<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
CAPSTAR BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 74-2833106
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 CONGRESS AVENUE, SUITE 1400
AUSTIN, TEXAS 78701
(Address of principal executive offices, including zip code)
--------------------
CAPSTAR BROADCASTING PARTNERS
401(k) RETIREMENT PLAN AND TRUST, AS AMENDED
(Full title of the plan)
WILLIAM S. BANOWSKY, JR.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
CAPSTAR BROADCASTING CORPORATION
600 CONGRESS AVENUE, SUITE 1400
AUSTIN, TEXAS 78701
(512) 340-7800
(Name, address and telephone number of agent for service)
copy to:
MICHAEL D. WORTLEY
VINSON & ELKINS L.L.P.
3700 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-7700
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered price per unit (1) offering price (1) registration fee
<S> <C> <C> <C> <C>
Class A Common Stock, $0.01 par
value per share................... 2,000,000 shares (2) $18.875 $37,750,000 $11,137
Interest in the Capstar
Broadcasting Partners 401(k)
Retirement Plan and Trust......... (3) (4) (4) (4)
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933 and based
on the average of the high and low prices reported on the New York
Stock Exchange on August 28, 1998.
(2) If, as a result of stock splits, stock dividends or similar
transactions, the number of securities purported to be registered on
this Registration Statement changes, the provisions of Rule 416 shall
apply to this Registration Statement, and this Registration Statement
shall be deemed to cover the additional securities resulting from the
split of, or dividend on, the securities covered by this Registration
Statement.
(3) Pursuant to Rule 416(c) under the Securities Act of 1993, this
Registration Statement also covers an indeterminate amount of plan
interests to be offered or sold pursuant to the Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust.
(4) Pursuant to Rule 457(h)(2) under the Securities Act of 1933, no
separate fee is required to registered plan interests.
===============================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed with the Securities and
Exchange Commission (the "Commission") by Capstar Broadcasting Corporation, a
Delaware corporation (the "Company" or "Registrant"), and are incorporated
herein by reference and made a part hereof:
(a) Prospectus, dated May 26, 1998, filed pursuant to Rule 424(b)
of the Rules and Regulations of the Commission under the
Securities Act of 1933 (the "Securities Act") on May 26, 1998;
(b) Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1998, filed with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on August 13, 1998;
(c) Current Report on Form 8-K, dated May 29, 1998, filed with the
Commission pursuant to the Exchange Act on June 15, 1998;
(d) Current Report on Form 8-K/A, dated May 29, 1998, filed with
the Commission pursuant to the Exchange Act on August 14,
1998; and
(e) The description of the Company's Class A Common Stock, par
value $.01 per share, contained in Item 1 of the Registration
Statement on Form 8-A filed with the Commission on May 11,
1998.
All documents subsequently filed by the Company and the Capstar
Broadcasting Partners 401(k) Retirement Plan and Trust, as amended (the "Plan"),
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment that indicates that all securities offered
have been sold, or that deregisters all securities then remaining unsold, shall
also be deemed to be incorporated by reference herein and to be a part hereof
from the dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement. Upon the written or oral request of any person
to whom a copy of this Registration Statement has been delivered, the Company
and the Plan will provide without charge to such person a copy of any and all
documents (excluding exhibits thereto unless such exhibits are specifically
incorporated by reference into such documents) that have been incorporated by
reference into this Registration Statement but not delivered herewith. Requests
for such documents should be addressed to Capstar Broadcasting Corporation, 600
Congress Avenue, Suite 1400, Austin, Texas 78701, Attention: Legal Department
(512) 340-7800.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Eight of the Amended and Restated Certificate of Incorporation
of the Registrant (the "Certificate of Incorporation") provides that the
Registrant shall indemnify its officers and directors to the maximum extent
allowed by the Delaware General Corporation Law. Pursuant to Section 145 of the
Delaware General Corporation Law, the Registrant generally has the power to
indemnify its current and former directors against expenses and liabilities
incurred by them in connection with any suit to which they are, or are
threatened to be made, a party by reason of their serving in those positions so
long as they acted in good faith and in a manner they reasonably believed to be
in, or not opposed
2
<PAGE> 3
to, the best interests of the Registrant, and with respect to any criminal
action, so long as they had no reasonable cause to believe their conduct was
unlawful. With respect to suits by or in the right of the Registrant, however,
indemnification is generally limited to attorneys' fees and other expenses and
is not available if the person is adjudged to be liable to the Registrant,
unless the court determines that indemnification is appropriate. The statute
expressly provides that the power to indemnify authorized thereby is not
exclusive of any rights granted under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Registrant also has the power to
purchase and maintain insurance for its directors and officers and has purchased
a policy providing such insurance.
Article Nine of the Certificate of Incorporation provides that no
director of the Registrant will be personally liable to the Registrant or any of
its stockholders for monetary damages arising from the director's breach of
fiduciary duty as a director. However, this does not apply with respect to any
action in which the director would be liable (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation 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.
The preceding discussion of the Certificate of Incorporation and
Section 145 of the Delaware General Corporation Law is not intended to be
exhaustive and is qualified in its entirety by the Certificate of Incorporation
and Section 145 of the Delaware General Corporation Law.
The Registrant has entered into indemnification agreements with the
Registrant's directors and officers. Pursuant to such agreements, the Registrant
will, to the extent permitted by applicable law, indemnify such persons against
all expenses, judgments, fines and penalties incurred in connection with the
defense or settlement of any actions brought against them by reason of the fact
that they were directors or officers of the Registrant or assumed certain
responsibilities at the direction of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1* Capstar Broadcasting Partners 401(k) Retirement Plan and
Trust, as amended.
5.1 (a)* Opinion of Vinson & Elkins L.L.P.
(b) The Company will submit the Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust and any
amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and will make all changes
required by the IRS in order to qualify the plan.
23.1* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- the Company.
23.2* Consent of Ernst & Young LLP, Independent Auditors --
Commodore Media, Inc., Southern Star Communications, Inc.,
formerly known as Osborn Communications Corporation, and
Capstar Communications, Inc., formerly known as SFX
Broadcasting, Inc.
23.3* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Benchmark Communications.
23.4* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Community Pacific Broadcasting Company, L.P.
23.5* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Midcontinent Broadcasting Co. of Wisconsin, Inc.
23.6* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Point Communications Limited Partnership.
23.7* Consent of Arthur Andersen LLP, Independent Auditors -- Ameron
Broadcasting, Inc.
3
<PAGE> 4
23.8* Consent of Arthur Andersen LLP, Independent Auditors --
Patterson Broadcasting, Inc.
23.9* Consent of Vinson & Elkins L.L.P. (included in Exhibit
5.1(a)).
24.1* Power of Attorney of officers and directors of the Company
(included on signature page to this Registration Statement).
- -------------------------
* Filed herewith.
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of 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; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Company pursuant to section 13 or section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any
liability under the Securities Act, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability
under the Securities Act, each filing of the Company's annual report
pursuant to section 13(a) or section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Austin, State of Texas, on August 31, 1998.
CAPSTAR BROADCASTING CORPORATION
(Registrant)
By: /s/ R. Steven Hicks
---------------------------------
R. Steven Hicks
President and Chief Executive
Officer
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of Capstar Broadcasting Corporation, a Delaware corporation, which is
filing a Registration Statement on Form S-8 with the Commission, Washington,
D.C. 20549 under the provisions of the Securities Act hereby constitute and
appoint R. Steven Hicks and William S. Banowsky, Jr., and each of them, the
individual's true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the person and in his or her name, place
and stead, in any and all capacities, to sign such Registration Statement and
any or all amendments, including post-effective amendments, to the Registration
Statement, including any registration statement for the same offering that is to
be effective upon filing pursuant to Rule 462(b) under the Securities Act, and
all other documents in connection therewith to be filed with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in fact as agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
SIGNATURE CAPACITY DATE
/s/ R. Steven Hicks President, Chief Executive August 31, 1998
- ------------------------- Officer and Director
R. Steven Hicks Principal Executive Officer)
/s/ Paul D. Stone Executive Vice President and August 31, 1998
- ------------------------- Chief Financial Officer
Paul D. Stone (Principal Financial and
Accounting Officer)
/s/ Thomas O. Hicks Chairman of the Board August 31, 1998
- -------------------------
Thomas O. Hicks
/s/ D. Geoffrey Armstrong Director August 31, 1998
- -------------------------
D. Geoffrey Armstrong
/s/ Michael J. Levitt Director August 31, 1998
- -------------------------
Michael J. Levitt
/s/ Lawrence D. Stuart, Jr. Director August 31, 1998
- -------------------------
Lawrence D. Stuart, Jr.
/s/ R. Gerald Turner Director August 31, 1998
- -------------------------
R. Gerald Turner
<PAGE> 6
Pursuant to the requirements of the Securities Act, the person
administering the Capstar Broadcasting Partners 401(k) Retirement Plan and Trust
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Austin, Texas, on the 31st
day of August, 1998.
CAPSTAR BROADCASTING PARTNERS
401(k) RETIREMENT PLAN AND TRUST
By: Capstar Broadcasting Partners, Inc.
Plan Sponsor and Plan Administrator
By: /s/ Paul D. Stone
----------------------
Paul D. Stone
Executive Vice President and Chief Financial Officer
<PAGE> 7
EXHIBIT INDEX
4.1* Capstar Broadcasting Partners 401(k) Retirement Plan and
Trust, as amended.
5.1 (a)* Opinion of Vinson & Elkins L.L.P.
(b) The Company will submit the Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust and any
amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and will make all changes
required by the IRS in order to qualify the plan.
23.1* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- the Company.
23.2* Consent of Ernst & Young LLP, Independent Auditors --
Commodore Media, Inc., Southern Star Communications, Inc.,
formerly known as Osborn Communications Corporation, and
Capstar Communications, Inc., formerly known as SFX
Broadcasting, Inc.
23.3* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Benchmark Communications.
23.4* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Community Pacific Broadcasting Company, L.P.
23.5* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Midcontinent Broadcasting Co. of Wisconsin, Inc.
23.6* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Point Communications Limited Partnership.
23.7* Consent of Arthur Andersen LLP, Independent Auditors -- Ameron
Broadcasting, Inc.
23.8* Consent of Arthur Andersen LLP, Independent Auditors --
Patterson Broadcasting, Inc.
23.9* Consent of Vinson & Elkins L.L.P. (included in Exhibit
5.1(a)).
24.1* Power of Attorney of officers and directors of the Company
(included on signature page to this Registration Statement).
- -------------------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.1
CAPSTAR BROADCASTING PARTNERS
401(k) RETIREMENT PLAN AND TRUST
<PAGE> 2
PREAMBLE
The purpose of this Plan and Trust is to provide, in accordance with its
provisions, a defined contribution plan providing retirement and other related
benefits for those Employees of the Employer who are eligible to participate
hereunder.
It is intended that the Plan qualify for approval under Sections 401 and 410
through 417 of the Internal Revenue Code. It is intended that the Trust qualify
for approval under Section 501 of the Code. It is further intended that the Plan
comply with the provisions of the Employee Retirement Income Security Act of
1974 (ERISA). In case of any ambiguity in the Plan's language, it will be
interpreted to accomplish the Plan's intent of qualifying under the Code and
complying with ERISA.
This Plan and Trust is exclusively for the benefit of the eligible Employees and
their Beneficiaries. Neither the Employer, the Plan Administrator nor the
Trustee will apply or interpret the terms of the Plan in any manner that permits
discrimination in favor of Highly Compensated Employees. All Employees under
similar circumstances will be treated alike.
The undersigned Employer and Trustee hereby adopt this Plan and Trust effective
as of October 1, 1997.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
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<S> <C>
ARTICLE 1 - DEFINITIONS ............................................................................... 1-1
ARTICLE 2 - PARTICIPATION ............................................................................. 2-1
ARTICLE 3 - PARTICIPANT ACCOUNTS ....................................................................... 3-1
ARTICLE 4 - ACCOUNTING AND VALUATION ................................................................... 4-1
ARTICLE 5 - RETIREMENT BENEFITS ........................................................................ 5-1
ARTICLE 6 - DEATH BENEFIT ............................................................................. 6-1
ARTICLE 7 - LIMITATIONS ON BENEFITS .................................................................. 7-1
ARTICLE 8 - MISCELLANEOUS ............................................................................ 8-1
ARTICLE 9 - ADMINISTRATION ............................................................................. 9-1
ARTICLE 10 - AMENDMENT OR TERMINATION OF PLAN ...................................................... 10-1
ARTICLE 11 - TRUSTEE AND TRUST FUND ................................................................. 11-1
</TABLE>
<PAGE> 4
ARTICLE 1
DEFINITIONS
As used in this document, unless otherwise defined or required by the context,
the following terms have the meanings set forth in this Article 1. Some of the
terms used in this document are not defined in Article 1, but for convenience
are defined as they are introduced in the text.
1.01 ACCOUNT
Account means a separate account maintained for each Participant
reflecting applicable contributions, applicable forfeitures, investment
income (loss) allocated to the account and distributions.
1.02 ACCOUNTING DATE, VALUATION DATE
The term Accounting Date means the last day of each Accounting Period
and any other days within the Accounting Period upon which, consistent
with established methods and guidelines, the Plan Administrator applies
the accounting procedures specified in Section 4.02. The term Valuation
Date, unless otherwise specified, means any business day on which the
New York Stock Exchange is open.
1.03 ACCOUNTING PERIOD
Accounting Period means each of the 3-month periods which end on March
31st, June 30th, September 30th and December 31st.
1.04 ACCRUED BENEFIT
A Participant's Accrued Benefit means the total value of his Accounts
as of a given date. A Participant's Accrued Benefit will not be reduced
solely on account of an amendment to the Plan.
A Participant's Vested Accrued Benefit is equal to his Vested
Percentage of that portion of his Accrued Benefit which is subject to
the Vesting Schedule plus 100% of the remaining portion of his Accrued
Benefit.
1.05 BENEFICIARY
Beneficiary means the person, persons, trust or other entity who is
designated to receive any amount payable upon the death of a
Participant.
1.06 CASH-OUT DISTRIBUTION
Cash-Out Distribution means, as described in Article 5, a distribution
to a Participant upon termination of employment of his Vested Accrued
Benefit.
1.07 CODE AND ERISA
Code means the Internal Revenue Code of 1986, as it may be amended from
time to time, and all regulations issued thereunder. Reference to a
section of the Code includes that section and any comparable section or
sections of any future legislation that amends, supplements or
supersedes such section and any regulations issued thereunder.
ERISA means Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time, and all
regulations issued thereunder. Reference to a section of ERISA includes
that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section and any
regulations issued thereunder.
1.08 COMPENSATION
Except where otherwise specifically provided in this Plan, Compensation
means Aggregate Compensation as defined in Section 7.03(a).
For Plan Years beginning prior to January 1, 1998, Compensation also
includes any amounts contributed by the Employer or any Related
Employer on behalf of any Employee pursuant to a salary
1-1
<PAGE> 5
reduction agreement which are not includable in the gross income of the
Employee due to Code Section 125, 402(e)(3), 402(h), 402(k) or 403(b).
Notwithstanding the foregoing, for all purposes under this Plan,
Compensation in excess of the Statutory Compensation Limit will be
disregarded.
Statutory Compensation Limit means $160,000 for the Plan Year beginning
January 1, 1997 and is adjusted periodically in accordance with Code
Section 401(a)(17)(b).
1.09 EFFECTIVE DATE
The Effective Date of the Plan is October 1, 1997.
1.10 ELIGIBLE EMPLOYEE CLASSIFICATION
An Eligible Employee Classification is a classification of Employees,
the members of which are eligible to participate in the Plan. The Plan
covers all employee classifications except Leased Employees, workers
classified by the Employer as Independent Contractors, Employees
classified by the Employer as Part Time Employees and who fail to work
at least 1,000 hours during any Plan Year and during the Employee's
initial Year of Eligibility Service, and union employees who are not
explicitly covered by the plan pursuant to the terms of a collective
bargaining agreement.
1.11 ELIGIBLE PARTICIPANT
An Eligible Participant is a Participant who, in accordance with the
provisions of Article 3, is eligible to share in the allocation of a
contribution for a given Contribution Period.
1.12 EMPLOYEE
(a) IN GENERAL
An Employee is any person who is employed by the Employer or a
Participating Employer. An individual classified by the
Employer as an Independent Contractor is not considered to be
an Employee.
(b) LEASED EMPLOYEE
A Leased Employee means any person who, pursuant to an
agreement between the Employer or any Related Employer
("Recipient Employer") and any other person ("leasing
organization"), has performed services for the Recipient
Employer on a substantially full-time basis for a period of at
least one year and such services are performed under the
primary direction or control of the Recipient Employer.
Any Leased Employee will be treated as an Employee of the
Recipient Employer; however, contributions or benefits
provided by the leasing organization which are attributable to
the services performed for the Recipient Employer will be
treated as provided by the Recipient Employer. If all Leased
Employees constitute less than 20% of the Employer's
non-highly-compensated work force within the meaning of Code
Section 414(n)(1)(c)(ii), then the preceding sentence will not
apply to any Leased Employee if such Employee is covered by a
money purchase pension plan ("Safe Harbor Plan") which
provides: (1) a nonintegrated employer contribution rate of at
least 10% of compensation, (2) immediate participation, and
(3) full and immediate vesting.
Years of Service for purposes of eligibility to participate in
the Plan and Years of Service for purposes of determining a
Participant's Vested Percentage include service by an Employee
as a Leased Employee.
1.13 EMPLOYER
The Employer and Plan Sponsor is Capstar Broadcasting Partners, Inc. A
Participating Employer is any organization which has adopted this Plan
and Trust in accordance with Section 8.07. Unless otherwise specified,
the term, Employer, also refers to any Participating Employer.
1-2
<PAGE> 6
The term Predecessor Employer means any prior employer to which the
Employer is the successor, including any Predecessor Employer for which
the Employer maintains the obligations of a Predecessor Plan
established by the Predecessor Employer. Service with a Predecessor
Employer will be included as Service with the Employer for all purposes
under this Plan.
1.13 EMPLOYMENT COMMENCEMENT DATE
The date an Employee first performs an Hour of Service for the Employer
is his Employment Commencement Date.
1.14 ENTRY DATE
Entry Date means the first day of the month which coincides with or
next follows the date upon which the eligibility requirements are met.
1.16 FISCAL YEAR
Fiscal Year means the taxable year of the Plan Sponsor. The Fiscal Year
of the Plan Sponsor is the 12 month period beginning January 1 and
ending December 31.
1.17 FORFEITURE
The term Forfeiture refers to that portion, if any, of a Participant's
Accrued Benefit which is in excess of his Vested Accrued Benefit
following the termination of the Participant's employment.
A Forfeiture is considered to occur as of the earlier of (a) the date
of the occurrence of the fifth of 5 consecutive One Year
Breaks-in-Service or (b) the date a Cash-Out Distribution occurs in
accordance with the provisions of Article 5
1.18 HIGHLY COMPENSATED DEFINITIONS
(a) COMPENSATION
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus (for Plan
Years beginning prior to January 1, 1998) amounts contributed
by the Employer pursuant to a salary reduction agreement which
are excludable from the gross income of the Employee under
Code Section 125, 402(e)(3), 402(h), 402(k) or 403(b).
Compensation in excess of the Statutory Compensation Limit
will be disregarded.
(b) DETERMINATION YEAR
Determination Year means the Plan Year for which the
determination of who is Highly Compensated is being made.
(c) RESERVED
(d) HIGHLY COMPENSATED EMPLOYEE
Highly Compensated Employee means any individual who is a
Highly Compensated Active Employee or a Highly Compensated
Former Employee within the meaning of Code Section 414(q) and
the regulations thereunder.
Highly Compensated Active Employee Highly Compensated Active
Employee means any individual who:
(1) During the Determination Year or the Lookback Year
was at any time a 5-percent Owner (within the meaning
of Code Section 416(i)) of the Employer or any
Related Employer; or
(2) During the Lookback Year (i) received Compensation
from the Employer and all Related Employers in excess
of $80,000 (or any greater amount determined by
regulations issued by the Secretary of the Treasury
under Code Section 415(d)); and
1-3
<PAGE> 7
(ii), if the Plan Sponsor elects the application of
this clause for such Lookback Year, was in the
Top-paid Group for such Lookback Year.
(f) HIGHLY COMPENSATED FORMER EMPLOYEE
Highly Compensated Former Employee means any Former Employee
who had a Separation Year (within the meaning of Treasury
Regulation Section 1.414(q)-1T Q&A-5) 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.
(g) HIGHLY COMPENSATED GROUP
Highly Compensated Group means all Highly Compensated
Employees.
(h) LOOKBACK YEAR
Lookback Year means the 12-month period immediately preceding
the Determination Year.
(i) NON-HIGHLY COMPENSATED EMPLOYEE
Non-Highly Compensated Employee means an Employee who is not a
Highly Compensated Employee.
(j) NON-HIGHLY COMPENSATED GROUP
Non-Highly Compensated Group means all Non-Highly Compensated
Employees.
(k) TOP-PAID GROUP
Top-Paid Group means those individuals who are among the top
20 percent of Employees of the Employer and all Related
Employers when ranked on the basis of Compensation received
during the year. In determining the number of individuals in
the Top-Paid Group (but not the identity of those
individuals), the following individuals may be excluded:
(1) Employees who have not completed 6 months of Service
by the end of the year. For this purpose, an Employee
who has completed One Hour of Service in any calendar
month will be credited with one month of Service;
(2) Employees who normally work fewer than 17 1/2 hours
per week;
(3) Employees who normally work fewer than 6 months
during any year. For this purpose, an Employee who
has worked on one day of a month is treated as having
worked for the whole month;
(4) Employees who have not reached age 21 by the end of
the year;
(5) Nonresident aliens who received no earned income
(which constitutes income from sources within the
United States) within the year from the Employer or
any Related 1-4 Employer; and
(6) Employees covered by a collective bargaining
agreement negotiated in good faith between the
employee representatives and the Employer or a group
of employers of which the Employer is a member if (i)
90% or more of all employees of the Employer and all
Related Employers are covered by collective
bargaining agreements, and (ii) this Plan covers only
Employees who are not covered under a collective
bargaining agreement.
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<PAGE> 8
1.19 HOUR OF SERVICE
An Hour of Service means:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will 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 the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service will be credited under this paragraph for any
12-month period. Hours under this paragraph will be calculated
and credited pursuant to Section 2530.200b-2 of the Department
of Labor Regulations which are incorporated herein by this
reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under
paragraphs (a) or (b), as the case may be, and under this
paragraph (c). These hours will be credited to the Employee
for the computation period or periods to which the award or
agreement pertains rather than the computation period in which
the award, agreement or payment is made.
Hours of Service for all Employees will be determined on the basis of
actual hours for which an Employee is paid or is entitled to payment.
Hours of Service will be credited for employment with any Related
Employer or any Predecessor Employer. Hours of Service will be credited
for any individual considered an employee under Code Section 414(n) or
414(o) and the regulations thereunder.
Solely for purposes of determining whether a One Year Break-in-Service
has occurred, a Participant who is absent from work on an authorized
Leave of Absence or by reason of the Participant's pregnancy, birth of
the Participant's child, placement of a child with the Participant in
connection with the adoption of such child, or for the purpose of
caring for such child for a period immediately following such birth or
placement, will receive credit for the Hours of Service which otherwise
would have been credited to the Participant but for such absence. The
Hours of Service credited under this paragraph will be credited in the
Plan Year in which the absence begins if such crediting is necessary to
prevent a One Year Break-in-Service in such Plan Year; otherwise, such
Hours of Service will be credited in the following Plan Year. The Hours
of Service credited under this paragraph are those which would normally
have been credited but for such absence; in any case in which the Plan
Administrator is unable to determine such hours normally credited, 8
Hours of Service per day will be credited. No more than 501 Hours of
Service will be credited under this paragraph for any 12-month period.
The Date of Severance is the second anniversary of the date on which
the absence begins. The period between the initial date of absence and
the first anniversary of the initial date of absence is deemed to be a
period of Service. The period between the first and second
anniversaries of the initial date of absence is neither a period of
service nor a 1-5 period of severance.
1.20 INVESTMENT FUND
An Investment Fund means any portion of the assets of the Trust Fund
which the Plan Administrator designates as an Investment Fund and for
which the Plan Administrator maintains a set of accounts separate from
the remaining assets of the Trust Fund.
(a) Specific Investment Fund means an Investment Fund which is
designated as a Specific Investment Fund by the Plan
Administrator in a manner and form acceptable to the Trustee.
(b) General Investment Fund means all assets of the Trust Fund
excluding the assets of any Specific Investment Funds.
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1.21 LEAVE OF ABSENCE
An authorized Leave of Absence means a period of time of one year or
less granted to an Employee by the Employer due to illness, injury,
temporary reduction in work force, or other appropriate cause or due to
military service during which the Employee's reemployment rights are
protected by law, provided the Employee returns to the service of the
Employer on or before the expiration of such leave, or in the case of
military service, within the time his reemployment rights are so
protected or within 60 days of his discharge from military service if
no federal law is applicable. All authorized Leaves of Absence are
granted or denied by the Employer in a uniform and nondiscriminatory
manner, treating Employees in similar circumstances in a like manner.
If the Participant does not return to active service with the Employer
on or prior to the expiration of his authorized Leave of Absence he
will be considered to have had a Date of Severance as of the earlier of
the date on which his authorized Leave of Absence expired, the first
anniversary of the last date he worked at least one hour as an Active
Participant, or the date on which he resigned or was discharged.
1.22 RESERVED
1.23 NORMAL RETIREMENT AGE
A Participant's Normal Retirement Age is age 65.
1.24 NORMAL RETIREMENT DATE
A Participant's Normal Retirement Date is the date on which the
Participant attains Normal Retirement Age.
1.25 ONE YEAR BREAK-IN-SERVICE
One Year Break-in-Service is defined in Section 1.42(a).
1.26 PARTICIPANT
The term Participant means an Employee or former Employee who is
eligible to participate in this Plan and who is or who may become
eligible to receive a benefit of any type from this Plan or whose
Beneficiary may be eligible to receive any such benefit.
(a) Active Participant means a Participant who is currently an
Employee in an Eligible Employee Classification.
(b) Disabled Participant means a Participant who has terminated
his employment with the Employer due to his Disability and who
is receiving or is entitled to receive benefits from the Plan.
(c) Retired Participant means a Participant who has terminated his
employment with the Employer after meeting the requirements
for his Normal Retirement Date and who is receiving or is
entitled to receive benefits from the Plan.
(d) Vested Terminated Participant means a Participant who has
terminated his employment with the Employer and who has a
nonforfeitable right to all or a portion of his or her Accrued
Benefit and who has not received a distribution of the value
of his or her Vested Accrued Benefit.
(e) Inactive Participant means a Participant who has (i)
interrupted his status as an Active Participant without
becoming a Disabled, Retired or Vested Terminated Participant
and (ii) has a non-forfeitable right to all or a portion of
his Accrued Benefit and has not received a complete
distribution of his benefit.
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<PAGE> 10
(f) Former Participant means a Participant who has terminated his
employment with the Employer and who currently has no
nonforfeitable right to any portion of his or her Accrued
Benefit.
1.27 PAYROLL WITHHOLDING AGREEMENT
If a written Payroll Withholding Agreement is required pursuant to the
provisions of Article 3, then each Participant who elects to
participate in the Plan will file such agreement on or before the first
day of the payroll period for which the agreement is applicable (or at
some other time as specified by the Plan Administrator). Such agreement
will be effective for each payroll period thereafter until modified or
amended.
The terms of such agreement will provide that the Participant agrees to
have the Employer withhold, each payroll period, any whole percentage
of his Compensation (or such other amount as allowed by the Plan
Administrator under rules applied on a uniform and nondiscriminatory
basis), not to exceed the limitations of Article 7. In consideration of
such agreement, the Employer periodically will make a contribution to
the Participant's proper Account(s) in an amount equal to the total
amount by which the Participant's Compensation from the Employer was
reduced during applicable payroll periods pursuant to the Payroll
Withholding Agreement.
Notwithstanding the above, Payroll Withholding Agreements will be
governed by the following general guidelines:
(a) A Payroll Withholding Agreement will apply to each payroll
period during which an effective agreement is on file with the
Employer. Upon termination of employment, such agreement will
become void.
(b) The Plan Administrator will establish and apply guidelines
concerning the frequency and timing of amendments or changes
to Payroll Withholding Agreements. Notwithstanding the
foregoing, a Participant may revoke his Payroll Withholding
Agreement at any time and discontinue all future withholding.
(c) The Plan Administrator may amend or revoke its Payroll
Withholding Agreement with any Participant at any time, if the
Employer determines that such revocation or amendment is
necessary to insure that a Participant's Annual Additions for
any Plan Year will not exceed the limitations of Article 7 or
to insure that the requirements of Sections 401(k) and 401(m)
of the Code have been satisfied with respect to the amount
which may be withheld and contributed on behalf of the Highly
Compensated Group.
(d) Except as provided above, a Payroll Withholding Agreement may
not be revoked or amended by the Participant or the Employer.
1.28 PLAN, PLAN AND TRUST, TRUST
The terms Plan, Plan and Trust and Trust mean Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust. The Plan Identification
Number is 001. The Plan is a profit sharing plan.
The term Predecessor Plan means any qualified plan previously
established and maintained by the Employer and to which this Plan is
the successor.
1.29 PLAN ADMINISTRATOR
The Plan Administrator is Capstar Broadcasting Partners, Inc. unless
the Plan Sponsor designates one or more individuals to serve as Plan
Administrator pursuant to Section 9.01.
1.30 PLAN YEAR
The Plan Year is the 12 month period beginning January 1 and ending
December 31. The Limitation Year coincides with the Plan Year.
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<PAGE> 11
1.31 RESERVED
1.32 QUALIFIED ANNUITY DEFINITIONS
(a) ANNUITY STARTING DATE
Annuity Starting Date means (i) the first day of the first
period for which an amount is payable as an annuity, or (ii)
in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which
entitled the Participant to such benefit.
(b) QUALIFIED ELECTION
(1) IN GENERAL
Qualified Election means a written waiver of a
Qualified Joint and Survivor Annuity or a Qualified
Survivor Annuity. The waiver must be consented to by
the Participant's spouse with such written consent
witnessed by a representative of the Plan
Administrator or a notary public. The spouse's
consent must include the designation of a specific
Beneficiary and the form of payment which cannot be
changed without the consent of the spouse. Such
consent will not be required if the Participant
establishes to the satisfaction of the Plan
Administrator that such written consent may not be
obtained because there is no spouse, the spouse
cannot be located or other circumstances that may be
prescribed by Treasury Regulations. Any consent which
is required under this Section will be valid only
with respect to the spouse who signs the consent (or
in the event of a deemed Qualified Election, the
designated spouse). Additionally, any revocation of a
prior waiver may be made by a Participant without the
consent of the spouse at any time before the Annuity
Starting Date; however, any waiver of a Qualified
Joint and Survivor Annuity or a Qualified Survivor
Annuity which follows such revocation must be in
writing and must be consented to by the Participant's
spouse. The number of waivers or revocations of such
waivers will not be limited.
(2) QUALIFIED JOINT AND SURVIVOR ANNUITY NOTICES
Not more than 90 days nor less than 30 days before
the Participant's Annuity Starting Date, the Plan
Administrator will provide the Participant a written
explanation of:
o the terms and conditions of a Qualified
Joint and Survivor Annuity;
o the Participant's right to make and the
effect of a Qualified Election to waive the
Qualified Joint and Survivor Annuity form of
benefit;
o a general description of the eligibility
conditions and other material features of
the optional forms of benefit and sufficient
additional information to explain the
relative values of the optional forms of
benefit available;
o the rights of the Participant's spouse; and
o the right to make, and the effect of, a
revocation of a previous Qualified Election
to waive the Qualified Joint and Survivor
Annuity.
(3) QUALIFIED SURVIVOR ANNUITY NOTICES
The election period to waive the Qualified Survivor
Annuity begins on the first day of the Plan Year in
which the Participant attains age 35 and ends on the
date of the Participant's death. If a Vested
Terminated Participant separates from service before
the beginning of the election period, the election
period begins on the date of separation from service.
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<PAGE> 12
The Plan Administrator will, within the applicable
notice period, provide each Participant a written
explanation of the Qualified Survivor Annuity
containing comparable information to that required
under the provisions of Section 1.32(b)(2). For
purposes of this paragraph, the term "applicable
notice period" means whichever of the following
periods ends last:
o the period beginning with the first day of
the Plan Year in which the Participant
attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in
which the Participant attains age 35;
o the period beginning two years before and
ending 12 months after the individual
becomes a Participant;
o the period beginning two years before and
ending 12 months after the joint and
survivor rules become effective for the
Participant; or
o the period beginning one year before and
ending 12 months after the Participant
separates from service before attaining age
35.
A Participant who will not have attained age 35 as of
the end of any current Plan Year may make a special
Qualified Election to waive the Qualified Survivor
Annuity for the period beginning on the date of the
election and ending on the first day of the Plan Year
in which the Participant attains age 35. The Election
will not be valid unless the Participant receives a
written explanation of the Qualified Survivor Annuity
in terms comparable to the explanation required
above. Qualified Survivor Annuity coverage will
automatically resume as of the first day of the Plan
Year in which the Participant attains age 35. Any new
waiver on or after that date will be subject to the
full requirements of this Section 1.32(b).
(c) QUALIFIED JOINT AND SURVIVOR ANNUITY
A Qualified Joint and Survivor Annuity means an annuity which
is purchased from an Insurer and which is payable for the life
of the Participant with a survivor annuity for the life of his
Surviving Spouse in an amount which is 50% of the amount
payable during the joint lives of the Participant and his
spouse. The amount of the Qualified Joint and Survivor Annuity
will be the amount of benefit which can be purchased from an
Insurer with the Participant's Vested Accrued Benefit.
(d) QUALIFIED LIFE ANNUITY
A Qualified Life Annuity means an annuity which is purchased
from an Insurer and which is payable for the lifetime of the
Participant with payments terminating upon the death of the
Participant. The amount of the Qualified Life Annuity will be
the amount of benefit which can be purchased from an Insurer
with the Participant's Vested Accrued Benefit.
(e) QUALIFIED SURVIVOR ANNUITY
A Qualified Survivor Annuity which a Surviving Spouse will be
eligible to receive under the provisions of Section 6.02 means
a monthly benefit payable for the remaining lifetime of the
Surviving Spouse. The amount of the Qualified Survivor Annuity
benefit will be the amount of benefit which can be purchased
from an Insurer with the Participant's Vested Accrued Benefit.
If the Participant's Vested Accrued Benefit is $3,500 or less,
the Plan Administrator will direct the immediate distribution
of the Participant's Vested Accrued Benefit to the Surviving
Spouse. If the Participant's Vested Accrued Benefit at the
time of any distribution exceeds $3,500, the Vested Accrued
Benefit at any later time will be deemed to exceed $3,500. The
Surviving Spouse may elect to receive the Qualified Survivor
Annuity as a lump sum.
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<PAGE> 13
Effective for the Plan Year beginning January 1, 1998, $5,000
shall be substituted for $3,500 in this paragraph in
compliance with the Taxpayer Relief Act of 1997.
1.33 RELATED EMPLOYER
The terms Related Employer and Affiliated Employer are used
interchangeably and mean any other corporation, association, company or
entity on or after the Effective Date which is, along with the
Employer, a member of a controlled group of corporations (as defined in
Code Section 414(b)), a group of trades or businesses which are under
common control (as defined in Code Section 414(c)), an affiliated
service group (as defined in Code Section 414(m)), or any organization
or arrangement required to be aggregated with the Employer by Treasury
Regulations issued under Code Section 414(o).
1.34 REQUIRED BEGINNING DATE
The Required Beginning Date for the commencement of benefit payments
from the Plan is the April 1 immediately following the calendar year in
which he attains age 70-1/2 for a Participant who is a Five Percent
Owner as defined in Section 1.36(d)(1) with respect to the Plan Year in
which the Participant attains age 70-1/2.
The Required Beginning Date for the commencement of benefit payments
from the Plan for any other Participant is the April 1 immediately
following the later of (i) the calendar year in which the Participant
attains age 70-1/2, or (ii) if so elected by the Participant, the
calendar year in which the Participant retires.
1.35 SURVIVING SPOUSE
Surviving Spouse means a deceased Participant's spouse who was married
to the Participant on the Participant's date of death. The Plan
Administrator and the Trustee may rely conclusively on a Participant's
written statement of his marital status. Neither the Plan Administrator
nor the Trustee is required at any time to inquire into the validity of
any marriage, the effectiveness of a common-law relationship or the
claim of any alleged spouse which is inconsistent with the
Participant's report of his marital status and the identity of his
spouse.
1.36 TOP-HEAVY DEFINITIONS
(a) AGGREGATE ACCOUNT
Aggregate Account means, with respect to each Participant, the
value of all accounts maintained on behalf of the Participant,
whether attributable to Employer or Employee contributions,
used to determine Top-Heavy Plan status under the provisions
of a defined contribution plan. A Participant's Aggregate
Account as of the Determination Date will be the sum of:
o the balance of his Account(s) as of the most recent
valuation date occurring within a 12-month period
ending on the Determination Date (excluding any
amounts attributable to deductible voluntary employee
contributions); plus
o contributions that would be allocated as of a date
not later than the Determination Date, even though
those amounts are not yet made or required to be
made; plus
o any Plan Distributions made within the Plan Year that
includes the Determination Date or within the four
preceding Plan Years.
(b) AGGREGATION GROUP
Aggregation Group means either a Required Aggregation Group or
a Permissive Aggregation Group as hereinafter determined.
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<PAGE> 14
(1) REQUIRED AGGREGATION GROUP
Each plan of the Employer in which a Key Employee is
a Participant, and each other plan of the Employer
which enables any plan in which a Key Employee
participates to meet the requirements of Code Section
401(a)(4) or 410, will be aggregated and the
resulting group will be known as a Required
Aggregation Group.
Each plan in the Required Aggregation Group will be
considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in
the Required Aggregation Group will be considered a
Top-Heavy Plan if the Required Aggregation Group is
not a Top-Heavy Group.
(2) PERMISSIVE AGGREGATION GROUP
The Employer may also include any other plan not
required to be included in the Required Aggregation
Group, provided the resulting group (to be known as a
Permissive Aggregation Group), taken as a whole,
would continue to satisfy the provisions of Code
Sections 401(a)(4) and 410.
Only a plan that is part of the Required Aggregation
Group will be considered a Top-Heavy Plan if the
Permissive Aggregation Group is a Top-Heavy Group. No
plan in the Permissive Aggregation Group will be
considered a Top-Heavy Plan if the Permissive
Aggregation Group is not a Top-Heavy Group.
Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year will be aggregated in order to determine whether
the plans are Top-Heavy Plans.
(c) DETERMINATION DATE
Determination Date means the last day of the preceding Plan
Year, or, in the case of the first Plan Year, the last day of
the first Plan Year.
(d) KEY EMPLOYEE
Key Employee means any Employee or former Employee (and his
Beneficiary) who, at any time during the Plan Year or any of
the preceding four Plan Years, was:
(1) A "Five Percent Owner" of the Employer. "Five Percent
Owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more
than 5% of the value of the outstanding stock of the
Employer or stock possessing more than 5% of the
total combined voting power of all stock of the
Employer. If the Employer is not a corporation, Five
Percent Owner means any person who owns more than 5%
of the capital or profits interest in the Employer.
In determining percentage ownership hereunder,
Related Employers will be treated as separate
Employers; or
(2) A "One Percent Owner" of the Employer having
Compensation from the Employer of more than $150,000.
"One Percent Owner" means any person who owns (or is
considered as owning within the meaning of Code
Section 318) more than 1% of the value of the
outstanding stock of the Employer or stock possessing
more than 1% of the total combined voting power of
all stock of the Employer. If the Employer is not a
corporation, One Percent Owner means any person who
owns more than 1% of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, Related Employers will be treated as
separate Employers. However, in determining whether
an individual has Compensation of more than $150,000,
Compensation from each Related Employer will be taken
into account.
(3) One of the 10 Employees having Compensation not less
than the Defined Contribution Dollar Limit (as
defined in Section 7.03(j) for the Plan Year) who
owns
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<PAGE> 15
(or is considered as owning within the meaning of
Code Section 318) both greater than 1/2% interest and
the largest interests in all Employers required to be
aggregated under Code Sections 414(b), (c), (m) and
(o);
(4) An officer (within the meaning of the regulations
under Code Section 416) of the Employer having
Compensation greater than 50% of the Defined Benefit
Dollar Limit as defined in Section 7.03(f) for the
Plan Year;
For purposes of this Section, Compensation means
Aggregate Compensation as defined in Section 7.03(a)
plus (for Plan Years beginning prior to January 1,
1998) any amounts contributed by the Employer
pursuant to a salary reduction agreement which are
excludable from the gross income of the Employee
under Code Section 125, 402(e)(3), 402(h), 402(k) or
403(b). Compensation in excess of the Statutory
Compensation Limit is disregarded.
(e) NON-KEY EMPLOYEE
Non-Key Employee means any Employee (and his Beneficiaries)
who is not a Key Employee.
(f) PLAN DISTRIBUTIONS
Plan distributions include distributions made before January
1, 1984, and distributions under a terminated plan which, if
it had not been terminated, would have been required to be
included in an aggregation group. However, distributions made
after the valuation date and before the Determination Date are
not included to the extent that they are already included in
the Participant's Single Sum Benefit as of the valuation date.
With respect to "unrelated" rollovers and plan-to-plan
transfers (those which are both initiated by an employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if such a rollover or
plan-to-plan transfer is made from this Plan, it will be
considered as a distribution for purposes of this Section. If
such a rollover or plan-to-plan transfer is made to this Plan,
it will not be considered as part of the Participant's Single
Sum Benefit. However, an unrelated rollover or plan-to-plan
transfer accepted before January 1, 1984, will be considered
as part of the Participant's Single Sum Benefit.
With respect to "related" rollovers and plan-to-plan transfers
(those which are either not initiated by an employee or are
made from one plan to another plan maintained by the same
employer), if such a rollover or plan-to-plan transfer is made
from this Plan, it will not be considered as a distribution
for purposes of this Section. If such a rollover or
plan-to-plan transfer is made to this Plan, it will be
considered as part of the Participant's Single Sum Benefit.
(g) PRESENT VALUE OF ACCRUED BENEFIT
In the case of the defined benefit plan, a Participant's
Present Value of Accrued Benefit, for Top-Heavy determination
purposes, will be determined using the following rules:
(1) The Present Value of Accrued Benefit will be
determined as of the most recent "valuation date"
within a 12-month period ending on the Determination
Date.
(2) For the first Plan Year, the Present Value of Accrued
Benefit will be determined as if (a) the Participant
terminated service as of the Determination Date; or
(b) the Participant terminated service as of the
valuation date, but taking into account the estimated
Present Value of Accrued Benefits as of the
Determination Date.
(3) For any other Plan Year, the Present Value of Accrued
Benefit will be determined as if the Participant
terminated service as of the valuation date.
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<PAGE> 16
(4) The valuation date must be the same date used for
computing the defined benefit plan minimum funding
costs, regardless of whether a calculation is
performed that plan year.
(5) A Participant's Present Value of Accrued Benefit as
of a Determination Date will be the sum of:
o the present value of his Accrued Benefit
determined using the actuarial assumptions
which are specified below; plus
o any Plan Distributions made within the Plan
Year that includes the Determination Date or
within the four preceding Plan Years; plus
o any employee contributions, whether
voluntary or mandatory. However, amounts
attributable to qualified voluntary employee
contributions, as defined in Code Section
219(e)(2) will not be considered to be a
part of the Participant's Present Value of
Accrued Benefit.
For purposes of this Section, the present value of a
Participant's Accrued Benefit will be equal to the
greater of the present value determined using the
actuarial assumptions which are specified for
Actuarial Equivalent purposes or the present value
determined using the "Applicable Interest Rate." The
Applicable Interest Rate is the rate or rates that
would be used by the Pension Benefit Guaranty
Corporation for a trusteed single-employer plan to
value a Participant's or Beneficiary's benefit on the
date of distribution (the "PBGC Rate"). If the
present value using the PBGC Rate exceeds $25,000,
the Applicable Interest Rate is 120% of the PBGC
Rate. However, the use of 120% of the PBGC Rate will
never result in a present value less than $25,000.
(6) Solely for the purpose of determining if this Plan
(or any other plan included in a Required Aggregation
Group of which this Plan is a part) is Top- Heavy,
the Accrued Benefit of any Employee other than a Key
Employee will be determined under
(A) the method, if any, that uniformly applies
for accrual purposes under all plans
maintained by the Employer or any Related
Employer, or
(B) if there is no such method, as if the
benefit accrued no more rapidly than the
slowest accrual rate permitted under the
fractional accrual rate of Code Section
411(b)(1)(c).
(h) SINGLE SUM BENEFIT
The Single Sum Benefit for any Participant in a defined
benefit pension plan will be equal to his Present Value of
Accrued Benefit. The Single Sum Benefit for any Participant in
a defined contribution plan will be equal to his Aggregate
Account.
(i) TOP-HEAVY GROUP
Top-Heavy Group means an Aggregation Group in which, as of the
Determination Date, the Single Sum Benefits of all Key
Employees under all plans included in the group exceeds 60% of
a similar sum determined for all Participants.
Super Top-Heavy Group means an Aggregation Group in which, as
of the Determination Date, the sum of (1) the Single Sum
Benefits of all Key Employees under all defined benefit plans
included in the group, plus (2) the Single Sum Benefit of all
Key Employees under all defined contribution plans included in
the group exceeds 90% of a similar sum determined for all
Participants.
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<PAGE> 17
(j) TOP-HEAVY PLAN
This Plan will be a Top-Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination
Date, the Single Sum Benefits of all Key Employees exceed 60%
of the Single Sum Benefits of all Participants under this
Plan.
This Plan will be a Super Top-Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the
Determination Date, the Single Sum Benefits of all Key
Employees exceed 90% of the Single Sum Benefits of all
Participants under this Plan.
If any Participant is a Non-Key Employee for a given Plan
Year, but was a Key Employee for any prior Plan Year, the
Participant's Single Sum Benefit will not be taken into
account for purposes of determining whether this Plan is a
Top-Heavy or Super Top-Heavy Plan (or whether any Aggregation
Group which includes this Plan is a Top-Heavy or Super
Top-Heavy Group).
If an individual has performed no services for the Employer at
any time during the 5-year period ending on the Determination
Date, any Single Sum Benefit of such individual will not be
taken into account for purposes of determining whether this
Plan is a Top-Heavy or Super Top-Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top-Heavy
Group or Super Top-Heavy Group).
1.37 TRUST FUND, TRUST
These terms mean the total cash, securities, real property, insurance
contracts and any other property held by the Trustee.
1.38 TRUSTEE
The Trustee is Charles Schwab Trust Company or any successor Trustee.
1.39 VESTED PERCENTAGE
A Participant's Vested Percentage as of a given date will be that
percentage determined in accordance with the Vesting Schedule.
Notwithstanding the preceding, a Participant will be 100% vested upon
reaching the earlier of (a) his Normal Retirement Age or (b) the later
of the date upon which the Participant attains age 65 or reaches the
5th anniversary of the date he commenced participation in the Plan.
1.40 VESTING SCHEDULE
A Participant's Vested Percentage will be determined in accordance with
the following table:
<TABLE>
<CAPTION>
YEARS OF VESTING SERVICE Vested Percentage
- ------------------------------------- -------------------------------------
<S> <C>
Less than 1 Year 0%
1 Year 20%
2 Years 40%
3 Years 60%
4 Years 80%
5 Years or more 100%
- ------------------------------------- -------------------------------------
</TABLE>
1.41 WRITTEN RESOLUTION
The terms Written Resolution and Written Consent are used
interchangeably and reflect decisions, authorizations, etc. by the
Employer.
1-14
<PAGE> 18
1.42 YEAR OF SERVICE
(a) CREDITING YEARS OF SERVICE
Years of Service are determined using the Elapsed Time Method
and/or the Hours of Service Method as specified in this
Section.
(1) ELAPSED TIME METHOD
Under the Elapsed Time Method, Years of Service are
based upon an Employee's Elapsed Time of employment
irrespective of the number of hours actually worked
during such period; a Year of Service (including a
fraction thereof) will be credited for each completed
365 days of Elapsed Time which need not be
consecutive. The following terms are used in
determining Years of Service under the Elapsed Time
Method:
(A) Date of Severance (Termination) - means the
earlier of (i) the actual date an Employee
resigns, is discharged, dies or retires, or
(ii) the first anniversary of the date an
Employee is absent from work (with or
without pay) for any other reason, e.g.,
disability, vacation, leave of absence,
layoff, etc.
(B) Elapsed Time - means the total period of
service which has elapsed between a
Participant's Employment Commencement Date
and Date of Termination including Periods of
Severance where a One Year Break-in-Service
does not occur.
(C) Employment Commencement Date - means the
date an Employee first performs one Hour of
Service for the Employer.
(D) One Year Break-in-Service - means any
365-day period following an Employee's Date
of Termination as defined above in which the
Employee does not complete at least one Hour
of Service
(E) Period of Severance - is the time between
the actual Date of Severance as defined
above and the subsequent date, if any, on
which the Employee performs an Hour of
Service.
All periods of employment will be aggregated
including Periods of Severance unless there is a One
Year Break-in-Service.
(2) HOURS OF SERVICE METHOD
Under the Hours of Service Method, a Year of Service
is credited for each 12 consecutive month Computation
Period during which an Employee is credited with a
specified number of Hours of Service.
Under the Hours of Service Method, a One Year
Break-in-Service means any Computation Period during
which an Employee completes 500 or fewer Hours of
Service.
Years of Eligibility Service for purposes of determining
eligibility to participate in the Plan and Years of Vesting
Service for purposes of determining a Participant's Vested
Percentage include service with any organization which is a
Related Employer with respect to the Employer.
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<PAGE> 19
(b) FOR ELIGIBILITY PURPOSES
Years of Service for purposes of eligibility to participate in
the Plan are referred to as Years of Eligibility Service and
are determined using the Hours of Service Method.
A Year of Eligibility Service is credited for each Computation
Period during which an Employee is credited with at least
1,000 Hours of Service. The initial Computation Period is the
12 consecutive month period beginning with the Employee's
Employment Commencement Date. Thereafter, the Computation
Period is the Plan Year beginning with the Plan Year in which
the initial Computation Period ends.
All of an Employee's Years of Eligibility Service are taken
into account in determining his eligibility to participate.
(c) FOR VESTING PURPOSES
Years of Service for purposes of computing a Participant's
Vested Percentage are referred to as Years of Vesting Service
and are determined using the Elapsed Time Method.
All of a Participant's Years of Vesting Service are taken into
account in determining his Vested Percentage.
1-16
<PAGE> 20
ARTICLE 2
PARTICIPATION
2.01 PARTICIPATION
An Employee who is classified by the Employer as a Full Time Employee
and who is a member of an Eligible Employee Classification will become
eligible to participate in the Plan on the Entry Date which coincides
with or next follows the attainment of age 21 and the completion of 3
months of employment.
An Employee who is classified by the Employer as a Part Time Employee
and who becomes a member of an Eligible Employee Classification by
completing a Year of Eligibility Service will become eligible to
participate in the Plan on the Entry Date which coincides with or next
follows the attainment of age 21 and the completion of one Year of
Eligibility Service.
An Employee who is eligible to participate as of the Effective Date or
as of a given Entry Date will automatically become a Participant as of
such date.
2.02 PARTICIPATION AFTER REEMPLOYMENT
An Employee who has satisfied all of the eligibility requirements but
terminates employment prior to his Entry Date will participate in the
Plan immediately upon returning to the employ of the Employer.
A Participant or Former Participant who has terminated employment will
participate as an Active Participant in the Plan immediately upon
returning to the employ of the Employer.
2.03 CHANGE IN EMPLOYMENT CLASSIFICATION
In the event a Participant becomes ineligible to participate because he
is no longer a member of an Eligible Employee Classification, the
Participant will participate immediately upon his return to an Eligible
Employee Classification.
In the event an Employee who is not a member of an Eligible Employee
Classification becomes a member of such a classification, such Employee
will begin to participate immediately if he has satisfied the
eligibility requirements which are specified in Section 2.01.
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<PAGE> 21
ARTICLE 3
PARTICIPANT ACCOUNTS
3.01 EMPLOYEE PRE-TAX ACCOUNT
Employee Pre-tax Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto
and distributions. A Participant's Employee Pre-tax Account is 100%
vested at all times.
(a) EMPLOYEE PRE-TAX CONTRIBUTIONS
(1) AMOUNT OF CONTRIBUTION
Each Participant may elect to make an Employee
Pre-tax Contribution each Contribution Period not to
exceed 18% of the Participant's Compensation. Such
contribution will be designated as a whole percentage
of Compensation or such other amount as allowed by
the Plan Administrator.
(2) PAYROLL WITHHOLDING
All Employee Pre-tax Contributions will be made
pursuant to a Payroll Withholding Agreement in
accordance with Section 1.27.
(3) NONDISCRIMINATION REQUIREMENTS
All Employee Pre-tax Contributions are Elective
Contributions within the meaning of Section 4.05(a)
and must satisfy the Nondiscrimination Requirements
of Section 4.05.
(4) EXCESS DEFERRALS
The maximum amount of Employee Pre-tax Contribution
which can be made under the Plan on behalf of any
Participant during any calendar year will be limited
to that amount which would not constitute an Excess
Deferral as defined in Section 4.05. The Plan
Administrator will distribute any Excess Deferral,
together with the income allocable to it, to the
Participant no later than April 15 of the calendar
year immediately following the year of the Excess
Deferral. If a Participant notifies the Plan
Administrator before March 1 of any calendar year
that Excess Deferrals have been made on his account
for the previous calendar year by reason of
participation in a Cash or Deferred Arrangement
maintained by another employer or employers, and if
the Participant requests that the Plan Administrator
distribute a specific amount to him on account of
Excess Deferrals and certifies that the requested
amount is an Excess Deferral, the Plan Administrator
will designate the amount requested together with the
income allocable to it as a distribution of Excess
deferrals and distribute such amount no later than
April 15 of that calendar year. The amount of Excess
Deferrals to be distributed will be reduced by any
Excess Contributions previously distributed or
recharacterized with respect to the Plan Year
beginning with or within the calendar year. The
amount of income allocable to the Excess Deferral
will be determined as described in Section 4.05.
(5) TIMING OF DEPOSITS
The Employer will deposit all Employee Pre-tax
Contributions on the earliest date on which such
contributions can reasonably be segregated from the
Employer's general assets, but in no event later than
15 business days following the end of the month in
which the amounts withheld would otherwise have been
paid to the Participant in cash.
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<PAGE> 22
The Contribution Period for Employee Pre-tax
Contributions is each payroll period.
(b) DISTRIBUTIONS
No distribution may be made from the Participant's Employee
Pre-tax Account or any account comprised of Matching
Contributions or Nonelective Contributions which are treated
as Elective Contributions in accordance with the provisions of
Section 4.05(h) except under one of the following
circumstances:
o the Participant's retirement, death, disability or
separation from service within the meaning of Code
Section 401(k)(2)(b);
o the Participant's attaining of age 59 1/2;
o the avoidance or alleviation of a Financial Hardship;
o the termination of this Plan without the
establishment of a successor plan within the meaning
of Treasury Regulation Section 1.401(k)-1(d)(3);
o the sale or other disposition by the Employer of at
least 85 percent of the assets used by the Employer
in a trade or business to an unrelated corporation
which does not maintain the plan, but only if the
Participant continues employment with the corporation
acquiring the assets and only if the Employer
continues to maintain this Plan; or
o the sale or other disposition by the Employer of its
interest in a subsidiary to an unrelated entity which
does not maintain the plan, but only if the
Participant continues employment with the subsidiary
and only if the Employer continues to maintain this
Plan.
This paragraph does not apply to distributions of Excess
Deferrals, Excess Contributions, or excess Annual Additions.
(c) FINANCIAL HARDSHIP WITHDRAWALS
A Participant may file with the Plan Administrator a written
request to withdraw, in order to avoid or alleviate a
Financial Hardship, any amount not to exceed that portion of
his Employee Pre-tax Account which represents his total
Employee Pre-tax Contributions.
The Plan Administrator will allow Financial Hardship
withdrawals only if they are necessary to satisfy a
Participant's immediate and heavy financial need.
(1) IMMEDIATE AND HEAVY FINANCIAL NEED
A withdrawal will be deemed to be made due to an
immediate and heavy financial need of the Participant
if it is made because of:
o Expenses for medical care described in Code
Section 213(d) previously incurred by the
Participant, his spouse or any of his
dependents (as defined in Code Section 152)
or necessary for these persons to obtain
medical care described in Code Section
213(d);
o Costs directly related to the purchase
(excluding mortgage payments) of a principal
residence for the Participant;
o Payment of tuition, room and board, or
educational fees for the next 12 months of
post-secondary education for the
Participant, his spouse, children or
dependents (as defined in Code Section 152);
3-2
<PAGE> 23
o Prevention of the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the
Participant's principal residence.
(2) NECESSARY TO SATISFY FINANCIAL NEED
No withdrawal may exceed the amount necessary to
satisfy the Participant's immediate and heavy
financial need. However, the amount of an immediate
and heavy financial need may include any amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the distribution. The Plan Administrator will
allow the withdrawal if it determines, after a full
review of the Participant's written request and
evidence presented by the Participant showing
immediate and heavy financial need as well as the
Participant's lack of other reasonably available
resources, that the withdrawal is necessary to
satisfy the need. No withdrawal will be treated as
necessary to the extent it can be satisfied from
other resources which are reasonably available to the
Participant, including those of the Participant's
spouse and minor children. A withdrawal will be
treated as necessary to the extent the Participant
demonstrates to the satisfaction of the Plan
Administrator that the need cannot be relieved by any
of the following:
o Reimbursement or compensation by insurance
or otherwise;
o Reasonable liquidation of assets to the
extent the liquidation would not itself
cause an immediate and heavy financial need;
o Cessation of Employee Pre-tax Contributions
or Employee After-tax Contributions (as
defined in Section 4.05(a)) or both under
any plan maintained by any employer;
o Other distributions or nontaxable (at the
time of the loan) loans from plans
maintained by any employer;
o Borrowing from commercial sources on
reasonable commercial terms.
Unless the Plan Administrator has evidence to the
contrary, it may rely upon the Participant's written
representation that the need cannot be relieved by
any of the foregoing.
(3) SAFE HARBOR
The Plan Administrator will not allow any withdrawal
until the Participant has obtained all distributions,
other than hardship distributions, and all nontaxable
loans currently available to the Participant under
all plans maintained by the Employer. Upon the
withdrawal of any portion of a Participant's Employee
Pre-tax Account, the Participant will become
ineligible for any Elective Contribution to this Plan
or any other plan maintained by the Employer, or to
make any contribution to this Plan or any other plan
maintained by the Employer until the first day of the
first payroll period which begins not less than 12
months following the date of withdrawal. For this
purpose the phrase "any other plan maintained by the
Employer" means all qualified and nonqualified plans
of deferred compensation maintained by the Employer.
The phrase includes stock option, stock purchase, or
similar plans, or a cash or deferred arrangement that
is part of a cafeteria plan within the meaning of
Code Section 125. It does not include the mandatory
employee contribution portion of a defined benefit
plan, nor does it include a health or welfare benefit
plan (including one that is part of a cafeteria plan
within the meaning of Code Section 125). Furthermore,
the maximum amount of Employee Pre-tax Contributions
which can be made under the Plan on behalf of any
Participant during the calendar year which follows
the calendar
3-3
<PAGE> 24
year in which the withdrawal was made will be limited
to the amount which would not be treated as an Excess
Deferral for that year reduced by the amount of
Employee Pre-tax Contributions made on behalf of the
Participant in the calendar year of withdrawal.
3.02 EMPLOYER MATCHING ACCOUNT
Employer Matching Account means the Account of a Participant reflecting
applicable contributions, forfeitures, investment income or loss
allocated thereto and distributions. A Participant's Employer Matching
Account is subject to the Vesting Schedule.
(a) EMPLOYER MATCHING CONTRIBUTIONS
Each Contribution Period, the Employer will, within the time
prescribed by law for making a deductible contribution, make
an Employer Matching Contribution to each eligible
Participant's Employer Matching Account in an amount which is
determined in accordance with this Section subject to the
limitations of Article 7.
The amount of Employer Matching Contribution to be made to a
Participant's Employer Matching Account is equal to 50% of
that portion of the Participant's Employee Pre-tax
Contribution which is not in excess of 6% of the Participant's
Compensation.
All Employer Matching Contributions are Matching Contributions
within the meaning of Section 4.05(a) and must satisfy the
Nondiscrimination Requirements of Section 4.05.
(b) CONTRIBUTION PERIOD
The Contribution Period for Employer Matching Contributions is
each payroll period.
(c) ELIGIBLE PARTICIPANT
With respect to Employer Matching Contributions, all
Participants are Eligible Participants.
(d) APPLICATION OF FORFEITURES
Forfeitures from a Participant's Employer Matching Account
will be used to reduce Employer Matching Contributions in the
Plan Year in which the Forfeitures are determined to occur.
(e) WITHDRAWALS
A Participant who is 100% vested in his Employer Matching
Account and has attained age 59 1/2 may withdraw all or any
portion of his Employer Matching Account subject to the
limitations of this Section. A Participant who is less than
100% vested in his Employer Matching Account or has not
attained age 59 1/2 may not withdraw any portion of his
Employer Matching Account prior to the time when benefits
otherwise become payable in accordance with the provisions of
Article 5.
3.03 EMPLOYER DISCRETIONARY ACCOUNT
Employer Discretionary Account means the Account of a Participant
reflecting applicable contributions, forfeitures, investment income or
loss allocated thereto and distributions. A Participant's Employer
Discretionary Account is subject to the Vesting Schedule.
(a) EMPLOYER DISCRETIONARY CONTRIBUTIONS
Each Plan Year, the Employer may, within the time prescribed
by law for making a deductible contribution, make an Employer
Discretionary Contribution to the Trust.
For a given Plan Year, the total Employer Discretionary
Contribution, if any, made by the Employer will be an amount
determined and authorized by the Employer for such Plan Year;
however, the Employer will not authorize Employer
Discretionary Contributions at such times or in such amounts
that the Plan, in operation, discriminates in favor of Highly
Compensated Employees.
3-4
<PAGE> 25
The total Employer Discretionary Contribution made by the
Employer will be allocated by the ratio which each Eligible
Participant's Pre-tax Contribution for the Plan Year which is
not in excess of 6% of the Participant's Compensation for the
Plan Year bears to the total of all Eligible Participants'
Pre-tax Contributions for the Plan Year that do not exceed 6%
of each Participant's Compensation for the Plan Year.
All Employer Discretionary Contributions are Matching
Contributions within the meaning of Section 4.05(a) and must
satisfy the Nondiscrimination Requirements of Section 4.05.
(b) CONTRIBUTION PERIOD
The Contribution Period for Employer Discretionary
Contributions is each calendar year.
(c) ELIGIBLE PARTICIPANT
With respect to Employer Discretionary Contributions, Eligible
Participant means any Participant who:
o is actively employed on the last day of the Plan
Year; or
o retires, dies or becomes disabled during the Plan
Year.
(d) APPLICATION OF FORFEITURES
Forfeitures from a Participant's Employer Discretionary
Account will be used to reduce Employer Matching Contributions
in the Plan Year in which the Forfeitures are determined to
occur.
(e) MINIMUM ALLOCATION FOR TOP-HEAVY PLAN
Notwithstanding anything contained herein to the contrary, for
any Plan Year in which this Plan is determined to be
Top-Heavy, a Participant who is a Non-Key Employee (including
any Employee who is excluded from the Plan because his
Compensation is less than a stated amount) will be entitled to
a minimum allocation of employer contributions in addition to
any Employer Discretionary Contributions equal to 3% of the
Non-Key Employee's Aggregate Compensation received during the
Plan Year. This minimum allocation will allocated to the
Participant's Employer Discretionary Account and will be
provided to each Non-Key Employee who is a Participant and is
employed by the Employer on the last day of the Plan Year
whether or not he or she is an otherwise Eligible Participant
or fails to make any mandatory Employee contribution to the
Plan.
The percentage referred to in the preceding paragraph will not
exceed the percentage of Aggregate Compensation at which
Employer contributions plus any reallocated Forfeitures are
made or allocated to the Key Employee for whom such percentage
is the largest; provided, however, this sentence will not
apply if the Plan is required to be included in an Aggregation
Group to meet the requirements of Code Sections 401(a)(4) or
410.
(f) WITHDRAWALS
A Participant who is 100% vested in his Employer Discretionary
Account and has attained age 59 1/2 may withdraw all or any
portion of his Employer Discretionary Account subject to the
limitations of this Section. A Participant who is less than
100% vested in his Employer Discretionary Account or has not
attained age 59 1/2 may not withdraw any portion of his
Employer Discretionary Account prior to the time when benefits
otherwise become payable in accordance with the provisions of
Article 5.
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<PAGE> 26
3.04 ROLLOVER ACCOUNT
Rollover Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto
and distributions. A Participant's Rollover Account is 100% vested at
all times.
(a) ROLLOVER CONTRIBUTIONS
Rollover Contribution means a contribution to the Plan by a
Participant where such contribution is the result of a prior
distribution from an Individual Retirement Account, an
Individual Retirement Annuity or another qualified plan. Such
prior contribution must be a rollover amount described in
Section 402(c)(4) of the Code or a rollover contribution
described in Section 408(d)(3) of the Code for which no amount
is attributable to any source other than a rollover amount
described in Section 402(c)(4) of the Code.
Each Employee who is a member of an Eligible Employee
Classification, regardless of whether he is a Participant in
the Plan, will have the right to make a Rollover Contribution
of cash (or other property of a form acceptable to the Plan
Administrator and the Trustee) into the Plan from another
qualified plan. If the Employee is not a Participant
hereunder, his Rollover Account will constitute his entire
interest in the Plan. In no event will the existence of a
Rollover Account entitle the Employee to participate in any
other benefit provided by the Plan.
If specifically provided for in a Written Resolution, Rollover
Contribution will also mean the amount of assets transferred,
pursuant to Section 10.05, to this Plan from another plan
which is qualified under Code Sections 401(a) and 501(a).
(b) WITHDRAWALS
A Participant may withdraw all or any portion of his Rollover
Account at any time.
3.05 PRIOR PLAN ACCOUNT
Prior Plan Account means the Account of a Participant reflecting
transfers from another qualified plan, investment income or loss
allocated thereto and distributions. A Participant's Prior Plan Account
is 100% vested at all times.
(a) PRIOR PLAN TRANSFERS
Prior Plan Transfers will mean amounts transferred, in
accordance with a Written Resolution pursuant to Section
10.05, to this Plan from another plan which is qualified under
Code Sections 401(a) and 501(a), and for which the amounts
transferred are not subject to the withdrawal restrictions of
Sections 3.01(b) and 3.01(c). Such amounts shall, in this
Plan, remain subject to any restrictions or limitation on
distribution that the Code subjected such amounts to under the
transferor plan, and such amounts shall, to the extent
required under the Code, also remain subject to payment in the
form, at the times, and on the occasions provided in the
transferor plan.
(b) WITHDRAWALS
A Participant may not withdraw any portion of his Prior Plan
Account prior to the time when benefits otherwise become
payable in accordance with the provisions of Article 5 except
to the extent that such withdrawals are governed by the
provisions of a transferor plan.
3.06 PRIOR PLAN PRE-TAX ACCOUNT
Prior Plan Pre-tax Account means the Account of a Participant
reflecting transfers of assets derived from employee pre-tax
contributions from another qualified plan, investment income or loss
allocated thereto and distributions. A Participant's Prior Plan Pre-tax
Account is 100% vested at all times.
3-6
<PAGE> 27
(b) PRIOR PLAN PRE-TAX TRANSFERS
Prior Plan Pre-tax Transfers will mean amounts transferred, in
accordance with a Written Resolution pursuant to Section
10.05, to this Plan from another plan which is qualified under
Code Sections 401(a) and 501(a), and for which the amounts
transferred are subject to the withdrawal restrictions of
Sections 3.01(b) and 3.01(c). Such amounts shall, in this
Plan, remain subject to any restrictions or limitation on
distribution that the Code subjected such amounts to under the
transferor plan, and such amounts shall, to the extent
required under the Code, also remain subject to payment in the
form, at the times, and on the occasions provided in the
transferor plan.
(b) WITHDRAWALS
A Participant may not withdraw any portion of his Prior Plan
Pre-tax Account prior to the time when benefits otherwise
become payable in accordance with the provisions of Article 5
except to the extent that such withdrawals are governed by the
provisions of a transferor plan.
3-7
<PAGE> 28
ARTICLE 4
ACCOUNTING AND VALUATION
4.01 GENERAL POWERS OF THE PLAN ADMINISTRATOR
The Plan Administrator will have the power to establish rules and
guidelines, which will be applied on a uniform and non-discriminatory
basis, as it deems necessary, desirable or appropriate with regard to
accounting procedures and to the timing and method of contributions to
and/or withdrawals from the Plan.
4.02 VALUATION PROCEDURE
As of each Valuation Date, the Plan Administrator will determine from
the Trustee the fair market value of each Specific Investment Fund and
will, subject to the provisions of this Article, determine the
allocation of such value among the Accounts of the Participants; in
doing so, the Plan Administrator will in the following order:
(a) Credit or charge, as appropriate, to the proper Accounts all
contributions, payments, transfers, forfeitures, withdrawals
or other distributions made to or from such Accounts since the
last preceding Valuation Date and that have not been
previously credited or charged.
(b) Credit or charge, as applicable, each Account with its pro
rata portion of the appreciation or depreciation in the fair
market value of each Specific Investment Fund since the prior
Valuation Date. Such appreciation or depreciation will reflect
investment income, realized and unrealized gains and losses,
other investment transactions and expenses paid from each
Specific Investment Fund.
4.03 RESERVED
4.04 PARTICIPANT DIRECTION OF INVESTMENT
(a) APPLICATION OF THIS SECTION
Subject to the provisions of this Section, each Participant
will have the right to direct the investment of all of his
Accounts among the Specific Investment Funds which are made
available by the Plan Administrator.
(b) GENERAL POWERS OF THE PLAN ADMINISTRATOR
The Plan Administrator will have the power to establish rules
and guidelines as it deems necessary, desirable or appropriate
with regard to the directed investment of contributions in
accordance with this Section. Such rules and guidelines are
intended to comply with Section 404(c) of ERISA and the
regulations thereunder. Included in such powers, but not by
way of limitation, are the following powers and rights.
(1) To direct the Trustee to temporarily invest those
contributions which are pending directed investment
in a Specific Investment Fund, in the General
Investment Fund or in some other manner as determined
by the Plan Administrator.
(2) To establish rules with regard to the transfer of all
or any part of the balance of an Account or Accounts
of a given Participant from one Investment Fund to
another.
(3) To direct the Trustee to maintain any part of the
assets of any Investment Fund in cash, or in demand
or short-term time deposits bearing a reasonable rate
of interest, or in a short-term investment fund that
provides for the collective investment of cash
balances or in other cash equivalents having ready
marketability, including, but not
4-1
<PAGE> 29
limited to, U.S. Treasury Bills, commercial paper,
certificates of deposit, and similar types of
short-term securities, as may be deemed necessary by
the Trustee in its sole discretion.
Neither the Trustee nor the Plan Administrator will be liable
for any loss that results from a Participant's exercise of
control over the investment of the Participant's Accounts. If
the Participant fails to provide adequate directions, the Plan
Administrator will direct the investment of the Participant's
Account. The Trustee will have no duty to review or make
recommendations regarding a Participant's investment
directions.
(c) ACCOUNTING
The Plan Administrator will maintain a set of accounts for
each Investment Fund. The accounts of the Plan Administrator
for each Investment Fund will indicate separately the dollar
amounts of all contributions made to such Investment Fund by
or on behalf of each Participant from time to time. The Plan
Administrator will compute the net income from investments;
net profits or losses arising from the sale, exchange,
redemption, or other disposition of assets, and the pro rata
share attributable to each Investment Fund of the expenses of
the administration of the Plan and Trust and will debit or
credit, as the case may be, such income, profits or losses,
and expenses to the unsegregated balance in each Investment
Fund from time to time. To the extent that the expenses of the
administration of the Plan and Trust are not directly
attributable to a given Investment Fund, such expenses, as of
a given Valuation Date, will be prorated among each Investment
Fund; such allocation of expenses will, in general, be
performed in accordance with the guidelines which are
specified in this Article.
(d) FUTURE CONTRIBUTIONS
Each Participant who chooses to participate in the Plan will
elect the percentage of those contributions (which are subject
to Participant direction of investment) which is to be
deposited to each available Investment Fund. Such election
will be in effect until modified. If any Participant fails to
make an election by the appropriate date, he will be deemed to
have elected an Investment Fund(s) as determined by the Plan
Administrator. Elections will be limited to multiples of one
percent (or such other reasonable increments as determined by
the Plan Administrator).
(e) CHANGE IN INVESTMENT OF PAST CONTRIBUTIONS
A Participant may file an election with the Plan Administrator
to shift the aggregate amount or reasonable increments (as
determined by the Plan Administrator) of the balance of his
existing Account or Accounts which are subject to Participant
direction of investment among the various Investment Funds.
Elections will be limited to multiples of one percent (or such
other reasonable increments as determined by the Plan
Administrator).
(f) CHANGES IN INVESTMENT ELECTIONS
Elections with respect to future contributions and/or with
respect to changes in the investment of past contributions
will be in writing on a form provided by the Plan
Administrator, except that each Participant may authorize the
Plan Administrator in writing on an authorization form
provided by the Plan Administrator to accept such directions
as may be made by the Participant by use of a telephone voice
response system maintained for such purpose.
The Plan Administrator may establish additional rules and
procedures with respect to investment election changes
including, for example, the number of allowed changes per
specified period, the amount of reasonable fee, if any, which
will be charged to the Participant for making a change,
specified dates or cutoff dates for making a change, etc.
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(g) ADDITION AND DELETION OF SPECIFIC INVESTMENT FUNDS
Specific Investment Funds may be made available from time to
time at the direction of the Plan Administrator. The Plan
Administrator will establish guidelines for the proper
administration of affected Accounts when a Specific Investment
Fund is added or deleted.
4.05 NONDISCRIMINATION REQUIREMENTS
(a) DEFINITIONS APPLICABLE TO THE NONDISCRIMINATION REQUIREMENTS
The following definitions apply to this Section:
(1) AGGREGATE LIMIT
With respect to a given Plan Year, Aggregate Limit
means the greater of the sum of [(a) + (b)] or the
sum of [(c) + (d)] where:
(A) is equal to 125% of the greater of DP or CP;
(B) is equal to 2 percentage points plus the
lesser of DP or CP, not to exceed 2 times
the lesser of DP or CP;
(C) is equal to 125% of the lesser of DP or CP;
(D) is equal to 2 percentage points plus the
greater of DP or CP, not to exceed 2 times
the greater of DP or CP;
DP represents the Deferral Percentage for the
Non-highly Compensated Group eligible under
the Cash or Deferred Arrangement for the
Plan Year; and
CP represents the Contribution Percentage for
the Non-highly Compensated Group eligible
under the plan providing for the Employee
After-tax Contributions or Employer Matching
Contributions for the Plan Year beginning
with or within the Plan Year of the Cash or
Deferred Arrangement.
(2) CASH OR DEFERRED ARRANGEMENT (CODA)
A Cash or Deferred Election is any election (or
modification of an earlier election) by an Employee
to have the Employer either:
o provide an amount to the Employee in the
form of cash or some other taxable benefit
that is not currently available, or
o contribute an amount to the Plan (or provide
an accrual or other benefit) thereby
deferring receipt of Compensation.
A Cash or Deferred Election will only be made with
respect to an amount that is not currently available
to the Employee on the date of election. Further, a
Cash or Deferred Election will only be made with
respect to amounts that would have (but for the Cash
or Deferred Election) become currently available
after the later of the date on which the Employer
adopts the Cash or Deferred Arrangement or the date
on which the arrangement first becomes effective.
A Cash or Deferred Election does not include a
one-time irrevocable election upon the Employee's
commencement of employment or first becoming an
Eligible Employee.
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<PAGE> 31
(3) COMPENSATION
For purposes of this Section, Compensation means
Aggregate Compensation as defined in Section 7.03(a)
plus (for Plan Years beginning prior to January 1,
1998) amounts contributed by the Employer pursuant to
a salary reduction agreement which are excludable
from the gross income of the Employee under Code
Section 125, 402(e)(3), 402(h), 402(k) or 403(b).
Compensation in excess of the Statutory Compensation
Limit is disregarded.
The period used to determine an Employee's
Compensation for a Plan Year may be limited to that
portion of the Plan Year in which the Employee was an
Eligible Employee, provided that this method is
applied uniformly to all Eligible Employees under the
Plan for the Plan Year.
(4) CONTRIBUTION PERCENTAGE
Contribution Percentage means, for any specified
group, the average of the ratios calculated (to the
nearest one-hundredth of one percent) separately for
each Participant in the group, of the amount of
Employee After-tax Contributions and Matching
Contributions which are made by or on behalf of each
Participant for a Plan Year to each Participant's
Compensation for the Plan Year.
For purposes of determining the Contribution
Percentage, each Employee who is eligible under the
terms of the Plan to make or to have contributions
made on his behalf is treated as a Participant. The
Contribution Percentage of an eligible Employee who
makes no Employee After-tax Contribution and receives
no Matching Contribution is zero.
The Contribution Percentage of a Participant who is a
Highly Compensated Employee for the Plan Year and who
is eligible to make Employee After-tax Contributions
or receive an allocation of Matching Contributions
(including Elective Contributions and Nonelective
Contributions which are treated as Employee or
Matching Contributions for purposes of the
Contribution Percentage Test) allocated to his
accounts under two or more plans which are sponsored
by the Employer will be determined as if the Employee
After-tax and Matching Contributions were made under
a single plan. For purposes of this paragraph, if a
Highly Compensated Employee participates in two or
more such plans which have different Plan Years, all
plans ending with or within the same calendar year
will be treated as a single plan.
(5) CONTRIBUTION PERCENTAGE TEST
The Contribution Percentage Test is a test applied on
a Plan Year basis to determine whether a plan meets
the requirements of Code Section 401(m).
In each of the following tests, the Contribution
Percentage for the Highly Compensated Group for a
Plan Year is compared with the Contribution
Percentage for the Non-highly Compensated Group for
the preceding Plan Year (or the current Plan Year if
elected by the Employer; provided, however, that if
such an election is made, it may not be changed
except as provided by the Secretary of the Treasury).
In the case of the first Plan Year of the Plan (if
this is not a successor plan within the meaning of
Treasury Regulation 1.401(k)-1(d)(3)), the
Contribution Percentage for the Non-highly
Compensated Group will be the Contribution Percentage
for the Non-highly Compensated Group for the first
Plan Year or, if the Employer elects to use 3% as the
Deferral Percentage for the first Plan Year, the
Contribution Percentage that would result if the
Deferral Percentage for each Non-highly Compensated
Participant were 3%.
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<PAGE> 32
The Contribution Percentage Test may be met by either
satisfying the General Contribution Percentage Test
or the Alternative Contribution Percentage Test.
The General Contribution Percentage Test is satisfied
if the Contribution Percentage for the Highly
Compensated Group does not exceed 125% of the
Contribution Percentage for the Non-highly
Compensated Group.
The Alternative Contribution Percentage Test is
satisfied if the Contribution Percentage for the
Highly Compensated Group does not exceed the lesser
of:
o the Contribution Percentage for the
Non-highly Compensated Group plus 2
percentage points, or
o the Contribution Percentage for the
Non-highly Compensated Group multiplied by
2.0.
If (i) one or more Highly Compensated Employees of
the Employer or any Related Employer are eligible to
participate in both a Cash or Deferred Arrangement
and a plan which provides for Employee After-tax
Contributions or Matching Contributions, (ii) the
Deferral Percentage for the Highly Compensated Group
does not satisfy the General Deferral Percentage
Test, and (iii) the Contribution Percentage for the
Highly Compensated Group does not satisfy the General
Contribution Percentage Test, then the Contribution
Percentage Test will be deemed to be satisfied only
if the sum of the Deferral Percentage and the
Contribution Percentage for the Highly Compensated
Group does not exceed the Aggregate Limit.
The Plan will not fail to satisfy the Contribution
Percentage test merely because all of the Eligible
Employees under the Plan for a Plan Year are Highly
Compensated Employees.
(6) DEFERRAL PERCENTAGE
Deferral Percentage means, for any specified group,
the average of the ratios calculated (to the nearest
one-hundredth of one percent) separately for each
Participant in the group, of the amount of Elective
Contributions which are made on behalf of each
Participant for a Plan Year to each Participant's
Compensation for the Plan Year.
For purposes of determining the Deferral Percentage,
each Employee who is eligible under the terms of the
Plan to have contributions made on his behalf is
treated as a Participant. The Deferral Percentage of
an eligible Employee who makes no Elective
Contribution is zero.
The Deferral Percentage of a Participant who is a
Highly Compensated Employee for the Plan Year and who
is eligible to have Elective Contributions (including
Nonelective Contributions or Matching Contributions
which are treated as Elective Contributions for
purposes of the Deferral Percentage Test) allocated
to his accounts under two or more Cash or Deferred
Arrangements which are maintained by the Employer
will be determined as if the Elective Contributions
were made under a single Arrangement. For purposes of
this paragraph, if a Highly Compensated Employee
participates in two or more Cash or Deferred
Arrangements which have different Plan Years, all
Cash or Deferred Arrangements ending with or within
the same calendar year will be treated as a single
Arrangement.
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<PAGE> 33
(7) DEFERRAL PERCENTAGE TEST
The Deferral Percentage Test is a test applied on a
Plan Year basis to determine whether a plan meets the
requirements of Code Section 401(k).
In each of the following tests, the Deferral
Percentage for the Highly Compensated Group for a
Plan Year is compared with the Deferral Percentage
for the Non-highly Compensated Group for the
preceding Plan Year (or the current Plan Year if
elected by the Employer; provided, however, that if
such an election is made, it may not be changed
except as provided by the Secretary of the Treasury).
In the case of the first Plan Year of the Plan (if
this is not a successor plan within the meaning of
Treasury Regulation 1.401(k)-1(d)(3)), the Deferral
Percentage for the Non-highly Compensated Group will
be 3%, or, if elected by the Employer, the actual
Deferral Percentage for the Non-highly Compensated
Group for the first Plan Year.
The Deferral Percentage Test may be met by either
satisfying the General Deferral Percentage Test or
the Alternative Deferral Percentage Test.
The General Deferral Percentage Test is satisfied if
the Deferral Percentage for the Highly Compensated
Group does not exceed 125% of the Deferral Percentage
for the Non-highly Compensated Group.
The Alternative Deferral Percentage Test is satisfied
if the Deferral Percentage for the Highly Compensated
Group does not exceed the lesser of:
o the Deferral Percentage for the Non-highly
Compensated Group plus 2 percentage points,
or
o the Deferral Percentage for the Non-highly
Compensated Group multiplied by 2.0.
If (i) one or more Highly Compensated Employees of
the Employer or any Related Employer are eligible to
participate in both a Cash or Deferred Arrangement
and a plan which provides for Employee After-tax
Contributions or Matching Contributions, (ii) the
Deferral Percentage for the Highly Compensated Group
does not satisfy the General Deferral Percentage
Test, and (iii) the Contribution Percentage for the
Highly Compensated Group does not satisfy the General
Contribution Percentage Test, then the Deferral
Percentage Test will be deemed to be satisfied only
if the sum of the Deferral Percentage and the
Contribution Percentage for the Highly Compensated
Group does not exceed the Aggregate Limit.
The Plan will not fail to satisfy the Deferral
Percentage test merely because all of the Eligible
Employees under the Plan for a Plan Year are Highly
Compensated Employees.
(8) ELECTIVE CONTRIBUTION
Elective Contribution means any contribution made by
the Employer to a Cash or Deferred Arrangement on
behalf of and at the election of an Employee. An
Elective Contribution will be taken into account for
a given Plan Year only if:
The Elective Contribution is allocated to the
Participant's Account as of a date within the Plan
Year to which it relates;
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<PAGE> 34
The allocation is not contingent upon the Employee's
participation in the Plan or performance of services
on any date after the allocation date;
The Elective Contribution is actually paid to the
trust no later than 12 months after the end of the
Plan Year to which the Elective Contribution relates;
and
The Elective Contribution relates to Compensation
which either (i) but for the Participant's election
to defer, would have been received by the Participant
in the Plan Year or (ii) is attributable to services
performed by the Participant in the Plan Year and,
but for the Participant's election to defer, would
have been received by the Participant within two and
one-half months after the close of the Plan Year.
Elective Contributions will be treated as Employer
Contributions for purposes of Code Sections 401(a),
401(k), 402(a), 404, 409, 411, 412, 415, 416, and
417.
(9) ELECTIVE DEFERRAL
Elective Deferral means the sum of the following:
o Any Elective Contribution to any Cash or
Deferred Arrangement to the extent it is not
includable in the Participant's gross income
for the taxable year of contribution;
o Any employer contribution to a simplified
employee pension as defined in Code Section
408(k) to the extent not includable in the
Participant's gross income for the taxable
year of contribution;
o Any employer contribution to an annuity
contract under Code Section 403(b) under a
salary reduction agreement to the extent not
includable in the Participant's gross income
for the taxable year of contribution; plus
o Any employee contribution designated as
deductible under a trust described in Code
Section 501(c)(18) for the taxable year of
contribution.
(10) ELIGIBLE EMPLOYEE
Eligible Employee means an Employee who is directly
or indirectly eligible to make a Cash or Deferred
Election under the Plan for all or a portion of the
Plan Year. An Employee who is unable to make a Cash
or Deferred Election because the Employee has not
contributed to another plan is also an Eligible
Employee. An Employee who would be eligible to make
Elective Contributions but for a suspension due to a
distribution or an election not to participate in the
Plan, is treated as an Eligible Employee for purposes
of Code Section 401(k)(3) and 401(m) for a Plan Year
even though the Employee may not make a Cash or
Deferred Election due to the suspension. Also, an
Employee will not fail to be treated as an Eligible
Employee merely because the employee may receive no
additional Annual Additions because of Code Section
415(c)(1) or 415(e).
(11) EMPLOYEE AFTER-TAX CONTRIBUTION
Employee After-tax Contribution means any
contribution made by an Employee to any plan
maintained by the Employer or any Related Employer
which is other than an Elective Contribution and
which is designated or treated at the time of
contribution as an after-tax contribution. Employee
After-tax Contributions include amounts attributable
to Excess Contributions which are recharacterized as
Employee After-tax Contributions.
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<PAGE> 35
(12) EXCESS CONTRIBUTION EXCESS
Contribution means, for each member of the Highly
Compensated Group, the amount of Elective
Contribution (including any Qualified Nonelective
Contributions and Qualified Matching Contributions
which are treated as Elective Contributions) which
exceeds the maximum contribution which could be made
if the Deferral Percentage Test were to be satisfied.
(13) EXCESS AGGREGATE CONTRIBUTION
Excess Aggregate Contribution means, for each member
of the Highly Compensated Group, the amount of
Employee After-tax and Matching Contributions
(including any Qualified Nonelective Contributions
and Elective Contributions which are treated as
Matching Contributions) which exceeds the maximum
contribution which could be made if the Contribution
Percentage Test were to be satisfied.
(14) EXCESS DEFERRAL
Excess Deferral means, for a given calendar year,
that amount by which each Participant's total
Elective Deferrals under all plans of all employers
exceed the dollar limit in effect under Code Section
402(g) for the calendar year.
(15) MATCHING CONTRIBUTION
Matching Contribution means any contribution made by
the Employer to any plan maintained by the Employer
or any Related Employer which is based on an Elective
Contribution or an Employee After-tax Contribution
together with any forfeiture allocated to the
Participant's Account on the basis of Elective
Contributions, Employee After-tax Contributions or
Matching Contributions. A Matching Contribution will
be taken into account for a given Plan Year only if:
o The Matching Contribution is allocated to a
Participant's Account as of a date within
the Plan Year to which it relates;
o The allocation is not contingent upon the
Employee's participation in the Plan or
performance of services on any date after
the allocation date;
o The Matching Contribution is actually paid
to the Trust no later than 12 months after
the end of the Plan Year to which the
Matching Contribution relates; and
o The Matching Contribution is based on an
Elective or Employee After-tax Contribution
for the Plan Year.
Any contribution or allocation, other than a
Qualified Nonelective Contribution, which is used to
meet the minimum contribution or benefit requirement
of Code Section 416 is not treated as being based on
Elective Contributions or Employee After-tax
Contributions and therefore is not treated as a
Matching Contribution.
Qualified Matching Contribution means a Matching
Contribution which is 100% vested and may be
withdrawn or distributed only under the conditions
described in Treasury Regulation 1.401(k)-1(d).
(16) NONELECTIVE CONTRIBUTION
Nonelective Contribution means any Employer
Contribution, other than a Matching Contribution,
which meets all of the following requirements:
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<PAGE> 36
o The Nonelective Contribution is allocated to
a Participant's Account as of a date within
the Plan Year to which it relates;
o The allocation is not contingent upon the
Employee's participation in the Plan or
performance of services on any date after
the allocation date;
o The Nonelective Contribution is actually
paid to the Trust no later than 12 months
after the end of the Plan Year to which the
Nonelective Contribution relates; and
o The Employee may not elect to have the
Nonelective Contribution paid in cash in
lieu of being contributed to the Plan.
Qualified Nonelective Contribution means a
Nonelective Contribution which is 100% vested and may
be withdrawn or distributed only under the conditions
described in Treasury Regulation 1.401(k)-1(d).
(b) APPLICATION OF DEFERRAL PERCENTAGE TEST
All Elective Contributions, including any Elective
Contributions which are treated as Employee After-tax or
Matching Contributions with respect to the Contribution
Percentage Test, must satisfy the Deferral Percentage Test.
Furthermore, any Elective Contributions which are not treated
as Employee After-tax or Matching Contributions with respect
to the Contribution Percentage Test must satisfy the Deferral
Percentage Test. The Plan Administrator will determine as soon
as administratively feasible after the end of the Plan Year
whether the Deferral Percentage Test has been satisfied. If
the Deferral Percentage Test is not satisfied, the Employer
may elect to make an additional contribution to the Plan on
account of the Non-highly Compensated Group. The additional
contribution will be treated as a Nonelective Contribution.
If the Deferral Percentage Test is not satisfied after any
Nonelective Contributions, the Plan Administrator may, in its
sole discretion, recharacterize all or any portion of the
Excess Contribution of each Highly Compensated Employee as an
Employee After-tax Contribution if Employee After-tax
Contributions are otherwise allowed by the Plan. If so, the
Plan Administrator will notify all affected Participants and
the Internal Revenue Service of the amount recharacterized no
later than the 15th day of the third month following the end
of the Plan Year in which the Excess Contribution was made.
Excess Contributions will be includable in the Participant's
gross income on the earliest date any Elective Contribution
made on behalf of the Participant during the Plan Year would
have been received by the Participant had the Participant
elected to receive the amount in cash. Recharacterized Excess
Contributions will continue to be treated as Employer
Contributions that are Elective Contributions for all other
purposes under the Code, including Code Sections 401(a) (other
than 401(a)(4) and 401(m)), 404, 409, 411, 412, 415, 416, 417
and 401(k)(2). With respect to the Plan Year for which the
Excess Contribution was made, the Plan Administrator will
treat the recharacterized amount as an Employee After-tax
Contribution for purposes of the Deferral Percentage Test and
the Contribution Percentage Test and for purposes of
determining whether the Plan meets the requirements of Code
Section 401(a)(4), but not for any other purposes under this
Plan. Therefore, recharacterized amounts will remain subject
to the nonforfeiture requirements and distribution limitations
which apply to Elective Contributions.
If the Deferral Percentage Test is still not satisfied, then
after the close of the Plan Year in which the Excess
Contribution arose but within 12 months after the close of
that Plan Year, the Plan Administrator will distribute the
Excess Contributions, together with allocable income, to
Participants of the Highly Compensated Group. Failure to do so
will cause the
4-9
<PAGE> 37
Plan to not satisfy the requirements of Code Section 401(a)(4)
for the Plan Year for which the Excess Contribution was made
and for all subsequent Plan Years for which the Excess
Contribution remains uncorrected.
The amount of Excess Contribution to be distributed to a
Highly Compensated Employee for a Plan Year will be reduced by
any Excess Deferrals previously distributed to the Participant
for the calendar year ending with or within the Plan Year in
accordance with Code Section 402(g)(2).
Excess Contributions will be treated as Employer Contributions
for purposes of Code Sections 404 and 415 even if distributed
from the Plan.
(c) APPLICATION OF CONTRIBUTION PERCENTAGE TEST
Employee After-tax Contributions and Matching Contributions,
disregarding any Matching Contributions which are treated as
Elective Contributions with respect to the Deferral Percentage
Test, must satisfy the Contribution Percentage Test. The Plan
Administrator will determine as soon as administratively
feasible after the end of the Plan Year whether the
Contribution Test has been satisfied. If the Contribution
Percentage Test is not satisfied, the Employer may elect to
make an additional contribution to the Plan for the benefit of
the Non-Highly Compensated Group. The additional contribution
will be treated as a Nonelective Contribution.
If the Contribution Percentage Test is still not satisfied,
then after the close of the Plan Year in which the Excess
Aggregate Contribution arose but within 12 months after the
close of that Plan Year, the Plan Administrator will
distribute (or forfeit, to the extent not vested) the Excess
Aggregate Contributions, together with allocable income, to
Participants of the Highly Compensated Group. Failure to do so
will cause the Plan to not satisfy the requirements of Code
Section 401(a)(4) for the Plan Year for which the Excess
Aggregate Contribution was made and for all subsequent Plan
Years for which the Excess Aggregate Contribution remains
uncorrected.
The determination of any Excess Aggregate Contributions will
be made after the recharacterization of any Excess
Contributions as Employee After-tax Contributions.
Excess Aggregate Contributions, including forfeited Matching
Contributions, will be treated as Employer Contributions for
purposes of Code Sections 404 and 415 even if they are
distributed from the Plan.
Forfeited Matching Contributions that are reallocated to the
Accounts of other Participants are treated as Annual Additions
under Code Section 415 for the Participant whose Accounts they
are reallocated to and for the Participants from whose
Accounts they are forfeited.
(d) RESERVED
(e) REDUCTION OF EXCESS AMOUNTS
For the purpose of determining the total amounts of Excess
Contributions and/or Excess Aggregate Contributions to be
recharacterized, returned to Participants or forfeited as the
case may be, the total Excess Contribution or total Excess
Aggregate Contribution will be reduced in a manner so that the
Deferral Percentage or the Contribution Percentage (Relevant
Percentage) of the affected Participant(s) with the highest
Relevant Percentage will first be lowered to a point not less
than the level of the affected Participant(s) with the next
highest Relevant Percentage. If further overall reductions are
required to satisfy the relevant test, each of the above
Participants' (or groups of Participants') Relevant Percentage
will be lowered to a point not less than the level of the
affected Participant(s) with the next
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<PAGE> 38
highest Relevant Percentage, and so on continuing until
sufficient total reductions have occurred to achieve
satisfaction of the relevant test.
The total Excess Contributions or Excess Aggregate
Contributions so determined shall then be recharacterized,
returned to Participants or forfeited in such a manner that
the amount of contribution allocated to the Highly Compensated
Participant(s) by or for whom the highest amount of
contributions have been made during the Plan Year will first
be lowered to an amount not less than the amount made by or
for the Highly Compensated Participant with the next highest
amount of contributions made during the Plan Year. If further
reductions are required to reduce the accounts of Highly
Compensated Participants by the total of all Excess
Contributions or Excess Aggregate Contributions, each of the
above Participant's contributions will be lowered to a point
not less than the level of the Highly Compensated Participant
with the next highest amount of contribution made during the
Plan Year, an so on continuing until sufficient total
reductions have been made to equal the total amount of Excess
Contributions and/or Excess Aggregate Contributions as the
case may be.
(f) PRIORITY OF REDUCTIONS
The Plan Administrator will determine the method and order of
correcting Excess Contributions and Excess Aggregate
Contributions. The method of correcting Excess Contributions
and Excess Aggregate Contributions must meet the requirements
of Code Section 401(a)(4). The determination of whether a rate
of Matching Contribution discriminates under Code Section
401(a)(4) will be made after making any corrective
distributions of Excess Deferrals, Excess Contributions and
Excess Aggregate Contributions.
Excess Aggregate Contributions (and any attributable income)
will be corrected first, by distributing any excess Employee
After-tax Contributions (and any attributable income); then by
distributing vested excess Matching Contributions (and any
attributable income); and finally, by forfeiting or
distributing non-vested Matching Contributions (and any
attributable income). The Plan will not distribute Employee
After-tax Contributions while the Matching Contributions based
upon those Employee After-tax Contributions remain allocated.
(g) INCOME
The income allocable to any Excess Contribution made to a
given Account for a given Plan Year will be equal to the total
income allocated to the Account for the Plan Year, multiplied
by a fraction, the numerator of which is the amount of the
Excess Contribution and the denominator of which is equal to
the sum of the balance of the Account at the beginning of the
Plan Year plus the Participant's Elective Contributions and
amounts treated as Elective Contributions for the Plan Year.
The income allocable to any Excess Aggregate Contribution made
to a given Account for a given Plan Year will be equal to the
total income allocated to the Account for the Plan Year,
multiplied by a fraction, the numerator of which is the amount
of the Excess Aggregate Contribution and the denominator of
which is equal to the sum of the balance of the Account at the
beginning of the Plan Year plus the Participant's Employee
After-tax and Matching Contributions and amounts treated as
Employee After-tax and Matching Contributions for the Plan
Year.
Notwithstanding the foregoing, the Plan may use any reasonable
method for computing the income allocable to any Excess
Contribution or Excess Aggregate Contribution provided the
method does not violate Code Section 401(a)(4), is used
consistently for all corrective distributions under the Plan
for the Plan Year, and is used by the Plan for allocating
income to the Participants' Accounts.
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<PAGE> 39
Income includes all earnings and appreciation, including
interest, dividends, rents, royalties, gains from the sale of
property, and appreciation in the value of stocks, bonds,
annuity and life insurance contracts and other property,
regardless of whether the appreciation has been realized.
(h) TREATMENT AS ELECTIVE CONTRIBUTIONS
The Plan Administrator may, in its discretion, treat all or
any portion of Qualified Nonelective Contributions or
Qualified Matching Contributions or both, whether to this Plan
or to any other qualified plan which has the same Plan Year
and is maintained by the Employer or a Related Employer, as
Elective Contributions for purposes of satisfying the Deferral
Percentage Test if they meet all of the following
requirements:
o All Nonelective Contributions, including the
Qualified Nonelective Contributions treated as
Elective Contributions for purposes of the Deferral
Percentage Test, satisfy the requirements of Code
Section 401(a)(4);
o Any Nonelective Contributions which are not treated
as Elective Contributions for purposes of the
Deferral Percentage Test or as Matching Contributions
for purposes of the Contribution Percentage Test
satisfy the requirements of Code Section 401(a)(4);
o The Qualified Matching Contributions which are
treated as Elective Contributions for purposes of the
Deferral Percentage Test are not taken into account
in determining whether any Employee After-tax
Contributions or other Matching Contributions satisfy
the Contribution Percentage Test;
o Any Matching Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test satisfy the requirements of Code
Section 401(m); and
o The plan which includes the Cash or Deferred
Arrangement and the plan or plans to which the
Qualified Nonelective Contributions and Qualified
Matching Contributions are made could be aggregated
for purposes of Code Section 410(b).
(i) TREATMENT AS MATCHING CONTRIBUTIONS
The Plan Administrator may, in its discretion, treat all or
any portion of Qualified Nonelective Contributions or Elective
Contributions or both, whether to this Plan or to any other
qualified plan which has the same Plan Year and is maintained
by the Employer or a Related Employer, as Matching
Contributions for purposes of satisfying the Contribution
Percentage Test if they meet all of the following
requirements:
o All Nonelective Contributions, including the
Qualified Nonelective Contributions treated as
Matching Contributions for purposes of the
Contribution Percentage Test, satisfy the
requirements of Code Section 401(a)(4);
o Any Nonelective Contributions which are not treated
as Elective Contributions for purposes of the
Deferral Percentage Test or as Matching Contributions
for purposes of the Contribution Percentage Test
satisfy the requirements of Code Section 401(a)(4);
o The Elective Contributions which are treated as
Matching Contributions for purposes of the
Contribution Percentage Test are not taken into
account in determining whether any other Elective
Contributions satisfy the Deferral Percentage Test;
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<PAGE> 40
o The Qualified Nonelective Contributions and Elective
Contributions which are treated as Matching
Contributions for purposes of the Contribution
Percentage Test are not taken into account in
determining whether any other contributions or
benefits satisfy Code Section 401(a); and
o All Elective Contributions, including those treated
as Matching Contributions for purposes of the
Contribution Percentage Test, satisfy the
requirements of Code Section 401(k)(3); and
o The plan that takes Qualified Nonelective
Contributions and Elective Contributions into account
in determining whether Employee After-tax and
Matching Contributions satisfy the requirements of
Code Section 401(m)(2)(a) and the plan or plans to
which the Qualified Nonelective Contributions and
Elective Contributions are made could be aggregated
for purposes of Code Section 410(b).
(j) AGGREGATION OF PLANS
If the Employer or a Related Employer sponsors one or more
other plans which include a Cash or Deferred Arrangement, the
Employer may elect to treat any two or more of such plans as
an aggregated single plan for purposes of satisfying Code
Sections 401(a)(4), 401(k) and 410(b). The Cash of Deferred
Arrangements included in such aggregated plans will be treated
as a single Arrangement for purposes of this Section. However,
only those plans that have the same plan year may be so
aggregated.
If the Employer or a Related Employer sponsors one or more
other plans to which Employee After-tax Contributions or
Matching Contributions are made, the Employer may elect to
treat any two or more of such plans as an aggregated single
plan for purposes of satisfying Code Sections 401(a)(4),
401(m) and 410(b). However, only those plans that have the
same plan year may be so aggregated.
Any such aggregation must be made in accordance with Treasury
Regulation 1.401(k)- 1(b)(3). For example, contributions and
allocations under the portion of a plan described in Code
Section 4975(e)(7) (an ESOP) may not be aggregated with the
portion of a plan not described in Code Section 4975(e)(7) (a
non-ESOP) for purposes of determining whether the ESOP or
non-ESOP satisfies the requirements of Code Sections
401(a)(4), 401(k), 401(m) and 410(b).
Plans that could be aggregated under Code Section 410(b) but
that are not actually aggregated for a Plan Year for purposes
of Code Section 410(b) may not be aggregated for purposes of
Code Sections 401(k) and 401(m).
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ARTICLE 5
RETIREMENT BENEFITS
5.01 VALUATION OF ACCOUNTS
For purposes of this Article, the value of a Participant's Accrued
Benefit will be determined as of the Valuation Date his Accounts are
liquidated to effect his distribution.
5.02 NORMAL RETIREMENT
After an Active Participant reaches his Normal Retirement Date, he may
elect to retire. Upon such retirement he will become a Retired
Participant and his Accrued Benefit will become distributable to him. A
Participant's Accrued Benefit will become nonforfeitable no later than
the date upon which he attains his Normal Retirement Age. The form and
timing of benefit payment will be governed by the provisions of Section
5.05.
5.03 DISABILITY RETIREMENT
In the event of a Participant's termination due to Disability, he will
be entitled to begin to receive a distribution of his Accrued Benefit
which will become nonforfeitable as of his date of termination. The
form and timing of benefit payment will be governed by the provisions
of Section 5.05. Disability means the determination by the Plan
Administrator that a Participant is unable by reason of any medically
determinable physical or mental impairment to perform the usual duties
of his employment or of any other employment for which he is reasonably
qualified based upon his education, training and experience.
5.04 TERMINATION OF EMPLOYMENT
(a) IN GENERAL
If a Participant's employment terminates for any reason other
than retirement, death, or disability, his Accrued Benefit
will become distributable to him as of the last day of the
month which coincides with or next follows the last date upon
which any contributions on the Participant's behalf are made
to the Trust following the Participant's date of termination
of employment (or as of such earlier date as determined by the
Plan Administrator in a uniform and nondiscriminatory manner).
The form and timing of benefit payment will be governed by the
provisions of Section 5.05.
(b) CASH-OUT DISTRIBUTION
If a Participant terminates employment and receives a
distribution equal to the Vested Percentage of his Accounts
which are subject to the Vesting Schedule (such Accounts are
hereinafter referred to as Employer Contribution Accounts), a
Cash-Out Distribution will be deemed to have occurred if the
following conditions are met:
(1) The Participant was less than 100% vested in his
Employer Contribution Accounts; and
(2) The entire distribution is made before the last day
of the second Plan Year following the Plan Year in
which the Participant terminated employment.
(c) RESTORATION OF EMPLOYER CONTRIBUTION ACCOUNTS
If, following the date of a Cash-Out Distribution, a
Participant returns to an Eligible Employee Classification
prior to incurring 5 consecutive One Year Breaks-in-Service,
then the Participant will have the right to repay to the
Trustee, within 5 years after his return date, the portion of
the Cash-Out Distribution which was attributable to his
Employer Contribution
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Accounts which were less than 100% vested in order to restore
such Accounts to their value as of the date of the Cash-Out
Distribution.
The Plan Administrator will restore an eligible Participant's
Employer Contribution Accounts as of the Accounting Date
coincident with or immediately following the complete
repayment of the Cash-Out Distribution. To restore the
Participant's Employer Contribution Accounts, the Plan
Administrator, to the extent necessary, will, under rules and
guidelines applied in a uniform and nondiscriminatory manner,
first allocate to the Participant's Employer Contribution
Accounts the amount, if any, of Forfeitures which would
otherwise be allocated under Article 3. To the extent such
Forfeitures for a particular Accounting Period are
insufficient to enable the Plan Administrator to make the
required restoration, the Employer will contribute such
additional amount as is necessary to enable the Plan
Administrator to make the required restoration. The Plan
Administrator will not take into account the allocation under
this Section in applying the limitation on allocations under
Article 7.
(d) NON-VESTED PARTICIPANT
If a Participant who is zero percent vested in his Employer
Contribution Accounts terminates employment, a Cash-Out
Distribution will be deemed to have occurred as of the
Participant's date of termination of employment.
If the Participant subsequently returns to an Eligible
Employee Classification prior to incurring five consecutive
One Year Breaks-in-Service, then the Participant will
immediately become entitled to a complete restoration of his
Employer Contribution Accounts as of the Accounting Date
coincident with or next following his date of re-employment.
Such restoration will be made in accordance with the
provisions of Section 5.04(c).
5.05 FORM OF BENEFIT PAYMENT
(a) IN GENERAL
Subject to the provisions of Section 5.06, the Plan
Administrator will direct the Trustee to make the payment of
any benefit provided under this Plan upon the event giving
rise to such benefit within 60 days following the receipt of a
Participant's written request for the payment of benefits on a
form provided by the Plan Administrator. The Plan
Administrator may temporarily suspend such processing in the
event of unusual or extraordinary circumstances such as the
conversion of Plan records from one recordkeeper to another.
The form of benefit for the payment of any benefit from the
Participant's Prior Plan Account and the Participant's Prior
Plan Pre-tax Account will be governed by the provisions of a
transferor plan pursuant to Section 10.05. The form of benefit
for the payment of any benefit paid from the Participant's
Prior Plan Account and the Participant's Prior Plan Pre-tax
Account that is paid in the form of an annuity will be in
accordance with the Qualified Annuity provisions of Section
5.05(b).
The form of benefit for the payment of any benefit from any
other Account will be a lump sum payment, unless the
Participant elects a direct transfer pursuant to Section 5.07.
If so required under the provisions of a transferor plan, upon
request, the Participant may receive his benefit from his
Prior Plan Account and from his Prior Plan Pre-tax Account
paid in a series of substantially equal annual or more
frequent installments over a period not extending beyond the
earliest of (a) the end of the period measured by the joint
life and last survivor expectancy of the Participant and his
spouse, or (b) twenty (20) years. The Plan Administrator and
the Trustee will have the power to establish rules and
guidelines as deemed necessary or appropriate with regard to
the payment of benefits under the installment payment form.
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<PAGE> 43
(b) QUALIFIED ANNUITY RULES
If required to be paid under the Qualified Annuity rules, the
form of benefit will be determined as follows:
(1) A Participant who is not married on the date benefits
are to commence will be provided a Qualified Life
Annuity, unless a lump sum payment is elected, under
a Qualified Election, by the Participant within the
90-day period which ends on his benefit commencement
date.
(2) A Participant who is married on the date benefits
commence will be provided a Qualified Joint and
Survivor Annuity unless a lump sum payment is
elected, under a Qualified Election, by the
Participant within the 90-day period which ends on
his benefit commencement date.
Within the 90-day period which ends on a married Participant's
expected benefit commencement date, the Plan Administrator
will provide each such Participant a written explanation of:
(1) the terms and conditions of a Qualified Joint and
Survivor Annuity;
(2) the Participant's right to make and the effect of a
Qualified Election to waive the Qualified Joint and
Survivor Annuity form of benefit;
(3) the rights of a Participant's spouse; and
(4) the right to make, and the effect of, a revocation of
a previous Qualified Election to waive the Qualified
Joint and Survivor Annuity.
Notwithstanding the above, if a terminated Participant's
Vested Accrued Benefit is $3,500 or less, such Participant's
Vested Accrued Benefit shall be payable in a lump sum of the
entire amount of his Vested Accrued Benefit. If the value of
his Vested Accrued Benefit at the time of any distribution
exceeds $3,500, the value of his Vested Accrued Benefit at any
later time will be deemed to also exceed $3,500. Effective for
the Plan Year beginning January 1, 1998, $5,000 shall be
substituted for $3,500 in this paragraph in compliance with
the Taxpayer Relief Act of 1997. This paragraph will not apply
after the Annuity Starting Date.
5.06 COMMENCEMENT OF BENEFIT
Subject to the provisions of this Article, commencement of a benefit
will, unless the Participant elects otherwise in writing, begin not
later than the 60th day after the later of the close of the Plan Year
in which the Participant attains Normal Retirement Age or the close of
the Plan Year which contains the date the Participant terminates his
service with the Employer.
Payment of a Participant's benefits must begin no later than his
Required Beginning Date.
All distributions required under this Section will be determined and
made in accordance with the regulations issued under Code Section
401(a)(9), including those dealing with minimum distribution
requirements. Notwithstanding the provisions of Section 5.05, an Active
Participant who is a Five Percent Owner and who has reached his
Required Beginning Date will receive an annual distribution of his
Accrued Benefit equal to the minimum required distribution determined
under Code Section 401(a)(9).
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<PAGE> 44
For purposes of this Section, life expectancy and joint and last
survivor expectancy are to be computed by the use of the return
multiples contained in Section 1.72-9 of the Income Tax Regulations.
Unless the Participant elects otherwise by the time of the first
required distribution, life expectancy of the Participant and the
surviving spouse will be recalculated annually. Such election shall be
irrevocable. The life expectancy of any other designated Beneficiary
will be calculated at the time payment first begins without further
recalculation.
If the Participant dies after distribution of his interest has begun,
the remaining portion of the interest will continue to be distributed
at least as rapidly as under the method of distribution being used
before the Participant's death.
5.07 DIRECTED TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS
(a) GENERAL
This Section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election
under this Section, a Distributee may elect, at the time and
in the manner prescribed by the Plan Administrator, to have
any portion of an Eligible Rollover Distribution paid directly
to an Eligible Retirement Plan specified by the Distributee in
a Direct Rollover.
(b) ELIGIBLE ROLLOVER DISTRIBUTION
An Eligible Rollover Distribution is any distribution of all
or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's designated beneficiary,
or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) 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, or
a qualified trust described in section 401(a) of the Code,
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to
the surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
(d) 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.
(e) DIRECT ROLLOVER
A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(f) WAIVER OF 30-DAY NOTICE
If a distribution is one to which Code Sections 401(a)(11) and
417 do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of
the Income Tax Regulations is given, provided that:
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<PAGE> 45
o the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option); and
o the Participant, after receiving the notice,
affirmatively elects to receive a distribution.
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<PAGE> 46
ARTICLE 6
DEATH BENEFIT
6.01 VALUATION OF ACCOUNTS
For purposes of this Article, the value of a Participant's Accrued
Benefit will be determined as of the Valuation Date his Accounts are
liquidated to effect his distribution.
6.02 DEATH BENEFIT
(a) LUMP SUM DEATH BENEFIT
With regard to the portion of a Participant's benefit that is
eligible to be distributed as a lump sum, in the event of the
death of the Participant prior to the date on which he
receives a complete distribution of his benefit under the
Plan, the Participant's Beneficiary will be entitled to
receive the value of the Participant's Accrued Benefit.
(b) PRE-RETIREMENT DEATH BENEFIT
With regard to the portion of a Participant's benefit that is
required to be paid under the Qualified Annuity rules of
Section 5.05(b), in the event of the death of a Participant
prior to the date that he begins to receive a retirement
benefit under the Plan, if the Participant has a Surviving
Spouse and if a Beneficiary other than the Participant's
Surviving Spouse has not been designated pursuant to a
Qualified Election, the Participant's Surviving Spouse will be
entitled to receive a Qualified Survivor Annuity.
If a Surviving Spouse does not exist or if a Beneficiary other
than the Participant's Surviving Spouse has been designated
pursuant to a Qualified Election, the Participant's designated
Beneficiary will be entitled to receive the value of the
Participant's Accrued Benefit.
(c) POST-RETIREMENT DEATH BENEFIT
With regard to the portion of a Participant's benefit that is
required to be paid under the Qualified Annuity rules of
Section 5.05(b), in the event of the death of a Retired
Participant or a Disabled Participant receiving a benefit, a
benefit will be paid to the Participant's Beneficiary or
Surviving Spouse in accordance with the form of benefit
payment elected under the Plan.
6.03 DESIGNATION OF BENEFICIARY
Each Participant will be given the opportunity to designate a
Beneficiary or Beneficiaries, and from time to time the Participant may
file with the Plan Administrator a new or revised designation on the
form provided by the Plan Administrator. If a Participant is married,
any designation of a Beneficiary other than the Participant's spouse
must be consented to by the Participant's spouse pursuant to a
Qualified Election.
If a Participant dies without designating a Beneficiary, or if the
Participant is predeceased by all designated Beneficiaries and
contingent Beneficiaries, the Plan Administrator will distribute all
benefits which are payable in the event of the Participant's death in
the following manner and to the first of the following (who are listed
in order of priority) who survive the Participant by at least 30 days:
o All to the Participant's Surviving Spouse;
o Equally among the then living children of the Participant (by
birth or adoption);
o Among the Participant's then living lineal descendants, by
right of representation; or
o The Participant's estate.
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<PAGE> 47
ARTICLE 7
LIMITATIONS ON BENEFITS
7.01 LIMITATION ON ANNUAL ADDITIONS
The amount of the Annual Addition which may be allocated under this
Plan to any Participant's Account as of any Allocation Date will not
exceed the Defined Contribution Limit (based upon his Aggregate
Compensation up to such Valuation Date) reduced by the sum of any
allocations of annual additions made to Participant's Accounts under
this Plan as of any preceding Allocation Date within the Limitation
Year.
If the Annual Addition under this Plan on behalf of a Participant is to
be reduced as of any Allocation Date as a result of the next preceding
paragraph, the reduction will be, to the extent required, effected by
first reducing Participant contributions (which increase the annual
addition), then Forfeitures (if any), and then Employer contributions
to be allocated under this Plan on behalf of the Participant as of the
Allocation Date.
Any necessary reduction will be made as follows:
(a) The amount of the reduction consisting of nondeductible
Participant contributions will be paid to the Participant as
soon as administratively feasible.
(b) The amount of the reduction consisting of any other
Participant contributions will be paid to the Participant as
soon as administratively feasible.
(c) The amount of the reduction consisting of Forfeitures will be
allocated and reallocated to other Accounts in accordance with
the Plan formula for allocating Forfeitures to the extent that
such allocations do not cause the additions to any other
Participant's Accounts to exceed the lesser of the Defined
Contribution Limit or any other limitation provided in the
Plan.
(d) The amount of the reduction consisting of Employer
contributions will be allocated and reallocated to other
Accounts in accordance with the Plan formula for Employer
Contributions to the extent that such allocations do not cause
the additions to any other Participant's Accounts to exceed
the lesser of the Defined Contribution Limit or any other
limitation provided in the Plan.
(e) To the extent that the reductions described in paragraph (d)
cannot be allocated to other Participant's Accounts, the
reductions will be allocated to a suspense account as
Forfeitures and held therein until the next succeeding
Allocation Date on which Forfeitures could be applied under
the provisions of the Plan. All amounts held in a suspense
account must be applied as Forfeitures before any additional
contributions, which would constitute annual additions, may be
made to the Plan. If the Plan terminates, the suspense account
will revert to the Employer to the extent it may not be
allocated to any Participant's Accounts.
(f) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not
participate in the allocation of the Trust Fund's investment
gains and losses.
7.02 WHERE EMPLOYER MAINTAINS ANOTHER QUALIFIED PLAN
(a) WHERE EMPLOYER MAINTAINS ANOTHER QUALIFIED DEFINED
CONTRIBUTION PLAN If the Employer maintains this Plan and one
or more other qualified defined contribution plans, one or
more welfare benefit funds (as defined in Code Section
419(e)), or one or more
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<PAGE> 48
individual medical accounts (as defined in Code Section
415(l)(2)), all of which are referred to in this Article 7 as
"qualified defined contribution plans", the annual additions
allocated under this Plan to any Participant's Accounts will
be limited in accordance with the allocation provisions of
this Section 7.02(a).
The amount of the Annual Additions which may be allocated
under this Plan to any Participant's Accounts as of any
Allocation Date will not exceed the Defined Contribution Limit
(based upon Aggregate Compensation up to the allocation date)
reduced by the sum of any allocations of Annual Additions made
to the Participant's Accounts under this Plan and any other
qualified defined contribution plans maintained by the
Employer as of any earlier Allocation Date within the
Limitation Year.
If an Allocation Date of this Plan coincides with an
Allocation Date of any other plan described in the above
paragraph, the amount of Annual Additions to be allocated on
behalf of a Participant under this Plan as of such date will
be an amount equal to the product of the amount described in
the next preceding paragraph multiplied by a fraction (not to
exceed 1.0), the numerator of which is the amount to be
allocated under this Plan without regard to this Article
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 7.
If the Annual Addition under this Plan on behalf of a
Participant is to be reduced as of any Allocation Date as a
result of the next preceding two paragraphs, the reduction
will be, to the extent required, effected by first reducing
Participant contributions (which increase the annual
addition), then Forfeitures (if any), and then any Employer
contributions, to be allocated under this Plan on behalf of
the Participant as of the Allocation Date.
If as a result of the first four paragraphs of this Section
7.02 the allocation of additions is reduced, the reduction
will be treated in the manner described in the third paragraph
of Section 7.01.
(b) WHERE EMPLOYER MAINTAINS A QUALIFIED DEFINED BENEFIT PLAN
(1) IN GENERAL
If the Employer maintains (or has ever maintained),
in addition to this Plan, one or more qualified
defined benefit plans, then for any Limitation Year,
the sum of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction will not exceed
1.0. If, in any Limitation Year, the sum of the
Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for a Participant would
exceed 1.0 without adjustment to the amount of the
annual benefit that can be paid to the Participant
under the defined benefit plan, then the amount of
annual benefit that would otherwise be paid to the
Participant under the defined benefit plan will be
reduced to the extent necessary to reduce the sum of
the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for the Participant to
1.0.
(2) TRANSITION RULE UNDER TRA '86
If a plan was in existence on May 6, 1986, the
numerator of the Defined Contribution Plan Fraction
will be reduced (to not less than zero) as prescribed
by the Secretary of the Treasury by subtracting the
amount required to decrease the sum of the Defined
Contribution Plan Fraction plus the Defined Benefit
Plan Fraction to 1.0. Such amount is determined (as
of the first day of the first Limitation Year
beginning on or after January 1, 1987) as the product
of:
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<PAGE> 49
(A) The amount by which, without this
adjustment, the sum of the Defined
Contribution Plan Fraction plus the Defined
Benefit Plan Fraction exceeds 1.0,
multiplied by
(B) The denominator of the Defined Contribution
Plan Fraction, as computed through the last
Limitation Year beginning before January 1,
1987, disregarding any changes in the terms
and conditions of the plan after May 5,
1986.
This subparagraph applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation
Years beginning before January 1, 1987.
(3) TRANSITION RULE UNDER TEFRA
In the case of a plan which met the limitation of
Section 415 of the Code for the last Limitation Year
beginning before January 1, 1983, the numerator of
the Defined Contribution Plan Fraction will be
reduced (to not less than zero) as prescribed by the
Secretary of the Treasury by subtracting the amount
required to decrease the sum of the Defined
Contribution Plan Fraction plus the Defined Benefit
Plan Fraction to 1.0. Such amount is determined (as
of the first day of the first Limitation Year
beginning on or after January 1, 1983) as the product
of:
(A) The amount by which, without this
adjustment, the sum of the Defined
Contribution Plan Fraction plus the Defined
Benefit Plan Fraction exceeds 1.0,
multiplied by
(B) The denominator of the Defined Contribution
Plan Fraction, as computed through the last
Limitation Year beginning before January 1,
1983.
7.03 DEFINITIONS APPLICABLE TO ARTICLE 7
(a) AGGREGATE COMPENSATION
Aggregate 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 to
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips
and bonuses), and excluding the following:
o Employer contributions to a plan of deferred
compensation which are not included 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 the
contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
o Amounts realized from the exercise of a nonqualified
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;
o Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
o Other amounts which received special tax benefits, or
contributions made by the employer (whether or not
under a salary reduction agreement) toward the
purchase
7-3
<PAGE> 50
of an annuity described in Code Section 403(b)
(whether or not the amounts are actually excludable
from the gross income of the employee).
For Plan Years beginning prior to January 1, 1998, Aggregate
Compensation excludes any amounts contributed by the Employer
or any Related Employer on behalf of any Employee pursuant to
a salary reduction agreement which are not includable in the
gross income of the Employee due to Code Section 125,
402(e)(3), 402(h), 402(k) or 403(b).
Notwithstanding the above, for Plan Years beginning on or
after January 1, 1998, Aggregate Compensation includes any
amounts contributed by the Employer or any Related Employer on
behalf of any Employee pursuant to a salary reduction
agreement which are not includable in the gross income of the
Employee due to Code Section 125, 402(e)(3), 402(h), 402(k) or
403(b).
Aggregate Compensation in excess of the Statutory Compensation
Limit is disregarded.
Aggregate Compensation for any Limitation Year is the
Aggregate Compensation actually paid or includable in gross
income in such year.
(b) ALLOCATION DATE
Allocation Date means the date with respect to which all or a
portion of employer contributions, employee contributions or
forfeitures or both are allocated to participant accounts
under a defined contribution plan.
(c) ANNUAL ADDITIONS
For Plan Years beginning after December 31, 1986, Annual
Additions are the sum of the following amounts allocated to
any defined contribution plan maintained by the Employer
(including voluntary contributions to any defined benefit plan
maintained by the Employer) on behalf of a Participant for a
Limitation Year:
o All Employee and Employer contributions;
o All reallocated forfeitures;
o Amounts allocated after March 31, 1984, to an
individual medical account, as defined in Code
Section 415(l)(2) which is part of a pension or
annuity plan maintained by the Employer, and amounts
derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after that
date, which are attributable to post-retirement
medical benefits required by Code Section 401(h)(6)
to be allocated to the separate account of a Key
Employee under a welfare benefit plan (as defined in
Code Section 419(e)) maintained by the Employer.
Contributions or forfeitures will be treated as Annual
Additions regardless of whether they constitute Excess
Deferrals, Excess Contributions or Excess Aggregate
Contributions within the meaning of the regulations under Code
Section 401(k) or 401(m) and regardless of whether they are
corrected through distribution or recharacterization. Excess
deferrals distributed in accordance with Treasury Regulation
1.402(g)-1(e)(2) or (3) are not Annual Additions. The Annual
Addition for any Limitation Year beginning before January 1,
1987, will not be recomputed to treat all Employee After-tax
Contributions as Annual Additions.
(d) ANNUAL BENEFIT
Annual Benefit means a benefit payable annually in the form of
a straight life annuity (with no ancillary benefits) under a
plan to which employees do not contribute and under which no
rollover contributions are made.
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<PAGE> 51
(e) DEFINED BENEFIT COMPENSATION LIMIT
The Defined Benefit Compensation Limit is equal to 100% of the
Participant's average Aggregate Compensation for the three
consecutive calendar years (or other twelve consecutive month
periods adopted by the Employer pursuant to a Written
Resolution and applied on a uniform and consistent basis) of
service during which the Participant had the greatest
Aggregate Compensation.
Where the annual benefit is payable to a Participant in a form
other than a straight life annuity or a Qualified Joint and
Survivor Annuity, the Defined Benefit Compensation Limit will
be the Actuarial Equivalent of a straight life annuity
beginning at the same age. No adjustment is required for the
following: pre-retirement disability benefits, pre-retirement
death benefits and post-retirement medical benefits. For
purposes of this paragraph, the interest rate used in
adjusting the Defined Benefit Compensation Limit will be the
greater of (1) 5%, or (2) the post-retirement interest rate
specified in the plan for Actuarial Equivalent purposes.
Where the annual benefit is payable to a Participant who has
fewer than 10 years of service with the Employer or any
Related or Predecessor Employer, the Defined Benefit
Compensation Limit will be multiplied by a fraction, the
numerator of which is the Participant's number of years of
service with the Employer or Related or Predecessor Employer,
and the denominator of which is 10.
With regard to a Participant who has separated from service
with a nonforfeitable right to an Accrued Benefit, the Defined
Benefit Compensation Limit will be adjusted effective January
1 of each Calendar year. For any Limitation Year beginning
after the separation occurs, the Defined Benefit Compensation
Limit will be equal to the Defined Benefit Compensation Limit
which was applicable to the Participant in the Limitation Year
in which he separated from service multiplied by a fraction,
the numerator of which is the Defined Benefit Dollar Limit for
the Limitation Year in which the Defined Benefit Compensation
Limit is being adjusted and the denominator of which is the
Defined Benefit Dollar Limit for the Limitation Year in which
the Participant separated from service.
(f) DEFINED BENEFIT DOLLAR LIMIT
The Defined Benefit Dollar Limit is equal to $90,000 for
calendar years 1984 through 1987. As of January 1, 1988 and as
of January 1 of each subsequent calendar year, the dollar
limitation (described in Code Section 415(b)(1)(a)) as
determined by the Secretary of the Treasury for that calendar
year will become effective as the Defined Benefit Dollar Limit
for the calendar year. For calendar years between 1976 and
1983, the Defined Benefit Dollar Limit is $75,000 as adjusted
by the Secretary of the Treasury under Code Section 415(d) for
that calendar year. The Defined Benefit Dollar Limit for a
calendar year applies to Limitation Years ending with or
within that calendar year.
Where the annual benefit is payable to a Participant in a form
other than a straight life annuity or a Qualified Joint and
Survivor Annuity, the Defined Benefit Dollar Limit will be the
Actuarial Equivalent of a straight life annuity beginning at
the same age. No adjustment is required for the following:
pre-retirement disability benefits, pre-retirement death
benefits, and post-retirement medical benefits. For purposes
of this paragraph, the interest rate used for adjusting the
Defined Benefit Dollar Limit will be the greater of (1) 5%, or
(2) the post-retirement interest rate specified for Actuarial
Equivalent purposes.
Where the annual benefit is payable to a Participant who has
fewer than 10 years of participation in the Plan, the Defined
Benefit Dollar Limit will be multiplied by a fraction, the
numerator of which is the Participant's number of years (or
part thereof) of participation in the Plan, and the
denominator of which is 10. To the extent provided by the
Secretary of the
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Treasury, this paragraph will be applied to each change in the
benefit structure of the Plan.
For a benefit commencing before a Participant's Social
Security Retirement Age but at or after age 62, the Defined
Benefit Dollar Limit will be adjusted in a manner which is
consistent with the reduction for old-age insurance benefits
commencing before Social Security Retirement Age under the
Social Security Act. The reduction will be 5/9 of 1% for each
of the first 36 months and 5/12 of 1% for each additional
month (up to 24 months) by which benefits commence before the
month of the Participant's Social Security Retirement Age. The
Defined Benefit Dollar Limit for a benefit commencing before
age 62 will be adjusted to the Actuarial Equivalent of the
Defined Benefit Dollar Limit for a benefit commencing at age
62 based on an interest rate equal to the greater of (1) 5%,
or (2) the interest rate specified in the plan for determining
actuarial equivalence for early retirement.
For a benefit commencing after a Participant's Social Security
Retirement Age, the Defined Benefit Dollar Limit will be
adjusted to the actuarial equivalent of the Defined Benefit
Dollar Limit for a benefit commencing at the Participant's
Social Security Retirement Age. For purposes of this
paragraph, the interest rate used for adjusting the Defined
Benefit Dollar Limit will be the lesser of (1) 5%, or (2) the
interest rate specified in the plan for determining actuarial
equivalence for early retirement.
(g) DEFINED BENEFIT LIMIT
The Defined Benefit Limit is the lesser of the Defined Benefit
Dollar Limit or the Defined Benefit Compensation Limit.
(h) DEFINED BENEFIT PLAN FRACTION DENOMINATOR
The Defined Benefit Plan Fraction Denominator with respect to
any Participant is the lesser of (1) the product of the
Defined Benefit Dollar Limit multiplied by 1.25, or (2) the
product of the Defined Benefit Compensation Limit multiplied
by 1.4. However, for purposes of determining the Defined
Benefit Plan Fraction Denominator, "years of service with the
Employer or any Related or Predecessor Employer" will be
substituted for "years of participation in the Plan" wherever
it appears in Section 7.03(f).
(i) DEFINED BENEFIT PLAN FRACTION
The Defined Benefit Plan Fraction is a fraction determined as
of the close of a Limitation Year, the numerator of which is
the Projected Annual Benefit payable to a Participant under
this Plan and the denominator of which is the Defined Benefit
Fraction Denominator. If a Participant has participated in
more than one defined benefit plan maintained by the Employer,
the numerator of the Defined Benefit Plan Fraction is the sum
of the projected annual benefits payable to the Participant
under all of the defined benefit plans, whether or not
terminated.
(j) DEFINED CONTRIBUTION LIMIT
The Defined Contribution Limit for a given Limitation Year is
equal to the lesser of (1) the Defined Contribution
Compensation Limit, which is 25% of Aggregate Compensation
applicable to the Limitation Year, or (2) the Defined
Contribution Dollar Limit, which, for calendar years after
1983 is the greater of $30,000 or one-fourth of the Defined
Benefit Dollar Limit for the Limitation Year, and for calendar
years between 1976 and 1983 is one-third of the Defined
Benefit Dollar Limit. If a short Limitation Year is created
because of an amendment changing the Limitation Year to a
different 12 consecutive month period, the Defined
Contribution Dollar Limit is multiplied by a fraction, the
numerator of which is equal to the number of months in the
short Limitation Year and the denominator of which is 12.
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(k) DEFINED CONTRIBUTION PLAN FRACTION
The Defined Contribution Plan Fraction is a fraction
determined as of the close of a Limitation Year, the numerator
of which is the sum of the Annual Additions to the
Participant's Accounts under all defined contribution plans of
the Employer for the current and all prior Limitation Years
and the denominator of which is the sum of the Annual
Additions which would have been made for the Participant for
the current and all prior Limitation Years (for all prior
years of service with the Employer or any predecessor
Employer) if in each Limitation year the Annual Additions
equaled the lesser of (1) the product of the Defined
Contribution Compensation Limit for the Limitation Year
multiplied by 1.4, or (2) the product of the Defined
Contribution Dollar Limit for the Limitation Year multiplied
by 1.25. The aggregate amount in the numerator of this
fraction due to years beginning before January 1, 1976 may not
exceed the aggregate amount in the denominator of this
fraction for all such years.
For purposes of this Section 7.03(k), the Annual Addition for
any Limitation Year beginning before January 1, 1987 will not
be recomputed to treat all Employee After-tax Contributions as
Annual Additions.
(l) EMPLOYER
The Employer is the Employer that adopts this Plan together
with all Related Employers. For this purpose, the definition
of Related Employer in Section 1.33 of this Plan is modified
by Code Section 415(h).
(m) LIMITATION YEAR
The Limitation Year will be the 12 consecutive month period
which is specified in Article 1 of this Plan and which is
adopted for all qualified plans maintained by the Employer
pursuant to a Written Resolution adopted by the Employer. In
the event of a change in the Limitation Year, the additional
limitations of Treasury Regulation Section 1.415-2(b)(4)(iii)
will also apply.
(n) PROJECTED ANNUAL BENEFIT
For purposes of this Section, a Participant's Projected Annual
Benefit is equal to the annual benefit to which a Participant
in a defined benefit Plan would be entitled under the terms of
the plan based on the following assumptions:
o The Participant will continue employment until
reaching normal retirement age as determined under
the terms of the plan (or current age, if that is
later);
o The Participant's compensation for the Limitation
Year under consideration will remain the same for all
future years;
o All other relevant factors used to determine benefits
under the plan for the Limitation Year under
consideration will remain constant for all future
Limitation Years; and
o The benefits resulting from any Participant
Contributions or Rollover Contributions are
disregarded.
(o) SOCIAL SECURITY RETIREMENT AGE
Social Security Retirement Age means age 65 for a Participant
born before January 1, 1938; age 66 for a Participant born
after December 31, 1937, but before January 1, 1955; and age
67 for a Participant born after December 31, 1954.
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7.04 EFFECT OF TOP-HEAVY STATUS
(a) GENERAL
Notwithstanding the provisions of Section 7.03, "1.0" will be
substituted for "1.25" wherever it appears in Sections 7.03(h)
and 7.03(k) for any Limitation Year in which the Plan is found
to be Top-Heavy for the Plan Year which coincides with or ends
within such Limitation Year.
(b) NON-APPLICATION
Section 7.04(a) will not apply for any Limitation Year in
which, for the Plan Year which coincides with or ends within
such Limitation Year, (1) the Plan is not determined to be
Super Top-Heavy and (2) for any Non-Key Employee who is a
Participant in both this Plan and a defined benefit plan
maintained by the Employer or a Related Employer, the annual
allocation of Employer contributions plus Forfeitures under
this Plan is not less than 7.5% of the Non-Key Employee's
Aggregate Compensation.
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ARTICLE 8
MISCELLANEOUS
8.01 EMPLOYMENT RIGHTS OF PARTIES NOT RESTRICTED
The adoption and maintenance of this Plan will not be deemed a contract
between the Employer and any Employee. Nothing in this Plan will give
any Employee or Participant the right to be retained in the employ of
the Employer or to interfere with the right of the Employer to
discharge any Employee or Participant at any time, nor will it give the
Employer the right to require any Employee or Participant to remain in
its employ, or to interfere with any Employee's or Participant's right
to terminate his employment at any time.
8.02 ALIENATION
(a) GENERAL
No person entitled to any benefit under this Plan will have
any right to sell, assign, transfer, hypothecate, encumber,
commute, pledge, anticipate or otherwise dispose of his
interest in the benefit, and any attempt to do so will be
void. No benefit under this Plan will be subject to any legal
process, levy, execution, attachment or garnishment for the
payment of any claim against such person.
(b) EXCEPTIONS
Section 8.02(a) will not apply to the extent a Participant or
Beneficiary is indebted to the Plan under the provisions of
the Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, the portion of the
amount distributed which equals the indebtedness will be
withheld by the Trustee to apply against or discharge the
indebtedness. Before making a payment, however, the
Participant or Beneficiary must be given written notice by the
Plan Administrator that the indebtedness is to be so paid in
whole or part from his Participant's Accrued Benefit. If the
Participant or Beneficiary does not agree that the
indebtedness is a valid claim against his Vested Accrued
Benefit, he will be entitled to a review of the validity of
the claim in accordance with procedures established by the
Plan Administrator.
Section 8.02(a) will not apply to a qualified domestic
relations order (QDRO) as defined in Code Section 414(p), and
those other domestic relations orders permitted to be so
treated by the Plan Administrator under the provisions of the
Retirement Equity Act of 1984. The Plan Administrator will
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a QDRO, a former spouse of a Participant
will be treated as the spouse or Surviving Spouse for all
purposes under the Plan. Where, however, because of a QDRO,
more than one individual is to be treated as a Surviving
Spouse, the total amount to be paid in the form of a Qualified
Survivor Annuity or the survivor portion of a Qualified Joint
and Survivor Annuity may not exceed the amount that would be
paid if there were only one Surviving Spouse. All rights and
benefits, including elections, provided to a Participant under
this Plan will be subject to the rights afforded to any
alternate payee as such term is defined in Code Section
414(p).
This Plan specifically permits distribution to an alternate
payee under a QDRO (without regard to whether the Participant
has attained his or her earliest retirement age as that term
is defined under Code Section 414(p)) in the same manner that
is provided for a Vested Terminated Participant.
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Section 8.02(a) will not apply with regard to the enforcement
of a federal tax levy made pursuant to Code Section 6331 or
collection by the United States of a judgment resulting from
an unpaid tax assessment.
8.03 QUALIFICATION OF PLAN
The Employer will have the sole responsibility for obtaining and
retaining qualification of the Plan under the Code with respect to the
Employer's individual circumstances.
8.04 CONSTRUCTION
To the extent not preempted by ERISA, this Plan will be construed
according to the laws of the state in which the Employer's principal
place of business is located. Words used in the singular will include
the plural, the masculine gender will include the feminine, and vice
versa, whenever appropriate.
8.05 NAMED FIDUCIARIES
(a) ALLOCATION OF FUNCTIONS
The authority to control and manage the operation and
administration of the Plan and Trust created by this
instrument will be allocated between the Plan Sponsor, the
Trustee, and the Plan Administrator, all of whom are
designated as Named Fiduciaries with respect to the Plan and
Trust as provided for by Section 402(a)(2) of ERISA. The Plan
Sponsor reserves the right to allocate the various
responsibilities for the present execution of the functions of
the Plan, other than the Trustee's responsibilities, among its
Named Fiduciaries. Any person or group of persons may serve in
more than one fiduciary capacity with regard to the Plan.
(b) RESPONSIBILITIES OF THE PLAN SPONSOR
The Plan Sponsor, in its capacity as a Named Fiduciary, will
have only the following authority and responsibility:
o To appoint or remove the Plan Administrator and
furnish the Trustee with certified copies of any
resolutions of the Plan Sponsor with regard thereto;
o To appoint and remove the Trustee;
o To appoint a successor Trustee or additional
Trustees;
o To communicate information to the Plan Administrator
and the Trustee as needed for the proper performance
of the duties of each;
o To appoint an investment manager (or to refrain from
such appointment), to monitor the performance of the
investment manager so appointed, and to terminate
such appointment (more than one investment manger may
be appointed and in office at any time); and
o To establish and communicate to the Trustee a funding
policy for the Plan.
(c) LIMITATION ON OBLIGATIONS OF NAMED FIDUCIARIES
No Named Fiduciary will have authority or responsibility to
deal with matters other than as delegated to it under this
Plan or by operation of law. A Named Fiduciary will not in any
event be liable for breach of fiduciary responsibility or
obligation by another fiduciary (including Named Fiduciaries)
if the responsibility or authority of the act or omission
deemed to be a breach was not within the scope of the Named
Fiduciary's authority or delegated responsibility.
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<PAGE> 57
(d) STANDARD OF CARE AND SKILL
The duties of each fiduciary will be performed with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of like character and with like objectives.
8.06 STATUS OF INSURER
The term Insurer refers to any legal reserve life insurance company
licensed to do business in the state within which the Employer
maintains its principal office. The Insurer will file such returns,
keep such records, make such reports and supply such information as
required by applicable law or regulation.
8.07 ADOPTION AND WITHDRAWAL BY OTHER ORGANIZATIONS
(a) PROCEDURE FOR ADOPTION
Subject to the provisions of this Section 8.07, any
organization now in existence or hereafter formed or acquired,
which is not already a Participating Employer under this Plan
and which is otherwise legally eligible may, in the future,
with the consent and approval of the Plan Sponsor, by formal
Written Resolution (referred to in this Section as an Adoption
Resolution), adopt the Plan and Trust hereby created for all
or any classification of persons in its employment and
thereby, from and after the specified effective date, become a
Participating Employer under this Plan. Such consent will be
effected by and evidenced by a formal Written Resolution of
the Plan Sponsor. The Adoption Resolution may contain such
specific changes and variations in Plan terms and provisions
applicable to the adopting Participating Employer and its
Employees as may be acceptable to the Plan Sponsor and the
Trustee. However, the sole, exclusive right of any other
amendment of whatever kind or extent to the Plan is reserved
to the Plan Sponsor. The Adoption Resolution will become, as
to the adopting organization and its Employees, a part of this
Plan as then amended or thereafter amended. It will not be
necessary for the adopting organization to sign or execute the
original or then amended Plan and Trust Agreement or any
future amendment to the Plan and Trust Agreement. The
effective date of the Plan for the adopting organization will
be that stated in the Adoption Resolution and from and after
such effective date the adopting organization will assume all
the rights, obligations and liabilities as a Participating
Employer under this Plan. The administrative powers of and
control by the Plan Sponsor as provided in the Plan, including
the sole right of amendment or termination of the Plan, of
appointment and removal of the Plan Administrator and the
Trustee, and of appointment and removal of an investment
manager will not be diminished by reason of the participation
of the adopting organization in the Plan.
(b) WITHDRAWAL
Any Participating Employer may withdraw from the Plan at any
time, without affecting the Plan Sponsor or other
Participating Employers not withdrawing, by complying with the
provisions of the Plan. A withdrawing Participating Employer
may arrange for the continuation by itself or its successor of
this Plan in separate forms for its own employees, with such
amendments, if any, as it may deem proper, and may arrange for
continuation of the Plan by merger with an existing plan and
transfer of plan assets. The Plan Sponsor may, it its absolute
discretion, terminate a Participating Employer's participation
at any time when in its judgment the Participating Employer
fails or refuses to discharge its obligations under the Plan.
(c) ADOPTION CONTINGENT UPON INITIAL AND CONTINUED QUALIFICATION
The adoption of this Plan by an organization as provided is
hereby made contingent and subject to the condition precedent
that said adopting organization meets all the statutory
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requirements for qualified plans, including, but not limited
to, Sections 401(a) and 501(a) of the Internal Revenue Code
for its Employees. If the Plan or the Trust, in its operation,
becomes disqualified, for any reason, as to the adopting
organization and its Employees, the portion of the Plan assets
allocable to them will be segregated as soon as is
administratively feasible, pending either the prompt (1)
requalification of the Plan as to the organization and its
employees to the satisfaction of the Internal Revenue Service
so as not to affect the continued qualified status thereof as
to other Employers, (2) withdrawal of the organization from
this Plan and a continuation by itself or its successor of its
plan separately from this Plan, or by merger with another
existing plan, with a transfer of its said segregated portion
of Plan assets, or (3) termination of the Plan as to itself
and its Employees.
8.08 EMPLOYER CONTRIBUTIONS
Employer contributions made to the Plan and Trust are made and will be
held for the sole purpose of providing benefits to Participants and
their Beneficiaries.
In no event will any contribution made by the Employer to the Plan and
Trust or income therefrom revert to the Employer except as provided in
Section 7.01(e) or as provided below.
(a) Any contribution made to the Plan and Trust by the Employer
because of a mistake of fact may be returned to the Employer
within one year of such contribution.
(b) Notwithstanding any other provision of the Plan and Trust, if
the Internal Revenue Service determines initially that the
Plan, as adopted by the Employer, does not qualify under
applicable sections of the Code and applicable Treasury
Department Regulations, and the Employer does not wish to
amend this Plan and Trust so that it does qualify, the value
of all assets will be distributed by the Trustee to the
Employer within one year after the date such initial
qualification is denied. Thereafter, the Employer's
participation in this Plan and Trust will be considered
rescinded and of no force or effect.
(c) Any contribution made by the Employer will be conditioned on
the deductibility of such contribution and may be refunded to
the Employer, to the extent the contribution is determined not
to be deductible, within one year after such determination is
made.
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ARTICLE 9
ADMINISTRATION
9.01 PLAN ADMINISTRATOR
The Plan Administrator will have the responsibility for the general
supervision and administration of the Plan and will be a fiduciary of
the Plan. The Employer may, by Written Resolution, appoint one or more
individuals to serve as Plan Administrator. If the Employer does not
appoint an individual or individuals as Plan Administrator, the
Employer will function as Plan Administrator. The Employer may at any
time, with or without cause, remove an individual as Plan Administrator
or substitute another individual therefor.
9.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
The Plan Administrator will be charged with and will have delegated to
it the power, duty, authority and discretion to interpret and construe
the provisions of this Plan, to determine its meaning and intent and to
make application thereof to the facts of any individual case; to
determine in its discretion the rights and benefits of Participants or
the eligibility of Employees; to give necessary instructions and
directions to the Trustee and the Insurer as herein provided or as may
be requested by the Trustee and the Insurer from time to time; to
resolve all questions of fact relating to any of the foregoing; and to
generally direct the administration of the Plan according to its terms.
All decisions of the Plan Administrator in matters properly coming
before it according to the terms of this Plan, and all actions taken by
the Plan Administrator in the proper exercise of its administrative
powers, duties and responsibilities, will be final and binding upon all
Employees, Participants and Beneficiaries and upon any person having or
claiming any rights or interest in this Plan. The Employer and the Plan
Administrator will make and receive any reports and information, and
retain any records necessary or appropriate to the administration of
this Plan or to the performance of duties hereunder or to satisfy any
requirements imposed by law. In the performance of its duties, the Plan
Administrator will be entitled to rely on information duly furnished by
any Employee, Participant or Beneficiary or by the Employer or Trustee.
9.03 ACTIONS OF THE PLAN ADMINISTRATOR
The Plan Administrator may adopt such rules as it deems necessary,
desirable or appropriate with respect to the conduct of its affairs and
the administration of the Plan. Whenever any action to be taken in
accordance with the terms of the Plan requires the consent or approval
of the Plan Administrator, or whenever an interpretation is to be made
of the terms of the Plan, the Plan Administrator will act in a uniform
and non-discriminatory manner, treating all Employees and Participants
in similar circumstances in a like manner. If the Plan Administrator is
a group of individuals, all of its decisions will be made by a majority
vote. The Plan Administrator will have the authority to employ one or
more persons to render advice or services with regard to the
responsibilities of the Plan Administrator, including but not limited
to attorneys, actuaries, and accountants. Any persons employed to
render advice or services will have no fiduciary responsibility for any
ministerial functions performed with respect to this Plan.
9.04 RELIANCE ON PLAN ADMINISTRATOR AND EMPLOYER
Until the Employer gives notice to the contrary, the Trustee and any
persons employed to render advice or services will be entitled to rely
on the designation of Plan Administrator that has been furnished to
them. In addition, the Trustee and any persons employed to render
advice or services will be fully protected in acting upon the written
directions and instructions of the Plan Administrator made in
accordance with the terms of this Plan. If the Plan Administrator is a
group of individuals, unless otherwise specified, any one of such
individuals will be authorized to sign documents on behalf of the Plan
Administrator and such authorized signatures will be recognized by all
persons dealing with the Plan Administrator. The Trustee and any
persons employed to render advice or services may take cognizance of
any rules established by the Plan Administrator and rely upon them
until
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notified to the contrary. The Trustee and any persons employed to
render advice or services will be fully protected in taking any action
upon any paper or document believed to be genuine and to have been
properly signed and presented by the Plan Administrator, Employer or
any agent of the Plan Administrator acting on behalf of the Plan
Administrator.
9.05 REPORTS TO PARTICIPANTS
The Plan Administrator will report in writing to a Participant his
Accrued Benefit under the Plan and the Vested Percentage of such
benefit when the Participant terminates his employment or requests such
a report in writing from the Plan Administrator. To the extent required
by law or regulation, the Plan Administrator will annually furnish to
each Participant, and to each Beneficiary receiving benefits, a report
which fairly summarizes the Plan's most recent report.
9.06 BOND
The Plan Administrator and other fiduciaries of the Plan will be bonded
to the extent required by ERISA or other applicable law. No additional
bond or other security for the faithful performance of any duties under
this Plan will be required.
9.07 COMPENSATION OF PLAN ADMINISTRATOR
The Compensation of the Plan Administrator will be left to the
discretion of the Plan Sponsor; no person who is receiving full pay
from the Employer will receive compensation for services as Plan
Administrator. All reasonable and necessary expenses incurred by the
Plan Administrator in supervising and administering the Plan will be
paid from the Plan assets by the Trustee at the direction of the Plan
Administrator to the extent not paid by the Plan Sponsor.
9.08 CLAIMS PROCEDURE
The Plan Administrator will make all determinations as to the rights of
any Employee, Participant, Beneficiary or other person under the terms
of this Plan. Any Employee, Participant or Beneficiary, or person
claiming under them, may make claim for benefit under this Plan by
filing written notice with the Plan Administrator setting forth the
substance of the claim. If a claim is wholly or partially denied, the
claimant will have the opportunity to appeal the denial upon filing
with the Plan Administrator a written request for review within 60 days
after receipt of notice of denial. In making an appeal the claimant may
examine pertinent Plan documents and may submit issues and comments in
writing. Denial of a claim or a decision on review will be made in
writing by the Plan Administrator delivered to the claimant within 60
days after receipt of the claim or request for review, unless special
circumstances require an extension of time for processing the claim or
review, in which event the Plan Administrator's decision must be made
as soon as possible thereafter but not beyond an additional 60 days. If
no action on an initial claim is taken within 120 days, the claims will
be deemed denied for purposes of permitting the claimant to proceed to
the review stage. The denial of a claim or the decision on review will
specify the reasons for the denial or decision and will make reference
to the pertinent Plan provisions upon which the denial or decision is
based. The denial of a claim will also include a description of any
additional material or information necessary for the claimant to
perfect the claim and an explanation of the claim review procedure
herein described. The Plan Administrator will serve as an agent for
service of legal process with respect to the Plan unless the Employer,
through written resolution, appoints another agent.
If a Participant or Beneficiary is entitled to a distribution from the
Plan, the Participant or Beneficiary will be responsible for providing
the Plan Administrator with his current address. If the Plan
Administrator notifies the Participant or Beneficiary by registered
mail (return receipt requested) at his last known address that he is
entitled to a distribution and also notifies him of the provisions of
this paragraph, and the Participant or Beneficiary fails to claim his
benefits under the Plan or provide his current address to the Plan
Administrator within one year after such notification, the
distributable amount will be forfeited and used to reduce the cost of
the Plan. If the Participant or Beneficiary is subsequently located,
such benefit will be restored.
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9.09 LIABILITY OF FIDUCIARIES
Except for a breach of fiduciary responsibility due to gross negligence
or willful misconduct, the Plan Administrator will not incur any
individual liability for any decision, act, or failure to act
hereunder. The Plan Administrator may engage agents to assist it and
may engage legal counsel who may be counsel for the Employer. The Plan
Administrator will not be responsible for any action taken or omitted
to be taken on the advice of counsel.
If there is more than one person serving as a fiduciary in any capacity
(for example, co-Trustees), each will use reasonable care to prevent
the other or others from committing a breach of this Plan. Nothing
contained in this Section will preclude any agreement allocating
specific responsibilities or obligations among the co-fiduciaries
provided that the agreement does not violate any of the terms and
provisions of this Plan. In those instances where any duties have been
allocated between co-fiduciaries, a fiduciary will not be liable for
any loss resulting to the Plan arising from any act or omission on the
part of another co-fiduciary to whom responsibilities or obligations
have been allocated except under the following circumstances:
o If he participates knowingly in, or knowingly undertakes to
conceal, an act or omission of a co-fiduciary knowing the act
or omission is a breach; or
o If by his failure to comply with his specific responsibilities
which give rise to his status as a fiduciary, he has enabled
the other fiduciary to commit a breach; or
o If he has knowledge of a breach by a co-fiduciary, unless he
makes reasonable efforts under the circumstances to remedy the
breach.
9.10 EXPENSES OF ADMINISTRATION
The Employer does not and will not guarantee the Plan assets against
loss. The Employer may in its sole discretion, but will not be
obligated to, pay the ordinary expenses of establishing the Plan,
including the fees of consultants, accountants and attorneys in
connection therewith. The Employer may, in its sole discretion (but
will not be obligated to), pay other costs and expenses of
administering the Plan. Unless paid by the Employer, such costs and
expenses will be a charge upon Plan assets and deducted by the Trustee.
9.11 DISTRIBUTION AUTHORITY
If any person entitled to receive payment under this Plan is a minor,
declared incompetent or is under other legal disability, the Plan
Administrator may, in its sole discretion, direct the Trustee to:
o Distribute directly to the person entitled to the payment;
o Distribute to the legal guardian or, if none, to a parent of
the person entitled to payment or to a responsible adult with
whom the person entitled to payment maintains his residence;
o Distribute to a custodian for the person entitled to payment
under the Uniform Gifts to Minors Act if permitted by the laws
of the state in which the person entitled to payment resides;
or
o Withhold distribution of the amount payable until a court of
competent jurisdiction determines the rights of the parties
thereto or appoints a guardian of the estate of the person
entitled to payment.
If there is any dispute, controversy or disagreement between any
Beneficiary or person and any other person as to who is entitled to
receive the benefits payable under this Plan, or if the Plan
Administrator is uncertain as to who is entitled to receive benefits,
or if the Plan Administrator is unable to locate the person who is
entitled to benefits, the Plan Administrator may with acquittance
interplead the funds into a court of competent jurisdiction in the
judicial district in which the Employer
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maintains its principal place of business and, upon depositing the
funds with the clerk of the court, be released from any further
responsibility for the payment of the benefits. If it is necessary for
the Plan Administrator to retain legal counsel or incur any expense in
determining who is entitled to receive the benefits, whether or not it
is necessary to institute court action, the Plan Administrator will be
entitled to reimbursement from the benefits for the amount of its
reasonable costs, expenses and attorneys' fees incurred.
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ARTICLE 10
AMENDMENT OR TERMINATION OF PLAN
10.01 RIGHT OF PLAN SPONSOR TO AMEND OR TERMINATE
The Plan Sponsor reserves the right to alter, amend, revoke or
terminate this Plan. No amendment will deprive any Participant or
Beneficiary of any vested right nor will it reduce any Accrued Benefit
to which he is then entitled with respect to Employer contributions
previously made, except as may be required to maintain the Plan as a
qualified plan under the Code. No amendment will change the duties or
responsibilities of the Trustee without its express written consent
thereto.
A plan amendment which has the effect of (a) eliminating or reducing an
early retirement benefit or a retirement-type subsidy, or (b)
eliminating an optional benefit form, will, with respect to benefits
attributable to service before the amendment be treated as reducing
Accrued Benefits.
10.02 ALLOCATION OF ASSETS ON TERMINATION OF PLAN
If this Plan is revoked or terminated (in whole or in part) or if
contributions are completely discontinued the Accounts of all affected
Participants will become non-forfeitable. The Employer will then
arrange for allocation of all assets among Participants so affected by
the total or partial termination in accordance with the requirements of
all applicable law and the regulations and requirements of the Internal
Revenue Service. All allocated amounts will be retained in the Plan to
the credit of the individual Participants until distribution as
directed by the Employer. Distribution to Participants may be in the
form of cash or other Plan assets or partly in each.
10.03 EXCLUSIVE BENEFIT
At no time will any part of the principal or income of the Plan assets
be used or diverted for purposes other than the exclusive benefit of
Participants in the Plan and their Beneficiaries, nor may any portion
of the Plan assets revert to the Employer except as provided in
Sections 7.01(e) and 8.08.
10.04 FAILURE TO QUALIFY
Notwithstanding any of the foregoing provisions, if this Plan, upon
adoption by the Employer, is submitted to the Internal Revenue Service
which then determines that the Plan as initially adopted by the
Employer is not a qualified plan under the Code, the Employer may elect
to terminate this Plan by giving written notice thereof. Such
termination will have the same effect as if the Plan were never
adopted, all policies and contracts will be canceled, and all
contributions, to the extent recoverable from the Trustee, will be
returned to their source. If any amendment to this Plan is submitted to
the Internal Revenue Service within the period allowed under Code
Section 401(b) which then determines that the Plan as amended is not a
qualified plan under the Code, the Employer may cancel or modify any or
all provisions of the amendment retroactive to the effective date of
the amendment in order to maintain the qualified status of the Plan,
whereupon written notice thereof will be furnished to all affected
Employees, Participants and Beneficiaries.
10.05 MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
In the event this Plan is merged or consolidated with another plan
which is qualified under Code Sections 401(a) (and 501(a) if
applicable), or in the event of a transfer of the assets or liabilities
of this Plan to another plan which is qualified under Code Sections
401(a) (and 501(a) if applicable), the benefit which each Participant
would be entitled to receive under the successor plan or other plan if
it were terminated immediately after the merger, consolidation or
transfer will be equal to or greater than the benefit which the
Participant would have received immediately before the merger,
consolidation or transfer if this Plan had then terminated.
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Any transfer of assets and/or liabilities to (or from) this Plan from
(or to) another plan qualified under Code Sections 401(a) (and 501(a)
if applicable) will be evidenced by a Written Resolution by the Plan
Sponsor of each affected plan which specifically authorizes such
transfer of assets and/or liabilities.
If any assets which are transferred to this Plan in accordance with the
provisions of this Section are required to be paid in the form of a
joint and survivor annuity, then, notwithstanding the provisions of
Articles 5 and 6, the form of benefit for the portion of a
Participant's Accrued Benefit which is attributable to such transferred
assets will be determined in accordance with the rules outlined in the
remainder of this Section.
(a) ANNUITY STARTING DATE
Annuity Starting Date means (i) the first day of the first
period for which an amount is payable as an annuity, or (ii)
in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which
entitled the Participant to such benefit.
(b) QUALIFIED ELECTION
(1) IN GENERAL
Qualified Election means a written waiver of a
Qualified Joint and Survivor Annuity or a Qualified
Survivor Annuity. The waiver must be consented to by
the Participant's spouse with such consent witnessed
by a representative of the Plan Administrator or a
notary public. The spouse's consent must include the
designation of a specific Beneficiary and the form of
payment which cannot be changed without the consent
of the spouse. Such consent will not be required if
the Participant establishes to the satisfaction of
the Plan Administrator that such written consent may
not be obtained because there is no spouse, the
spouse cannot be located or other circumstances that
may be prescribed by Treasury Regulations. Any
consent which is required under this Section will be
valid only with respect to the spouse who signs the
consent (or in the event of a deemed Qualified
Election, the designated spouse). Additionally, any
revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any
time before the Annuity Starting Date; however, any
waiver of a Qualified Joint and Survivor Annuity or a
Qualified Survivor Annuity which follows such
revocation must be in writing and must be consented
to by the Participant's spouse. The number of waivers
or revocations of such waivers will not be limited.
(2) QUALIFIED JOINT AND SURVIVOR ANNUITY NOTICES
Not more than 90 days nor less than 30 days before
the Participant's Annuity Starting Date, the Plan
Administrator will provide the Participant a written
explanation of:
o the terms and conditions of a Qualified
Joint and Survivor Annuity;
o the Participant's right to make and the
effect of a Qualified Election to waive the
Qualified Joint and Survivor Annuity form of
benefit;
o a general description of the eligibility
conditions and other material features of
the optional forms of benefit and sufficient
additional information to explain the
relative values of the optional forms of
benefit available;
o the rights of the Participant's spouse; and
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o the right to make, and the effect of, a
revocation of a previous Qualified Election
to waive the Qualified Joint and Survivor
Annuity.
(3) QUALIFIED SURVIVOR ANNUITY NOTICES
The election period to waive the Qualified Survivor
Annuity begins on the first day of the Plan Year in
which the Participant attains age 35 and ends on the
date of the Participant's death. If a Vested
Terminated Participant separates from service before
the beginning of the election period, the election
period begins on the date of separation from service.
The Plan Administrator will, within the applicable
notice period, provide each Participant a written
explanation of the Qualified Survivor Annuity
containing comparable information to that required
under the provisions of Section 1.32(b)(2). For
purposes of this paragraph, the term "applicable
notice period" means whichever of the following
periods ends last:
o the period beginning with the first day of
the Plan Year in which the Participant
attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in
which the Participant attains age 35;
o the period beginning two years before and
ending 12 months after the individual
becomes a Participant;
o the period beginning two years before and
ending 12 months after the joint and
survivor rules become effective for the
Participant; or
o the period beginning one year before and
ending 12 months after the Participant
separates from service before attaining age
35.
A Participant who will not have attained age 35 as of
the end of any current Plan Year may make a special
Qualified Election to waive the Qualified Survivor
Annuity for the period beginning on the date of the
election and ending on the first day of the Plan Year
in which the Participant attains age 35. The Election
will not be valid unless the Participant receives a
written explanation of the Qualified Survivor Annuity
in terms comparable to the explanation required
above. Qualified Survivor Annuity coverage will
automatically resume as of the first day of the Plan
Year in which the Participant attains age 35. Any new
waiver on or after that date will be subject to the
full requirements of this Section 1.32(b).
(c) QUALIFIED JOINT AND SURVIVOR ANNUITY
A Qualified Joint and Survivor Annuity means an annuity which
is purchased from an Insurer and which is payable for the life
of the Participant with a survivor annuity for the life of his
Surviving Spouse in an amount which is 50% of the amount
payable during the joint lives of the Participant and his
spouse. The amount of the Qualified Joint and Survivor Annuity
will be the amount of benefit which can be purchased from an
Insurer with the Participant's Vested Accrued Benefit.
(d) QUALIFIED LIFE ANNUITY
A Qualified Life Annuity means an annuity which is purchased
from an Insurer and which is payable for the lifetime of the
Participant with payments terminating upon the death of the
Participant. The amount of the Qualified Life Annuity will be
the amount of benefit which can be purchased from an Insurer
with the Participant's Vested Accrued Benefit
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(e) QUALIFIED SURVIVOR ANNUITY
A Qualified Survivor Annuity which a Surviving Spouse will be
eligible to receive under the provisions of Section 6.02 means
a monthly benefit payable for the remaining lifetime of the
Surviving Spouse. The amount of the Qualified Survivor Annuity
benefit will be the amount of benefit which can be purchased
from an Insurer with the Participant's Vested Accrued Benefit.
If the Participant's Vested Accrued Benefit is $3,500 or less,
the Plan Administrator will, without the request or approval
of the Surviving Spouse, direct the immediate distribution of
the Participant's Vested Accrued Benefit to the Surviving
Spouse. If the Participant's Vested Accrued Benefit at the
time of any distribution exceeds $3,500, the Vested Accrued
Benefit at any later time will be deemed to exceed $3,500. The
Surviving Spouse may elect to receive the Qualified Survivor
Annuity as a lump sum. Effective for the Plan Year beginning
January 1, 1998, $5,000 shall be substitute for $3,500 in this
paragraph in compliance with the Taxpayer Relief Act of 1997.
10.06 EFFECT OF PLAN AMENDMENT ON VESTING SCHEDULE
No amendment to the Vesting Schedule will deprive a Participant of his
nonforfeitable right to his Vested Accrued Benefit as of the date of
the amendment. Further, if the Vesting Schedule of the Plan is amended,
or if the Plan is amended in any way that directly or indirectly
affects the computation of a Participant's non-forfeitable percentage,
each Participant with at least 3 Years of Vesting Service as of the
last day of the election period described below may elect, within a
reasonable period after the adoption of the amendment, to have his
Vested Percentage computed under the Plan without regard to such
amendment. The period during which such election may be made will
commence with the date the amendment is adopted and will end 60 days
after the latest of:
(a) the date the amendment is adopted;
(b) the date the amendment becomes effective; or
(c) the date the Participant is issued written notice of the
amendment by the Employer.
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ARTICLE 11
TRUSTEE AND TRUST FUND
11.01 ACCEPTANCE OF TRUST
The Trustee, by signing this Agreement, accepts this Trust and agrees
to perform the duties of the Trustee in accordance with the terms and
conditions set forth herein.
11.02 TRUST FUND
(a) PURPOSE AND NATURE
The Trustee will establish and maintain a Trust Fund for
purposes of providing a means of accumulating the assets
necessary to provide the benefits which become payable under
the Plan. The Trustee will receive, hold and invest all
contributions made by the Employer, any Participating
Employers, and the Participants, including the investment
earnings thereon. The Trust Fund arising from such
contributions and earnings will consist of all assets held by
the Trustee under the Plan and Trust. All benefits payable
under the Plan will be paid by the Trustee from the Trust
Fund.
Any person having any claim under the Plan will look solely to
the assets of the Trust Fund for satisfaction. In no event
will the Plan Administrator, the Employer, any Employees, any
officer of the Employer or any agents of the Employer or the
Plan Administrator be liable in their individual capacities to
any person whomsoever, under the provisions of this Plan and
Trust, except as provided by law.
The Trust Fund will be used and applied only in accordance
with the provisions of the Plan and Trust, to provide the
benefits thereof, and no part of the corpus or income of the
Trust Fund will be used for, or diverted to, purposes other
than for the exclusive benefit of the Participants or their
Beneficiaries entitled to benefits under the Plan, except to
the extent specifically provided elsewhere herein.
(b) OPERATION OF THE TRUST FUND
The Trust Fund will be maintained in accordance with the
accounting requirements of the Plan. No Participant will have
any right to any specific asset or any specific portion of the
Trust Fund prior to distribution of benefits. Withdrawals from
the Trust Fund will be made to provide benefits to
Participants and Beneficiaries in the amounts specified by the
Plan, and to pay expenses agreed to in writing by the Plan
Administrator.
(c) INVESTMENTS
The Trustee will invest the Trust Fund in accordance with the
proper directions of the Plan Administrator or Investment
Manager. Except to the extent required by ERISA or otherwise
provided in this Plan, the Trustee shall have no duty or
responsibility to review, initiate action, or make
recommendations regarding Trust assets and shall retain assets
until directed by the Plan Administrator to dispose of them.
(d) COMBINED TRUST FUND FOR COLLECTIVE INVESTMENT PURPOSES
If the Plan Sponsor creates or maintains one or more employee
benefit plans qualified under Code Section 401(a) in addition
to this Plan, the Plan Sponsor may request the Trustee to hold
the assets of the additional plan or plans in the Trust Fund.
The Plan Administrator shall keep records showing the interest
of the Plan and each additional plan in the Trust Fund unless
the Trustee enters into an agreement with the Plan Sponsor to
keep separate accounts for each such plan. The Plan Sponsor
and the Plan Administrator shall not permit
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or cause the assets of one plan to be used to pay benefits or
the administrative expenses of any other plan with assets in
the Trust Fund.
11.03 RECEIPT OF CONTRIBUTIONS
The Trustee will be accountable to the Employer for the funds
contributed to it, but will have no duty to see that the contributions
received comply with the provisions of the Plan. The Trustee will not
be obligated to collect any contributions from the Employer or the
Participants.
11.04 POWERS OF THE TRUSTEE
Subject to the provisions and limitations contained elsewhere in this
Plan, the Trustee will have full discretion and authority with regard
to the investment of the Trust Fund. The Trustee is authorized and
empowered, but not by way of limitation, with the following powers,
rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, United
States retirement plan bonds, corporate bonds, debentures,
convertible debentures, commercial paper, U.S. Treasury bills,
book entry deposits with the United States Federal Reserve
Bank or System, Master Notes or similar arrangements sponsored
by the Trustee or any other financial institution as permitted
by law, improved or unimproved real estate situated in the
United States, mortgages, notes or other property of any kind,
real or personal, as a prudent man would so invest under like
circumstances with due regard for the purposes of this Plan;
(b) To maintain any part of the assets of the Trust Fund in cash,
or in demand or short-term time deposits bearing a reasonable
rate of interest (including demand or short-term time deposits
of or with the Trustee), or in a short-term investment fund or
in other cash equivalents having ready marketability,
including, but not limited to, U.S. Treasury Bills, commercial
paper, certificates of deposit (including such certificates of
deposit of or with the Trustee), and similar types of
short-term securities, as may be deemed necessary by the
Trustee in its sole discretion;
(c) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure,
lease for any term even though commencing in the future or
extending beyond the term of the Trust, and otherwise deal
with all property, real or personal, in such manner, for such
considerations and on such terms and conditions as the Trustee
will decide;
(d) To credit and distribute the Trust as directed by the Plan
Administrator or any agent of the Plan Administrator. The
Trustee will not be obliged to inquire as to whether any payee
or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as
to the manner of making any payment or distribution. The
Trustee will be accountable only to the Plan Administrator for
any payment or distribution made by it in good faith on the
order or direction of the Plan Administrator or any agent of
the Plan Administrator;
(e) To borrow money, assume indebtedness, extend mortgages and
encumber by mortgage or pledge;
(f) To compromise, contest, arbitrate, or abandon claims and
demands, in its discretion;
(g) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to
participate in any voting trusts, mergers, consolidations or
liquidations, and to exercise or sell stock subscriptions or
conversion rights;
(h) To hold any securities or other property in the name of the
Trustee or its nominee, or in another form as it may deem
best, with or without disclosing the trust relationship;
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(i) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management,
investment and distribution of the Trust;
(j) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make
payment or delivery of the funds or property until final
adjudication is made by a court of competent jurisdiction;
(k) To file all tax forms or returns required of the Trustee;
(l) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that
the Trustee will not be obligated to or required to do so
unless indemnified to its satisfaction; and
(m) To keep any or all of the Trust property at any place or
places within the United States or abroad, or with a
depository or custodian at such place or places; provided,
however, that the Trustee may not maintain the indicia of
ownership of any assets of the Plan outside the jurisdiction
of the District Courts of the United States, except as may be
expressly authorized in U.S. Treasury or U.S. Department of
Labor regulations.
11.05 INVESTMENT IN COMMON OR COLLECTIVE TRUST FUNDS
Notwithstanding the provisions of Section 11.04, the Plan Sponsor
specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any common or collective trust fund
which at the time of the investment provides for the pooling of the
assets of plans qualified under Code Section 401(a). The authorization
applies only if such common or collective trust fund: (a) is exempt
from taxation under Code Section 584 or 501(a); (b) if exempt under
Code Section 501(a), expressly limits participation to pension and
profit sharing trusts which are exempt under Code Section 501(a) by
reason of qualifying under Code Section 401(a); (c) prohibits that part
of its corpus or income which equitably belongs to any participating
trust from being used for or diverted to any purposes other than for
the exclusive benefit of the Employees or their Beneficiaries who are
entitled to benefits under such participating trust; (d) prohibits
assignment by participating trust of any part of its equity or interest
in the group trust; and (e) the sponsor of the group trust created or
organized the group trust in the United States and maintains the group
trust at all times as a domestic trust in the United States. The
provisions of the common or collective trust fund agreement, as amended
by the Trustee from time to time, are by this reference incorporated
within this Plan and Trust. The provisions of the common or collective
trust fund will govern any investment of Plan assets in that fund. This
provision constitutes the express permission required by Section
408(b)(8) of ERISA.
11.06 INVESTMENT IN INSURANCE COMPANY CONTRACTS
The Trustee may invest any portion of the Trust Fund in a deposit
administration, guaranteed investment or similar type of investment
contract (hereinafter referred to as Contract); provided, however, that
no such Contract may provide for an optional form of benefit which
would not be provided for under the provisions hereof. The Trustee will
be the complete and absolute owner of Contracts held in the Trust Fund.
The Trustee may convert from one form to another any Contract held in
the Trust Fund; designate any mode of settlement; sell or assign any
Contract held in the Trust Fund; surrender for cash any Contract held
in the Trust Fund; agree with the insurance company issuing any
Contract to any release, reduction, modification or amendment thereof;
and, without limitation of any of the foregoing, exercise any and all
of the rights, options and privileges that belong to the absolute owner
of any Contract held in the Trust Fund that are granted by the terms of
any such Contract or by the terms of this Agreement.
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The Trustee will hold in the Trust Fund the proceeds of any sale,
assignment or surrender of any Contract held in the Trust Fund and any
and all dividends and other payments of any kind received in respect to
any Contract held in the Trust Fund.
No insurance company which may issue any Contract based upon the
application of the Trustee will be responsible for the validity of this
Plan, be required to look into the terms of this Plan, be required to
question any act of the Plan Administrator or the Trustee hereunder or
be required to verify that any action of the Trustee is authorized by
this Plan. If a conflict should arise between the terms of the Plan and
any such Contract, the terms of the Plan will govern.
11.07 FEES AND EXPENSES FROM FUND
The Trustee will be entitled to receive reasonable annual compensation
as may be mutually agreed upon from time to time between the Plan
Sponsor and the Trustee. The Trustee will pay all expenses reasonably
incurred by it in its administration and investment of the Trust Fund
from the Trust Fund unless the Plan Sponsor pays the expenses. No
person who is receiving full pay from the Plan Sponsor will receive
compensation for services as Trustee.
11.08 RECORDS AND ACCOUNTING
The Trustee will keep full and complete records of the administration
of the Trust Fund which the Employer and the Plan Administrator may
examine at any reasonable time. As soon as practical after the end of
each Plan Year and at such other reasonable times as the Employer may
direct, the Trustee will prepare and deliver to the Employer and the
Plan Administrator an accounting of the administration of the Trust,
including a report on the fair market value of all assets of the Trust
Fund.
11.09 DISTRIBUTION DIRECTIONS
If no one claims a payment or distribution made from the Trust, the
Trustee will notify the Plan Administrator and will dispose of the
payment in accordance with the subsequent direction of the Plan
Administrator.
11.10 THIRD PARTY
No person dealing with the Trustee will be obliged to see to the proper
application of any money paid or property delivered to the Trustee, or
to inquire whether the Trustee has acted pursuant to any of the terms
of the Plan. Each person dealing with the Trustee may act upon any
notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and will not be liable to any person
whomsoever in so doing. The certification of the Trustee that it is
acting in accordance with the Plan will be conclusive in favor of any
person relying on the certification.
11.11 PROFESSIONAL AGENTS, AFFILIATES AND ARBITRATION
(a) PROFESSIONAL AGENTS
The Trustee may employ and pay from the Trust Fund reasonable
compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be
necessary. The Trustee may delegate to any agent, attorney,
accountant or other person selected by it any non-Trustee
power or duty vested in it by the Plan; the Trustee may act or
refrain from acting on the advice or opinion of any agent,
attorney, accountant or other person so selected.
(b) USE OF AFFILIATES
(1) Charles Schwab Trust Company (CSTC) is authorized to
contract or make other arrangements with The Charles
Schwab Corporation, Charles Schwab & Co., Inc., their
affiliates and subsidiaries, successors and assigns
(collectively referred to as Schwab), and any other
organizations affiliated with or subsidiaries of CSTC
or related entities, for the provision of services to
the Trust Fund or Plan, except where
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such arrangements are prohibited by law or
regulation. As used below, authorized person means
any person whose authorization is required pursuant
to the provision of any prohibited transaction
exemption otherwise applicable.
(2) CSTC is authorized to place securities orders, settle
securities trades, hold securities in custody and
other related activities on behalf of the Trust Fund
through or by Schwab whenever possible unless the
authorized person specifically instructs the use of
another Broker. Trades and related activities
conducted through the Broker will be subject to fees
and commissions established by the Broker, which may
be paid from the Trust Fund or netted from the
proceeds of trades.
(3) Trades will not be executed through Schwab unless the
Plan Administrator and the authorized person have
received disclosure concerning the relationship of
Schwab to CSTC, and the fees and commissions which
may be paid to Schwab, CSTC and any affiliate or
subsidiary of any of them as a result of using Schwab
to execute trades or for other services.
(4) CSTC is authorized to disclose such information as is
necessary to the operation and administration of the
Trust Fund to Schwab and to such other persons or
organizations that CSTC determines have a legitimate
business purpose for obtaining such information.
(5) At the direction of the authorized person, CSTC may
purchase shares of regulated investment companies (or
other investment vehicles) advised by Schwab or CSTC
("Schwab Funds"), except to the extent that such
investment is prohibited by law or regulation. Schwab
Fund shares may not be purchased for or held by the
Trust Fund unless the Plan Administrator has received
disclosure concerning the relationship of Schwab or
CSTC to the Schwab Funds, and any fees which may be
paid to such entities.
(6) To the extent permitted under applicable laws, CSTC
may invest in deposits, long and short term debt
instruments, stocks and other securities, including
those of CSTC or Schwab.
(7) CSTC and Schwab are authorized to tape record
conversations between CSTC or Schwab and persons
acting on behalf of the Plan or a Participant in
order to verify data on transactions.
(c) ARBITRATION
Any dispute under this agreement will be resolved by
submission of the issue to a member of the American
Arbitration Association who is chosen by the Employer and the
Trustee. If the Employer and the Trustee cannot agree on such
a choice, each will nominate a member of the American
Arbitration Association, and the two nominees will then select
an arbitrator. Expenses of the arbitration will be paid as
decided by the arbitrator.
11.12 VALUATION OF TRUST
The Trustee will value the Trust Fund as of the last day of each Plan
Year to determine the fair market value of the Trust, and the Trustee
will value the Trust Fund on such other date(s) as may be necessary to
carry out the provisions of the Plan.
11.13 LIABILITY OF TRUSTEE
The Trustee will be liable only for the safeguarding and administration
of the assets of this Trust Fund in accordance with the provisions
hereof and any amendments hereto and no other duties or
responsibilities will be implied. The Trustee will not be required to
pay any interest on funds paid to
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or deposited with it or to its credit under the provisions of this
Trust, unless pursuant to a written agreement between the Employer and
the Trustee. The Trustee will not be responsible for the adequacy of
the Trust Fund to meet and discharge any liabilities under the Plan and
will not be required to make any payment of any nature except from
funds actually received as Trustee. The Trustee may consult with legal
counsel (who may be legal counsel for the Employer) selected by the
Trustee and will be fully protected for any action taken, suffered or
omitted in good faith in accordance with the opinion of said legal
counsel. It will not be the duty of the Trustee to determine the
identity or mailing address of any Participant or any other person
entitled to benefits hereunder, such identity and mailing addresses to
be furnished by the Employer, the Plan Administrator or an agent of the
Plan Administrator. The Trustee will be under no liability in making
payments in accordance with the terms of this Plan and the
certification of the Plan Administrator or an agent of the Plan
Administrator who has been granted such powers by the Plan
Administrator.
Except to the extent required by any applicable law, no bond or other
security for the faithful performance of duty hereunder will be
required of the Trustee.
11.14 REMOVAL OR RESIGNATION AND SUCCESSOR TRUSTEE
A Trustee may resign at any time upon giving 30 days prior written
notice to the Plan Sponsor or, with the consent of the Plan Sponsor, a
Trustee may resign with less than 30 days prior written notice. The
Plan Sponsor may remove a Trustee by giving at least 30 days prior
written notice to the Trustee.
Upon the removal or resignation of a Trustee, the Plan Sponsor will
appoint and designate a successor Trustee which will be one or more
individual successor Trustees or a corporate Trustee organized under
the laws of the United Sates or of any state thereof with authority to
accept and execute trusts. Any successor Trustee must accept and
acknowledge in writing its appointment as a successor Trustee before it
can act in such capacity.
Title to all property and records or true copies of such records
necessary to the current operation of the Trust Fund held by the
Trustee hereunder will vest in any successor Trustee acting pursuant to
the provisions hereof, without the execution or filing of any further
instrument. Any resigning or removed Trustee will execute all
instruments and do all acts necessary to vest such title in any
successor Trustee of record. Each successor Trustee will have, exercise
and enjoy all the powers, both discretionary and ministerial, herein
conferred upon his predecessor. No successor Trustee will be obligated
to examine the accounts, records and acts of any previous Trustee or
Trustees, and each successor Trustee in no way or manner will be
responsible for any action or omission to act on the part of any
previous Trustee.
Any corporation which results from any merger, consolidation or
purchase to which the Trustee may be a party, or which succeeds to the
trust business of the Trustee, or to which substantially all the trust
assets of the Trustee may be transferred, will be the successor to the
Trustee hereunder without any further act or formality with like effect
as if the successor Trustee had originally been named Trustee herein;
and in any such event it will not be necessary for the Trustee or any
successor Trustee to give notice thereof to any person, and any
requirement, statutory or otherwise, that notice will be given is
hereby waived.
11.15 APPOINTMENT OF INVESTMENT MANAGER
One or more Investment Managers may be appointed by the Plan Sponsor
(or the Plan Administrator) to exercise full investment management
authority with respect to all or a portion of the Trust assets.
Authorized payment of the fees and expenses of the Investment
Manager(s) may be made from the Trust assets. For purposes of this
agreement, any Investment Manager so appointed will, during the period
of his appointment, possess fully and absolutely those powers, rights
and duties of the Trustee (to the extent delegated by the Plan Sponsor
or the Plan Administrator) with respect to the investment or
reinvestment of that portion of the Trust assets over which the
Investment Manager has investment management authority. The Investment
Manager must be one of the following:
11-6
<PAGE> 73
(a) Registered as an investment advisor under the Investment
Advisors Act of 1940;
(b) A bank, as defined in the Investment Advisors Act of 1940; or
(c) An insurance company qualified to manage, acquire, or dispose
of such Plan assets under the laws of more than one state.
Any Investment Manager will acknowledge in writing to the Plan Sponsor
or the Plan Administrator and to the Trustee that he or it is a
fiduciary with respect to the Plan. During any period of time when the
Investment Manager is so appointed and serving, and with respect to
those assets in the Plan over which the Investment Manager exercises
investment management authority, the Trustee's responsibility will be
limited to holding such assets as a custodian, providing accounting
services, disbursing benefits as authorized, and executing such
investment instructions only as directed by the Investment Manager. The
Trustee will not be responsible for any acts or omissions of the
Investment Manager. Any certificates or other instruments duly signed
by the Investment Manager (or the authorized representative of the
Investment Manager), purporting to evidence any instruction, direction
or order of the Investment Manager with respect to the investment of
those assets of the Plan over which the Investment Manager has
investment management authority, will be accepted by the Trustee as
conclusive proof thereof. The Trustee will also be fully protected in
acting in good faith upon any notice, instruction, direction, order,
certificate, opinion, letter, telegram or other document believed by
the Trustee to be genuine and from the Investment Manager (or the
authorized representative of the Investment Manager). The Trustee will
not be liable for any action taken or omitted by the Investment Manager
or for any mistakes of judgment or other action made, taken or omitted
by the Trustee in good faith upon direction of the Investment Manager.
11.16 LOANS TO PARTICIPANTS
The Plan Administrator may authorize the Trustee to lend on a
nondiscriminatory basis to a Participant an amount from the Plan as
specified herein; provided, a reasonable rate of interest will be
charged on the loan, the loan will be secured by 50% of the
Participant's Vested Accrued Benefit in the Plan, and provision for
repayment will be made. All loans will be subject to the approval of
the Plan Administrator which will investigate each application for a
loan. The Plan Administrator will prescribe such rules as may be
necessary to provide guidelines as to under which circumstances and for
what purpose loans will be permitted.
The Plan Administrator will prescribe guidelines as to which Account or
Accounts loans may be made from. Each loan made to a Participant will
be made from the Participant's allowable Account or Accounts. All
interest and principal repayments will be credited to the Participant's
Account from which the loan was made.
In addition to any additional rules and regulations as the Plan
Administrator may adopt all loans will comply with the following terms
and conditions:
(a) Only Active and Inactive Participants will be eligible to
apply for a loan. Each application for a loan will be made in
writing to the Plan Administrator, whose action thereon will
be final.
(b) Each loan will be made against collateral being the assignment
of 50% of the borrower's entire right, title and interest in
and to the Trust Fund, supported by the borrower's promissory
note for the amount of the loan, including interest payable to
the order to the Trustee, and any additional security deemed
necessary to adequately secure the Loan. If a person fails to
make a required payment within 90 days of the due date set
forth in the loan agreement, the loan will be in default.
There will be no foreclosure against a Participant's Accrued
Benefit prior to his becoming entitled to a distribution of
benefits in accordance with the terms of this Plan. All loans
will become due and payable in full upon the termination of a
11-7
<PAGE> 74
Participant's employment. If a Participant with an outstanding
loan terminates employment and becomes entitled to a
distribution of benefits from the Plan, then the outstanding
balance of the unpaid loan plus any accrued interest thereon
will be deducted from the amount of otherwise distributable
benefits and the Participant's promissory note will be
distributed to the Participant.
(c) The principal repayment will be amortized over the fixed life
of a loan with installments of principal and interest to be
paid not less often than quarterly. The period of repayment
for each loan will be arrived at by mutual agreement between
the Plan Administrator and the borrower, but in no event will
such period exceed a reasonable period of time. The period of
repayment will in no event exceed 5 years unless the loan is
to be used to acquire, construct, reconstruct or substantially
rehabilitate any dwelling unit which, within a reasonable
period of time, is to be used as a principal residence of the
Participant.
(d) The minimum amount of any loan is equal to $1,000.
(e) The maximum amount of any loan is such that when the amount of
the loan is added to the outstanding balance of all other
loans made to the Participant from the Plan (and any other
plans maintained by the Employer or any Related Employer) the
total does not exceed the lesser of:
(1) 50% of the Participant's Vested Accrued Benefit; or
(2) $50,000, reduced by the amount, if any, of the
highest balance of all outstanding loans to the
Participant during the one-year period ending on the
day prior to the day on which the loan in question is
made.
(f) Each loan will bear interest at a rate equal to the prime rate
which is published in the Wall Street Journal as being
representative of the base rate on corporate loans at large
U.S. money center commercial banks on the first day of the
month in which the loan is made, plus 2 percentage points.
(g) A Participant may have no more than one loan outstanding at
any time.
(h) Each loan will require the Participant (and, if the
Participant is married, the Participant's spouse) to consent
to the loan and the possible reduction in the Participant's
Accrued Benefit. Such consent must be made in writing within
the 90-day period before the making of the loan. (i) No loan
will be permitted to a Participant in a year in which he is
either an Owner-Employee or Shareholder-Employee as defined in
Code Section 4975(d).
The spousal consent must meet requirements which are
comparable to the requirements described in Code Section
417(a)(2). Any security interest held by the Plan by reason of
an outstanding loan is taken into account in determining the
value of a Qualified Survivor Annuity. However, in the event a
Participant defaults on a loan, the security interest in the
loan will be deducted from the Qualified Survivor Annuity.
11-8
<PAGE> 75
IN WITNESS WHEREOF, this instrument has been executed by the duly authorized and
empowered officers of the Employer, this 1st day of October, 1997.
Capstar Broadcasting Partners, Inc.
By: /s/ Paul D. Stone
-------------------------------------
Paul D. Stone,
Executive Vice President/CFO
The Trustee agrees to serve as Trustee under the terms of this instrument.
Charles Schwab Trust Company
By: /s/ Rose Hauer
-------------------------------------
1
<PAGE> 76
FIRST AMENDMENT TO THE
CAPSTAR BROADCASTING PARTNERS
401(k) RETIREMENT PLAN AND TRUST
This amendment, effective January 1, 1998, is made by Capstar Broadcasting
Partners, Inc. (hereinafter referred to as the "Employer").
WHEREAS, the Employer has previously established the Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust (the "Plan") for the benefit of
eligible employees and their beneficiaries; and
WHEREAS, pursuant to Plan Section 10.01, the Board of Directors of Capstar
Broadcasting Partners, Inc. (the "Board") is authorized to amend the Plan on its
behalf;
NOW, THEREFORE, the following amendments are hereby made and shall be effective
January 1, 1998 unless otherwise specified:
Plan Section 1.09 is amended to add the following:
To the extent that any plan is merged into this Plan, the provisions of
this Plan that are intended to comply with changes in the qualification
requirements made by the Uniformed Services Employment and Reemployment
Rights Act (USERRA), the Uruguay Round Agreements Act (GATT), the Small
Business Job Protection Act of 1996 (SBJPA) and the Taxpayer Relief Act
of 1997 (TRA '97) shall be effective for the merged plan as required by
applicable law.
Plan Section 1.32(e) is amended by adding the following sentence at the end of
the second paragraph:
Effective January 1, 1999, $5,000 is substituted for $3,500 in this
paragraph in compliance with the Taxpayer Relief Act of 1997.
Plan Section 5.05(c) is amended by adding the following sentence:
Effective January 1, 1999, $5,000 is substituted for $3,500 in this
paragraph in compliance with the Taxpayer Relief Act of 1997.
The following Section 8.09 is added to Plan Article 8.
8.09 Employees in Qualified Military Service
Notwithstanding any provisions of this Plan to the contrary,
contributions, benefits and service credits with respect to
qualified military service will be provided in accordance with
Section 414(u) of the Internal Revenue Code.
<PAGE> 77
IN WITNESS WHEREOF, the Employer, Capstar Broadcasting Partners, Inc. has caused
this instrument to be executed as of the date specified below.
Employer:
Capstar Broadcasting Partners, Inc.
Dated: April 17, 1998 By: /s/ Kim Borron
--------------------- -------------------
Vice President
<PAGE> 78
SECOND AMENDMENT TO THE
CAPSTAR BROADCASTING PARTNERS
401(K) RETIREMENT PLAN AND TRUST
This amendment effective January 1, 1998 is made by Capstar Broadcasting
Partners, Inc. hereinafter referred to as (the "Employer").
WHEREAS, the Employer has previously established the Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust (the "Plan") for the benefit of
eligible employees and their beneficiaries; and
WHEREAS, pursuant to Plan Section 10.01, the Employer reserves the right to
amend the Plan to the extent the amendment will not deprive any participant or
beneficiary of any vested right, nor to the extent it will reduce any accrued
benefit to which a participant or beneficiary is then entitled to with respect
to employer contributions previously made, except as may be required to maintain
the Plan as qualified under the Internal Revenue Code of 1986 as amended, nor to
the extent an amendment will change the duties or responsibilities of the
trustee without the expression written consent of the trustees;
WHEREAS, some radio stations purchased by the Employer or purchased by an entity
in the same controlled group as the Employer employ individuals that would
normally be eligible for participation in the Plan shortly after the close of
the contemplated purchase;
WHEREAS, some of such stations may be sold shortly after their purchase by the
Employer or their purchase by an entity in the same controlled group as the
Employer;
WHEREAS, the Employer desires to limit participation in the Plan to employees
that are not employed at a radio station whose sale is pending during the whole
period for which it is an asset of the Employer or an asset of an entity in the
same controlled group as the Employer;
NOW, THEREFORE, the following amendment is hereby made and shall be effective
January 1, 1998 unless otherwise specified:
Plan Section 1.10 is amended to read as follows:
Eligible Employee Classification
An Eligible Employee Classification is a classification of Employees,
the members of which are eligible to participate in the Plan. The Plan
covers all employee classifications except Leased Employees, workers
classified by the Employer as Independent Contractors, Employees
classified by the Employer as Part Time Employees and who have failed
to work at least 1,000 hours during any Plan Year and during the
Employee's Initial Year of Eligibility Service, and union employees who
are not explicitly covered by the Plan pursuant to the terms of a
collective bargaining agreement. An Eligible Employee Classification
shall also not include
<PAGE> 79
those employees who are employed at a facility, described in Appendix A
to this document, which facility is pending sale to an unrelated
entity.
NOW, THEREFORE, be it further provided that except as contemplated above the
Plan shall continue to read in its current state.
IN WITNESS WHEREOF, this amendment has been executed by the duly authorized
officer of the company as of the date specified below and effective as set forth
herein.
Employer:
Capstar Broadcasting Partners, Inc.
Dated: June 30, 1998 By: /s/ Kim Borron
--------------------------- --------------------------------
Vice President
-2-
<PAGE> 80
THIRD AMENDMENT TO THE
CAPSTAR BROADCASTING PARTNERS
401(K) RETIREMENT PLAN AND TRUST
This amendment effective August 31, 1998 is made by Capstar Broadcasting
Partners, Inc. hereinafter referred to as (the "Employer").
WHEREAS, the Employer has previously established the Capstar Broadcasting
Partners 401(k) Retirement Plan and Trust (the "Plan") effective October 1, 1997
for the benefit of eligible employees and their beneficiaries;
WHEREAS, pursuant to Plan Section 10.01, the Employer reserves the right to
amend the Plan to the extent the amendment will not deprive any participant or
any beneficiary of any vested right, nor to the extent it will reduce any
accrued benefit to which a participant or beneficiary is then entitled to with
respect to employer contributions previously made, except as may be required to
maintain the Plan as a qualified Plan under the Internal Revenue Code of 1986 as
amended (the "Code");
WHEREAS, currently the trustee of the Plan is the Charles Schwab Trust Company,
(the "Trustee");
WHEREAS, any amendment which changes the duties or responsibility of the Trustee
must be established with the express written consent of the Trustee; and
WHEREAS, the Employer believes it is in the best interest of Plan participants
to allow participants to invest funds in their accounts in securities of the
Employer or an entity aggregated with the Employer pursuant to Code Section
414(b) or (c) at the time established by the Plan Administrator.
NOW, THEREFORE, the Plan is hereby amended as follows and except as provided
below shall continue to read in its current state:
Article 12 of the Plan is hereby added to the Plan to read as follows effective
August 31 1998:
ARTICLE 12
PROVISIONS RELATING TO EMPLOYER STOCK
12.01 Type of Employer Stock
The Trustee will, to the extent practical based on the Participant's or
Beneficiary's election, invest that portion of the Trust Fund so
elected by Participants and Beneficiaries, in Common Stock of the
Employer, any Participating Employer or any entity aggregated with the
Employer pursuant to Code Section 414(b) or (c) (Employer Stock) which
includes treasury stock which has been purchased by the Employer.
<PAGE> 81
12.02 Voting Rights
(a) In General
Before each annual or special meeting of the Employer's
shareholders, the Plan Administrator will cause to be sent to
each Participant and Beneficiary who has Employer Stock
allocated to his Accounts a copy of the proxy solicitation
material for the meeting, together with a form requesting
confidential instructions to the Trustee on how to vote the
shares of Employer Stock allocated to his Accounts.
Voting rights with respect to shares of Employer Stock held in
the Trust Fund shall be voted by the Trustee in such manner as
may be determined by the respective Participants and
Beneficiaries, with respect to all matters requiring
shareholder approval.
With respect to shares of Employer Stock in the Trust Fund
which are allocated to Participants and Beneficiaries who fail
to give directions to the Trustee, such shares shall be voted
by the Trustee based on the voting directions of those
Participants and Beneficiaries who issued directions with
respect to Employer Stock allocated to their Accounts. The
number of non-voted shares to be voted in a particular manner
shall be determined by multiplying the total number of such
shares by a fraction, the numerator of which is the number of
allocated shares directed to be voted in such manner, and the
denominator of which is the total number of allocated shares
directed to be voted in any manner with respect to the matter
at issue.
The Plan Administrator may establish such rules and guidelines
as it deems necessary to properly effect the provision of this
Section 12.02
(b) Tender Offers
In the event of a tender offer for shares of Employer Stock
the Plan Administrator will advise each Participant or
Beneficiary who has shares of Employer Stock allocated to his
Accounts in writing of the terms of the tender offer as soon
as practicable after its commencement and will furnish each
Participant or Beneficiary with a form by which he may
instruct the Trustee confidentially to tender shares allocated
to his Accounts. The Plan Administrator may also provide
Participants or Beneficiaries with such other material
concerning the tender offer as the Plan Administrator, in its
discretion, determines to be appropriate.
Each Participant or Beneficiary shall have the right, to the
extent of the number of shares of Employer Stock in his
account, to direct the Trustee in writing as to the manner in
which to respond to a tender or exchange offer with respect to
shares of such Employer Stock.
The Employer shall utilize its best efforts to timely
distribute or cause to be distributed to each Participant or
Beneficiary such information as will be distributed
<PAGE> 82
to shareholders of the Employer in connection with any such
tender or exchange offer.
The Trustee shall, with respect to Employer Stock held in the
Trust Fund, accept or reject the terms of any tender offer
and, accordingly, tender Employer Stock held by the Trustee in
the Trust Fund in accordance with the terms and provisions of
any tender offer, or not tender such Employer Stock, as
directed by the respective Participants or Beneficiaries. With
respect to shares of Employer Stock which are allocated to
Participants or Beneficiaries who have not given directions,
the Trustee shall not tender any shares of Employer Stock with
respect to which such Participants or Beneficiaries have the
right of direction.
The sum of fractional shares allocated to Participants' and
Beneficiaries' Accounts and unallocated shares of Employer
Stock shall be tendered or exchanged in the same manner and
proportion as shares with respect to which Participants and
Beneficiaries have the right of direction are tendered or
exchanged.
The Plan Administrator may establish such rules and guidelines
as it deems appropriate to properly effect the provisions of
this Section 12.02.
12.03 Fiduciary Duties
The Plan Administrator shall be the fiduciary responsible for designing
procedures structured in order to safeguard the confidentiality of
information relating to the purchase, holding, and sale of Employer
Stock, and the exercise of voting, tender, and similar rights, with
respect to Employer Stock, by Participants and Beneficiaries; provided
that, such procedures need not be designed to safeguard the
confidentiality of information to the extent necessary to comply with
Federal laws or state laws not preempted by ERISA. The Plan
Administrator shall further insure that such procedures are at all
times sufficient to safeguard the confidentiality of the applicable
information and are followed. If the Plan Administrator determines that
any situation involves a potential for undue employer influence upon
Participants and Beneficiaries with regard to the direct or indirect
exercise of shareholder rights, it shall appoint an independent
fiduciary to carry out activities relating to any such situation.
12.04 Trustee Notification
The Employer will maintain the Plan such that either (a) as of the date
hereof the percentage of the issued and outstanding class of equity
security registered under Section 12 of the Securities Exchange Act of
1934 which is Employer Stock owned by the Plan (the Plan Percentage) is
less than 4.5%, or (b) that the Plan and its prior trust have complied
with all notice and filing requirements imposed by federal securities
laws with regard to Employer Stock. The Employer will (a) notify the
Trustee in writing within 5 business days following any date as of
which the Plan Percentage equals or exceeds 4.5%, (b) monitor the Plan
Percentage on a daily basis so long as the Plan Percentage is at least
4.5%, (c) notify the Trustee in writing within 5 business days
following any date as of which the Plan Percentage equals or exceeds 5%
and, if applicable, 10%, and (d) provide monthly written reports to the
<PAGE> 83
Trustee disclosing the Plan Percentage. The foregoing monitoring and
notification requirements shall cease during any month when the Plan
Percentage is below 4.5% for each day of the month.
IN WITNESS WHEREOF, the Employer, Capstar Broadcasting Partners, Inc. and the
Trustee, Charles Schwab Trust Company, have caused this instrument to be
executed as of the dates specified below.
Employer:
CAPSTAR BROADCASTING PARTNERS, INC.
By: /s/ Kim Borron
-----------------------------------
Title: Vice President
--------------------------------
Dated: August 25, 1998
--------------------------
The Trustee agrees to continue to serve as Trustee under the terms of the Plan
and this Third Amendment to the Plan.
Trustee:
CHARLES SCHWAB TRUST COMPANY
By: /s/ Rose Hauer
-----------------------------------
Title: Officer
--------------------------------
Dated: August 25, 1998
---------------------------
<PAGE> 1
EXHIBIT 5.1(a)
[VINSON & ELKINS LETTERHEAD]
WRITER'S TELEPHONE WRITER'S FAX
(214) 220-7700 (214) 999-7700
August 31, 1998
Capstar Broadcasting Corporation
600 Congress Avenue
Suite 1400
Austin, Texas 78701
Ladies and Gentlemen:
We have acted as counsel for Capstar Broadcasting Corporation, a
Delaware corporation (the "Company"), in connection with the Company's
registration on Form S-8 under the Securities Act of 1933 (the "Securities Act")
of 2,000,000 shares (the "Shares") of Class A Common Stock, par value $0.01 per
share, of the Company, which may be purchased in the open market and offered
from time to time under the Capstar Broadcasting Partners 401(k) Retirement Plan
and Trust (the "Plan") and of an indeterminate amount of interests in the Plan
under the Company's Registration Statement on Form S-8 (the "Registration
Statement") filed with the Securities and Exchange Commission on August 31,
1998.
In reaching the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as we deemed necessary or advisable for
purposes of this opinion, including (i) the Registration Statement, (ii) the
Amended and Restated Certificate of Incorporation of the Company, as filed with
the Secretary of State of the State of Delaware, (iii) the Bylaws of the
Company, (iv) certain minutes of meetings of, and resolutions adopted by, the
Board of Directors of the Company relating to the Plan, and (v) the Plan.
We have assumed that (i) all information contained in all documents we
reviewed is true, correct and complete, (ii) all signatures on all documents we
reviewed are genuine, (iii) all documents submitted to us as originals are true
and complete, (iv) all documents submitted to us as copies are true and complete
copies of the originals thereof, and (v) all persons executing and delivering
the documents we examined were competent to execute and deliver such documents.
Based on the foregoing, and having due regard for the legal
considerations we deem relevant, we are of the opinion that each Share, when
issued pursuant to the terms of the Plan, will be legally issued, fully paid and
non-assessable.
<PAGE> 2
Capstar Broadcasting Corporation
August 31, 1998
Page 2
This opinion is limited in all respects to the laws of the State of
Texas, the Delaware General Corporation Law and the federal laws of the United
States of America. You should be aware that we are not admitted to the practice
of law in the State of Delaware.
This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 8, 1997, on our audits of the
consolidated financial statements of Capstar Broadcasting Corporation and
Subsidiaries as of December 31, 1996 and 1997, and for each of the three years
in the period ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
Austin, Texas
August 31, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference of our reports dated (i) February
10, 1997 with respect to the consolidated financial statements of Commodore
Media, Inc. and Subsidiaries, (ii) February 3, 1997 with respect to the
consolidated financial statements of Southern Star Communications Inc., formerly
known as Osborn Communications Corporation, and (iii) March 5, 1998, except for
Notes 2 and 14 as to which the date is April 27, 1998, with respect to the
consolidated financial statements of Capstar Communications, Inc., formerly
known as SFX Broadcasting, Inc. and Subsidiaries, in the Registration Statement
on Form S-8 pertaining to Capstar Broadcasting Corporation Class A Common Stock
and interest in Capstar Broadcasting Partners 401(k) Retirement Plan and Trust.
/s/ Ernst & Young LLP
New York, New York
August 31, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 8, 1997, on our audits of the
consolidated financial statements of Benchmark Communications Radio Limited
Partnership as of December 31, 1995 and 1996, and for each of the three years in
the period ended December 31, 1996.
/s/ PricewaterhouseCoopers LLP
Dallas, Texas
August 31, 1998
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 13, 1997, on our audit of the
consolidated financial statements of Community Pacific Broadcasting Company L.P.
as of December 31, 1996 and for the year then ended.
/s/ PricewaterhouseCoopers LLP
San Jose, California
August 31, 1998
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 3, 1997 on our audit of the
consolidated financial statements of Midcontinent Broadcasting Co. of Wisconsin,
Inc. as of December 31, 1996 and for the year then ended.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
August 31, 1998
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 3, 1997 on our audit of the
consolidated financial statements of Point Communications Limited Partnership as
of December 31, 1996 and for the year then ended.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
August 31, 1998
<PAGE> 1
EXHIBIT 23.7
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated May 14, 1997, on
the financial statements of Ameron Broadcasting, Inc. included in the Capstar
Broadcasting Corporation Prospectus dated May 26, 1998.
/s/ Arthur Andersen LLP
St. Louis, Missouri
August 31, 1998
<PAGE> 1
EXHIBIT 23.8
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 20, 1998, on the financial statements of Patterson Broadcasting, Inc. and
subsidiaries, included in or made part of Capstar Broadcasting Corporation's
Registration Statement on Form S-1 (File No. 333-48819), as amended on May 26,
1998, and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
August 31, 1998
