As filed with the Securities and Exchange Commission on June 19, 1998.
Registration No. 333-
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Friede Goldman International Inc.
(Exact name of registrant as specified in its charter)
Delaware 72-1362492
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
525 East Capital Street
Suite 402
Jackson, Mississippi 39201
(Address, including zip code, of Principal Executive Offices)
FRIEDE GOLDMAN INTERNATIONAL INC. 401(K) RETIREMENT PLAN
(Full title of the plan)
James A. Lowe, III
General Counsel and Secretary
525 East Capital Street
Suite 402
Jackson, Mississippi 39201
(601) 352-1107
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
copy to:
Thomas P. Mason, Esq.
Andrews & Kurth L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
to be Offering Price Offering Registration
Title of Securities to be Registered registered (1)(2) Per Share (3) Price (3) Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 200,000 Shares $27.66 $5,532,000 $1,631.94
=======================================================================================================================
</TABLE>
(1) The number of shares of Common Stock registered hereby is subject to
adjustment to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended (the "Securities Act"), this Registration Statement also
covers an indeterminate amount of plan interests to be offered or sold
pursuant to the Plan. In accordance with Rule 457(h)(2), no separate
fee calculations are made for plan interests.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h) under the Securities Act,
based upon the average of the high and low price per share of the
Registrant's Common Stock on the Nasdaq National Market as reported in
the Wall Street Journal on June 19, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants as specified by Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act"). These documents and
the documents incorporated herein by reference pursuant to Item 3 of Part II of
this Registration Statement, taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Securities Act (the "Prospectus").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
Friede Goldman International Inc. (the "Company") and the Friede
Goldman International Inc. 401(k) Retirement Plan (the "Plan") incorporate
herein by reference the following documents as of their respective dates as
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended April 5, 1998;
(c) The Company's Current Report on Form 8-K/A filed with the
Commission on April 21, 1998;
(d) The Company's Current Report on Form 8-K/A filed with the
Commission on March 17, 1998;
(e) The Company's Current Report on Form 8-K filed with the
Commission on February 20, 1998;
(f) The Company's Current Report on Form 8-K filed with the
Commission on January 16, 1998; and
(g) The description of the Company's common stock, par value
$0.01 (the "Common Stock"), contained in the Company's Registration
Statement on Form 8-A (No. 0-22595) filed with the Commission on May
22, 1997, pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
All documents filed by the Company or the Plan pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") subsequent to the date of this Registration Statement and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to be modified
or superseded for purposes of the Registration Statement and the Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is, or is deemed to be, incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or the Prospectus.
II-2
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation
II-3
<PAGE>
of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.
Article Ninth of the Company's Amended and Restated Certificate of
Incorporation states that:
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article Ninth
shall not eliminate or limit the liability of a director to the extent provided
by applicable law (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit. No amendment to or repeal of this Article
Ninth shall apply to, or have any effect on, the liability or alleged liability
of any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment or repeal. If the DGCL is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended.
In addition, Article VI of the Company's Bylaws further provides that
the Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement.
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------ -----------
4.1 Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 (No. 333-27599)).
4.2 Bylaws (incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (No. 333-27599)).
4.3* Friede Goldman International Inc. 401(k) Retirement Plan.
5.1 The Registrant 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.
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Ernst & Young.
23.3* Consent of Doane Raymond Chartered Accountants.
24.1* Power of Attorney (set forth on the signature page contained in Part II
of this Registration Statement).
- ----------------------------
*Filed herewith
II-4
<PAGE>
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement:
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and 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
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 6 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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
II-5
<PAGE>
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-6
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, 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 Jackson, State of Mississippi, on the 19th day
of June, 1998.
FRIEDE GOLDMAN INTERNATIONAL INC.
By: /s/ James A. Lowe, III
------------------------------
James A. Lowe, III
General Counsel and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Friede Goldman International Inc. (the "Company"), hereby
constitutes and appoints J. L. Holloway and James A. Lowe, III, or either of
them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file this Registration Statement under the Securities Act of 1933,
as amended, and any or all amendments (including, without limitation,
post-effective amendments), with all exhibits and any and all documents required
to be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do, if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ J. L. Holloway Chairman of the Board of Directors,
- --------------------------- President and Chief Executive Officer June 19, 1998
J. L. Holloway
/s/ Linda B. Helton Controller (Principal Financial Officer June 19, 1998
- --------------------------- and Principal Accounting Officer)
Linda B. Helton
Director June , 1998
- ---------------------------
Alan A. Baker
/s/ T. Jay Collins Director June 19, 1998
- ---------------------------
T. Jay Collins
</TABLE>
II-7
<PAGE>
<TABLE>
<S> <C> <C>
/s/ John G. Corlew Director June 19, 1998
- ----------------------------
John G. Corlew
/s/ Jerome L. Goldman Director June 19, 1998
- ----------------------------
Jerome L. Goldman
Director June , 1998
- ----------------------------
Raymond E. Mabus, Jr.
/s/ Howell W. Todd Director June 19, 1998
- ----------------------------
Howell W. Todd
</TABLE>
II-8
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Act of 1933,
as amended, the Compensation Committee has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pascagoula, State of Mississippi, on the 19th day of
June, 1998.
Plan Administrator:
Friede Goldman International Inc.
By: /s/ James A. Lowe, III Secretary
--------------------------------
Name: James A. Lowe, III Secretary
II-9
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
4.1 Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-1 (No. 333-27599)).
4.2 Bylaws (incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (No. 333-27599)).
4.3* Friede Goldman International Inc. 401(k) Retirement Plan.
5.1 The Registrant 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.
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Ernst & Young.
23.3* Consent of Doane Raymond Chartered Accountants.
24.1* Power of Attorney (set forth on the signature page contained in Part II
of this Registration Statement).
----------------------------
*Filed herewith
II-10
Exhibit 4.3
THE INSTITUTIONAL PROTOTYPE PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 12
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - Purpose; Internal Revenue Service Approval.....................1
1.1 Purpose........................................................1
1.2 Internal Revenue Service Approval..............................1
1.3 Qualification..................................................1
ARTICLE II - Definitions....................................................2
2.1 "Account"......................................................2
2.2 "Adoption Agreement" ..........................................2
2.3 "After-tax Contributions"......................................2
2.4 "Anniversary Date".............................................2
2.5 "Annuity Starting Date"........................................2
2.6 "Basic Plan Document"..........................................2
2.7 "Beneficiary"..................................................2
2.8 "Compensation".................................................2
2.9 "Disability"...................................................3
2.10 "Earned Income"................................................3
2.11 "Effective Date"...............................................4
2.12 "Elective Deferrals"...........................................4
2.13 "Employee".....................................................4
2.14 "Employer".....................................................4
2.15 "Employer Contribution"........................................5
2.16 "Entry Date"...................................................5
2.17 "Excess Compensation"..........................................5
2.18 "Family Member"................................................5
2.19 "Fidelity".....................................................5
2.20 "Fidelity Funds"...............................................5
2.21 "Fund Share"...................................................5
2.22 "Fiscal Year"..................................................5
2.23 "Highly Compensated Employee"..................................5
2.24 An "Hour of Service"...........................................7
2.25 "Matching Contributions".......................................7
2.26 "Maximum Disparity Rate".......................................8
2.27 "Non-Highly Compensated Employee"..............................8
2.28 "Normal Retirement Age"........................................8
2.29 "OASDI Rate"...................................................8
2.30 "One-Year Break in Service"....................................8
2.31 "Owner-Employee"...............................................8
2.32 "Participant"..................................................8
2.33 "Permissible Investment".......................................8
(i)
<PAGE>
Page
----
2.34 "Plan".........................................................8
2.35 "Plan Administrator"...........................................8
2.36 "Plan Year"....................................................8
2.37 "Qualified Matching Contributions".............................8
2.38 "Qualified Nonelective Contributions"..........................9
2.39 "Registered Investment Company"................................9
2.40 "Salary Adjustment Agreement"..................................9
2.41 "Self-Directed Brokerage Account"..............................9
2.42 "Self-Employed Individual".....................................9
2.43 "Sponsor"......................................................9
2.44 "Taxable Wage Base"............................................9
2.45 "Trust"........................................................9
2.46 "Trustee"......................................................9
2.47 "Valuation Date"...............................................9
2.48 A "Year of Eligibility Service"................................9
2.49 "Years of Vesting Service".....................................9
ARTICLE III - Participation............................... ................10
3.1 Satisfaction of Participation Requirements....................10
3.2 Determination of Satisfaction of Participation Requirements by
Plan Administrator........................................11
3.3 Duration of Participation.....................................11
3.4 Leaves of Absence, etc........................................11
3.5 Non-Discrimination............................................11
3.6 Additional Participation Requirements.........................11
3.7 Transfer from Eligible Class..................................12
3.8 Transfer to Eligible Class....................................12
ARTICLE IV - Contributions to the Trust.....................................12
4.1 Salary Adjustment Agreement...................................12
4.2 Elective Deferrals............................................13
4.3 After-tax Contributions.......................................13
4.4 Matching Contributions........................................14
4.5 Employer Contributions........................................14
4.6 Determination of Contributions................................15
4.7 Payment of Contributions......................................15
4.8 Contributions Held in Trust...................................15
4.9 Reversion of Certain Employer Contributions...................16
4.10 Rollover Contributions........................................16
ARTICLE V - Participants' Accounts: Allocation of Assets and Contributions..16
5.1 Participants' Accounts........................................16
5.2 Allocation of Elective Deferrals..............................17
(ii)
<PAGE>
Page
----
5.3 Allocation of After-tax Contributions........................17
5.4 Allocation of Matching Contributions.........................17
5.5 Allocation of Employer Contributions.........................17
5.6 Allocation of Rollover Contributions.........................19
5.7 Allocation of Forfeitures....................................19
5.8 Valuation of Trust Assets and Adjustment of Account Balances.20
5.9 Investment of Contributions..................................20
5.10 Distributions and Forfeitures................................21
ARTICLE VI - Limitations on Elective Deferrals, Matching Contributions and
After-Tax Contributions...............................................21
6.1 Maximum Amount of Elective Deferrals.........................21
6.2 Limitation on Elective Deferrals.............................22
6.3 Limitation on After-tax Contributions and Matching
Contributions............................................25
6.4 Multiple Use Test............................................28
6.5 Further Limitations on Matching Contributions................28
6.6 Special Rules................................................28
6.7 Responsibility of the Employer and the Plan Administrator....29
ARTICLE VII - Payments to or for the Accounts of Participants or Terminated
Participants..........................................................29
7.1 Restrictions on Payments and Distributions...................29
7.2 Retirement Benefits..........................................29
7.3 Disability Benefits..........................................29
7.4 Death Benefits...............................................29
7.5 Termination of Employment Prior to Retirement or Death.......32
7.6 In-Service Withdrawals.......................................34
7.7 Methods and Timing of Payment................................36
7.8 Minimum Distribution Requirements............................43
7.9 Whereabouts of Participants and Beneficiaries................46
7.10 Loans to Participants........................... ..........47
7.11 Distributions Upon Termination of Plan or Disposition
of Assets or Subsidiary.................................49
7.12 Responsibility of the Employer and the Plan Administrator....49
ARTICLE VIII - Amendment and Termination of Plan............................49
8.1 Amendment by Sponsor.........................................49
8.2 Amendment by Employer........................................50
8.3 Limitations on Vesting Amendments............................51
8.4 Termination of Plan..........................................52
8.5 Merger or Consolidation......................................52
8.6 Termination of Trust.........................................52
(iii)
<PAGE>
Page
----
ARTICLE IX - Plan Administration............................................53
9.1 Plan Administrator...........................................53
9.2 Powers and Responsibilities of Plan Administrator............53
9.3 Action by Plan Administrator.................................54
9.4 Discretionary Action.........................................54
9.5 Employment of Agents.........................................54
9.6 Indemnification of Plan Administrator........................54
9.7 Claims Procedure.............................................54
ARTICLE X - Establishment of Trust and Rights and Duties of Trustee.........55
10.1 Establishment of Trust.......................................55
10.2 Powers of Trustee............................................55
10.3 Investments..................................................57
10.4 Method of Holding and Selling Securities.....................57
10.5 Voting; Delivery of Information..............................57
10.6 Power to Borrow..............................................58
10.7 Reliance on Trustee as Owners................................58
10.8 Liquidation of Assets........................................58
10.9 Reliance by Trustee on Other Persons.........................58
10.10 Action by Individual Trustees................................59
10.11 Records and Accounting.......................................59
10.12 Payment of Taxes.............................................59
10.13 Compensation and Expenses....................................60
10.14 Resignation or Removal of Trustee............................60
10.15 Indemnification of Trustee...................................60
10.16 Successor to Institutional Trustee...........................61
10.17 Responsibilities of Trustee..................................61
10.18 Allocation and Delegation of Responsibilities................61
ARTICLE XI - The Employer...................................................62
11.1 No Contract of Employment....................................62
11.2 No Contract to Maintain Plan.................................62
11.3 Liability of an Employer.....................................62
11.4 Action by an Employer........................................62
11.5 Successor to Business of an Employer.........................62
11.6 Dissolution of the Employer..................................63
11.7 Plan Covering Owner-Employee.................................63
ARTICLE XII - Limitation on Allocations.....................................64
ARTICLE XIII - Amendment and Continuation of Predecessor Plan; Transfer of Funds
to or from Other Qualified Plans......................................70
13.1 Amendment and Continuation of Predecessor Plan...............70
(iv)
<PAGE>
Page
----
13.2 Transfer of Funds from an Existing Plan......................71
13.3 Acceptance of Assets by Trustee..............................71
13.4 Transfer of Assets from Trust................................72
ARTICLE XIV - Miscellaneous.................................................72
14.1 Spendthrift Provision........................................72
14.2 Notices......................................................72
14.3 Facility of Payment..........................................72
14.4 Construction.................................................72
14.5 Impossibility of Performance.................................73
14.6 Definition of Words..........................................73
14.7 Titles.......................................................73
14.8 Conflict with Plan Provisions................................73
14.9 Non-Discrimination Data Substantiation.......................73
ARTICLE XV - Top Heavy Plans..............................................73
15.1 Application of Article.......................................73
15.2 Definitions..................................................73
15.3 Determination of Top-Heavy Status............................76
15.4 Provisions Applicable When Plan is Not Top-Heavy.............76
15.5 Provisions Applicable When Plan is Top Heavy.................76
15.6 Responsibility of the Employer and the Plan Administrator....77
(v)
<PAGE>
THE INSTITUTIONAL PROTOTYPE PLAN
ARTICLE I - Purpose; Internal Revenue Service Approval
1.1 Purpose. The Employer and the Trustee have adopted the Plan and
Trust, consisting of this Basic Plan Document and the Adoption Agreement
executed by the Employer and the Trustee, for the purpose of prescribing uniform
terms and conditions under which retirement and other benefits are to be
provided from the Trust Fund to the Employer's Employees. It is intended that
the Plan and Trust shall qualify as an employees' retirement trust within the
meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and shall comply with all applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). So far as
possible, the Plan should be interpreted in a manner consistent with this
intent. Except as provided in Sections 1.3 and 4.5 of the Plan, under no
circumstances shall any part of the corpus or income of the Trust, other than
such part as may be required to pay taxes, if any, or administrative expenses of
the Plan or Trust, be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries.
1.2 Internal Revenue Service Approval. Any Employer who adopts only a
plan or plans established under a Standardized Adoption Agreement and Basic Plan
Document No. 12, and who does not and has not in the past maintained any other
plan (including a welfare benefit fund, as defined in Section 419(e) of the
Code, which provides post-retirement medical benefits allocated to separate
accounts for key employees, as defined in Section 419A(d)(3) of the Code, or an
individual medical account, as defined in Section 415(l)(2) of the Code), may
rely on the letter received by the Sponsor from the Internal Revenue Service
determining that the text of the Plan satisfies the requirements of Section
401(a) of the Code and that the text of the Trust satisfies the requirements of
Section 501(a) of the Code. Any other Employer should apply to the Internal
Revenue Service, as soon as reasonably practicable after the Plan is
established, for a determination that the Plan and Trust meet the aforesaid
requirements.
1.3 Qualification. If the Plan fails to attain or retain qualification
under Sections 401(a) and 501(a) of the Code, the Plan will no longer
participate in this prototype plan and will be considered an individually
designed plan.
Contributions by the Employer to the Trust are conditioned upon the
Trust's initial qualification and retention of qualification upon amendment. If
the Plan fails to attain or retain initial qualification, such contributions
shall be returned to the Employer within one year after the denial of
qualification, provided that the plan or plan amendment is submitted to the
Internal Revenue Service within one year from the date of its adoption.
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ARTICLE II - Definitions
Wherever used herein, unless the context clearly indicates otherwise,
the following words shall have the following meanings:
2.1 "Account" means any of the accounts established for a Participant
in accordance with Section 5.1.
2.2 "Adoption Agreement" means an agreement between the Employer and
the Trustee, which establishes or amends the Plan and Trust and designates the
optional provisions selected by the Employer and pursuant to which the Trustee
accepts its responsibility under Article X. The provisions of the Adoption
Agreement shall be an integral part of the Plan.
2.3 "After-tax Contributions" means the contributions made to the Plan
by Participants pursuant to Section 4.3 of the Plan.
2.4 "Anniversary Date" of a Plan means the last day of its Plan Year.
2.5 "Annuity Starting Date" means the first day of the first period for
which an amount is paid as an annuity or in any other form.
2.6 "Basic Plan Document" means "THE INSTITUTIONAL PROTOTYPE PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 12" as set forth herein or as the same may be
amended from time to time.
2.7 "Beneficiary" means the person or persons designated pursuant to
the provisions of Section 7.4, to receive distributions of such Participant's
account or accounts upon his death.
2.8 "Compensation" for purposes of Articles IV, V and VI, means wages
as defined in Section 3401 (a) of the Code and all other payments of
compensation paid to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to furnish the
Employee a written statement under Sections 6041(d) and 6051(a)(3) of the Code
(i.e., information required to be reported in the Wages, Tips and Other
Compensation Box on Form W-2). Compensation must be determined without regard to
any rules under Section 3401(a) of the Code 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) of
the Code). Compensation 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 Section 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
If specified by the Employer in the Adoption Agreement, for purposes of
Articles IV and V, Compensation or Earned Income shall exclude overtime,
bonuses, commissions, taxable fringe
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benefits, income incurred upon the exercise of stock options, severance pay or
amounts paid to the Participant before the Participant is eligible to
participate in the Plan.
For purposes of Section 2.23 (Highly Compensated Employee) and Section
15.2(b) (Key Employee), Compensation means Compensation as defined in Section
12.5(c), but including any amount which is contributed by the Employer pursuant
to a salary reduction agreement which is not includible in the gross income of
the Employee under Section 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
For purposes of Article XII (Code Section 415 Limitations) and Section
15.5(a) (top-heavy minimum contribution), Compensation means Compensation as
defined in Section 12.5(c).
In the case of any Self-Employed Individual, Compensation shall include
the Self-Employed Individual's Earned Income.
The annual Compensation of each Participant taken into account for
purposes of determining all benefits provided under the Plan for any
determination period shall not exceed $150,000, as adjusted by the Secretary at
the same time and in the same manner as under Section 415(d) of the Code. If the
period for determining Compensation used in calculating a Participant's
allocation for a determination period is a short Plan Year (i.e., shorter than
twelve months), the annual compensation limit is an amount equal to the
otherwise applicable annual compensation limit multiplied by a fraction, the
numerator of which is the number of months in the short Plan Year, and the
denominator of which is twelve.
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), 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.
2.9 "Disability" means a Participant's inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and such impairment qualifies the Participant to receive
disability benefits from the Social Security Administration.
2.10 "Earned Income" of a Self-Employed Individual means the net
earnings from self-employment in the trade or business with respect to which the
Plan is established, for which personal services of the Self-Employed Individual
are a material income-producing factor, determined without regard to items not
included in gross income and the deductions allocable to such items. In
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determining Earned Income, such net earnings are reduced by contributions by the
Employer to a qualified plan to the extent deductible under Section 404 of the
Code.
Net earnings shall be determined with regard to the deduction allowed
to the Employer by Section 164(f) of the Code.
2.11 "Effective Date" means the first day of the month on which the
Plan or the amendment, whichever is applicable, becomes effective as specified
in the applicable Adoption Agreement.
2.12 "Elective Deferrals" means the contributions made to the Plan by
the Employer pursuant to Section 4.2 of the Plan on behalf of a Participant who
has entered into a Salary Adjustment Agreement with the Employer.
2.13 "Employee" means any person who is employed by the Employer or any
Related Employer, including a Self-Employed Individual. An Employee's employment
shall be deemed to have commenced on the date on which he first performs an Hour
of Service as an Employee.
Any leased employee shall be treated as an Employee and contributions
or benefits provided by the leasing organization which are attributable to
services performed for the Employer or any Related Employer shall be treated as
provided by the employer. Notwithstanding the foregoing, if such leased
employees constitute less than twenty percent (20%) of the Employer's non-highly
compensated workforce within the meaning of Section 414(n)(5)(C)(ii) of the
Code, the preceding sentence shall not apply to any leased employee if such
employee is covered by a money purchase pension plan providing: (1) a
non-integrated employer contribution rate of at least ten percent (10%) of
compensation (as defined in Section 415(c)(3) of the Code, but including amounts
contributed to a salary reduction agreement which are excludable from the
employee's gross income under Sections 125, 402(a)(8), 402(h) or 403(b) of the
Code), (2) immediate participation, and (3) full and immediate vesting. For
purposes of this paragraph, the term "leased employee" means any person (other
than an employee of the Employer) who pursuant to an agreement between the
Employer and any other person ("leasing organization") has performed services
for the Employer (or for the Employer and/or 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 Employer.
2.14 "Employer" means a self-employed individual, sole proprietor,
partnership, trust, or corporation identified as the Employer in the Adoption
Agreement or any successor to all or a major portion of its business which
pursuant to Section 11.5 adopts the Plan. "Related Employer" means (a) a
corporation which, together with the Employer, is a member of a controlled group
of corporations (as defined in Section 414(b) of the Code), (b) a trade or
business (whether or not incorporated) which is under common control (as defined
in Section 414(c) of the Code) with the Employer, (c) a corporation, a
partnership or other entity which, together with the Employer, is a member of an
affiliated service group (as defined in Section 414(m) of the Code), or (d) any
other
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entity required to be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code. When used in this Basic Plan Document, the terms "an
Employer" or "any Employer" refer to the Employer and all Related Employers.
If the organization or other entity named as Employer in the Adoption
Agreement is a sole proprietorship or a professional corporation and the sole
proprietor of such proprietorship or the sole shareholder of the professional
corporation dies, then the legal representative of the estate of such sole
proprietor or shareholder shall be deemed to be the Employer until such time as,
through the disposition of such sole proprietor's or sole shareholder's estate
or otherwise, any organization or other entity succeeds to the interests of the
sole proprietor in the proprietorship or the sole shareholder in the
professional corporation.
2.15 "Employer Contribution" means the contributions made by the
Employer for the Participants pursuant to Section 4.5 of the Plan.
2.16 "Entry Date" means (a) the first day of the Plan Year and (b) the
first day of the seventh month of the Plan Year, or such other date or dates as
may be elected by the Employer in the Adoption Agreement.
2.17 "Excess Compensation" means the Participant's Compensation in
excess of the Taxable Wage Base.
2.18 "Family Member" includes the spouse, lineal ascendants and
descendants of an Employee or former Employee and the spouses of such lineal
ascendants and descendants.
2.19 "Fidelity" means Fidelity Management and Research Company, or its
successor, which is the mass submitter of this prototype plan.
2.20 "Fidelity Funds" means any Registered Investment Company for which
Fidelity serves as investment adviser or any group trust for which Fidelity or
an affiliate serves as investment manager or discretionary trustee and that has
been made available as investment under this Plan.
2.21 "Fund Share" means the share, unit or other evidence of ownership
in a Permissible Investment.
2.22 "Fiscal Year" of an Employer means a twelve consecutive month
period which is the fiscal year of the Employer as specified in its Adoption
Agreement.
2.23 "Highly Compensated Employee" means either a highly compensated
active employee or a highly compensated former employee.
A highly compensated active employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received
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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 include: (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 one
hundred (100) Employees who received the most Compensation from the Employer
during the determination year; and (ii) Employees who are 5-percent owners at
any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
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 Participant of either a 5-percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the ten (10) most Highly
Compensated Employees ranked on the basis of Compensation paid by the Employer
during such year, then the Family Participant and the 5-percent owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the Family
Participant 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 Participant and 5-percent owner or top-ten Highly Compensated
Employee.
The determination of who is a Highly Compensated Employee, including
the determination of the number and identity of Employees in the top-paid group,
the top one hundred (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.
The determination of who is a Highly Compensated Employee may be made
pursuant to Internal Revenue Service Revenue Procedure 93-42, Data
Substantiation Guidelines and NonDiscrimination Requirements of Sections
401(a)(4), 410(b) and Related Code Sections.
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2.24 An "Hour of Service" means:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for an Employer or a Related Employer. These hours
shall be credited to the Employee for the computation period in which the duties
are performed;
(b) Each hour for which an Employee is paid, or entitled to payment by
an Employer or a Related Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more than
501 Hours of Service will be credited under this paragraph for any single
continuous period (whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and credited pursuant to
Section 2530.200b-2(b) and (c) of the Department of Labor Regulations which are
incorporated herein by this reference;
(c) Each hour for which an Employee would have been credited with an
Hour of Service but for his absence from work by reason of pregnancy, birth or
adoption of his child, or for purposes of caring for such child during a period
beginning immediately following such birth or adoption. No more than 501 Hours
of Service will be credited under this paragraph for any single continuous
period. Such Hours shall be credited in the computation period during which such
absence begins if such credit is necessary to avoid a One-Year Break in Service
for such year; otherwise, such Hours shall be credited in the immediately
following computation period;
(d) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer. The same Hours of
Service shall not be credited both under paragraph (a), (b) or (c), as the case
may be, and under this paragraph (d). These hours shall be credited to the
Employee for the computation period to which the award or agreement pertains
rather than the computation period in which the award, agreement or payment is
made;
(e) Each hour (other than those credited under Paragraphs (a), (b),
(c), or (d)) for which an Employee is credited pursuant to Section 3.4 of the
Plan; and
(f) Where the Employer maintains the plan of a predecessor employer or
if a predecessor employer has been designated as such in the Adoption Agreement,
Hours of Service for such predecessor employer shall be treated as Hours of
Service for the Employer. If such predecessor employer was not a corporation,
Hours of Service as an Employee, a sole proprietor or partner of such
predecessor employer shall be treated as Hours of Service for the Employer.
2.25 "Matching Contributions" means the contributions made by the
Employer pursuant to Section 4.4 of the Plan on behalf of a Participant on
account of his Elective Deferrals made under this Plan.
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2.26 "Maximum Disparity Rate" means the greater of (i) 5.7 percent or
(ii) the OASDI Rate.
2.27 "Non-Highly Compensated Employee" means any Employee entitled to
participate in the Plan as determined under Article III who is not a Highly
Compensated Employee.
2.28 "Normal Retirement Age" for any Employee means age 65 or such
lower age specified in the Adoption Agreement.
2.29 "OASDI Rate" for a Plan Year shall mean that portion of the tax
rate under Section 3111(a) of the Code in effect on the first day of the Plan
Year which is attributable to old age insurance.
2.30 "One-Year Break in Service" means, with respect to any Employee, a
period of severance of at least twelve consecutive months. A period of severance
is a continuous period of time during which the Employee does not perform an
Hour of Service for the Employer. Such period begins on the date the Employee
retires, quits or is discharged, or if earlier, the twelve-month anniversary of
the date on which the Employee was otherwise absent from service.
2.31 "Owner-Employee" means an individual who is a sole proprietor of
an Employer or who is a partner owning more than ten percent (10%) of either the
capital or profits interest of a partnership which is an Employer.
2.32 "Participant" means any Employee entitled to participate in the
Plan as determined under Article III and any former Employee with respect to
whom any Accounts are maintained under the Plan.
2.33 "Permissible Investment" means the investments specified by the
Plan Administrator available for investment of assets of the Trust, and agreed
to by the Trustee and the Sponsor, which may include Fidelity Funds, other
Registered Investment Companies, group or collective investment funds maintained
by the Trustee, or bank or insurance companies fixed interest income contracts.
2.34 "Plan" means the plan established by the Employer under an
Adoption Agreement.
2.35 "Plan Administrator" means the administrator and named fiduciary
of the Plan as identified in Section 9.1.
2.36 "Plan Year" means the calendar year, unless a different twelve
consecutive month period is specified in the Adoption Agreement.
2.37 "Qualified Matching Contributions" means the contributions made by
the Employer for a Plan Year pursuant to Section 4.5(d) on behalf of a
Participant who is a Non-Highly Compensated Employee and who has made Elective
Deferrals to the Plan for the Plan Year.
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2.38 "Qualified Nonelective Contributions" means the contributions made
by the Employer pursuant to Section 4.5(c) on behalf of a Participant who is a
Non-Highly Compensated Employee.
2.39 "Registered Investment Company" means any one or more
corporations, partnerships or trusts registered under the Investment Company Act
of 1940, as amended.
2.40 "Salary Adjustment Agreement" means the agreement described in
Section 4.2 and entered into between a Participant and the Employer.
2.41 "Self-Directed Brokerage Account" means a brokerage account
established on behalf of a Participant and which may be invested at the
self-direction of the Participant in any Permissible Investments or any
publicly-traded security. No part of a Self-Directed Brokerage Account may be
invested in stock of the Employer.
2.42 "Self-Employed Individual" means an individual who has Earned
Income for the taxable year from an Employer, or an individual who would have
had such Earned Income but for the fact that the Employer had no Net Profits for
the taxable year.
2.43 "Sponsor" means Fidelity [OPTIONAL = any entity that has become a
sponsoring organization of this Fidelity mass submitter institutional prototype
plan may substitute its name here for that of Fidelity.]
2.44 "Taxable Wage Base" means the maximum amount of earnings which may
be considered wages for the calendar year containing the first day of the Plan
Year, under Section 3121(a)(1) of the Code.
2.45 "Trust" means the trust established under Article X and an
Adoption Agreement.
2.46 "Trustee" means the financial institution or person or persons who
have executed the Adoption Agreement as trustee or trustees or successor trustee
or trustees appointed by the Employer and acting as trustee for the purposes of
the Plan.
2.47 "Valuation Date" means any date for revaluation of the Trust and
adjustments of the accounts held thereunder as determined in accordance with
Section 5.8.
2.48 A "Year of Eligibility Service" for any Employee of an Employer
means each twelve consecutive month period beginning on the date the Employee
first performs an Hour of Service or any anniversary thereof, during which
twelve-month period he is credited with at least 1,000 Hours of Service.
2.49 "Years of Vesting Service" means, with respect to any Employee,
the number of whole years of his periods of service with the Employer or a
Related Employer, subject to any
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exclusions elected by the Employer in the Adoption Agreement. An Employee will
receive credit for the aggregate of all time periods commencing with the
Employee's first day of employment or reemployment and ending on the date a
One-Year Break in Service begins, except to the extent any such periods are
excluded under the Adoption Agreement. The first day of employment or
reemployment is the first day the Employee performs an Hour of Service. An
Employee will also receive credit for any period of severance of less than
twelve consecutive months. Fractional periods of a year will be expressed in
terms of days.
In the case of a Participant who has five (5) consecutive One-Year
Breaks in Service, all Years of Vesting Service after such breaks in service
will be disregarded for the purpose of vesting the employer-derived account
balance that accrued before such breaks, but both pre-break and post-break
service will count for the purposes of vesting the Employer-derived account
balance that accrues after such breaks.
In the case of a Participant who does not have five (5) consecutive
One-Year Breaks in Service, both the pre-break and post-break service will count
in vesting both the pre-break and post-break Employer-derived account balance.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a One-Year
Break in Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the individual, (b) by reason of the birth of a child of the individual, (c)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (d) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
If the Plan maintained by the Employer is the plan of a predecessor
employer, an Employee's Years of Vesting Service shall include years of service
with such predecessor employer. In any case in which the Plan maintained by the
Employer is not the plan maintained by a predecessor employer, service for such
predecessor shall be treated as service for the Employer to the extent provided
in the Adoption Agreement.
ARTICLE III- Participation
3.1 Satisfaction of Participation Requirements. Each Employee of an
Employer who on the Effective Date meets the participation requirements
specified in Section 3.6 and the conditions specified in the Adoption Agreement
shall become or continue to be a Participant on the Effective Date. Each other
Employee of an Employer, including each future Employee, who meets such
participation requirements after the Effective Date shall become a Participant
on the later of the date he becomes an Employee and the Entry Date coincident
with or next following the date he meets such participation requirements. An
Employer using a Full Service Adoption Agreement may specify different
conditions that an Employee must meet in order to be eligible to make Elective
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Deferral and After-tax Contributions or to be eligible to receive Employer
Contributions and Matching Contributions. An Employee who has met the
eligibility conditions to make Elective Deferrals and After-tax Contributions
but who has not met the eligibility conditions for Employer Contributions and
Matching Contributions shall not be considered a Participant for purposes of
eligibility to receive Employer Contributions and Matching Contributions until
the Entry Date on which such conditions are met.
3.2 Determination of Satisfaction of Participation Requirements by Plan
Administrator. The determination of the participation of an Employee of an
Employer shall be made by the Plan Administrator from the Employer's records.
3.3 Duration of Participation. A Participant shall cease participation
for all purposes of the Plan when he no longer satisfies the participation
requirements and is not eligible and will not become eligible to receive any
further benefits from the Plan on account of his prior employment. A former
Participant or Employee who terminated employment after satisfying the
participation requirements shall again become a Participant immediately on the
day when he again becomes an eligible Employee.
3.4 Leaves of Absence, etc. In the case of an Employee who, without
pay, leaves an Employer to enter the armed services of the United States of
America and who returns to its employ at or before the expiration of ninety (90)
days after the date on which he is first entitled to be released from active
duty in the armed services (or at such later date as the Employer may approve or
as may be required by law) or in the case of an Employee who is absent from
work, with the approval of an Employer and without pay, by reason of vacation,
sickness, disability, temporary lay-off, jury duty, or leave of absence for
other similar reasons, the Employer shall credit such Employee for such period
of absence with the number of Hours of Service determined by multiplying the
number of Hours of Service in such Employee's last full regular work week
immediately preceding such absence by the duration (in weeks) of such absence.
For purposes of granting leaves of absence, Employees in similar circumstances
shall be treated alike by an Employer in accordance with the standards set forth
in Section 9.4. Nothing herein contained shall restrain an Employer's right to
terminate the employment of any Employee, whether or not during a leave of
absence.
3.5 Non-Discrimination. In no event may the participation requirements
under the Plan be more favorable for Highly Compensated Employees (as defined in
Section 414(q) of the Code) than for other Employees.
3.6 Additional Participation Requirements. An Employee employed in the
ineligible categories described in paragraph (a), (b) and/or (c) below will not
be eligible to become a Participant in the Plan:
(a) Employees who are nonresident aliens and who receive no
compensation from the Employer, which constitutes income from sources within the
United States.
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(b) If the Adoption Agreement provides that Employees covered by a
collective bargaining agreement which does not include this Plan are excluded
from the Plan, then such exclusion shall be applicable only if retirement
benefits were the subject of good faith bargaining. If this paragraph (b) is
applicable, the term "collective bargaining representative" does not include any
organization more than half of whose members are employees who are owners,
officers, or executives of the Employer.
(c) Classes of Employees specified by the Employer in the Adoption
Agreement as ineligible to participate in the Plan.
3.7 Transfer from Eligible Class. In the event a Participant is no
longer in an eligible class of Employees, as defined in the Adoption Agreement
and Section 3.6, such Participant will cease be eligible to make Elective
Deferrals or After-Tax Contributions or to share in Employer Contributions,
Matching Contributions and forfeitures but shall continue to be treated as an
Employee for all other purposes under the Plan. If such Participant returns to
an eligible class, such Participant shall participate immediately in the Plan
upon returning to such eligible class.
3.8 Transfer to Eligible Class. In the event an Employee who is not a
member of an eligible class of employees, as defined in the Adoption Agreement
and Section 3.6, becomes a member of an eligible class, such Employee shall
become a Participant immediately if such Employee has satisfied the otherwise
applicable participation requirements specified in the Adoption Agreement.
ARTICLE IV - Contributions to the Trust
4.1 Salary Adjustment Agreement. If an Employer has specified in its
Adoption Agreement that Elective Deferrals may be made to the Trust, each
Participant may, but shall not be required to, enter into a Salary Adjustment
Agreement with the Employer under which the Participant agrees to reduce his
Compensation by a specified percent and the Employer agrees to contribute such
amount on the Participant's behalf to the Trust. The terms of such Salary
Adjustment Agreement shall:
(a) specify the percentage of such Participant's Compensation to be
paid by the Employer on the Participant's behalf each pay period to the Trust;
(b) provide that the Plan Administrator may reduce the percentage or
amount in (a) if necessary to assure that the applicable limitations on
contributions and allocations set forth in Articles VI and XII are satisfied for
each Plan Year;
(c) specify the date as of which the Salary Adjustment Agreement
becomes effective, which date shall be the first day of a future pay period; and
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(d) set forth such other or additional information as in the opinion of
the Plan Administrator is desirable or necessary for the operation of the Plan.
An Employee who is a Participant on the Effective Date may enter into a
Salary Adjustment Agreement with the Employer at least fifteen (15) days (or
such shorter period as the Plan Administrator allows) prior to the Effective
Date, such Salary Adjustment Agreement to be effective as of the first payroll
period commencing after said date. In the case of any other Employee becoming a
Participant for the first time or in the case of a former Employee becoming a
Participant upon reemployment, (i) the Plan Administrator shall notify such
Employee of his eligibility to enter into a Salary Adjustment Agreement in
advance of the date on which such Employee becomes a Participant and shall
forward to such individual a Salary Adjustment Agreement; and (ii) salary
reduction shall commence on behalf of such Employee with the first pay period
commencing after he becomes a Participant if such Employee enters into the
Salary Adjustment Agreement with the Employer at least fifteen (15) days (or
such shorter period as the Plan Administrator allows) prior to the date he
becomes a Plan Participant. In all cases, the initiative for applying for salary
reduction rests with the individual Employee.
4.2 Elective Deferrals. Subject to the provisions of Articles VI and
XII, for each pay period, the Employer shall contribute to the Trust on behalf
of each Participant an amount equal to the percentage of such Participant's
Compensation specified in the Salary Adjustment Agreement between the Employer
and such Participant. Each Participant may elect to increase or decrease the
amount or percentage rate of such Participant's salary adjustment only as of the
first day of any future payroll period for which the Employer can reasonably
process the request. Each Participant may elect to suspend completely his salary
adjustment as of the first day of any future payroll period for which the
Employer can reasonably process the request. Each such change or suspension
shall be made by notice filed with the Plan Administrator in advance. No change
in or suspension of the amount or percentage rate of the Participant's salary
adjustment shall be made at any other time by the Participant and the salary
adjustment amount or percentage rate in force at any time shall continue in
force unless and until changed in accordance with the provisions of the
preceding sentences. All Elective Deferrals under this Section 4.2 shall be
recorded in a separate Elective Deferral Account and shall be fully vested at
all times.
4.3 After-tax Contributions. If an Employer has specified in its
Adoption Agreement that its Employees who are Participants may contribute to the
Trust, then, subject to the provisions of Articles VI and XII, each such
Participant may, but shall not be required to, contribute to the Trust such
amounts in cash as he may choose. Such amounts shall be nondeductible
contributions. After-tax Contributions for each Plan Year may be made by
payroll deduction or otherwise, as permitted by the Employer and the Plan
Administrator, and must be made at such time or times as the Employer shall
determine. Each Participant may elect to increase or decrease the amount or
percentage rate of his After-tax Contributions only as of the first day of any
future payroll period for which the Employer can reasonably process the request.
Each Participant may elect to suspend completely his After-tax Contributions as
of the first day of any future payroll period for which the Employer can
reasonably process the request. Each such change or suspension shall be made by
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notice filed with the Plan Administrator in advance. No change in or suspension
of the amount or percentage rate of the Participant's After-tax Contributions
shall be made at any other time by the Participant and the amount or percentage
rate of After-tax Contributions in force at any time shall continue in force
unless and until changed in accordance with the preceding sentences. All
contributions under this Section 4.3 shall be recorded in a separate After-tax
Account and shall be fully vested at all times.
4.4 Matching Contributions. If an Employer has specified in its
Adoption Agreement that Matching Contributions will be made to the Trust, then
for each Plan Year, the Employer shall, subject to the restrictions set forth in
Article XII, pay to the Trustee an amount determined in accordance with its
Adoption Agreement; provided, however, that the Matching Contribution paid to
the Trustee for any Plan Year shall not exceed the maximum amount permitted as a
Federal income tax deduction for the Employer on account of such contribution
for such Plan Year. The amount of Matching Contributions to be funded shall be
reduced by any available forfeitures pursuant to Section 5.7 unless otherwise
provided in the applicable Adoption Agreement. Matching Contributions shall be
calculated and funded by the Employer at the frequency set forth in the Adoption
Agreement.
The Plan is designed to qualify as a profit-sharing plan for purposes
of Sections 401(a), 402, 412 and 417 of the Code, but the Employer may make
Matching Contributions without regard to net profits.
4.5 Employer Contributions.
(a) Money Purchase Formula: If the Plan is established under a Money
Purchase Adoption Agreement (a "Money Purchase Plan"), for each Plan Year, an
Employer shall, subject to the restrictions set forth in Article XII, pay to the
Trustee an amount determined in accordance with its Adoption Agreement;
provided, however, that an Employer's contribution paid to the Trustee for any
Plan Year shall not exceed the maximum amount permitted as a Federal income tax
deduction for the Employer on account of such contribution for such Plan Year.
The amount of the Employer Contributions to be funded shall be reduced
by any available forfeitures pursuant to Section 5.7 hereof unless otherwise
provided in the applicable Adoption Agreement.
(b) Profit Sharing Formula: If the Plan is established under a Profit
Sharing Adoption Agreement, for each Plan Year, an Employer shall, subject to
the restrictions set forth in Article XII, pay to the Trustee an amount
determined in accordance with its Adoption Agreement; provided, however, that an
Employer's contribution paid to the Trustee for any Plan Year shall not exceed
the maximum amount permitted as a Federal income tax deduction for the Employer
on account of such contribution for such Plan Year.
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The Plan is designed to qualify as a profit-sharing plan for purposes
of Sections 401(a), 402, 412 and 417 of the Code, but the Employer may make
Employer Contributions to the Plan without regard to net profits.
(c) Qualified Nonelective Contributions. If an Employer has specified
in its Adoption Agreement that Qualified Nonelective Contributions may be made
to the Trust, then in lieu of distributing Excess Contributions as provided in
Section 6.2 of the Plan, or distributing or forfeiting Excess Aggregate
Contributions as provided in Section 6.3 of the Plan, in any Plan Year, the
Employer may make a specific contribution to the Trust calculated on a pro rata
basis in accordance to Compensation (as defined for testing purposes) on behalf
of all Participants who are Non-highly Compensated Employees in an amount
sufficient to enable the Plan to satisfy the Average Deferral Percentage test
and/or Average Contribution Percentage test pursuant to regulations under the
Code. Such Qualified Nonelective Contributions are subject to full and immediate
vesting and are distributable only after the Participant has attained age 59
1/2, has terminated employment, or pursuant to Section 7.11.
(d) Qualified Matching Contributions. In lieu of distributing or
forfeiting Excess Aggregate Contributions as provided in Section 6.3 of the
Plan, if so provided in the Adoption Agreement, in any Plan Year, the Employer
may make a specific contribution to the Trust calculated on a pro rata basis
based on Matching Contributions allocated to all Participants who are Non-Highly
Compensated Employees and who made Elective Deferrals to the Trust during the
Plan Year up to the amount sufficient to enable the Plan to satisfy the Average
Contribution Percentage test pursuant to regulations under the Code. Such
Qualified Matching Contributions are subject to full and immediate vesting and
are distributable only after the Participant has attained age 59 1/2, has
terminated employment, or pursuant to Section 7.11.
4.6 Determination of Contributions. The amount of Employer
Contributions and Matching Contributions for each Plan Year shall be determined
by the Employer in accordance with the terms of this Plan and the applicable
Adoption Agreement. The amount of the contribution, as determined by the
Employer, shall be conclusive and binding on all persons.
4.7 Payment of Contributions. The Employer Contributions and Matching
Contributions to the Trust for each Plan Year of the Employer shall be made
within the time required by law in order to obtain a deduction of the amount of
such payment for Federal income tax purposes for such Plan Year, as determined
under the applicable provisions of the Code. The Elective Deferrals and
After-tax Contributions to the Trust for each calendar month shall be made as
soon as administratively possible and in no event no later than fifteen (15)
business days immediately following the calendar month to which such
contributions relate.
4.8 Contributions Held in Trust. All contributions made hereunder are
to be held by the Trustee in the Trust in accordance with the provisions of
Article X, and are to be invested and reinvested as provided therein.
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4.9 Reversion of Certain Employer Contributions. All contributions by
an Employer hereunder shall be made upon the condition that such contributions
are fully deductible for Federal income tax purposes. In the event that any such
deduction is disallowed in whole or in part, then the Employer may direct the
Trustee to return such contribution (to the extent disallowed) to the Employer
at any time within the twelve (12) month period commencing on the date of
disallowance. In the event that an Employer shall make a contribution hereunder
on the basis of a mistake of fact, the Employer may direct the Trustee to return
such contribution to the Employer at any time within the twelve (12) month
period commencing on the date of contribution.
4.10 Rollover Contributions. Notwithstanding anything to the contrary
elsewhere herein, with the consent of the Plan Administrator, an Employee who is
in an eligible class under Section 3.6 may make and the Trustee shall accept a
Rollover Contribution, subject to the consent of the Trustee if the contribution
includes property other than cash. A Rollover Contribution shall mean a
contribution which is an "eligible rollover distribution" within the meaning of
Section 402(c)(4) of the Code or a "rollover distribution" within the meaning of
Section 408(d)(3)(A)(ii) and which satisfies all applicable provisions of the
Code. An Employee who is in an eligible class under Section 3.6 may make a
contribution under this section whether or not he has satisfied the
participation requirements with respect to age and service specified in the
Adoption Agreement. An Employee who makes a contribution under this Section 4.10
and does not otherwise qualify as a Participant is, nevertheless, deemed to be a
Participant for the limited purpose of administering that contribution with
respect to directed investments, in-service withdrawals, loans and
distributions. Contributions under this Section 4.10 may be made in cash, check,
participants' promissory notes or securities, provided that such promissory
notes and securities are acceptable to the Trustee and the recordkeeper. All
contributions under this Section 4.10 shall be credited to a separate Rollover
Account for such Employee which shall be fully vested at all times. Rollover
contributions pursuant to this Section 4.10 shall not be deemed to be
Participant contributions for purposes of Article XII.
ARTICLE V - Participants' Accounts: Allocation of Assets and Contributions
5.1 Participants' Accounts. The Plan Administrator shall maintain an
Elective Deferral Account for each Participant on whose behalf Elective
Deferrals have been contributed to the Trust pursuant to Section 4.2, an
After-tax Account for each Participant who has contributed to the Trust pursuant
to Section 4.3, a Matching Account for each Participant on whose behalf Matching
Contributions have been contributed to the Trust pursuant to Section 4.4, an
Employer Account for each Participant on whose behalf Employer Contributions
have been contributed to the Trust pursuant to Section 4.5(a) or (b), and a
Rollover Account for each Employee who has contributed to the Trust pursuant to
Section 4.10. The Plan Administrator shall also maintain a Qualified Nonelective
Contribution Account for each Participant on whose behalf Qualified Nonelective
Contributions and/or Qualified Matching Contributions have been contributed to
the Trust pursuant to Section 4.5(c) and (d). If the Employer Contributions
under Section 4.5(b) also qualify as Qualified Nonelective Contributions, then
the Plan Administrator shall only maintain one Qualified Nonelective
Contribution Account for each Participant for purpose of holding Employer
Contributions made pursuant to both Sections 4.5(b), (c) and (d). The Plan
Administrator shall also
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maintain Transferee Plan Accounts for each Participant for whom assets have been
transferred from a Transferee Plan.
5.2 Allocation of Elective Deferrals. At the time of payment of
Elective Deferrals to the Trust pursuant to Section 4.2, the Employer shall
deliver to the Plan Administrator a schedule showing the name of each
Participant for whom Elective Deferrals are included in such payment and the
amount of Elective Deferrals made on behalf of each such Participant. Subject to
the provisions of Articles VI and XII, the Plan Administrator shall allocate to
the Elective Deferral Account of each Participant listed on such schedule the
amount of Elective Deferrals made on his behalf to the Trust as shown therein.
5.3 Allocation of After-tax Contributions. At the time of payment of
After-tax Contributions to the Trust pursuant to Section 4.3, the Employer shall
deliver to the Plan Administrator a schedule showing the name of each
Participant whose After-tax Contributions are included in such payment and the
amount of After-tax Contributions made by each such Participant. Subject to the
provisions of Articles VI and XII, the Plan Administrator shall allocate to the
After- tax Account of each Participant listed on such schedule the amount of his
After-tax Contributions as shown therein.
5.4 Allocation of Matching Contributions. At the time of payment of
Matching Contributions to the Trust pursuant to Section 4.4, the Employer shall
deliver to the Plan Administrator a schedule showing the name of each
Participant for whom Matching Contributions are included in such payment and the
amount of Matching Contributions for each such Participant as determined by the
applicable provisions of the Adoption Agreement. The Participants who are
entitled to receive Matching Contributions shall be those Participants on whose
behalf Elective Deferrals have been made and who have satisfied the eligibility
conditions for receiving Matching Contributions as set forth in the Adoption
Agreement. Subject to the provisions of Articles VI and XII, the Plan
Administrator shall allocate to the Matching Account of each Participant listed
on such schedule the amount of Matching Contributions made on his behalf to the
Trust as shown therein.
5.5 Allocation of Employer Contributions.
(a) Schedule. At the time of payment of Employer Contributions to the
Trust pursuant to Section 4.5(a), the Employer shall deliver to the Plan
Administrator a schedule showing the name of each person who is an eligible
Participant entitled to share in the allocation of Employer Contributions for
the Plan Year (as determined in accordance with the Adoption Agreement), and
opposite the name of each such Participant, the amount of Compensation paid to
him by the Employer during such Plan Year.
(b) Allocation of Employer Contributions.
(i) MONEY PURCHASE PLANS NOT INTEGRATED WITH SOCIAL SECURITY.
If the allocation of Employer contributions is not integrated with
Social
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Security, the Plan Administrator shall, subject to the limitations
imposed by Article XII, credit to the Employer Account of each
Participant listed on the schedule furnished by the Employer pursuant
to Section 5.5(a) that portion of the Employer Contribution for such
Plan Year which bears the same ratio to the total amount of such
contribution as the Compensation shown for such Participant on such
schedule bears to the aggregate Compensation shown on said schedule for
all such Participants.
(ii) MONEY PURCHASE PLANS NOT INTEGRATED WITH SOCIAL
SECURITY. If an integrated formula has been selected in the Adoption
Agreement, the Plan Administrator shall, subject to the limitations
imposed by Article XII, credit to the Employer Account of each
Participant listed on the schedule furnished by the Employer pursuant
to Section 5.5(a) a portion of the Employer Contribution for such Plan
Year on the following basis:
FIRST, an amount equal to the percentage
specified in Paragraph 4(B)(1) of the Adoption Agreement times
the aggregate Compensation of all Participants listed on the
schedule for such Plan Year shall be credited to such
Participants' Employer Accounts in proportion to their
Compensation for such Plan Year; and
SECOND, an amount equal to the percentage
specified in Paragraph 4(B)(2) of the Adoption Agreement times
the aggregate Excess Compensation of all Participants listed
on the schedule for such Plan Year shall be credited to the
Employer Accounts of such Participants in proportion to their
Excess Compensation for such Plan Year.
(iii) PROFIT SHARING PLANS NOT INTEGRATED WITH SOCIAL
SECURITY. If the allocation of Employer Contributions is not integrated
with Social Security, the Plan Administrator shall, subject to the
limitations imposed by Article XII, credit to the Employer Account of
each Participant listed on the schedule furnished by the Employer
pursuant to Section 5.5(a) that portion of the Employer Contribution
for such Plan Year which bears the same ratio to the total amount of
such contribution as the Compensation shown for such Participant on
such schedule bears to the aggregate Compensation shown on said
schedule for all such Participants. Notwithstanding the foregoing, if
the Adoption Agreement provides for a fixed flat dollar amount of
Employer Contribution for each eligible Participant, the Plan
Administrator shall, subject to the limitations imposed by Article X11,
credit to the Employer Account of each eligible Participant such fixed
flat dollar amount of Employer Contribution.
(iv) PROFIT SHARING PLANS INTEGRATED WITH SOCIAL
SECURITY. If an integrated formula has been selected in tile Adoption
Agreement, the Plan Administrator shall, subject to the limitations
imposed by Article XII, credit to the Employer Account of each
Participant listed on the schedule furnished by the Employer pursuant
to
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Section 5.5(b) a portion of the Employer Contribution for such Plan
Year on the following basis:
FIRST, Employer Contribution will be
allocated to the Employer Account of each eligible Participant
in the ratio that the sum of each such Participant's
Compensation and Excess Compensation for the Plan Year bears
to the sum of the aggregate Compensation and Excess
Compensation shown on the schedule for all such Participants,
provided that the amounts so credited to the Participant's
Employer Account for the Plan Year shall not exceed the
Maximum Disparity Rate times the sum of the Participant's
Compensation and Excess Compensation; and
NEXT, the balance of the Employer
Contribution shall be allocated to the Participants' Employer
Accounts in proportion to their Compensation for such Plan
Year.
5.6 Allocation of Rollover Contributions. At the time of payment of
rollover contributions to the Trust pursuant to Section 4.10, the Employer shall
deliver to the Plan Administrator a schedule showing the name of each Employee
whose rollover contributions are included in such payment and the amount of
rollover contributions made by each such Participant. The Plan Administrator
shall allocate to the Rollover Account of each Participant listed on such
schedule the amount of his rollover contributions as shown therein.
5.7 Allocation of Forfeitures. The amounts forfeited by terminated
Participants pursuant to Sections 6.3, 6.5 and 7.5 in any Plan Year shall be
initially held in a holding account by the Trustee and invested in Fund Shares
of a fund selected by the Plan Administrator. The amount in the holding account
shall be used to restore forfeitures as provided in Section 7.5(b). Any amount
remaining in the holding account at the end of the Plan Year in which the
forfeiture occurs shall be used to reduce the contributions of the Employer next
payable under the Plan (or applied towards payment of administrative expenses of
the Plan); provided, however, that if so elected by the Employer in the Adoption
Agreement, the amount in the holding account attributable to forfeitures of
Matching Contributions shall be allocated pro rata based on Matching
Contributions for the entire Plan Year. If no Matching Contributions have been
allocated, then forfeitures of Matching Contributions shall be allocated pro
rata based on Elective Deferrals for the entire Plan Year without regard to all
allocation conditions set forth in the Adoption Agreement. If no Elective
Deferrals or Matching Contributions are made or allocated, forfeitures of
Matching Contributions shall be allocated into the Matching Accounts, but
calculated as if they were additional forfeitures of Employer Contributions. If
so elected by the Employer in the Adoption Agreement, the amount in the holding
account attributable to forfeitures of Employer Contributions shall be allocated
pro rata based on Employer Contributions for the entire Plan Year. If no
Employer Contributions have been allocated, then such forfeitures shall be
allocated pro rata based on eligible Participants' Compensation for the Plan
Year, using Compensation as defined for allocation of Employer Contributions.
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5.8 Valuation of Trust Assets and Adjustment of Account Balances. As of
each Anniversary Date of the Trust and as of any other date which the Plan
Administrator in its discretion may determine (any of which dates is herein
referred to as a "Valuation Date"), the Trustee shall determine and report to
the Plan Administrator the net asset value of the Fund Shares and the net worth
of each Participant's Accounts and the Trust. In determining the net worth of
each Participant's Accounts and the Trust, the Trustee shall value assets at
their fair market value. In the case of assets with no readily ascertainable
fair market value, the Trustee shall determine the said value on any reasonable
basis it may deem appropriate. As of each Valuation Date, the Plan Administrator
shall adjust the Account balances of each Participant to reflect contributions,
distributions, withdrawals, forfeitures, loans and earnings, expenses, gains and
losses attributable to the Fund Shares held in each Participant's Accounts. As
of each Valuation Date, the Plan Administrator shall adjust the balance in each
Self-Directed Brokerage Account to reflect contributions, distributions,
withdrawals, forfeitures, loans, and earnings, expenses, gains and losses
attributable to the investments held in each Self-Directed Brokerage Account.
The Plan Administrator shall follow a method consistently followed and uniformly
applied with each Participant's Accounts and Self-Directed Brokerage Account, if
any.
5.9 Investment of Contributions.
(a) Manner of Investment. All contributions made to the Accounts of
Participants shall be held for investment by the Trustee. Except to the extent
that a Participant's Account is invested in a loan pursuant to Section 7.10, the
Accounts of Participants shall be invested and reinvested only in Fund Shares of
the Permissible Investments selected by the Employer in the Adoption Agreement
or if the Employer has specified in the Adoption Agreement that Self-Directed
Brokerage Accounts are permitted under the Plan, in publicly-traded securities,
other than stock of the Employer. Each Participant must satisfy the minimum
amount imposed by the Employer before he may establish a Self-Directed Brokerage
Account.
(b) Investment Decisions.
(i) To the extent provided in the Adoption Agreement,
each Participant shall direct the investment of his Accounts. Pursuant
to Section 10.3, the Trustee shall have no discretionary authority, and
shall render no investment advice and make no recommendations, except
as provided in Section 5.9(d), with respect to the investment of the
Trust Fund. If the Participant is directing the investment of his
Accounts, the Participant shall file initial investment instructions as
well as subsequent investment instructions with the Plan Administrator,
on such form or voice response system as the Plan Administrator may
provide.
While any balance remains in the Accounts of a Participant after his
death, the Beneficiary of the Participant shall make decisions as to
the investment of the Accounts to the same extent as if the Beneficiary
were the Participant. To the extent required by a Qualified Domestic
Relations Order, an alternate payee shall make investment decisions
with respect
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to the portion of a Participant's Accounts subject to the Qualified
Domestic Relations Order to the same extent as if such alternate payee
were the Participant.
(ii) To the extent provided in the Adoption
Agreement, the Plan Administrator shall direct the Trustee as to the
investment of the Participant's Accounts. The Plan Administrator shall
also have the right to make decisions as to the investment of the
Accounts of missing Participants or select a default fund for
Participants who fail to make investment decisions.
(iii) All dividends, interest, gains and
distributions of any nature received in respect of Fund Shares shall be
reinvested in additional shares of that fund.
(iv) Expenses attributable to the acquisition of
investments shall be charged to the appropriate Account or
Self-Directed Brokerage Account of the Participant for which such
investment is made.
(c) Trustee's Responsibility. The Trustee shall have no duty to inquire
into the investment decision of a Participant or a Plan Administrator or to
advise such person regarding the purchase, retention or sale of assets credited
to any Participant's Accounts.
5.10 Distributions and Forfeitures. Whenever the Trustee shall make any
distribution to or on behalf of a Participant from any of his Accounts in
accordance with the provisions of Article VII, the amount so distributed shall
be based upon the value of such Account as of the Valuation Date coincident with
or next preceding the date of such distribution, and shall thereupon be charged
against such Account. Whenever a Participant shall forfeit all or any portion of
the amount standing to the credit of his Employer Account and Matching Account
in accordance with the provisions of Section 7.5, the amount so forfeited shall
be charged against his Employer Account and Matching Account, respectively.
ARTICLE VI - Limitations on Elective Deferrals, Matching Contributions
and After-Tax Contributions
6.1 Maximum Amount of Elective Deferrals. For each calendar year, the
Elective Deferrals made on behalf of any Participant under this Plan and similar
contributions made under all other plans of the Employer with a cash or deferred
feature shall not exceed the dollar limitation contained in Code Section 402(g)
in effect at the beginning of such calendar year. Elective Deferrals shall not
include amounts properly distributed to a Participant as an Excess Amount
pursuant to Section 6.2(b). If, during any calendar year, more than the maximum
permissible amount under Code Section 402(g) is allocated pursuant to one or
more cash or deferred arrangements to a Participant's accounts under the Plan
and any other plan described in Code Sections 401(k), 408(k), 403(b), 457, or
501(c)(18), the following provisions shall apply:
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(a) The Participant may, but is not required to, assign to
this Plan all or part of such contributions in excess of the maximum permissible
amount (hereinafter "Excess Elective Deferrals") by notifying the Plan
Administrator by March 1 of the calendar year next succeeding the calendar year
in which such contributions are made. To be effective, such notice must be in
writing, state that Excess Elective Deferrals have been made on behalf of such
Participant for the preceding calendar year, and be submitted to the Plan
Administrator. A Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account only those Excess
Elective Deferrals made to this Plan.
(b) To the extent a Participant timely assigns, or is deemed
to assign, Excess Elective Deferrals to the Plan pursuant to (a) above, the Plan
Administrator shall direct the Trustee to distribute such Excess Elective
Deferrals, adjusted for income or loss allocable thereto pursuant to Section
6.1(c) below, to the Participant no later than the April 15 of the calendar year
next succeeding the calendar year in which such Excess Elective Deferrals were
made. Notwithstanding the foregoing, the amount of Excess Elective Deferrals
shall be reduced by any Excess Contributions previously distributed with respect
to the Participant for the Plan Year beginning with or within the calendar year.
(c) Excess Elective Deferrals shall be adjusted for any income
or loss up to the last day of the calendar year in which such Excess Elective
Deferrals were made. The income or loss allocable to Excess Elective Deferrals
is (i) the income or loss allocable to tie Participant's Elective Deferral
Account for the taxable calendar year multiplied by a fraction, the numerator of
which is such Participant's Excess Elective Deferrals for the year and the
denominator is the balance of such Account, determined as the beginning of the
calendar year plus any Elective Deferrals made during the calendar year without
regard to any income or loss occurring during such calendar year or (ii) such
other amount determined under any reasonable method, provided that such method
is used consistently for all Participants in calculating the distributions
required under this Article VI for the Plan Year, and is used by the Plan to
allocate income or loss to Participants' Accounts. Income or loss allocable to
the period between the end of the calendar year and the date of distribution
shall be disregarded in determining income or loss. Excess Elective Deferrals
shall be treated as an Annual Addition under the Plan, unless such amounts are
distributed no later than the first April 15 following the close of the calendar
year.
6.2 Limitation on Elective Deferrals.
(a) For each Plan Year, the Average Deferral Percentage of the group of
Participants who are Highly Compensated Employees for the Plan Year may not
exceed the greater of (i) 1.25 times the Average Deferral Percentage of the
group of Participants who are Non-Highly Compensated Employees for the same Plan
Year; or (ii) the lesser of 2 times the Average Deferral Percentage of all such
Non-Highly Compensated Employees, or such Average Deferral Percentage plus 2
percentage points.
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For purposes of this Section 6.2, the "Average Deferral Percentage" of
a specified group of Participants for a Plan Year shall be the average of the
ratios (calculated separately Participants in determining the Average Deferral
Percentage both for Non-Highly Compensated Employees and for Highly Compensated
Employees.
(iv) For purposes of applying the Average Deferral
Percentage test, Qualified Nonelective Contributions must be made
before the last day of the 12-month period immediately following the
Plan Year to which contributions relate.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Average Deferral Percentage test and
the amount of Qualified Nonelective Contributions, if any, used in such
test.
(vi) The determination and treatment of the deferral
percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(c) If, for any Plan Year, the Plan is unable to satisfy the Average
Deferral Percentage test set forth in subsection (a) above, then in lieu of
distributing excess contributions to Highly Compensated Employees as provided in
subsection (d) below, the Employer may make a Qualified Nonelective Contribution
to the Trust on behalf of Participants who are Non-Highly Compensated Employees
in an amount sufficient to enable the Plan to meet the Average Deferral
Percentage test set forth in subsection (a) above. Such Qualified Nonelective
Contribution shall be allocated to the Qualified Nonelective Contribution
Account of each Participant who is a Non-Highly Compensated Employee and who is
eligible to participate in the Plan at any time during the Plan Year in the
ratio which each such Participant's Compensation for the Plan Year bears to the
total of all such Participants' Compensation for the Plan Year.
(d) If, for any Plan Year, after taking into account the Qualified
Nonelective Contribution made by the Employer pursuant to subsection (c) above,
if any, the Plan Administrator shall determine the aggregate amount of Elective
Deferrals of Highly Compensated Employees for such Plan Year exceeds the maximum
amount of such contributions permitted by the Average Deferral Percentage test
set forth in subsection (a) above, the Plan Administrator shall reduce such
excess contributions made on behalf of Highly Compensated Employees in order of
their deferral percentages, beginning with the highest of such percentages
(hereinafter "Excess Contributions"). For each Highly Compensated Employee who
is so affected, the Plan Administrator shall reduce the Excess Contribution from
his Elective Deferral Account; provided, however, that the amount of Excess
Contribution shall be reduced by the Excess Elective Deferrals previously
distributed to the Participant for the calendar year ending with or within the
same Plan Year. Excess Contributions of each Participant who is subject to the
Family Member aggregation rules shall be allocated among the Family Members of
such Participant in proportion to the Elective Deferrals (and amounts treated as
Elective Deferrals) of each Family Member that is combined to determine the
combined deferral percentage. Such Excess Contributions, plus any income for
each Participant in such group) of (A)
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the amount of the Contributions actually paid over to the Trust on behalf of
each Participant for each Plan Year to (B) the Participant's Compensation for
the Plan Year. For purposes of this Section 6.2, "Compensation" shall have the
same meaning as in Section 2.8; provided, however, that the Plan Administrator
may elect to exclude Compensation paid for the period when the Participant was
not eligible to make Elective Deferrals to the Plan. For purposes of this
Section 6.2, "Contributions" shall include both Elective Deferrals (including
Excess Elective Deferrals of Highly Compensated Participants) and Qualified
Nonelective Contributions, if any. Such Contributions shall not include (1)
Excess Elective Deferrals of Non-Highly Compensated Employees that arise solely
from Elective Deferrals made under this Plan or other plans of the Employer, and
(2) Elective Deferrals that are taken into account in the Contribution
Percentage Test (provided the Average Deferral Percentage test is satisfied both
with and without exclusion of these Elective Deferrals). For purposes of
computing Average Deferral Percentages, each Employee who would be a Participant
but for the failure to make Elective Deferrals shall be treated as a Participant
on whose behalf no Elective Deferrals are made.
(b) Special Rules:
(i) The deferral percentage for the Plan Year of a
Highly Compensated Employee who is eligible to have Elective Deferrals
allocated to his accounts under two or more arrangements described in
Code Section 401(k), that are maintained by the Employer, shall be
determined as if such Elective Deferrals were made under a single
arrangement. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations promulgated under Code Section 401(k).
(ii) In the event that this Plan satisfies the
requirements of Code Section 401(k), 401(a)(4), or 410(b) only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such Code sections only if aggregated with
this Plan, then this Section 6.2 shall be applied by determining the
Average Deferral Percentages of Employees as if all such plans were a
single plan. Plans may be aggregated in order to satisfy Code Section
401(k) only if they have the same Plan Year.
(iii) For purposes of determining the deferral
percentage of a Participant who is a 5 % owner or one of the top ten
Highly Compensated Employees, the Elective Deferrals (and, if
applicable, Qualified Nonelective Contributions) and Compensation of
such Participant shall include the Elective Deferrals (and, if
applicable, Qualified Nonelective Contributions) and Compensation for
the Plan Year of his Family Members. Such Family Members shall be
disregarded as separate and minus any loss allocable thereto, shall be
distributed to each affected Highly Compensated Employee no later than
the last day of the Plan Year following the Plan Year in which such
Excess Contributions were made. If Excess Contributions are not
distributed before the date which is 2-1/2 months after the last
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day of the Plan Year in which such Excess Contributions arose, a 10%
excise tax shall be imposed on the Employer maintaining the Plan with
respect to such amounts. Excess Contributions shall be treated as an
Annual Addition under the Plan.
(e) Excess Contributions shall be adjusted for any income or
loss up to and including the last day of the Plan Year for which such Excess
Contributions were made. The income or loss allocable to Excess Contributions is
(i) the income or loss allocable to the Participant's Elective Deferral Account
for the Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the denominator is the
balance of such Account, determined as of the beginning of the Plan Year plus
any Elective Deferrals made during the Plan Year without regard to any income or
loss occurring during such Plan Year, or (ii) such other amount determined under
any reasonable method, provided that such method is used consistently for all
Participants in calculating any distributions required under this Article VI for
the Plan Year and is used by the Plan in allocating income or loss to
Participants' Accounts. Income or loss allocable to the period between the end
of the Plan Year and the date of distribution shall be disregarded.
6.3 Limitation on After-tax Contributions and Matching Contributions.
(a) For each Plan Year, the Average Contribution Percentage of
the group of Participants who are Highly Compensated Employees for the Plan Year
may not exceed the greater of (i) 1.25 times the Average Contribution Percentage
of the group of Participants who are Non-Highly Compensated Employees for the
same Plan Year, or (ii) the lesser of 2 times the Average Contribution
Percentage of all such Non-Highly Compensated Employees or such Average
Contribution Percentage plus 2 percentage points.
For purposes of this Section 6.3, the "Average Contribution Percentage"
of a specified group of Participants for a Plan Year shall be the average of the
ratios (expressed as a percentage and calculated separately for each Participant
in such group) of (A) the Contribution Percentage Amounts actually paid over to
the Trust on behalf of each Participant to (B) the Participant's Compensation
for the Plan Year. For purposes of this Section 6.3, "Compensation" shall have
the same meaning as in Section 2.7; provided, however, that the Plan
Administrator may elect to exclude Compensation paid for the period when the
Participant was not eligible to participate in the Plan. For purposes of this
Section 6.3, "Contribution Percentage Amounts" shall be the sum of After-tax
Contributions and Matching Contributions. 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
related are Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions. In determining the Contribution Percentage Amounts, the Plan
Administrator may include Qualified Nonelective Contributions that are not used
in satisfying the Average Deferral Percentage test of Section 6.2. The Plan
Administrator also may elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the Average Deferral Percentage test is met before
the Elective Deferrals are used in the Average Contribution Percentage test and
continues to be met following the exclusion of those Elective Deferrals that are
used to meet the Average Contribution Percentage test. For purposes of computing
Average Contribution Percentages, each Employee who
25
<PAGE>
is eligible to make After-tax Contributions or Elective Deferrals or to receive
a Matching Contribution shall be taken into account as a Participant, whether or
not he is actually making, or entitled to receive, such contributions to the
Trust.
(b) Special Rules:
(i) For purposes of this Section 6.3, the
contribution percentage of a Highly Compensated Employee for the Plan
Year who is eligible to have Contribution Percentage Amounts allocated
to his accounts under two or more plans described in Code Section 401
(a), or arrangements described in Code Section 401 (m) that are
maintained by the Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan.
Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under regulations under Code
Section 401(m).
(ii) In the event that this Plan satisfies the
requirements of Code Section 401(m), 401(a)(4) or 410(b) 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 6.3 shall be applied by
determining the Contribution Percentage of Participants as if all such
plans were a single plan. Plans may be aggregated in order to satisfy
Code Section 401(m) only if they have the same Plan Year.
(iii) For purposes of determining the Contribution
Percentage of a Participant who is a 5% owner or one of the top-ten
Highly Compensated Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of his Family
Members. Such Family Members shall be disregarded as separate Employees
in determining the Average Contribution Percentage both for Non-Highly
Compensated Employees and for Highly Compensated Employees.
(iv) For purposes of applying the Average
Contribution Percentage test, After-tax Contributions are considered to
have been made in the Plan Year in which contributed to the Trust.
Matching Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions will be considered made for a Plan
Year if made no later than the end of the 12-month period immediately
following the Plan Year to which such Contributions relate.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Average Contribution Percentage test
and the amount of Qualified Nonelective Contributions and Qualified
Matching Contributions, if any, used in such test.
(vi) 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.
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(c) If, for any Plan Year, the Plan is unable to satisfy the
Average Contribution Percentage test set forth in subsection (a) above, in lieu
of distributing excess Contribution Percentage Amounts to Highly Compensated
Employees as provided in subsection (d) below, the Employer if permitted in the
Adoption Agreement may make a Qualified Nonelective Contribution and/or
Qualified Matching Contribution to the Trust on behalf of Participants who are
Non-Highly Compensated Employees and who have made Elective Deferrals to the
Trust for the Plan Year in an amount sufficient to enable the Plan to meet the
Average Contribution Percentage test set forth in subsection (a) above.
(d) If, for any Plan Year, after taking into account the
Qualified Nonelective Contribution and/or Qualified Matching Contribution made
by the Employer pursuant to subsection (c) above, if any, the Plan Administrator
shall determine that the aggregate Contribution Percentage Amounts of Highly
Compensated Employees for such Plan Year exceeds the maximum amount permitted by
the Average Contribution Percentage test in subsection (a) above the Plan
Administrator shall reduce such excess Contribution Percentage Amounts made on
behalf of Highly Compensated Employees in order of their contribution
percentages, beginning with the highest of such percentages (hereinafter "Excess
Aggregate Contributions"). The foregoing determination shall be made after first
determining Excess Elective Deferrals pursuant to Section 6.1, and then
determining Excess Contributions pursuant to Section 6.2. For each Highly
Compensated Employee who is affected, the Plan Administrator shall first reduce
amounts credited to his After-tax Contribution Account and shall then reduce, to
the extent necessary, amounts credited to his Matching Contribution Account.
Excess Aggregate Contributions of each Highly Compensated Employee who is
subject to the Family Member aggregation rules shall be allocated among the
Family Members in proportion to the After-tax Contributions and Matching
Contributions (and amounts treated as Contribution Percentage Amounts) of each
Family Member that is combined to determine the combined contribution
percentage. Excess Aggregate Contributions which are attributable to the sum of
After-tax Contributions and fully vested Matching Contributions plus any income
and minus any loss allocable thereto, shall be distributed to each affected
Highly Compensated Employee no later than the last day of the Plan Year
following the Plan Year in which such Excess Aggregate Contributions were made.
If such Excess Aggregate Contributions are not distributed within 2 1/2 months
after the last day of the Plan Year in which such Excess Aggregate Contributions
arose, a 10% excise tax shall be imposed on the Employer maintaining the Plan
with respect to those amounts. Excess Aggregate Contributions which are
attributable to Matching Contributions which are not fully vested, plus any
income and minus any loss allocable thereto, shall be forfeited and shall be
applied to reduce future Matching Contributions. Excess Aggregate Contributions
shall be treated as an Annual Addition under the Plan.
(e) Excess Aggregate Contributions shall be adjusted for any
income or loss up to and including the last day of the Plan Year for which such
Excess Aggregate Contributions were made. The income or loss allocable to Excess
Aggregate Contributions is (i) the income or loss allocable to the Participant's
After-tax Account and/or Matching Account, as the case may be, 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 balance of such
Account or
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<PAGE>
Accounts, as the case may be, determined as of the beginning of the Plan Year
plus any After-tax Contributions and/or Matching Contributions, as the case may
be, made during the Plan Year without regard to any income or loss occurring
during such Plan Year, or (ii) such other amount determined under any reasonable
method, provided that such method is used consistently for all Participants in
calculating any distributions required under this Article VI for the Plan Year
and is used by the Plan in allocating income or loss to Participants' Accounts.
Income or loss allocable to the period between the end of the Plan Year and the
date of distribution shall be disregarded.
6.4 Multiple Use Test. If one or more Participants who are Highly
Compensated Employees participate in both a cash or deferred arrangement and a
plan subject to the Average Contribution Percentage test maintained by the
Employer and the sum of the Average Deferral Percentage and Average Contribution
Percentage of those Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the Contribution Percentage Amounts of those
Highly Compensated Participants who also participate in a cash or deferred
arrangement will be reduced (beginning with such Highly Compensated Employee
whose contribution percentage is the highest) so that the Aggregate Limit is not
exceeded. The amount by which each Highly Compensated Employee's Contribution
Percentage Amount is reduced shall be treated as an Excess Aggregate
Contribution. The Average Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees are determined after any
corrections required to meet the Average Deferral Percentage and Average
Contribution Percentage tests in Sections 6.2 and 6.3. Multiple use does not
occur if both the Average Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees does not exceed 1.25 multiplied
by the Average Deferral Percentage and Average Contribution Percentage of the
Non-Highly Compensated Employees.
For purposes of this Section 6.4, the "Aggregate Limit" shall mean the
sum of (i) 125 percent of the greater of the Average Deferral Percentage of the
Participants who are Non-Highly Compensated Employees for the Plan Year or the
Average Contribution Percentage of the Participants who are 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% of, or two percentage points plus the lesser of such
Average Deferral Percentage or Average Contribution Percentage. "Lesser" shall
be substituted for "greater" in (i) and "greater" shall be substituted for
"lesser" after "two percentage points plus the" in (ii) if such substitution
would result in a larger Aggregate Limit.
6.5 Further Limitations on Matching Contributions. To the extent
required by applicable regulations, any Matching Contributions generated by a
Participant's Excess Deferrals or Excess Contributions shall be forfeited by
such Participant and allocated pursuant to the provisions of Section 5.7.
6.6 Special Rules. Any amount distributed to a Highly Compensated
Employee pursuant to this Article VI shall not be subject to any of the consent
rules for Participants and contained in
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Article VII below. Amounts distributed pursuant to this Article VI shall be
withdrawn from the Participant's investments in the Trust in accordance to
instructions from the Plan Administrator.
6.7 Responsibility of the Employer and the Plan Administrator. It shall
be the responsibility of the Employer and the Plan Administrator to insure that
the limitations imposed by this Article are fully complied with at all times.
The Trustee shall have no responsibility with respect to insuring such
compliance and shall be under no obligation whatsoever to take any action to
determine whether in fact the limitations of this Article are being fully
complied with at all times.
ARTICLE VII - Payments to or for the Accounts of Participants or
Terminated Participants
7.1 Restrictions on Payments and Distributions. No money or other
property of the Trust shall be paid out or distributed by the Trustee except (a)
for the purchase or other acquisition of investments; (b) for defraying the
expenses, including taxes, if any, or administering the Plan and Trust as
elsewhere herein provided; (c) for the return of contributions pursuant to
Section 1.3, Section 4.9 or Article VI, or (d) for the purpose of making
distributions to or for the account of Participants upon the written direction
of the Plan Administrator in accordance with the rules set forth below.
7.2 Retirement Benefits. A Participant shall be fully vested in all his
Accounts upon attainment of his Normal Retirement Age or Early Retirement Age.
Upon retirement of a Participant, which shall be deemed to mean any termination
of his employment with an Employer at or after his reaching Normal Retirement
Age or Early Retirement Age, the full amount of such Participant's Accounts
shall then become distributable to such Participant pursuant to Sections 7.7 and
7.8. For this purpose, Early Retirement Age means the Participant's attainment
of the age and completion of the number of Years of Vesting Service as set forth
in the Adoption Agreement. Said definition shall apply only if selected by the
Employer in the Adoption Agreement.
7.3 Disability Benefits. If the Plan Administrator shall determine,
that a Participant is totally disabled from continuing in the employ of the
Employer by reason of Disability (as defined in Section 2.9), the full amount of
such Participant's Accounts shall then become distributable to such Participant
pursuant to Sections 7.7 and 7.8. The Plan Administrator's determination as to
whether a Participant has become totally disabled from continuing in the employ
of the Employer by reason of Disability shall be conclusive and binding upon all
persons.
7.4 Death Benefits.
(a) Profit Sharing Plans. Upon the death of any Participant prior to
commencement of benefit payments to such Participant under Section 7.7, the full
amount of such Participant's Accounts shall then be distributable to the
surviving spouse of such Participant pursuant to Sections 7.7 and 7.8; provided,
however, that such Accounts shall be distributable in accordance with paragraph
(c), below, instead of this paragraph (a), if there is no surviving spouse
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<PAGE>
or if the Participant has elected to designate a non-spousal Beneficiary in a
writing which satisfies either of the following conditions:
(i) (A) The Participant's surviving spouse has
consented in writing to such 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 designation 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
has been witnessed by a Plan representative or a notary public; or
(ii) It is established to the satisfaction of the
Plan Administrator that the consent of the surviving spouse could not
have been obtained because there is no spouse, because the spouse
cannot be located, or because of other circumstances prescribed by
regulations issued under Section 417(a)(2) of the Code.
Notwithstanding the foregoing, any Accounts which contain assets
resulting from a direct or indirect transfer on or after August 23, 1984 from a
defined benefit plan, stock bonus plan, profit-sharing plan or money purchase
plan and which is subject to the survivor annuity requirements of Section
401(a)(11) and Section 417 of the Code (a "Transferee Plan") shall be subject to
paragraph (b) below.
(b) Money Purchase Plans. Upon the death of any Participant
prior to his Annuity Starting Date, one-half of such Participant's Accounts
shall then be applied toward the purchase of a nontransferable annuity for the
life of the surviving spouse of such Participant. The surviving spouse may elect
to have such annuity distributed within a reasonable period after the
Participant's death and may also elect distribution of such amount in any other
form permissible under Sections 7.7 and 7.8. The remainder of such Participant's
Accounts shall be distributable in accordance with paragraph (c); provided,
however, that the full amount of such Accounts shall be distributable in
accordance with paragraph (c) instead of this paragraph (b) if there is no
surviving spouse or if the Participant has elected to waive the surviving spouse
annuity in a writing which satisfies either of the following conditions:
(i) (A) The Participant's surviving spouse has
consented in writing to such election; (B) the election designates a
specific Beneficiary, including any class of Beneficiaries or any
contingent Beneficiaries, which may not be changed without spouse
consent (or the spouse expressly permits designation 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
has been witnessed by a plan representative or a notary public; or
(ii) It is established to the satisfaction of the
Plan Administrator that the consent of the surviving spouse could not
have been obtained because there is no spouse, because the spouse
cannot be located, or because of other circumstances prescribed by
regulations issued under Section 417(a)(2) of the Code.
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A Participant's waiver of the surviving spouse annuity must be made
during an election period beginning on the first day of the Plan Year in which
the Participant attains age thirty-five (35) and ending on the date of the
Participant's death; provided, however, that in the case of a Participant who
separates from service prior to the first day of the Plan Year in which age
thirty-five (35) is attained, the applicable period shall begin on the date of
such separation from service. The Plan Administrator shall provide each
Participant, within the applicable period for such Participant, a written
explanation of the terms and conditions of the surviving spouse annuity; the
Participant's right to make and the effect of an election to waive it; the
rights of the Participant's spouse; and the right to make, and the effect of, a
revocation of a previous election to waive the surviving spouse annuity.
The applicable period for a Participant is whichever of the following
period ends last: (1) the period beginning with the first day of the Plan Year
in which the Participant attains age thirty-two (32) and ending with the close
of the Plan Year preceding the Plan Year in which the Participant attains age
thirty-five (35); (2) a reasonable period after the individual becomes a
Participant; and (3) a reasonable period ending after this Section 7.4(b) 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 (2) and (3) above 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 thirty-five (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.
No consent obtained pursuant to this Section 7.4(b) shall be valid
unless the Participant has received notice as provided in the preceding
paragraphs.
If the amount to be applied toward the purchase of an annuity is less
than or equal to $3,500, the Plan Administrator shall direct the Trustee to
distribute such entire amount to the surviving spouse in a lump sum in lieu of
the purchase of an annuity within a reasonable time after the Participant's
death.
Any living Participant not receiving benefits on August 23, 1984 and
who would otherwise not be covered under this paragraph (b) must be given the
opportunity to elect to have this paragraph (b) apply if such Participant was
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 separated from service.
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(c) Payments To Designated Beneficiary. Each Participant shall
have the right to designate one or more Beneficiaries, including contingent
Beneficiaries, entitled to receive the amount payable on behalf of such
Participant under the provisions of this paragraph (c) in the event of his
death. Such designation shall be made in writing in such manner as the Plan
Administrator shall determine. The Plan Administrator shall maintain a file of
such designations. A Participant may change such designation from time to time
subject to paragraph (a) or (b) and (d), and may revoke such designation. Upon
the death of any Participant, the entire portion of such Participant's Accounts
which is subject to this paragraph (c) (or in the case of a terminated or
retired Participant who has not been paid in full, the undistributed balance of
his accounts) shall then be distributable to such Participant's Beneficiary or
Beneficiaries pursuant to Sections 7.7 and 7.8. If a Participant dies without
having designated a Beneficiary, or if none of the designated Beneficiaries
survives the Participant, or if the Plan Administrator is in doubt as to the
effective status of a Beneficiary designation, the surviving spouse shall be
deemed to be the Beneficiary if living with such Participant at the time of his
death; otherwise the duly appointed executor or administrator of the estate of
such Participant shall be deemed to be his Beneficiary. If a Beneficiary
entitled to receive any amount payable in behalf of a Participant under the Plan
dies prior to having received the entire amount, the undistributed balance shall
be distributed to any surviving contingent Beneficiaries and otherwise to such
deceased Beneficiary's estate.
(d) Any consent by a spouse under Section 7.4(a)(i) or (b)(i)
(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 that the spouse voluntarily elects to relinquish such rights. A
revocation of any such Beneficiary designation may be made by a Participant at
any time prior to the commencement of benefits, without the consent of the
spouse. The number of revocations shall not be limited. A former spouse shall be
treated as a surviving spouse to the extent benefits must be paid to such former
spouse upon the Participant's death pursuant to a Qualified Domestic Relations
Order, except that no consent shall be required from such former spouse with
respect to the designation of a Beneficiary to receive benefits not subject to
said order.
7.5 Termination of Employment Prior to Retirement or Death.
(a) Benefits Upon Termination of Employment. In the event that a
Participant's employment with an Employer is terminated under circumstances
other than as provided for under Sections 7.2 through 7.4, such Participant
shall be entitled to a benefit equal to the full amount standing to the credit
of such Participant's Accounts other than his Employer Account and Matching
Account plus a percentage of the amount standing to the credit of his Employer
Account and a percentage of the amount standing to the credit of his Matching
Account as determined by the applicable vesting provisions specified in the
Adoption Agreement. The vested benefit determined in accordance with the
foregoing sentence shall never be adjusted on account of any Years of Vesting
Service which the Participant might complete upon reemployment by an Employer
after a Break in Service, except as provided in Section 7.5(c).
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If, upon termination of employment, the value of a Participant's vested
account balances derived from Employer and After-tax Contributions (including
prior distributions) is not greater than $3,500, the Participant shall receive a
distribution of the value of his vested account balances in a lump sum pursuant
to the provisions of Section 7.7 within a reasonable time after his termination
of employment, and the nonvested portion of his Accounts shall be treated as a
forfeiture and reallocated pursuant to the provisions of Section 5.7. For this
purpose, if the value of a Participant's vested account balance is zero, the
Participant shall be deemed to have received a distribution of such vested
account balance upon his termination of employment.
If, upon termination of employment, the value of a Participant's vested
account balances derived from Employer and After-tax Contributions (including
prior distributions) is greater than $3,500 and he elects, in accordance with
the requirements of Section 7.7, to receive the entire value of his vested
account balances in a lump sum or in the form of an annuity contract, the
nonvested portion of his Accounts shall be treated as a forfeiture and
reallocated pursuant to the provisions of Section 5.7.
In all other cases, the nonvested portion of a Participant's Accounts
shall be maintained in a suspense account and treated as a forfeiture and
reallocated pursuant to the provisions of Section 5.7 when such Participant
incurs five (5) consecutive One-Year Breaks-in-Service.
(b) Reemployment. If a former Participant is reemployed, he shall
become a Participant immediately upon reemployment, and all his prior Years of
Vesting Service shall be restored.
If any other former Participant who is not fully vested in his Accounts
at termination of employment is reemployed after incurring five consecutive
One-Year Breaks-in-Service, he shall have no right to any forfeited account
balance. Any undistributed vested portion of his Employer Account shall be held
in a separate vested Employer Account, and future Employer contributions on his
behalf shall be credited to a new Employer Account. Any undistributed vested
portion of his Matching Account shall be held in a separate vested Matching
Account, and future Matching Contributions on his behalf shall be credited to a
new Matching Account.
The following provisions shall apply with respect to a former
Participant who is not fully vested in his Accounts at termination of
employment, and who is reemployed before he incurs five (5) consecutive One-Year
Breaks-in-Service:
(i) If the nonvested portions of the Participant's
Employer Account and Matching Account have been maintained in a
suspense account, the amount in the suspense account shall be restored
to his Employer Account and Matching Account.
(ii) If the nonvested portions of the Participant's
Employer Account and Matching Account have been forfeited, and the
Participant has previously received the vested portions of his Employer
Account and Matching Account, he shall have the right to repay
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<PAGE>
to the Plan the full amount of such prior distribution. Such repayment
must be made on or before the earlier of five (5) years after the first
date on which the Participant is subsequently reemployed by the
Employer, or the close of the first period of five (5) consecutive
One-Year Breaks in Service following the date of distribution. Upon
such repayment, the amount of any such repayment plus the value of the
forfeited portion of such Employer Account and Matching Account as of
the date of forfeiture shall be credited to such Employer Account and
Matching Account.
(iii) If the Participant is deemed to have received a
distribution from his Employer Account and Matching Account pursuant to
Section 7.5(a), and his entire Employer Account and Matching Account
have been forfeited, upon the reemployment of such Participant, the
value of his Employer Account and Matching Account as of the date of
the forfeiture shall be restored to his credit no later than the end of
the Plan Year in which the reemployment occurs.
(iv) The previously forfeited amount shall be funded
by forfeitures from other Accounts, additional Employer Contributions,
or any combination thereof at the Employer's discretion. Such
restoration shall not be treated as an annual addition under Article
XII.
(v) Any Employer Contributions to which such
Participant becomes entitled after reemployment shall be credited to
his Employer Account. Any Matching Contributions to which such
Participant becomes entitled after reemployment shall be credited to
his Matching Account. The portion of such Accounts to which he will be
entitled upon subsequent termination of employment will be based upon
his aggregate Years of Vesting Service before and after the break.
(c) Determination by Plan Administrator. The determination of the
amount to which a terminated Participant is entitled in accordance with the
foregoing rules shall be made by the Plan Administrator (subject to the
provisions of Section 9.4), and his determination shall be conclusive and
binding upon all persons.
7.6 In-Service Withdrawals.
(a) No Hardship. If the Adoption Agreement specifies that in-service
withdrawals may be made pursuant to this Section 7.6(a), each Participant,
regardless of age, may elect, at such time and in such manner as the Plan
Administrator may prescribe, to withdraw from his After-tax Account and Rollover
Account, up to the amount of such total Account balances. With respect to
withdrawals from a Transferee Plan or a Money Purchase Plan, such withdrawals
will be subject to the spousal consent requirements of Section 7.7(b).
(b) Age 59 1/2 And Over. If the Adoption Agreement specifies that
in-service withdrawals may be made pursuant to this Section 7.6(b), then each
Participant who has attained age
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fifty-nine and one-half (59 1/2) (or Normal Retirement Age in the case of a
Transferee Plan or a Money Purchase Plan) may elect, at such time and in such
manner as the Plan Administrator may prescribe, to withdraw from the vested
balances of all Accounts. In the event a Participant makes an in-service
withdrawal pursuant to this Section 7.6(b) from an Account in which he is not
fully vested, the vested portion of such Account shall thereafter be determined
by (i) adding the amount previously withdrawn to his then Account balance, (ii)
multiplying the resulting sum by his then vesting percentage, and (iii)
subtracting from the resulting product the amount previously withdrawn. With
respect to withdrawals from a Transferee Plan or a Money Purchase Plan, such
withdrawals will be subject to the spousal consent requirements of Section
7.7(b).
(c) Financial Hardship. If the Adoption Agreement specifies that
hardship withdrawals may be made pursuant to this Section 7.6(c), each
Participant may request at such time and in such manner as the Plan
Administrator may prescribe, to withdraw all or any portion of his Elective
Deferral Account in order to meet a "Financial Hardship;" provided that no such
withdrawal can exceed the aggregate amount of his Elective Deferrals contributed
to the Plan to that date of withdrawal, reduced by prior withdrawals; and
provided, further, that no such withdrawal shall be permitted until the full
amount permitted to be withdrawn under Section 7.6(a) has been withdrawn.
For purposes of this Section 7.6(c), Financial Hardship shall mean an
immediate and heavy financial need which such Participant is not able to meet
from any other reasonably available resources. The determination that the
Participant is faced with a Financial Hardship and of the amount required to
meet such Financial Hardship which is not reasonably available from other
resources of the Participant shall be made by the Plan Administrator in
accordance with uniform and nondiscriminatory standards and policies which shall
be adopted by the Plan Administrator and consistently applied to each
application for a withdrawal pursuant to this Section 7.6(c). An immediate and
heavy financial need will exist only with respect to: (1) expenses incurred or
necessary for medical care as described in Section 213(d) of the Code of the
Participant or the Participant's spouse or dependents, (2) the purchase
(excluding mortgage payments) of a principal residence for the Participant, (3)
payment of tuition and related education fees (including room and board
expenses) for the next twelve months of post-secondary education for the
Participant, or the Participant's spouse, children or dependents, and (4) the
need to prevent an eviction or mortgage foreclosure on the Participant's
principal residence. If a Participant has an immediate and heavy financial need
as described above, he may receive a hardship withdrawal provided the Plan
Administrator determines that such Participant is not able to meet such need
from any other reasonably available resources. With respect to withdrawals from
a Transferee Plan, such withdrawals will be subject to the spousal consent
requirements of Section 7.7(b).
(d) A distribution shall be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if.
(A) The Participant has obtained all
distributions, other than hardship distributions, and all
nontaxable (at the time of the loan) loans currently available
under all plans maintained by the Employer;
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(B) All plans maintained by the Employer
provide that the Participant's Elective Deferrals (and
Employee Contributions) will be suspended for twelve months
after the receipt of the hardship distribution;
(C) The distribution is not in excess of the
amount of an immediate and heavy financial need (including
amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the
distribution); and
(D) All plans maintained by the Employer
provide that the Participant may not make Elective Deferrals
for the Participant's taxable year immediately following the
taxable year of the hardship distribution in excess of the
applicable limit under Section 402(g) of the Code for such
taxable year less the amount of such Participant's Elective
Deferrals for the taxable year of the hardship distribution.
(e) A Participant wishing to make a withdrawal shall make application
to the Plan Administrator stating the amount he wishes to withdraw, the reason
for the withdrawal if the withdrawal is pursuant to Section 7.6(c), and such
other information as the Plan Administrator may require. The Trustee shall make
payment to such Participant of the amount the Plan Administrator determines
shall be withdrawn in accordance with the foregoing rules. The Plan
Administrator's determination shall be conclusive and binding on all persons.
(f) No forfeitures shall occur solely as a result of a Participant
making a withdrawal pursuant to the provisions of this Section 7.6.
(g) A Participant may not request an in-service withdrawal in the same
processing period that he requests a loan.
7.7 Methods and Timing of Payment.
(a) Whenever a Participant's Accounts become distributable pursuant to
this Section to such Participant or his designated Beneficiary or other person,
unless the Adoption Agreement provides otherwise, distribution of the Accounts
shall be made pursuant to Option A in the case of a profit sharing plan and
pursuant to Option B in the case of a Money Purchase Plan or a Transferee Plan.
Notwithstanding the foregoing, if a Participant's aggregate vested account
balances are $3,500 or less, such Accounts shall be distributed pursuant to
Option A. In the event a Participant is required to begin receiving minimum
required distribution in accordance with Section 7.8 prior to the Participant's
retirement, death or other termination of employment, a distribution of such
minimum required amount only shall be made in accordance with Section 7.8.
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Option A: (i) One lump sum payment in cash; (ii) a total
Direct Rollover of an Eligible Rollover Distribution;
or (iii) a partial lump sum in cash and a Direct
Rollover of the remaining balance.
Option B: Purchase of an immediate nontransferable annuity
contract. This Option B shall be available only in a
Money Purchase Plan or a Transferee Plan and the
terms of such annuity contracts shall comply with the
requirements of this Plan.
(b) Distributions may commence less than thirty (30) days after the
notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
(i) The Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least thirty (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),
(ii) The Participant, after receiving the notice,
affirmatively elects a distribution, and
(iii) If a distribution is one to which Sections 401(a)(11)
and 417 apply, the Participant affirmatively elects a distribution at
least seven (7) days after receiving the notice.
For purposes of this Article, the following words shall have the following
meanings:
(1) Eligible Rollover Distribution: An
eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of
the distributee, except that an eligible rollover
distribution does not include: any distribution that
is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the life (or life expectancy) of the distributes or
the joint lives (or joint life expectancies) of the
distributes and the distributee's designated
beneficiary, or for a specified period of ten years
or more; any distribution to the extent such
distribution is required under section 401(a)(9) of
the Code; and the portion of any distribution that is
not includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) Eligible Retirement Plan: An eligible
retirement plan is an individual retirement account
described in section 408(a) of the Code, an
individual retirement annuity described in section
408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution.
However, in the
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case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual
retirement annuity.
(3) Distributee: A distributee includes an
employee or former employee. In addition, the
employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former
spouse who is the alternate payee under a qualified
domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.
(4) Direct Rollover: A Direct Rollover is a
payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
(c) Benefits payable to a Participant from a Money Purchase Plan or a
Transferee Plan shall be payable pursuant to Option B in the form of an annuity
contract which provides for payments to the Participant for his life, and in the
case of a married Participant, with payments continuing after his death to this
spouse for her life equal to fifty percent (50%) of the amount payable during
their joint lives. Any annuity contract distributed under the Plan shall be
purchased by the Trustee at the direction of the Plan Administrator and shall be
nontransferable. The Participant may elect, within the ninety-day period ending
on the Annuity Starting Date, an optional form of annuity contract or other
optional form provided under the Plan in a writing which satisfies either of the
following conditions:
(i) (A) The Participant's spouse consents in writing
to such election; (B) 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); (C) the spouse's consent acknowledges the effect of
the election; and (D) the spouse's consent has been witnessed by a Plan
representative or a notary public; or
(ii) It is established to the satisfaction of the
Plan Administrator that the spouse's consent cannot be obtained because
there is no spouse, because the spouse cannot be located, or because of
other circumstances prescribed by regulations issued under Section
417(a)(2) of the Code.
Any consent by a spouse obtained under this Section 7.7(c) (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
form of benefit, and that the spouse voluntarily elects to relinquish such
right. A Participant may revoke an election of an optional form of benefit
without the consent of his spouse at any time prior to the Annuity Starting
Date. The number of revocations shall not be limited. No spousal consent
obtained under this provision shall be valid unless the Participant has received
notice as provided in the paragraph below.
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The Plan Administrator shall provide each Participant no less than
thirty (30) days and no more than ninety (90) days prior to the Annuity Starting
Date 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. Distribution to a Participant may commence seven (7) days
after the foregoing explanation is given, provided that the Plan Administrator
clearly informs the Participant that the Participant has a right to a period of
at least thirty (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.
(d) The payment period of an annuity contract distribution to
the Participant pursuant to this Section may be as long as the Participant
lives. If the annuity is payable to the Participant and his spouse or Designated
Beneficiary, the payment period of an annuity contract may be for as long as
either the Participant or his spouse or Designated Beneficiary lives. Such an
annuity may provide for an annuity certain feature for a period not exceeding
the life expectancy of the Participant. If the annuity is payable to the
Participant and his spouse, such period may not exceed the joint life and last
survivor expectancy of the Participant and his spouse. If the annuity is payable
to the Participant and a Designated Beneficiary, such period may not exceed the
joint life and last survivor expectancy of the Participant and such Beneficiary,
subject to satisfaction of the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations. If the
Participant dies prior to the commencement of his benefits, the payment period
of an annuity contract distributed to the Beneficiary of the Participant may be
as long as the Participant's Beneficiary lives, and may provide for an annuity
certain feature for a period not exceeding the life expectancy of the
Beneficiary. Any annuity contract distributed under the Plan must provide for
nonincreasing payments.
In the case of a Money Purchase Plan or a Transferee Plan, the
following transition rules shall apply:
(i) Any living married Participant not receiving
benefits on August 23, 1984, who was credited with at least one (1)
Hour of Service under this Plan or a predecessor plan on or after
September 2, 1974, and who is not otherwise credited with any service
in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid pursuant to Option B. The
opportunity to make such election must be offered to each such
Participant during the period commencing on August 23, 1984, and ending
on the date benefits would otherwise commence to said Participant.
(ii) Any Participant who has made an election
pursuant to the previous paragraph and any Participant who does not
make an election under the last paragraph of Section 7.4(b) or who
meets the requirements of such paragraph except that such Participant
does not have at least ten (10) Years of Vesting Service when he or she
separates from
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<PAGE>
service, shall have his or her benefits distributed in accordance with
all of the following requirements if and only if benefits under the
Plan would have been payable in the form of a life annuity:
(A) Automatic joint and survivor annuity. If
benefits in the form of a life annuity become payable to a
married Participant who:
(1) begins to receive payments under the
Plan on or after Normal Retirement Age; or
(2) dies on or after Normal Retirement Age
while still working for the Employer; or
(3) begins to receive payments on or after
the qualified early retirement age; or
(4) separates from service on or after
attaining Normal Retirement Age (or the qualified
early retirement age) and after satisfying the
eligibility requirements for the payment of benefits
under the Plan and thereafter dies before beginning
to receive such benefits;
then such benefits will be received under this Plan in the
form of Option B unless the Participant has elected otherwise
during the election period. The election period must begin at
least six (6) months before the Participant attains qualified
early retirement age and end not more than ninety (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 Option B 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 ninetieth (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 paragraph (b),
qualified early retirement age is the latest of:
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<PAGE>
(1) the earliest date, under the Plan, on
which the Participant may elect to receive retirement
benefits,
(2) the first day of the 120th month
beginning before the Participant reaches Normal
Retirement Age, or
(3) the date the Participant begins
participation.
(e) Whenever during any Plan Year, the amount standing to the
credit of a Participant's Accounts becomes distributable upon his retirement,
disability, death or other termination of employment as provided in Sections 7.2
through 7.5, the Plan Administrator shall direct the Trustee to distribute such
Accounts within a reasonable time after such retirement, disability, death or
other termination of employment. Notwithstanding the foregoing, if a
Participant's aggregate vested account balances to be distributed upon
disability or severance under Section 7.3 or 7.5 are greater than $3,500, such
Accounts shall not be distributed in whole or in part until the Participant
reaches Normal Retirement Age, unless the Participant (and spouse in the case of
a Money Purchase Plan or Transferee Plan if the benefit is not payable pursuant
to Option B of Section 7.7) consents in writing to such earlier distribution.
(f) In no event shall the distribution of a Participant's
Accounts, unless the Participant otherwise elects, begin later than the sixtieth
(60th) day after the close of the Plan Year in which the later of the following
events occurs:
(i) the Participant's Normal Retirement Age; or
(ii) the Participant's termination of service with
the Employer.
Notwithstanding anything to the contrary elsewhere herein, if the amount of the
payment required to commence on the date determined under this Section cannot be
ascertained by such date, such payment may be postponed as long as it is made no
later than sixty (60) days after the earliest date on which the amount of such
payment can be ascertained, and, if Option B or C is applicable, is made
retroactive to the date otherwise required by this Section. Notwithstanding the
foregoing, the failure of a Participant and spouse to consent to a distribution
while a benefit is immediately distributable shall be deemed to be an election
to defer commencement of payment of any benefit sufficient to satisfy this
Section.
(g) Notwithstanding any other provision hereof, any part of a
Participant's account balances which are payable to an alternate payee pursuant
to the terms of a Qualified Domestic Relations Order shall be paid in the
amount, form, and manner provided therein.
(i) The term "Qualified Domestic Relations Order"
means any judgment, decree, or order (including approval of a property
settlement agreement) which is made pursuant to a State domestic
relations law (including a community property law) and relates
41
<PAGE>
to the provision of child support, alimony payments, or marital
property rights to a spouse, former spouse, child, or other dependent
of a Participant, and which satisfies all of the following
requirements:
(A) The order creates or recognizes the
existence of an alternate payee's right to, or assigns to an
alternate payee the right to receive all or a portion of the
benefits payable with respect to the Participant under the
Plan.
(B) The order clearly specifies the name and
the last known mailing address (if any) of the Participant and
the name and mailing address of each alternate payee, the
amount or percentage of the Participant's account balances to
be paid by the Plan to each alternate payee, or the manner in
which such amount or percentage is to be determined, the
number of payments or period to which such order applies, and
each plan to which such order applies.
(C) The order does not require the Plan to
provide any type or form of benefit, or any option, not
otherwise provided under the Plan, does not require the Plan
to provide benefits in excess of the Participant's vested
account balances, and does not require the payment of benefits
to an alternate payee which are required to be paid to another
alternate payee under another order previously determined to
be a Qualified Domestic Relations Order. An order shall not
fail to be qualified if it provides for a payment to be made
to an alternate payee prior to the time the Participant would
be entitled to receive a payment hereunder.
(D) The order is entered on or after January
1, 1985, or the order was entered prior to such date and the
Plan Administrator is paying benefits pursuant to such order
on such date.
(ii) The Plan Administrator shall establish
reasonable procedures to determine the qualified status of domestic
relations orders and to administer distributions under such Qualified
Domestic Relations Orders. Upon receipt by the Plan Administrator of a
domestic relations order, the Plan Administrator shall promptly notify
the Participant and any other alternate payee of the receipt of such
order and the Plan's procedures for determining the qualified status of
such order. Within a reasonable period after receipt of such order, the
Plan Administrator shall determine whether such order is a Qualified
Domestic Relations Order and notify the Participant and each alternate
payee of such determination. During the period in which the Plan
Administrator is determining whether the order is qualified (and during
any subsequent legal challenges to such determination), any amounts
which would have been payable to the alternate payee during such period
shall be segregated in a separate account in the Trust, which shall be
paid to the appropriate parties if a determination is made within
eighteen (18) months after receipt of the order. If the issue of
qualification of the order is not resolved within eighteen (18) months
after receipt of the order, the segregated amounts (plus interest
thereon, if any) shall be paid to the person or
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<PAGE>
persons who would have been entitled to such amounts if there had been
no order. Any subsequent determination with respect to such order shall
be applied prospectively only.
(iii) The term "alternate payee" means any spouse,
child, or other dependent of a Participant who is recognized by a
domestic relations order as having a right to receive all, or a portion
of, the benefits payable under the Plan with respect to such
Participant.
7.8 Minimum Distribution Requirements.
(a) General Rules
(i) Subject to Section 7.7(c), the requirements of this
Section 7.8 shall apply to any distribution of a Participant's interest
and shall take precedence over any inconsistent provisions of this
Plan.
(ii) All distributions required under this Section shall be
determined by the Plan Administrator and made in accordance with
Section 401(a)(9) of the Code and the proposed regulations promulgated
thereunder, including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations.
(b) Required Beginning Date. The entire interest of a Participant must
be distributed or begin to be distributed no later than the Participant's
Required Beginning Date.
(c) Limits on Distribution Periods. As of the first Distribution
Calendar Year, distributions, if not made in a single-sum, may only be made over
one of the following periods (or a combination thereof):
(i) the life of the Participant, or
(ii) a period certain not extending beyond the life expectancy
of the Participant.
(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:
(i) If a Participant's benefit is to be distributed
over (A) a period not extending beyond the life expectancy of the
Participant, (B) 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.
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<PAGE>
(ii) 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 Applicable Life Expectancy.
(iii) 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
Participant's Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(iv) If the Participant's benefit is distributed
pursuant to Option B in the form of an annuity purchased from an
insurance company, distributions thereunder shall be made in accordance
with the requirements of Section 401(a)(9) of the Code and the proposed
regulations promulgated thereunder.
(e) Death Distribution Provisions.
(i) Distribution beginning before death. If the
Participant dies after distribution of his interest has begun, the
remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior
to the Participant's death.
(ii) Distribution beginning after death. If the
Participant dies before distribution of his interest begins,
distribution of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of
the Participant's death except to the extent that an election is made
to receive 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 seventy and
one-half (70 1/2).
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If the Participant has not made an election pursuant to Section 7.7(a)
by the time of his death, the Participant's Designated Beneficiary must elect
the method of distribution no later than the earlier of (A) December 31 of the
calendar year in which distributions would be required to begin under this
Section, or (B) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
Designated Beneficiary, or if the Designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
(iii) For purposes of (ii) above, if the surviving
spouse dies after the Participant, but before payments to such spouse
begin, the provisions of subsection (ii), with the exception of
subsection (ii)(B) therein, shall be applied as if the surviving spouse
were the Participant.
(iv) For purposes of this Section 7.8(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.
(v) For the purpose of this Section 7.8(e),
distribution of a Participant's interest is considered to begin on the
Participant's Required Beginning Date (or, if subsection (iii) above is
applicable, the date distribution is required to begin to the surviving
spouse pursuant to subsection (ii) 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
(i) Applicable Life Expectancy. The life 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 each succeeding calendar year.
(ii) Designated Beneficiary. The individual who is designated
as the Beneficiary under the Plan in accordance with Section 401(a)(9)
of the Code and the regulations promulgated thereunder.
(iii) 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
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the Participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin pursuant to
subsection (e) above.
(iv) 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.
Life expectancies shall be recalculated annually only if specifically
elected by the Participant (or spouse, in the case of distributions described in
subsection (e)(ii)(B) above) by the time distributions are required to begin.
Such election shall be irrevocable as to the Participant (or spouse) and shall
apply to all subsequent years. The life expectancy of a nonspouse beneficiary
may not be recalculated.
(v) 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) 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.
(vi) Required Beginning Date. The Required Beginning
Date of a participant is the first day of April of the
calendar year following the calendar year in which the
Participant attains age seventy and one-half (70 1/2).
7.9 Whereabouts of Participants and Beneficiaries. The Plan
Administrator will at all times be responsible for determining the whereabouts
of each Participant or Beneficiary who may be entitled to benefits under the
Plan and will at all times be responsible for instructing the Trustee in writing
as to the current address of each such Participant of Beneficiary. The Trustee
will be entitled to rely on the latest written statement received from the Plan
Administrator as to such addresses. The Trustee will be under no duty to make
any distributions under the Plan unless and until it has received written
instructions from the Plan Administrator satisfactory to the Trustee containing
the name and address of the distributee, the time when the distribution is to
occur, and the form which the distribution will take. Notwithstanding the
foregoing, if the Trustee attempts to make a distribution in accordance with the
Plan Administrator's instructions but is unable to make
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such distribution because the whereabouts of the distributee is unknown, the
Trustee will notify the Plan Administrator of such situation and thereafter the
Trustee will be under no duty to make any further distributions to such
distributee until it receives further written instructions from the Plan
Administrator. If a benefit is forfeited because the Participant or Beneficiary
cannot be found, such benefit will be reinstated if a claim is made by the
Participant or Beneficiary.
7.10 Loans to Participants. If an Employer has specified in its
Adoption Agreement that loans may be made pursuant to this Section 7.10, then
upon application of a Participant who is an Employee, the Plan Administrator may
direct the Trustee to lend to the Participant such amount or amounts as the Plan
Administrator may determine, provided that the aggregate amount of all
outstanding loans, including accrued interest thereon, shall not exceed the
lesser of (a) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans during the one year period ending on the day before the loan is
made, over the outstanding balance of loans from the Plan on the date the loan
is made, or (b) fifty percent (50%) of the sum of the vested portion of the
Participant's Accounts. For the purpose of the above limitation, all loans from
all plans of the Employer and any Related Employers are aggregated. The Plan
Administrator shall adopt a written loan program and have the sole authority and
duty to determine whether any loan complies with the Code and other Plan
requirements, and the Trustee shall have no duty to determine any such
compliance.
Each loan to Participants shall meet the following requirements as well
as any requirements set forth in the written loan program:
(i) Loans shall be made available to all Participants on a
reasonably equivalent basis.
(ii) 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 Participants.
(iii) Loans shall be evidenced by the promissory notes of the
Participants, shall be adequately secured and shall bear a reasonable
interest rate.
(iv) In the case of a Transferee Plan or a Money Purchase
Plan, a Participant's interest in the Trust may be used to secure said
loan only if the Participant obtains the consent of his spouse, if any,
to use his interest in the Trust as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the
ninety-day period that ends on the date on which the loan is to be
secured. The consent must be in writing, must acknowledge the effect of
the loan, and must be witnessed by a Plan representative or notary
public and consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to the loan. A
new spousal consent shall be required if the Participant's interest in
the Trust shall be used as security for renegotiation, extension,
renewal, or other revision of the loan.
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(v) In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable event
occurs under the Plan.
(vi) Each 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 less than twelve (12)
months or more than sixty (60) months from the date of the loan, or if
the loan is used to acquire any dwelling unit which within a reasonable
time is to be used (determined at the time such loan is made) as a
principal residence of the Participant, over a period not extending
beyond 180 months or such shorter period of time as the Plan
Administrator specifies in properly adopted loan procedures from time
to time.
(vii) No loans shall be made to a Participant who is an
Owner-Employee or a shareholder-employee. For purposes of this
requirement, a shareholder-employee means an employee or officer of a
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 five percent (5 %) of the
outstanding stock of such corporation.
(viii) The minimum amount of any loan shall be the amount set
forth in the Adoption Agreement.
(ix) A Participant may not request a loan in the same
processing period that he requests an in-service withdrawal.
Each loan made hereunder shall be deemed to be a separate investment
and shall be credited to a separate loan account for the benefit of the
borrowing Participant, in which event all payments of interest and principal
shall be credited to such Participant's account. Amounts credited to such
Participant's separate loan account as a result of payments of interest and
principal shall be reinvested as soon as practicable in accordance with the
Participant's or the Plan Administrator's investment elections pursuant to
Article VI. Amounts credited to such Participant's separate loan account as a
result of payments of interest and principal shall be reinvested as soon as
practicable by the Trustee in accordance with the provisions of Section 10.3.
If any part or all of the amount standing to the account of a
Participant shall become distributable to such Participant or his Beneficiary
while a loan to such Participant under this Section is outstanding, the Trustee
may apply the amount of such distribution in payment of the entire outstanding
loan principal, whether or not then due, and any interest theretofore accrued,
before distributing the balance, if any, to the Participant or his Beneficiary.
If a valid spousal consent has been obtained in accordance with
paragraph (iv) above or is not required, 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
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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.
7.11 Distributions Upon Termination of Plan or Disposition of Assets or
Subsidiary. Notwithstanding anything to the contrary hereof, distribution of a
Participant's Elective Deferral Account and Qualified Nonelective Contribution
Account may occur upon the happening of any of the following events:
(a) The termination of the Plan without establishment or
maintenance of another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code).
(b) The disposition by a corporation of substantially all of
the assets (within the meaning of Section 409(d)(2) of the Code) used by such
corporation in a trade or business of such corporation, but only with respect to
an Employee who continues employment with the corporation acquiring such assets.
(c) The disposition by a corporation of such corporation's
interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code),
but only with respect to an Employee who continues employment with such
subsidiary.
In the case of subsection (a), the distribution of the Participant's
Accounts shall be made in a lump sum.
In the case of subsection (b) or (c) above, the transferor corporation
shall continue to maintain the Plan after the disposition.
7.12 Responsibility of the Employer and the Plan Administrator. It
shall be the responsibility of the Employer and the Plan Administrator to insure
that the limitations imposed by this Article are fully complied with at all
times. The Trustee shall have no responsibility with respect to insuring such
compliance and shall be under no obligation whatsoever to take any action to
determine whether in fact the limitations of this Article are being fully
complied with at all times.
ARTICLE VIII - Amendment and Termination of Plan
8.1 Amendment by Sponsor. Fidelity may amend this Plan and the Adoption
Agreements at any time and from time to time, provided that:
(a) The duties or liabilities of the Trustee, Plan Administrator or the
Employer shall be increased only upon sixty (60) days' prior written notice to
the Trustee, Plan Administrator or the Employer respectively, unless such
amendment is made in order to comply with the
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requirements of the Code and regulations and rulings of the Internal Revenue
Service thereunder, or applicable regulations of any other governmental
authority; and
(b) No amendment shall cause or permit any assets of the Trust to be
diverted to purposes other than for the exclusive benefit of the eligible
Employees of the Employer which established the Trust or their Beneficiaries or
estates or would cause any reduction in the amount theretofore credited to any
Participant or eliminate an optional form of benefit or would cause or permit
any portion of the assets of the Trust to revert or become the property of the
Employer.
For purposes of Sponsoring Organization Amendments, Fidelity shall be
recognized as the agent of the Sponsoring Organization. If any Sponsoring
Organization does not adopt the amendments made by Fidelity, its plan will no
longer be identical to or a minor modifier of the Fidelity mass submitter
institutional prototype plan.
Fidelity shall mail a copy of each amendment to the Employer at its
last known address as shown on the books of Fidelity.
8.2 Amendment by Employer. No Employer which has adopted this Plan by
means of a Adoption Agreement shall have authority to amend the Plan in any way
except as provided in this Article VIII, nor shall any such amendment become
effective and binding upon the Trustee until a properly executed copy of such
amendment has been delivered to and accepted by the Trustee.
(a) Elective Provisions. An Employer may amend the elective provisions
of the Adoption Agreement establishing its Trust at any time and from time to
time or discontinue or terminate the Trust by delivering to the Trustee a copy
of an amendment or discontinuance or termination certified by a duly authorized
person on behalf of the Employer; provided, however, that, except as provided in
Section 1.2 and Article XIII, the Employer shall have no power to amend or
terminate the Trust in such manner as would cause or permit (i) any of the
assets of the Trust to be diverted to purposes other than for the exclusive
benefit of the eligible Employees of the Employer or their Beneficiaries or
estates; (ii) any reduction in the amount theretofore credited to any
Participant; (iii) any portion of the assets of the Trust to revert to or become
the property of the Employer; (iv) the elimination or reduction of an optional
form of benefit; (v) the duties or liabilities of the Trustee to be increased
without its written consent; and (vi) in the case of a Money Purchase Plan, the
significant reduction in the rate of future benefit accrual unless, after
adoption of the plan amendment and not less than fifteen (15) days before the
effective date of the plan amendment, the Plan Administrator provides a written
notice, setting forth the plan amendment and its effective date, to each
Participant, each Beneficiary who is an alternate payee, and each employee
organization representing Participants of the Plan. Each amendment shall be
effective on the effective date of such amended Adoption Agreement except that
retroactive changes to a previous election or elections pursuant to the
regulations issued under Sections 401(a)(4) or 401(b) shall be permitted. If the
Employer amends any provision other than the elective provisions of the Adoption
Agreement for any reason, including a waiver of the minimum funding requirement
under Section 412(d) of the Code, except as provided in Section 8.2(b) and
except to add certain model amendments published
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by the Internal Revenue Service which specifically provide that their adoption
will not cause the Plan to be treated as individually designed, its Trust will
be deemed to be an individually designed plan and may no longer participate in a
prototype established under this Basic Plan Document.
(b) Permissible Employer Amendments. Notwithstanding the foregoing, the
Employer will be permitted to amend the provisions of the Plan by adding
appropriate language to its Adoption Agreement if required to preserve the
qualified status of the Plan under any of the following circumstances:
(i) The Employer maintains or had maintained another qualified
plan (other than a standard plan established under this Basic Plan
Document) and wishes to provide particular provisions to define the
method by which such plan or plans shall be aggregated with this Plan
for purposes of Sections 415 and/or 416 of the Code.
(ii) The Employer maintains another qualified plan (other than
a standard plan established under this Basic Plan Document) and wishes
to provide the minimum benefits required by Section 416 of the Code
under such other plan rather than under this Plan.
Any Plan containing such an amendment may not rely on the Sponsor's opinion
letter but must be submitted to the Internal Revenue Service as described in
Section 1.2.
8.3 Limitations on Vesting Amendments. Notwithstanding anything to the
contrary elsewhere herein or in the Adoption Agreement, no amendment to the
vesting provisions specified in the Adoption Agreement shall deprive a
Participant of his nonforfeitable rights to benefits accrued to the date of the
amendment. Further, if such vesting provisions are amended, or if the Plan is
amended in any way that directly or indirectly affects the computation of a
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 Vesting Service with the Employer may elect, within
a reasonable period after the adoption of the amendment, to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment. The period during which the election may be made shall commence with
the date the amendment is adopted and shall end on the latest of:
(i) sixty (60) days after the amendment is adopted;
(ii) sixty (60) days after the amendment becomes effective; or
(iii) sixty (60) days after the Participant is issued written
notice of the amendment by the Employer.
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
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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 Participant's
employer-derived accrued benefit will not be less than the percentage computed
under the Plan without regard to such amendment.
8.4 Termination of Plan. In the event of termination or partial
termination (within the meaning of Section 41 1 (d)(3) of the Code) by an
Employer of the Plan, or complete discontinuance of contributions thereto by the
Employer, the rights of all Participants (or, in the case of a partial
termination, the Participants affected thereby) to amounts theretofore credited
to their Accounts under the Plan shall be fully vested and nonforfeitable. Upon
any such termination or discontinuance, the Trustee shall hold the assets of the
Trust in accordance with the provisions of the Plan and distribute such assets
from time to time to Participants entitled thereto in accordance with such
provisions; provided that the Plan Administrator may, in connection with such
termination or discontinuance, direct the Trustee to apply the amount standing
to the credit of a Participant's Accounts for his benefit, pursuant to one or
more options specified and selected in accordance with Section 7.7, within a
reasonable time after such termination or discontinuance. In the event that the
Employer shall terminate the Trust at any time prior to the complete
distribution of all property held by the Trustee pursuant to such provisions,
the Trustee shall, at the direction of the Plan Administrator, (a) reduce to
cash all or any part of the Trust; (b) pay the liabilities, if any, of the
Trust; (c) value the remaining assets of the Trust as of the date of termination
and adjust Participants' account balances in the same manner as provided in
Article V; and (d) distribute the assets of the Trust in accordance with the
provisions of the Plan in cash or in kind or partly in cash and partly in kind
to and among the Participants in liquidation in proportion to the amounts
standing to the credit of their respective accounts under the Trust as of the
termination date.
8.5 Merger or Consolidation. With the approval of the Trustee, the
Employer may direct the Plan be merged or consolidated with another plan or
trust or direct that assets and liabilities accrued under the Plan be
transferred to another plan or trust. The Plan shall not be merged or
consolidated with any other plan or trust, nor shall the assets or liabilities
accrued under the Plan be transferred to any other plan or trust, unless the
benefit under such successor plan or trust, if it were to terminate immediately
after such merger, consolidation or transfer, of each Participant under the Plan
would be at least as great as the benefit to which such Participant would have
been entitled had the Plan terminated immediately prior to such merger,
consolidation or transfer. The foregoing limitation shall be applied in
accordance with regulations promulgated under Section 414(l) of the Code.
8.6 Termination of Trust. The Trust shall in any event terminate
whenever all property under the Trust held by the Trustee shall have been
distributed in accordance with the terms of the Plan.
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ARTICLE IX - Plan Administration
9.1 Plan Administrator. For purposes of ERISA, each Employer shall
serve as the "Plan Administrator" with respect to the Plan of said Employer,
unless the Employer shall specifically designate an individual or individuals
(who may also be the Trustee) to act as Plan Administrator. The appointment of
such individual or individuals shall become effective upon acceptance of such
appointment, and shall continue until resignation or removal by the Employer.
The Trustee shall accept and may rely upon a certification by the Employer as to
the identity of the Plan Administrator.
9.2 Powers and Responsibilities of Plan Administrator. The Plan
Administrator is hereby vested with all powers and authority necessary in order
to carry out its duties and responsibilities in connection with the
administration of the Plan as herein provided, and is authorized to make such
rules and regulations as it may deem necessary to carry out the provisions of
said Plan. The Plan Administrator's powers and responsibilities include, but are
not limited to, the following:
(a) To make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good faith to
be final and conclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan;
(d) To administer the claims and review procedures specified in Section
9.7;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the provisions
of the Plan;
(f) To determine the person or persons to whom such benefits will be
paid;
(g) To authorize the payment of benefits and to provide for the
distribution of rollover notices in accordance with Section 402(f) of the Code;
(h) To comply with the reporting and disclosure requirements of Part 1
of Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants as
may be required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA; and
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(k) To take any and all other actions the Plan Administrator determines
to be necessary or appropriate to effect its responsibilities as such.
9.3 Action by Plan Administrator. If there is more than one individual
acting as Plan Administrator then the Plan Administrator shall act by a majority
of their number at the time in office and such action may be taken either by
vote at a meeting or in writing without a meeting. The Plan Administrator may by
such majority action authorize any one or more of their number to execute any
document or documents or to take any other action on behalf of the Plan
Administrator, and in such event any one of their number may certify in writing
to any person the taking of such action and the name or names of the individual
so authorized, including himself. Any such person shall be protected in
accepting and relying upon any such document or certificate and is released from
inquiry into the authority of any of such individuals.
9.4 Discretionary Action. Wherever under the provisions of this
Agreement the Plan Administrator is given any discretionary power or powers,
such power or powers shall not be exercised in such manner as to cause any
discrimination in favor of or against any Employee or class of Employees. Any
discretionary action taken by the Plan Administrator hereunder shall be
consistent to the maximum extent practicable with any prior discretionary action
taken by it under similar circumstances and to this end the Plan Administrator
shall keep a record of all discretionary action taken by them under any
provision hereof.
9.5 Employment of Agents. The Plan Administrator may employ agents,
including, but not limited to, investment counsel, custodians, accountants or
attorneys, to perform such services and duties in connection with the
administration of the Trust as they may direct. The compensation of such agents
shall be an expense chargeable to the Trust Fund in accordance with Section
10.13. The Plan Administrator shall be fully protected in acting upon the advice
of any such agent, in whole or in part, and shall not be liable for any act or
omission of any such agent, the Plan Administrator's only duty being to use
reasonable care in the selection of any such agent.
9.6 Indemnification of Plan Administrator. If the Plan Administrator is
not the Employer, the Employer shall indemnify and hold harmless the Plan
Administrator from any and all claims, loss, damages, expenses (including
reasonable counsel fees approved by the Employer) and liability (including any
reasonable amounts paid in settlement with the Employer's approval), arising
from any act or omission of such Plan Administrator, except when the same is
judicially determined to be due to the wilful misconduct or gross negligence of
such Plan Administrator.
9.7 Claims Procedure.
(a) All claims for benefits or for determination of the qualified
status of a domestic relations order under this Plan shall be filed in writing
with the Plan Administrator in accordance with such procedures as the Plan
Administrator shall reasonably establish.
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(b) The Plan Administrator shall, within ninety (90) days of submission
of a claim, provide adequate notice in writing to any claimant whose claim has
been denied. Such notice shall contain the specific reason or reasons for the
denial and references to specific Plan provisions on which the denial is based.
The Plan Administrator will also provide the claimant with a description of any
material or information which is necessary in order for the claimant to perfect
his claim and an explanation of why such material or information is necessary.
If special circumstances require an extension of time for processing the claim,
the Plan Administrator shall furnish the claimant a written notice of such
extension prior to the expiration of the ninety (90) day period. The extension
notice shall indicate the reasons for the extension and the expected date for a
final decision, which date shall not be more than one hundred and eighty (180)
days from the initial claim.
(c) The Plan Administrator shall, upon written request by a claimant
submitted to the Plan Administrator within sixty (60) days of the claimant's
receipt of the notice that his claim had been denied, afford a reasonable
opportunity to such claimant, for a full and fair review by the Plan
Administrator of the decision denying the claim. The Plan Administrator will
afford the claimant the opportunity to review pertinent documents and to submit
issues and comments in writing. The claimant shall have the right to be
represented.
(d) The Plan Administrator shall, within sixty (60) days of receipt of
a request for a review, render a written decision on the review. If special
circumstances require extra time for the Plan Administrator to review the
decision, the Plan Administrator will attempt to complete the review as soon as
practicable, and in no event will the Plan Administrator take more than one
hundred and twenty (120) days to send the claimant a written notice of the
decision on review.
ARTICLE X - Establishment of Trust and Rights and Duties of Trustee
10.1 Establishment of Trust. The Employer by the execution of the
Adoption Agreement establishes a retirement plan trust for the benefit of its
eligible Employees, to receive contributions made under the Plan.
(a) If the Plan is established under an Adoption Agreement which names
an individual or individuals as Trustee, there shall be any number of Trustees
of the Trust any or all of whom may be officers or employees of the Employer or
any other corporation or individuals. The Trustee(s) shall be appointed by the
Employer.
(b) If the Plan is established under an Adoption Agreement which names
a bank or qualified financial institution as Trustee, the Trustee shall be such
bank or qualified financial institution as may be named as Trustee in the
Adoption Agreement.
10.2 Powers of Trustee. It shall be the duty of the Trustee to receive
all contributions which shall be made to the Trust and, subject to the
provisions of Article V relating to Participants', Beneficiaries' and Plan
Administrator's investment directions and this Article, to hold, invest and
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reinvest such funds in the Trust, and to make payments therefrom in accordance
with the written directions of the Plan Administrator. The Trustee shall have no
responsibility for the correctness under the terms of the Plan or Trust of any
written directions which it receives from the Plan Administrator.
The Trustee shall have no discretion or authority with respect to the
investment of the Trust but shall act solely as a directed trustee of the funds
contributed to it. In addition to and not in limitation of such powers as the
Trustee has by law or under any other provisions of the Plan, the Trustee will
have the following powers, each of which the Trustee exercises solely as
directed Trustee in accordance with the written direction of the Plan
Administrator except to the extent a Plan asset is subject to Participant
direction of investment and provided that no such power shall be exercised in
any manner inconsistent with the provisions of ERISA:
(a) To deal with all or any part of the Trust and to invest all or part
of the Trust in investments available under the Plan, without regard to the law
of any state regarding proper investment;
(b) To retain uninvested such cash as it may deem necessary or
advisable, without liability for interest thereon, for the administration of the
Trust;
(c) To sell, convert, redeem, exchange or otherwise dispose of all or
any part of the assets constituting the Trust;
(d) To enforce by suit or otherwise, or to waive, its rights on behalf
of the Trust, and to defend claims asserted against it or the Trust, provided
that the Trustee is indemnified to its satisfaction against liability and
expenses;
(e) To employ such agents and counsel as may be reasonably necessary in
collecting, managing, administering, investing, distributing and protecting the
Trust or the assets thereof and to pay them reasonable compensation;
(f) To compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(g) To oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith, and to deposit securities
under deposit agreements;
(h) To apply for or purchase annuity contracts;
(i) To hold securities unregistered, or to register them in its own
name or in the name of nominees;
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(j) To appoint customers to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with stock
clearing corporations or depositories or similar organizations;
(k) To make, execute, acknowledge and deliver any and all instruments
that it deems necessary or appropriate to carry out the powers herein granted;
and
(l) Generally to exercise any of the powers of an owner with respect to
all or any part of the Trust.
The Employer specifically acknowledges and authorizes that affiliates
of the Trustee may act as its agent in the performance of ministerial,
nonfiduciary duties under the Trust. The expenses and compensation of such agent
shall be paid by the Trustee.
10.3 Investments. The Trustee shall invest and reinvest the funds of
the Trust and keep the same invested in Permissible Investments or in
publicly-traded securities pursuant to Self-Directed Brokerage Accounts, other
than stock of the Employer, without distinction between principal and income, in
accordance with the investment directions submitted by the Participants or
Beneficiaries pursuant to Article V and otherwise in accordance with the
directions of the Plan Administrator. If any investment directions are not
received from the Participants, Beneficiaries or the Plan Administrator, or if
received, are unclear in the opinion of the Trustee or its agent, all or a
portion of the assets of the Trust may be held uninvested without liability for
loss of income or appreciation and without liability for interest, pending
receipt of proper orders or clarification, or such assets may be invested on an
interim basis in such short-term liquid Permissible Investments as are selected
by the Plan Administrator on a uniform basis for such purpose. If the Trustee
invests in one or more collective or group investment funds (whether or not the
Trustee acts as trustee thereunder) for the collective investment of assets of
pension or profit sharing trusts pursuant to Revenue Ruling 81-100, such
collective or group investment funds shall constitute part of the Plan, and the
instrument creating such funds shall constitute part of this Trust.
10.4 Method of Holding and Selling Securities. The Trustee may keep any
or all securities or other property in the name of some other person, firm or
corporation or in its own name without disclosing fiduciary capacity. The
Trustee may sell at public auction or by private contract, redeem, or otherwise
realize upon, any securities, investments or other property forming a part of
the Trust and for such purposes may execute such instruments and writings and do
such things as it shall deem proper.
10.5 Voting; Delivery of Information. The Trustee shall deliver, or
cause to be executed and delivered, to the Employer or Plan Administrator all
notices, prospectuses, financial statements, proxies and proxy soliciting
materials received by the Trustee relating to securities held by the Trust, and
the Employer or Plan Administrator shall deliver these to the appropriate
Participant or the Beneficiary of a deceased Participant. The Trustee shall
undertake to deliver such materials directly to Participants and Beneficiaries
if it so agrees with the Plan Administrator. The Trustee shall not
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vote any securities held by the Trust except in accordance with the written
instructions of the Participant or the Beneficiary of the Participant, if the
Participant is deceased; provided, however, that the Trustee may, in the absence
of instructions, vote "present" for the sole purpose of allowing such shares to
be counted for establishment of a quorum at a shareholders' meeting. The Trustee
shall have no duty to solicit instructions from Participants, Beneficiaries or
the Plan Administrator.
10.6 Power to Borrow. When instructed by the Plan Administrator, the
Trustee is hereby authorized to borrow money for the purposes of the Trust upon
such terms and conditions as the Plan Administrator may determine, and for any
amount so borrowed to issue the promissory note of the Trustee and to secure the
repayment thereof by pledge, mortgage or hypothecation of all or any part of the
property of the Trust, and no person loaning money to the Trustee shall be bound
to see to the application of the money loaned or to inquire into the validity of
any such borrowing.
10.7 Reliance on Trustee as Owners. No person dealing with the Trustee
shall be required to take any notice of this Agreement, but all persons so
dealing shall be protected in treating the Trustee as the absolute owner with
full power of disposition of all the property of the Trust, and all persons
dealing with the Trustee are released from inquiry into the decision or
authority of the Trustee and from seeing to the application of the property paid
or delivered to the Trustee.
10.8 Liquidation of Assets. The Trustee shall not be required to make
any payments hereunder in excess of the net realizable value of the assets of
the Trust at the time of such payment. The Trustee shall not be required to make
any payments in cash unless there shall be in the Trust at the time an amount of
cash sufficient for the purpose. In case of such deficiency in cash, the Trustee
shall take such action as to the disposition of securities or other property
forming a part of the Trust as will provide the amount of cash necessary for
such payments.
10.9 Reliance by Trustee on Other Persons. The Trustee may rely upon
and act upon any writing from any person authorized by the Employer or Plan
Administrator to give instructions concerning the Plan and may conclusively rely
upon and be protected in acting upon any written order from the Employer or Plan
Administrator or upon any other notice, request, consent, certificate, or other
instructions or paper reasonably believed by it to have been executed by a duly
authorized person, so long as it acts in good faith in taking or omitting to
take any such action. The Trustee need not inquire as to the basis in fact of
any statement in writing received from the Employer or Plan Administrator.
The Trustee will be entitled to rely on the latest certificate it has
received from the Employer or Plan Administrator as to any person or persons
authorized to act for the Employer or Plan Administrator hereunder and to sign
on behalf of the Employer or Plan Administrator any directions or instructions,
until it receives from the Employer or Plan Administrator written notice that
such authority has been revoked.
Notwithstanding any provision contained herein, the Trustee will be
under no duty to take any action with respect to any Participant's Account
(other than as specified herein) unless and until
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the Employer or Plan Administrator furnishes the Trustee with written
instructions on a form acceptable to the Trustee, and the Trustee agrees thereto
in writing. The Trustee will not be liable for any action taken pursuant to the
Employer or Plan Administrator's written instructions (nor for the collection of
contributions under the Plan, nor the purpose or propriety of any distribution
made thereunder).
In the event that any dispute may arise regarding the payment of any
sums or regarding any act to be performed by the Trustee, the Trustee may in its
sole discretion retain such payment or postpone the performance of such act
until actual adjudication of such act shall have been made in a court of
competent jurisdiction, or until it shall have been indemnified against loss to
its satisfaction; provided, however, that in the event of any such dispute, the
Trustee may rely upon and act in accordance with any directions received from
the Plan Administrator.
10.10 Action by Individual Trustees. If there is more than one Trustee,
then the Trustees shall act by a majority of their number at the time in office
and such action may be taken either by vote at a meeting or in writing without a
meeting. The Trustees may by such majority action authorize any one or more of
their number to execute any document or documents or to take any other action on
behalf of the Trustees, and in such event any one of the Trustees may certify in
writing to any person the taking of such action and the name or names of the
Trustee or Trustees so authorized, including himself. Any such person shall be
protected in accepting and relying upon any such document or certificate and is
released from inquiry into the authority of any of the Trustees.
10.11 Records and Accounting. The Trustee shall keep accurate and
detailed records of its transactions hereunder, and all its accounts, books and
records relating thereto shall be open at all reasonable times to the inspection
of the Employer and its authorized representatives. The Trustee shall render in
writing, at least once each twelve (12) months, accounts of its transactions
under the Trust to the Employer and the Employer may approve such accounts of
the Trustee by an instrument in writing delivered to the Trustee. In the absence
of the filing in writing with the Trustee by the Employer of exceptions or
objections to any such account within sixty (60) days after the receipt by the
Employer of any such account, the Employer shall be deemed to have approved such
account; and in such case, or upon the written approval of the Employer of any
such account, the Trustee shall be released, relieved and discharged by the
Employer with respect to all matters and things set forth in such account. In
any proceeding instituted by the Trustee or the Employer respecting an
accounting, only the Employer and/or the Trustee shall be the necessary parties.
The Trustee shall from time to time make such other reports and furnish such
other information concerning the Trust to the Employer as it may in writing
reasonably request.
10.12 Payment of Taxes. Upon direction of the Employer, the Trustee
shall pay out of the Trust any and all taxes of any and all kinds, including
without limitation property taxes and income taxes levied or assessed under
existing or future laws upon or in respect of the Trust or any monies,
securities or other property forming a part thereof or the income therefrom
subject to the terms of any agreements or contracts made with respect to trust
investments which make other provision for such tax payments. The Trustee may
assume that any taxes assessed on or in respect of the Trust
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or its income are lawfully assessed unless the Employer shall in writing advise
the Trustee that in the opinion of counsel for the Employer which established
the Trust such taxes are or may be unlawfully assessed. In the event that the
Employer shall so advise the Trustee, the Trustee will, if so requested in
writing by the Employer which established the Trust, contest the validity of
such taxes in any manner deemed appropriate by the Employer or its counsel but
at the expense of the Trust; or the Employer may itself contest the validity of
any such taxes at the expense of the Trust and in the name of the Trustee; and
the Trustee agrees to execute all documents, instruments, claims and petitions
necessary or advisable in the opinion of the Employer or its counsel for the
refund, abatement, reduction or elimination of any such taxes to the extent the
execution thereof is in accordance with ERISA, the Code and any other applicable
state or federal laws.
10.13 Compensation and Expenses. If the Trustee is a bank or other
financial institution other than an Employer, the Trustee shall be entitled to
reasonable compensation for its services. The rate of compensation as initially
agreed upon with the Employer shall continue in effect until written notice by
the Trustee of any change therein. Unless otherwise determined by the Employer,
any individual Trustees shall serve without compensation for their services as
such. All expenses of the Trustee, the Plan Administrator and the Trust shall,
unless paid by the Employer, constitute a charge upon the Trust and shall,
unless allocable to the Accounts of particular Participants, be charged against
the Accounts of all Participants in such reasonable manner as the Trustee shall
determine. Such expenses shall include any expenses incident to the functioning
of the Plan and Trust, including, but not limited to, attorneys' fees and the
compensation of other agents, accounting and clerical charges, expenses, if any,
of being bonded as required by ERISA, and other costs of administering the Plan
and Trust.
10.14 Resignation or Removal of Trustee. Any Trustee acting hereunder
may resign at any time upon sixty (60) days' written notice to the Employer and
to any remaining Trustees, and the Employer may remove any Trustee at any time
upon sixty (60) days' written notice to such Trustee and any remaining Trustees.
If any Trustee shall die, resign, be removed or for any other reason cease to be
Trustee, the Employer shall appoint a successor Trustee or Trustees. In the
absence of such appointment, (a) the remaining Trustee or Trustees, if any,
shall exercise all of the powers of the Trustee or (b) if there are no remaining
Trustees, the prior Trustee shall continue to serve until the assets of the
Trust have been transferred to any qualified financial institution selected by
such prior Trustee to act as interim Trustee. The appointment of a successor
Trustee shall be effective upon written notification to the Employer of the
acceptance of such appointment. The Trustee may, upon transfer and delivery of
the Trust to a successor Trustee, reserve such reasonable amount as it shall
deem necessary to provide for its fees, compensation, costs and expenses, or for
the payment of any other liabilities chargeable against the Trustee for which it
may be liable. The Trustee shall not be liable for the acts or omissions of any
successor Trustee.
10.15 Indemnification of Trustee. The Employer shall indemnify and hold
harmless any Trustee from any and all claims, loss, damages, expenses (including
reasonable counsel fees approved by the Employer) and liability (including any
reasonable amounts paid in settlement with the Employer's approval), arising
from any act or omission of such Trustee, (including, without
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limitation, any act or omission which results from a direction given by the Plan
Administrator or the Employer or from any service provider to the Plan) except
when the same is judicially determined to be due to the gross negligence or
wilful misconduct of such Trustee.
10.16 Successor to Institutional Trustee. Any entity into which an
institutional Trustee may merge or with which it may be consolidated or any
entity resulting from any such merger or consolidation shall be the successor of
such institutional Trustee hereunder without the necessity for execution or
filing of any additional instrument or the performance of any further act.
10.17 Responsibilities of Trustee. The Trustee shall be responsible
only for the management and disbursement of amounts actually contributed to the
Trust. The Trustee shall discharge its duties hereunder solely in the interest
of Participants and Beneficiaries and with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, and the Trustee shall be
subject to all applicable requirements of ERISA. The Trustee shall have no duty
to take any action to ensure the tax qualified status of the Plan under the
Code. The Trustee shall have no responsibility for determining the correctness
of the amount of any contributions, or for the failure of an Employer to make
the contributions provided for in the Adoption Agreement, for the correctness of
any disbursement made, or other action taken, pursuant to the written directions
of the Plan Administrator, or for any act or omission of any service provider to
the Plan. The Trustee shall not have a duty to bring any action or proceeding to
enforce the collection of any contribution by the Employer. The Trustee shall
not be liable for or under any duty to inquire as to the proper application of
any part of the Trust Fund if distributions are made to the Participants or
Beneficiaries in accordance with directions of the Plan Administrator, nor shall
the Trustee be responsible for the adequacy of the Trust Fund to meet and
discharge any and all distributions and liabilities under the Plan.
10.18 Allocation and Delegation of Responsibilities. The named
fiduciary with respect to the Plan and Trust within the meaning of Section 402
of ERISA shall be the Plan Administrator. The responsibilities of the Employer,
the Plan Administrator and the Trustee shall be allocated as provided herein and
in the Adoption Agreements, and each shall have only those responsibilities and
obligations that are specifically Unposed upon him by this Plan and the
applicable Adoption Agreement. It is intended that each such person shall be
responsible for the proper exercise of his own powers, duties, responsibilities
and obligations under the Plan and shall not be responsible for any act or
omission of any other person. Each such person shall be entitled to delegate all
or any part of his responsibilities and obligations to any other person or
entity. In the event of any such delegation, (a) the person making such
delegation shall not be liable for any act or omission of the person to whom the
responsibility has been delegated as long as the selection and retention of such
person is prudent and (b) the person to whom the powers and obligations are
delegated shall be responsible only for the proper exercise of the powers,
duties, responsibilities and obligations that have been specifically delegated
to him.
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ARTICLE XI - The Employer
11.1 No Contract of Employment. The Plan shall not be construed as
creating any contract of employment between the Employer which established the
Plan and any Participant, eligible Employee, or other person, and nothing herein
contained shall give any person the right to be retained in the employ of the
Employer or otherwise restrain the Employer's right to deal with its employees,
including Participants and eligible Employees, and their hiring, discharge,
layoff, compensation, and all other conditions of employment in all respects as
though the Plan did not exist.
11.2 No Contract to Maintain Plan. An Employer, by the establishment of
the Plan, shall not be deemed to have entered into an agreement to maintain the
Plan or to make any future contributions thereto or reimbursement of expenses
incurred thereunder. Each contribution by an Employer to its Plan shall be
voluntary, and an Employer shall have the right to suspend payment of its
contributions, and no Participant or any other person shall have any cause or
right of action against an Employer by reason of failure by the Employer to make
contributions to the Trust, or by reason of any action by the Employer in
terminating the Plan.
11.3 Liability of an Employer. Subject to any Employer's agreement to
indemnify the Plan Administrator and/or Trustee as provided in Sections 9.6 and
10.15 and except as otherwise required by applicable federal law, neither the
Employer nor any person acting in behalf of the Employer shall be liable for any
act or omission on the part of a Plan Administrator selected by the Employer or
any Trustee, or for any act performed or the failure to perform any act by any
person with respect to the Plan or the Trust, the Employer's only duty being to
use reasonable care in the selection of the Plan Administrator and Trustee.
11.4 Action by an Employer. Whenever under the terms of the Plan or
Trust an Employer (other than a Self-Employed Individual) is permitted or
required to take any action, such action shall be taken by the Board of
Directors of the Employer, or by any duly authorized officer or partner of the
Employer. In such event any such officer or partner may certify to the Trustee
or any other person the taking of such action and the name or names of the
officers or partners so authorized, including himself. The execution of any
direction, document, or certificate in behalf of an Employer by any of its
officers or partners shall constitute his certification of his authority with
respect thereto, and the Trustee, or other person shall be protected in
accepting and relying upon any such direction, document, or certificate and is
released from inquiry into the authority of any officer or partner of the
Employer. If the Employer is a Self-Employed Individual, all actions shall be
taken by the Self-Employed Individual. Upon the death of the Self-Employed
Individual, the executor or administrator of his estate shall assume all the
responsibilities of the Self-Employed Individual.
11.5 Successor to Business of an Employer. Unless the Plan be sooner
terminated, a successor to the business of the Employer, by whatever form or
manner resulting, may continue the Employer's Plan by executing an appropriate
supplementary agreement, and such successor shall ipso facto succeed to all the
rights, powers and duties of the Employer thereunder. The employment
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of any Employee who has continued in the employ of such successor shall not be
deemed to have been terminated or severed for any purposes hereunder.
11.6 Dissolution of the Employer. In the event that the Employer is
dissolved by reason of bankruptcy or insolvency or otherwise, without any
provision being made for the continuance of its Plan by a successor to the
business of the Employer, each Plan Participant shall be fully vested, and the
Trustee shall proceed in the same manner as though the Plan had been terminated
by such Employer as provided in Section 8.4.
11.7 Plan Covering Owner-Employee.
(a) If contributions or benefits are provided under the Plan for one or
more Owner-Employees who control both an Employer and one or more other trades
or businesses, the Plan and the plan established for the other trades or
businesses must, when looked at as a single plan, satisfy Sections 401(a) and
(d) of the Code for the employees of the Employer and all such other trades or
businesses.
(b) If contributions or benefits are provided under the Plan for one or
more Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies Sections 401(a) and (d) of the Code and which provides contributions
and benefits not less favorable than provided for Owner- Employees under the
Plan.
(c) If a Participant is covered as an Owner-Employee under the plans of
two or more trades or businesses which are not controlled and the Participant
controls a trade or business, then the contributions or benefits of the
employees under the plan of the controlled trade or business must be as
favorable as those provided for the Owner-Employee under the most favorable plan
of the trade or business which is not controlled.
(d) For purposes of paragraphs (a), (b) and (c), 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:
(i) own the entire interest in an unincorporated trade or
business, or
(ii) in the case of a partnership, own more than fifty percent
(50%) of either the capital interest or the profits interest in the
partnership.
For purposes of this paragraph (d), 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. It shall be the responsibility of the Employer and
the Plan Administrator to insure that the limitations imposed by this Section
are fully
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complied with at all times. The Trustee shall have no responsibility with
respect to insuring such compliance and shall be under no obligation whatsoever
to take any action to determine whether in fact the limitations of this Section
are being fully complied with at all times.
ARTICLE XII - Limitation on Allocations
12.1 (This Section applies only to a Participant who does not
participate in, and has never participated in, any other qualified plan
maintained by the Employer, a welfare benefit fund, as defined in Section 419(e)
of the Code, maintained by the Employer, or an individual medical account, as
defined in Section 415(l)(2) of the Code, maintained by the Employer which
provides an Annual Addition as defined in Section 12.5.)
(a) The amount of the Annual Additions which may be allocated under the
Plan to the Participant's accounts for any Plan Year shall not exceed the
Maximum Permissible Amount. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts would cause the Annual
Additions for the Plan Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated shall be reduced so that the Annual Additions for the
Plan Year will equal the Maximum Permissible Amount.
(b) Prior to determining the Participant's Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount for a
Participant on a basis of a reasonable estimation of the Participant's
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated. As soon as administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount will be determined on the basis
of the Participant's actual Compensation for the Limitation Year. If, as a
result of allocation of forfeitures or a reasonable error in estimating a
Participant's Compensation, the Annual Additions under the Plan on behalf of a
Participant is to be reduced as of any Allocation Date, such reduction shall be
made in the following order:
(i) The Participant's voluntary nondeductible contributions be
reduced and the full amount of such reduction, adjusted for earnings,
shall be returned to him in cash;
(ii) The Elective Deferrals allocated to his Elective Deferral
Account shall be reduced and the full amount of such reduction,
adjusted for earnings, shall be returned to him in cash;
(iii) The Matching Contributions and forfeitures allocated to
his Matching Account shall be reduced; and
(iv) The Employer Contributions and forfeitures allocated to
his Employer Account shall be reduced.
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(c) Any reduction required pursuant to clause (iii) of subsection (b)
shall be held in a suspense account and applied to reduce the Participant's
Matching Contributions for the next Limitation Year. Any reduction required
pursuant to clause (iv) of subsection (b) shall be reallocated to other
Participants' Accounts in accordance with the provisions of Section 5.5 to the
extent that such allocations do not cause the Annual Additions to any such other
Participants' accounts to exceed the lesser of the Maximum Permissible Amount or
any other limitation provided in the Plan. If a Participant is not covered by
the Plan at the end of a Limitation Year, the reduction required by clause (iii)
of subsection (b) shall be allocated to a suspense account. To the extent that
the reduction in clause (iv) of subsection (b) cannot be allocated to other
Participants' Accounts, it shall be allocated to a suspense account. The
suspense account shall 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. In the
event of termination of the Plan the suspense account shall revert to the
Employer to the extent it cannot be allocated to any Participant's Account. If a
suspense account is in existence at any time during the Plan Year, it shall not
participate in the allocation of the Trust's investment gains and losses
pursuant to Section 5.9. If a suspense account is in existence at any time
during a particular Limitation Year, all amounts in the suspense account shall
be allocated to Participants' Accounts before any Employer contributions or any
Participant contributions may be made to the Plan for that Limitation Year.
Excess amounts may not be distributed to Participants or former Participants.
(d) Notwithstanding any other provision in subsections (a) through (c),
the Employer shall not contribute any amount that would cause an allocation to
the suspense account as of the date the contribution is allocated. If the
contribution is made prior to the date as of which it is to be allocated, then
such contribution shall not exceed an amount that would cause an allocation to
the suspense account if the date of contribution were an Allocation Date.
12.2 (This Section applies only to a Participant who, in addition to
the Plan, is covered during any Limitation Year 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 which provides an Annual Addition as
defined in Section 12.5.)
(a) The Annual Additions which may be allocated under the Plan to any
Participant's accounts for any Limitation Year shall not exceed the Maximum
Permissible Amount reduced by the Annual Additions previously credited to such
Participant's accounts under the other plans or welfare benefit funds for the
same Limitation Year.
If the Annual Additions with respect to the Participant under such
other defined contribution plans, welfare benefit funds and individual medical
accounts are less than the Maximum Permissible Amount, and the Employer
contribution that would otherwise be contributed or allocated to the
Participant's accounts under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
shall be reduced so that the Annual Additions under all such plans, funds and
individual medical accounts for the Limitation Year will
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equal the Maximum Permissible Amount. If the Annual Additions with respect to
such Participant under such other defined contribution plans, welfare benefit
funds and individual medical accounts in the aggregate are equal to or greater
than the Maximum Permissible Amount, no amount may be contributed or allocated
to the Participant's accounts under the Plan for the Limitation Year.
(b) If, as a result of allocation of forfeitures or a reasonable error
in estimating a Participant's compensation (under a method uniformly determined
for all Participants similarly situated), a Participant's Annual Additions under
this Plan and such other plans would result in an Excess Amount for a Limitation
Year, the Excess Amount will be deemed to consist of the Annual Additions last
allocated, except that Annual Additions attributable to a welfare benefit fund
or an individual medical account will be deemed to have been allocated first
regardless of the actual Allocation Date. If an Allocation Date of the Plan
coincides with an Allocation Date of any other defined contribution plan
described in subsection (a), the amount of Annual Additions to be allocated on
behalf of a Participant under the Plan as of such date shall be an amount equal
to the product of the amount to be allocated under the Plan without regard to
this Article multiplied by the lesser of one (1) or a fraction, the numerator of
which is the amount described in subsection (a) during the Limitation Year and
the denominator of which is the amount that would otherwise be allocated on this
Allocation Date under all plans without regard to this Article.
(c) If the Annual Additions under the Plan on behalf of a Participant
is to be reduced as of any Allocation Date as a result of subsections (a) and
(b), such reduction shall be effected in the manner described in Section 12.1
(b).
(d) If as a result of subsections (a) and (b) the allocation of Annual
Additions is reduced, such reduction shall be treated in the manner described in
Section 12.1(c).
(e) Notwithstanding any other provision in subsections (a) through (d),
the Employer shall not contribute any amount that would cause an allocation to
the suspense account as of the date the contribution is allocated. If the
contribution is made prior to the date as of which it is to be allocated, then
such contribution shall not exceed an amount that would cause an allocation to
the suspense account if the date of contribution were an Allocation Date.
12.3 (This Section applies only to a Participant who participates in
one or more qualified defined contribution plans maintained by the Employer
other than a Master or Prototype Plan.)
(a) Annual Additions allocated under the Plan to any Participant's
accounts shall be limited in accordance with the allocation provisions of
Section 12.2 as though the other plan were a Master or Prototype Plan, unless
the Employer specifically provides other limitations in the Adoption Agreement.
12.4 (This Section applies only to an Employer which, in addition to
the Plan, maintains or at any time maintained, a qualified defined benefit plan
covering any Participant.)
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(a) The sum of the Participant's Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction shall 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 shall be limited in accordance with the
limitations specifically provided by the Employer in the Adoption Agreement.
12.5 For purposes of this Article, the following terms shall be defined
as follows:
(a) "Allocation Date" means the date with respect to which all or a
portion of Employer contributions, Participant contributions, or forfeitures are
allocated to Participants' accounts.
(b) "Annual Additions" means, with respect to any Participant, the sum,
for the Limitation Year, of (i) all Employer contributions allocated to his
account; (ii) all forfeitures allocated to his account; (iii) all Participant's
nondeductible contributions allocated to his account, (iv) contributions
allocated after March 31, 1984, to an individual medical benefit account, as
defined in Section 415(l)(2) of the Code, maintained for such Participant under
a pension or annuity plan sponsored by an Employer, (v) Excess Elective
Deferrals (other than amounts distributed no later than the first April 15
following the close of the Participant's taxable year), (vi) Excess
Contributions, (vii) Excess Aggregate Contributions, and (viii) 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. For the purpose of this
Article, amounts allocated to the Participant's account from a suspense account
shall also be treated as Annual Additions.
(c) "Compensation" means a Participant's earned income, wages,
salaries, and fees for professional services and other amounts received for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan (including, but not limited to commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as
described in Treasury Regulation Section 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 the Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
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(iii) Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified or incentive
stock option; and
(iv) Other amounts which received special tax
benefits, or contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity contract
described in Section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of the
Employee).
For purposes of applying the limitations of this Article, Compensation
for a Limitation Year is the Compensation actually paid or made available during
such year.
(d) "Defined Benefit Fraction" means a fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all qualified
defined benefit plans (whether or not terminated) maintained by the Employer,
and the denominator of which is the lesser of 100% of the dollar limitation in
effect for the Limitation Year under Section 415(b)(1)(A) of the Code or 140% of
the Participant's average Compensation for the highest three (3) consecutive
calendar years during which the Participant was an active Participant in such
plan, 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 qualified defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction will not be
less than 125% of the sum of the annual benefits under such plans which the
Participant had accrued as of the later of the end of the last Limitation Year
beginning before January 1, 1987, disregarding any changes in the terms and
conditions of the Plan. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
Section 415 of the Code as in effect for all Limitation Years beginning before
January 1, 1987.
(e) "Defined Contribution Fraction" means a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's accounts under all
qualified 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 qualified defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions attributable to all welfare
benefit funds, as defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(l)(2) of the Code, maintained by the
Employer), and the denominator of which is the sum of the Maximum Permissible
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 Permissible Amount in any Limitation Year is the
lesser of 100% of the dollar limitation in effect under Section 415(c)(1)(A) of
the Code or thirty-five percent (35%) of the Participant's Compensation for such
year.
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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 later 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, but using the Section 415 limitation applicable to the first Limitation
Year beginning on or after January 1, 1987.
(f) "Employer" means 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) of the Code as modified by Section
414(h)) or affiliated service groups (as defined in Section 414(m) of the Code)
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
(g) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(h) "Limitation Year" means the Plan Year (or any other twelve (12)
consecutive-month period adopted for all plans of the Employer and specified in
the Adoption Agreement). All qualified plans maintained by the Employer must use
the same Limitation Year. If the Limitation Year is amended to a different
twelve consecutive-month period, the new Limitation Year must begin on a date
within the Limitation Year in which the amendment is made.
(i) "Master or Prototype Plan" means a plan the form of which has been
the subject of a favorable opinion letter from the Internal Revenue Service.
(j) "Maximum Permissible Amount" means, with respect to any Participant
for a Limitation Year, the maximum Annual Additions that may be contributed or
allocated to a Participant's Account for such Limitation Year shall not exceed
the lesser of (1) $30,000 or if greater, one-fourth of the defined benefit
dollar limit set forth in Section 415(b)(1) or (2) twenty-five percent (25 %) of
the Participant's Compensation for the Limitation Year. The Compensation
limitation referred to in (2) shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or 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 twelve consecutive-month period, the
Maximum Permissible Amount shall not exceed the amount set forth in (1)
multiplied by the following fraction:
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Number of months in the short Limitation Year
---------------------------------------------
Twelve (12)
(k) "Projected Annual Benefit" means the annual retirement benefit
(adjusted to an actuarial 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:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(ii) 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.
12.6 It shall be the responsibility of the Employer and the Plan
Administrator to insure that the limitations imposed by this Article are fully
complied with at all times. The Trustee shall have no responsibility with
respect to insuring such compliance and shall be under no obligation whatsoever
to take any action to determine whether in fact the limitations of this Article
are being fully complied with at all times.
ARTICLE XIII - Amendment and Continuation of
Predecessor Plan; Transfer of Funds to or from
Other Qualified Plans
13.1 Amendment and Continuation of Predecessor Plan. In the event the
Employer has previously established a plan (the "predecessor plan") which is a
defined contribution plan under the Code and which on the date of adoption of
the Plan meets the applicable requirements of Section 401 (a) of the Code, the
Employer may, in accordance with the provisions of the predecessor plan, amend
and continue the predecessor plan in the form of the Plan and become the
Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant or former Participant in the predecessor plan immediately prior to
the effective date of such amendment and continuation will become a Participant
or former Participant in the Plan;
(b) No election may be made under the vesting provisions of the
Adoption Agreement if such election would reduce the benefits of a Participant
under the Plan to less than the benefits to which he would have been entitled if
he voluntarily. separated from the service of the Employer immediately prior to
such amendment and continuation;
(c) No amendment to the plan shall decrease a Participant's accrued
benefit or eliminate an optional form of benefit;
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(d) The amounts standing to the credit of a Participant's account
immediately prior to such amendment and continuation which represent the amounts
properly attributable to (i) contributions by the Participant (pre-tax or
after-tax) and (ii) contributions by the Employer and forfeitures will
constitute the opening balance of his Account or Accounts under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary in
accordance with the provisions of the predecessor plan will continue to be paid
in accordance with such provisions;
(f) Any beneficiary designation in effect after August 23, 1984, under
the predecessor plan immediately before such amendment and continuation will be
deemed a valid designation of Beneficiary under Section 7.4 if such designation
satisfies the requirements of Section 7.4, unless and until the Participant
revokes such designation or designates a new Beneficiary under the Plan; and
(g) Unless the Employer and the Trustee agree otherwise, all assets of
the predecessor trust will be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets will be invested by the Trustee as
soon as reasonably practicable pursuant to Article V. The Employer agrees to
assist the Trustee in any way requested by the Trustee in order to facilitate
the transfer of assets from the predecessor trust to the Trust Fund.
13.2 Transfer of Funds from an Existing Plan. The Employer may from
time to time direct the Trustee, in accordance with such rules as the Trustee
may establish, to accept funds transferred for the benefit of Participants from
a trust forming part of another qualified plan under the Code, provided such
plan is a defined contribution plan. Such transferred amounts will be credited
to Participants' Accounts in accordance with their respective interests
immediately upon receipt by the Trustee in accordance with the provisions in
paragraph (d) of Section 13. 1 as if such assets were transferred from a
predecessor plan. A Participant's interest under the Plan in transferred amounts
which were fully vested and nonforfeitable under the transferring plan will be
fully vested and nonforfeitable at all times. Such transferred assets will be
invested by the Trustee in accordance with the provisions of paragraph (g) of
Section 13.1 as if such assets were transferred from a predecessor plan. Forms
of benefit available under the transferee plan shall continue to be offered
under the Plan with respect to such transferred assets.
13.3 Acceptance of Assets by Trustee. The Trustee will not accept
assets which are not Permissible Investments, or in cash. Such assets shall be
accompanied by written instructions showing separately the respective
contributions by the prior employer and by the employee, and identifying the
assets attributable to such contributions. The Trustee shall establish such
accounts as may be necessary or appropriate to reflect such contributions under
the Plan. The Trustee shall hold such assets for investment in accordance with
the provisions of Article V and shall, in accordance with the written
instructions of the Employer, make appropriate credits to the Accounts of the
Participants for whose benefit assets have been transferred.
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13.4 Transfer of Assets from Trust. The Employer may direct the Trustee
to transfer all or a specified portion of the Trust assets to any other plan or
plans maintained by the Employer or the employer or employers of a former
Participant or Participants, provided that the Trustee has received evidence
satisfactory to it that such other plan meets all applicable requirements of the
Code, that such transfer is in compliance with all the applicable requirements
of the Code including, but not limited to, Section 414(l) of the Code, and the
Plan and that spousal consent to such benefit transfer has been obtained if such
consent is legally required. The assets so transferred shall be accompanied by
written instructions from the Employer naming the persons for whose benefit such
assets have been transferred, showing separately the respective contributions by
the Employer and by each Participant, if any, and identifying the assets
attributable to the various contributions. The Trustee shall have no further
liabilities with respect to assets so transferred.
ARTICLE XIV - Miscellaneous
14.1 Spendthrift Provision. Beneficial interests of Participants or
their Beneficiaries in the Trust shall not be assignable nor subject to
attachment nor receivership, nor shall they pass to any trustee in bankruptcy or
be reached or applied by any legal process for the payment of any obligations of
any such person, except obligations of a Participant to the Trust in connection
with any outstanding loans to such Participant pursuant to Section 7.10.
Notwithstanding the foregoing, the provisions of this Section 14.1 shall not
preclude the Trustee from complying with a Qualified Domestic Relations Order.
14.2 Notices. All notices required to be given by the Trustee to an
Employer or the Plan Administrator shall be deemed to have been given when
mailed to the address of the Employer or the Plan Administrator, respectively,
as indicated by the Trustee's records. All notices required to be given to the
Trustee by an Employer shall be deemed to have been given when mailed to the
address indicated by the Employer's records.
14.3 Facility of Payment. In the event the Plan Administrator
determines, on the basis of medical reports or other evidence satisfactory to
the Plan Administrator, that the recipient of any benefit payments under the
Plan is incapable of handling his affairs by reason of minority, illness,
infirmity or other incapacity, the Plan Administrator may direct the Trustee to
disburse such payments to a person or institution designated by a court which
has jurisdiction over such recipient or a person or institution otherwise having
the legal authority under State law for the care and control of such recipient.
The receipt by such person or institution of any such payments shall be complete
acquittance therefor, and any such payment to the extent thereof, shall
discharge the liability of the Trust for the payment of benefits hereunder to
such recipient.
14.4 Construction. In any question of interpretation or other matter of
doubt, an Employer, the Plan Administrator and the Trustee may rely upon the
opinion or counsel for the Employer or any other attorney at law designated by
the Employer with the approval of the Trustee. The provision of this Plan and
Trust shall be construed, administered and enforced according to ERISA
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and the laws of the Trustee's state of domicile. All contributions to the Trust
shall be deemed to be made in the Trustee's state of domicile.
14.5 Impossibility of Performance. In case it becomes impossible for an
Employer, the Plan Administrator, or the Trustee to perform any act under the
Plan or Trust, that act shall be performed which in the judgment of the Plan
Administrator or Trustee will most nearly carry out the intent and purpose of
the Plan or Trust. All parties to the applicable Adoption Agreement or in any
way interested in the Plan or Trust shall be bound by any acts performed under
such condition.
14.6 Definition of Words. Feminine or neuter pronouns shall be
substituted for those of the masculine form, and the plural shall be substituted
for the singular, in any place or places herein where the context may require
such substitution or substitutions.
14.7 Titles. The titles of articles and sections are included only for
convenience and shall not be construed as a part of this Plan or in any respect
affecting or modifying its provisions.
14.8 Conflict with Plan Provisions. In the event that any contract or
other arrangement which is entered into pursuant to the Plan or Trust conflicts
in any manner with the provisions of the Plan and Trust, then the provisions of
the Plan and Trust shall control.
14.9 Non-Discrimination Data Substantiation. The Employer may elect to
follow the guidelines for substantiating compliance with the non-discrimination
rules pursuant to Internal Revenue Service Revenue Procedure 93-42, Data
Substantiation Guidelines and Non-Discrimination Requirements of Section
401(a)(4), 410(b), and Related Code Sections. The guidance in this Revenue
Procedure is designed to allow Employers to use alternative methods for
substantiating compliance with the non-discrimination requirements.
ARTICLE XV - Top Heavy Plans
15.1 Application of Article. This Article XV will apply to all Plans
except Plans deemed to be Top-Heavy; provided, however, that Section 15.5 shall
also apply to a Plan that is deemed to be Top-Heavy.
15.2 Definitions. When used in this Article XV, the following terms
shall have the indicated meanings:
(a) "Determination Date" means, for any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year, and for the first Plan
Year, the last day of that year.
(b) "Key Employee" means any Employee or former Employee who at any
time during the Plan Year containing the Determination Date or the four
preceding Plan Years was:
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(i) an officer of an Employer, whose Compensation for
such Plan Year exceeds 50% of the dollar limitation in effect
under Section 415(b)(1)(A) for any such Plan Year;
(ii) one of the ten (10) Employees having
Compensation for such Plan Year in excess of the Maximum
Permissible Amount defined in Section 11.5(i)(1) of the Plan
and owning (or considered as owning under Section 318 of the
Code) the largest interests in an Employer;
(iii) a five-percent owner of an Employer;
(iv) a one percent owner of an Employer, whose
Compensation for such Plan Year exceeds $150,000;
(v) a Beneficiary of a Key Employee.
For this purpose, Compensation means Compensation as defined in Section
12.5(c), 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, 402(a)(8), 402(h) or 403(b) of the Code.
The determination of who is a Key Employee shall be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
(c) "Permissive Aggregation Group" means the Required Aggregation Group
plus any other plan or plans (including terminated plans) of an Employer which,
when considered as a group with the Required Aggregation Group, would continue
to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(d) "Present Value" means actuarial present value based only on the
interest and mortality rates specified in the Adoption Agreement.
(e) "Required Aggregation Group" means (i) each qualified plan of an
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 (ii) any other qualified plan (including terminated plans) of
an Employer which enables a plan described in (i) to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
(f) "Top Heavy Ratio" means the percentage determined as follows:
(i) If the plan or group of plans being tested
includes one or more defined contribution plans (including any
Simplified Employee Pension Plan) and no defined benefit plan which
during the five-year period ending on the Determination Date(s) has or
has had
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accrued benefits, the Top-Heavy Ratio is a fraction, the numerator of
which is the sum of the account balances of all Key Employees as of the
Determination Date (including any part of any account balance
distributed in the five (5) year period ending on the Determination
Date), 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) of all participants as of the
determination date. Both the numerator and denominator of the Top-Heavy
Ratio are increased to include any contribution which is due but unpaid
as of the Determination Date, and to exclude Deductible Account
balances and any Rollover Account balances accepted from a plan of an
unrelated employer.
(ii) If the plan or group of plans being tested
includes one or more defined contribution plans (including any
Simplified Employee Pension Plan) and one or more defined benefit plans
which during the five-year period ending on the Determination Date(s)
has or has had any accrued benefits, the Top-Heavy Ratio is a fraction,
the numerator of which is the sum of account balances under the defined
contribution plans for all Key Employees and the present value of
accrued benefits under the defined benefit plans for all Key Employees,
and the denominator of which is the sum of the account balances under
the defined contribution plans for all participants and the present
value of accrued benefits under the defined benefit plans for all
participants. Both the numerator and denominator of the Top-Heavy Ratio
are increased to include any distribution of an account balance or an
accrued benefit made in the five (5) year period ending on the
Determination Date and any contribution due but unpaid as of the
Determination Date, and to exclude any Rollover Account balances
accepted from a plan of an unrelated employer.
(iii) For purposes of (i) and (ii) above, the value
of account balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls within or
ends with the twelve (12) month period ending on the Determination
Date, except as provided in Section 416 of the Code and regulations
thereunder for the first and second 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 performed one Hour of Service for the Employer 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. 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 (1) the method, if any, that uniformly appears for
accrual purposes under all defined benefit plans maintained by the
Employer, or (2) if there is no such method, as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under the
fractional method of Section 411(b)(1)(C) of the Code.
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(g) "Valuation Date" means the date elected by the Employer in
the Adoption Agreement as of which account balances or accrued benefits are
valued for purposes of calculating the Top-Heavy Ratio.
15.3 Determination of Top-Heavy Status. For any Plan Year, the Plan is
top-heavy if any of the following conditions exists:
(a) The Top-Heavy Ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group.
(b) The Plan is part of a Required Aggregation Group but not
part of a Permissive Aggregation Group and the Top-Heavy Ratio for such group
exceeds sixty percent (60%).
(c) The Plan is part of a Required Aggregation Group and/or a
Permissive Aggregation Group and the Top-Heavy Ratio for each such group exceeds
sixty percent (60%).
15.4 Provisions Applicable When Plan is Not Top-Heavy. For any Plan
Year in which the Plan is not Top-Heavy, and for any Plan Year in which the
Top-Heavy Ratio does not exceed 90% and increased minimum benefits are provided
as required by Section 416(h)(2)(A) of the Code, 125% shall be substituted for
100% in Sections 12.5(d) and 12.5(e).
15.5 Provisions Applicable When Plan is Top Heavy. The following
provisions shall apply for any Plan Year in which the Plan is Top-Heavy or is
deemed to be Top-Heavy:
(a) Minimum Contribution.
(i) If the Employer does not maintain a defined
benefit plan, for any Plan Year in which this Plan is top-heavy or
deemed to be top-heavy, the Employer contributions (and forfeitures)
made on behalf of any Participant who is not a Key Employee and who is
employed on the last day of the Plan Year shall not be less am the
lesser of three percent (3%) of such Participant's Compensation (as
defined in Section 12.5(c)) or in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy Section 401
of the Code and this Plan is not integrated with social security, the
largest percentage of Employer contributions (including Elective
Deferrals and Matching Contributions) and forfeitures, as a percentage
of the Key Employee's Compensation (as defined in Section 12.5(c)),
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. Neither Elective Deferrals nor Matching
Contributions may be taken into account for the purpose of satisfying
this minimum top-heavy allocation requirement.
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(ii) If the Employer maintains a defined benefit
plan, the Employer contributions (and forfeitures) made on behalf of
Participant who is not a Key Employee and who is a participant in a
defined benefit plan maintained by the Employer shall not be less than
five percent (5 %) of such Participant's Compensation (as defined in
Section 12.5(c)).
(iii) If the Employer elected an Integrated Formula
in the Adoption Agreement for a profit sharing plan, "2.7%" shall be
substituted for the term "Maximum Disparity Rate" in Section
5.5(b)(iv), and the allocation steps in Section 5.5(b)(iv) shall be
preceded by the following steps:
(1) Employer Contribution will be allocated
to each eligible Participant determined under Section 5.5(b)
in the ratio that the Participant's Compensation bears to the
aggregate Compensation of all eligible Participants, but not
in excess of three percent (3%).
(2) Any Employer Contribution remaining
after (iii)(1) above will be allocated to each eligible
Participant in the ratio that the Participant's Excess
Compensation for the Plan Year bears to the aggregate Excess
Compensation of all eligible Participants, but not in excess
of three percent (3%).
(iv) The provisions in (i) through (iii) above shall
not apply to any Participant to the extent the Participant is covered
under any other plan or plans of the Employer and the Employer has
provided in the Adoption Agreement that the minimum allocation or
benefit requirement applicable to top-heavy plans will be met in the
other plan or plans.
(b) Minimum Vesting. For any Plan Year in which this Plan is
top-heavy or deemed to be top-heavy, one of the minimum vesting schedules set
forth in the Adoption Agreement shall automatically apply to the Employer and
Matching Account of each Participant of the Plan who has an Hour of Service
after the Plan becomes top-heavy or is deemed to be top-heavy if the minimum
vesting schedule provides faster vesting than the regular vesting schedule
specified by the Employer in its Adoption Agreement. The minimum vesting
schedule applies to the entire Employer and Matching Account of the Participant,
including benefits accrued before the effective date of Section 416 and benefits
accrued before the Plan became top-heavy.
In the event the Plan ceases to be top-heavy for any subsequent Plan
Year, the vested percentage of any Participant who terminated after the Plan has
ceased to be top-heavy shall continue to be determined by the top-heavy vesting
schedule.
15.6 Responsibility of the Employer and the Plan Administrator. It
shall be the responsibility of the Employer and the Plan Administrator to insure
that the limitations imposed by this Article are fully complied with at all
times. The Trustee shall have no responsibility with
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respect to insuring such compliance and shall be under no obligation whatsoever
to take any action to determine whether in fact the limitations of this Article
are being fully complied with at all times.
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-8 of our
report dated February 11, 1998, included in Friede Goldman International Inc.'s
Form 10-K for the year ended December 31, 1997, and to all references to our
Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Jackson, Mississippi
June 19, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Friede Goldman International Inc. 401(k) Retirement
Plan of our report dated April 17, 1998, with respect to the consolidated
financial statements of Achere, S.A. for the year ended December 31, 1997
included in the Current Report on Form 8-K/A dated April 21, 1998, filed by
Friede Goldman International Inc. with the Securities and Exchange Commission.
/s/ Ernst & Young Audit
Nantes, France
June 19, 1998
Exhibit 23.3
Independent Auditors' Consent
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report on the financial statements of Newfoundland
Ocean Enterprises Limited dated May 12, 1997, which appears in Exhibit 99.3 of
the Report on Form 8-K/A dated as of March 17, 1998.
St. John's, Newfoundland, Canada /s/ Doane Raymond
June 19, 1998 Chartered Accountants
