As filed with the Securities and
Exchange Commission on December 30, 1998 Registration No.
333-____
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
PRIORITY HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1927379
(State or other jurisdiction
(I.R.S. Employer
of incorporation or organization)
Identification No.)
285 WEST CENTRAL PARKWAY 32714
ALTAMONTE SPRINGS, FLORIDA (Zip Code)
(Address of Principal Executive Offices)
PROFIT SHARING PLAN OF
PRIORITY HEALTHCARE CORPORATION AND AFFILIATES
(Full title of the plan)
ROBERT L. MYERS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
285 WEST CENTRAL PARKWAY, ALTAMONTE SPRINGS, FLORIDA 32714
(Name and address of agent for service)
(407) 869-7001
(Telephone number, including area code, of agent for
service)
COPY TO:
JAMES A. ASCHLEMAN
BAKER & DANIELS
300 NORTH MERIDIAN STREET, SUITE 2700
INDIANAPOLIS, INDIANA 46204
(317) 237-0300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO REGISTERED REGISTERED (1) OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SHARE (2) PRICE (2)
<S> <C> <C> <C> <C>
Class B Common 500,000 $33.9375 $16,968,750 $4,717.31
Stock,
$0.01 par value
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933 (the "Securities
Act"), this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein. Pursuant to Rule 457(h)(2) under the Securities Act, no
separate fee is required to register such interest.
(2) Estimated solely for purposes of calculating the registration fee and
computed in accordance with Rule 457(c) and (h) under the Securities Act
using the average of the high and low sale prices of the Class B Common
Stock as reported by the NASDAQ National Market System on December 22,
1998, which was $33.9375 per share.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION*
*Information required by Part I of Form S-8 to be contained in
the Section 10(a) Prospectus is omitted from this Registration
Statement in accordance with Rule 428 under the Securities Act and
the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by Priority Healthcare
Corporation (the "Registrant") with the Securities and Exchange
Commission are incorporated by reference in this Registration
Statement:
(1) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997;
(2) The Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1998, June 30, 1998 and September
30, 1998; and
(3) The description of the Registrant's Class B Common Stock
contained in the Registrant's Registration Statement on
Form 8-A filed with the Securities and Exchange Commission
on October 22, 1997, including any amendment or report
filed for the purpose of updating such description.
In addition, all documents subsequently filed by the Registrant
or the Profit Sharing Plan of Priority Healthcare Corporation and
Affiliates (the "Plan") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or
which deregisters all securities offered hereby then remaining
unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from their respective
dates of filing.
The Registrant will promptly provide without charge to each
person to whom a prospectus is delivered a copy of any or all
information that has been incorporated herein by reference (not
including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by
reference into such information) upon the written or oral request of
such person directed to the Vice President of Administration of the
Registrant at its principal offices, 285 West Central Parkway,
Altamonte Springs, Florida 32714, telephone (407) 869-7001.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Indiana Business Corporation Law provides that a
corporation, unless limited by its Articles of Incorporation, is
required to indemnify its directors and officers against reasonable
expenses incurred in the successful defense of any proceeding to
which the director or officer was a party because of serving as a
director or officer of the corporation.
As permitted by the Indiana Business Corporation Law, the
Registrant's Restated Articles of Incorporation provide for
indemnification of directors, officers and employees of the
Registrant against any and all liability and reasonable expense that
may be incurred by them, arising out of any claim or action, civil,
criminal, administrative or investigative, in which they may become
involved by reason of being or having been a director, officer, or
employee. To be entitled to indemnification, those persons must have
been wholly successful in the claim or action or the Board of
Directors must have determined that such persons acted in good faith
in what they reasonably believed to be the best interests of the
Registrant (or at least not opposed to its best interests) and, in
addition, in any criminal action, had reasonable cause to believe
their conduct was lawful (or had no reasonable cause to believe that
their conduct was unlawful).
In addition, the Registrant has a directors' and officers'
liability and company reimbursement policy that insures against
certain liabilities, including liabilities under the Securities Act,
subject to applicable retentions.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The list of Exhibits is incorporated herein by reference to the
Index to Exhibits.
The Registrant hereby undertakes that it will submit or has
submitted the Plan and any amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and has made or will make all
changes required by the IRS in order to qualify the Plan under
Section 401 of the Internal Revenue Code.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
(iii)To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided, however, that paragraphs (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 with or furnished to the
Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the 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 the 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.
The undersigned registrant hereby undertakes 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 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
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.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities
Act, 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
Altamonte Springs, State of Florida, on December 29, 1998.
PRIORITY HEALTHCARE CORPORATION
By: /S/ ROBERT L. MYERS
Robert L. Myers
President and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in
their respective capacities and on the respective dates indicated
opposite their names. Each person whose signature appears below
hereby authorizes each of William E. Bindley and Robert L. Myers,
each with full power of substitution, to execute in the name and on
behalf of such person any post-effective amendment to this
Registration Statement and to file the same, with exhibits thereto,
and other documents in connection therewith, making such changes in
this Registration Statement as the registrant deems appropriate, and
appoints each of William E. Bindley and Robert L. Myers, each with
full power of substitution, attorney-in-fact to sign any amendment
and any post-effective amendment to this Registration Statement and
to file the same, with exhibits thereto, and other documents in
connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ WILLIAM E. BINDLEY Chairman of the Board December 29, 1998
William E. Bindley
/S/ ROBERT L. MYERS President, Chief Executive Officer December 29, 1998
Robert L. Myers and Director (Principal Executive
Officer)
/S/ DONALD J. PERFETTO Executive Vice President, Chief December 29, 1998
Donald J. Perfetto Financial Officer and Treasurer
(Principal Financial and
Accounting Officer)
/S/ MICHAEL D. MCCORMICK Director December 29, 1998
Michael D. McCormick
/S/ THOMAS J. SALENTINE Director December 29, 1998
Thomas J. Salentine
/S/ RICHARD W. ROBERSON Director December 29, 1998
Richard W. Roberson
/S/ REBECCA M. SHANAHAN Director December 29, 1998
Rebecca M. Shanahan
</TABLE>
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act,
the trustees (or other persons who administer the employee benefit
plan) have duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City
of Altamonte Springs, State of Florida on December 29, 1998.
PROFIT SHARING PLAN OF PRIORITY
HEALTHCARE CORPORATION AND AFFILIATES
By: /S/ ROBERT L. MYERS
Robert L. Myers, Plan
Administrator
/S/ DONALD J. PERFETTO
Donald J. Perfetto, Plan
Administrator
/S/ BARBARA LUTTRELL
Barbara Luttrell, Plan
Administrator
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
DESCRIPTION OF EXHIBIT
Exhibit
NO.
<S> <C>
4.1 Restated Articles of Incorporation of the Registrant. (The copy of
this Exhibit filed as Exhibit 3-A to the Company's Registration
Statement on Form S-1 (Registration No. 333-34463) is incorporated
herein by reference.)
4.2 By-Laws of the Registrant, as amended to date. (The copy of this
Exhibit filed as Exhibit 3-B to the Company's Registration Statement
on Form S-1 (Registration No. 333-34463) is incorporated herein by
reference.)
4.3 Articles of Restatement of the Restated Articles of Incorporation of
the Registrant. (The copy of this Exhibit filed as Exhibit 3-C to
the Company's Registration Statement on Form S-1 (Registration No.
333-34463) is incorporated herein by reference.)
4.4 Profit Sharing Plan of Priority Healthcare Corporation and
Subsidiaries.
23 Consent of PricewaterhouseCoopers LLP.
24 Powers of Attorney (included on the Signature Page of the
Registration Statement).
</TABLE>
EXHIBIT 4.4
PRISM{<reg-trade-mark>} PROTOTYPE RETIREMENT PLAN & TRUST
<section>401(K) PROFIT SHARING PLAN
(NONSTANDARDIZED)
ADOPTION AGREEMENT (1)
The Employer (2), designated below, hereby establishes a profit-sharing
plan (optionally including a cash or deferred arrangement (as defined in
<section>401(k) of the Internal Revenue Code)) for all Eligible Employees
as defined in this Adoption Agreement pursuant to the terms of the
PRISM{<reg-trade-mark>} PROTOTYPE RETIREMENT PLAN & TRUST BASIC PLAN
DOCUMENT # 05.
A. EMPLOYER INFORMATION:
1. NAME: PRIORITY HEALTHCARE CORPORATION
2. ADDRESS: 285 WEST CENTRAL PARKWAY, SUITE 1704
3. ADDRESS: ALTAMONTE SPRINGS, FL 32714-2554
4. ATTENTION: BARBARA LUTTRELL TELEPHONE:(407) 772-1516
5. EMPLOYER TAXPAYER IDENTIFICATION NUMBER (3):35-1927379
B. BASIC PLAN PROVISIONS:
1. PLAN NAME (SELECT ONE):
/X/ A. This plan is established effective 01/01/99, (the "Effective
Date") as a profit sharing plan (optionally with a cash or
deferred arrangement as defined in Code <section>401(k)) to
be known as Profit Sharing Plan of Priority Healthcare
Corporation and Affiliates (the "Plan") in the form of the
PRISM{<reg-trade-mark>} PROTOTYPE RETIREMENT PLAN & TRUST.
B. This plan is an amendment and restatement in the form of the
PRISM{<reg-trade-mark>} PROTOTYPE RETIREMENT PLAN & TRUST,
effective , (the "Effective Date") of the (the "Plan"),
originally effective as of (the "Original Effective Date").
2. EMPLOYER'S THREE DIGIT PLAN NUMBER: 001
3. COMMITTEE MEMBERS (4):
4. DEFINITIONS:
A. COMPENSATION for allocation purposes:
I Will be determined over the following applicable period
(select only one):
/X/ (A) the Plan Year
(B) the period of Plan participation during the Plan
Year
(C) a consecutive 12 month period commencing on and
ending with, or within, the Plan Year.
II If selected, Compensation will include Employer
contributions made pursuant to a Salary Reduction
Agreement, or other arrangement, which are not
includible in the gross income of the Employee under
<section><section>125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Internal Revenue Code.
III Shall NOT include (select as many as desired):
(A) Bonuses
(B) Commissions
(C) Taxable fringe benefits identified below:
/X/ (D) Other items of remuneration identified below:
(1) Income derived from exercise of stock
options.
(2) Any benefit not included in the employee's
taxable income for the year.
IV Shall be limited to $ , which shall be the maximum
amount of compensation considered for plan allocation
purposes (but not for testing purposes), and may not be
an amount in excess of the Internal Revenue Code
<section>401(a)(17) limit in effect for the Plan Year
(5). If no amount is specified, Compensation shall be
limited to the Internal Revenue Code
<section>401(a)(17) amount, as adjusted by the
Secretary of the Treasury from time to time.
B. EARLY RETIREMENT DATE:
/X/ I is not applicable to this Plan
II is the latter of the date on which the Participant
attains age (not less than 55) and the date on which
the Participant completes Years of Service.
C. HOUR OF SERVICE shall be determined on the basis of the
method selected below. Only one method may be selected.
The method shall be applied to all Employees covered under
the Plan as follows (select only one):
/X/ I On the basis of actual hours for which an Employee is
paid, or entitled to be paid.
II On the basis of days worked. An Employee shall be
credited with ten (10) Hours of Service if under
<section>1.1(U) of the Plan such Employee would be
credited with at least one (1) Hour of Service during
the day.
III On the basis of weeks worked. An Employee shall be
credited with forty-five (45) Hours of Service if under
<section>1.1(U) of the Plan such Employee would be
credited with at least one (1) Hour of Service during
the week.
IV On the basis of semi-monthly payroll periods. An
Employee shall be credited with ninety-five (95) Hours
of Service if under <section>1.1(U) of the Plan such
Employee would be credited with at least one (1) Hour
of Service during the semi-monthly payroll period.
V On the basis of months worked. An Employee shall be
credited with one hundred ninety (190) Hours of Service
if under <section>1.1(U) of the Plan such Employee
would be credited with at least one (1) Hour of Service
during the month.
D. LIMITATION YEAR shall mean the 12 month period commencing on
January 1 and ending on December 31.
E. NORMAL RETIREMENT DATE for each Participant shall mean
(select one):
/X/ I the date the Participant attains age 65: (not to
exceed 65)
II the latter of the date the Participant attains age
(not to exceed 65) or the (not to exceed 5th)
anniversary of the participation commencement date. If
for the Plan Years beginning before January 1, 1988,
Normal Retirement Date was determined with reference to
the anniversary of the participation commencement date
(more than 5 but not to exceed 10 years), the
anniversary date for Participants who first commenced
participation under the Plan before the first Plan Year
beginning on or after January 1, 1988 shall be the
earlier of (A) the tenth anniversary of the date the
Participant commenced participation in the Plan (or
such anniversary as had been elected by the employer,
if less than 10) or (B) the fifth anniversary of the
first day of the first Plan Year beginning on or after
January 1, 1988. Notwithstanding any other provisions
of the Plan, the participant commencement date is the
first day of the first Plan Year in which the
Participant commenced participation in the Plan.
F. PERMITTED DISPARITY LEVEL, for purposes of allocating
Employer Contributions, shall mean (select only one):
/X/ I Not applicable - the Plan does not use permitted
disparity.
II The Taxable Wage Base, which is the contribution and
benefit base under section 230 of the Social Security
Act at the beginning of the year.
III % (not greater than 100%) of the Taxable Wage Base as
defined in B(4)(f)(ii) above.
IV $ , provided that the amount does not exceed the
Taxable Wage Base as defined in B(4)(f)(ii) above.
G. PLAN YEAR shall mean (select and complete only one of the
following):
I The 12-consecutive month period which coincides with
the Limitation Year. The first Plan Year shall be the
period commencing on the Effective Date and ending on
the last day of the Limitation Year.
II The 12-consecutive month period commencing on, , 19,
and each annual anniversary thereof.
/X/ III The calendar year (January 1 through December 31).
H. QUALIFIED DISTRIBUTION DATE, for purposes of making
distributions under the provisions of a Qualified Domestic
Relations Order (as defined in Internal Revenue Code
<section>414(p), /X/ SHALL SHALL NOT be the date the order
is determined to be qualified. If SHALL is selected, the
Alternate Payee will be entitled to an immediate
distribution of benefits as directed by the Qualified
Domestic Relations Order. If SHALL NOT is selected, the
Alternate Payee may only take a distribution on the earliest
date that the Participant is entitled to a distribution.
I. SPOUSE:
If selected, Spouse shall mean only that person who has
actually been the Participant's spouse for at least one
year.
J. YEAR OF SERVICE shall mean:
I For ELIGIBILITY purposes (select one of the following):
(A) the 12 consecutive months during which an Employee
is credited with (not more than 1000) Hours of
Service.
/X/ (B) a Period of Service (using the elapsed time method
of counting Service, as described in
<section>1.1(N)(3) of the Plan).
II For ALLOCATION accrual purposes (select one of the
following):
/X/ (A) the 12 consecutive months during which an Employee
is credited with 1000 (not more than 1000) Hours
of Service.
(B) a Period of Service (using the elapsed time method
of counting Service, as described in
<section>1.1(N)(3) of the Plan).
III For VESTING service purposes (select one of the
following):
/X/ (A) the 12 consecutive months during which an Employee
is credited with 1000 (not more than 1000) Hours
of Service.
(B) a Period of Service (using the elapsed time method
of counting Service, as described in
<section>1.1(N)(3) of the Plan).
IV For purpose of computing Years of Service in plans
where Year of Service is defined in terms of Hours of
Service), the consecutive 12 month period shall be:
(A) For ELIGIBILITY purposes, the first Year of
Service shall be computed using the 12 month
period commencing on the Employee's date of hire
and ending on the first annual anniversary of the
Employee's date of hire (the "Initial Computation
Period"). In the event an employee does not
complete an eligibility Year of Service during
this initial computation period, the computation
period shall be (select only one):
/X/ (1) the period commencing on each annual
anniversary of the Employee's date of hire
and ending on the next annual anniversary of
the Employee's date of hire.
(2) the Plan Year, commencing with the Plan Year
in which the Initial Computation Period ends.
(B) For VESTING purposes, Years of Service shall be
computed on the basis of:
(1) the period commencing on each annual
anniversary of the Employee's date of hire
and ending on the next annual anniversary of
the Employee's date of hire.
/X/ (2) the Plan Year, commencing with the first Plan
Year an Employee completes an Hour of
Service.
(C) For ALLOCATION accrual purposes, Year of Service
shall be computed on the basis of the Plan Year.
/X/ V For ELIGIBILITY purposes, Years of Service with the
following Predecessor Employers shall count in
fulfilling the eligibility requirements for this Plan:
Bindley Western Industries, Inc., and subsidiaries, but
only for service as of the Effective Date, and only for
employees employed by Priority Healthcare Corporation
(or its affiliates) as of the Effective Date.
/X/ VI For VESTING purposes, Years of Service with the
following Predecessor Employers shall count for
purposes of determining the nonforfeitable amount of a
Participant's account: Bindley Western Industries,
Inc., and subsidiaries, but only for service as of the
Effective Date, and only for employees employed by
Priority Healthcare Corporation (or its affiliates) as
of the Effective Date.
5. COVERAGE:
This Plan is extended by the Employer to the following Employees
who have met the eligibility requirements (select as many as
appropriate):
I All Employees
II Salaried Employees
III Sales Employees
IV Hourly Employees
V Leased Employees
/X/ VI All Employees except (select as applicable):
/X/ (A) those who are members of a unit of Employees
covered by a collective bargaining agreement
between the Employer and Employee representatives,
if retirement benefits were the subject of good
faith bargaining and if two percent or less of the
Employees who are covered pursuant to that
agreement are professionals as defined in Section
1.410(b)-9 of the Regulations. For this purpose,
the term "Employee representative" does not
include any organization more than half of whose
members are Employees who are owners, officers, or
executives of the Employer.
(B) those who are nonresident aliens (within the
meaning of Internal Revenue Code
<section>7701(b)(1)(B)) and who receive no earned
income (within the meaning of Internal Revenue
Code <section>911(d)(2)) from the Employer which
constitutes income from sources within the United
States (within the meaning of Internal Revenue
Code <section>861(a)(3)).
VII Union Employees (who are members of the following
unions or union affiliates:
VIII Other Employees, described as follows:
6. ELIGIBILITY:
An Employee covered by the Plan may become a Participant upon
completion of the following eligibility requirements:
A. SERVICE (6):
I There shall be no minimum service requirement for an
Employee to become a Participant.
/X/ II The Employee must complete 90 Days of Service (not more
than 2 years) to be a Participant for purposes of
receiving allocations of Employer Profit Sharing
Contributions.
B. AGE:
I There shall be no minimum age requirement for an
Employee to become a Participant.
/X/ II The Employee must attain age 21 (not more than 21) to
be a Participant in the Plan.
C. WAIVER OF AGE AND SERVICE REQUIREMENTS:
I Notwithstanding the provisions of Items B(6)(a) and
(b), Employees who have not satisfied the age and
service requirements, but would otherwise be eligible
to participate in the plan, shall be eligible to
participate on the Effective Date.
II For new Plans, notwithstanding the provisions of Items
B(6)(a) and (b), Employees who have not satisfied the
age and service requirements, but would otherwise be
eligible to participate in the plan, shall be eligible
to participate on the Effective Date.
D. ENTRY DATES:
Upon completion of the eligibility requirements, an Employee
shall commence participation in the Plan (select only one):
I As soon as practicable under the payroll practices
utilized by the Employer, and consistently applied to
all Employees, or if earlier, the first day of the Plan
Year (7).
II As of the first day of the month following the
completion of the eligibility requirements.
/X/ III As of the earliest of the first day of the Plan Year,
fourth, seventh or tenth month of the Plan Year next
following completion of the eligibility requirements.
IV As of the earliest of the first day of the Plan Year or
seventh month of the Plan Year next following
completion of the eligibility requirements.
V As of the first day of the Plan Year next following
completion of the eligibility requirements (may only be
selected if the eligibility year of service requirement
is 6 months or less).
7. VESTING:
A. The percentage of a Participant's Employer Contribution
Account (attributable to Employer Profit Sharing
Contributions) to be vested in him or her upon termination
of employment prior to attainment of the Plan's Normal
Retirement Date shall be (8):
<TABLE>
<CAPTION>
Completed Years of Service
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7
I 0% 100%
II 0% 0% 100%
III 0% 20% 40% 60% 80% 100%
IV 0% 0% 20% 40% 60% 80% 100%
V 10% 20% 30% 40% 60% 80% 100%
/X/ VI 20% 40% 60% 80% 100%
VII 0% 0% 0% 0% 0% 0% 100%
VIII Full and immediate vesting upon entry into the Plan (9)
</TABLE>
Notwithstanding anything to the contrary in the Plan, the
amount inserted in the blanks above shall not exceed the
limits specified in Code <section>411(a)(2).
B. For purposes of computing a Participant's vested account
balance, Years of Service for vesting purposes /X/ SHALL
SHALL NOT include Years of Service before the Employer
maintained this Plan or any predecessor plan, and /X/ SHALL
SHALL NOT include Years of Service before the Employee
attained age 18.
C. Notwithstanding the provisions of this Item B(7)(c) of the
Adoption Agreement, a Participant shall become fully vested
in his Participant's Employer Contribution if (10):
I the Participant's job is eliminated without the
Participant being offered a comparable position
elsewhere with the Employer.
II for such reason as is described below:
8. EMPLOYER PROFIT SHARING CONTRIBUTIONS:
A. CONTRIBUTIONS:
/X/ I In its discretion, the Employer may contribute Employer
Profit Sharing Contributions to the Plan.
II The Employer shall contribute Employer Profit Sharing
Contributions to the Plan in the amount of % of the
Compensation of all Eligible Participants under the
Plan.
III If selected, the Employer may make Employer Profit
Sharing Contributions without regard to current or
accumulated Net Profits of the Employer for the taxable
year ending with, or within the Plan Year.
IV If selected, the Employer may designate all or any part
of the Employer Profit Sharing Contributions as
Qualified Nonelective Contributions, provided, however,
that contributions so designated will be subject to the
same vesting, distribution, and withdrawal restrictions
as Before Tax Contributions (11).
B. ALLOCATIONS:
Employer Profit Sharing Contributions shall be allocated to
the accounts of eligible Participants according to the
following selected allocation formula:
/X/ I The Employer Profit Sharing Contributions shall be
allocated to each eligible Participant's account in the
ratio which the Participant's Compensation bears to the
Compensation of all eligible Participants. Employer
Profit Sharing Plan Contributions, shall be allocated
to the accounts of Participants who have completed a
Year of Service (12) (select one):
(A) as of the last day of the month preceding the
month in which the contribution was made.
(B) as of the last day of the Plan quarter preceding
the quarter in which the contribution was made.
/X/ (C) as of the last day of the Plan Year.
II The Employer Profit Sharing Contributions shall be
allocated in accordance with the following formula:
(A) If the Plan is Top-Heavy, the contribution shall
be first credited to each eligible Participant's
Account in the ratio which the Participant's
Compensation bears to the total Compensation of
all eligible Participants, up to 3% of each
Participant's Compensation.
(B) If the Plan is Top-Heavy, any Employer Profit
Sharing Contribution remaining after the
allocation in (a) above shall be credited to each
eligible Participant's account in the ratio which
the Participant's Excess Compensation (13) bears
to the total Excess Compensation of all eligible
Participants, up to 3% of each eligible
Participant's Excess Compensation.
(C) Any contributions remaining after the allocation
in (b) above shall be credited to each eligible
Participant's account in the ratio which the sum
of the Participant's total Compensation and Excess
Compensation bears to the sum of the total
Compensation and Excess Compensation of all
eligible Participants, up to an amount equal to
the maximum Excess Percentage times the sum of the
Participant's Compensation and Excess
Compensation. If the Plan is Top-Heavy, the
maximum Excess Percentage is % (insert
percentage). If the Plan is not Top-Heavy, the
maximum Excess Percentage is % (insert
percentage, which shall not exceed the prior
Excess Percentage limitation specified by more
than 3).
NOTE:If the Permitted Disparity Level defined at Item
B(4)(f) is the Taxable Wage Base (which is the
contribution and benefit base under section 230 of
the Social Security Act at the beginning of the
year), then the maximum Excess Percentage should
be 2.7% if the Plan is Top-Heavy and 5.7% if the
Plan is not Top-Heavy.
If the Permitted Disparity Level defined at Item
B(4)(f) is greater than 80% but less than 100% of
the Taxable Wage Base, then the maximum Excess
Percentage should be 2.4% if the Plan is Top-Heavy
and 5.4% if the Plan is not Top-Heavy.
If the Permitted Disparity Level defined at Item
B(4)(f) is greater than the greater of $10,000 or
20% of the Taxable Wage Base, but not more than
80%, then the maximum Excess Percentage should be
1.3% if the Plan is Top-Heavy and 4.3% if the Plan
is not Top-Heavy.
(D) Any remaining Employer Profit Sharing Contribution
shall be allocated among eligible Participants'
accounts in the ratio which the Participant's
Compensation bears to the total Compensation of
all Participants.
/X/ III If selected, and the Employer has elected to allocate
Employer Profit Sharing Plan Contributions as of the
last day of the Plan Year, a Participant must be
employed by the Employer on the last day of the Plan
Year in order to receive an allocation (14).
IV A Participant who terminates before the end of the
period for which contributions are allocated shall
share in the allocation of Employer Profit Sharing
Contributions if termination of employment was the
result of (select all that apply):
(A) retirement
(B) disability
(C) death
(D) other, as specified below:
9. ROLLOVER & TRANSFER CONTRIBUTIONS (SELECT ONE):
/X/ A. Subject to policies, applied in a consistent and
nondiscriminatory manner, adopted by the Committee, each
Employee, who would otherwise be eligible to participate in
the Plan except that such Employee has not yet met the
eligibility requirements, and each Participant may make a
Rollover Contribution as described in Internal Revenue Code
<section><section>402(a)(5), 403(a)(4) or 408(d)(3).
B. Subject to policies, applied in a consistent and
nondiscriminatory manner, adopted by the Committee, each
Participant may make a Rollover Contribution as described in
Internal Revenue Code <section><section>402(a)(5), 403(a)(4)
or 408(d)(3).
C. No Employee shall make Rollover Contributions to the Plan.
10. DISTRIBUTIONS:
a. DISTRIBUTIONS UPON SEPARATION FROM SERVICE:
The Normal Form of Benefit under the Plan shall be a single
lump sum distribution, made /X/ (if selected) as soon as
administratively practical after receipt of a distribution
request from a Participant entitled to a distribution or
(if selected) upon the Participant's attainment of the
Plan's Early Retirement Date or the Plan's Normal Retirement
Date, whichever is earlier.
In addition to the Normal Form of Benefit, the Participant
shall be entitled to select from among the following
optional forms of benefit specified by the employer (select
as many as apply):
I Installment payments
II Such other forms as may be specified below:
B. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
/X/ I There shall be no in-service distribution of
Participant account balances derived from Employer
Profit Sharing Contributions.
II Participants may request an in-service distribution of
their account balance attributable to Employer Profit
Sharing Contributions, for the following reasons:
(A) For purposes of satisfying a financial hardship,
as determined in accordance with the uniform
nondiscriminatory policy of the Committee;
(B) Attainment of age 59 1/2 by the Participant; or
(C) Attainment of the Plan's Normal Retirement Date by
the Participant.
11. FORFEITURES:
A. Forfeitures of amounts attributable to Employer Profit
Sharing Contributions shall be reallocated as of:
/X/ I the last day of the Plan Year in which the Forfeiture
occurred.
II the last day of the Plan Year following the Plan Year
in which the Forfeiture occurred.
III the last day of the Plan Year in which the Participant
suffering the Forfeiture has incurred five consecutive
One Year Breaks in Service.
B. Forfeitures of Employer Profit Sharing Contributions shall
be reallocated as follows:
I Not applicable as Employer Profit Sharing Contributions
are always 100% vested and nonforfeitable.
II Used first to pay the expenses of administering the
Plan, and then allocated pursuant to one of the
following two options (15):
III Forfeitures shall be allocated to Participant's
accounts in the same manner as Employer Profit Sharing
Contributions, Employer Matching Contributions,
Qualified Nonelective Contributions or Qualified
Matching Contributions, in the discretion of the
Employer, for the year in which the Forfeiture arose.
/X/ IV Forfeitures shall be applied to reduce the Employer
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions or
Qualified Matching Contributions, in the discretion of
the Employer, for the Plan Year following the Plan Year
in which the Forfeiture arose.
12. LIMITATIONS ON ALLOCATIONS:
If the Employer maintains or ever maintained another qualified
retirement plan in which any Participant in this Plan is (or was)
a participant, or could possibly become a participant, the
Employer must complete the following:
A. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer other
than a Master or Prototype Plan:
I The provisions of this Plan shall apply as if the other
plan were a Master or Prototype plan; or,
II The following provisions will be effective to limit the
total Annual Additions to the Maximum Permissible
Amount, and will properly reduce any Excess Amounts, in
a manner that precludes Employer discretion:
B. If the Participant is or ever has been a participant in a
qualified defined benefit plan maintained by the Employer,
the following provisions will be effective to satisfy the
1.0 limitation of Internal Revenue Code <section>415(e), in
a manner that precludes Employer discretion:
13. INTERNAL REVENUE CODE <section>411(D)(6) PROTECTED BENEFITS:
/X/ If selected, the Plan has Internal Revenue Code
<section>411(d)(6) Protected Benefits from a prior plan that this
Plan amends, that must be protected.
(Attach addendum)
14. TOP-HEAVY PLAN PROVISIONS:
For each Plan Year in which the Plan is a Top-Heavy Plan the
following provisions will apply:
A. The percentage of a Participant's Employer Contribution
Account to be vested in him upon termination of employment
prior to retirement shall be:
I a percentage determined in accordance with the
following schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE PERCENTAGE
<S> <C> <C> <C>
Less than two 0
Two but less than 20
three
Three but less than 40
four
Four but less than 60
five
Five but less than six 80
Six or more 100;
</TABLE>
II 100% vesting after (not to exceed 3) Years of Service;
provided, however, that Years of Service may not exceed
two (2) if the service requirement for eligibility
exceeds 1 year; or
/X/ III computed in accordance with the vesting schedule
selected by the Employer in Items B(7)(a) or C(4)(d),
as long as the benefits under the vesting schedule in
Items B(7)(a) or C(4)(d) vest at least as rapidly as
the two options specified in this Item B(14)(a), above.
If the vesting schedule under the Plan shifts in or out of
the schedules above for any Plan Year because of the Plan's
Top-Heavy status, such shift is an amendment to the vesting
schedule and the election in <section>2.2 of the Basic Plan
Document applies.
B. For purposes of minimum Top-Heavy allocations, contributions
and forfeitures equal to % (not less than 3%) of each
Non-key Employee's Compensation will be allocated to each
Participant's Contribution Account when the Plan is a
Top-Heavy Plan, except as otherwise provided in the Basic
Plan Document. This Item 14 will not apply to any
Participant to the extent the Participant is covered under
any other plan or plans of the Employer and the Employer
completes the following: (Insert the name of the plan or
plans which will meet the minimum allocation or benefit
requirement applicable to Top-Heavy plans.)
C. The Valuation Date as of which account balances or accrued
benefits are valued for purposes of computing the Top-Heavy
Ratio shall be the last day of each Plan Year.
D. If the Employer maintains or has ever maintained one or more
defined benefit plans which have covered or could cover a
Participant in this Plan, complete the following:
Present Value: For purposes of establishing Present Value
to compute the Top-Heavy Ratio, any benefit shall be
discounted only for mortality and interest based on the
following:
Interest rate % Mortality table
15. INVESTMENTS:
A. Investments made pursuant to the investment direction
provisions of the Basic Plan Document shall be made into any
appropriate Investment Fund as selected by the Employer. In
addition, investment of Plan assets is expressly authorized,
as required by Revenue Ruling 81-100, in each of the
following common or collective funds sponsored by the
Trustee, or an affiliate of the Trustee (16):
KEY TRUST COMPANY EB MANAGED GUARANTEED INVESTMENT CONTRACT
FUND, THE KEY TRUST COMPANY MULTIPLE INVESTMENT TRUST FOR
EMPLOYEE BENEFIT TRUSTS, AND OTHER COLLECTIVE TRUSTS EXEMPT
FROM TAX UNDER IRC <section>501 AND AS DESCRIBED IN REV.
RUL. 81-100.
/X/ B. If selected, an Employer Stock Fund shall be available as an
Investment Fund pursuant to the terms of the Basic Plan
Document.
I If selected, and an Employer Stock Fund is available as
an Investment Fund, Participants will have the right,
notwithstanding any other provisions of the Plan, to
direct that a portion of the Plan assets held for their
benefit and invested in the Employer Stock Fund be
diversified pursuant to the provisions of
<section>10.7(F) of the Basic Plan Document.
C. Participants may make changes of existing account balances
and future contributions from among the Investment Funds
offered:
/X/ I Once during each business day that the Trustee and the
New York Stock Exchange are open.
II Once during each calendar month.
III Once during each quarter of the Plan Year.
IV Once during each rolling day period.
D. If selected, the Participant shall be restricted in making
changes of existing account balances from any Investment
Fund, as specified in the terms or conditions of such
Investment Fund, and the Employer shall attach an addendum
specifying such restriction.
E. The Participant will designate into which Investment Funds
all contributions to their accounts are made, EXCEPT the
following:
I Employer Profit Sharing Contributions
II Employer Mandatory Matching Contributions
III Employer Discretionary Matching Contributions
IV Qualified Matching Contributions
V Qualified Nonelective Contributions
F. If selected, and to the extent a selection is made above,
the Employer shall attach an Investment Direction Addendum
specifying how the contributions so specified shall be
invested among the Investment Fund.
G. If selected, the Participant shall be restricted in the use
of the Employer Stock Fund as an Investment Fund for
designating the investment of contributions in the
Participant's account, as follows:
I The Participant may not direct the investment of Plan
assets held in their account into the Employer Stock
Fund.
II The Participant may direct % of the following
contributions into the Employer Stock Fund:
(A) Employer Profit Sharing Contributions
(B) Employer Mandatory Matching Contributions
(C) Employer Discretionary Matching Contributions
(D) Qualified Matching Contributions
(E) Qualified Nonelective Contributions
III % of the following contributions will be invested into
the Employer Stock Fund, with the balance invested
among:
(A) the other Investment Funds, including the Employer
Stock Fund
(B) the other Investment Funds, NOT including the
Employer Stock Fund
16. LOANS (SELECT ONE):
/X/ A. Loans may be made from the Plan in accordance with the Basic
Plan Document and such policies and procedures as the
Committee may adopt and apply on a consistent and
nondiscriminatory basis (17).
B. No loans shall be made from the Plan.
17. TRUSTEE:
The Trustee of this Plan shall be Key Trust Company of Indiana,
NA (a bank or trust company affiliated with KeyCorp within the
meaning of Internal Revenue Code <section>1504).
18. EFFECTIVE DATE ADDENDUM:
If selected, the following provisions shall have the
specified effective dates (which are different from the date
specified in Item B(1)):
C. <section>401(K) PLAN PROVISIONS:
1. Service:
An Eligible Employee shall be required to fulfill the following
eligibility service requirements in order to participate in the
Plan through a salary reduction agreement and for purposes of
receiving an allocation of Employer Matching Contributions:
A. The Employee must complete of Service (not more than 1
year) to be a Participant for purposes of receiving
allocations of Employer Matching Contributions.
/X/ B. The Employee must complete 90 Days of Service (not more than
1 year) to be a Participant for purposes of entering into a
Salary Reduction Agreement and having Employee Before Tax
Contributions or Employee After Tax Contributions
contributed to the Plan on the Employee's behalf.
2. EMPLOYEE SALARY DEFERRALS:
/X/ A. Participants shall be entitled to enter into a Salary
Reduction Agreement providing for Before Tax Contributions
to be made to the Plan.
I The minimum Before Tax Contribution shall be 1% of the
Participant's Compensation.
II The maximum Before Tax Contribution shall be 13% of the
Participant's Compensation.
B. Participants shall be entitled to enter into a Salary
Reduction Agreement providing for After Tax Contributions to
be made to the Plan.
I The minimum After Tax Contribution shall be % of the
Participant's Compensation.
II The maximum After Tax Contribution shall be % of the
Participant's Compensation.
III If selected, notwithstanding the above, a Participant
shall not be able to enter into a Salary Reduction
Agreement providing for After Tax Contributions to be
made to the Plan unless the Participant has entered
into a Salary Reduction Agreement that provides for
Before Tax Contributions to be made to the Plan in an
amount of at least % of the Participant's
Compensation.
C. If selected, a Participant shall be entitled to enter into a
Salary Reduction Agreement providing that any extraordinary
item of compensation, not yet payable (including bonuses),
be withheld from the Participant's Compensation and
contributed to the Plan as either a Before Tax Contribution,
or After Tax Contribution (provided such contributions are
authorized above, and to the extent that such contribution,
when aggregated with either the Participants other Before
Tax Contributions or After Tax Contributions do not exceed
the limitations specified above, on an annual basis).
3. CONTRIBUTION CHANGES:
A. Participants may increase or decrease the amount of
contributions made to the Plan pursuant to a Salary
Reduction Agreement once each:
I Plan Year
II Semi-annual period, based on the Plan Year
/X/ III Quarter, based on the Plan Year
IV Month
V Other, as specified below (provided that it is at least
once per year):
B. Claims for returns of Excess Before Tax Contributions for
the Participant's preceding taxable year must be made in
writing, and submitted to the Committee by March 1 (specify
a date between March 1 and April 15). (18)
4. EMPLOYER MATCHING CONTRIBUTIONS (19):
A. MANDATORY MATCHING CONTRIBUTIONS:
The Employer shall make contributions to the Plan, in an amount
as specified below:
I An amount, equal to % of each Participant's Before Tax
Contributions, however, no match shall be made on
Participant's Before Tax Contributions in excess of %
(or $ ) of the Participant's Compensation.
II An amount, equal to % of each Participant's After Tax
Contributions, but not to exceed % of the
Participant's Compensation, or $ .
III An amount, equal to % of each Participant's
contributions made pursuant to a Salary Reduction
Agreement (including both Before Tax Contributions and
After Tax Contributions), but only if the Participant
has entered into a Salary Reduction Agreement providing
for Before Tax Contributions of at least % of the
Participant's Compensation, but not to exceed % of the
Participant's Compensation, or $ .
IV An amount equal to the sum of the following:
(A) % of the first % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement; plus,
(B) % of the next % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement; plus,
(C) % of the next % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement, but not to exceed % of the
Participant's Compensation, or $ .
V An amount equal to $ , for each Participant who enters
into a Salary Reduction Agreement providing for
Before Tax Contributions, After Tax Contributions, or
either Before Tax Contributions or After Tax
Contributions (or a combination of both) equal to or
exceeding % of the Participant's Compensation. Such
contributions shall be made and allocated:
(A) only during the first Plan Year the Plan is in
effect, or if a restatement, for the first Plan
Year beginning with, or containing the restatement
Effective Date.
(B) each Plan Year that a Participant has in force a
Salary Reduction Agreement meeting the criteria
specified above.
(C) during the first Plan Year that the Participant
participates through a Salary Reduction Agreement
meeting the criteria specified above.
B. DISCRETIONARY MATCHING CONTRIBUTIONS:
The Employer shall make contributions to the Plan, in an
amount determined by resolution of the Board of Directors on
an annual basis. The Board resolution shall provide for the
percentage and/or amount of Before Tax Contributions and/or
After Tax Contributions to be matched and the maximum
percentage and/or amount of Before Tax Contributions and/or
After Tax Contributions eligible for matching.
C. ALLOCATION OF MATCHING CONTRIBUTIONS:
Employer Matching Contributions shall be allocated pursuant
to the terms of the Basic Plan Document, notwithstanding the
foregoing:
I A Participant who terminates before the end of the
period for which contributions are allocated shall
share in the allocation of Employer Matching
Contributions if termination of employment was the
result of (select all that apply):
(A) retirement
(B) disability
(C) death
(D) other, as specified below:
II Employer Matching Contributions shall be allocated to
the accounts of Participants (select one):
(A) as of each pay period for which a contribution was
made pursuant to a Salary Reduction Agreement.
(B) semi-monthly.
(C) as of the last day of the month preceding the
month in which the contribution was made.
(D) as of the last day of the Plan quarter preceding
the quarter in which the contribution was made.
(E) as of the last day of the Plan year.
III If selected, the Employer may make Employer Matching
Contributions without regard to current or accumulated
Net Profits of the Employer for the taxable year ending
with, or within the Plan Year (20).
D. The percentage of a Participant's Employer Matching
Contribution Account (21) (attributable to Employer Matching
Contributions) to be vested in him or her upon termination
of employment prior to attainment of the Plan's Normal
Retirement Date shall be (22):
<TABLE>
<CAPTION>
Completed Years of Service
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7
I 0% 100%
II 0% 0% 100%
III 0% 20% 40% 60% 80% 100%
IV 0% 0% 20% 40% 60% 80% 100%
V 10% 20% 30% 40% 60% 80% 100%
VI 0% 0% 0% 0% 100%
VII 0% 0% 0% 0% 0% 0% 100%
VIII Full and immediate vesting upon entry into the Plan
</TABLE>
Notwithstanding anything to the contrary in the Plan, the
amount inserted in the blanks above shall not exceed the
limits specified in Code <section>411(a)(2).
E. Notwithstanding the provisions of this Item C(4)(e) of the
Adoption Agreement, a Participant shall become fully vested
in his Participant's Employer Matching Contribution Account
if (23):
I the Participant's job is eliminated without the
Participant being offered a comparable position
elsewhere with the Employer.
II for such reason as is described below:
F. CORRECTIVE CONTRIBUTIONS:
I If selected, the Employer shall be authorized to make
Qualified Matching Contributions, subject to the terms
of the Basic Plan Document, in an amount determined by
resolution of the Board of Directors on an annual
basis.
/X/ II If selected, the Employer shall be authorized to make
Qualified Nonelective Contributions, subject to the
terms of the Basic Plan Document, in an amount
determined by resolution of the Board of Directors on
an annual basis.
5. GAP EARNINGS:
If selected, Gap Earnings, as defined in <section>3.2(G)(1)
of the Basic Plan Document, will be calculated for Excess
Elective Deferrals, Excess Contributions and Excess
Aggregate Contributions, and refunded to the Participant as
provided for in Article III of the Basic Plan Document.
6. FORFEITURES:
A. Forfeitures of amounts attributable to Employer Matching
Contributions shall be reallocated as of:
I the last day of the Plan Year in which the Forfeiture
occurred.
II the last day of the Plan Year following the Plan Year
in which the Forfeiture occurred.
III the last day of the Plan Year in which the Participant
suffering the Forfeiture has incurred the fifth
consecutive One Year Break in Service.
B. Forfeitures of Employer Matching Contributions shall be
reallocated as follows:
I Not applicable as Employer Matching Contributions are
always 100% vested and nonforfeitable.
II Used first to pay the expenses of administering the
Plan, and then allocated pursuant to one of the
following two options:
III Forfeitures shall be allocated to Participant's
accounts in the same manner as Employer Profit Sharing
Contributions, Employer Matching Contributions,
Qualified Nonelective Contributions or Qualified
Matching Contributions, in the discretion of the
Employer, for the year in which the Forfeiture arose.
IV Forfeitures shall be applied to reduce the Employer
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions or
Qualified Matching Contributions, in the discretion of
the Employer, for the Plan Year following the Plan Year
in which the Forfeiture arose.
C. Forfeitures of Excess Aggregate Contributions shall be:
I Applied to reduce Employer contributions for the Plan
Year in which the excess arose, but allocated as below,
to the extent the excess exceeds Employer contributions
for the Plan Year, or the Employer has already
contributed for such Plan Year.
II Allocated after all other forfeitures under the Plan:
(A) to the Matching Contribution account of each
Non-highly Compensated Participant who made Before
Tax Contributions or After Tax Contributions in
the ratio which each such Participant's
Compensation for the Plan Year bears to the total
Compensation of all such Participants for the Plan
Year; or,
(B) to the Matching Contribution account of each
Non-highly Compensated Eligible Participant in the
ratio which each Eligible Participant's
Compensation for the Plan Year bears to the total
Compensation of all Eligible Participants for the
Plan Year.
7. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
A. There shall be no in-service distribution of Participant
account balances derived from Before Tax Contributions
(including Qualified Nonelective Contributions and Qualified
Matching Contributions treated as Before Tax Contributions
under the terms of the Basic Plan Document), or Employer
Matching Contributions.
B. Participants may request an in-service distribution of their
account balance attributable to Employer Matching
Contributions, for the following reasons:
I For purposes of satisfying a financial hardship, as
determined in accordance with the uniform
nondiscriminatory policy of the Committee;
II Attainment of age 59 1/2 by the Participant; or
III Attainment of the Plan's Normal Retirement Date by the
Participant.
/X/ C. Participants may request an in-service distribution of their
account balance attributable to Employee Before Tax
Contributions, for the following reasons:
I For purposes of satisfying a financial hardship, as
determined by the facts and circumstances of an Employee's
situation, in accordance with the provisions of <section>3.9
of the Basic Plan Document;
/X/ II For purposes of satisfying a financial hardship, using the
"safe harbor" provisions of <section>3.9 of the Basic Plan
Document.
III Attainment of age 59 1/2 by the Participant; or
IV Attainment of the Plan's Normal Retirement Date by the
Participant.
NOTICE: The adopting Employer may not rely on an opinion letter issued by
the National Office of the Internal Revenue Service as evidence that the
Plan is qualified under the provisions of <section>401 of the Internal
Revenue Code. In order to obtain reliance with respect to the Plan's
qualification, the Employer must apply to the Key District Office of the
Internal Revenue Service for a determination letter.
This Adoption Agreement may only be used in conjunction with Basic Plan
Document # 05.
This Plan document may only be used under the express authority of KeyCorp,
its subsidiaries and affiliates, and is not effective as completed until
executed by a duly authorized officer of KeyCorp, one of its subsidiaries
or affiliates, and approved by KeyCorp's counsel.
KeyCorp, as sponsor, may amend or discontinue this prototype plan document
upon proper notification to all adopting Employers pursuant to Revenue
Ruling 89-13.
Failure to properly fill out an Adoption Agreement may result in
disqualification of the Plan, and adverse tax consequences to the Employer
and Plan Participants.
This Plan is sponsored by:
KeyCorp, on behalf of its operating subsidiaries, banking and trust
company affiliates
127 Public Square
Cleveland, Ohio 44114
(800) 982-3811
<PAGE>
IN WITNESS WHEREOF, the Employer and the Trustee, by their respective
duly authorized officers, have caused this Adoption Agreement to be
executed on this 15th day of December, 1998.
EMPLOYER: PRIORITY HEALTHCARE CORPORATION
By: /S/ BARBARA LUTTRELL
Title: VICE PRESIDENT, ADMINISTRATION
TRUSTEE: KEY TRUST COMPANY OF INDIANA, NA
By: /S/ APRIL M. CZENKUSCH
Title: VICE PRESIDENT
and
By: /S/ THOMAS M. GETTY
Title: CLIENT MANAGER
APPROVED ON BEHALF OF TRUSTEE:
Initials: Date:
<PAGE>
INVESTMENT FUND DESIGNATION
Priority Healthcare Corporation (the "Named Fiduciary"), as an
independent fiduciary with respect to the Profit Sharing Plan of Priority
Healthcare Corporation and Affiliates (the "Plan"), an employee pension
benefit plan covered by the applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and its
employees who participate therein (the "Participants"), hereby designates
the following investment funds from among the investment fund options
available for adopting employers of the PRISM<reg-trade-mark> PROTOTYPE
RETIREMENT PLAN & TRUST (as defined in <section>10.7 of the Plan),
available for selection by Participants for the investment of Plan assets
held for their benefit:
(a) The American Funds Group<reg-trade-mark>: EuroPacific
Growth Fund
(b) The American Funds Group<reg-trade-mark>: Washington Mutual
Investors Fund
(c) The Victory Balanced Fund: Class A
(d) The Victory Investment Quality Bond Fund
(e) The Victory Special Value Fund: Class A
(f) The Victory U.S. Government Obligations Fund
(g) Priority Healthcare Corporation Common Stock
(h)
(i)
(j)
(k)
(1)
(m)
/X/ In addition, if selected, an Employer Stock Fund will also be
available.
In making the selection of Investment Funds, the Named Fiduciary hereby
confirms and acknowledges that:
<circle>The Named Fiduciary has had made available to it copies of the
prospectuses (to the extent required under applicable federal
securities law and regulation) for each investment fund available
for selection by adopting employers of the PRISM<reg-trade-mark>
PROTOTYPE RETIREMENT PLAN & TRUST, and has received copies of
each such prospectus for the Investment Funds selected;
<circle>The Named Fiduciary acknowledges that the Trustee of the Plan
may receive certain fees for services provide to, or on behalf of
an Investment Fund, or the sponsors or distributors thereof,
pursuant to plans of distribution adopted by the fund under the
provisions of Rule 12b-1 of the Investment Company Act of 1940,
and further acknowledges that (i) such fee, if paid, is
appropriate for services rendered to the fund, and when
aggregated with other fees for service payable to the Trustee
constitutes reasonable compensation for the Trustee's services to
the Plan; and (ii) the Plan will be able to redeem its interest
in any such Investment Fund on reasonably short notice without
penalty;
<circle>The Named Fiduciary further acknowledges that it has selected
the Investment Funds on its determination, after due inquiry,
that the Investment Funds are appropriate vehicles for the
investment of Plan assets pursuant to the terms of the Plan,
considering all relevant facts and circumstances, including but
not limited to (i) the investment policy and philosophy of the
Named Fiduciary developed pursuant to ERISA <section>404; (ii)
the ability of Participants, using an appropriate mix of
Investment Funds, to diversify the investment of Plan assets held
for their benefit; and, (iii) the ability of Participants to,
utilizing an appropriate mix of Investment Funds, to structure an
investment portfolio within their account in the Plan with risk
and return characteristics within the normal range of risk and
return characteristics for individuals with similar investment
backgrounds, experience and expectations; and,
<circle>The Named Fiduciary acknowledges that it has not relied on any
representations or recommendations from the Trustee or any of its
employees in selecting the Investment Funds.
The Trustee agrees to follow the Named Fiduciary's direction with respect
to offering the Investment Funds available for selection by the
Participants in the Plan for the investment of Plan assets held for their
benefit:
IN WITNESS WHEREOF, the Employer, by its duly authorized
representative, has executed this document in connection with adoption of
the Plan utilizing the PRISM<reg-trade-mark> PROTOTYPE
RETIREMENT PLAN & TRUST documents, as provided by the Trustee.
NAMED FIDUCIARY: PRIORITY HEALTHCARE CORPORATION
By: /S/ BARBARA LUTTRELL
Title: VICE PRESIDENT, ADMINISTRATION
<PAGE>
FOOTNOTES
(1) Footnotes in this Adoption Agreement are not to be construed as part
of the Plan provisions but are explanatory only. To the extent a
footnote is inconsistent with the provisions of the Basic Plan
Document or applicable law, the provisions of the Plan shall be
construed in conformity with the Basic Plan Document or law.
(2) Terms that are capitalized are defined in the PRISM{<reg-trade-mark>}
PROTOTYPE RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT.
(3) The Plan will have an individual TIN, distinct from the Employer TIN.
(4) Committee members direct the day to day operation of the Plan.
Committee members serve at the pleasure of the Employer. See
<section>11.4 for changes in Committee membership. If no Committee
members are specified, the Employer shall assume responsibility for
the operations of the Plan.
(5) If no amount is specified, the maximum amount of Compensation allowed
under Code <section>401(a)(17) (the "$150,000 limit" ("$200,000 limit"
prior to the Plan Year beginning before January 1, 1994)), as adjusted
from time to time, shall be used.
(6) If a fractional year is elected, the elapsed time method of computing
service shall be used for the fractional year. Eligibility provisions
for optional cash or deferred arrangements are contained in Item C of
this Adoption Agreement.
(7) Notwithstanding the foregoing, an Employee who has met the eligibility
requirements may not enter the Plan later than six months following
the date on which the Employee first completes the eligibility
requirements.
(8) Notwithstanding the selection made in this Item B(7)(a), a Participant
shall be fully vested in his or her Employer Contribution Accounts if
the Participant dies or becomes Disabled while in the employ of the
Employer.
(9) If more than one Year of Service is an eligibility requirement, Item
viii MUST be selected.
(10) The provisions of this section will be administered by the Employer on
a consistent and nondiscriminatory basis.
(11) Amounts designated as Qualified Nonelective Contributions will be
allocated pursuant to <section>3.1(A)(14) of the Basic Plan Document.
(12) In the event contributions are allocated on a basis other than a full
plan year, the Year of Service shall be based on the elapsed time
method of calculation, and a Participant shall be deemed to have
completed an appropriate Period of Service for allocation purposes if
the Participant has completed a pro-rata Period of Service
corresponding to the interval on which contributions are allocated.
(13) Excess Compensation means a Participant's Compensation in excess of
the Permitted Disparity Level specified in the Definitions section of
this Adoption Agreement.
(14) Even if this Item is selected, the provisions of <section>4.8 of the
Basic Plan Document may supersede this requirement if necessary to
satisfy Code Sections 401(a)(26) and 410(b).
(15) If this option is selected, iii or iv MUST be selected to reallocate
Forfeitures of Employer Profit Sharing Contributions REMAINING after
expenses of administering the Plan have been paid.
(16) This Item is for use in identifying collective trust funds, which,
pursuant to Revenue Ruling 81-100 must be specifically referenced in
the Plan. Actual Investment Funds are referenced on the Investment
Fund Designation form attached to this Adoption Agreement.
(17) If this option is selected, the Employer must establish appropriate
procedures for implementation of the Plan's loan program.
(18) The date specified is for the refund of amount deferred in excess of
the Code <section>402(g) limit (the $7,000 limit) for the
Participant's taxable year.
(19) The Employer shall have the right to designate all, or any portion of
Employer Matching Contributions as Qualified Matching Contributions,
which shall then be subject to the same vesting, distribution, and
withdrawal restrictions as Before Tax Contributions.
(20) Net Profits will never be required for the contribution of Before Tax
Contributions, After Tax Contributions, Qualified Nonelective
Contributions or Qualified Matching Contributions.
(21) Notwithstanding anything in the Adoption Agreement to the contrary,
amounts in a Participant's account attributable to Before Tax
Contributions, Qualified Nonelective Contributions, and Qualified
Matching Contributions shall be 100% vested and nonforfeitable at all
time.
(22) Notwithstanding the selection made in this Item B(7)(b), a Participant
shall be fully vested in his or her Employer Contribution Accounts if
the Participant dies or becomes Disabled while in the employ of the
Employer.
(23) The provisions of this section will be administered by the Employer on
a consistent and nondiscriminatory basis.
<PAGE>
PRISM<reg-trade-mark> PROTOTYPE RETIREMENT PLAN AND TRUST
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Unless the context indicates otherwise, the following
terms, when used herein with initial capital letters, shall have the
meanings set forth below:
(A) ACCOUNTING DATE: The date which is the last business day of each
month of the Employer's Plan Year or such other date as may be
agreed upon between the Employer and the Trustee, but only if the
Employer has specifically requested the Trustee to prepare an
accounting on or before such date. Notwithstanding the foregoing,
the Trustee shall value the assets held in the Trust on each
business day that the Trustee and the New York Stock Exchange are
open for business.
(B) ADOPTION AGREEMENT: The Adoption Agreement adopting this Plan which
has been executed by the Employer and accepted by the Trustee,
including any amendment thereof, which is incorporated herein by
reference.
(C) BASIC PLAN DOCUMENT: This document, which, in connection with the
Adoption Agreement forms the Plan.
(D) BENEFICIARY: The person or persons to whom a deceased Participant's
benefits are payable under the Plan.
(E) BREAK IN SERVICE: A 12-consecutive month period during which the
Participant does not complete more than one-half of the Hours of
Service with the Employer required for a Year of Service, as elected
in the Adoption Agreement. For eligibility purposes, the initial
12-consecutive month period is the period beginning on the Employees
date of hire. Subsequent 12-consecutive month periods for
eligibility purposes will be either the period ending on the annual
anniversary of the Employee's date of hire or the Plan Year, as
selected in the Adoption Agreement. For all other purposes, the 12-
consecutive month period shall be the Plan Year, or other
computation period as selected in the Adoption Agreement. If the
elapsed time method of crediting service is elected in the Adoption
Agreement, "Break In Service" will mean a Period of Severance of at
least 12 consecutive months.
(F) CODE: The Internal Revenue Code of 1986, and amendments thereto.
(G) COMMITTEE: The Committee provided for in Article XI, which shall be
a Named Fiduciary as defined in the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). To the extent that the
Employer does not appoint a Committee, the Employer shall have the
duty of the day to day administration of the Plan and shall be the
Named Fiduciary for that purpose.
(H) COMPENSATION: Compensation shall have the following various
definitions, as may be appropriate within the context of the Plan:
(1) Compensation as that term is defined in Section 6.6(A) of the
Plan. For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income. Compensation shall
include only that compensation which is actually paid to the
Participant during the determination period. Except as
provided elsewhere in this Plan, the determination period shall
be the period elected by the Employer in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year. For purposes of
allocations of Employer Profit Sharing or Matching
Contributions, the definition of Compensation in Section
6.6(A)(2)(a) shall be used, as modified in the Adoption
Agreement.
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation for allocation purposes shall
include any amount which is contributed by the Employer
pursuant to a salary reduction agreement and which is not
includible in the gross income of the employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
(2) For years beginning after December 31, 1988, and prior to
January 1, 1994, the annual Compensation of each Participant
taken into account for determining all benefits provided under
the Plan for any determination period shall not exceed
$200,000. This limitation shall be adjusted by the Secretary
at the same time and in the same manner as under Section 415(d)
of the Code except that the dollar increase in effect on
January 1 of any calendar year is effective for plan years
beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990. After
December 31, 1993, the annual Compensation of each Participant
taken into account for determining all benefits provided under
the Plan for any determination period shall not exceed
$150,000, or such other lesser amount as may be specified in
the Adoption Agreement. This limitation shall be adjusted by
the Secretary at the same time and in the same manner as under
Section 415(d) of the Code. If a Plan determines Compensation
on a period of time that contains fewer than 12 calendar
months, then the annual Compensation limit is an amount equal
to the annual Compensation limit for the calendar year in which
the Compensation period begins multiplied by a ratio obtained
by dividing the number of full months in the period by 12.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the
application of such rules the adjusted 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 individuals in
proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
If compensation for any prior determination period is taken
into account in determining an Employee's allocations or
benefits for the current determination period, the compensation
for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the
applicable compensation limit is $200,000. In addition, in
determining allocations in plan years beginning on or after
January 1, 1994, the annual compensation limit in effect for
determination periods beginning before that date is $150,000.
(I) DISABILITY: The inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than twelve (12) months. The permanence and degree of such
impairment shall be supported by medical evidence. The Employer
shall determine the existence of a Disability based on its current
disability policy, applied on a uniform and nondiscriminatory basis.
(J) 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 individual are a material income-producing
factor. Net earnings will be determined without regard to items not
included in gross income and the deductions allocable to such items.
Net earnings are reduced by contributions by the Employer to a
qualified Plan to the extent deductible under Section 404 of the
Code. Net earnings shall be determined with regard to the deduction
allowed to the taxpayer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
(K) EARLY RETIREMENT DATE: The date specified in the Adoption Agreement
at which a participating Employee may receive an early retirement
benefit.
(L) EFFECTIVE DATE: The date specified in the Adoption Agreement which
shall be the effective date of the provisions of this Plan, unless
modified in Item B(18) of the Adoption Agreement. If the Plan is a
restatement of an existing Plan, the original effective date of the
Plan shall be as specified in the Adoption Agreement.
(M) ELIGIBLE EMPLOYEE: Any Employee who is eligible to receive an
Employer contribution (including forfeitures), as defined in Item
B(6) of the Adoption Agreement.
(N) ELIGIBILITY COMPUTATION PERIOD: For purposes of determining Years
of Service and Breaks in Service for purposes of eligibility, the
initial Eligibility Computation Period is the 12-consecutive month
period beginning on the Employee's Employment Commencement Date.
(1) For plans in which the Eligibility Computation Periods commence
on the 12-consecutive month anniversary of the Employee's
Employment Commencement Date, the succeeding 12-consecutive
month periods commence with the first anniversary of the
Employee's Employment Commencement Date.
(2) For plans in which the Eligibility Computation Period shifts to
the Plan Year, the succeeding 12-consecutive month periods
commence with the first Plan Year which commences prior to the
first anniversary of the Employee's Employment Commencement
Date regardless of whether the Employee is entitled to be
credited with number of Hours of Service specified in the
Adoption Agreement during the initial Eligibility Computation
Period. An Employee who is credited with number of Hours of
Service specified in the Adoption Agreement in both the initial
Eligibility Computation Period and the first Plan Year which
commences prior to the first anniversary of the Employee's
initial Eligibility Computation Period will be credited with
two Years of Service for purposes of eligibility to
participate.
Years of Service and Breaks in Service will be measured on the
same Eligibility Computation Period.
(3) Notwithstanding any other provisions of this section, if the
elapsed time method of crediting service is elected in the
Adoption Agreement for purposes of eligibility, an Employee
will receive credit for the aggregate of all time periods
completed (as may be elected in the Adoption Agreement)
beginning with the Employee's Employment Commencement Date or
Reemployment Commencement Date and ending on the date a Break
In Service begins. The Employee will receive credit for any
Period of Severance of less than 12 consecutive months.
(O) EMPLOYEE: Any employee, including any Self Employed Individual, 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 paragraph
as provided in Sections 414(n) or (o) of the Code.
(P) EMPLOYER: The Employer specified in the Adoption Agreement and any
successor to the business of the Employer establishing the Plan,
which shall be the Plan Administrator for purposes of Section 3(16)
of ERISA, a Named Fiduciary as defined in ERISA, and which may
delegate all or any part of its powers, duties and authorities in
such capacity without ceasing to be such Plan Administrator.
(Q) EMPLOYMENT COMMENCEMENT DATE: The date on which an Employee first
performs an Hour of Service for the Employer.
(R) ENTRY DATE: The date selected by the Employer in Item B(6)(d) of
the Adoption Agreement, which shall be:
(1) The Effective Date of the Plan, for any Employee who has
satisfied the eligibility requirements set forth in the
Adoption Agreement;
(2) The first day of the month which coincides with or immediately
follows the date on which the Employee satisfies the
eligibility requirements set forth in the Adoption Agreement;
(3) The first day of the Plan Year or the fourth, seventh, or tenth
month of the Plan Year which coincides with or immediately
follows the date on which the Employee satisfies such
eligibility requirements;
(4) The first day of the Plan Year or the seventh month of the Plan
Year which coincides with or immediately follows the date on
which the Employee satisfies such eligibility requirements;
(5) The first day of the Plan Year, but only if the eligibility
service requirements specified in Item B(6)(d) are six months
or less; or,
(6) As soon as practicable after the Employee satisfies such
eligibility requirements specified in the Adoption Agreement,
but in no event beyond the date which would be six months
following the date on which the Employee first completes the
eligibility requirements specified in the Adoption Agreement.
(S) ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
(T) HIGHLY COMPENSATED EMPLOYEE: The term Highly Compensated Employee
includes highly compensated active employees and highly compensated
former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (i) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (ii) received Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Section 415(d) of the
Code) and was a member of the top-paid group for such year; or (iii)
was an officer of the Employer and received Compensation during such
year that is greater than 50 percent of the dollar limitation in
effect under section 415(b)(1)(A) of the Code. The term Highly
Compensated Employee also includes: (i) Employees who are both
described in the preceding sentence if the term "determination year"
is substituted for the term "look-back year" and the Employee is one
of the 100 Employees who receive the most compensation from the
Employer during the determination year; and (ii) Employees who are 5
percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation requirement of (iii)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the twelve-month period immediately
preceding the determination year. A highly compensated former
employee includes any Employee who separated from service (or was
deemed to have separated) prior to the determination year, performs
no service for the Employer during the determination year, and was a
highly compensated active employee for either the separation year or
any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former
employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the family member and
the 5 percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and 5 percent owner or
top-ten Highly Compensated Employee shall be treated as a single
employee receiving Compensation and Plan contributions or benefits
equal to the sum of such Compensation and contributions or benefits
of the family member and 5 percent owner or top-ten Highly
Compensated Employee.
For purposes of this Section, family member includes the Spouse,
lineal ascendants and descendants of the employee or former employee
and the spouses of such lineal ascendants and descendants.
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.
(U) HOUR OF SERVICE:
(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; and
(2) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including Disability), layoff,
jury duty, military duty, or leave of absence. No more than
501 Hours of Service shall be credited under this paragraph for
any single continuous period (whether or not such period occurs
in a single computation period). Hours under this paragraph
shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by reference; and
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service shall not be credited both under
subparagraph (1) or subparagraph (2), as the case may be, and
under this subparagraph (3). These hours shall be credited to
the Employee for the computation period or periods to which the
award or agreement pertains rather than for the computation
period in which the award, agreement or payment is made.
Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m)),
a controlled group of corporations (under Section 414(b)), or a
group of trades or businesses under common control (under
Section 414(c)) of which the adopting Employer is a member, and
any other entity required to be aggregated with the Employer
pursuant to Section 414(o).
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Sections
414(n) or 414(o).
(4) Where the Employer maintains the Plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer. If the Employer does not
maintain the Plan of a predecessor employer, the Plan does not
credit service with the predecessor employer, unless the
Employer identifies the predecessor in its Adoption Agreement
and specifies the purposes for which the Plan will credit
service with that predecessor employer.
(5) Solely for purposes of determining whether a Break-in-Service,
as defined in Section 1.1(E), for participation 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. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a
child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under
this paragraph shall be credited (1) in the computation period
in which the absence begins if the crediting is necessary to
prevent a Break-in-Service in that period, or (2) in all other
cases, in the following computation period.
(6) Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
(V) INVESTMENT FUND: One of the funds provided for in Section 10.7, and
as selected by the Employer, as a Named Fiduciary, on the Investment
Fund Designation portion of the Adoption Agreement.
(W) 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.
A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase
pension Plan providing: (1) a nonintegrated employer contribution
rate of at least 10 percent of compensation, as defined in Section
415(c)(3) of the Code, but including amounts contributed pursuant to
a salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(e)(3),
Section 402(h)(1)(B) or Section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased
employees do not constitute more than 20 percent of the recipient's
nonhighly compensated workforce.
(X) NET PROFITS: Current and accumulated earnings of the Employer
before Federal and state taxes and contributions to this and any
other qualified Plan, determined by the Employer in accordance with
generally accepted accounting principles.
(Y) NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is
neither a Highly Compensated Employee nor a Family Member.
(Z) NORMAL RETIREMENT DATE: The date specified in the Adoption
Agreement at which a participant shall become fully vested in his
account balances, as provided for in this document.
(AA) OWNER-EMPLOYEE: An individual who is a sole proprietor, or who is a
partner owning more than 10 percent of either the capital or profits
interest of the partnership.
(BB) PAIRED PLANS: The Employer has adopted Plan #001 and Plan # 003,
both using this basic Plan document, which constitutes a set of
"paired plans" as defined by the Internal Revenue Service in Revenue
Procedure 89-9, or any successor thereto.
(CC) PARTICIPANT: A person who becomes eligible to participate in
accordance with the provisions of Article II, and whose
participation has not been terminated.
(DD) PERMITTED DISPARITY LEVEL: The level selected in the Adoption
Agreement, not to exceed the Taxable Wage Base in effect at the
beginning of the Plan Year. The Taxable Wage Base is the
contribution and benefit base under section 230 of the Social
Security Act at the beginning of the year.
(EE) PERIOD OF SERVICE: The period beginning on the Employee's
Employment Commencement Date or Reemployment Commencement Date, and
ending on the date a Period of Severance begins. The Employee will
receive credit for any Period of Service of less than 12 consecutive
months. Fractional periods of a year will be expressed in days.
(FF) PERIOD OF SEVERANCE: A continuous period of time during which the
Employee is not employed by the Employer. A Period of Severance
begins on the date the Employee retires, quits, or is discharged, or
dies, or if earlier, the twelve month anniversary of the date on
which the Employee was first absent from work for any other reason;
provided, that if an Employee is absent from work for any other
reason and retires, quits, is discharged, or dies within 12 months,
the Period of Severance begins on the day the Employee quits,
retires, is discharged, or dies.
(GG) PLAN: This Plan established by the Employer as embodied in this
agreement and in the Adoption Agreement, and all subsequent
amendments thereto.
(HH) PLAN YEAR: The 12-consecutive month period designated by the
Employer in the Adoption Agreement. In the event that the original
Effective Date is not the first day of the Plan Year, the first Plan
Year shall be a short Plan Year, beginning on the original Effective
Date, and ending on the last day of the Plan Year as specified in
the Adoption Agreement.
(II) QUALIFIED DISTRIBUTION DATE: For purposes of Section 7.13, the
Qualified Distribution Date, if selected in the Adoption Agreement,
shall be the earliest retirement date specified in Code Section
414(p) and shall operate to allow a distribution to an Alternate
Payee at the time a domestic relations order is determined to be
qualified.
(JJ) REEMPLOYMENT COMMENCEMENT DATE: The date on which an Employee
completes an Hour of Service with the Employer after a Break In
Service or a Period of Severance.
(KK) RELATED EMPLOYERS: Any employer related to the Employer as a
controlled group of corporations (as defined in Section
<section>414(b) of the Code), a group of trades or businesses
(whether or not incorporated) which are under common control (as
defined in Section 414(c)) or an affiliated service group (as
defined in Section 414(m) or in Section 414(o) of the Code). If the
Employer is a member of a related group, the term "Employer"
includes the related group members for purposes of crediting Hours
of Service, determining Years of Service and Breaks in Service under
Article II, applying participation and coverage testing, applying
the limitations on allocations in Section 6.6, applying the top
heavy rules and the minimum allocation requirements of Article IX,
the definitions of Employee, Highly Compensated Employee,
Compensation and Leased Employee, and for any other purpose required
by the applicable Code section or by a Plan provision. However, an
Employer may contribute to the Plan only by signing the Adoption
Agreement or a Participation Agreement to the Employer's Adoption
Agreement. If one or more of the Employer's related group members
become Participating Employers by executing a Participation
Agreement to the Employer's Adoption Agreement, the term "Employer"
includes the participating related group members for all purposes of
the Plan, and "Plan Administrator" means the Employer that is the
signatory to the Adoption Agreement.
If the Employer's Plan is a standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are
eligible to participate in the Plan, irrespective of whether the
related group member directly employing the Employee is a
Participating Employer. If the Employer's Plan is a nonstandardized
Plan, the Employer must specify in Item B(5) of its Adoption
Agreement, whether the Employees of related group members that are
not Participating Employers are eligible to participate in the Plan.
Under a nonstandardized Plan, the Employer may elect to exclude from
the definition of "Compensation" for allocation purposes any
Compensation received from a related employer that has not executed
a Participation Agreement and whose Employees are not eligible to
participate in the Plan.
(LL) SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for
the taxable year from the trade or business for which the Plan is
established; also, an individual who would have had Earned Income
but for the fact that the trade or business had no Net Profits for
the taxable year.
(MM) SPOUSE: The person to whom the Participant is legally married at
the relevant time. Notwithstanding the foregoing, if selected in
the Adoption Agreement, Spouse shall only refer to an individual to
whom a Participant has been married to for a period of at least one
year, ending at the relevant time.
(NN) STOCKHOLDER-EMPLOYEE: An employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as
owning within the meaning of Section 318(a)(1) of the Code), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
(OO) TERMINATION DATE: The date on which a Participant's employment is
terminated as provided in Section 5.1.
(PP) TRUSTEE: The entity specified in Item B(17) of the Adoption
Agreement, which shall be any bank or trust company which is
affiliated with KeyCorp. within the meaning of Section 1504 of the
Code, each of which with full trust powers, and its successors by
merger or reorganization.
(QQ) TRUST FUND: All assets held under the Plan by the Trustee.
(RR) VALUATION DATE. The date on which the assets of the Trust shall be
valued, as provided for herein, with earning or losses since the
previous Valuation Date being credited, as appropriate to
Participant accounts. Notwithstanding anything to the contrary in
the Plan, the Valuation date shall be each business day that the
Trustee and the New York Stock Exchange are each open for business,
provided, however, that the Trustee shall not be obligated to value
the Trust in the event, through circumstances beyond its control,
appropriate prices may not be obtained for the assets held in the
Investment Funds.
(SS) VESTING COMPUTATION PERIOD. The Vesting Computation Period shall be
the 12-consecutive month period selected by the Employer in the
Adoption Agreement.
(TT) YEAR OF PARTICIPATION: For purposes of vesting, a twelve (12) month
period in which an Employee has a balance in an account established
under a 401(k)/401(m) arrangement regardless of whether the Employee
is currently making contributions under the arrangement.
(UU) YEAR OF SERVICE: (i) If the elapsed time method of crediting
service is elected in the Adoption Agreement, a Year of Service will
mean a one-year Period of Service. If the actual hours method of
crediting service is elected in the Adoption Agreement, a Year of
Service will mean a 12-consecutive month period as specified in the
Adoption Agreement during which the Employee completes the number of
Hours of Service (not to exceed 1000) specified in the Adoption
Agreement.
1.2 GENDER AND NUMBER. Unless the context indicates otherwise, the
masculine shall include the feminine, and the use of any words
herein in the singular shall include the plural and vice versa.
1.3 CONTROL OF TRADES OR BUSINESSES BY OWNER-EMPLOYEE. If this Plan
provides contributions or benefits for one or more Owner-Employees
who control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and the Plan
established for other trades or businesses must, when looked at as a
single Plan, satisfy Sections 401(a) and (d) for the employees of
this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a Plan
which satisfies Sections 401(a) and (d) and which provides contributions
and benefits not less favorable than provided for Owner-Employees under
this Plan.
If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the individual
controls a trade or business, then the contributions or benefits of the
employees under the Plan of the trades or businesses which are controlled
must be as favorable as those provided for him under the most favorable
Plan of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control a trade or business
if the Owner-Employee, or two or more Owner-Employees together:
(1) Own the entire interest in an unincorporated trade or business, or
(2) In the case of a partnership, own more than 50 percent of either
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.
ARTICLE II
ELIGIBILITY AND VESTING
2.1 ELIGIBILITY.
(A) PARTICIPATION. Every Employee who meets the eligibility
requirements specified by the Employer in the Adoption Agreement
shall become eligible to commence participation in this Plan.
(B) COMMENCEMENT OF PARTICIPATION.
(1) For purposes of Money Purchase Pension Plans, Profit Sharing
Plans and 401(k) Plans with Profit Sharing Contributions, each
Eligible Employee shall commence participation on the Entry
Date.
(2) For purposes of 401(k) and 401(m) arrangements, an Eligible
Employee may, but is not required to, enroll as a Participant
as of the Entry Date on which such Employee is initially
eligible by filing with the Committee before such date, an
enrollment form prescribed by the Committee. The time period
for filing an enrollment form shall be determined by the
Committee. The form shall include an authorization and request
to the Employer to deduct from such Participant's Compensation
in each pay period the designated After Tax Contributions,
and/or to reduce such Participant's Compensation in each pay
period by the amount of the designated Before Tax
Contributions.
(C) YEARS OF SERVICE COUNTED TOWARDS ELIGIBILITY. All Years of Service
with the Employer are counted toward eligibility except the
following:
(1) In a Plan which (a) requires an Employee to complete more than
one Year of Service as an eligibility requirement and (b)
provides immediate 100% vesting in a Participant's Employer
Contribution Account after not more than two (2) Years of
Service, if an Employee has a 1-year Break in Service before
satisfying the Plan's requirement for eligibility, service
before such break will not be taken into account.
(2) In the case of a Participant who does not have any
nonforfeitable right to the account balance derived from
Employer contributions, Years of Service before a period of
consecutive 1-year Breaks in Service will not be taken into
account in computing eligibility service if the number of
consecutive 1-year Breaks in Service in such period equals or
exceeds the greater of 5 or the aggregate number of Years of
Service. Such aggregate number of Years of Service will not
include any Years of Service disregarded under the preceding
sentence by reason of prior Breaks in Service.
(3) If a Participant's Years of Service are disregarded pursuant to
the preceding paragraph, such Participant will be treated as a
new Employee for eligibility purposes. If a Participant's
Years of Service may not be disregarded pursuant to the
preceding paragraph, such Participant shall continue to
participate in the Plan, or, if terminated, shall participate
immediately upon reemployment.
(D) ELIGIBILITY BREAK IN SERVICE, ONE YEAR HOLD-OUT RULE. If the Plan
is a nonstandardized Plan, then:
(1) In the case of any Participant who has a 1-year Break in
Service or Severance, years of eligibility service before such
break will not be taken into account until the Employee has
completed a Year of Service after returning to employment.
(2) For plans in which the eligibility computation is measured with
reference to the Employment Commencement Date, such Year of
Service will be measured beginning on the Employee's
Reemployment Commencement Date and, if necessary, subsequent
12-consecutive month periods beginning on anniversaries of the
Reemployment Commencement Date.
(3) For plans which shift the Eligibility Computation Period to the
Plan Year, such Year of Service will be measured by the
12-consecutive month period beginning on the Employee's
Reemployment Commencement Date and, if necessary, Plan Years
beginning with the Plan Year which includes the first
anniversary of the Reemployment Commencement Date.
(4) If a Participant completes a Year of Service in accordance with
this provision, his or her participation will be reinstated as
a Participant as of the Reemployment Commencement Date.
(E) PARTICIPATION UPON RETURN TO ELIGIBLE CLASS.
(1) In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate but
has not incurred a Break In Service, such Employee shall
participate immediately upon returning to an eligible class of
Employees. If such Participant incurs a Break In Service
eligibility will be determined under the Break in Service rules
of the Plan.
(2) In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such
Employee will participate immediately if such Employee has
satisfied the minimum age and service requirements and would
have otherwise previously become a Participant.
2.2 VESTING.
(A) VESTING SCHEDULE. In the case of an Employee who terminates
participation under this Plan for any reason other than death,
Disability, or employment at the Normal Retirement Date, such
Participant, as of the last day of his participation under this
Plan, shall have a vested interest in his Employer Contribution
Account pursuant to the formula specified by the Employer in the
Adoption Agreement.
(B) VESTING UPON NORMAL RETIREMENT DATE. Notwithstanding the vesting
schedule elected by the Employer in Items B(7)(a) or C(4)(d) of the
Adoption Agreement, an Employee's right to his or her Employer
Contribution balance shall be nonforfeitable at the Employee's
Normal Retirement Date.
(C) VESTING BREAK IN SERVICE - 1 YEAR HOLDOUT. In the case of any
Participant who has incurred a 1-year Break in Service, Years of
Service before such break will not be taken into account until the
Participant has completed a Year of Service after such Break in
Service.
(D) VESTING FOR PRE-BREAK AND POST-BREAK ACCOUNT. In the case of a
Participant who has 5 or more consecutive 1-year Breaks in Service,
all service after such Breaks in Service will be disregarded for the
purpose of vesting the employer-derived account balance that accrued
before such Breaks in Service. Such Participant's pre-break service
will count in vesting the post-break employer-derived account
balance only if either:
(1) such Participant has any nonforfeitable interest in the account
balance attributable to employer contributions at the time of
separation from service; or
(2) upon returning to service the number of consecutive 1-year
Breaks in Service is less than the number of Years of Service.
Separate accounts will be maintained for the Participant's
pre-break and post-break Employer Contribution Account balance.
Both accounts will share in the earnings and losses of the
Trust Fund.
(E) AMENDMENT OF VESTING SCHEDULE. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or
indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each
Participant with at least three (3) Years of Service with the
Employer may elect within a reasonable period after the adoption of
the amendment or change, to have the nonforfeitable percentage
computed under this 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 preceding sentence
shall be applied by substituting "5 Years of Service" for "3 Years
of Service" where such language appears.
This period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end on the latest of:
(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 or Committee.
(F) AMENDMENT AFFECTING VESTED AND/OR ACCRUED BENEFITS. No amendment to
the Plan shall be effective to the extent that it has the effect of
decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's account balance may be reduced
to the extent permitted under Section 412(c)(8) of the Code. For
purposes of this paragraph, a Plan amendment which has the effect of
decreasing a Participant's account balance or eliminating an
optional form of benefit, with respect to benefits attributable to
service before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of a Plan is amended,
in the case of an Employee who is a Participant as of the later of
the date such amendment is adopted or the date it becomes effective,
the nonforfeitable 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.
ARTICLE III
CODE 401(K) AND CODE 401(M) ARRANGEMENTS
3.1 PROVISION RELATING TO BOTH BEFORE TAX CONTRIBUTIONS AND AFTER TAX
CONTRIBUTIONS.
(A) DEFINITIONS: The following definitions are applicable to this
Article of the Plan.
(1) ACTUAL DEFERRAL PERCENTAGE OR 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 (whether
or not the Employee was a Participant for the entire Plan Year,
but limited to that portion of the Plan Year in which the
Employee was an Eligible Participant if the Employer so elects
for such Plan Year to so limit Compensation for all Eligible
Employees). Employer contributions on behalf of any
Participant shall include (1) any Before Tax Contributions made
pursuant to the Participant's deferral election, including
Excess Before Tax Contributions, but excluding Before Tax
Contributions that are taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both with
and without exclusion of these Before Tax Contributions); and
(2) at the election of the Employer, Qualified Non-elective
Contributions and Qualified Matching Contributions. For
purposes of computing Actual Deferral Percentages, an Employee
who would be a Participant but for the failure to make Before
Tax Contributions shall be treated as a participant on whose
behalf no Before Tax Contributions are made.
(2) AFTER TAX CONTRIBUTIONS ("EMPLOYEE CONTRIBUTIONS"): 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.
(3) AGGREGATE LIMIT: The sum of (i) 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 Code Section 401(m) for the Plan Year beginning
with or within the Plan Year of the cash or deferred
arrangement and (ii) the lesser of 200% or two plus the lesser
of such ADP or ACP. "Lesser" is substituted for "greater" in
"(i)", above, and "greater" is substituted for "lesser" after
"two plus the" in "(ii)" if it would result in a larger
Aggregate Limit.
(4) AVERAGE CONTRIBUTION PERCENTAGE OR ACP: the average (expressed
as a percentage) of the Contribution Percentages of the
Eligible Participants in a group.
(5) BEFORE TAX CONTRIBUTIONS ("ELECTIVE DEFERRALS"): Employer
contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, which shall include
contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a
Participant's Before Tax Contributions are 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 Code Section 402(h)(1)(B), any
eligible deferred compensation Plan under Code Section 457, any
Plan as described under Code Section 457, any Plan as described
under Code Section 501(c)(18), and any Employer contributions
made on behalf of a Participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a salary
reduction agreement.
(6) 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, but
limited to that portion of the Plan Year in which the Employee
was an Eligible Participant if the Employer so elects for such
Plan Year to so limit Compensation for all Eligible Employees).
(7) CONTRIBUTION PERCENTAGE AMOUNTS: The sum of the After Tax
Contributions, Matching Contributions, and Qualified Matching
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. Such Contribution Percentage
Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or
because the contributions to which they relate are Excess
Before Tax Contributions, Excess Contributions or Excess
Aggregate Contributions. If so elected in the Adoption
Agreement the Employer may include Qualified Non-elective
Contributions in the Contribution Percentage Amounts. The
Employer also may elect to use Before Tax Contributions in the
Contribution Percentage Amounts so long as the ADP test is met
before the Before Tax Contributions are used in the ACP test
and continues to be met following the exclusion of those Before
Tax Contributions that are used to meet the ACP test.
(8) ELIGIBLE PARTICIPANT: Any Employee who is eligible to make an
After Tax Contribution or a Before Tax Contribution (if the
Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive a
Matching Contribution (including forfeitures) or a Qualified
Matching Contribution. If an After Tax Contribution is
required as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan if such
Employee made such a contribution shall be treated as an
eligible Employee on behalf of whom no After Tax Contributions
are made.
(9) 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 Before Tax Contributions pursuant to Section 3.2(D)
and (E) and then determining Excess Contributions pursuant
to section 3.2(F), (G) and (H).
(10) EXCESS BEFORE TAX CONTRIBUTIONS ("EXCESS ELECTIVE DEFERRALS"):
Those Before Tax Contributions that are includible in a
Participant's gross income under Section 402(g) of the Code to
the extent such Participant's Before Tax Contributions for a
taxable year exceed the dollar limitation under such Code
section. Excess Before Tax Contributions shall be treated as
Annual Additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the
close of the Participants taxable year. Excess Before Tax
Contributions shall be adjusted for income or loss up to the
end of the taxable year of the Employee, and if elected in the
Adoption Agreement, for the income or loss attributable to the
period from the end of the Employee's taxable year to the date
of distribution (the "Gap Period"). The income or loss
allocable to Excess Before Tax Contributions is (1) the income
or loss allocable to the Participant's Before Tax Contribution
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Before Tax
Contributions for the year and the denominator is the
Participant's account balance attributable to Before Tax
Contributions without regard to any income or loss occurring
during such taxable year plus, (2) if Gap Period income or loss
applies, ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Participant's taxable year and the date of
distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
(11) EXCESS CONTRIBUTIONS: With respect to any Plan Year, the
excess of:
(a) The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly
Compensated Employee 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 Employee in order of the
ADPs, beginning with the highest of such percentages).
(12) MATCHING CONTRIBUTIONS: An Employer contribution made to this
or any other defined contribution Plan on behalf of a
Participant on account of an After Tax Contribution made by
such Participant, or on account of a Participant's Before Tax
Contribution, under a Plan maintained by the Employer.
(13) QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which
are subject to the distribution and nonforfeitability
requirements under Section 401(k) of the Code when made.
Qualified Matching Contributions shall be allocated, in the
discretion of Employer, to the accounts of all Employees, or
only to the accounts of Non-highly Compensated Employees.
(14) QUALIFIED NON-ELECTIVE CONTRIBUTIONS: Contributions (other
than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to
Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are applicable
to Before Tax Contributions and Qualified Matching
Contributions. Qualified Non-elective Contributions shall be
allocated, in the discretion of Employer, to the accounts of
all Employees, or only to the accounts of Non-highly
Compensated Employees.
(B) NONFORFEITABILITY AND VESTING. The Participant's accrued benefits
derived from Before Tax Contributions and After Tax Contributions
are nonforfeitable and fully vested.
(C) NOTICE TO COMMITTEE. The Committee shall set the time period during
which a Participant may provide written notice to increase, decrease
or terminate Before Tax Contributions and After Tax Contributions.
(D) SUSPENSION AFTER RECEIPT OF HARDSHIP DISTRIBUTION. If the Employer
has elected in the Adoption Agreement to have the "safe harbor"
hardship rules apply, an Employee's Before Tax Contributions and
After Tax Contributions shall be suspended for twelve months after
the receipt by such Employee of a Hardship distribution (as defined
in Section 3.9) from this Plan or any other Plan maintained by the
Employer.
(E) SEPARATE ACCOUNTS. Separate accounts for Before Tax Contributions
and After Tax Contributions will be maintained for each Participant.
Each account will be credited with the applicable contributions and
earnings thereon.
3.2 BEFORE TAX CONTRIBUTIONS. (ELECTIVE DEFERRALS).
(A) ALLOCATION OF BEFORE TAX CONTRIBUTIONS. If the Employer selects
Item C(2) in the Adoption Agreement, for each Plan Year the Employer
will contribute and allocate to each Participant's Before Tax
Contribution Account an amount equal to the amount of the
Participant's Before Tax Contributions. The provisions of the cash
or deferred arrangement may be made effective as of the first day of
the Plan Year in which the cash or deferred option is adopted,
however, under no circumstances may a salary reduction agreement or
other deferral mechanism be adopted retroactively. Before Tax
Contributions must be contributed and allocated to the Plan no later
than thirty (30) days after the close of the Plan Year for which the
contributions are deemed to be made, or such other time as provided
in applicable regulations under the Code.
(B) BEFORE TAX CONTRIBUTIONS PURSUANT TO A SALARY REDUCTION AGREEMENT.
To the extent provided in the Adoption Agreement, a Participant may
elect to have Before Tax Contributions made under this Plan. Before
Tax Contributions shall be continuing contributions through payroll
deduction made pursuant to a salary reduction agreement.
(1) COMMENCEMENT OF BEFORE TAX CONTRIBUTIONS. An Employee may
elect to commence Before Tax Contributions as of his or her
Entry Date as described in Section 2.1(B). Such election shall
not become effective before the Entry Date. Such election may
not be made retroactively.
(2) MODIFICATION AND TERMINATION OF BEFORE TAX CONTRIBUTIONS. A
Participant's election to commence Before Tax Contributions
shall remain in effect until modified or terminated. A
Participant may increase or decrease his or her Before Tax
Contributions as of any date as selected by the Employer in
Item C(3) of the Adoption Agreement upon notice to the
Committee. A Participant may terminate his or her election to
make Before Tax Contributions as of the Participant's next wage
payment date upon notice to the Committee. Any Participant who
terminates Before Tax Contributions may elect to recommence
making Before Tax Contributions as of the date selected by the
Employer in Item C(3) of the Adoption Agreement following his
or her suspension of contributions.
(C) CASH BONUSES. If Item C(2)(c) of the Adoption Agreement is
selected, a Participant may also enter into a salary reduction
agreement on cash bonuses that, directing that the amount of such
salary reduction be contributed to the Plan as a Before Tax
Contribution, or received by the Participant in cash. A Participant
shall be afforded a reasonable period to elect to defer amounts
described in this Section 3.2 to the Plan. Such election shall not
become effective before the Participant's Entry Date.
(D) MAXIMUM AMOUNT OF BEFORE TAX CONTRIBUTIONS. A Participant's Before
Tax Contributions are subject to any limitations imposed in Item
C(2) of the Adoption Agreement, calculated on an annual basis, and
any further limitations under the Plan. No Participant shall be
permitted to have Before Tax Contributions made under this Plan, or
any other qualified Plan maintained by the Employer, during any
taxable year in excess of the dollar limitation contained in Code
Section 402(g) in effect at the beginning of such taxable year.
Furthermore, if an Employee receives a Hardship distribution (as
defined in Section 3.9, utilizing the "safe harbor" rules) from this
Plan or any other Plan maintained by the Employer, the Employee may
not make Before Tax Contributions for the Employee's taxable year
immediately following the taxable year of the Hardship distribution
in excess of the applicable limit under Section 402(g) of the Code
for such taxable year less the amount of the Employee's Before Tax
Contributions for the taxable year of the Hardship distribution.
(E) DISTRIBUTION OF EXCESS BEFORE TAX CONTRIBUTIONS. If a Participant
makes Before Tax Contributions to this Plan and to another Plan, and
the Participant has made Excess Before Tax Contributions to one or
more of the plans, the Participant may assign the amount of any such
Excess Before Tax Contributions among the plans under which such
Before Tax Contributions were made. The Participant may assign to
this Plan any Excess Before Tax Contributions made during a taxable
year of the Participant to this Plan by notifying the Committee on
or before the date specified in the Adoption Agreement of the amount
of the Excess Before Tax Contributions to be assigned to the Plan.
A Participant is deemed to notify the Committee of any Excess Before
Tax Contributions that arise by taking into account only those
Before Tax Contributions made under the Plan or Plans of this
Employer.
Notwithstanding any other provision of the Plan, Excess Before Tax
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to
whose account Excess Before Tax Contributions were assigned for the
preceding year and who claims Excess Before Tax Contributions for
such taxable year.
The Participant's claim shall be in writing; shall be submitted to
the Committee not later than the date elected in Item CC of the
Adoption Agreement; shall specify the amount of the Participant's
Excess Before Tax Contribution for the preceding calendar year; and
shall be accompanied by the Participant's written statement that if
such amounts are not distributed, such Excess Before Tax
Contributions, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k), or 403(b) of the
Code, will exceed the limit imposed on the Participant by Section
402(g) of the Code for the year in which the deferral occurred.
(F) ACTUAL DEFERRAL PERCENTAGE. The ADP for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Non-highly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(1) 1.25 LIMIT. The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ADP for Participants who are Non-highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
(2) 2.0 LIMIT. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 2.0, provided that the ADP for
Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are Non-highly Compensated
Employees by more than two (2) percentage points.
(3) SPECIAL RULES.
(a) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Before Tax Contributions (and Qualified Non-elective
Contributions, or Qualified Matching Contributions, or
both, if treated as 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 Before Tax Contributions (and, if applicable,
such Qualified Non-elective Contributions or Qualified
Matching Contributions, or both,) were made under a single
arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements
that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
(b) 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.
(c) 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 Before Tax Contributions
(and Qualified Non-elective Contributions or Qualified
Matching Contributions, or both, if treated as Before Tax
Contributions for purposes of the ADP test) and
Compensation of such Participant shall include the Before
Tax Contributions (and, if applicable, Qualified
Non-elective Contributions) and Compensation for the Plan
Year of Family Members (as defined in Section 414(q)(6) of
the Code). Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate
employees in determining the ADP both for Participants who
are Non-highly Compensated Employees and for Participants
who are Highly Compensated Employees.
(d) For purposes of determining the ADP test, Before Tax
Contributions if treated as Before Tax Contributions and
Qualified Non-elective Contributions must be made before
the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
Qualified Non-elective Contributions used in such test.
(f) 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.
(G) DISTRIBUTION OF EXCESS CONTRIBUTIONS. Notwithstanding any other
provision of the Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be distributed no later than
the last day of each Plan Year to Participants to whose accounts
Excess Contributions were allocated for the preceding Plan Year. If
such excess amounts are distributed more than 2-1/2 months after the
last day of the Plan Year in which such excess amounts arose, a ten
(10) percent excise tax will be imposed on the Employer maintaining
the Plan with respect to such amounts. Such distributions shall be
made to Highly Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of such
Employees. Excess Contributions of Participants who are subject to
the Family Member aggregation rules shall be allocated among the
Family Members in proportion to the Before Tax Contributions (and
amounts treated as Before Tax Contributions) of each Family Member
that is combined to determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall
be treated as Annual Additions under the Plan.
(1) DETERMINATION OF INCOME OR LOSS. The Excess Contributions
shall be adjusted for income or loss up to the date of
distribution. The income or loss allocable to Excess
Contributions is (1) the income or loss allocable to the
Participant's Before Tax Contribution Account (and, if
applicable, the Qualified Non-elective Contribution Account or
the Qualified Matching Contribution Account or both) multiplied
by a fraction, the numerator of which is such Participant's
Excess Contribution for the year and the denominator is the
Participant's account balance attributable to Before Tax
Contributions (and Qualified Non-Elective Contributions or
Qualified Matching Contributions or both, if any of such
contributions are included in the ADP test) without regard to
any income or loss occurring during such taxable year, plus,
(2) if Gap Period income or loss applies, as elected in the
Adoption Agreement, ten percent of the amount determined under
(1) multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after the 15th
of such month.
(2) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions
shall be distributed from the Participant's Before Tax
Contribution Account and Qualified Matching Contribution
Account (if applicable) in proportion to the Participant's
Before Tax Contributions and Qualified Matching Contributions
(to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the participant's
Qualified Non-elective Contribution Account only to the extent
that such Excess Contributions exceed the balance in the
Participant's Before Tax Contribution Account.
(H) RECHARACTERIZATION. If the Plan permits After Tax Contributions
(Employee Contributions), Excess Contributions may be
recharacterized pursuant to this subsection. Recharacterized
amounts may be used in the Plan from which Excess Contributions
arose or in another Plan of the employer with the same Plan Year.
(1) TREATMENT OF AMOUNTS RECHARACTERIZED. A Participant may treat
his or her Excess Contributions as an amount distributed to the
Participant and then contributed by the Participant to the
Plan. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Before Tax
Contributions. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other After Tax Contributions made by that
Employee would exceed any stated limit under the Plan on After
Tax Contributions.
(2) TIMING OF RECHARACTERIZATION. Recharacterization must occur no
later than two and one-half months after the last day of the
Plan Year in which such Excess Contributions arose and is
deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount
recharacterized and the consequences thereof. Recharacterized
amounts will be taxable to the Participant for the
Participant's tax year in which the Participant would have
received them in cash.
(I) ADJUSTMENTS TO BEFORE TAX CONTRIBUTION PERCENTAGES. Anything to the
contrary in this Article III notwithstanding, the Committee shall
have the right to reduce the percentages designated pursuant to
Section 3.2(B), of any one or more Highly Compensated Employees in a
manner prescribed or approved by the Committee to the extent
necessary or convenient to ensure that at least one of the ADP tests
set forth in Section 3.2(F) is satisfied, but in no event shall such
reduction result in a percentage less than zero. Any such reduction
shall be effected quarterly, or more frequently as the Committee may
determine and each affected Highly Compensated Employee shall be
deemed to have elected the permissible percentage determined by the
Committee. The Committee may, on a prospective basis, and subject
to the percentage limits of Section 3.3 below, treat amounts
contributed to the Plan pursuant to a salary reduction agreement as
After Tax Contributions by each affected Highly Compensated
Employee; provided that if any such reduction cannot be so treated
because of the said percentage limits or because of the
nondiscrimination requirements of Code Section 401(m) or otherwise,
then the amount of such reduction (and any income allocable thereto)
shall be distributed to each affected Highly Compensated Employee
pursuant to Code Section 401(k)(8) or Code Section 401(m)(6), if
applicable, not later than the close of the first 2-1/2 months of
the Plan Year following the Plan Year in which the contribution was
made.
3.3 AFTER TAX CONTRIBUTIONS. (EMPLOYEE CONTRIBUTIONS).
(A) ALLOCATION OF AFTER TAX CONTRIBUTIONS. If the Employer selects Item
C(2)(b) in the Adoption Agreement, the Employer will deduct from the
Participant's pay and allocate to each Participant's After Tax
Contribution Account an amount equal to the percentage of
Compensation authorized by the Participant as an After Tax
Contribution. The Employer shall transmit After Tax Contributions
to the Trustee within thirty (30) days after the month end in which
such deductions are made.
(B) EMPLOYEE AUTHORIZES AFTER TAX CONTRIBUTIONS. To the extent provided
in the Adoption Agreement, a Participant may elect to make After Tax
Contributions under the Plan.
(1) ELECTION TO MAKE AFTER TAX CONTRIBUTIONS. An Employee may
elect to make After Tax Contributions as of his or her Entry
Date as described in Section 2.1(B). Such election will not
become effective before the Entry Date.
(2) MODIFICATION AND TERMINATION OF AFTER TAX CONTRIBUTIONS. A
Participant's election to commence After Tax Contributions
shall remain in effect until modified or terminated. A
Participant may increase or decrease his or her After Tax
Contributions as selected by the Employer in Item C(3) of the
Adoption Agreement upon written notice to the Committee. A
Participant may terminate his or her election to make After Tax
Contributions at any time as of the Participant's next wage
payment date upon written notice to the Committee. Any
Participant who terminates After Tax Contributions may elect to
recommence making After Tax Contributions as of the date
selected by the Employer in Item C(3) of the Adoption Agreement
following his or her suspension of contributions.
(C) MAXIMUM AMOUNT OF AFTER TAX CONTRIBUTIONS. A Participant's After
Tax Contributions are subject to any limitations imposed in Item
C(3) of the Adoption Agreement, calculated on an annual basis, and
any further limitations under the Plan.
(D) CASH BONUSES. If Item C(2)(c) of the Adoption Agreement is
selected, a Participant may also enter into a salary reduction
agreement on cash bonuses, directing that the amount of such salary
reduction be contributed to the Plan as an After Tax Contribution,
or received by the Participant in cash. A Participant shall be
afforded a reasonable period to elect to defer amounts described in
this Section 3.3 to the Plan. Such election shall not become
effective before the Participant's Entry Date.
3.4 EMPLOYER CONTRIBUTIONS.
(A) MATCHING CONTRIBUTIONS. If elected by the Employer in the Adoption
Agreement, the Employer will or may make Matching Contributions to
the Plan. The amount of such Matching Contributions shall be
calculated by reference to the Participants' Before Tax
Contributions and/or After Tax Contributions as specified by the
Employer in the Adoption Agreement.
(B) QUALIFIED MATCHING CONTRIBUTIONS. If elected by the Employer in the
Adoption Agreement, the Employer may make Qualified Matching
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as
provided in Section 3.2(G) of the Plan, or Excess Aggregate
Contributions as provided in Section 3.5(C) of the Plan, the
Employer may make Qualified Matching Contributions on behalf of
Employees that are sufficient to satisfy either the Actual Deferral
Percentage or the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
(C) QUALIFIED NON-ELECTIVE CONTRIBUTIONS. If elected by the Employer in
the Adoption Agreement, the Employer may make Qualified Non-elective
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as
provided in Section 3.2(G) of the Plan, or Excess Aggregate
Contributions as provided in Section 3.5(C) of the Plan, the
Employer may make Qualified Non-elective Contributions on behalf of
Employees that are sufficient to satisfy either the Actual Deferral
Percentage or the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
(D) SEPARATE ACCOUNTS. An Employer Matching Account shall be maintained
for a Participant's accrued benefit attributable to Matching
Contributions. A Qualified Matching Contribution Account shall be
maintained for a Participant's accrued benefit attributable to
Qualified Matching Contributions. A Qualified Non-elective
Contribution Account shall be maintained for a Participant's accrued
benefit attributable to Qualified Non-elective Contributions. Such
accounts shall be credited with the applicable contributions,
earnings and losses, distributions, and other adjustments.
(E) VESTING. Matching Contributions will be vested in accordance with
the Employer's election in Items C(4)(d) and C(4)(e) of the Adoption
Agreement. In any event, Matching Contributions shall be fully
vested at Normal Retirement Date, upon the complete or partial
termination of the Plan, or upon the complete discontinuance of
Matching Contributions, as applicable. Qualified Non-elective
Contributions and Qualified Matching Contributions are
nonforfeitable when made.
(F) FORFEITURES. Forfeitures of Matching Contributions shall be used to
reduce such contributions, or shall be allocated to Participants, in
accordance with the Employer's election in Item C(6) of the Adoption
Agreement.
(G) ALLOCATION OF DISCRETIONARY MATCHING CONTRIBUTIONS. If the Employer
selects Item C(4)(b) in the Adoption Agreement, any discretionary
Matching Contributions shall be allocated as of the allocation date
specified in Item C(4)(c)(ii) of the Adoption Agreement, to the
Employer Matching Account of each Participant who has made Before
Tax Contributions and/or After Tax Contributions eligible for
matching. If Item C(4)(c)(ii)(e) has been selected (imposing a last
day of the Plan Year requirement) the allocation shall be made to a
Participant who (1) if a Participant in a nonstandardized Plan, is
employed or on leave of absence on the last day of the Plan Year,
and (2) if a Participant in a standardized Plan, either completes
more than 500 Hours of service during the Plan Year or is employed
on the last day of the Plan Year. The following Participants will
also share in the Matching Contributions for the year, if elected in
the Adoption Agreement: (1) Participants in a nonstandardized Plan
whose employment terminated before the end of the Plan Year because
of retirement, death, disability or as specified in the Adoption
Agreement, and (2) Participants in a standardized Plan whose
employment terminated before the end of the Plan Year because of
retirement, death, disability or as specified in the Adoption
Agreement, and completed 500 Hours of Service or less.
Notwithstanding the foregoing, if the Employer makes a contribution
prior to the end of the Plan Year, Participants shall be entitled to
an allocation of that contribution when made, without regard to any
end of the Plan Year requirement.
(H) LIMITATION ON EMPLOYER CONTRIBUTIONS. The Employer's contributions
for any Plan Year shall not exceed the maximum amount which the
Employer may deduct pursuant to Section 404 of the Code.
3.5 LIMITATIONS ON AFTER TAX CONTRIBUTIONS (EMPLOYEE CONTRIBUTIONS) AND
MATCHING CONTRIBUTIONS.
(A) CONTRIBUTION PERCENTAGE. The 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) 1.25 LIMIT. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ACP for Participants who are Non-highly Compensated Employees
for the same Plan Year by 1.25, or
(2) 2.0 LIMIT. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by two (2), provided that the ACP for
Participants who are Highly Compensated Employees does not
exceed the ACP for Participants who are Non-highly Compensated
Employees by more than two (2) percentage points.
(B) SPECIAL RULES.
(1) MULTIPLE USE. 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 ACP of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employee whose ACP is
the highest) so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution
Percentage amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not
occur if either the ADP and ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of
the Non-highly Compensated Employees.
(2) AGGREGATION OF CONTRIBUTION PERCENTAGES. 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
accounts under two or more plans described in Section 401(a) of
the Code, or arrangements described in Section 401(k) of the
Code, that are maintained by the Employer, shall be determined
as if the total of such Contribution Percentage Amounts was
made under each Plan. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that
have different Plan years all cash or deferred arrangements
ending with or within the same calendar year shall be treated
as a single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandated to be
disaggregated under regulations under Section 401(m) of the
Code.
(3) AGGREGATION OF PLANS. In the event that this Plan satisfies
the requirements of Sections 401(m), 401(a)(4) or 410(b) of the
Code only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of such sections
of the Code only if aggregated with this Plan, then this
section shall be applied by determining the Contribution
Percentage of Employees as if all such plans were a single
Plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Section 401(m) of the
Code only if they have the same Plan Year.
(4) FAMILY AGGREGATION. 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 Employee 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
Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(5) TIME OF CONTRIBUTIONS. For purposes of determining the
Contribution Percentage test, After Tax Contributions are
considered to have been made in the Plan Year in which
contributed to the Trust. Matching Contributions and 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 day after the close of the Plan Year.
(6) RECORDS. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(7) REGULATIONS. 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.
(C) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(1) GENERAL RULE. Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income and minus
any loss allocable thereto, shall be forfeited, if forfeitable,
or if not forfeitable, distributed no later than the last day
of each Plan Year to Participants to whose accounts Excess
Aggregate Contributions were allocated for the preceding Plan
Year. Excess Aggregate Contributions of Participants who are
subject to the Family Member aggregation rules shall be
allocated among the Family Members in proportion to the After
Tax and Matching Contributions (or amounts treated as Matching
Contributions) of each Family Member that is combined to
determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2-1/2 months after the
last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions
under the Plan.
(2) DETERMINATION OF INCOME OR LOSS. Excess Aggregate
Contributions shall be adjusted for income or loss up to the
date of distribution. The income or loss allocable to Excess
Aggregate Contributions is the sum of: (1) income or loss
allocable to the Participant's After Tax Contribution Account,
Matching Contribution Account, Qualified Matching Contribution
Account, (if any, and if all amounts therein are not used in
the ADP test) and, if applicable, the Qualified Non-elective
Contribution Account and Before Tax Contribution 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; and (2) ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of
such month.
(3) FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS. Forfeitures of
Excess Aggregate Contributions may either be reallocated to the
accounts of Non-Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in
Item C(6)(c) of the Adoption Agreement.
(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess Aggregate
Contributions shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the Participant's After
Tax Contribution Account and Matching Contribution Account and
Qualified Matching Contribution Account (and, if applicable,
the Participant's Qualified Non-elective Contribution Account
and Before Tax Contribution Account, or both).
3.6 NET PROFITS NOT REQUIRED IF SO ELECTED IN ADOPTION AGREEMENT. If the
Employer elects, Matching Contributions may be made without regard
to Net Profits in accordance with Item C(4)(c)(iii) of the Adoption
Agreement. If the Plan is a profit-sharing Plan, the Plan shall
continue to be designed to qualify as a profit-sharing Plan for
purposes of Sections 401(a), 402, 412, and 417 of the Code. Net
Profits shall not be required for Before Tax Contributions or After
Tax Contributions to be made to the Plan.
3.7 FORM, PAYMENT AND ALLOCATION OF CONTRIBUTIONS. All contributions
under this Article III made for a Plan Year shall be made in cash,
and shall be delivered to the Trustee at such time or times as
shall be agreed upon between the Committee and the Trustee. The
Committee shall instruct the Trustee as to the allocation of
contributions to the Participant's accounts.
3.8 DISTRIBUTION REQUIREMENTS FOR BEFORE TAX CONTRIBUTION ACCOUNT.
Before Tax Contributions, Qualified Non-elective Contributions and
Qualified Matching Contributions, and income allocable to each are
not distributable to a Participant or his or her Beneficiary or
Beneficiaries, in accordance with such Participant's, Beneficiary's
or Beneficiaries' election, earlier than upon separation from
service, death, disability, or as selected in the Adoption
Agreement. Such amounts may not be distributed unless in accordance
with the Participant's election made pursuant to rules established
by the Committee as authorized in the Adoption Agreement, and upon:
(A) Termination of the Plan without the establishment of another defined
contribution Plan, other than an employee stock ownership Plan (as
defined in Section 4975(e) or Section 409 of the Code) or a
simplified employee pension Plan as defined in Section 408(k).
(B) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets.
(C) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code) if such corporation continues to
maintain this Plan, but only with respect to Employees who continue
employment with such subsidiary.
(D) The attainment of age 59-1/2 in the case of a profit-sharing Plan,
or the attainment of the Plan's Normal Retirement Date, if either or
both are selected in the Adoption Agreement.
(E) The Hardship of the Participant as described in Section 3.9, if
selected in the Adoption Agreement.
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 411(a)(11) and 417 of the Code. In addition, distributions
after March 31, 1988, that are triggered by any of the first three
events above, in Sections 3.8(A), (B) and (C) must be made in a lump
sum.
3.9 HARDSHIP DISTRIBUTION.
(A) AMOUNT AVAILABLE FOR WITHDRAWAL. Upon the written request of a
Participant received and approved by the Committee, a Participant
may withdraw, in cash, up to one hundred per cent (100%) of the
amount of such Participant's Before Tax Contributions (and any
earnings credited to a Participant's account as of the end of the
last Plan Year ending before July 1, 1989) or such lesser amount as
the Committee may approve, in the event of Hardship. For purposes
of this Section, Hardship is defined as 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 411(a)(11) and
417 of the Code. The Committee is authorized to and shall request
from the Participant making such a request such evidence as the
Committee deems necessary and appropriate to substantiate a
Hardship, the amount of expenses resulting from such Hardship and
the other resources of the Participant reasonably available to meet
such expenses.
(B) SPECIAL RULES:
(1) IMMEDIATE AND HEAVY NEED. The following are the only financial
needs considered immediate and heavy: expenses incurred or
necessary for medical care, described in Section 213(d) of the
Code, of the Employee, the Employee's Spouse or dependents; the
purchase (excluding mortgage payments) of a principal residence
for the Employee; payment of tuition and related educational
fees for the next twelve months of post-secondary education for
the Employee, the Employee's Spouse, children or dependents; or
the need to prevent the eviction of the Employee from, or a
foreclosure on the mortgage of, the Employee's principal
residence.
(2) SATISFACTION OF NEED. A distribution will be considered as
necessary to satisfy an immediate and heavy financial need of
the Employee only if:
(a) The Employee has obtained all distributions, other than
Hardship distributions, and all nontaxable loans under
all plans maintained by the Employer;
(b) All plans maintained by the Employer provide that the
Employee's Before Tax Contributions (and After Tax
Contributions) will be suspended for twelve months after
the receipt of the Hardship distribution;
(c) The distribution is not in excess of an immediate and
heavy financial need (including amounts necessary to pay
any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution);
and
(d) All plans maintained by the Employer provide that the
Employee may not make Before Tax Contributions for the
Employee's taxable year immediately following the taxable
year of the Hardship distribution in excess of the
applicable limit under Section 402(g) of the Code for
such taxable year less the amount of such Employee's
Before Tax Contributions for the taxable year of the
Hardship distribution.
(3) TAXES AND PENALTIES. The amount of an immediate and heavy
financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.
3.10 WITHDRAWAL OF AFTER TAX CONTRIBUTIONS. Subject to the provisions of
the Plan, in accordance with rules for giving notice as determined
by the Committee, a Participant may withdraw as of the first
Accounting Date subsequent to receipt by the Committee of such
notice:
(A) MAXIMUM AMOUNT. An amount equal to not more than 100% of the
Participant's After Tax Contribution Account determined as of such
Accounting Date. No Participant who has made any withdrawal of
After Tax Contributions in the twelve (12) months preceding the
giving of such notice may make a withdrawal under this Section. A
Participant who makes a withdrawal of After Tax Contributions shall
be required to suspend After Tax Contributions for a period of six
(6) months, commencing with the effective date of such withdrawal.
A Participant may, pursuant to Article III, elect to commence After
Tax Contributions as of the first day of the first payroll period of
the month following the conclusion of such suspension period, or the
first payroll period of any month thereafter, upon advance written
notice to the Committee.
(B) MINIMUM AMOUNT. Notwithstanding anything to the contrary in this
Section 3.10, any withdrawal made pursuant to Section 3.10(A) shall
be for a minimum whole dollar amount not less than Five Hundred
Dollars ($500.00); except that if the amount available for
withdrawal is less than Five Hundred Dollars ($500.00) then the
minimum amount of the withdrawal shall be the amount available.
(C) FORFEITURES. No forfeitures will occur solely as a result of an
Employee's withdrawal of After Tax Contributions.
(D) LOAN SECURITY. Notwithstanding anything to the contrary in this
Section 3.10, a Participant may not make a withdrawal pursuant to
this Section of any portion of the Participants vested interest
which has been assigned to secure repayment of a loan in accordance
with Section 11.10, below, until such time as the Committee shall
have released said portion so assigned.
3.11. WITHDRAWAL OF MATCHING CONTRIBUTIONS. Subject to the provisions of
the Plan, in accordance with rules for giving notice as determined
by the Committee, and as elected in the Adoption Agreement, a
Participant may withdraw as of the first Accounting Date subsequent
to receipt by the Committee of such notice:
(A) MAXIMUM AMOUNT. An amount equal to not more than 100% of the vested
amounts in the Participant's Matching Contribution Account
determined as of such Accounting Date. No Participant who has made
any withdrawal of Matching Contributions in the twelve (12) months
preceding the giving of such notice may make a withdrawal under this
Section.
(B) MINIMUM AMOUNT. Notwithstanding anything to the contrary in this
Section 3.11, any withdrawal made pursuant to Section 3.11(A) shall
be for a minimum whole dollar amount not less than Five Hundred
Dollars ($500.00); except that if the amount available for
withdrawal is less than Five Hundred Dollars ($500.00) then the
minimum amount of the withdrawal shall be the amount available.
(C) FORFEITURES. No forfeitures will occur solely as a result of an
Employee's withdrawal of Matching Contributions.
(D) LOAN SECURITY. Notwithstanding anything to the contrary in this
Section 3.11, a Participant may not make a withdrawal, pursuant to
this Section of any portion of the Participant's vested interest
which has been assigned to secure repayment of a loan in accordance
with Section 11.10, below, until such time as the Committee shall
have released said portion so assigned.
ARTICLE IV
OTHER CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS.
(A) MONEY PURCHASE PENSION PLANS ONLY. As elected by the Employer in
the Adoption Agreement, the Employer shall make contributions to the
Plan.
(B) PROFIT SHARING PLANS AND 401(K) PLANS ONLY.
(1) EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer,
shall or may make contributions to the Plan in an amount as
selected in the Adoption Agreement or determined by Resolution
of the Board of Directors of the Employer.
(2) NET PROFITS NOT REQUIRED IF SO ELECTED IN ADOPTION AGREEMENT.
If the Employer elects, Employer Contributions under a profit
sharing Plan may be made without regard to Net Profits in
accordance with Item B(8)(a)(iii) of the Adoption Agreement.
The Plan shall continue to be designed to qualify as a
profit-sharing Plan for purposes of Sections 401(a), 402, 412,
and 417 of the Code.
4.2 SEPARATE ACCOUNTS. An Employer Contribution Account shall be
maintained for each Participant to which will be credited the
employer pension or profit sharing contributions ("Employer
Contributions"). Such accounts shall be credited with the
applicable contributions, earnings and losses, distributions, and
other adjustments.
4.3 VESTING. Employer Contributions will be vested in accordance with
the Employer's election in Item B(7), as applicable, of the Adoption
Agreement. In any event, Employer Contributions shall be fully
vested at Normal Retirement Date, upon the complete or partial
termination of the Plan, and, in profit sharing plans, upon the
complete discontinuance of Employer Contributions.
4.4 LIMITATION ON EMPLOYER CONTRIBUTIONS. The Employer's Contribution
for any Plan Year shall not exceed the maximum amount which the
Employer may deduct pursuant to Section 404 of the Code. The
Employer Contributions shall be payable not later than the time for
filing the Employer's federal income tax return, including
extensions.
4.5 EMPLOYEE CONTRIBUTIONS.
(A) DISTRIBUTIONS FROM QUALIFIED PLANS - ROLLOVERS.
(1) If the Employer selects Item B(9) in the Adoption Agreement, an
Employee who is entitled to make a rollover contribution
described in Section 402(a)(5), Section 403(a)(4) or Section
408(d)(3) of the Code ("Rollover Contribution"), may elect,
with the approval of the Committee, to make such a Rollover
Contribution to the Plan. The Employee shall deliver or cause
to be delivered, to the Trustee the cash which constitutes such
Rollover Contribution at such time or times and in such manner
as shall be specified by the Committee. As of the date of
receipt of such property by the Trustee, a Rollover Account
shall be established in the name of the Employee who has made a
Rollover Contribution as provided in this Section 4.5 and shall
be credited with such assets on such date. A Rollover
Contribution shall not be deemed to be a contribution of such
Employee for any purpose of this Agreement. All Rollover
Contributions and the earnings on these contributions shall be
immediately fully vested and nonforfeitable.
(2) Subject to the provisions of the Plan, on advance notice given
to the Committee in accordance with rules established by the
Committee a Participant in a profit sharing Plan or 401(k)
profit sharing Plan may withdraw all or any part (in any whole
dollar amount specified by the Participant) of the value of any
Rollover Account, provided no Participant who has made any
withdrawal under Section 4.5(A) during the calendar year in
which such notice is given may make an additional withdrawal
under this Section 4.5(A) during the remainder of such year.
(B) NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS NO
LONGER ACCEPTED.
(1) This Plan will not accept nondeductible employee contributions
and matching contributions except pursuant to a 401(m)
arrangement described in Article III. Employee contributions
for Plan Years beginning after December 31, 1986, together with
any matching contributions as defined in Section 401(m) of the
Code, will be limited so as to meet the nondiscrimination test
of Section 401(m).
(2) A separate account will be maintained by the Trustee for the
previously made nondeductible employee contributions of each
Participant.
(3) Employee contributions and earnings thereon will be
nonforfeitable at all times. No forfeitures will occur solely
as a result of an Employee's withdrawal of Employee
contributions.
(C) DEDUCTIBLE EMPLOYEE CONTRIBUTIONS NO LONGER ACCEPTED. The Committee
will not accept deductible Employee contributions which are made for
a taxable year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a separate account
which will be nonforfeitable at all times. The account will share
in the gains and losses of the Trust Fund in the same manner as
described in Article VI of the Plan. No part of the deductible
voluntary contribution account will be used to purchase life
insurance. Subject to Section 7.10, Joint and survivor annuity
requirements (if applicable), the Participant may withdraw any part
of the deductible voluntary contribution account by making a written
application to the Committee.
4.6 EXCLUSIVE BENEFIT. Except as provided in the Plan, the Employer has
no beneficial interest in the Trust Fund, and no part of the Trust
Fund shall revert or be repaid to the Employer, directly or
indirectly, or diverted to purposes other than for the exclusive
benefit of Participants and their Beneficiaries, except that (1) any
contribution made by the Employer because of a mistake of fact must
be returned to the Employer within one year of the contribution; (2)
in the event the deduction of a contribution made by the Employer is
disallowed under Section 404 of the Code, such contribution (to the
extent disallowed) must be returned to the Employer within one year
of the disallowance of the deduction; and (3) in the event that the
Commissioner of Internal Revenue determines that the Plan is not
initially qualified under the Internal Revenue 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.
4.7 FORM, PAYMENT AND ALLOCATION OF CONTRIBUTIONS. Contributions made
for a Plan Year shall be made in cash; provided, however, that if
the Plan has an Employer Stock Fund, contributions for the Employer
Stock Fund may be made in Employer Stock. Contributions shall be
delivered to the Trustee at such time or times as shall be agreed
upon between the Committee and the Trustee. The Committee shall
instruct the Trustee as to the allocation of contributions to the
Participant's accounts pursuant to the elections made in the
Adoption Agreement. Employer Stock contributed to the Plan shall be
valued at fair market value at the time of its transfer to the Plan.
4.8 SAFE HARBOR ALLOCATION. Notwithstanding anything to the contrary in
the Adoption Agreement, in the event the requirements of Code
Sections 401(a)(26) or 410(b) are not met during the Plan Year,
Employer Contributions will be allocated to Eligible Employees in
the following order until the applicable requirements are met:
(A) Eligible Employees employed by the Employer on the last day of the
Plan Year and who have completed more than 750 Hours of Service
during the Plan Year;
(B) Eligible Employees employed by the Employer on the last day of the
Plan Year and who have completed more than 500 but less than 750
Hours of Service during the Plan Year;
(C) Eligible Employees employed by the Employer on the last day of the
Plan Year and who have completed 500 or fewer Hours of Service
during the Plan Year;
(D) Eligible Employees who have completed 750 or more Hours of Service
during the Plan Year;
(E) Eligible Employees who have completed more than 500 but less than
750 Hours of Service during the Plan Year.
In no event will Employees who have terminated employment with the
Employer during the Plan Year and who have completed 500 or fewer
Hours of Service during the Plan Year receive any allocation of
Employer Profit Sharing Contributions.
ARTICLE V
PERIOD OF PARTICIPATION
5.1 TERMINATION DATES. A Participant's Termination Date will be the
date on which his employment with the Employer is terminated because
of the first to occur of the following events:
(A) NORMAL RETIREMENT. The Participant retires from the employ of the
Employer upon attaining the Normal Retirement Date selected in the
Adoption Agreement. If the Employer enforces a mandatory retirement
age the Normal Retirement Date is the date the Participant attains
the lesser of that mandatory age or the age specified in the
Adoption Agreement.
(B) EARLY RETIREMENT. The Participant retires from the employ of the
Employer upon attaining the Early Retirement Date selected in the
Adoption Agreement. If a Participant terminates employment prior to
meeting any minimum age specified in the Adoption Agreement but
after having completed the specified minimum service requirement,
the terminated Participant shall be entitled to an early retirement
benefit upon attaining the minimum age required.
(C) LATE RETIREMENT. The Participant retires from the employ of the
Employer after the Normal Retirement Date. A Participant who
continues to work beyond the Normal Retirement Date shall continue
participation in the Plan on the same basis as the other
Participants.
(D) DISABILITY RETIREMENT. The Participant is terminated from the
employ of the Employer because of Disability, as determined by the
Committee, as defined in Section 1.1(I), irrespective of his age.
(E) DEATH. The Participant's death.
(F) OTHER TERMINATION. The Participant terminates employment before
Normal, Early, Late or Disability Retirement.
If a Participant continues in the employ of the Employer but no
longer is a member of a class of Employees to which the Plan has
been and continues to be extended by the Employer, the Participant's
Termination Date nevertheless will be as stated above and his or her
accounts will be held as stated in Section 5.2.
5.2 RESTRICTED PARTICIPATION. When distribution of part or all of the
benefits to which a Participant is entitled under the Plan is
deferred beyond or cannot be made until after the Participant's
Termination Date, or during any period that a Participant continues
in the employ of the Employer but no longer is a member of a class
of Employees to which the Plan has been and continues to be extended
by the Employer, the Participant, or in the event of his or her
death such Participant's Beneficiary, will be considered and treated
as a Participant for all purposes of the Plan, except that no share
of contributions or forfeitures will be credited to his or her
Accounts (a) for any period such Participant continues in the employ
of the Employer but no longer is a member of a class of Employees to
which the Plan has been and continues to be extended by the
Employer, or (b) after the Participant's Termination Date.
ARTICLE VI
ACCOUNTING
6.1 ACCOUNTS ESTABLISHED. There shall be established and maintained for
each Participant such accounts as are applicable, to reflect such
Participant's interest in each Investment Fund.
All income, expenses, gains and losses attributable to each account shall
be separately accounted for. The interest of each Participant in the
Trust Fund at any time shall consist of the amount credited to his or her
accounts as of the last preceding Valuation Date plus credits and minus
debits to such accounts since that date.
6.2 EMPLOYER CONTRIBUTIONS CONSIDERED MADE ON LAST DAY OF PLAN YEAR.
Unless otherwise elected in the Adoption Agreement, for purposes of
this Article VI, the Employer's Contribution under Article IV will
be considered to have been made on the last day of the Plan Year for
which contributed.
6.3 ACCOUNTING STEPS. As of each Valuation Date, the Trustee shall:
(A) Charge to the prior account balances all previously uncharged
payments or distributions made from Participants' accounts since the
last preceding Valuation Date.
(B) Adjust the net credit balances in Participants' accounts upward or
downward, pro rata, so that the total of such net credit balances
will equal the then adjusted net worth of the Trust Fund;
(C) Allocate and credit Employer Contributions and any forfeitures (as
described in Section 7.3) that are to be allocated and credited as
of that date in accordance with Sections 6.5 and 6.6.
Notwithstanding the preceding, the Trustee shall be authorized to
utilize such other method of accounting for the gains or losses
experience by the Trust as may accurately reflect each Participant's
interest therein.
6.4 ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(A) DISCRETIONARY PROFIT SHARING CONTRIBUTIONS.
(1) NONSTANDARDIZED PLANS. If the Plan is a nonstandardized Plan,
Employer Contributions for the Plan Year shall be allocated
among and credited to the Employer Contribution Accounts of
each Participant, including a Participant on leave of absence,
who is entitled to receive a contribution as elected by the
Employer in the Adoption Agreement, pursuant to the formula
elected by the Employer in Item B(8)(b) of the Adoption
Agreement If elected in the Adoption Agreement, Participants
whose employment terminated because of retirement, death or
disability before the end of the Plan Year will share in the
contributions for the year if elected in the Adoption
Agreement.
(2) STANDARDIZED PLANS. Employer Contributions for the Plan Year
shall be allocated among and credited to the Employer
Contribution Account of each Participant who either completes
more than 500 Hours of Service during the Plan Year (or such
lesser number of Hours of Service as may be specified in the
Adoption Agreement) or is employed on the last day of the Plan
Year pursuant to the formula elected by the Employer in Item
B(8)(b) of the Adoption Agreement. If elected in the Adoption
Agreement, Participants whose employment terminated before the
end of the Plan Year because of retirement, death or disability
will share in the contributions for the year if elected in the
Adoption Agreement.
(B) MONEY PURCHASE PENSION PLANS. Employer Contributions will be made
and allocated to the Employer Contribution Accounts of Participants
for the Plan Year as elected in the Adoption Agreement. Sections
6.4(A)(1) and (2) above also apply to the Money Purchase Pension
Plans.
(C) PAIRED PLANS. Notwithstanding anything in the Plan to the contrary,
if the Employer maintains two plans which are Paired Plans, only one
may contain an allocation, as elected in the Adoption Agreement,
utilizing permitted disparity as defined in Code Section 401(l).
6.5 ALLOCATION OF FORFEITURES. As elected in Items B(11) and/or C(6) of
the Adoption Agreement, as of the last day of the Plan Year, any
forfeitures which arose under the Plan during that year shall be
used to: (i) pay the expenses of the Plan; (ii) reduce Employer
Contributions; or, (iii) be allocated to Participants accounts, as
may be selected in the Adoption Agreement. Forfeitures under (iii)
shall be allocated as provided in Section 6.4.
6.6 LIMITATION ON ALLOCATIONS.
(A) DEFINITIONS: For purposes of limiting allocations pursuant to this
section, the following definitions shall apply:
(1) ANNUAL ADDITIONS: The sum of the following amounts credited to
a Participant's account for the Limitation Year:
(a) Employer Contributions;
(b) Employee Contributions;
(c) forfeitures;
(d) 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) of
the Code, maintained by the Employer are treated as
Annual Additions to a defined contribution Plan; and,
(e) allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under Sections
6.6(B)(4) or 6.6(C)(6) in the Limitation Year to reduce
Employer Contributions will be considered Annual Additions
for such Limitation Year.
(2) COMPENSATION: Compensation as described below, interpreted
consistently with the provisions of Code Section 414(s) and the
regulations issued thereunder, as may be selected by the
Employer, and uniformly applied for testing purpose:
(a) W-2 COMPENSATION (WAGES, TIPS, AND OTHER COMPENSATION
REQUIRED TO BE REPORTED UNDER SECTIONS 6041, 6051, AND
6052 OF THE CODE, AS REPORTED ON FORM W-2). Compensation
is defined as wages within the meaning of Section 3401(a)
and all other payments of compensation to an Employee by
the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish
the Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code. Compensation must be
determined without regard to any rules under Section
3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the
services performed (such as the exception for agricultural
labor in Section 3401(a)(2).
(b) WITHHOLDING COMPENSATION (<section>3401(A)). 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)).
(c) SECTION 415 SAFE-HARBOR COMPENSATION. Compensation is
defined as wages, salaries, and fees for professional
services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment
with the Employer maintaining the Plan to the extent that
the amounts are includible in gross income (including, but
not limited to, commissions paid salesman, 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 includible in the
Employee's gross income for the taxable year in
which contributed, or Employer contributions under a
simplified employee pension Plan to the extent such
contributions are deductible by the Employee, or any
distributions from a Plan of deferred compensation;
(ii) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock
(or property) held by an Employee 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 anything in the definitions of
Compensation preceding, at the discretion of the
Employer, uniformly applied, Compensation shall, for
purposes of ADP and ACP testing as provided for in
Article III, include amounts not currently includible
in income pursuant to Code Sections 125, 402(a)(8),
402(h) and 403(b). For allocation purposes, such
amounts shall be includible as elected in the
Adoption Agreement.
For any self-employed Individual, Compensation will
mean Earned Income.
For Limitation Years beginning after December 31,
1991, for purposes of applying the limitations of
Section 6.6, Compensation for a Limitation Year is
the compensation actually paid or made available
during such Limitation Year.
Notwithstanding the preceding sentence, Compensation
for a Participant in a defined contribution Plan who
is permanently and totally disabled (as defined in
Section 22(e)(3) of the Code) is the Compensation
such Participant would have received for the
Limitation Year if the Participant had been paid at
the rate of Compensation paid immediately before
becoming permanently and totally disabled; such
imputed compensation for the disabled Participant may
be taken into account only if the Participant is not
a Highly Compensated Employee, (as defined in Section
414(q) of the Code), and contributions made on behalf
of such Participant are nonforfeitable when made.
(3) DEFINED BENEFIT FRACTION: A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under
all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for
the Limitation Year under Sections 415(b) and (d) of the Code
or 140 percent of the Participant's 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 per cent 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.
(4) DEFINED CONTRIBUTION DOLLAR LIMITATION: For purposes of
calculating the Maximum Permissible Amount: $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in effect for the
Limitation Year.
(5) DEFINED CONTRIBUTION FRACTION: A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's
accounts 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, individual medical accounts, as
defined in Section 415(l)(2) of the Code, and simplified
employee pension, 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 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.
(6) EMPLOYER: For purposes of this Section 6.6: the Employer that
adopts this Plan, and all members of a controlled group of
corporations (as defined in section 414(b) of the Code as
modified by Section 415(h), all commonly controlled trades or
businesses (as defined in Section 414(c) as modified by Section
415(h)) or affiliated service groups (as defined in Section
414(m)) of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
(7) EXCESS AMOUNT: The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(8) HIGHEST AVERAGE COMPENSATION: For purposes of calculating the
Defined Benefit Fraction, the average compensation for the
three (3) consecutive Years of Service with the Employer that
produces the highest average. A Year of Service with the
Employer is the twelve-consecutive month period defined in Item
B(4)(j) of the Adoption Agreement.
(9) LIMITATION YEAR: A calendar year or any other 12 consecutive
month period elected in Item B(4)(d) 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.
(10) MASTER OR PROTOTYPE PLAN: A Plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue
Service.
(11) MAXIMUM PERMISSIBLE AMOUNT: The maximum Annual Addition that
may be contributed or allocated to a Participant's 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 Compensation for the
Limitation Year.
The Compensation limitation referred to in (b) shall not
apply to any contribution for medical benefits (within the
meaning of Section 401(h) or Section 419A(f)(2) of the
Code) which is otherwise treated as an Annual Addition
under Section 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible
Amount will not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
12
(12) PROJECTED ANNUAL BENEFIT: For purposes of calculating the
Defined Benefit Fraction: 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: (1) the Participant will continue employment until
Normal Retirement Date under the Plan, (or current age, if
later), and (2) 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.
(B) ANNUAL ADDITION LIMITATIONS:
(1) If the Participant does not participate in, and has never
participated in another qualified Plan or welfare benefit fund,
as defined in Section 419(e) of the Code maintained by the
Employer, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the Employer, or a
simplified employee pension, as defined in Section 408(K) of
the Code, maintained by the Employer which provides an Annual
Addition as defined in Section 6.6(E), 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 Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the
Limitation Year, uniformly determined for all Participants
similarly situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(4) If pursuant to Section 6.6(B)(3) or as result of the allocation
of forfeitures, there is an Excess Amount, the excess will be
disposed of as follows:
(a) 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 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 6.6(A), 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 Participants' accounts before any Employer
Contributions or any Employee contributions may be made to
the Plan for that Limitation Year. Excess Amounts may not
be distributed to Participants or former Participants.
(C) MULTIPLE PLAN LIMITATION.
(1) This Section 6.6(C) 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(l)(2) of the Code,
maintained by the Employer, or a simplified employee pension
maintained by the employer which provides an Annual Addition as
defined in Section 6.6(A) during any Limitation Year. The
Annual Additions which may be credited to a Participant's
accounts under this Plan for any such Limitation Year shall not
exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's accounts under the other
qualified master and prototype defined contribution plans,
welfare benefit funds, individual medical accounts, and
simplified employee pensions for the same Limitation Year. If
the Annual Additions with respect to the Participant under
other qualified master and prototype defined contribution plans
and welfare benefit funds, individual medical accounts, and
simplified employee pension, maintained by the Employer are
less than the Maximum Permissible Amount and the contributions
that would otherwise be contributed or allocated to the
Participant's Employer Contribution Account under this Plan
would cause the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to
the Participant under such other qualified master and prototype
defined contribution plans, welfare benefit funds individual
medical accounts, and simplified employee pension, in the
aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the
Participant's Employer Contribution Account under this Plan for
the Limitation Year.
(2) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in
Section 6.6(B)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(4) If, pursuant to Section 6.6(C)(3) or as a result of the
allocation of forfeitures, a Participant's Annual Additions
under this Plan and all other plans result in an Excess Amount
for a Limitation Year, the Excess Amount shall be deemed to
consist of the amounts last allocated, except that Annual
Additions attributable to a simplified employee pension will be
deemed to have been allocated first, followed by annual
additions to a welfare benefit fund or individual medical
account regardless of the actual allocation 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 other qualified Master or Prototype
defined contribution plans.
(6) Any Excess Amount attributed to this Plan should be disposed of
as provided in Section 6.6(C)(4).
(D) 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 accounts under this Plan for any Limitation Year will
be limited in accordance with Section 6.6(C) (1-6) as though the
Plan were a Master or Prototype Plan unless the Employer provides
other limitations in Item B(12) of the Adoption Agreement.
(E) 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 accounts under this Plan for any Limitation Year will
be limited in accordance with Item B(12) of the Adoption Agreement.
6.7 REPORTS TO PARTICIPANTS. The Committee shall cause reports to be
made at least annually to each Participant and to the Beneficiary of
each deceased Participant as to the value of each such Participant's
accounts, as of an appropriate preceding Valuation Date.
ARTICLE VII
PAYMENT OF ACCOUNT BALANCES
7.1 TERMINATION OF EMPLOYMENT UPON DISABILITY OR DEATH. A Participant
shall become fully vested in his or her Employer Contribution
Accounts if the Participant becomes Disabled under Sections 5.1(A),
(B), (C) or (D) or dies while still employed. The accounts of a
Participant who retires becomes Disabled or dies will become
distributable to the Participant or to his or her Spouse or
Beneficiary. If distributed immediately, subject to Section 7.4,
the distributable balance, after adjustments, will be determined as
soon as practicable following the receipt by the Trustee of written
notice of the Participant's termination from the Committee.
7.2 TIMING FOR DETERMINING ACCOUNT BALANCE UPON TERMINATION OF
EMPLOYMENT PRIOR TO RETIREMENT, DISABILITY OR DEATH. If a
Participant terminates employment with the Employer before
retirement under Sections 5.1(F) the vested portion of the
Participant's Employer Contribution Account and/or Matching Account
shall be determined and such Participant's accounts will be
distributable to the Participant. If distributed immediately,
subject to Section 7.4, the distributable balance, after
adjustments, will be determined as soon as practicable following
receipt by the Trustee of written notice of the Participant's
termination from the Committee. The account balance shall be
distributable at such time as elected in the Adoption Agreement, but
in no event shall an account balance not be distributable later than
the Participant's Normal Retirement Date.
7.3 VESTING ON DISTRIBUTION BEFORE BREAK-IN-SERVICE; CASH-OUTS.
(A) If an Employee terminates service, and the value of the Employee's
vested account balance derived from Employer and Employee
contributions is not greater than $3,500, the Employee will receive
a distribution of the value of the entire vested portion of such
account balances, and Rollover Account balance, if any. The
nonvested portion will be treated as a forfeiture. For purposes of
this Section 7.3, if the value of an Employee's vested account
balance is zero, the Employee shall be deemed to have received a
distribution of such vested account balance. A Participant's vested
account balance shall not include accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B) of the Code
for Plan Years beginning prior to January 1, 1989.
(B) If an Employee terminates service, and elects, in accordance with
the requirements of Section 7.4, to receive the value of the
Employee's vested account balance, the nonvested portion will be
treated as a forfeiture. If the Employee elects to have distributed
less than the entire vested portion of the balance in the Employer
Contribution Account, the part of the nonvested portion that will be
treated as a forfeiture is the total nonvested portion multiplied by
a fraction, the numerator of which is the amount of the distribution
attributable to Employer Contributions and the denominator of which
is the total value of the vested balance in the Employer
Contribution Account.
(C) If an Employee receives a distribution pursuant to this Section 7.3
and the Employee resumes employment covered under this Plan, the
Employee's Employer Contribution Account and/or Matching Account
balance will be restored to the amount on the date of distribution
if the Employee repays to the Plan the full amount of the
distribution attributable to Employer contributions before the
earlier of 5 years after the first date on which the Participant is
subsequently reemployed by the Employer, or the date the Participant
incurs five (5) consecutive one (1) year Breaks in Service following
the date of the distribution. If an Employee is deemed to receive a
distribution pursuant to this Section 7.3, and the Employee resumes
employment covered under this Plan before the date the Participant
incurs five (5) consecutive one (1) year Breaks in Service, upon the
reemployment of such Employee, the Employer Contribution Account
balance and/or Matching Account balance of the Employee will be
restored to the amount on the date of such deemed distribution.
7.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS.
(A) If the value of a Participant's vested account balance 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 annuity starting date is the first day of the
first period for which an amount is paid as an annuity or any other
form. The Committee 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 than 90 days prior to the annuity starting date. However,
distribution may commence less than 30 days after the notice
described in the preceding sentence is given, provided the
distribution is one to which sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, 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 the participant,
after receiving the notice, affirmatively elects a distribution.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the
Participant pursuant to 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), and if the Employer or any entity within the
same controlled group as the Employer does not maintain another
defined contribution Plan (other than an employee stock ownership
Plan as defined in Section 4975(e)(7) of the Code), the
Participant's account balance will, without the Participant's
consent, be distributed to the Participant. However, if any entity
within the same controlled group as the Employer maintains another
defined contribution Plan (other than an employee stock ownership
Plan as defined in Section 4975(e)(7) of the Code) then the
Participant's account balance will be transferred, without the
Participant's consent, to the other Plan if the Participant does not
consent to an immediate distribution.
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 the Normal Retirement Date or
age 62.
(B) 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
Participant's vested account balance shall not include amounts
attributable to accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code.
7.5 COMMENCEMENT OF BENEFITS. Unless the Participant elects otherwise,
payments will be made or commence to a Participant by the Trustee,
as directed by the Committee, no later than the sixtieth (60th) day
after the latest of the close of the Plan Year in which (1) the
Participant attains age sixty-five (65) (or Normal Retirement Date;
if earlier); (2) occurs the tenth (10th) anniversary of the year in
which the Participant commenced participation in the Plan; or (3)
the Participant terminates his or her service with the Employer.
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 7.4 of the Plan, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this section.
7.6 TIMING AND MODES OF DISTRIBUTION.
(A) GENERAL RULES.
(1) Subject to Section 7.10, Joint and Survivor Annuity
Requirements, the requirements of this Section 7.6 shall apply
to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this Section 7.6
apply to calendar years beginning after December 31, 1984.
(2) All distributions required under this Section 7.6 shall be
determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the regulations.
(3) The normal form of payment for a profit-sharing Plan satisfying
the requirements of Section 7.10(F) hereof shall be a single
sum with no option for annuity payments; provided, however,
that distributions may be made:
(a) In installment payments, if the Employer has elected
installment payments in Item B(10)(a) of the Adoption
Agreement;
(b) Through such other form of benefit as may be identified in
Item B(10)(a) of the Adoption Agreement, which shall be
available to Participants as an optional form of benefit
payment, and shall preclude Employer discretion;
(c) Through such other form of benefits as may be required to
be protected as Section 411(d)(6) protected benefits.
(B) REQUIRED BEGINNING DATE. The entire interest of a Participant must
be distributed or begin to be distributed no later than the
Participant's required beginning date.
(C) LIMITS ON DISTRIBUTION PERIODS. As of the first distribution
calendar year, distributions, if not made in a single-sum, may only
be made over one of the following periods (or a combination
thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated Beneficiary,
(3) a period certain not extending beyond the life expectancy of
the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(D) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the
Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or
after the required beginning date:
(1) INDIVIDUAL ACCOUNT.
(a) If a Participant's benefit is to be distributed over:
(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 value of the
amount available for distribution is paid within the life
expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first distribution calendar year
shall not be less than the quotient obtained by dividing
the Participant's benefit by the lesser of (1) the
applicable life expectancy or (2) if the Participant's
Spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of
Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall be
distributed using the applicable life expectancy in
Section (1)(a) above as the relevant divisor without
regard to 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 other calendar years, including
the minimum distribution for the distribution calendar
year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that
distribution calendar year.
(2) OTHER FORMS. If the Participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code and the
regulations thereunder.
(E) DEATH DISTRIBUTION PROVISIONS
(1) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies
after distribution of his or her interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(2) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies
before distribution of his or her interest begins, distribution
of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance
with (a) or (b) below:
(a) if any portion of the Participant's interest is payable to
a designated Beneficiary, distributions may be made over
the life or over a period certain not greater than the
life expectancy of the designated Beneficiary commencing
on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(b) if the designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required to
begin in accordance with (a) above shall not be earlier
than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the
Participant died and (2) 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 7.6(E)(2) by the time of his or her death,
the Participant's designated Beneficiary must elect the
method of distribution no later than the earlier of (1)
December 31 of the calendar year in which distributions
would be required to begin under this section, or (2)
December 31 of the calendar year in 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) SURVIVING SPOUSE'S DEATH. For purposes of Section (E)(2)
above, if the surviving Spouse dies after the Participant, but
before payments to such Spouse begin, the provisions of Section
(E)(2) with the exception of paragraph (b) therein, shall be
applied as if the surviving Spouse were the Participant.
(4) MINOR BENEFICIARY. For purposes of this Section (E), any
amount paid to a child of the Participant will be treated as if
it had been paid to the surviving Spouse if the amount becomes
payable to the surviving Spouse when the child reaches the age
of majority.
(5) DISTRIBUTION CONSIDERED TO BEGIN ON REQUIRED BEGINNING DATE.
For the purposes of this Section (E), distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if Section (E)(3)
above is applicable, the date distribution is required to begin
to the surviving Spouse pursuant to Section (E)(2) above). If
distribution in the form of an annuity irrevocably commences to
the Participant before the required beginning date, the date
distribution is considered to begin is the date distribution
actually commences.
(F) DEFINITIONS.
(1) APPLICABLE LIFE EXPECTANCY: The life expectancy (or joint and
last survivor expectancy) calculated using the attained age of
the Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
(2) DESIGNATED BENEFICIARY: The individual who is designated as
the Beneficiary under the Plan in accordance with Section
401(a)(9) and the proposed regulations thereunder.
(3) DISTRIBUTION CALENDAR YEAR: A calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first distribution calendar
year is the calendar year immediately preceding the calendar
year which contains the Participant's required beginning date.
For distributions beginning after the Participant's death, the
first distribution calendar year is the calendar year in which
distributions are required to begin pursuant to Section (E)
above.
(4) LIFE EXPECTANCY: Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples
in Tables V and VI of Section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or Spouse, in the
case of distributions described in Section (E)(2)(b) above) by
the time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or Spouse) and shall apply
to all subsequent years. The life expectancy of a non-spouse
Beneficiary may not be recalculated.
(5) PARTICIPANT'S BENEFIT:
(a) The account balance as of the last valuation date in the
calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to
the account balance as of dates in the valuation calendar
year after the valuation date and decreased by
distributions made in the valuation calendar year after
the valuation date.
(b) Exception for second distribution calendar year. For
purposes of paragraph (a) above, if any portion of the
minimum distribution for the first distribution calendar
year is made in the second distribution calendar year on
or before the required beginning date, the amount of the
minimum distribution made in the second distribution
calendar year shall be treated as if it had been made in
the immediately preceding distribution calendar year.
(6) REQUIRED BEGINNING DATE:
(a) GENERAL RULE. The required beginning date of a
Participant is the first day of April of the calendar
year following the calendar year in which the Participant
attains age 70-1/2.
(b) TRANSITIONAL RULES. The required beginning date of a
Participant who attains age 70-1/2 before January 1,
1988, shall be determined in accordance with (1) or (2)
below:
(i) Non-5-percent owners. The required beginning date of
a Participant who is not a 5-percent owner is the
first day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70-1/2 occurs.
(ii) 5-percent owners. The required beginning date of a
Participant who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day
of April following the later of:
(a) the calendar year in which the participant
attains age 70-1/2, or
(b) the earlier of the calendar year with or within
which ends the Plan Year in which the
Participant becomes a 5-percent owner, or the
calendar year in which the Participant
retires.
The required beginning date of a Participant who
is not a 5-percent owner who attains age 70-1/2
during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(c) 5-PERCENT OWNER. A Participant is treated as a
5-percent owner for purposes of this Section if
such Participant is a 5-percent owner as defined
in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard
to whether the Plan is top-heavy) at any time
during the Plan Year ending with or within the
calendar year in which such owner attains age
66-1/2 or any subsequent Plan Year.
(d) 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.
(G) TRANSITIONAL RULE.
(1) DISTRIBUTIONS TO 5-PERCENT OWNERS. Notwithstanding the other
requirements of this Section 7.6 and subject to the
requirements of Section 7.10, Joint and Survivor Annuity
Requirements, distributions on behalf of any Employee,
including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of when such
distribution commences):
(a) The distribution by the plan is one which would not have
disqualified such plan under Section 401(a)(9) of the
Internal Revenue Code as in effect prior to amendment by
the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in
the plan is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(c) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January
1, 1984.
(d) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(e) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will
be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee
listed in order of priority.
(2) DISTRIBUTION ON DEATH. 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.
(3) DESIGNATION OF DISTRIBUTION METHOD. For any distribution which
commences before January 1, 1984, but continues after December
31, 1983, the Employee, or the Beneficiary, to whom such
distribution is being made, will be presumed to have designated
the method of distribution under which the distribution is
being made if the method of distribution was specified in
writing and the distribution satisfies the requirements in
subsections (G)(1)(a) and (e).
(4) REVOCATION OF DESIGNATIONS. If a designation is revoked any
subsequent distribution must satisfy the requirements of
Section 401(a)(9) of the Code and the regulations thereunder.
If a designation is revoked subsequent to the date
distributions are required to begin, the plan must distribute
by the end of the calendar year following the calendar year in
which the revocation occurs the total amount not yet
distributed which would have been required to have been
distributed to satisfy Section 401(a)(9) of the Code and the
regulations thereunder, but for the Section 242(b)(2) election.
For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental
benefit requirements in Section 1.401(a)(9)-2 of the Income Tax
Regulations. Any changes in the designation will be considered
to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named
in the designation) under the designation will not be
considered to be a revocation of the designation, so long as
such substitution or addition does not alter the period over
which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is transferred
or rolled over from one Plan to another Plan, the rules in Q&A
J-2 and Q&A J-3 shall apply.
7.7 DESIGNATION OF BENEFICIARY.
(A) DEFAULT BENEFICIARY. In the case of a Participant who is married,
the Participant's Beneficiary shall be the Participant's Spouse, but
if the Participant's Spouse consents as provided in this Section
7.7, or if the Participant is not married, then the Participant
shall have the right to designate that after such Participant's
death such Participant's accounts shall be distributed to a
designated Beneficiary or Beneficiaries.
(B) SPOUSAL CONSENT. Any consent of a Spouse given pursuant to this
Section must be in writing and given prior to the death of the
Participant. Such consent must acknowledge the effect of the
Participant's Beneficiary designation, the identity of any
non-Spouse Beneficiary, including any class of Beneficiaries and
contingent Beneficiaries, and the consent must be witnessed by a
Plan representative or a Notary Public. The Participant may not
subsequently change the designation of his or her Beneficiary unless
his Spouse consents to the new designation in accordance with the
requirements set forth in the preceding sentence. The consent of a
Participant's Spouse shall not be required if the Participant
establishes to the satisfaction of the Committee that consent may
not be obtained because there is no Spouse, the Spouse cannot be
located or because of such other circumstances as the Secretary of
the Treasury may prescribe by regulations. A Spouse's consent shall
be irrevocable. Any consent by a Spouse, or establishment that the
consent of the Spouse may not be obtained, shall be effective only
with respect to that Spouse.
(C) CHANGING BENEFICIARIES. Subject to Subparagraphs (A) and (B) above,
the Participant's designation of Beneficiary may be made, changed or
revoked by the Participant at any time by a written instrument, in
form satisfactory to the Committee, and shall become effective only
when executed by such Participant (and, if applicable, consented to
by the Participant's Spouse as set forth in Section 7.7(B)) and
filed with the Committee prior to such Participant's death. If all
of the Beneficiaries named in such designation shall have
predeceased such Participant, or die prior to complete distribution
of the Participant's accounts, or if such Participant fails to
execute and file a designation and is not survived by a Spouse the
payment of such Participant's accounts shall be made pursuant to the
Plan and to such Beneficiaries as required by state law. Neither
the Employer, the Committee, nor the Trustee, shall have any duty to
see that such Participant, any Spouse or any Beneficiary executes
and files any such designation with the Committee.
7.8 OPTIONAL FORMS OF BENEFIT. The optional forms of benefit provided
by this Plan are not subject to Employer discretion and are made
available to all Participants on a nondiscriminatory basis. The
optional forms of benefit are described in Articles III and VII, as
may be selected in the Adoption Agreement. If selected in Item
B(13) of the Adoption Agreement, the Employer may attach to the Plan
a list of the Section "411(d)(6) protected benefits" that must be
preserved from a individually designed Plan or other prototype Plan
which this Plan amends.
7.9 DISTRIBUTION UPON DISABILITY. In the event of the Disability of the
Participant, the Trustee, following receipt of notification of such
Disability from the Committee, shall make distributions from the
Account.
7.10 JOINT AND SURVIVOR ANNUITY REQUIREMENTS.
(A) APPLICATION. The provisions of this Section 7.10 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 7.10(G).
(B) QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the
ninety-day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance will be paid in the form of a
Qualified Joint and Survivor Annuity and an unmarried Participant's
Vested Account Balance will be paid in the form of a life annuity.
The Participant may elect to have such annuity distributed upon
attainment of the Earliest Retirement Age under the Plan.
(C) QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. Unless an optional form
of benefit has been selected within the election period pursuant to
a Qualified Election, if a Participant dies before the Annuity
Starting Date then the Participant's Vested Account Balance shall be
applied toward the purchase of an annuity for the life of the
surviving Spouse. The surviving Spouse may elect to have such
annuity distributed within a reasonable period after the
Participant's death.
(D) DEFINITIONS.
(1) ELECTION PERIOD: The period which begins on the first day of
the Plan Year in which the Participant attains age 35 and ends
on the date of the Participant's death. If a Participant
separates from service prior to the first day of the Plan Year
in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period shall
begin on the date of separation.
Pre-age 35 waiver: 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 Qualified Preretirement
Survivor Annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of
the Qualified Preretirement Survivor Annuity in such terms as
are comparable to the explanation required under Section
7.10(E). Qualified Preretirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full
requirements of this Section 7.10.
(2) EARLIEST RETIREMENT AGE: The earliest date on which, under the
Plan, the Participant could elect to receive retirement
benefits.
(3) QUALIFIED ELECTION: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(a) the Participant's Spouse consents in writing to the
election; (b) the election designates a specific Beneficiary
including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal consent
(or the Spouse expressly permits designations by the
Participant without any further spousal consent); (c) the
Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a Plan representative
or Notary Public. Additionally, a Participant's waiver of the
Qualified Joint and Survivor Annuity shall not be effective
unless the election designates a form of benefit payment which
may not be changed without spousal consent (or the spouse
expressly permits designations by the Participant without any
further spousal consent). If it is established to the
satisfaction of a Plan representative that there is no Spouse
or that the Spouse cannot be located, a waiver will be deemed a
Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable,
and that the Spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver may be
made by a Participant without the consent of the Spouse at any
time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under
this provision shall be valid unless the Participant has
received notice as provided in Paragraph (E) below.
(4) QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate annuity for
the life of the Participant with a survivor annuity for the
life of the Spouse which is not less than 50 percent and not
more than 100 percent of the amount of the annuity which is
payable during the joint lives of the Participant and the
Spouse and which is the amount of benefit which can be
purchased with the Participant's vested account balance. The
percentage of the survivor annuity under the Plan shall be 50%.
(5) SPOUSE (SURVIVING SPOUSE): the Spouse or surviving Spouse of
the Participant, provided that a former Spouse will be treated
as the Spouse or surviving Spouse and the current Spouse will
not be treated as the Spouse or surviving Spouse to the extent
provided under a qualified domestic relations order as
described in Section 414(p) of the Code.
(6) ANNUITY STARTING DATE: The first day of the first period for
which an amount is payable as an annuity or any other form.
(7) VESTED ACCOUNT BALANCE: The aggregate value of the
Participant's vested account balances derived from Employer and
Employee contributions (including rollovers), whether vested
before or upon death. The provisions of this Section 7.10
shall apply to a Participant who is vested in amounts
attributable to Employer contributions, Employee contributions
(or both) at the time of death or distribution.
(E) NOTICE REQUIREMENTS.
(1) QUALIFIED JOINT AND SURVIVOR ANNUITY. In the case of a
Qualified Joint and Survivor Annuity as described in Section
7.10(B), the Committee 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: (i) the terms and
conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of benefit;
(iii) the rights of a Participant's Spouse; and (iv) the right
to make, and the effect of, a revocation of a previous election
to waive the Qualified Joint and Survivor Annuity.
(2) QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. In the case of a
Qualified Pre-Retirement Survivor Annuity as described in
Section 7.10(C), the Committee shall provide each Participant
within the applicable period for such Participant a written
explanation of the Qualified Pre-Retirement Survivor Annuity in
such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section
7.10(E) applicable to a Qualified Joint and Survivor Annuity.
The applicable period for a Participant is whichever of the
following periods ends last: (i) the period beginning with the
first day of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-two (32) and ending with the
close of the Plan Year in which the Participant attains age
thirty-five (35); (ii) a reasonable period ending after the
individual becomes a Participant; (iii) a reasonable period
ending after Section 7.10(E)(3) ceases to apply to the
Participant; and (iv) a reasonable period ending after Section
7.10 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
thirty-five (35).
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii),
(iii) and (iv) is the end of the two-year period beginning one
year prior to the date the applicable event occurs, and ending
one year after that date. In the case of a Participant who
separates from service before the Plan Year in which age 35 is
attained, notice shall be provided within the two-year period
beginning one-year prior to separation and ending one year
after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
participant shall be redetermined.
(3) SUBSIDIZED ANNUITY DISTRIBUTIONS. Notwithstanding the other
requirements of this Section 7.10(E), the respective notices
prescribed by this Section 7.10(E) need not be given to a
Participant if (1) the Plan "fully subsidizes" the cost of a
Qualified Joint and Survivor Annuity or Qualified
Pre-Retirement Survivor Annuity, and (2) the Plan does not
allow the Participant to waive the Qualified Joint and Survivor
Annuity or Qualified Preretirement Survivor Annuity and does
not allow a married Participant to designate a non-Spouse
Beneficiary. For purposes of this Section 7.10(E), a Plan
fully subsidizes the cost of a benefit if no increase in cost,
or decrease in benefits to the Participant may result from the
Participant's failure to elect another benefit.
(F) SAFE HARBOR RULES.
(1) APPLICATION. This Section shall apply to a Participant in a
profit-sharing Plan, and to any distribution, made on or after
the first day of the first Plan Year beginning after December
31, 1988, from or under a separate account attributable solely
to accumulated deductible employee contributions, as defined in
Section 72(o)(5)(B) of the Code, and maintained on behalf of a
Participant in a money purchase pension Plan, (including a
target benefit Plan) if the following conditions are satisfied:
(1) the Participant does not or cannot elect payments in the
form of a life annuity, and (2) on the death of the
Participant, the Participant's vested account balance will be
paid to the Participant's surviving Spouse, but if there is no
surviving Spouse or, if the surviving Spouse has already
consented in a manner conforming to a Qualified Election, then
to the Participant's designated Beneficiary. The surviving
Spouse may elect to have distribution of the vested account
balance commence within the 90-day period following the date of
the Participant's death. The account balance shall be adjusted
for gains or losses occurring after the Participant's death in
accordance with the provisions of the Plan governing the
adjustment of account balances for other types of
distributions. This Section 7.10(F) shall not be operative
with respect to a Participant in a profit-sharing Plan if the
Plan is a direct or indirect transferee of a defined benefit
Plan, money purchase Plan, a target benefit Plan, stock bonus,
or profit-sharing Plan which is subject to the survivor annuity
requirements of Section 401(a)(11) and Section 417 of the Code.
If this Section 7.10(F) is operative, then the provisions of
this Section 7.10, other than in Section 7.10(G), shall be
inoperative.
(2) WAIVER. The Participant may waive the spousal death benefit
described in this section at any time provided that no such
waiver shall be effective unless it satisfies the conditions of
Section 7.10(D)(3) (other than the notification requirement
referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
(3) VESTED ACCOUNT BALANCE. For purposes of this Section 7.10(F),
vested account balance shall mean, in the case of a money
purchase pension Plan or a target benefit Plan, the
Participant's separate account balance attributable solely to
accumulated deductible employee contributions within the
meaning of Section 72(o)(5) (B) of the Code. In the case of a
profit-sharing Plan, vested account balance shall have the same
meaning as provided in Section 7.10(D)(7).
(G) TRANSITIONAL RULES.
(1) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous sections of this Section 7.10 must be given the
opportunity to elect to have the prior sections of this Section
7.10 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 ten (10) years of vesting service when
he or she separated from service.
(2) Any living Participant not receiving benefits on August 23,
1984 who was credited with at least one Hour of Service under
this Plan or 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 7.10(G)(4).
(3) The respective opportunities to elect (as described in Section
7.10(G)(1) and (2) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984
and ending on the date benefits would otherwise commence to
these Participants.
(4) Any Participant who has elected pursuant to Section 7.10(G)(2)
and any Participant who does not elect under Section 7.10(G)(1)
or who meets the requirements of Section 7.10(G)(1) except that
such Participant does not have at least ten (10) years of
vesting service when he or she separates from service, shall
have his or her benefits distributed in accordance with all of
the following requirements of benefits would have been payable
in the form of a life annuity:
a) Automatic joint and survivor annuity. If benefits in the
form of a life annuity become payable to a married
participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Date; or
(ii) dies on or after Normal Retirement Date 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 Date (or the Qualified Early Retirement
Age) and after satisfying the eligibility
requirements for the payment of benefits under the
Plan and thereafter dies before beginning to receive
such benefits;
then such benefits will be received under this Plan
in the form of a Qualified Joint and Survivor
Annuity, unless the Participant has elected
otherwise during the election period. The election
period must begin at least 6 months before the
Participant attains Qualified Early Retirement Age
and end not more than 90 days before the
commencement of benefits. Any election hereunder
will be in writing and may be changed by the
Participant at any time.
b) Election of early survivor annuity. A Participant who is
employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, during the
election period, to have a survivor annuity payable on
death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the
payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her
death. Any election under this provision will be in
writing and may be changed by the Participant at any
time. The election period begins on the later of (1) the
90th day before the Participant attains the Qualified
Early Retirement Age, or (2) the date on which
participation begins, and ends on the date the
Participant terminates employment.
c) For purposes of this Section 7.10(G)(4):
(i) Qualified Early Retirement Age is the latest of: (i)
the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
(ii) the first day of the 120th month beginning
before the Participant reaches Normal Retirement
Date, or (iii) the date the Participant begins
participation.
(ii) Qualified Joint and Survivor Annuity is an annuity
for the life of the participant with a survivor
annuity for the life of the Spouse as described in
Section 7.10(D)(4).
(H) NONTRANSFERABILITY. Any annuity distributed from the Plan must be
nontransferable.
(I) INCORPORATION OF TERMS. 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.
7.11 DISTRIBUTIONS TO QUALIFIED PLANS. In the event a former Employee
whose accounts have not been fully distributed becomes an active
participant in a Plan qualified under Section 401(a) of the Code,
the Committee may direct the Trustee to transfer the amount in such
Participant's account(s) to any such Plan provided the Plan to
receive such transfers authorizes accepting the transfer, provides
that assets transferred shall be held in a separate account and
requires that the assets transferred shall not be subject to any
forfeiture provisions.
7.12 PROFIT SHARING PLANS AND 401(K) PROFIT SHARING PLANS ONLY -
WITHDRAWAL OF EMPLOYER CONTRIBUTIONS. Subject to the provisions of
the Plan, in accordance with rules for giving notice as determined
by the Committee, and as elected in the Adoption Agreement, a
Participant may withdraw as of the first Accounting Date subsequent
to receipt by the Committee of such notice:
(A) An amount equal to not more than 100% of the Participant's Employer
Contribution Account determined as of such Accounting Date. No
Participant who has made any withdrawal of Employer Contributions in
the twelve (12) months preceding the giving of such notice may make
a withdrawal under this Section.
(B) Notwithstanding anything to the contrary in this Section 7.12, any
withdrawal made pursuant to Section 7.12(A) shall be for a minimum
whole dollar amount not less than Five Hundred Dollars ($500.00);
except that if the amount available for withdrawal is less than Five
Hundred Dollars ($500.00) then the minimum amount of the withdrawal
shall be the amount available.
(C) No forfeitures will occur solely as a result of an Employee's
withdrawal of Employer Contributions.
(D) Notwithstanding anything to the contrary in this Section 7.12, a
Participant may not make a withdrawal, pursuant to this Section of
any portion of the Participant's vested interest which has been
assigned to secure repayment of a loan in accordance with Section
10.10, below, until such time as the Committee shall have released
said portion so assigned.
7.13. PROHIBITION AGAINST ALIENATION.
(A) Except as provided in Sections 401(a)(13) and 414(p) of the Code, no
benefit or interest available under this Plan will be subject to
assignment or alienation, either voluntarily or involuntarily.
(B) 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 the
Committee determines that such order is a qualified domestic
relations order, as defined in Section 414(p) of the Code, or any
domestic relations order entered before January 1, 1985.
(C) All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to
any "alternate payee" under a "qualified domestic relations order."
Furthermore, an immediate distribution to an "alternate payee" shall
be permitted if such distribution is authorized by a "qualified
domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan, provided that
in no event will any such distribution accelerate the repayment of
any loan made to the affected Participant under the Plan, unless
such Participant consents thereto in writing. For purposes of this
Section 7.13, "alternate payee," "qualified domestic relations
order" and "earliest retirement age" shall have the meaning set
forth under Code Section 414(p), unless a Qualified Distribution
Date has been selected in the Adoption Agreement, in which case the
earliest retirement age shall be the date on which the domestic
relations order is determined to be qualified.
7.14 MISSING PARTICIPANT OR BENEFICIARY. Each Participant and/or each
Beneficiary must file with the Committee from time to time in
writing his or her post office address and each change of post
office address. Any communication, statement or notice addressed to
a Participant and/or Beneficiary at such last post office address
filed with the Committee or if no address is filed with the
Committee then at the last post office address as shown on the
Employer's records, will be binding on the Participant and/or
Beneficiary for all purposes of the Plan. Neither the Committee nor
the Trustee shall be required to search for or locate a Participant
or Beneficiary.
Any other provision of the Plan to the contrary notwithstanding, if any
application for a benefit has not been filed by a Participant otherwise
eligible therefor within ninety (90) days after the Plan Year in which
occurred his or her termination date, the Committee shall mail to such
Participant and/or Beneficiary at his or her last known address an
application for benefit and a reminder that he or she is eligible for
such benefit. If such application is not filed with the Committee in
accordance with the provisions of the Plan within ninety (90) days after
it is so mailed to such Participant or his or her termination date,
whichever is later, the benefit shall be forfeited and shall be used to
reduce future Employer Contributions as though the Participant were not
vested in his or her accounts as of the end of said ninety (90) day
period. Upon the subsequent filing of an application therefor by the
Participant and/or his Beneficiary, such accounts shall be immediately
reinstated pursuant to this provision as though the Participant were 100%
vested in his or her accounts in an amount equal to the cash value of the
accounts on the date forfeited. To the extent forfeited amounts are not
available, the Employer shall contribute the amount required to reinstate
the Participant's account balance.
7.15 LIMITATION ON CERTAIN DISTRIBUTIONS. Notwithstanding anything
contained herein to the contrary, the Trustee may, in its
discretion, delay satisfying requests for distributions for up to
one year where distributions require amounts to be withdrawn from
the Guaranteed Investment Contract Fund; provided, however, that in
no event shall the Trustee delay distributions to a Participant
beyond the legally required time for distribution as set forth in
Section 7.5.
7.16 FORM OF DISTRIBUTIONS AND WITHDRAWALS. The Trustee shall make all
distributions and withdrawals under the Plan, including Hardship
withdrawals, other withdrawals while the Participant is still
employed, and distributions upon retirement, disability, death and
separation from service, pro rata, from all accounts and Investment
Funds, as follows:
(A) In a Plan with no Employer Stock Fund, all withdrawals and
distributions under the Plan shall be made in cash.
(B) In a Plan with an Employer Stock Fund:
(1) Withdrawals and distributions under the Plan from the other
Investment Fund(s) shall be made in cash.
(2) Withdrawals and distributions under the Plan from the Employer
Stock Fund may be made in cash or in full shares of Employer
Stock, with any fractional share paid in cash, as elected by
the Participant. For the cash portion of any distribution or
withdrawal, the Participant will receive the cash proceeds from
the sale of shares of Employer Stock as of the sale date.
ARTICLE VIII
DIRECT ROLLOVERS
8.1 GENERAL. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Article, a distributee may elect, at the time and in the manner
prescribed by the Plan administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible
retirement Plan specified by the distributee in a direct rollover.
8.2 DEFINITIONS.
(A) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually ) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated Beneficiary, or for a
specified period of ten years or more; any distribution to the
extent such distribution is required under section 401(a)(9) of the
Code; and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(B) 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.
(C) DISTRIBUTEE: A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving Spouse
and the Employee's or former Employee's Spouse or former Spouse who
is the alternate payee under a qualified domestic relations order,
as defined in section 414(p) of the Code, are distributees with
regard to the interest of the Spouse or former Spouse.
(D) DIRECT ROLLOVER: A direct rollover is a payment by the Plan to the
eligible retirement Plan specified by the distributee.
(E) WAIVER OF NOTICE. If a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than 30 days after the notice
required under Section 1.411(a)-(11)(c) of the Income Tax
Regulations is given, provided that: (1) the plan administrator
clearly informs the Participant that the Participant has a right to
a period of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and (2) the
Participant, after receiving the notice, affirmatively elects a
distribution.
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 USE OF TOP-HEAVY PROVISIONS. If the Plan becomes a Top-Heavy Plan
in any Plan Year after December 31, 1983, the provisions of this
Article IX will supersede any conflicting provision in the Plan or
the Adoption Agreement. The Committee has sole responsibility to
make the determination as to the top-heavy status of the Plan.
9.2 TOP-HEAVY DEFINITIONS.
(A) KEY EMPLOYEE: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual Compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's Compensation
exceeds 100% of the dollar limitation under Section 415(c)(1)(A) of
the Code, a 5 per cent owner of the Employer, or a 1 per cent owner
of the Employer who has an annual Compensation of more than
$150,000. Annual compensation means compensation as defined in Item
B(4)(a) of the Adoption Agreement, 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(e)(3), Section 402(h)(1)(B) or Section 403(b) of the
Code. The determination period is the Plan Year containing the
Determination Date and the 4 preceding Plan Years.
The determination of who is Key Employee will made by the Committee
in accordance with Section 416(i)(1) of the Code and the regulations
thereunder.
(B) TOP-HEAVY PLAN: This Plan, for any Plan Year beginning after
December 31, 1983, if any of the following conditions exists:
(1) 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.
(2) 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.
(3) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60 percent.
(C) TOP-HEAVY RATIO: For purposes of determining if the Plan is a
Top-Heavy Plan:
(1) If the Employer maintains one or more defined contribution
plans (including any Simplified employee pension Plan) and the
Employer has not maintained any defined benefit Plan which
during the 5-year period ending on the Determination Date(s)
has or has had accrued benefits, the Top-Heavy Ratio for this
Plan alone or for the Required or Permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the sum
of the account balances of all Key Employees as of the
Determination Date(s) (including any part of any account
balance distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which is the sum
of all account balances (including any part of any account
balance distributed in the 5-year period ending on the
Determination Date(s), both computed in accordance with Section
416 of the Code and the regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are increased
to reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
(2) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees determined in
accordance with (1) above, and the Present Value of accrued
benefits under the aggregated defined benefit plan or plans for
all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the defined benefit
plan or plans for all Participants as of the Determination
Date(s), all determined in accordance with Section 416 of the
Code and regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the five-year period ending on the
Determination Date.
(3) For purposes of (1) and (2) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
Plan years of a defined benefit Plan. The account balances and
accrued benefits of a Participant (a) who is not a Key Employee
but who was a Key Employee in a prior year, or (b) who has not
been credited with at least one Hour of Service with any
Employer maintaining the Plan at any time during the five-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. Voluntary deductible employee
contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the
value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall
within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is no
such method, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under the fractional rule of
Section 411(b)(1)(C) of the Code.
(D) 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 Section 401(a)(4) and
Section 410 of the Code.
(E) REQUIRED AGGREGATION GROUP: (1) Each qualified Plan of the Employer
in which at least one Key Employee participates or participated at
any time during the determination period (regardless of whether the
Plan has terminated), and (2) any other qualified Plan of Employer
which enables a Plan described in (1) to meet the requirements of
Section 401(a)(4) or Section 410 of the Code.
(F) DETERMINATION DATE: For purposes of determining if there is a Key
Employee and for calculating the Top-Heavy Ratio: 1) for any Plan
Year subsequent to the first Plan Year, the last day of the
preceding Plan Year, and 2) for the first Plan Year of the Plan, the
last day of that year.
(G) VALUATION DATE: The date specified in Item B(14)(c) of the Adoption
Agreement as of which account balances or accrued benefits are
valued for purposes of calculating the Top-Heavy Ratio.
(H) PRESENT VALUE: Present Value shall be based only on the interest
and mortality rates specified in the Adoption Agreement.
9.3 MINIMUM ALLOCATION.
(A) Except as otherwise provided in Section 9.3(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 per cent (3%) of such Participant's Compensation or
in the case where the Employer has no defined benefit Plan which
designates this Plan to satisfy Section 401 of the Code, the largest
percentage of Employer contributions and forfeitures, as a
percentage of the 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) such
Participants failure to complete 1,000 Hours of Service (or any
other equivalent provided in the Plan) or (ii) the Employee's
failure to make mandatory contributions or (iii) Compensation less
than a stated amount.
(B) For purposes of computing the minimum allocation, Compensation shall
mean Compensation as defined in Section 6.6(A) as limited by Section
401(a)(17) of the Code.
(C) Section 9.3(A) shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
(D) Section 9.3(A) 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 B(14) 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.
(E) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or Section 411(a)(3)(D) of the
Code.
(F) For each Plan Year in which the Paired Plans are Top-Heavy, the
Top-Heavy requirements set forth in Article VIII of the Plan and
Item B(14) of the Adoption Agreement shall apply.
(G) Neither Before Tax Contributions nor Matching Contributions may be
taken into account for the purpose of satisfying the minimum
Top-Heavy contribution requirements.
9.4 MINIMUM VESTING SCHEDULES. For any Plan Year in which this Plan is
a Top-Heavy Plan, the vesting schedule elected by the Employer in
Item B(14) and/or C(4)(d) of 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 nonforfeitable percentage
may occur in the event the Plan's status as a Top-Heavy Plan changes
for any Plan Year. However, this Section 9.4 does not apply to the
account balance 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
9.4.
ARTICLE X
TRUSTEE
10.1 TRUSTEE. The Trustee shall receive, hold, invest, administer and
distribute the Trust Fund in accordance with the provisions of the
Plan as herein set forth.
10.2 RECORDS AND ACCOUNTS OF TRUSTEE. The Trustee shall maintain
accurate and detailed records and accounts of all its transactions
of the Trust Fund, which shall be available at all reasonable times
for inspection or audit by any person designated by the Employer and
by any other person or entity to the extent required by law.
10.3 REPORTS TO EMPLOYER. As soon as practicable following the close of
each accounting period and following the effective date of the
termination of the Plan, the Trustee shall file a written report
with the Employer. The report shall set forth all transactions with
respect to the Trust Fund during the period listing the Trust Fund
assets with their market value as of the close of the period covered
by the report.
10.4 POWERS OF TRUSTEE. The Trustee shall administer the Trust Fund as a
nondiscretionary Trustee, and the Trustee shall not have any
discretion or authority with regard to the investment of the Trust
Fund and shall act solely as a directed Trustee of the fund
contributed to it. The Trustee, as a nondiscretionary Trustee, as
may be directed by the Employer (or the Participants to the extent
provided herein) is authorized and empowered, by way of limitation,
with the following powers, rights and duties, each of which the
Trustee shall exercise in a nondiscretionary manner as directed in
accordance with the direction of the Employer (or the Participants)
as a Named Fiduciary (except to the extent that Plan assets are
subject to the control and management of a properly appointed
Investment Manager):
(A) At the direction of the Named Fiduciary, to sell, write options on,
convey or transfer, invest and reinvest any part thereof in each and
every kind of property, whether real, personal or mixed, tangible or
intangible, whether income or non-income producing and wherever
situated, including, but not limited to, time deposits (including
time deposits in the Trustee or its affiliates, or any successor
thereto, if the deposits bear a reasonable rate of interest), fee
simple, leasehold or lesser estates in real estate, shares of common
and preferred stock, mortgages, bonds, leases, notes, debentures,
equipment or collateral trust certificates, rights, warrants,
convertible or exchangeable, and other corporate, individual or
government securities or obligations, annuity, retirement or other
insurance contracts, mutual funds (including funds for which the
Trustee or its affiliates serve as investment advisor), units of
group or collective trusts established to permit the pooling of
funds of separate pension and profit sharing trusts, provided the
Internal Revenue Service has ruled such group trust to be qualified
under Code Section 401(a) and exempt under Code Section 501(a) (or
the applicable corresponding provision of any other Revenue Act) or
in units of any other common, collective or commingled trust fund
heretofore or hereafter established and maintained by the Trustee or
its affiliates; as long as the Trustee holds any units hereunder,
the instrument establishing such common trust fund (including all
amendments thereto) shall be deemed to have been adopted and made a
part of this Plan, and such other investments as the Named Fiduciary
shall direct the Trustee to invest Plan assets or hold as an
Investment Fund for the investment of Plan assets pursuant to
Participant direction.
(B) At the direction of the Named Fiduciary, to sell, convert, redeem,
exchange, grant options for the purchase or exchange of, or
otherwise dispose of any property held hereunder, at public or
private sale, for cash or upon credit with or without security,
without obligation on the part of any person dealing with the
Trustee to see to the application of the proceeds of or to inquire
into the validity, expediency, or propriety of any such disposal;
(C) At the direction of the Named Fiduciary, to manage, operate, repair,
partition and improve and mortgage or lease (with or without an
option to purchase) for any length of time any property held in the
Trust Fund; to renew or extend any mortgage or lease, upon such
terms as the Trustee may deem expedient; to agree to reduction of
the rate of interest on any mortgage; to agree to any modification
in the terms of any lease or mortgage, or of any guarantee
pertaining to either of them; to exercise and enforce any right of
foreclosure; to bid in property on foreclosure; to take a deed in
lieu of foreclosure with or without paying consideration therefor
and in connection therewith to release the obligation on the bond
secured by the mortgage; and to exercise and enforce in any action,
suit or proceeding at law or in equity any rights, covenants,
conditions, or remedies with respect to any lease or mortgage or to
any guarantee pertaining to either of them or to waive any default
in the performance thereof;
(D) In accordance with the direction of a Named Fiduciary, to vote,
personally or by general or limited proxy, any shares of stock or
other securities held in the Trust Fund, provided that all voting
rights pertaining to shares of any financial institution in the
state where the Trustee is located shall be exercised by the trustee
only if and as directed in writing by the Committee; provided
further, that the Trustee and the Employer may agree in writing that
such voting rights be passed through to the Participant's in
proportion to their interest in the Investment Funds, to delegate
discretionary voting power to the trustees of a voting trust for any
period of time; and to exercise or sell, personally or by power of
attorney, any conversion or subscription or other rights appurtenant
to any securities or other property held in the Trust Fund;
(E) As may be directed by the Named Fiduciary, to join in or oppose any
reorganization, recapitalization, consolidation, merger or
liquidation, or any Plan therefor, or any lease (with or without an
option to purchase), mortgage or sale of the property of any
organization the securities of which are held in the Trust Fund; to
pay from the Trust Fund any assessments, charges, or compensation
specified in any Plan of reorganization, recapitalization,
consolidation, merger or liquidation; to deposit any property with
any committee or depository; and to retain any property allotted to
the Trust Fund in any reorganization, recapitalization,
consolidation, merger or liquidation;
(F) In accordance with the written instructions of a Named Fiduciary, to
settle, compromise or commit to arbitration any claim, debt or
obligation of or against the Trust Fund; to enforce or abstain from
enforcing any right, claim, debt, or obligation; and to abandon any
property determined by it to be worthless;
(G) As may be directed by the Named Fiduciary, to continue to hold any
property of the Trust Fund, whether or not productive of income; to
reserve from investment and keep unproductive of income, without
liability for interest, such cash as it deems advisable and,
consistent with its obligations as Trustee hereunder, to hold such
cash in a demand deposit in the Trustee bank, its affiliates, or any
successor thereto;
(H) To hold property of the Trust Fund in its own name, or in the name
of nominee, without disclosure of this trust, or in bearer form so
that it may pass by delivery, and to deposit property with any
depository, but no such holding or depositing shall relieve the
Trustee of its responsibility for the safe custody and disposition
of the Trust Fund in accordance with the provisions of this
agreement as may be directed by the Named Fiduciary, and the
Trustee's records shall at all times show that such property is part
of the Trust Fund;
(I) As directed by the Named Fiduciary, to make, execute and deliver, as
Trustee, any deeds, conveyances, leases (with or without option to
purchase), mortgages, options, contracts, waivers, or other
instruments that the Trustee shall deem necessary or desirable in
the exercise of its powers under this agreement;
(J) To employ, at the expense of the Employer or the Trust Fund, agents
and delegate to them such duties as the Trustee sees fit; the
Trustee shall not be responsible for any loss occasioned by any such
agents selected by it with reasonable care; the Trustee may consult
with legal counsel (who may be counsel for the Employer) concerning
any questions which may arise with reference to its power or duties
under this Plan, and the written opinion of such counsel shall be
full and complete protection with respect to any action taken or not
taken by the Trustee in good faith and in accordance with the
written opinion of such counsel;
(K) To pay out of the Trust Fund any taxes imposed or levied with
respect to the Trust Fund and may contest the validity or amount of
any tax, assessment, penalty, claim or demand respecting the Trust
Fund; however, unless the Trustee shall have first been indemnified
to its satisfaction, it shall not be required to contest the
validity of any tax, or to institute, maintain or defend against any
other action or proceeding either at law or in equity;
(L) To make loans to Participants in accordance with policies
established by the Committee and in accordance with the terms of the
Plan and the and to segregate or otherwise identify property of the
Trust Fund as directed by the Committee for such purpose including
providing collateral for loans made pursuant to the Plan.
10.5 TRUSTEE'S FEES AND EXPENSES. The Trustee shall be entitled to
receive reasonable fees for its services hereunder in accordance
with its schedule of fees then in effect and shall be entitled to
receive reimbursement for all reasonable expenses incurred by it in
the administration of this Plan. Except to the extent that the
Employer shall pay such fees and expenses, they shall be charged to
and collected by the Trustee from each Participant's accounts. The
Trustee's fees and expenses for extraordinary services in connection
with any Participant's accounts may be charged to and collected by
the Trustee from such accounts.
10.6 TRUSTEE MAY RESIGN OR BE REMOVED. The Trustee may resign by written
notice to the Employer which shall be effective sixty (60) days
after delivery unless the Trustee and the Employer agree to an
earlier effective date. The Trustee may be removed by the Employer
by written notice to the Trustee which shall be effective sixty (60)
days after delivery unless the Trustee and the Employer agree to an
earlier effective date. Prior to the effective date of such
resignation or removal, the Employer shall amend its Plan to
eliminate any reference to the PRISM
<reg-trade-mark>
PROTOTYPE RETIREMENT PLAN AND TRUST, and appoint a new trustee.
The Trustee shall deliver the Trust Fund to its successor on the
effective date of resignation or removal, or as soon after such
effective date as practicable. However, the Trustee may first
subtract any amounts owed it from the Trust Fund for compensation,
expenses and taxes due.
If the Employer fails to so amend the Plan and appoint a successor
trustee within the sixty (60) days, or longer period as the Trustee
permits in writing, the Trustee shall apply to a court of competent
jurisdiction for appointment of a successor trustee.
10.7 SEPARATE INVESTMENT FUNDS.
(A) The assets of the Trust Fund shall be held in such number of
Investment Funds as the Employer and the Trustee may agree, plus an
Employer Stock Fund if selected by the Employer in the Adoption
Agreement, as the Employer shall designate in writing on the
Investment Fund Designation form affixed to the Adoption Agreement.
Such Investment Funds shall be selected by the Employer from among
the funds offered by the Trustee for use as Investment Funds in the
PRISM
<reg-trade-mark>
PROTOTYPE RETIREMENT PLAN & TRUST. The Trustee reserves the right
to change the funds available for use as Investment Funds in the
PRISM
<reg-trade-mark>
PROTOTYPE RETIREMENT PLAN & TRUST, from time to time, and the
Employer agrees to execute an amended Investment Fund Designation
form to reflect any such changes as may impact the Investment Funds
available to the Employer's Plan. The Employer hereby acknowledges
that, available as Investment Funds are interests in registered
investment companies (i.e. mutual funds) for which the sponsoring
organization, its parent, affiliates or successors may serve as
investment advisor and receive compensation from the registered
investment company for its services as investment advisor. The
Employer acknowledges that it, as Named Fiduciary, has the sole
responsibility for selection of the Investment Funds offered under
the Plan, and it has done so on the basis of the Employer's
determination, after due inquiry, of the appropriateness of the
selected Investment Funds as vehicles for the investment of Plan
assets pursuant to the terms of the Plan, considering all relevant
facts and circumstances, including but not limited to (i) the
investment policy and philosophy of the Employer developed pursuant
to ERISA <section>402(b)(1); (ii) the Participants, including
average level of investment experience and sophistication; (iii) the
ability of Participants, using an appropriate mix of Investment
Funds, to diversify the investment of Plan assets held for their
benefit; (iv) the ability of Participants to, utilizing an
appropriate mix of Investment Funds, to structure an investment
portfolio within their account in the Plan with risk and return
characteristics within the normal range of risk and return
characteristics for individuals with similar investment backgrounds,
experience and expectations; and, (v) in making the selection of
Investment Funds, the Employer did not rely on any representations
or recommendations from the Trustee or any of its employees, except
as may have been provided through written materials, including
marketing materials provided by the various sponsors or distributors
of the Investment Funds, and that the Investment Fund selection has
not be influenced, approved, or encouraged through the actions of
the Trustee or its employees.
For purposes of the Plan, "Employer Stock" shall mean common stock
listed on a recognized securities exchange issued by an Employer of
Employees covered by the Plan or by an affiliate of such Employer
and which shall be a "qualifying employer security" as defined in
ERISA. The Employer Stock Fund shall be invested and reinvested in
shares of Employer Stock, which stock shall be purchased by the
Trustee to the extent not contributed to the Plan by the Employer,
except for amounts which may reasonably be expected to be necessary
to satisfy distributions to be made in cash. No Employer Stock
shall be acquired or held in any Investment Fund other than the
Employer Stock Fund. Up to 100% of the assets of the Trust Fund may
be invested in Employer Stock.
All contributions shall be allocated by the Trustee to the Plan's
Investment Funds specified by the Employer. Dividends, interest and
other distributions shall be reinvested in the same Investment Fund
from which received.
Employers sponsoring 401(k) profit sharing plans may elect to
determine the Investment Funds, including an Employer Stock Fund, if
applicable, into which Matching Contributions and/or Employer
Contributions will be invested and/or into which Participants may
not direct contributions. By making these designations, the
Employer shall be deemed to have advised the Trustee in writing
regarding the retention of investment powers.
Notwithstanding the foregoing provisions of this Section 10.7(A),
the Trustee may, in its discretion, accept certain investments which
have been, and are, held as part of the Trust Fund prior to the date
the Employer adopted this Plan. Such investments shall be
considered investments directed by the Employer or an Investment
Committee for the Plan ("Investment Committee"), if one is acting.
The Trustee shall hold, administer and dispose of such investments
in accordance with directions to the Trustee contained in a written
notice from the Employer or Investment Committee. Any such notice
shall advise the Trustee regarding the retention of investment
powers by the Employer or the Investment Committee and shall be of a
continuing nature or otherwise, and may be revoked in writing by the
Employer or Investment Committee.
The Trustee shall not be liable but shall be fully protected by
reason of its taking or refraining from taking any action at the
direction of the Employer or Investment Committee, nor shall the
Trustee be liable but shall be fully protected by reason of its
refraining from taking any action because of the failure of the
Employer or the Investment Committee to give a direction or order.
The Trustee shall be under no duty to question or make inquiry as to
any direction, notification or order or failure to give a direction,
notification or order by the Employer or the Investment Committee.
The Trustee shall be under no duty to make any review of investments
directed by the Employer or Investment Committee acquired for the
Trust Fund and under no duty at any time to make any recommendation
with respect to disposing of or continuing to retain any such
investments. While the Employer may direct the Trustee with respect
to Plan investments, the Employer may not (1) borrow from the Fund
or pledge any assets of the Fund as security for a loan; (2) buy
property or assets from or sell property or assets to the Fund; (3)
charge any fee for services rendered to the Fund; or (4) receive any
services from the Fund on a preferential basis.
The Employer hereby indemnifies and holds the Trustee or its nominee
harmless from any and all actions, claims, demands, liabilities,
losses, damages or reasonable expenses of whatsoever kind and nature
in connection with or arising out of (1) any action taken or omitted
in good faith or any investment or disbursement of any part of the
Trust Fund made by the Trustee in accordance with the directions of
the Employer or the Investment Committee or any inaction with
respect to any Employer or Investment Committee directed investment
or with respect to any investment previously made at the direction
of the Employer or Investment Committee in the absence of directions
from the Employer or Investment Committee therefor, or (2) any
failure by the Trustee to pay for any property purchased by the
Employer or the Investment Committee for the Trust Fund by reason of
the insufficiency of funds in the Trust Fund.
Anything hereinabove to the contrary notwithstanding, the Employer
shall have no responsibility to the Trustee under the foregoing
indemnification if the Trustee knowingly participated in or
knowingly concealed any act or omission of the Employer or
Investment Committee knowing that such act or omission constituted a
breach of fiduciary responsibility, or if the Trustee fails to
perform any of the duties undertaken by it under the provisions of
this Plan, or if the Trustee fails to act in conformity with the
directions of an authorized representative of the Employer or the
Investment Committee.
(B) Each Participant shall by such mechanism as may be agreed upon
between the Trustee and Employer, direct that the contributions made
to his or her accounts for which the Participant may direct
investments, as selected by the Employer in the Adoption Agreement,
be invested in one or more of the Investment Funds, including the
Employer Stock Fund, if applicable. At the time an Employee becomes
eligible for the Plan, he or she shall specify the percentage of his
or her accounts (expressed in percentage increments as may be agreed
to between the Employer and the Trustee) to be invested pro-rata in
each such Investment Fund.
(C) Upon prior written notice to the Trustee, or other form of notice
acceptable to the Trustee, a Participant may change an investment
direction with respect to future contributions. Through acceptable
notice to the Trustee, the Participant may elect to transfer all or
a portion of such Participant's interest in each Investment Fund
(based on the value of such interest on the Valuation Date
immediately preceding such election), including an Employer Stock
Fund, if applicable, to any other of the Investment Funds selected
by the Employer so that the Participant's interest in the said
Investment Funds immediately after the transfer is allocated in
percentage increments as may be agreed to by the Employer and the
Trustee.
Notwithstanding any Participant's election to change Investment
Funds, the Trustee may, in its discretion, delay satisfaction of
requests to change from a guaranteed investment contract fund for up
to one year, or delay satisfaction of changes in Investment Funds
pending settlement of prior changes in Investment Funds.
(D) The Employer will be responsible when transmitting Employer and
Employee contributions to show the dollar amount to be credited to
each Investment Fund for each Employee.
(E) Except as otherwise provided in the Plan, neither the Trustee, nor
the Employer, nor any fiduciary of the Plan shall be liable to the
Participant or any of his or her beneficiaries for any loss
resulting from action taken at the direction of the Participant.
(F) In a 401(k) profit sharing Plan where the Employer has elected to
invest a portion or all of the Matching Contributions and/or
Employer Contributions in the Employer Stock Fund, then the
following shall apply:
If selected by the Employer in the Adoption Agreement, a Participant
who is fifty-five (55) years of age or older and who is 100% vested
in his Matching Contribution account and/or Employer Contribution
account may elect to have the Employer Stock (and any earnings
thereon) attributable to such Matching Contributions and/or Employer
Contributions diversified in the other Investment Funds under the
Plan in accordance with the following rules and limitations. The
amount of Employer Stock which may be diversified each Plan Year
shall be determined in accordance with the following schedule:
<TABLE>
<CAPTION>
THEN THE PERCENT OF THE NUMBER OF
WHOLE SHARES (ROUNDED TO THE NEAREST
WHOLE NUMBER) CREDITED TO THE
PARTICIPANTS' MATCHING ACCOUNT
IF THE AGE ATTAINED BY THE AND/OR EMPLOYER CONTRIBUTION ACCOUNT
PARTICIPANT ON THE LAST DAY OF THE PRECEDING
DURING THE PLAN YEAR IS: PLAN YEAR WHICH MAY BE DIVERSIFIED
PURSUANT TO THE RULES BELOW MAY NOT
EXCEED
<S> <C>
55 25%
56 25%
57 30%
58 40%
59 50%
60 60%
61 70%
62 80%
63 90%
64 100%
</TABLE>
The election to diversify may only be made once each Plan Year. The
election may be made in any month by providing notice to the
Committee in accordance with the frequency selected by the Employer
for other Investment Fund changes under the Plan. Each election to
make a transfer pursuant to this Section shall specify the
Investment Fund(s) into which the shares subject to diversification
will be reinvested so that the Participant's interest in the said
Investment Fund(s), immediately after the transfer, is allocated in
increments as may be allowed by the Trustee. Thereafter, the
Participant's interest in said Investment Fund(s) shall be subject
to transfer in accordance with this Section.
(G) Forfeitures arising under the Plan will be invested in an Investment
Fund as may be selected in the discretion of the Employer.
(H) In the event the Trust holds life insurance, the following
restrictions shall apply:
(1) Limitations on Premium Payments
(a) If ordinary or whole life insurance contracts are
purchased on the life of a Participant, less than one-half
of the insured Participant's current allocation of
contributions will be used to pay premiums attributable to
such insurance. Ordinary or whole life insurance
contracts are those with both nondecreasing benefits and
nonincreasing premiums.
(b) If term or universal life insurance contracts are
purchased, no more than one-quarter of the insured
Participant's current allocation of contributions will be
used to pay premiums attributable to such insurance.
(c) If a combination of ordinary or whole life insurance
contracts and term or universal life insurance contracts
are purchased, the sum of one-half of the ordinary life
insurance premiums and all other life insurance premiums
will not exceed one-fourth of the aggregate employer
contributions allocated to any participant.
(2) The Plan Administrator will direct the Trustee to convert the
entire value of any life insurance contract at or before the
Participant's actual retirement or distribution on termination
of employment, but not later than the Participant's Required
Beginning Date to provide cash values or retirement annuity
income, or, subject to the Joint and Survivor Annuity waiver
requirements of Section 7.10, the Plan Administrator may direct
the Trustee to distribute the insurance contract directly to
the Participant.
(3) The Trustee, at the direction of the Employer shall be entitled
to exercise all rights and options with respect to any such
life insurance contracts held by the Plan.
10.8 REGISTRATION, DISTRIBUTION AND VOTING OF EMPLOYER STOCK AND
PROCEDURES REGARDING TENDER OFFERS.
(A) All voting rights on shares of Employer Stock held in the Employer
Stock Fund shall be exercised by the Trustee only as directed by the
Participants acting in their capacity as "Named Fiduciaries" (as
defined in Section 402 of the Act) in accordance with the following
provisions of this Section 10.8(A):
(1) As soon as practicable before each annual or special
shareholders' meeting of the Employer, the Trustee shall
furnish to each Participant sufficient copies of the proxy
solicitation material sent generally to shareholders, together
with a form requesting confidential instructions on how the
shares of Employer Stock allocated to such Participant's
account, and, separately, such shares of Employer Stock as may
be unallocated ("Unallocated Shares") or allocated to
Participant accounts but for which the Trustee does not receive
timely voting instruction from the Participant ("Non-Directed
Shares"), (including fractional shares to 1/1000th of a share)
are to be voted. The direction with respect to Non-Directed
Shares and Unallocated Shares shall apply to such number of
votes equal to the total number of votes attributable to Non-
Directed Shares and Unallocated Shares multiplied by a
fraction, the numerator of which is the number of shares of
Employer Stock credited to the Participant's account and the
denominator of which is the total number of shares credited to
the accounts of all such Participants who have timely provided
directions to the Trustee with respect to Non-Directed Shares
and Unallocated Shares under this Section 10.8(A)(1). The
Employer and the Committee will cooperate with the Trustee to
ensure that Participants receive the requisite information in a
timely manner. The materials furnished to the Participants
shall include a notice from the Trustee that the Trustee will
vote any shares for which timely instructions are not received
by the Trustee as may be directed by those voting Participants,
acting in their capacity as Named Fiduciaries of the Plan as
provided above. Upon timely receipt of such instructions, the
Trustee shall vote the shares as instructed. The instructions
received by the Trustee from Participants or Beneficiaries
shall be held by the Trustee in strict confidence and shall not
be divulged or released to any person including directors,
officers or employees of the Employer, or of any other company,
except as otherwise required by law.
(2) With respect to all corporate matters submitted to
shareholders, all shares of Employer Stock shall be voted only
in accordance with the directions of such Participants as Named
Fiduciaries as given to the Trustee as provided in Section
10.8(A)(1). With respect to shares of Employer Stock allocated
to the account of a deceased Participant, such Participant's
Beneficiary, as Named Fiduciary, shall be entitled to direct
the voting of shares of Employer Sock as if such Beneficiary
were the Participant.
(B) All tender or exchange decisions with respect to Employer Stock held
in the Employer Stock Fund shall be made only by the Participants
acting in their capacity as Named Fiduciaries with respect to the
Employer Stock allocated to their accounts in accordance with the
following provisions of this Section 10.8(B):
(1) In the event an offer shall be received by the Trustee
(including a tender offer for shares of Employer Stock subject
to Section 14(d)(1) of the Securities Exchange Act of 1934 or
subject to Rule 13e-4 promulgated under that Act, as those
provisions may from time to time be amended) to purchase or
exchange any shares of Employer Stock held by the Trust, the
Trustee will advise each Participant who has shares of Employer
Stock credited to such Participant's account in writing of the
terms of the offer as soon as practicable after its
commencement and will furnish each Participant with a form by
which he may instruct the Trustee confidentially whether or not
to tender or exchange shares allocated to such Participant's
account, and, separately, Unallocated Shares and Non-Directed
Shares (including fractional shares to 1/1000th of a share).
The directions with respect to Non-Directed Shares and
Unallocated Shares shall apply to such number of Non-Directed
Shares and Unallocated Shares equal to the total number of Non-
Directed Shares and Unallocated Shares multiplied by a
fraction, the numerator of which is the number of shares of
Employer Stock credited to the Participant's account and the
denominator of which is the total number of shares credited to
the accounts of all such Participants who have timely provided
directions to the Trustee with respect to Non-Directed Shares
and Unallocated Shares under this Section 10.8(B). The
materials furnished to the Participants shall include (i) a
notice from the Trustee that, except as provided in this
Section 10.8(B), the Trustee will not tender or exchange any
shares for which timely instructions are not received by the
Trustee and (ii) such related documents as are prepared by any
person and provided to the shareholders of the Employer
pursuant to the Securities Exchange Act of 1934. The Committee
and the Trustee may also provide Participants with such other
material concerning the tender or exchange offer as the Trustee
or the Committee in its discretion determines to be
appropriate; provided, however, that prior to any distribution
of materials by the Committee, the Trustee shall be furnished
with sufficient numbers of complete copies of all such
materials. The Employer and the Committee will cooperate with
the Trustee to ensure that Participants receive the requisite
information in a timely manner.
(2) The Trustee shall tender or not tender shares or exchange
shares of Employer Stock (including fractional shares to
1/1000th of a share) only as and to the extent instructed by
the Participants as Named Fiduciaries as provided in Section
10.8(B)(1). With respect to shares of Employer Stock allocated
to the account of a deceased Participant, such Participant's
Beneficiary, as a Named Fiduciary, shall be entitled to direct
the Trustee whether or not to tender or exchange such shares as
if such Beneficiary were the Participant. If tender or
exchange instructions for shares of Employer Stock allocated to
the account of any Participant are not timely received by the
Trustee, the Trustee will treat the non-receipt as a direction
not to tender or exchange such shares. The instructions
received by the Trustee from Participants or Beneficiaries
shall be held by the Trustee in strict confidence and shall not
be divulged or released to any person, including directors,
officers or employees of the Employer, or of any other company,
except as otherwise required by law.
(3) In the event, under the terms of a tender offer or otherwise,
any shares of Employer Stock tendered for sale, exchange or
transfer pursuant to such offer may be withdrawn from such
offer, the Trustee shall follow such instructions respecting
the withdrawal of such securities from such offer in the same
manner and the same proportion as shall be timely received by
the Trustee from the Participants, as Named Fiduciaries,
entitled under this Section 10.8(B) to give instructions as to
the sale, exchange or transfer of securities pursuant to such
offer.
(4) In the event an offer shall be received by the Trustee and
instructions shall be solicited from Participants pursuant to
Section 10.8(B)(1-3) regarding such offer, and prior to
termination of such offer, another offer is received by the
Trustee for the securities subject to the first offer, the
Trustee shall use its best efforts under the circumstances to
solicit instructions from the Participants to the Trustee (i)
with respect to securities tendered for sale, exchange or
transfer pursuant to the first offer, whether to withdraw such
tender, if possible, and, if withdrawn, whether to tender any
securities so withdrawn for sale, exchange or transfer pursuant
to the second offer and (ii) with respect to securities not
tendered for sale, exchange or transfer pursuant to the first
offer, whether to tender or not to tender such securities for
sale, exchange or transfer pursuant to the second offer. The
Trustee shall follow all such instructions received in a timely
manner from Participants in the same manner and in the same
proportion as provided in Section 10.8(B)(1-3). With respect
to any further offer for any Employer Stock received by the
Trustee and subject to any earlier offer (including successive
offers from one or more existing offerors), the Trustee shall
act in the same manner as described above.
(5) A Participant's instructions to the Trustee to tender or
exchange shares of Employer Stock will not be deemed a
withdrawal or suspension from the Plan or a forfeiture of any
portion of the Participant's interest in the Plan. Funds
received in exchange for tendered shares will be credited to
the account of the Participant whose shares were tendered and
will be used by the Trustee to purchase Employer Stock, as soon
as practicable. In the interim, the Trustee will invest such
funds in short-term investments permitted under the Plan, and
in the same manner in which forfeited amounts are invested.
(6) In the event the Employer initiates a tender or exchange offer,
the Trustee may, in its sole discretion, enter into an
agreement with the Employer not to tender or exchange any
shares of Employer Stock in such offer, in which event, the
foregoing provisions of this Section 10.8(B) shall have no
effect with respect to such offer and the Trustee shall not
tender or exchange any shares of Employer Stock in such offer.
(C) The Trustee acting with respect to the Employer Stock Fund may with
the consent of the Committee designate any Employee or other Trustee
as agent to solicit the instructions to vote provided for in
Subsection (A) of this Section, and shall be held harmless in
relying upon such agent's written advice as to how shares are to be
voted, and said Trustee may, with the consent of the Committee,
designate any Employee as agent to solicit instructions from
Participants regarding such a tender offer, as required under
Subsection (B) above, and shall be held harmless in relying upon
such agent's written advice as to whether shares of Employer Stock
are to be tendered.
(D) The Employer shall be responsible for complying with applicable
federal and state securities laws and regulations.
10.9 VALUATION OF INVESTMENT FUNDS AND ACCOUNTS.
(A) As of each Valuation Date, the Trustee shall determine the fair
market value of each Investment Fund, including an Employer Stock
Fund, if any, being administered by the Trustee. With respect to
each such Investment Fund, the Trustee shall determine (a) the
change in value between the current Valuation Date and the then last
preceding Valuation Date, (b) the net gain or loss resulting from
expenses paid (including fees and expenses, if any, which are to be
charged to such Fund) and (c) realized and unrealized gains and
losses.
The transfer of funds to or from an Investment Fund pursuant to
Section 10.7(C) and payments, distributions and withdrawals from an
Investment Fund to provide benefits under the Plan for Participants
or Beneficiaries shall not be deemed to be gains, expenses or losses
of an Investment Fund.
After each Valuation Date, the Trustee shall allocate the net gain
or loss of each Investment Fund as of such Valuation Date to the
accounts of Participants participating in such Investment Fund on
such Valuation Date. Contributions, forfeitures and rollovers
received and credited to Participants' accounts as of such Valuation
Date, or as of any earlier date since the last preceding Valuation
Date shall not be considered in allocating gains or losses allocated
to Participants' accounts.
(B) The reasonable and equitable decision of the Trustee as to the value
of each Investment Fund, including an Employer Stock Fund, if any,
and of any account as of each Valuation Date shall be conclusive and
binding upon all persons having any interest, direct or indirect, in
the Investment Funds or in any account.
ARTICLE XI
ADMINISTRATION
11.1 COMMITTEE MEMBERSHIP. The Employer shall appoint a Committee which
shall consist of at least one member. The Committee members will
be named in the Adoption Agreement and may be, but are not required
to be, Employees of the Employer. All members of the Committee
shall serve at the pleasure of the Employer. In the event that the
Committee has more than one member, one member shall serve as
Chairman and one as Secretary. Any member of the Committee may
resign by notice in writing to the Employer. Any vacancy in the
Committee shall be filled by the Employer as soon as practicable
after a vacancy. If the Employer does not designate a Committee,
the Employer shall assume all of the duties of the Committee.
11.2 POWERS AND DUTIES OF COMMITTEE. The Committee shall have all powers
and duties and only the powers and duties as are specifically
conferred upon it by this Plan or as the Employer may delegate to or
impose upon it consistent with the provisions of this Plan, ERISA
and the Code. Without limiting the generality of the foregoing, the
Committee shall have the following powers and duties:
(A) to interpret and construe the terms and provisions of this Plan and
to decide any questions which may arise hereunder, including but not
limited to --
(1) the amount of a Participant's Compensation,
(2) a Participant's Years of Service,
(3) the age of any person who might be entitled to receive
benefits,
(4) the right of any person to receive benefits,
(5) the amount of any benefits to be paid to any persons;
(B) to cause to be maintained all necessary records and accounts under
this Plan and to keep in convenient form any data as may be
necessary for valuation of the assets and liabilities;
(C) to rely upon the records of the Employer or upon any certificate,
statement or other representation made to it by a Participant, a
Beneficiary, the authorized representative of the Participant or
Beneficiary, or the Trustee concerning any fact required to be
determined under any of the provisions of this Plan, and the
Committee shall not be required to make inquiry into the propriety
of any action by the Employer or the Trustee;
(D) to give written notice to a Participant, a Beneficiary, or the
authorized representative of the Participant or Beneficiary, of the
amount of benefits payable under this Plan;
(E) to make and enforce any rules, not inconsistent with this Plan, as
it shall deem necessary or proper for the efficient administration
of this Plan;
(F) to have and exercise such other authority as it deems necessary to
carry out the purposes and provisions of this Plan, provided that
any act of discretion permitted shall be exercised in a uniform
non-discriminatory manner with respect to individuals in like or
similar circumstances;
(G) to adopt rules and guidelines for the administration of this Plan,
provided that they are not inconsistent with the terms of this Plan
and are uniformly applicable to all persons similarly situated and
to delegate in accordance with Section 11.8 such functions and
duties as the Committee deems advisable;
(H) to establish a funding policy and investment objectives consistent
with the purposes of the Plan and the requirements of law;
(I) to employ such attorneys, accountants and agents as it shall
determine to assist it in carrying out its duties hereunder.
Except as otherwise provided in this Plan or determined by the
Employer, any action or determination taken or made by the Committee
or any interpretation or construction made by the Committee shall be
final and shall be binding upon all persons. The Committee shall at
all times exercise the power and authority given to it under this
Plan in a fair, reasonable and non-discriminatory manner.
11.3 ACTIONS OF THE COMMITTEE. Any act authorized or required to be
taken by the Committee shall be taken by a decision of the majority
of the members acting at the time. Any decision of the Committee
may be expressed by a vote at a Committee meeting or in writing,
signed by all members of the Committee, without a meeting. All
allocation statements, notices, directions, approvals, instructions
and all other communications required or authorized to be given by
the Committee under this Plan shall be in writing and signed by a
majority of the members of the Committee. The Committee may,
however, by an instrument in writing signed by all the members and
filed with the Trustee, designate one or more if its members as
having the authority to sign all such communications on behalf of
the Committee. Until notified in writing to the contrary, the
Trustee shall be fully protected in acting in accordance with all
communications which it considers genuine and to have been signed on
behalf of the Committee by the members authorized to sign
communications. If at any time for any reason the Committee shall
be unable to act with respect to any matter, the Employer shall act
with respect to that matter and its action shall be final and it
shall be binding upon all persons.
11.4 RESIGNATION, REMOVAL AND DESIGNATION OF SUCCESSORS. Any member of
the Committee may resign at any time and any member may be removed
by the Employer with or without cause. In case of resignation,
death, removal or inability or failure for any cause of any member
of the Committee to serve or to continue to serve, a successor shall
be appointed by the Employer. The Committee shall promptly notify
the Trustee of any change in its membership.
11.5 COMMITTEE REVIEW. If any Participant, Spouse, Beneficiary, or other
authorized representative of a Participant, Spouse or Beneficiary
shall file an application with the Committee for benefits under the
Plan and the application is denied, in whole or in part, such
applicant shall be notified of the denial in writing within ninety
(90) days of receipt of the claim. The notice to the applicant
shall state that the Committee has denied the application pursuant
to the exercise of its discretionary powers. This notice shall set
forth the specific reasons for the denial, specific reference to
pertinent Plan provisions upon which the denial is based, a
description of any additional information needed to perfect the
claim with an explanation of why it is necessary and an explanation
of procedure for appeal.
Any Participant, Spouse, Beneficiary, or other authorized representative
of the Participant, Spouse or Beneficiary whose application for benefits
has been denied may, within sixty (60) days after receiving the
notification, make a written application to the Committee to review the
denial. The applicant may request that the review be made by written
statements submitted by the applicant and the Committee, at a hearing, or
by both. Any hearing shall be held in the main offices of the Employer
on a date and time as the Employer shall designate with at least seven
(7) days notice to the applicant unless the applicant accepts shorter
notice. Within sixty (60) days after the review has been completed, the
Employer shall render a written decision and shall send a copy to the
applicant. This decision shall include specific reasons for the
decision, as well as specific references to the pertinent Plan provisions
upon which the decision is based.
If the Participant, Spouse, Beneficiary, or other authorized
representative of a Participant, Spouse or Beneficiary does not file
written notice with the Employer at the times set forth above, the
individual shall have waived all benefits under this Plan other than as
set forth in the notice from the Committee.
11.6 RECORDS. The Committee shall keep or cause to be kept records of
all meetings, proceedings and actions held, undertaken or performed
by it and shall furnish to the Employer reports as the Employer may
request.
11.7 COMPENSATION. The members of the Committee shall serve without
compensation for services as such, but all reasonably incurred fees
and expenses shall be paid by the Employer.
11.8 DESIGNATION OF NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
AMONG FIDUCIARIES. The Employer, the Committee and the Trustee
shall be "Named Fiduciaries" with respect to this Plan as that term
is defined in ERISA. The Named Fiduciaries shall have only those
specific powers, duties, responsibilities and obligations as are
given to them under this Plan. The Named Fiduciaries may designate
any person or persons as a fiduciary and may delegate to such person
or persons any one or more of their powers, functions, duties and
responsibilities with respect to the Plan as set forth in this Plan,
authorizing or providing for such direction, information or action.
Any such designation shall be made in writing and shall become
effective upon written acceptance. No such designation or
delegation by the Employer or the Committee of any of its powers,
authority or responsibilities to the Trustee shall become effective
unless such designation or delegation shall first be accepted by the
Trustee in a writing signed by it and delivered to the Employer or
the Committee, as applicable. Furthermore, each Named Fiduciary may
rely upon any such direction, information or action of another Named
Fiduciary as being proper under this Plan and is not required to
inquire into the propriety of any such direction, information or
action. It is intended that under this Plan each Named Fiduciary
shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations and shall not be
responsible for act or failure to act of another fiduciary.
11.9 NOTICE BY COMMITTEE OR EMPLOYER. Any communication or notice to any
person by the Committee or the Employer shall be in writing and may
be given by delivery to the person or by first class mail with
postage prepaid addressed to the person at the last address on file
with the Committee or the Employer. Any notice delivered as
provided above shall be deemed to have been given when delivered,
and any notice mailed as provided above shall be deemed to have been
given when mailed.
11.10 LOANS TO PARTICIPANTS.
(A) (1) In accordance with Section 11.8 above, the Committee is hereby
designated as the named fiduciary with sole authority and
responsibility to approve or deny loans and, except as provided
in subsections (G) and (H) of this Section, collect unpaid
loans, in accordance with the provisions of this Section 11.10.
This Section 11.10 shall apply if the Employer is eligible to
and elects Item B(16) of the Adoption Agreement.
(2) Subject to the consent of the Committee, loans may be made upon
approval of the written application of a Participant or
Beneficiary submitted to the Committee. Such application shall
be submitted during a specified period established by the
Committee prior to the date the loan is to be made. The
Committee shall notify the Participant or Beneficiary whether
the loan has been approved or denied. Loans shall be made
available to all Participants and Beneficiaries on a reasonably
equivalent basis, except that no loans will be made to any
Stockholder-Employee or Owner-Employee and no loan shall be
made to any Participant which the Committee, upon reviewing the
Participant's written application determines may be reasonably
expected to be unable to repay the loan. Loans shall not be
made available to Highly Compensated Employees (as defined in
Section 414(q) of the Code) in an amount greater than the
amount made available to other Employees. Except for loans
made prior to the date this Plan is adopted, a Participant or
Beneficiary shall have no more than five loans outstanding at
any given time.
(3) All loans will be adequately secured and will bear a reasonable
rate of interest. Rates of interest will be determined daily
by the Trustee for Plan loans. The Committee will determine
the minimum loan amount for the Plan.
(B) In reviewing and approving or denying loan applications hereunder,
the Committee shall bear sole responsibility for ensuring compliance
with all applicable federal or state laws and regulations, including
the federal Truth In Lending Act (15 U.S.C. <section>1601 et seq.),
and Equal Credit Opportunity Act (15 U.S.C. <section>1691 et seq.).
The Committee shall upon request supply the Trustee with evidence
that it has complied with such federal or state law.
(C) Notwithstanding Section 7.13 above, each loan made hereunder shall
be secured by a written assignment, in favor of the Plan, of that
portion of the Participant's accounts which the Committee determines
to be necessary to adequately secure repayment of the loan.
(D) A Participant must obtain the consent of his or her Spouse, if any,
to use the account balance as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the
ninety (90) day period that ends on the date the loan is to be so
secured. The consent must be in writing and must be witnessed by a
Plan representative or Notary Public. Such consent shall thereafter
be binding with respect to the consenting spouse or any subsequent
spouse with respect to that loan. A new consent shall be required
if the account balance is used for renegotiation, extension,
renewal, or other revision of the loan.
Notwithstanding the preceding paragraph, no spousal consent is
required for the use of the account balance as security for a Plan
loan to the Participant under a safe-harbor profit sharing Plan as
described in Section 7.10(F).
(E) No loan shall be approved by the Committee to any Participant or
Beneficiary in any amount which exceeds the lesser of
(1) $50,000, reduced by the excess (if any) of -
(a) the highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the
date on which such loan was made, over,
(b) the outstanding balance of loans from the Plan on the
date on which such loan was made, or
(2) fifty percent (50%) of the present value of the Participant's
nonforfeitable accrued benefit.
For purposes of the above limitation, all loans from all plans
of the Employer and other members of a group of employers
described in Sections 414(b), (c), (m) and (o) of the Code are
aggregated.
The term of the loan shall be determined by the Committee.
Furthermore, any loan shall, by its terms require that
repayment (principal and interest) be amortized in level
payments, not less frequently than quarterly over a period not
extending beyond five years from the date of the loan, except
that the Committee, in its discretion, may permit a repayment
period in excess of five years for loans made to a Participant
or Beneficiary used to acquire a dwelling unit which, within a
reasonable time (determined at the time the loan is made) will
be used as a principal residence of the borrower.
An assignment or pledge of any portion of the participant's
interest in the Plan will be treated as a loan under this
paragraph.
(F) Each loan hereunder shall be made pro rata from the borrowing
Participant's available accounts and Investment Funds. Loan
repayments shall generally be made via payroll deduction, except
that the repayment of outstanding principal at maturity, in the
event the loan is called, or in the event the Participant chooses to
prepay the loan shall be made in such manner as the Committee shall
determine. Loan repayments and interest thereon shall be credited
to the Investment Funds and accounts in accordance with current
elections. No loan shall be considered a general investment of the
Trust Fund. Each loan shall be evidenced by a written agreement,
evidencing the Participant's obligation to repay the borrowed amount
to the Plan, in such form and with such provisions consistent with
this Section 11.10 as is acceptable to the Trustee. All loan
agreements shall be deposited with the Trustee.
(G) In the event a Participant does not repay the principal of such loan
or interest thereon at such times as are required by the terms of
the loan or if the Participant ceases to be an Employee while such
Participant has a loan made hereunder which is outstanding, the
Committee, in its discretion, may direct the Trustee to take such
action as the Committee may reasonably determine, including:
(1) demand repayment of the loan and, subject to Section 10.4(K),
institute legal action against the Participant to enforce
collection of any balance due from the Participant, or
(2) demand repayment of the loan, and charge the total amount of
the unpaid loan and unpaid interest against the balance
credited to the Participant's vested account balance which was
assigned as security for the loan and reduce any payment or
distribution from the Trust Fund to which the Participant or
the Participant's Beneficiary may become entitled to the
extent necessary to discharge the obligation on the loan.
Notwithstanding the foregoing provisions of this Paragraph (G),
in the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs
in the Plan.
(H) In the event the Committee fails or refuses for any reason to direct
the Trustee as provided in Paragraph (G) above or if the Trustee
otherwise reasonably concludes that the collectibility of a loan
hereunder is in jeopardy, the Trustee is authorized to take such
action as it may reasonably determine to enforce repayment and
satisfaction of the loan. The Employer shall be responsible for
costs and expenses incurred in collecting any loan balance.
(I) In the event that the amount of any payment or distribution from the
Trust Fund is insufficient to repay the balance due on any loan, the
Participant shall be liable for and continue to make repayments on
such balance.
(J) If a valid spousal consent has been obtained in accordance with
Paragraph (D), 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.
ARTICLE XII
FAILURE TO ATTAIN OR RETAIN QUALIFIED STATUS
12.1 FAILURE TO QUALIFY AS A PROTOTYPE. This Plan is established with
the intent that it shall qualify under Section 401 of the Code and
that it shall comply with ERISA and all other applicable laws,
regulations and rulings. It may be modified and amended
retroactively, if necessary, to secure such qualification. Should
the Internal Revenue Service determine that this Plan does not
qualify under the Code or any statute of similar import, or fails or
refuses to issue an opinion, and if the Plan is not amended, as
required to qualify, before the time allowed by law for the Employer
to file its corporate federal tax return for the taxable year in
which the Effective Date occurs, the Plan shall be considered to be
rescinded and of no force and effect. Any assets attributable to
contributions made by the Employer shall be returned to the Employer
by the Trustee as soon as administratively feasible. The Employer
shall refund to the Participant any contributions made by the
Participant to the Plan.
12.2 FAILURE OF EMPLOYER TO ATTAIN OR RETAIN QUALIFICATION. 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.
ARTICLE XIII
MISCELLANEOUS
13.1 EMPLOYER ACTION. Except as may be specifically provided herein, any
action required or permitted to be taken by the Employer may be
taken on behalf of the Employer by any officer of the Employer.
13.2 NO GUARANTEE OF INTERESTS. Neither the Trustee, the Employer nor
any other named fiduciary in any way guarantees the Trust Fund from
loss or depreciation, nor do they guarantee any payment to any
person. The liability of the Trustee, the Employer and a named
fiduciary to make any payments hereunder is limited to the available
assets of the Trust Fund.
13.3 EMPLOYMENT RIGHTS. The Plan is not a contract of employment.
Participation in the Plan will not give any Participant the right to
be retained in the Employer's employ, nor any right or claim to any
benefit under the Plan, unless the right or claim has specifically
accrued under the Plan.
13.4 INTERPRETATIONS AND ADJUSTMENTS. To the extent permitted by law, an
interpretation of the Plan and a decision on any matter within a
named fiduciary's discretion made in good faith is binding on all
persons. A misstatement or other mistake of fact shall be corrected
when it becomes known and the person responsible shall make such
adjustment on account thereof as he or she considers equitable and
practicable.
13.5 UNIFORM RULES. In the administration of the Plan, uniform rules
will be applied to all Participants similarly situated.
13.6 EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable and signed,
made or presented by the proper party or parties.
13.7 WAIVER OF NOTICE. Any notice required under the Plan may be waived
by the person entitled to notice.
13.8 CONTROLLING LAW. The law of the state where the Trustee is located
shall be the controlling state law in all matters relating to the
Plan and shall apply to the extent that it is not preempted by the
laws of the United States of America.
13.9 TAX EXEMPTION OF TRUST. The trust herein created is designated as
constituting a part of a Plan intended to qualify under Sections
401(a) of the Code and to be tax-exempt under Section 501(a) of the
Code.
13.10 COUNTERPARTS. The Plan may be executed in two or more counterparts,
any one of which will be an original without reference to the
others.
13.11 ANNUAL STATEMENT OF ACCOUNT. The assets of the Trust Fund will be
valued annually at fair market as of the last day of each Plan Year.
On such date the earning and losses of the Trust Fund will be
allocated to each Participant's accounts in the ratio that such
account balance bears to all account balances. The Trustee will
deliver to the Employer a statement of each Participant's account
balances as of the last day of Plan Year.
13.12 NO DUTY TO INQUIRE. No person shall have any duty to make any
inquiry as to the application or use of the Trust Fund, or any part
thereof, or to inquire into the validity, expediency or propriety of
any matter or thing done or proposed to be done by the Trustee.
13.13 INVALIDITY. In case any provisions of this Plan shall be invalid,
this fact shall not affect the validity of any other provision.
13.14 TITLES. Titles to Articles and Sections are for convenience only
and shall have no bearing upon the construction or interpretation of
this Plan.
13.15 NO DUTY OF TRUSTEE TO COLLECT CONTRIBUTIONS. The Trustee shall be
accountable for all contributions received but shall have no duty to
require any contributions to be delivered or to determine if the
contributions received comply with the Plan or with any Board of
Directors resolution of the Employer providing for contributions.
13.16 TRUSTEE DISTRIBUTES BY COMMITTEE DIRECTION. The Trustee shall make
distributions only through Committee direction. The Trustee shall
have no responsibility to see how distributions are applied or to
ascertain whether the Committee's directions comply with the Plan.
Notwithstanding anything in the Plan to the contrary, payments made
in accordance with these provisions will continue only so long as
amounts remain in the Participant's accounts.
ARTICLE XIV
AMENDMENT OR TERMINATION
14.1 AMENDMENT BY THE SPONSOR. Society National Bank, the sponsoring
organization, reserves the right without being required to obtain
the approval of the Employer to amend any part of the Plan from time
to time, subject to the provisions of Article XII, Section 14.2 and
the following:
(A) Except as provided in Section 14.1(B) and (C), no amendment shall
become effective until at least thirty (30) days' prior written
notice (unless the Employer agrees to shorter notice) has been given
to the Employer, nor shall any such amendment reduce Participants'
benefits to less than the benefits to which they would have been
entitled if they had resigned from the employ of the Employer on the
effective date of the amendment;
(B) An amendment of the Plan and Trust which the sponsor deems necessary
to enable the Plan and Trust to meet the requirements of Section
401(a) of the Code may be made effective as of the date the Plan and
Trust was established by the sponsor or as of any subsequent date;
(C) An amendment of the Plan and Trust to conform the Plan and Trust to
any change in the law, regulations or rulings of the United States
may take effect as of the date such amendment is required to be
effective. Any amendment executed pursuant to the provisions of
this Section 14.1 shall be executed by an authorized officer of the
sponsor, or its successor. For purposes of this Section 14.1, the
Employer shall be deemed to have been furnished a copy of any
amendment on the business day next following the mailing by the
sponsor or the Trustee.
14.2 AMENDMENT BY ADOPTING EMPLOYER. 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 Master or Prototype Plan and will be considered
to have an individually designed Plan.
14.3 VESTING - PLAN TERMINATION. In the event of termination or partial
termination of the Plan, the account balance of each affected
Participant will be nonforfeitable.
14.4 VESTING - COMPLETE DISCONTINUANCE OF CONTRIBUTIONS. In the event of
a complete discontinuance of contributions under the Plan, the
account balance of each affected Participant will be nonforfeitable.
14.5 PLAN MERGER - MAINTENANCE OF BENEFIT. In the event of a merger or
consolidation with, or transfer of assets to any other Plan, each
Participant will receive a benefit immediately after the merger,
consolidation or transfer (if the Plan then terminated) which is at
least equal to the benefit the Participant was entitled to
immediately before such merger, consolidation or transfer (if the
Plan had then terminated).
14.6 DIRECT TRANSFER. In its discretion, the Trustee may accept the
direct transfer of Plan assets from the trustee of other retirement
plans described in Code Section 401(a). If the Plan receives a
direct transfer of elective deferrals (or amounts treated as
elective deferrals) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections
401(k)(2) and (10) continue to apply to those transferred elective
deferrals.
14.7 TERMINATION OF PARTICIPATION BY EMPLOYER. The Employer expects to
continue its participation in this Plan indefinitely but reserves
the right to terminate this Plan as to its Employees at any time by
written instrument filed with the Trustee. In the event of such
termination, partial termination or complete discontinuance of
contributions, or termination as provided in Section 13.3, the
account balance of each affected Participant will be nonforfeitable.
Distribution to Participants who have theretofore become entitled to
the payment of any benefits hereunder or to Spouses or Beneficiaries
of deceased Participants shall be made in the same manner as if the
Employer's participation had not terminated or contributions had not
been discontinued.
The account(s) of each such Participant, in the event of payment in other
than a single sum, need not be converted into cash, but may continue to
remain in the trust, with a right and obligation thereafter to
participate in the net earnings, losses, taxes and expenses of the trust.
If any Participant shall die after the termination of the Employer's
participation and before all of said Participant's interest has been
paid, then, upon the written direction of Employer, the entire
undistributed portion shall be paid in a single sum to the Participant's
Beneficiary.
In the event of complete discontinuance of contributions, the Employer
shall terminate this Plan as to its Employees and each Participant's
interest shall be distributed to such Participant.
14.8 NOTICE OF AMENDMENT, TERMINATION OR PARTIAL TERMINATION. The
Committee will notify affected Participants of an amendment,
termination or partial termination of the Plan within a reasonable
time.
14.9 SUBSTITUTION OF TRUSTEE. Any corporation or association into which
the Trustee may be converted, merged or with which it may be
consolidated, or any corporation or association resulting from any
conversion, merger, reorganization or consolidation to which the
Trustee may be a party, shall be the successor of the Trustee
hereunder without the execution or filing of any instrument or the
performance of any further act.
ARTICLE XV
DISCHARGE OF DUTIES BY FIDUCIARIES
15.1 DISCHARGE OF DUTIES. Subject to the provisions of Articles IX and
X, the Named Fiduciaries and any other fiduciary shall discharge
their respective duties set forth in the Plan solely in the interest
of the Participants and their Spouses and Beneficiaries and:
(A) for the exclusive purpose of:
(1) providing benefits to Participants and their Spouses and
Beneficiaries; and
(2) defraying reasonable expenses of administering the Plan;
(B) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims; and
(C) by diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so.
ARTICLE XVI
AMENDMENT AND CONTINUATION OF ORIGINAL PLAN
16.1 AMENDMENT AND CONTINUATION. Notwithstanding any of the foregoing
provisions of the Plan to the contrary, an Employer which has
previously established a profit sharing Plan and trust or money
purchase pension Plan and trust, as applicable, (the "Original
Plan") may, in accordance with the provisions of the Original Plan,
amend and continue that Plan in the form of this Plan and Trust and
become an Employer hereunder, subject to the following:
(A) Subject to the conditions and limitations of the Plan, each person
who is a Participant or former Participant under the Original Plan
immediately prior to the Effective Date of the amendment and
continuation thereof in the form of this Plan will continue as a
Participant under this Plan;
(B) The words "Original Plan" shall be substituted for the word "Plan"
where the word appears in Section 2.2 of the Plan;
(C) No election may be made in the Adoption Agreement if such election
will reduce the benefits of a Participant under the Original Plan to
less than the benefits to which he would have been entitled if he
had resigned from the employ of the Employer on the date of the
amendment and continuation of the Original Plan in the form of this
Plan;
(D) The amounts, if any, credited to a Participant's or former
Participant's accounts, immediately prior to the Effective Date of
the amendment and continuation of the Original Plan in the form of
this Plan shall constitute the opening balances in his or her
accounts, as appropriate, under this Plan and Trust;
(E) Amounts being paid to a former Participant or Beneficiary in
accordance with the provisions of the Original Plan shall continue
to be paid in accordance with such provisions; and
(F) Any Beneficiary designation in effect under the Original Plan
immediately before its amendment and continuation in the form of
this Plan shall be deemed to be a valid Beneficiary designation
filed with the Employer under Section 7.7 of this Plan, to the
extent consistent with the provisions of this Plan, unless and until
the Participant or former Participant revokes such Beneficiary
designation or makes a new Beneficiary designation under this Plan.
IN WITNESS WHEREOF, Society National Bank has established this prototype
Plan as of the 24th day of March, 1995.
SOCIETY NATIONAL BANK
By: /S/ EDWARD J. TOGNETTI
Title: SENIOR VICE PRESIDENT AND GENERAL COUNSEL
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 25, 1998, which appears
on page 37 of Priority Healthcare Corporation's Annual Report on Form 10-K
for the year ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Indianapolis, Indiana
December 28, 1998
