of the Highly Compensated Employees does
not exceed 1.25 multiplied by the ADP and ACP of the Non-highly
Compensated Employees.
Provided, however, that for Plan Years beginning before the later of
January 1, 1992 or the date that is 60 days after publication of final
regulations, the Aggregate Limit in the preceding paragraph is
increased to the greater of the Aggregate Limit or the following new
aggregate limit. The new aggregate limit is the sum of:
(a) 125 percent of the lesser of (1) the actual deferral percentage
of the group of non-highly compensated employees eligible under
the arrangement subject to section 401(k) of the Code for the
Plan Year, or (2) the actual contribution percentage of the group
of non-highly compensated employees eligible under the Plan
subject to section 401(m) of the Code for the Plan year beginning
with or within the Plan Year of the arrangement subject to
section 401(k) of the Code, and
(b) Two plus the greater of (1) or (2) above. In no event, however,
shall this amount exceed 200 percent of the greater of (1) or (2)
above.
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ARTICLE VI
VESTING AND FORFEITURES
6.01 Nonforfeitable Accounts:
A Participant's Employee Elective Deferral Account, Employee Post-Tax
Voluntary Contribution Account, Employee Rollover/Transfer Account,
Employee VDEC Account, Employer Qualified Matching Contribution
Account, and Employer Qualified Non-Elective Contribution Account, and
all earnings, appreciations and additions thereto, less any losses,
depreciation and distributions allocable thereto, shall be fully vested
and nonforfeitable at all times.
6.02 Accounts Subject to Vesting Schedule:
A Participant's Vested Percentage in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account shall
be determined as follows:
(a) Normal Retirement Age:
A Participant's interest in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account
shall become fully vested when he reaches Normal Retirement Age.
A Participant who terminates his service with the Employer prior
to Normal Retirement Age but does not suffer a one-year Break in
Service before the close of the Plan Year in which his Normal
Retirement Date occurs will be deemed to have terminated
employment on his Normal Retirement Age.
(b) Death or Disability:
A Participant's interest in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account
shall become fully vested upon his death or Disability prior to
Normal Retirement Age.
(c) Termination Before Normal Retirement Age:
A Participant's Vested Percentage in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account
shall be determined according to the vesting schedule specified
in the Adoption Agreement if the Participant terminates his
employment before attaining Normal Retirement Age.
(d) Plan Termination:
A Participant's interest in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account
shall become fully vested in the event of termination or partial
termination of this Plan, or upon complete discontinuance of
Employer contributions.
6.03 Vesting at Termination:
(a) When a Participant's employment is terminated on account of
retirement on or after Normal Retirement Age, death, Disability,
or otherwise, the Vested Percentage of his Employer Profit
Sharing Contribution Account and his Employer Matching
Contribution Account (after all required adjustments thereto)
shall be determined in accordance with section 6.02 and the
vesting schedule specified in the Adoption Agreement as of the
Valuation Date coincident with or next following termination of
employment. The Participant's Vested Percentage of his Employer
Profit Sharing Contribution Account and his Employer Matching
Contribution Account and the balance, if any, of all of the
Participant's other accounts will become distributable to the
Participant or his Beneficiary in
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accordance with Article VII. Any nonvested balance will become a
Forfeiture and will be allocated pursuant to section 6.04.
(b) If a Participant terminates employment and elects in accordance
with the requirements of section 7.02(b) to receive less than the
entire value of the Vested Percentage of his Participant's
Account derived from Employer contributions, the part of the
nonvested portion that will be 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 Percentage of the Participant's Employer Contribution
Account.
6.04 Forfeitures:
Forfeitures will be allocated as follows:
(a) Forfeitures shall be first used to restore Participants' Employer
Profit Sharing Contribution Accounts and Employer Matching
Contribution Accounts pursuant to the buyback provisions of
section 6.05;
(b) Forfeitures shall next be used to restore any Participant's
Accounts pursuant to the restoration provisions of sections
4.05(a)(1) and 9.04(e);
(c) Forfeitures shall next be used to reduce the Employer's Matching
Contribution, if any, for the Plan Year, if so elected in the
Adoption Agreement; and
(d) Any remaining Forfeitures shall be allocated to Participant's
Employer Profit Sharing Contribution Accounts in accordance with
section 4.02 for the Plan Year in which the Forfeiture occurs.
6.05 Buyback:
(a) If a Former Participant is reemployed by the Employer before the
Former Participant incurs five consecutive 1-year Breaks in
Service, and such Former Participant has received a distribution
of all or any portion of the Vested Percentage of his
Participant's Account prior to his reemployment, any forfeited
amounts shall be restored to the amount on the date of
distribution if he repays the full amount distributed to him,
other than his Employee Post-Tax Voluntary Contribution Account
and his Employee Rollover/Transfer Contribution Account, before
the earlier of 5 years after the first date on which the
Participant is subsequently reemployed by the Employer, or the
date the Participant incurs five consecutive 1-year Breaks in
Service after the date of the distribution.
(b) If a Former Participant is reemployed by the Employer before the
Former Participant incurs five consecutive 1-year Breaks in
Service, and such Former Participant was deemed to have received
a distribution of the entire Vested Percentage of his
Participant's Account prior to his reemployment, he shall be
deemed to have repaid the amount of the deemed distribution, and
any amounts forfeited on the date of deemed distribution shall be
restored.
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ARTICLE VII
PAYMENT OF BENEFITS
7.01 Payment of Benefits:
(a) The Vested Percentage of a Participant's Account shall become
payable to a Participant or his beneficiary pursuant to this
Article VII as follows:
(1) Upon actual retirement on or after the Participant's Normal
Retirement Date.
(2) Upon the death of the Participant.
(3) Upon the Disability of the Participant.
(4) Upon termination of the Participant's employment prior to
retirement, death, or Disability.
(b) The Vested Percentage of a Participant's Account may also
be distributed upon:
(1) Termination of the Plan without the establishment of
another defined contribution plan.
(2) The disposition by the Employer (if 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 corporate Employer if such
corporate Employer continues to maintain this Plan after
the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such
assets.
(3) The disposition by the Employer (if a corporation) to an
unrelated entity of such corporate Employer's interest in a
subsidiary (within the meaning of section 409(d)(3) of the
Code) if such corporate Employer continues to maintain the
Plan, but only with respect to Employees who continue
employment with such subsidiary.
(4) The attainment of the age, if any, elected in Item 42 of
the Adoption Agreement. However, under no circumstances
will any distribution be made from a Participant's Employee
Elective Deferral Account, Employer Qualified Non-Elective
Contribution Account, or Employer Qualified Matching
Contribution Account pursuant to this provision before the
Participant attains age 59-1/2.
(5) The hardship of the Participant as described in section
7.12 of the Plan, if the Employer so elects in the Adoption
Agreement.
(c) If so elected in Item 20 of the Adoption Agreement, a Participant
shall be entitled to withdraw all or a portion of his Employee
Post-Tax Voluntary Contributions and, with the consent of the
Plan Administrator, the actual earnings thereon. In the event
such a withdrawal is made, a Participant shall be barred from
making any additional Employee Post-Tax Voluntary Contributions
or withdrawals until the first day of the next Plan Year. All
withdrawals of Employee Post-Tax Voluntary Contributions shall be
made subject to the uniform and
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nondiscriminatory requirements of the Employer as to the timing
and manner of such withdrawals. No Forfeitures shall result
solely as a result of withdrawal of Employee Post-Tax Voluntary
Contributions.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and
participant consent requirements (if applicable) contained in
sections 401(a)(11) and 417 of the Code.
7.02 Commencement of Benefits:
(a) A Participant whose benefit has become payable pursuant to
7.01(a)(1), (2) or (3) (retirement, death or Disability) shall be
eligible to commence receiving benefit payments as of the
Valuation Date coincident with or next following the date of
termination of employment. Such Participant (or the Participant's
Beneficiary, if the Participant has died) may request that up to
50% of the Participant's Account be distributed as soon as
administratively feasible, and the remainder will be distributed
after such Valuation Date. However, if the Employer has elected
item 37.c or 37.d which would permit payment sooner had the
Participant terminated for reasons other than death, Disability
or retirement, then the Participant (or his Beneficiary) may
elect such earlier payment as if his benefit had become payable
pursuant to 7.01(a)(4). A Participant whose benefit has become
payable pursuant to 7.01(a)(4) shall be eligible to commence
receiving benefit payments in accordance with the selection made
in Item 37 of the Adoption Agreement.
(b) Each Participant whose employment with the Employer has
terminated for a cause other than death of the Participant shall
be eligible to elect the time at which his benefit payments
hereunder shall commence. Such election may be made at any time
after the Participant's termination of employment and must be
made in writing to the Plan Administrator. The election must
specify the proposed date as of which the Participant elects to
commence receiving benefit payments. The Plan Administrator shall
commence benefit payments pursuant to the election as soon as
administratively feasible after the Valuation Date coincident
with or next following the commencement date specified in the
Participant's election. However, if the Employer has elected Item
37.c. in the Adoption Agreement, the distribution will be made in
one or more payments as soon as administratively feasible after
the proposed date, based on the balance of the Participant's
Account as of the immediately preceding Valuation Date, adjusted
for any contributions, withdrawals, distributions, loans,
insurance payments, or expenses since that date.
(c) Unless the Participant elects to the contrary pursuant to
7.02(b), distribution of benefits shall commence no later than
sixty (60) days after the latest of:
(1) The close of the Plan Year in which the Participant attains
the Normal Retirement Age specified in the Adoption
Agreement;
(2) If the Participant does not retire by his Normal Retirement
Date, the date the Participant terminates employment; or
(3) The 10th anniversary of the year in which the Participant
commenced participation in the Plan.
Notwithstanding the foregoing, the failure of a Participant and
Spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of section 7.08 of
the Plan, shall be deemed to be an election to defer commencement
of payment of any benefit sufficient to satisfy this section.
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(d) Distribution of a Participant's Account must be made or begun by
the Required Beginning Date.
7.03 Joint and Survivor Requirements:
(a) Unless an election was made in the Adoption Agreement not to
provide life annuity benefit options pursuant to the special rule
described in section 7.10, the provisions of this section 7.03
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 7.11.
(b) Except as provided in section 7.03(a) and 7.10, a Participant or
Former Participant who has a Vested Percentage in his
Participant's Account, including any balance held in the
Participant's Employee Post-Tax Voluntary Contribution Account
and Employee Rollover/Transfer Account, which becomes payable for
any reason other than the death of the Participant shall receive
any distribution from the Plan in the form of a Joint and
Survivor Annuity if the Participant is married on the date
benefit payments commence, or in the form of a life annuity if
the Participant is unmarried, unless an optional form of benefit
described in section 7.06 is selected pursuant to a Qualified
Election within the 90 day period ending on the Annuity Starting
Date, or unless the benefit is payable under section 7.08(a).
These joint and survivor annuity requirements shall apply to any
benefit payable to a Participant under a contract purchased by
the Plan and paid by a third party.
7.04 Minimum Distribution Requirements:
(a) Subject to the joint and survivor annuity requirements, the
requirements of sections 7.04, 7.05, 7.06, 7.07, and 7.13 shall
apply to any distribution of a Participant's Account and will
take precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of such sections apply
to calendar years beginning after December 31, 1984. All
distributions required under such sections shall be determined
and made in accordance with the proposed regulations under
section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of section 1.401(a)(9)-2 of the
proposed regulations.
(b) If the Participant's Account is to be distributed in other than a
single sum, the following minimum distribution rules shall apply
on or after the Required Beginning Date:
(1) For amounts distributed from an individual account:
(A) If a Participant's Benefit is to be distributed over
(i) a period not extending beyond the life expectancy
of the Participant or the joint life and last
survivor expectancy of the Participant and the
Participant's Designated Beneficiary or (ii) a period
not extending beyond the life expectancy of the
Designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the first Distribution Calendar
Year, must at least equal the quotient obtained by
dividing the Participant's Benefit by the Applicable
Life Expectancy.
(B) For calendar years beginning before January 1, 1989,
if the Participant's Spouse is not the Designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present
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<PAGE> 73
value of the amount available for distribution is
paid within the life expectancy of the Participant.
(C) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning
with distributions for the first Distribution
Calendar Year, shall not be less than the quotient
obtained by dividing the Participant's Benefit by the
lesser of (i) the Applicable Life Expectancy or (ii)
if the Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section
1.401(a)(9)-2 of the proposed regulations.
Distributions after the death of the Participant
shall be distributed using the Applicable Life
Expectancy in section 7.04(b)(1)(a) above as the
relevant divisor without regard to proposed
regulations section 1.401(a)(9)-2.
(D) The minimum distribution required for the
Participant's first Distribution Calendar Year must
be made on or before the Participant's Required
Beginning Date. The minimum distribution for the
other calendar years, including the minimum
distribution for the Distribution Calendar Year in
which the Employee's Required Beginning Date occurs,
must be made on or before December 31 of that
Distribution Calendar Year.
(2) 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.
7.05 Payment at Death:
(a) Except as provided in sections 7.03(a) and 7.10, if a Participant
or Former Participant dies before benefit payments have
commenced, the Vested Percentage of the Participant's Account,
including the proceeds of any life insurance Contracts allocated
to the Participant's Account, will be paid in the form of a
Preretirement Survivor Annuity unless an optional form of benefit
described in section 7.06 is selected pursuant to a Qualified
Election within the Qualified Preretirement Survivor Annuity
Election Period. Furthermore, the Surviving Spouse may elect to
have such Preretirement Survivor Annuity distributed within a
reasonable period after the death of the Participant.
(b) Notwithstanding section 7.05(a), the Participant's Beneficiary,
including the Participant's Surviving Spouse, shall have the
right to elect following the death of the Participant that the
Vested Percentage of the Participant's Account be paid in an
optional form of benefit as described in section 7.06. Further,
the Participant's Beneficiary may elect the time at which benefit
payments shall commence. Such election may be made at any time
after the Participant's death and must be made in writing to the
Plan Administrator. The election must specify the proposed date
as of which the Beneficiary elects to commence receiving benefit
payments. Such commencement date shall not be earlier than the
date the Beneficiary becomes eligible for payment pursuant to
section 7.02(a) and shall comply with the requirements of 7.05(c)
below. The Plan Administrator shall commence benefit payments
pursuant to the election as soon as administratively feasible
after the Valuation Date coincident with or next following the
commencement date specified in the Participant's Beneficiary's
election.
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<PAGE> 74
(c) Any benefits paid because of the death of the Participant,
including the proceeds of any life insurance Contracts held by
the Plan on the life of the Participant, shall be distributed
according to the following rules:
(1) If the Participant dies after distribution of his interest
has begun, the remaining portion of such interest will
continue to be distributed at least as rapidly as under the
method of distribution being used prior to the
Participant's death.
(2) If the Participant dies before distribution of his interest
begins, distribution of the Participant's entire interest
shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death, except to the extent that an election is made to
receive the distribution in accordance with (A) or (B)
below.
(A) If any portion of the Participant's interest is
payable to a Designated Beneficiary, distributions
may be made over the life or over a period certain
not greater than the life expectancy of the
Designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the Participant
died.
(B) If the Designated Beneficiary is the Participant's
Surviving Spouse, the date distributions are required
to begin in accordance with (A) above need not be
earlier than the later of (i) December 31 of the
calendar year immediately following the calendar year
in which the Participant died and (ii) December 31 of
the calendar year in which the Participant would have
attained age 70-1/2.
If the Participant has not made an election pursuant
to this section 7.05(c)(2) by the time of his 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.
(3) For purposes of section 7.05(c)(2) above, if the Surviving
Spouse dies after the Participant, but before payments to
such spouse begin, the provisions of section 7.05(c)(2),
with the exception of paragraph (B) therein, shall be
applied as if the Surviving Spouse were the Participant.
(4) For purposes of this section 7.05(c), any amount paid to a
child of the Participant will be treated as if it had been
paid to the Surviving Spouse if the amount becomes payable
to the Surviving Spouse when the child reaches the age of
majority.
(5) For the purposes of this section 7.05(c), distribution of a
Participant's interest is considered to begin on the
Participant's Required Beginning Date (or, if section
7.05(c)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to
section 7.05(c)(2)
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above). If distribution in the form of an annuity
irrevocably commences to the Participant before the
Required Beginning Date, the date distribution is
considered to begin is the date distribution actually
commences.
7.06 Optional Form of Payment of Benefits:
Benefits may be paid in any of the following forms subject to the
provisions of sections 7.03, 7.04, and 7.05. However, options (c) and
(d) are not applicable if the Employer has elected in the Adoption
Agreement that the benefit options will not include any form of life
annuity.
(a) A single payment to the Participant (or to the Designated
Beneficiary, if the Participant has died).
(b) Installments for a period certain not to exceed the life
expectancy of the Participant (or the Participant's Beneficiary,
if the Participant has died) or the joint lives and last survivor
expectancies of the Participant and the Participant's Designated
Beneficiary. In such case, the Participant's Account from which
such benefits are paid shall remain part of the general Trust
Fund and shall be subject to the gains and losses of the Trust
Fund. However, the Participant may elect to have such
Participant's Account held in a segregated account and to invest
the same as directed by such Participant in writing.
(c) An annuity for the life of the Participant (or for the life of
the Designated Beneficiary, if the Participant has died).
(d) A joint and survivor annuity for the lives of the Participant and
the Designated Beneficiary.
(e) A combination of the above.
7.07 Designation of Beneficiary:
(a) Each Participant may, by written notice filed with the
Administrator, designate a Beneficiary or Beneficiaries to
receive the Participant's benefit at the Participant's death.
Such designation may be changed or revised from time to time by
written instrument filed with the Administrator. If no
designation has been made, or if no Beneficiary is living at the
time of a Participant's death, his Beneficiary shall be:
(1) his Surviving Spouse; but if he has no Surviving Spouse,
(2) his surviving children, in equal shares; but if he has no
surviving children,
(3) his estate.
(b) A Beneficiary designation shall be effective only to the extent
that the Plan is not required to:
(1) pay the Vested Percentage of the Participant's Account in
the form of an annuity for the life of the Surviving Spouse
pursuant to section 7.03(b), or
(2) pay the Vested Percentage of the Participant's Account to
the Surviving Spouse in accordance with section 7.10.
7.08 Restrictions On Immediate Distributions:
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(a) If a Participant's Account has become payable pursuant to the
provisions of section 7.02 and the Vested Percentage of the
Participant's Account does not exceed $3,500, the value of the
Vested Percentage of the Participant's Account shall be
distributed to him. If the Vested Percentage of the Participant's
Account is zero, the Participant shall be deemed to have received
a distribution of the value of the Vested Percentage of the
account. For purposes of computing the value of the Vested
Percentage of the Participant's Account, accumulated deductible
employee contributions within the meaning of section 72(o)(5)(B)
of the Code for Plan Years beginning before January 1, 1989 shall
not be considered.
(b) (1) If the value of the Vested Percentage of a Participant's
Account derived from Employer and Employee contributions
exceeds (or at the time of any prior distribution exceeded)
$3,500, and the account balance is immediately
distributable, the Participant and the Participant's Spouse
(or where either the Participant or the Spouse has died,
the survivor) must consent to any distribution of such
account balance. The consent of the Participant and the
Participant's Spouse shall be obtained in writing within
the 90-day period ending on the Annuity Starting Date. The
Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution
until the Participant's account balance 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), and
shall be provided no less than 30 days and no more that 90
days prior to the Annuity Starting Date.
Notwithstanding the foregoing, if a distribution is one to
which sections 401(a)(11) and 417 of the 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
regulations under the Code is given, provided that:
(A) the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
(B) the Participant, after receiving the notice,
affirmatively elects a distribution.
(2) Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form
of a Joint and Survivor Annuity while the account balance
is immediately distributable. (Furthermore, if payment in
the form of a Joint and Survivor Annuity is not required
with respect to the Participant pursuant to section 7.10 of
the Plan, only the Participant need consent to the
distribution of an account balance that is immediately
distributable.) Neither the consent of the Participant nor
the Participant's Spouse shall be required to the extent
that a distribution is required to satisfy section
401(a)(9) or section 415 of the Code. In addition, upon
termination of this Plan if the Plan does not offer an
annuity option (purchased from a commercial provider), the
Participant's Account may, without the Participant's
consent, be distributed to the Participant or transferred
to another defined contribution plan (other than an
employee stock ownership plan as defined in section
4975(e)(7) of the Code) within the same controlled group.
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(3) An account balance is immediately distributable if any part
of the 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 Normal Retirement Age or age 62.
(4) For purposes of determining the applicability of the
foregoing consent requirements to distributions made before
the first day of the first Plan Year beginning after
December 31, 1988, the value of the Vested Percentage of
the Participant's Account shall not include amounts
attributable to accumulated deductible employee
contributions within the meaning of section 72(o)(5)(B) of
the Code.
7.09 Notice Requirements:
(a) In the case of a Joint and Survivor Annuity, the Plan
Administrator shall no less than 30 days and no more than 90 days
prior to the Annuity Starting Date provide each Participant a
written explanation of:
(1) The terms and conditions of a Joint and Survivor Annuity;
(2) The Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity form of
benefit;
(3) The rights of a Participant's Spouse; and
(4) The right to make, and the effect of, a revocation of a
previous election to waive the Joint and Survivor Annuity.
(b) In the case of a Preretirement Survivor Annuity, the Plan
Administrator shall provide each Participant within the
Applicable Period a written explanation of the Preretirement
Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the
requirements of section 7.09(a) applicable to a Joint and
Survivor Annuity.
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7.10 Special Rule for Electing Plans:
(a) This section applies if the Employer has elected in the Adoption
Agreement that the benefit options will not include any form of
life annuity. If such an election is made by the Employer, then
the following two conditions are applicable to the Plan:
(1) The Participant cannot elect payments in the form of a life
annuity, and
(2) On the death of the Participant, the Participant's Account
including any life insurance proceeds from Contracts on the
life of the Participant will be paid to the Participant's
Surviving Spouse, but if there is no Surviving Spouse, or,
if the Surviving Spouse has already consented in a manner
conforming to a Qualified Election, then to the
Participant's Designated Beneficiary.
(3) The Surviving Spouse may elect to have distribution of the
Participant's Account within the 90-day period following
the date of the Participant's death. The account balance
will 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.
However, this section 7.10 shall not be operative with respect to
the Participant if it is determined that this Plan is a direct or
indirect transferee of a defined benefit plan, money purchase
pension plan (including a target benefit plan), or stock bonus or
profit sharing plan which is subject to the survivor annuity
requirements of section 401(a)(11) and 417 of the Code. If this
section is operative, then the Joint and Survivor Annuity
requirement of section 7.04 and the Preretirement Survivor
Annuity requirement of section 7.05 shall be inoperative.
(b) The Participant may waive the spousal benefit provided in section
7.10(a)(2) above at any time; provided, however, that no such
waiver shall be effective unless it satisfies the conditions
(other than the notice requirements referred to therein) that
would apply to the Participant's Qualified Election to waive the
Preretirement Survivor Annuity.
7.11 Transitional Joint and Survivor Annuity Rules:
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
previous sections of this 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 had at least 10 years
of vesting service when he separated from service.
(b) 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 7.11(d) of this Article.
(c) The opportunities to elect described in (a) and (b) 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.
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(d) Any Participant who has elected pursuant to section 7.11(b) above
and any Participant who does not elect under section 7.11(a)
above or who meets the requirements of section 7.11(a) except
that such Participant does not have at least 10 years of vesting
service when he separates from service, shall have his benefits
distributed in accordance with all of the following requirements
if benefits would have been payable in the form of a life
annuity.
(1) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(ii) dies on or after Normal Retirement Age while still
working for the Employer; or
(iii) begins to receive payments on or after the qualified
early retirement age; or
(iv) 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 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.
(2) 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 Joint and Survivor
Annuity if the Participant had retired on the day before
his 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.
7.12 Hardship Withdrawals:
(a) If so elected by the Employer in the Adoption Agreement,
distribution of a Participant's Employee Elective Deferrals
Account (including only those earnings accrued as of December 31,
1988) may be made to a Participant in the event of hardship. For
the purposes of this section, hardship is defined as an immediate
and heavy financial need of the Employee where such Employee
lacks other available resources. Hardship distributions are
subject to the spousal consent requirements contained in sections
401(a)(11) and 417 of the Code, unless the Employer has made the
election described in section 7.10.
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(b) The following are the only financial needs considered immediate
and heavy: expenses incurred or necessary for medical care
described in section 213(d) of the Code, of the Employee, the
Employee's spouse, children, or dependents; the purchase
(excluding mortgage payments) of a principal residence for the
Employee; payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Employee, the
Employee's spouse, children or dependents; the need to prevent
the eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence; and any other
financial need deemed by the Commissioner of the Internal Revenue
Service to be immediate and heavy.
(c) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(1) The Employee has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans maintained by the Employer;
(2) All plans maintained by the Employer provided that the
Employee's Elective Deferrals (and Employee Post-Tax
Voluntary Contributions) will be suspended for twelve
months after the receipt of the hardship distribution;
(3) 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
(4) All plans maintained by the Employer provide that the
Employee may not make Employee Elective Deferrals for the
Employee's taxable year immediately following the taxable
year of the hardship distribution in excess of the
applicable limit under section 401(g) of the Code for such
taxable year less the amount of such Employee's Employee
Elective Deferral for the taxable year of the hardship
distribution.
(d) If a distribution is made to a Participant under this section
7.12, then the following shall apply:
(1) The Participant's Employee Elective Deferrals and Employee
Post-Tax Voluntary Contributions will be suspended for 12
months after the receipt of the hardship distribution. A
Participant whose deferrals and contributions have been
suspended will be deemed to have elected to stop his
deferrals and contributions and will be permitted to begin
deferrals and contributions pursuant to the applicable
provisions of this Plan.
(2) The Participant may not make Employee Elective Deferrals
for the Employee's taxable year immediately following the
taxable year of the hardship distribution in excess of the
applicable limit under section 401(g) of the code for such
taxable year less the amount of such Participant's Employee
Elective Deferral for the taxable year of the hardship
distribution.
7.13 Transitional Minimum Distribution Rules:
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(a) Notwithstanding the other requirements of this article and
subject to the joint and survivor annuity requirements in this
article, 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):
(1) 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.
(2) 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.
(3) Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will be
made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee listed
in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee will be presumed
to have designated the method of distribution under which the
distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in subsections 7.13(a)(1) and (5).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of section 401(a)(9) of the Code and the
proposed regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin, the
trust must distribute by the end of the calendar year following
the calendar year in which the revocation occurs the total amount
not yet distributed which would have been required to have been
distributed to satisfy section 401(a)(9) of the Code and the
proposed regulations thereunder, but for the section 242(b)(2)
election. For calendar years beginning after December 31, 1988,
such distributions must meet the minimum distribution incidental
benefit requirements in section 1.401(a)(9)-2 of the proposed
regulations. Any changes in the designation will be considered to
be a revocation of the designation. However, the mere
substitution or addition of another beneficiary (one not named in
the designation) under the designation will not be considered to
be a revocation of the designation, so long as such substitution
or addition does not alter the period over which distributions
are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from one plan to
another plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
7.14 In-Service Distributions:
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If so elected in Item 42 of the Adoption Agreement, distribution of up
to 100% of the Participant's Account may be made to a Participant who
is still an Employee if all of the following requirements have been
met:
(a) The Participant must have completed at least 5 years of
participation in the Plan. If the Participant has not completed 5
years of participation, then only amounts which have been on
deposit for at least 24 months may be withdrawn.
(b) The Participant has satisfied any requirements specified in Item
42 of the Adoption Agreement.
(c) If required by Item 42 of the Adoption Agreement, the Participant
must have suffered a financial hardship, determined by the
Administrator. Financial hardship shall include but not be
limited to a deductible medical expense, a deductible casualty
loss, an illness or disability which prevents employment for six
weeks or more, a judgment or other extraordinary liability
exceeding 10% of the Participant's taxable income, funeral
expenses for a member of the Participant's family, the threatened
foreclosure of a mortgage on the Participant's residence, the
threatened bankruptcy of the Participant, the education of the
Participant's children, or the purchase of the Participant's
primary personal residence.
Notwithstanding the above, distributions to a Participant from his
Employee Elective Deferral Account, Employer Qualified Matching
Account, and Employer Qualified Non-Elective Account may be made only
if otherwise distributable under section 7.01.
7.15 Distributions Under Qualified Domestic Relations Order:
(a) Distribution of all or any part of a Participant's Account
pursuant to the provisions of a qualified domestic relations
order as defined in section 414(p) of the Code ("QDRO") is
specifically authorized. Distribution may be made to an alternate
payee (as defined in section 414(p)(8) of the Code) under a QDRO
prior to a Participant's earliest retirement age (as defined in
section 414(p)(4)(B) of the Code) if the QDRO provides for an
earlier distribution. This provision does not entitle the
alternate payee to receive a form of distribution not otherwise
permitted under this Plan.
(b) Upon receipt of an order which appears to be a domestic relations
order, the Plan Administrator will promptly notify the
Participant and each alternate payee of the receipt of the order
and provide them with a copy of the procedures established by the
Plan for determining whether the order is a QDRO. While the
determination is being made, a separate accounting will be made
with respect to any amounts which would be payable under the
order while the determination is being made. If the Plan
Administrator or a court determines that the order is a QDRO
within 18 months after receipt, the Plan Administrator will begin
making payments, including the separately-accounted for amounts,
pursuant to the order when required or as soon as
administratively practical. If the Plan Administrator or court
determines that the order is not a QDRO, or if no determination
is made within 18 months after receipt, then the separately
accounted for amounts will be either restored to the
Participant's Account or distributed to the Participant, as if
the order did not exist. If the order is subsequently determined
to be a QDRO, such determination shall be applied prospectively
to payments made after the determination.
(c) This section does not authorize a Participant to receive a
distribution at a time not otherwise permitted under the Plan.
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7.16 Direct Rollover:
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this part, a Distributee
may elect with respect to any distribution made on or after January 1,
1993, 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. If the Distributee's
Eligible Rollover Distributions are expected to total less than $200
during the Plan Year, the Administrator is not required to remit the
benefit in a Direct Rollover. If the Distributee elects to have only a
portion of an Eligible Rollover Distribution paid as a Direct Rollover,
the Administrator may require that portion equal or exceed $500. The
Distributee may not specify more than one Eligible Retirement Plan to
which a Direct Rollover is to be made.
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ARTICLE VIII
SPECIAL TOP-HEAVY PLAN RULES
8.01 Applicability of Article:
If the Plan is or becomes a Top-Heavy Plan in any Plan Year beginning
after December 31, 1983, or is deemed to be a Top-Heavy Plan under the
Adoption Agreement, the provisions of this Article VIII shall become
applicable and shall supersede any conflicting provisions under the
Plan or the Adoption Agreement.
8.02 Minimum Allocations:
(a) Except as otherwise provided in (c) and (d) 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 and
Employee Elective Deferrals, as a percentage of the Key
Employee's Compensation as limited by section 401(a)(17) of the
Code, 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 or elective
contributions to the Plan, or (iii) Compensation less than a
stated amount. In a Top-Heavy Plan Year in which the Employer
maintains another plan or plans covering any Participant under
this Plan, then the minimum allocation level as selected in Item
28 of the Adoption Agreement shall be substituted for the three
percent (3%) of Compensation described above.
(b) For purposes of computing the minimum allocation, Compensation
will mean Compensation as defined in Item 18 of the Adoption
Agreement without regard to the exclusions from Compensation as
defined in Item 18.d. of the Adoption Agreement.
(c) Employee Elective Deferrals and Employer Matching Contributions
and Employer Qualified Matching Contributions made on account of
Employee Elective Deferrals may not be taken into account for the
purpose of satisfying this section.
(d) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan
Year.
(e) The provision in (a) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or
plans of the Employer and the Employer has provided in Item 28 of
the Adoption Agreement that the minimum allocation or benefit
requirement applicable to Top-Heavy Plans will be met in the
other plan or plans.
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(f) The minimum contribution required pursuant to this section (to
the extent required to be nonforfeitable under section 416(b) of
the Code) may not be forfeited under sections 411(a)(3)(B) or
411(a)(3)(D) of the Code.
8.03 Minimum Vesting:
For any Plan Year in which this is a Top-Heavy Plan, the minimum
vesting schedule elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The 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 and benefits accrued
before the Plan became a Top-Heavy Plan. Further, no decrease in a
Participant's Vested Percentage may occur in the event the Plan's
status as a Top-Heavy Plan changes for any Plan Year. However, this
section does not apply to the account balances of any Employee who does
not have an Hour of Service after the Plan has initially become a
Top-Heavy Plan and such Employee's account balance attributable to
Employer Contributions and Forfeitures will be determined without
regard to this section. If the Plan's status changes from a Top-Heavy
Plan to a non- Top-Heavy Plan, any change to a different vesting
schedule because of the change in status will be considered an
amendment to the vesting schedule for purposes of Section 14.01 of the
Plan.
8.04 Super Top-Heavy Plans:
In any Plan Year in which the Top-Heavy Ratio exceeds 90%, the
denominators of the Defined Benefit Fraction and the Defined
Contribution Fraction shall be computed using 100 percent of the dollar
limitation instead of 125 percent.
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ARTICLE IX
ADMINISTRATION OF PLAN
9.01 Responsibilities of Employer:
The Employer shall have the following responsibilities with respect to
administration of the Plan:
(a) The Employer shall adopt a funding policy and method consistent
with the obligations of the Plan and Title I of ERISA. The
Employer shall communicate such policy to the Trustee, which
shall coordinate such funding policy with its investment
strategy.
(b) The Employer may in its discretion appoint an Investment Manager
to manage all or a designated portion of the assets of the Plan.
In such event, the Trustee shall follow the directive of the
Investment Manager in investing the assets of the Plan managed by
the Investment Manager.
(c) The Employer shall appoint an Administrator to administer the
Plan. In absence of such an appointment, the Employer shall serve
as Administrator. The Employer may remove and reappoint an
Administrator from time to time.
(d) The Employer shall, formally or informally, review the
performance from time to time of persons appointed by it or to
which duties have been delegated by it, such as the Trustee,
Administrator, and Committee.
(e) The Employer shall supply the Administrator in a timely manner
with all information necessary for it to fulfill its
responsibilities under the Plan. The Administrator may rely upon
such information and shall have no duty to verify it.
9.02 Rights and Responsibilities of Plan Administrator:
The Administrator shall administer the Plan according to its terms for
the exclusive benefit of Participants, Former Participants, and their
Beneficiaries.
(a) The Administrator's responsibilities shall include but not be
limited to the following:
(1) Determining all questions relating to the eligibility of
Employees to participate or remain Participants hereunder.
(2) Computing, certifying and directing the Trustee with
respect to the amount and form of benefits to which a
Participant may be entitled hereunder.
(3) Authorizing and directing the Trustee with respect to
disbursements from the Trust Fund.
(4) Maintaining all necessary records for administration of the
Plan.
(5) Interpreting the provisions of the Plan and preparing and
publishing rules and regulations for the Plan which are not
inconsistent with its terms and provisions.
(6) Complying with all reporting, disclosure and notice
requirements of the Code and ERISA.
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(b) In order to fulfill its responsibilities, the Administrator shall
have all powers necessary or appropriate to accomplish his duties
under the Plan, including the power to determine all questions
arising in connection with the administration, interpretation and
application of the Plan. Any such determination shall be
conclusive and binding upon all persons. However, all
discretionary acts, interpretations and constructions shall be
done in a nondiscriminatory manner based upon uniform principles
consistently applied. No action shall be taken which would be
inconsistent with the intent that the Plan remain qualified under
section 401(a) of the Code. The Administrator is specifically
authorized to employ or retain suitable employees, agents, and
counsel as may be necessary or advisable to fulfill its
responsibilities hereunder, and to pay their reasonable
compensation, which shall be reimbursed from the Trust Fund if
not paid by the Employer within thirty days after the
Administrator advises the Employer of the amount owed.
(c) The Administrator shall serve as the designated agent for legal
process under the Plan.
9.03 Administrative Committee:
If so provided in the Adoption Agreement, the Employer shall appoint a
Committee of one or more persons to serve as the Administrator. The
Employer shall make its appointments in writing, and each member of the
Committee shall consent in writing to serve on the Committee. The
following provisions shall govern the Committee.
(a) Membership -
Any Employee or member of the board of directors of the Employer
is eligible to serve as a member of the Committee. The Committee
members shall hold office at the pleasure of the Employer, and
all vacancies shall be filled by the Employer.
(b) Officers -
The Committee shall elect a Chairman, Secretary, and such other
officers as it may determine from its membership, to serve at the
pleasure of the Committee.
(c) Meetings -
The Committee shall hold meetings upon such notice, at such place
or places, and at such times as it may from time to time
determine. Notice shall not be required if waived in writing. A
majority of the members of the Committee in office at the time
shall constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee at any
meeting shall be by vote of a majority of those present at such
meeting and entitled to vote. Resolutions may be adopted or other
action taken without a meeting upon written consent signed by a
majority of the members of the Committee.
(d) Expenses and Compensation -
All usual and reasonable expenses of the Committee may be paid in
whole or part by the Employer, and any expenses of the Committee
not paid by the Employer shall be paid by the Trustee out of the
principal or earnings of the Trust Fund. Any members of the
Committee who are Employees shall not receive compensation with
respect to their services with the Committee. The Committee and
the individual members thereof shall be indemnified by the
Employer, and not from the Trust Fund, against any and all
liabilities arising by reason of any act or failure to act made
in good faith pursuant to the provisions of the Plan, including
expenses reasonably incurred in the defense of any claim relating
thereto.
(e) Records -
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Any act or determination with respect to the administration of
the Plan made by the Committee and any assistant or
representative appointed by it shall be duly recorded by the
Committee or by the assistant or representative appointed by it
to keep such records. All records, together with such other
documents as may be necessary for the administration of the Plan,
shall be preserved in the custody of the Committee or the
assistant or representative appointed by it. The Committee shall
keep on file a copy of the Plan and Trust, including any
subsequent amendments, and registration statements as may be
required by the laws of the United States or other jurisdiction,
for examination by Participants in the Plan during reasonable
business hours.
(f) Administrative Directives of the Committee -
Administrative directives of the Committee to the Trustee shall
be delivered in writing and signed by a member of the Committee
authorized by the Committee to sign on its behalf.
(g) Discretionary Acts -
Any discretionary actions of the Committee or the Employer with
respect to the administration of the Plan shall be made in a
manner which does not discriminate in favor of Highly Compensated
Employees. In the event the Committee exercises any discretionary
authority under the Plan with respect to a Participant who is a
member of the Committee, such discretionary authority shall be
exercised solely and exclusively by those members of the
Committee other than such Participant, or if such Participant is
the sole member of the Committee, such discretionary authority
shall be exercised solely and exclusively by the Board of
Directors of the Employer.
(h) Resignation -
A member of the Committee may resign at any time by filing a
writing notice thereof with the Employer and the Committee,
effective on some later date specified in the notice. If a member
of the Committee ceases to be an Employee or member of the board
of directors of the Employer, he shall be deemed to have resigned
from the Committee on such date.
9.04 Benefit Claims Procedure:
(a) Any claim for benefits under the Plan shall be made in writing to
the Administrator. If such claim for benefits is wholly or
partially denied, the Administrator shall, within thirty (30)
days after receipt of the claim, notify the Participant or
Beneficiary of the denial of the claim. Such notice of denial
shall:
(1) be in writing;
(2) be written in a manner calculated to be understood by the
Participant or Beneficiary, and
(3) contain:
(A) the specific reason or reasons for denial of the
claim,
(B) a specific reference to the pertinent Plan provisions
upon which the denial is based,
(C) a description of any additional material or
information necessary to perfect the claim, along
with an explanation of why such material or
information is necessary, and
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(D) an explanation of the claim review procedure in
accordance with the provisions of this Article.
(b) Within sixty (60) days after the receipt by the Participant or
Beneficiary of a written notice of denial of the claim, or such
later time as shall be deemed reasonable taking into account the
nature of the benefit subject to the claim and any other
attendant circumstances, the Participant or Beneficiary may file
a written request with the Administrator that it conduct a full
and fair review of the denial of the claim for benefits.
(c) The Administrator shall deliver to the Participant or Beneficiary
a written decision on the claim within thirty (30) days after the
receipt of the aforementioned request for review, except that if
there are special circumstances (such as the need to hold a
hearing, if necessary) which require an extension of time for
processing, the aforementioned thirty (30) day period shall be
extended to sixty (60) days. Such decisions shall:
(1) be written in a manner calculated to be understood by the
Participant or Beneficiary,
(2) include the specific reason or reasons for the decision,
and
(3) contain a specific reference to the pertinent Plan
provisions upon which the decision is based.
(d) The decision of the Administrator shall be final and binding on
all parties, unless determined by a court of competent
jurisdiction to be arbitrary and capricious.
(e) (1) If after a Participant's Account becomes distributable
under Article VII no claim for benefit is made by the
Participant within 6 months after notice by certified mail
addressed to such Participant is sent to the last known
address of such Participant, then the Participant's Account
shall be deemed to have been forfeited, and the forfeiture
shall be allocated pursuant to section 6.04 of the Plan.
(2) If a Participant whose Participant's Account has been
forfeited pursuant to this provision at any time thereafter
makes a claim for the benefit, the dollar amount of the
Participant's Account which was forfeited, unadjusted for
earnings or losses subsequent to the date of forfeiture,
shall be restored during the Plan Year in which the claim
is made. The restoration shall be made as follows: first,
from any Forfeitures which would have otherwise been
allocated for the Plan Year; second, from any earnings of
the Trust Fund for the Plan Year; and finally, from
Employer contributions allocated for the Plan Year.
9.05 Multiple Roles:
Nothing herein shall be interpreted to prevent the same person from
serving in more than one fiduciary capacity for the Plan.
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ARTICLE X
TRUST AGREEMENT
10.01 Trust Agreement:
Unless otherwise elected in the Adoption Agreement, this Trust
Agreement shall form a part of the Plan, and all rights and benefits
that may accrue to any persons under the Plan shall be subject to all
the terms and provisions of this Article X. The Trustee hereunder
agrees to take, hold, invest, administer, and distribute, in accordance
with the following provisions, all contributions and assets paid or
delivered to it pursuant to the Plan. The Trustee shall carry out its
duties with the care, skill, prudence, and diligence under the
circumstances then prevailing that a man 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. All legal right, title and
interest in and to the assets of the Trust Fund shall at all times be
vested exclusively in the Trustee.
10.02 Basic Responsibilities of Trustee:
The Trustee shall have the following primary responsibilities:
(a) To invest, manage and control the assets of the Plan in a manner
consistent with the funding policy established by the Employer,
subject, however, to the direction of an Investment Manager as to
all or a portion of the assets of the Plan, if an Investment
Manager has been appointed by the Employer, and subject to the
direction of Participants if the Employer has so provided in the
Adoption Agreement.
(b) To maintain accounting records for all receipts, disbursements
and interests of Participants, and to furnish the Employer an
annual report.
(c) To value the assets of the trust at fair market value on the
Valuation Date, and to allocate the earnings and losses to each
Participant's Account in the manner specified in the Adoption
Agreement.
(d) To pay benefits under the Plan to Participants and their
Beneficiaries at the direction of the Administrator.
10.03 Investment:
(a) Subject to the provisions of paragraphs (c) and (d) of this
section, the Trustee is authorized to invest the Trust Fund in
such bonds, notes, debentures, mortgages, investment trust
certificates, preferred or common stocks, interests in real
estate, leaseholds, royalties (including overriding oil and gas
royalties whether measured by production or by gross or taxable
income from property), oil and gas leases, oil payments or any
other type of oil properties, and other forms of securities
(including qualified employer securities (as defined in section
407(d)(5) of ERISA), but not exceeding the percentage, if any, of
the Trust Fund specified by the Employer in the Adoption
Agreement), any pooled investment funds or any common or mutual
trust funds, including any pooled fund or common trust fund
administered by the Trustee, or in any other property, real or
personal, either within or without the State of Texas, as the
Trustee may deem advisable, without being limited by a statute or
rule of court regarding investments by trustees. The Trustee may
hold any reasonable portion of the Trust Fund in cash pending
investment or payment of expenses or benefits, without liability
for interest.
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(b) Subject to the provisions of paragraphs (c) and (d) of this
section, as of any valuation date of a collective trust
established for the purpose of collective investment of the
assets of trusts maintained with the Trustee or other trustees
under qualified retirement plans (hereinafter referred to as a
"Collective Trust"), the Trustee may transfer any part or all of
the assets of the Trust Fund to the trustee of the Collective
Trust for admission to one or more of the investment funds
therein. The Trustee is expressly authorized to permit the
commingling of any or all of the assets of the Trust Fund,
through the medium of the Collective Trust, with the assets of
other trusts eligible to participate in the Collective Trust
under the terms thereof. During such time as any part or all of
the assets of the Trust Fund are held in the Collective Trust,
they shall be subject to all of the provisions of the declaration
creating the Collective Trust as amended from time to time. The
Trustee shall have with respect to the interest of the Trust Fund
in the Collective Trust the powers conferred by this Trust
Agreement to the extent that such powers are not inconsistent
with the provisions of the declaration creating the Collective
Trust. The Trustee may withdraw all or any part of any interest
of the Trust Fund in the Collective Trust in accordance with the
terms of the Collective Trust. To the extent of the interest of
the Trust Fund in the Collective Trust, the Collective Trust
shall be part of the Plan.
(c) If the Employer so elects in the Adoption Agreement, a
Participant may direct the Trustee as to the investment of the
Participant's accounts specified in the Adoption Agreement. The
Trustee shall maintain a segregated account for each of the
accounts for which investment is directed by a Participant,
except for the portion of any Participant's Account which has
been invested in a commingled investment fund established by the
Trustee pursuant to section 10.04(t). The Trustee is authorized
to establish any reasonable rules and procedures governing
Participant-directed accounts which it deems desirable. Any such
rules and procedures will be applied to all Participants on a
nondiscriminatory basis. The Trustee is specifically authorized
to establish any rules, procedures, and investment alternatives
which it deems necessary or advisable to comply with the
requirements of section 404(c) of ERISA. To the extent allowed by
law, the Trustee shall not be liable for any loss resulting from
the Participant's direction of the investment of all or any
portion of his Participant's Account.
(d) The Employer may, in its discretion, appoint in writing one or
more Investment Managers to direct the investment of all or any
portion of the Trust Fund, as follows:
(1) The Employer shall give the Trustee copies of (A) the
instrument appointing the Investment Manager, (B) an
instrument evidencing the acceptance of appointment,
acknowledging that the Investment Manager is a fiduciary
for purposes of ERISA, and certifying the Investment
Manager's registration under the Investment Adviser's Act
of 1940, and (C) direction to the Trustee as to the portion
of the Trust Fund to be invested at the direction of the
Investment Manager.
(2) After receipt of the instruments described in (1) above,
the Trustee shall make available to the Investment Manager
the appropriate portion of the Trust Fund. The Trustee
shall be under no obligation to review or question any
investment decision made by the Investment Manager, and the
Trustee shall have no liability for losses with respect to
such investments on account of any action directed, taken,
or omitted by such Investment Manager. The Investment
Manager will continue to direct the investment of the
appropriate portion of the Trust Fund until the Trustee
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receives written notice from the Employer that the
Investment Manager has resigned or has been removed.
10.04 Rights and Powers of the Trustee:
The Trustee is authorized to exercise all powers conferred upon the
Trustee by law which it may deem necessary or proper for the investment
and protection of the Trust Fund. The Trustee, to the extent permitted
by law or regulatory authority, is specifically authorized and
empowered:
(a) To purchase, or subscribe for, any securities or other property
and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase,
or otherwise dispose of any securities or other property held by
the Trustee, by private contract or at public auction. No person
dealing with the Trustee shall be bound to see to the application
of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition,
with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without
power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes
affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's
nominees, and to hold any investments in bearer form, but the
books and records of the Trustee shall at all times show that all
such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall
deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof
by pledging all, or any part, of the Trust Fund; and no person
lending money to the Trustee shall be bound to see the
application of the money lent or to inquire into the validity,
expediency, or propriety of any borrowing;
(f) To keep such reasonable portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the
best interests of the Plan, without liability for interest
thereon;
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired
as Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to carry out the powers herein
granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence
or defend suits or legal or
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administrative proceedings, and to represent the Plan in all
suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may
not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance companies, to
be selected by the Administrator, as an investment of the Trust
Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise,
at any time or from time to time, whatever rights and privileges
may be granted under such annuity, or other Contracts; to
collect, receive, and settle for the proceeds of all such annuity
or other Contracts as and when entitled to do so under the
provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) Except as hereinafter expressly authorized, the Trustee is
prohibited from selling or purchasing stock options. The Trustee
is expressly authorized to write and sell call options under
which the holder of the option has the right to purchase shares
of stock held by the Trustee as a part of the assets of this
Trust, if such options are traded on and sold through a national
securities exchange registered under the Securities Exchange Act
of 1934, as amended, which exchange has been authorized to
provide a market for option contracts pursuant to Rule 9B-1
promulgated under such Act, and so long as the Trustee at all
times up to and including the time of exercise or expiration of
any such option holds sufficient stock in the assets of this
Trust to meet the obligations under such option if exercised. In
addition, the Trustee is expressly authorized to purchase and
acquire call options for the purchase of shares of stock covered
by such options if the options are traded on and purchased
through a national securities exchange as described in the
immediately preceding sentence, and so long as any such option is
purchased solely in a closing purchase transaction, meaning the
purchase of an exchange traded call option the effect of which is
to reduce or eliminate the obligations of the Trustee with
respect to a stock option contract or contracts which it has
previously written and sold in a transaction authorized under the
immediately preceding sentence;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan
associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit
trust created by the Employer or an affiliated company of the
Employer, and to commingle such assets and make joint or common
investments and carry joint accounts on behalf of this Plan and
such other trust or trusts, allocating undivided shares or
interests in such investments or accounts or any pooled assets of
the two or more trusts in accordance with their respective
interests;
(q) To employ a bank or trust company pursuant to the terms of its
usual and customary bank agency agreement, under which the duties
of such bank or trust company shall be of a custodial, clerical
and record-keeping nature;
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(r) To transfer a Participant's interest in the Plan to the trustee
of another trust forming part of a plan represented by such
trustee as meeting the requirements of section 401(a) of the
Code, provided such trust permits such transfers to be made;
(s) To accept funds for the account of a Participant transferred from
the trustee of another plan represented by such trustee as
meeting the requirements of section 401(a) of the Code, provided
such trust permits such transfers to be made;
(t) If the Employer has specified in the Adoption Agreement that
Participants may direct the investment of their accounts, to
establish and maintain one or more investment funds in which all
or a portion of the accounts of Participants may be commingled.
(u) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may
deem necessary to carry out the purposes of the Plan.
10.05 Administration and Payment:
(a) The Trustee shall be accountable for all contributions received
by it but shall have no duty to require any contributions to be
made to it, or to determine that the amounts received comply with
the Plan, or to determine that the fund is adequate to provide
the benefits payable pursuant to the Plan.
(b) Payments shall be made from the Trust Fund by the Trustee to such
persons, in such manner, at such times and in such amounts as the
Administrator shall direct. The Trustee shall be fully protected
in making, discontinuing or stopping payments from the Trust Fund
in accordance with the directions of the Administrator. The
Trustee shall have no responsibility to see to the application of
payments so made or to ascertain whether the directions of the
Administrator comply with the Plan. In no event, however, shall
any such payment exceed the amount then credited to the
respective Participant's Account. When the Administrator directs
that any payment is to be made only during or until the time a
certain condition exists regarding the payee, any payment made by
the Trustee in good faith, without actual notice or knowledge of
the changed status or condition of the payee, shall be considered
to have been properly made by the Trustee and made in accordance
with the direction of the Administrator.
(c) All notices, communications, designations, certifications,
orders, instructions and objections of the Administrator or
Employer shall be in writing, and the Trustee shall act and shall
be fully protected in acting in accordance with such notices,
communications, designations, certifications, orders,
instructions and objections. In the event that the Administrator
fails for any reason to furnish the Trustee with any required
notice, communication, designation, certification, order,
instruction, or objection, the Trustee may take such action,
including the making of distributions, as it in its discretion
deems necessary or advisable under the circumstances, after it
has been put on notice that any action on its part is required.
All notices or other communications from the Trustee to the
Administrator shall be in writing signed by the Trustee.
(d) The Trustee shall be fully protected in acting in accordance with
a determination by the Administrator of whether a domestic
relations order received by the Plan is a qualified domestic
relations order described in section 414(p) of the Code. If the
Administrator for any reason fails to make such determination,
the Trustee may take such action, including making distributions
and segregating accounts, as it shall in its discretion deem
necessary and advisable under the circumstances.
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10.06 Compensation and Expenses:
The Trustee shall be reimbursed for any reasonable expenses incurred by
it as Trustee, including reasonable expenses of legal counsel. In
addition, the Trustee shall be paid such reasonable compensation as
shall be agreed upon from time to time in writing by the Employer and
the Trustee. However, an individual serving as Trustee who already
receives full-time pay from the Employer shall not receive compensation
from this Plan. Unless paid or advanced by the Employer, such expenses
and compensation shall be paid from the Trust Fund.
10.07 Accounts of the Trustee:
(a) The Trustee shall maintain accurate and detailed records and
accounts of all transactions hereunder, which shall be available
at all reasonable times for inspection or audit by any person or
persons designated by the Administrator. The Trustee, at the
direction of the Administrator, shall submit to auditors such
valuations, reports or other information as they may reasonably
require.
(b) Within sixty days following the later of the Anniversary Date or
receipt by the Trustee of the Employer's contribution for the
Taxable Year, and following the effective date of the removal or
resignation of the Trustee, the Trustee shall file with the
Employer a written account setting forth all transactions
affected by it subsequent to the end of the period covered by its
last previous annual account, the assets of the Trust Fund at the
close of the period covered by such account, the net income or
loss of the Trust Fund, the gains or losses realized by the Trust
Fund upon the sale or other disposition of assets, the increase
or decrease in the value of the Trust Fund, all payments and
distributions made from the Trust Fund, and such other
information as the Trustee or Administrator deems appropriate.
(c) Upon the receipt by the Trustee of the Employer's written
approval of any such account, or upon the expiration of thirty
days after delivery of any such account to the Employer, such
account (as originally stated if no objection has been
theretofore filed by the Employer, or as theretofore adjusted
pursuant to agreement between the Employer and the Trustee) shall
be deemed to be approved by the Employer except as to matters, if
any, covered by written objections theretofore delivered to the
Trustee by the Employer regarding which the Trustee has not given
an explanation, or made adjustments, satisfactory to the
Employer, and the Trustee shall be released and discharged as to
all items, matters and things set forth in such account which are
not covered by such written objections as if such account had
been settled and allowed by a decree of a court having
jurisdiction regarding such account and of the Trustee, the
Employer, the Administrator and all persons having or claiming to
have any interest in the Fund. The Trustee, nevertheless, shall
have the right to have its accounts settled by judicial
proceedings if it so elects, in which event the Employer, the
Administrator and the Trustee shall be the only necessary
parties.
10.08 Co-Trustees:
If the Employer has designated two or more persons to serve as Co-
Trustees, then the Employer and the Co-Trustees may agree in writing as
to the division of fiduciary responsibilities among the Co-Trustees,
which agreement may provide that certain assets or classes of assets
will be held and invested by each Co-Trustee. Each Co-Trustee shall be
responsible only with respect to those assets for which it is given
custody and investment discretion. In absence of such an agreement,
then the Co-Trustees shall be jointly responsible for the duties of the
Trustee.
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10.09 Resignation and Removal of Trustee:
(a) The Trustee may resign at any time by delivering to the Employer,
at least thirty (30) days before its effective date, a written
notice of his resignation.
(b) The Employer may remove the Trustee at any time by delivering or
mailing by registered or certified mail, addressed to such
Trustee at his last known address, at least thirty (30) days
before its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer. Upon
accepting such appointment in writing, such successor shall
become vested with all the estate, rights, powers, discretions,
and duties of his predecessor with like respect as if he were
originally named as a Trustee herein. Until such a successor is
appointed and has accepted its appointment, the remaining Trustee
or Trustees shall have full authority to act under the terms of
this Agreement.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the
event a successor is so designated by the Employer and accepts
such designation, the successor shall, without further act,
become vested with all the estate, rights, powers, discretion,
and duties of his predecessor with the like effect as if he were
originally named as Trustee herein immediately upon the death,
resignation, incapacity, or removal of his predecessor.
(e) Upon resignation or removal, any Trustee hereunder shall provide
the accounting required by section 10.07 within sixty days of the
effective date of his resignation or removal.
10.10 Successor Trustee:
(a) Upon resignation or removal of the Trustee and acceptance by a
successor, the reigning or removed Trustee shall transfer and
deliver the Trust Fund to the successor, after reserving such
reasonable amount as it shall deem necessary to pay its
compensation and all expenses incurred or to be incurred by it in
administering or settling the accounts of the Trust Fund.
(b) Any successor Trustee shall have all of the powers of the initial
Trustee. A successor Trustee may rely on the accounting provided
by its predecessors, and a successor Trustee shall not be liable
for the acts or omissions of any predecessor Trustee.
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ARTICLE XI
LOANS TO PARTICIPANTS
11.01 Loans to Participants:
(a) If the Adoption Agreement provides that loans shall be made
available under the Plan, the Trustee shall establish a
participant loan program which meets the requirements of
_2550.408b-1 of the DOL Regulations. The program shall delegate
to the Administrator the responsibility of administering the loan
program.
(b) At the direction of the Administrator and pursuant to such
program, the Trustee shall lend a Participant or beneficiary an
amount of his Participant's Account not exceeding the lesser of
(1) one-half (1/2) of the Vested Percentage in his Participant's
Account, or (2) $50,000. In no event may the loan amount exceed
$50,000 reduced by the excess (if any) of the highest outstanding
balance of loans during the one year period ending on the day
before the loan is made, over the outstanding balance of loans
from the Plan on the date the loan is made. For purposes of the
above limitation, all loans from all plans of the Employer and
Affiliated Employers are aggregated.
11.02 Terms and Conditions:
The Administrator shall notify the Participants of the general terms
and conditions under which such loans are to be made. In addition to
such rules and regulations as the Trustee shall adopt, all loans shall
be subject to the following terms and conditions:
(a) An application for a loan by a Participant shall be made in
writing to the Administrator. The Administrator shall investigate
each such application and his action thereon shall be final. The
Administrator shall make loans available to all Participants and
beneficiaries on a reasonably equivalent basis. Loans shall not
be made available to Highly Compensated Employees in an amount
greater than the amount made available to other employees.
(b) Loans must be adequately secured. Although it is the intention
under this Plan that loans to Participants be repaid, the
collateral for each loan shall be the assignment of the
Participant's entire right, title and interest in and to the
Trust Fund, evidenced by the Participant's promissory note for
the amount of the loan (including interest), payable to the order
of the Trustee, and such other security as the Administrator may
require.
(c) Unless this is an electing plan described in section 7.10, a
Participant must obtain the consent of his or her spouse, if any,
to use of the Participant's Account as security for the loan.
Such Participant's Spouse's consent must be obtained within the
90 day period immediately preceding the date of the loan. The
consent must be in writing, must acknowledge the effect of the
loan, and must be witnessed by a plan representative or notary
public. Such consent shall thereafter be binding with respect to
the consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the Participant's
Account is used for renegotiation, extension, renewal, or other
revision of the loan.
(d) (1) The period of repayment for any loan shall be by agreement
between the Administrator and the Participant, but in no
event shall it exceed five (5) years.
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(2) Notwithstanding the provisions of section 11.02(d)(1) of
the Plan, any loan used to acquire any dwelling unit which
within a reasonable time (determined at the time the loan
is made) is to be used as a principal residence of the
Participant, shall not be required to be repaid within five
(5) years, but shall be repaid within a reasonable period
of time to be determined by the Administrator.
(3) The provisions of section 11.02(d)(1) and (2) shall not
apply to loans, assignments, and pledges made prior to
August 13, 1982. In the case of such loans, the period of
repayment shall be by agreement between the Administrator
and the Participant, but in no event shall it exceed ten
(10) years.
(4) For purposes of this section 11.02, the outstanding balance
of any loan which is renegotiated, extended, renewed, or
revised after such date shall be treated as an amount
received as a loan on the date of such renegotiation,
extension, renewal, or revision.
(e) The loan by its terms shall require substantially level
amortization with payments not less frequently than quarterly
over the term of the loan.
(f) Each loan shall bear interest at a reasonable rate to be fixed by
the Administrator and, in determining the interest rate, the
Administrator shall take into consideration interest rates being
charged at the time of the loan. The Administrator shall not
discriminate among Participants in the matter of interest rates,
but loans granted at different times may bear different interest
rates and terms, if, in the opinion of the Administrator, the
differences are justified by changes in the general economic
condition.
(g) No distribution shall be made to any Participant, Former
Participant or to a Beneficiary of such a person, unless and
until all unpaid loans, including accrued interest thereon, have
been liquidated.
(h) No Participant loan shall exceed the present value of the
Participant's Vested Percentage in his Participant's Account.
(i) In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs
under the Plan.
(j) No loans will be made to any Owner-Employee
or shareholder-employees, unless approval for such loan is
obtained from the U.S. Department of Labor. For purposes of this
requirement, a shareholder-employee means an employee or officer
of an S corporation who owns (or is considered as owning within
the meaning of section 318(a)(1) of the Code), on any day during
the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
(k) If a valid spousal consent has been obtained in accordance with
(c), then, notwithstanding any other provision of this 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 100% of the
Participant's vested account balance (determined without regard
to the preceding sentence) is payable to the surviving spouse,
then the account balance shall be adjusted by first reducing the
vested account balance by the amount of the security used as
repayment of the loan, and then determining the benefit payable
to the surviving spouse.
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11.03 Protection of Trustee:
Notwithstanding the provisions of section 11.01, the Trustee shall not
be obligated to make any loan to any Participant if it determines that
the rate of interest fixed by the Administrator is not reasonable as
required by section 408(b)(1) of ERISA, or if the loan or the terms of
the loan violate ERISA or any other statute or regulation. Any
promissory note given to the Trustee under section 11.01 shall
constitute an asset of the Trust Fund, but the Trustee shall have no
responsibility with respect to holding, investing or administering the
note except upon the written direction of the Administrator. The
Employer shall indemnify and hold the Trustee harmless against any
expense, loss, liability or obligation resulting from any loan made to
any Participant at the written direction of the Administrator.
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ARTICLE XII
INSURANCE CONTRACTS
12.01 Investment in Insurance Contracts:
If the Employer chooses in the Adoption Agreement to allow insurance as
an investment of the Trust Fund, the Administrator or an individual
Participant may direct that part or all of the contributions by or for
any Participant be allocated to such Participant's insurance account
and used to purchase and pay premiums for appropriate annuity Contracts
or life insurance Contracts on the life of the Participant from such
legal reserve insurance companies as shall be designated by the
Administrator or Participant from time to time. Any amounts not used
for premium payment because of small differences between premium
amounts and the percentage of contributions actually allocated may be
applied against future premiums or returned to the account from which
allocated as directed by the Participant.
12.02 Investment Limitations:
Purchases of life insurance Contracts pursuant to section 12.01 shall
be subject to the following investment limitations:
(a) Ordinary Life -
For purposes of these incidental insurance provisions, ordinary
life insurance Contracts are Contracts with both non-decreasing
death benefits and non-increasing premiums. If such Contracts are
purchased, less than one-half (1/2) of the aggregate Employer
Contributions allocated to any Participant shall be used to the
pay premiums attributable to ordinary life insurance Contracts.
(b) Term and Universal Life -
No more than one-fourth (1/4) of the aggregate Employer
Contributions allocated to any Participant shall be used to pay
the premiums on term life insurance Contracts, universal life
insurance Contracts, and all other life insurance Contracts which
are not ordinary life.
(c) Combination -
The sum of one-half (1/2) of the ordinary life premiums and the
term premiums shall not exceed one-fourth (1/4) of the aggregate
Employer Contributions allocated to any Participant.
12.03 General Provisions:
The investment and administration of a Participant's insurance account
shall be subject to the following provisions:
(a) All Contracts and the insurers issuing such Contracts shall be
authorized to act in the state of the situs of the Trust.
(b) Any life insurance Contract shall be of the type commonly known
as "ordinary life", "endowment", "retirement income", "universal
life", or "term life" Contract. No life insurance Contract shall
provide a higher death benefit per dollar of premium than that
provided by a Contract of ordinary life insurance, except for any
"term life" Contract. If retirement income Contracts are
purchased on the life of any Participant, the insurance factor
will be considered to be incidental only if the death benefit
under the Contract does not exceed one hundred times the monthly
annuity provided under the Contract.
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(c) Any annuity Contract shall provide for the payment, commencing at
the Participant's Normal Retirement Date, of at least $25.00 per
month, or a benefit of equivalent actuarial value.
(d) Any life insurance Contract shall provide a death benefit in the
face amount of not less than $1,000.
(e) The Participant on whose life a Contract may be issued shall sign
the application for such Contract and submit to any physical
examination as may be required by the insurer.
(f) All Contracts shall provide that they are not transferable except
by the Trustee; and that in the case of any other holder, they
may not be sold, assigned, discounted or pledged as collateral
for a loan or as security for the performance of an obligation or
for any other purpose except to the insurer. All annuity
Contracts which are distributed must be nontransferable.
(g) All Contracts must provide that the Trustee will be the
beneficiary; however, the Trustee shall be required to pay over
all Contract proceeds to the Participant's designated Beneficiary
in accordance with the distribution provisions of the Plan.
(h) All Contracts shall be purchased and held by the Trustee as owner
thereof. The Trustee shall exercise the incidents of ownership in
such Contracts at the direction of the Participant in accordance
with the Plan subject to the following conditions:
(1) Dividends payable on such Contracts shall be applied to
reduce the premiums thereon unless the Administrator shall,
by notice in writing to the Trustee at the time of the
first direction of a contribution under the Plan to the
insurance account, direct that all dividends payable on all
Contracts to be purchased for the account of all
Participants thereafter should accumulate to increase the
benefits provided thereunder.
(2) If at any time the amount of contributions by or on behalf
of any Participant which is allocated to the insurance
account shall be inadequate to pay the premiums then due on
any Contract held by the Trustee for the account of such
Participant, after reduction of such premiums by any
dividends available for premium reduction pursuant to
subsection (1) above, the Trustee shall reduce the amount
of such Contracts so that the premiums then due shall equal
the amount which is available for the payment thereof. The
reduction may be made by surrendering a Contract or a
portion thereof for its cash surrender value (which shall
be transferred by the Trustee to the investment account) or
by putting all or a portion of any Contract on a paid-up
basis. No extended term coverage shall be elected upon any
reduction of premiums.
(i) Directions of monies to the insurance account must be accompanied
or preceded by written instructions from the Administrator or
Participant designating the insurer and selecting the Contracts
to be purchased. In the absence of such instructions, no monies
shall be allocated to the insurance account. Amounts allocated to
the insurance account with respect to each Participant shall, in
the absence of express instructions by the Participant to the
contrary, be first used to pay the premiums then due on any
Contracts then in effect under the Plan for the account of such
Participant. If the amount directed to the insurance account for
the account of any Participant should, after the application of
the portion thereof (if any) required to pay premiums on any
Contracts previously purchased for him, be less than or in excess
of the amount required to purchase an initial or additional
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Contract for his account, the amount which cannot be applied to
such purchase shall be allocated to the regular Employer
Contribution Account within sixty (60) days after the end of the
Plan Year.
(j) At or before retirement, and subject to the joint survivor
annuity requirements, any life insurance on the life of a
Participant shall be either distributed to the Participant or
converted to cash to provide retirement income for the
Participant. Any benefits arising from such distribution or
conversion shall be paid in accordance with the Plan.
(k) The terms of any annuity Contract purchased and distributed by
the Plan to a Participant or Spouse shall comply with the
requirements of this Plan. In the event of any conflict between
the terms of the Plan and the provisions of any Contract
hereunder, the terms of the Plan shall control.
12.04 Insurance as General Investment:
If directed by the Administrator, the Trustee shall have the authority
to apply for and pay premiums on life insurance policies for the
benefit of the Trust Fund as a whole, and such Contracts may be on the
lives of any person in whom there is an insurable interest, including
Participants. Any such Contracts held for the benefit of the Trust Fund
as a whole shall be treated as investments of the Trust and the cash
value thereof shall be used in valuing the Trust and all premiums paid
thereon by the Trustee shall be charged to the trust assets as a whole
and not to any specific accounts. All dividends, death benefits and
other payments actually received by the Trustee by reason of such
Contracts shall be credited to the Trust and allocated the same as
proceeds derived from the sale of any other assets held thereunder.
12.05 Insurance Company Not a Party:
If the Trustee shall be directed to purchase a life insurance,
retirement income or annuity Contract from an insurance company, no
such insurance company shall be deemed a party to this Plan and Trust,
nor shall such insurance company have any obligation to determine that
any person with respect to whom the Trustee makes an application for a
Contract is, in fact, eligible for benefits or participation under this
Plan. The insurance company shall have no obligation to determine any
fact, the determination of which is necessary or desirable for the
proper issuance of such Contracts, and shall be fully protected in
acting upon any advice, representation or other instrument executed by
the Trustee. In no event shall the insurance company be responsible for
any lack or failure of proper authority in the establishment of the
Plan or Trust, or for any acts of any person or of the Employer in the
establishment or maintenance thereof.
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ARTICLE XIII
EXCLUSIVE BENEFIT
13.01 Exclusive Benefit:
Except as provided in this Article, the assets of this Plan shall not
inure to the benefit of the Employer and shall be held for the
exclusive purpose of providing benefits to Participants, Former
Participants, and their Beneficiaries, and defraying the reasonable
expenses of administering the Trust Fund.
13.02 Mistake of Fact:
Any contribution which is made by the Employer under a mistake of fact
shall be returned to the Employer within one year of the contribution.
13.03 Requirement of Qualification:
(a) All contributions made by the Employer under this Plan are
conditioned upon the initial qualification of the Plan under
section 401 of the Code. In the event that the Commissioner of
Internal Revenue determines that the Plan is not initially
qualified under the Code, any contribution made incident to that
initial qualification by the Employer must be returned to the
Employer within one year after the date the initial qualification
is denied, but only if the application for the qualification is
made by the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe.
(b) If the Employer's plan fails to attain or retain qualification,
such plan will no longer participate in this prototype plan and
will be considered an individually designed plan.
13.04 Requirement of Deductibility:
All contributions made by the Employer under this Plan are conditioned
upon the deductibility of such contributions under section 404 of the
Code, as amended. To the extent that a deduction of any contribution is
disallowed, such contribution (to the extent disallowed) shall be
returned to the Employer within one year after the date of
disallowance.
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ARTICLE XIV
AMENDMENT, TERMINATION AND MERGER
14.01 Amendment:
(a) Plan Data, Inc., as the Sponsor of this regional prototype plan,
may amend any part of the plan document or the Adoption
Agreement.
(b) The Employer reserves the right at any time, and from time to
time, to discontinue making contributions to the Trust Fund, or
to amend any and all of the provisions of this Plan and Trust, or
to terminate or partially terminate the Plan and Trust. The
Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement
when such language is necessary to satisfy section 415 or section
416 of the Code because of the required aggregation of multiple
plans, and (3) add certain model amendments published by the
Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as individually
designed. An Employer that amends the Plan for any other reason,
including a waiver of the minimum funding requirement under
section 412(d) of the Code, will no longer participate in this
regional prototype plan and will be considered to have an
individually designed plan.
(c) No part of the Trust Fund shall, by reason of any suspension,
amendment, termination or partial termination, be used for or
diverted to purposes other than the exclusive benefit of the
Participants, Former Participants and Beneficiaries. No
suspension, amendment, termination or partial termination may
retroactively change or deprive any Participant, Former
Participant or Beneficiary of rights already accrued under the
Plan or eliminate an optional form of benefit, except insofar as
such amendment is necessary to preserve the qualification and tax
exemption of the Trust pursuant to sections 401(a) and 501(a) of
the Code, or to the extent permitted under section 412(c)(8) of
the Code, or to comply with any applicable provision of law. For
purposes of this paragraph, a Plan amendment which has the effect
of decreasing a Participant's account balance or eliminating an
optional form of benefit with respect to service before the
amendment shall be treated as reducing an accrued benefit. If the
vesting schedule of the Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the Vested
Percentage (determined as of such date) of such Employee's
Employer-derived accrued benefit will not be less than the
percentage computed under the Plan without regard to such
amendment. No amendment shall affect the terms of payment or the
value of any life insurance policies already issued as computed
to the date of such amendment, and no such amendment shall
deprive the insurer of any of its exemptions with respect to its
policies and annuities. No amendment shall increase the duties of
the Trustee or otherwise adversely affect the Trustee unless the
Trustee agrees thereto in writing.
(d) If the Plan's vesting schedule is amended, or the Plan is amended
in any way which directly or indirectly affects the computation
of the Participant's Vested Percentage, each Participant with at
least three (3) Years of Service with the Employer may elect,
within a reasonable period after the adoption of the amendment,
to have his Vested Percentage computed under the Plan without
regard to such amendment or change. For Participants who do not
have at least 1 hour of service in any Plan Year beginning after
December 31, 1988, the
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preceding sentence shall be applied by substituting "5 Years of
Service" for "3 Years of Service" where such language appears. If
a Participant fails to make such election, then such Participant
shall be subject to the amended vesting provisions. The period
during which the election may be made shall commence with the
date the amendment is adopted and shall end on the later of:
(1) Sixty (60) days after the amendment is adopted;
(2) Sixty (60) days after the amendment becomes effective; or
(3) Sixty (60) days after the Participant is issued written
notice of the amendment by the Employer.
14.02 Plan Termination:
Upon complete discontinuance of Employer contributions or termination
of the Plan, each Participant's Account shall become fully vested and
nonforfeitable. Upon termination of the Plan with respect to a group of
Employees which constitutes a partial termination of the Plan, the
Participant's Account of each Employee affected shall be fully vested
and nonforfeitable.
14.03 Distribution Upon Plan Termination:
Upon termination, partial termination, or complete discontinuance of
contributions, the Administrator shall instruct the Trustee to
determine the value of the Trust Fund and to adjust the Participants'
Accounts. The Administrator shall thereupon instruct the Trustee
whether currently to distribute the entire amount of each Participant's
Account required to be fully vested as a result of such termination,
partial termination, or discontinuance; or whether to distribute
therefrom as if the Plan had continued; or whether currently to
distribute the balance of certain of those accounts, and distribute the
balance of others as if the Plan had continued; or whether to make
distributions after the complete discontinuance of contributions, or
termination, or partial termination of the Plan, but prior to the time
when distributions would have been made had the Plan continued. The
Administrator shall, in all events, exercise its discretion under this
section 14.03 in a non-discriminatory manner. Any distribution
hereunder shall be made in accordance with the provisions of Article
VII as if the Participant had terminated employment. The Trust shall
continue in effect until the Trustee shall have completed the
distribution of the assets of the Trust Fund, and the accounts of the
Trustee have been settled.
14.04 Merger:
In the event that the Plan is merged or consolidated with, or the
assets or liabilities of the Trust Fund are transferred to any other
plan, each Participant shall have a benefit immediately after such
merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before such
merger, consolidation or transfer. The amount of such benefit shall be
determined by comparing the benefit to which the Participant would have
been entitled had the Plan terminated immediately prior to the merger,
consolidation or transfer to the benefit to which the Participant would
have been entitled had the Plan terminated immediately after the
merger, consolidation or transfer. However, the Plan is not considered
terminated as a result of the merger, consolidation or transfer and the
full vesting requirement of section 14.02 does not apply solely because
of the merger, consolidation or transfer unless the Plan is merged
with, consolidated with or transferred to a defined benefit pension
plan.
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ARTICLE XV
MISCELLANEOUS
15.01 This Plan is Not an Employment Contract:
Neither the adoption of the Plan by the Employer, nor any action of the
Employer or the Trustee under this Plan, nor the issuance of any
insurance policy, nor the payment of any benefits, shall be construed
to confer upon any person any legal right to be continued as an
Employee of the Employer or any affiliated or related employer. All
Employees shall be subject to discharge to the same extent as they
would have been had this Plan never been adopted.
15.02 Limitations on the Obligations of the Employer:
The Employer assumes no obligations under the Plan, except those
specifically stated in this Plan. No person shall have any right to
participate in profits by reason of this Plan, except to the extent
expressly set forth herein. The Employer shall be under no legal
obligation to make any contributions to the Trust Fund, except as
expressly provided herein.
15.03 Agreement Binding:
The Plan (including any and all amendments hereto) shall be binding
upon the Employer, its successors and assigns, and upon the
Participants and their Beneficiaries and their respective heirs,
executors, administrators, personal representatives and all persons
claiming by, under, or through any of them.
15.04 Assignment, Alienation, or Encumbrance:
No interest, right or claim in or to any part of the Trust Fund or any
payment therefrom may be assigned, alienated or encumbered, either
voluntarily or involuntarily, and any attempt to do so shall be null
and void. The preceding sentence 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. A domestic relations order which
is entered into before January 1, 1985, shall be treated as a qualified
domestic relations order if payment of benefits pursuant to the order
has commenced as of such date, and may be treated as a qualified
domestic relations order if payment of benefits has not commenced as of
such date, even though the order does not satisfy the requirements of
section 414(p). The Administrator shall determine whether any domestic
relations order received by the Plan is a qualified domestic relations
order described in section 414(p) of the Code and shall advise the
Trustee in writing of its determination within a reasonable time after
the receipt of the order.
15.05 Retroactive Effect:
The Employer may adopt this Plan to restate an existing plan to comply
with any requirements of the Tax Reform Act of 1986 (Pub. L. 99-514),
the Omnibus Budget Reconciliation Act of 1986 (Pub. L. 99-509), and the
Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100-23) that are
effective for Plan Years beginning before January 1, 1989. In such
case, notwithstanding the retroactive effective date of this Plan
specified in the Adoption Agreement, the provisions of such existing
plan shall remain operative for Plan Years beginning before January 1,
1989, and only those provisions of this Plan required to be effective
for such prior Plan Years shall be retroactively effective.
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15.06 Construction:
Whenever in the language of the Plan the masculine gender is used, it
shall be deemed equally to refer to the feminine gender. Unless
otherwise indicated, the words "hereof," "herein," and other similar
compounds of the word "here" shall mean and refer to the entire Plan,
and not to any particular provision or section.
15.07 Headings:
The headings of Articles and sections are included solely for
convenience of reference, and if there be any conflict between such
headings and the text of the Plan, the text shall control.
15.08 Governing Law:
Except as superseded by federal law, this Plan shall be governed by the
laws of the State of Texas as to all matters of construction, validity,
effect and performance.
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ARTICLE XVI
PARTICIPATING EMPLOYERS
16.01 Adoption by Other Employers:
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity (provided an
Owner-Employee of such entity does not participate in the Plan for Plan
Years beginning before January 1, 1984), whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating
Employer, by signing a duplicate of the signature page of the Adoption
Agreement, which will then be attached to the Adoption Agreement.
16.02 Requirements of Participating Employers:
(a) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold
and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer shall not affect such
Participant's rights under the Plan, and all amounts credited to
such Participant's Account as well as his accumulated service
time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(d) (1) Money Purchase Pension Plan - All rights and values
forfeited by termination of employment shall inure only to
the benefit of the Participating Employer by which the
forfeiting Participant was employed, except if the
Forfeiture is for an Employee whose Employer is a member of
an affiliated or controlled group, then said Forfeiture
shall be apportioned to the Participating Employers who are
members of the affiliated or controlled group and be used
to reduce contributions to the Plan. Should an Employee of
one ("First") Employer be transferred to an associated
("Second") Employer (the Employer, an affiliate or
subsidiary), such transfer shall not cause his
Participant's Account balance (generated while an Employee
of "First" Employer) in any manner, or by an amount to be
forfeited. Such Employee's Participant's Account balance
for all purposes of the Plan, including length of service,
shall be considered as though he had always been employed
by the "Second" Employer and as such had received
contributions, Forfeitures, earnings or losses, and
appreciation or depreciation in value of assets totaling
amount so transferred.
(2) Profit Sharing Plan - All rights and values forfeited by
termination of employment shall inure only to the benefit
of the Participants of the Participating Employer by which
the forfeiting Participant was employed, except if the
Forfeiture is for an Employee whose Employer is a member of
an affiliated or controlled group, then said Forfeiture
shall be allocated to all Employer Profit Sharing
Contribution Accounts of Participating Employers who are
members of the affiliated or controlled group. Should
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an Employee of one ("First") Employer be transferred to an
associated ("Second") Employer (the Employer, an affiliate
or subsidiary), such transfer shall not cause his
Participant's Account balance (generated while an Employee
of "First" Employer) in any manner, or by any amount to be
forfeited. Such Employee's Participant's Account balance
for all purposes of the Plan, including length of service,
shall be considered as though he had always been employed
by the "Second" Employer and as such had received
contributions, Forfeitures, earnings or losses, and
appreciation or depreciation in value of assets totaling
amount so transferred.
(e) Any expenses of the Trust which are to be paid by the Employer or
by the Trust Fund shall be paid by each Participating Employer in
the same proportion that the total amount standing to be credit
of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
16.03 Designation of Agent:
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably
the Employer as its agent. Unless the context of the Plan clearly
indicates the contrary, the word "Employer" shall be deemed to include
each Participating Employer as related to its adoption of the Plan.
16.04 Employee Transfers:
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and
eligibility. No such transfer shall effect a termination of employment
hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to
such Employee in the same manner as was the Participating Employer from
whom the Employee was transferred.
16.05 Participating Employers Contribution:
Any contribution or Forfeiture subject to allocation during each Plan
Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions of this Plan. On the basis
of the information furnished by the Administrator, the Trustee shall
keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of
the Employees of each Participating Employer. The Trustee may, but need
not, register Contracts so as to evidence that a particular
Participating Employer is the interested Employer hereunder, but in the
event of an Employee transfer from one Participating Employer to
another, the employing Employer shall immediately notify the Trustee
thereof.
16.06 Amendment:
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the
Trustee where such consent is necessary in accordance with the terms of
this Plan.
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16.07 Discontinuance of Participation:
Any Participating Employer shall be permitted to discontinue or revoke
its participation in the Plan. At the time of any such discontinuance
or revocation, satisfactory evidence thereof and of any applicable
conditions imposed shall be delivered to the Trustee. The Trustee shall
thereafter transfer, deliver and assign Contracts and other Trust Fund
assets allocable to the Participants of such Participating Employer to
such new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate qualified
plan for its Employees. If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating
Employer pursuant to the provisions of Article X hereof. In no such
event shall any part of the corpus or income of the Trust as it relates
to such Participating Employer be used for or diverted for purposes
other than for the exclusive benefit of the Employees of such
Participating Employer.
16.08 Administrator's Authority:
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
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Exhibit 5.1
(214) 969-1700
January 5, 1998
Brigham Exploration Company
6300 Bridge Point Parkway, Suite 500
Austin, Texas 78730
Re: Registration Statement on Form S-8
Dear Ladies and Gentlemen:
We have acted as counsel for Brigham Exploration Company, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of an aggregate of
300,000 shares of the Company's Common Stock, $.01 par value per share (the
"Shares"), for issuance under the Brigham, Inc. 401(k) Plan (the "Plan") and of
an indeterminate amount of interests in the Plan (the "Interests").
We have participated in the preparation of the Company's Registration
Statement on Form S-8 (the "Registration Statement"), filed with the Securities
and Exchange Commission, relating to the registration of the Shares and the
Interests under the Securities Act.
In connection with the foregoing, we have examined the originals or
copies, certified or otherwise authenticated to our satisfaction, of the
resolutions of the Company's Board of Directors establishing the Plan, the
Registration Statement and such corporate records of the Company, certificates
of officers of the Company, and other instruments and documents as we have
deemed necessary to require as a basis for the opinion hereinafter expressed. As
to various questions of fact material to such opinion, we have, where relevant
facts were not independently established, relied upon statements of officers of
the Company whom we believe to be responsible.
Based upon the foregoing and in reliance thereon, we advise you that in
our opinion (i) the Shares, when issued and delivered in accordance with the
provisions of the Plan, will be legally issued, fully paid and nonassessable,
and (ii) the Interests, when offered and issued in accordance with the
provisions of the Plan, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
THOMPSON & KNIGHT,
A Professional Corporation
By: /s/ Joe Dannenmaier
-----------------------------------------
Joe Dannenmaier, Attorney
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated March 6, 1998, which
appears on page F-2 of the 1997 Annual Report on Form 10-K of Brigham
Exploration Company for the year ended December 31, 1997.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
January 5, 1999
