<PAGE>
As filed with the Securities and Exchange Commission on February 26, 1999
Registration No.333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CONDOR TECHNOLOGY SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 54-1814931
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
170 JENNIFER ROAD, SUITE 325
ANNAPOLIS, MARYLAND 21401
(Address of Principal Executive Offices) (Zip Code)
-------------------------------------
CONDOR TECHNOLOGY SOLUTIONS, INC.
401(K) RETIREMENT SAVINGS PLAN
(Full title of the plan)
------------------------------------
JOHN F. MCCABE, ESQUIRE WITH A COPY TO:
Vice President and General Counsel D. SCOTT FREED, ESQUIRE
Condor Technology Solutions, Inc. Whiteford, Taylor & Preston L.L.P.
170 Jennifer Road, Suite 325 Seven Saint Paul Street
Annapolis, Maryland 21401 Baltimore, Maryland 21202
(410) 266-8700 (410) 347-8700
(Name, address and telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount Proposed maximum Proposed maximum
to be registered to be offering price aggregate Amount of
registered per share (1) offering price (1) registration fee
---------- --------------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock (par value 125,000 $ 11.8125 $ 1,476,562.50 $ 442.97
$.01 per share)(2)
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low sale
prices of the Common Stock on the Nasdaq National Market on February 19, 1999
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein. Pursuant
to Rule 457(h)(2) under the Securities Act of 1933, no separate registration fee
is required with respect to the plan interests being registered hereby.
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of registered securities will
begin as soon as possible after such effective date.
<PAGE>
PART I
INFORMATION IN THE SECTION 10(A) PROSPECTUS(1)
Documents containing the information required to be provided in this
Part I will be separately sent or given to employees participating in the 401(k)
Retirement Savings Plan (the "Plan") as contemplated by Rule 428(b)(1) under the
Securities Act of 1933, as amended (the "Securities Act"). In accordance with
the instructions to Part I of Form S-8, such documents will not be filed with
the Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 under the Securities Act.
- ------------------------------------
(1) Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended (hereinafter, the
"Securities Act"), and the Note to Part I of Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, filed or to be filed with the
Commission, are, or shall be deemed to be, incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997.
(b) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
(c) Current Report on Form 8-K dated December 22, 1998 as
amended on February 22, 1999.
(d) The description of the common stock, par value $.01 per
share (the "Common Stock"), of the Registrant contained in its Registration
Statement on Form S-1, and amendments thereto (File No. 333-37179), which is
incorporated by reference into its Registration Statement on Form 8-A (File No.
0-23635) filed by the Registrant pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(e) All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold. 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. The documents required to be so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-Laws provide that the Company shall, to the fullest
extent permitted by Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL"), as amended from time to time, indemnify all persons whom
it may indemnify pursuant thereto.
Section 145 of the DGCL permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlements actually and reasonably incurred by them in connection with any
action, suit or proceeding brought by third parties by reason of the fact that
they were or are directors, officers, employees or agents of the corporation, if
such directors, officers, employees or agents acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agents in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnity for such adjudication of
liability.
Article Seven of the Company's Certificate of Incorporation provides
that the Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the DGCL, which makes directors liable for unlawful dividends or
unlawful stock repurchases or redemptions, or (d) for transactions from which
directors derive improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index on Page II-7.
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the
II-3
<PAGE>
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
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 Annapolis, State of Maryland, on February 16, 1999.
CONDOR TECHNOLOGY SOLUTIONS, INC.
By:/s/ Kennard F. Hill
-------------------------------------------------
Kennard F. Hill,
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act, the 401(k)
Retirement Savings Plan has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of
Annapolis, State of Maryland, on February 15, 1999.
401(k) RETIREMENT SAVINGS PLAN
BY:/s/ William J. Caragol, Jr.
-------------------------------------------------
William J. Caragol, Jr.
Vice President
as Plan Administrator
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director whose signature
appears below constitutes and appoints John F. McCabe and William J. Caragol,
Jr., or either of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign for the undersigned any and all
amendments or post-effective amendments to this Registration Statement on Form
S-8 relating to the issuance of Common Stock of the Registrant and participation
interests in the Plan, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission.
We hereby confirm all acts taken by such agents and attorneys-in-fact, or any
one or more of them, as herein authorized.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Kennard F. Hill Chairman of the Board and Chief February 16, 1999
- ------------------- Executive Officer (principal
Kennard F. Hill executive officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Daniel J. Roche President and Chief Operating February 15, 1999
- ------------------- Officer
Daniel J. Roche
/s/ William J. Caragol, Jr. Chief Financial Officer February 15, 1999
- --------------------------- (principal financial and
William J. Caragol, Jr. accounting officer)
/s/ C. Lawrence Meador Director February 16, 1999
- ----------------------
C. Lawrence Meador
/s/ Peter T. Garahan Director February 16, 1999
- --------------------
Peter T. Garahan
/s/ Ann Torre Grant Director February 16, 1999
- -------------------
Ann Torre Grant
/s/ William E. Hummel Director February 16, 1999
- ---------------------
William E. Hummel
/s/ Dennis Logue Director February 16, 1999
- ----------------
Dennis Logue
/s/ Edward J. Mathias Director February 16, 1999
- ---------------------
Edward J. Mathias
/s/ William M. Newport Director February 16, 1999
- ----------------------
William M. Newport
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
4.1 Condor Technology Solutions, Inc. 401(k) Retirement Savings Plan
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of Deloitte & Touche LLP
24 Power of Attorney (included on the Signature Page)
</TABLE>
II-7
<PAGE>
Exhibit 4.1
CONDOR TECHNOLOGY SOLUTIONS, INC. 401(K) RETIREMENT SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS...........................................................................................1
1.01 "Plan"..............................................................................................1
1.02 "Employer"..........................................................................................1
1.03 "Trustee"...........................................................................................1
1.04 "Plan Administrator"................................................................................1
1.05 "Administrative Committee"..........................................................................1
1.06 "Employee"..........................................................................................1
1.07 "Highly Compensated Employee".......................................................................1
1.08 "Participant".......................................................................................2
1.09 "Beneficiary".......................................................................................2
1.10 "Compensation"......................................................................................2
1.11 "Account"...........................................................................................3
1.12 "Accrued Benefit"...................................................................................3
1.13 "Nonforfeitable"....................................................................................3
1.14 "Plan Year".........................................................................................3
1.15 "Effective Date"....................................................................................3
1.16 "Plan Entry Date"...................................................................................3
1.17 "Accounting Date"...................................................................................3
1.18 "Trust".............................................................................................3
1.19 "Trust Fund"........................................................................................4
1.20 "Nontransferable Annuity"...........................................................................4
1.21 "ERISA".............................................................................................4
1.22 "Code"..............................................................................................4
1.23 "Service"...........................................................................................4
1.24 "Hour of Service"...................................................................................4
1.25 "Disability"........................................................................................6
1.26 Service for Predecessor Employer....................................................................6
1.27 Related Employers...................................................................................6
1.28 Leased Employees....................................................................................6
1.29 Determination of Top Heavy Status...................................................................7
1.30 Plan Maintained by More Than One Employer...........................................................9
1.31 "Participating Employer"............................................................................9
1.32 "Related Employer"..................................................................................9
1.33 "Sponsor"...........................................................................................9
ARTICLE II - EMPLOYEE PARTICIPANTS...............................................................................10
2.01 Eligibility........................................................................................10
2.02 Year of Service - Participation....................................................................10
2.03 Break in Service - Participation...................................................................11
2.04 Participation upon Re-employment...................................................................11
ARTICLE III - EMPLOYER CONTRIBUTIONS AND FORFEITURES.............................................................12
3.01 Amount.............................................................................................12
3.02 Determination of Contribution......................................................................13
3.03 Time of Payment of Contribution....................................................................13
3.04 Contribution Allocation............................................................................13
</TABLE>
<PAGE>
<TABLE>
<S> <C>
3.05 Forfeiture Allocation..............................................................................15
3.06 Accrual of Benefit.................................................................................15
3.07 Limitations on Allocations to Participants' Accounts...............................................16
3.08 Definitions - Article III..........................................................................18
ARTICLE IV - PARTICIPANT CONTRIBUTIONS...........................................................................21
4.01 Participant Rollover Contributions.................................................................21
4.02 Participant Contribution - Forfeitability..........................................................21
4.03 Participant Contribution - Withdrawal/Distribution.................................................22
4.04 Participant Contribution - Accrued Benefit.........................................................22
ARTICLE V - TERMINATION OF SERVICE - PARTICIPANT VESTING.........................................................23
5.01 Normal Retirement Age..............................................................................23
5.02 Participant Disability or Death....................................................................23
5.03 Vesting Schedule...................................................................................23
5.04 Cash-Out Distributions to Partially-Vested Participants/ Restoration of
Forfeited Accrued Benefit...............................................................................23
5.05 Segregated Account for Repaid Amount...............................................................25
5.06 Year of Service - Vesting..........................................................................25
5.07 Break In Service - Vesting.........................................................................25
5.08 Included Years of Service - Vesting................................................................26
5.09 Forfeiture Occurs..................................................................................26
ARTICLE VI - TIME AND METHOD OF PAYMENT OF BENEFITS..............................................................27
6.01 Time of Payment of Accrued Benefit.................................................................27
6.02 Method of Payment of Accrued Benefit...............................................................30
6.03 Benefit Payment Elections..........................................................................33
6.04 Annuity Distributions to Participants and Surviving Spouses........................................35
6.05 Waiver Election - Qualified Joint and Survivor Annuity.............................................37
6.06 Waiver Election - Preretirement Survivor Annuity...................................................38
6.07 Distributions under Domestic Relations Orders......................................................39
ARTICLE VII - EMPLOYER ADMINISTRATIVE PROVISIONS.................................................................41
7.01 Information to Administrative Committee............................................................41
7.02 No Liability.......................................................................................41
7.03 Indemnity of Certain Fiduciaries...................................................................41
7.04 Employer Direction of Investment...................................................................41
7.05 Amendment to Vesting Schedule......................................................................42
ARTICLE VIII - PARTICIPANT ADMINISTRATIVE PROVISIONS.............................................................43
8.01 Beneficiary Designation............................................................................43
8.02 No Beneficiary Designation/Death of Beneficiary....................................................43
8.03 Personal Data to Administrative Committee..........................................................44
8.04 Address for Notification...........................................................................44
8.05 Assignment or Alienation...........................................................................44
8.06 Litigation against the Trust.......................................................................44
8.07 Appeal Procedure for Denial of Benefits............................................................44
8.08 Participant Direction of Investment................................................................45
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE IX - ADMINISTRATIVE COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS............................47
9.01 Members' Compensation, Expenses....................................................................47
9.02 Term...............................................................................................47
9.03 Powers.............................................................................................47
9.04 General............................................................................................47
9.05 Funding Policy.....................................................................................48
9.06 Manner of Action...................................................................................48
9.07 Authorized Representative..........................................................................48
9.08 Interested Member..................................................................................49
9.09 Individual Accounts................................................................................49
9.10 Value of Participant's Accrued Benefit.............................................................49
9.11 Allocation and Distribution of Net Income Gain or Loss.............................................49
9.12 Individual Statement...............................................................................50
9.13 Account Charged. ..................................................................................50
9.14 Unclaimed Account Procedure........................................................................50
ARTICLE X - CUSTODIAN/TRUSTEE, POWERS AND DUTIES.................................................................51
10.01 Acceptance........................................................................................51
10.02 Receipt of Contributions..........................................................................51
10.03 Investment Powers.................................................................................51
10.04 Records and Statements............................................................................54
10.05 Fees and Expenses from Fund.......................................................................54
10.06 Parties to Litigation.............................................................................54
10.07 Professional Agents...............................................................................54
10.08 Distribution of Cash or Property..................................................................54
10.09 Distribution Directions...........................................................................54
10.10 Third Party/Multiple Trustees.....................................................................55
10.11 Resignation.......................................................................................55
10.12 Removal...........................................................................................55
10.13 Interim Duties and Successor Trustee..............................................................55
10.14 Valuation of Trust................................................................................55
10.15 Limitation on Liability - If Investment Manager, Ancillary Trustee or
Independent Fiduciary Appointed.........................................................................56
10.16 Investment in Group Trust Fund....................................................................56
10.17 Appointment of Ancillary Trustee or Independent Fiduciary.........................................56
ARTICLE XI - PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY..............................................58
11.01 Insurance Benefit.................................................................................58
ARTICLE XII - MISCELLANEOUS......................................................................................59
12.01 Evidence..........................................................................................59
12.02 No Responsibility for Employer Action.............................................................59
12.03 Fiduciaries not Insurers..........................................................................59
12.04 Waiver of Notice..................................................................................59
12.05 Successors........................................................................................59
12.06 Word Usage........................................................................................59
12.07 State Law.........................................................................................59
12.08 Employment Not Guaranteed.........................................................................60
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE XIII - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION.........................................................61
13.01 Exclusive Benefit.................................................................................61
13.02 Amendment by Employer.............................................................................61
13.03 Discontinuance....................................................................................62
13.04 Full Vesting on Termination.......................................................................62
13.05 Merger/Direct Transfer............................................................................62
13.06 Termination.......................................................................................63
ARTICLE XIV - PROVISIONS RELATING TO CODE Section 401(k) AND TO CODE
Section 401(M)...................................................................................................65
14.01 Section 401(k) Arrangement....................................................................... 65
14.02 Definitions.......................................................................................65
14.03 Annual Elective Deferral Limitation...............................................................68
14.04 Actual Deferral Percentage ("ADP") Test...........................................................68
14.05 Nondiscrimination Rules for Employer Matching Contributions/
Participant Nondeductible Contributions.................................................................71
14.06 Multiple Use Limitation...........................................................................74
ARTICLE XV - EXTENSION OF PLAN TO RELATED EMPLOYERS..............................................................75
15.01 Adoption by Related Employers.....................................................................75
15.02 Termination of Participation......................................................................75
15.03 Authority.........................................................................................75
</TABLE>
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC. 401(K) RETIREMENT SAVINGS PLAN
WITNESSETH:
Condor Technology Solutions, Inc., a corporation organized under the
laws of the State of Delaware, establishes a Plan for the administration and
distribution of contributions made by the Employer for the purpose of providing
retirement benefits for eligible Employees. The provisions of this Plan apply
solely to an Employee whose employment with the Employer terminates on or after
the Effective Date of the Plan. If an Employee's employment with the Employer
terminates prior to the Effective Date, that Employee is not entitled to any
benefit under the Plan.
Now, therefore, in consideration of their mutual covenants, the
Employer and the Trustee agree as follows:
ARTICLE I - DEFINITIONS
1.01 "PLAN" means the retirement plan established by the Employer in
the form of this Agreement, designated as the Condor Technology Solutions, Inc.
401(k) Retirement Savings Plan.
1.02 "EMPLOYER" means Condor Technology Solutions, Inc. or any other
employer (a "Participating Employer") who adopts this Plan in accordance with
the terms of Article XV.
Employers shall be eligible to participate in this Plan with the
consent of the Sponsor as provided in Appendix B of this Plan.
1.03 "TRUSTEE" means CG Trust Company, or any successor in office who
in writing accepts the position of Trustee.
1.04 "PLAN ADMINISTRATOR" is the Administrative Committee unless the
Employer designates another person to hold the position of Plan Administrator.
In addition to his other duties, the Plan Administrator has full responsibility
for compliance with the reporting and disclosure rules under ERISA as respects
this Agreement.
1.05 "ADMINISTRATIVE COMMITTEE" means the Administrative Committee as
from time to time constituted.
1.06 "EMPLOYEE" means any common law employee of the Sponsor and the
Related Employers and any Leased Employees. "Employee" excludes anyone whom the
Employer treats as an independent contractor other than Leased Employees.
1.07 "HIGHLY COMPENSATED EMPLOYEE" means an Employee who, during the
Plan Year or during the preceding Plan Year is more than 5% owner of the
Employer (applying the constructive ownership rules of Code Section 318, and
applying the principles of Code Section 318, for an unincorporated entity);
or who, during the preceding Plan Year has Compensation in excess of $80,000
(as adjusted by the Commissioner of Internal Revenue for the relevant year)
and, if the Employer elects, was part of the top-paid 20% group of Employees
(based on
1
<PAGE>
Compensation for the preceding Plan Year).
For purposes of this Section 1.07, "Compensation" means Compensation
as defined in Section 1.10, except any exclusions from Compensation do not
apply, and Compensation must include "elective contributions" (as defined in
Section 1.10). The Administrative Committee must make the determination of
who is a Highly Compensated Employee, including the determinations of the
number and identity of the top paid 20% group, consistent with Code Section
414(q) and regulations issued under that Code Section. The Employer may make
a calendar year data election to determine the Highly Compensated Employees
for the Plan Year, as prescribed by Treasury regulations or by other guidance
published in the Internal Revenue Bulletin. A calendar year data election
must apply to all plans of the Employer which reference the highly
compensated employee definition in Code Section 414(q).
The term "Highly Compensated Employee" also includes any former
Employee who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday.
1.08 "PARTICIPANT" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.09 "BENEFICIARY" is a person designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the Plan until
the Trustee has fully distributed his benefit to him. A Beneficiary's right to
(and the Plan Administrator's, the Administrative Committee's or a Trustee's
duty to provide to the Beneficiary) information or data concerning the Plan does
not arise until he first becomes entitled to receive a benefit under the Plan.
1.10 "COMPENSATION" means W-2 wages as defined under Code Section
3401(a) for purposes of federal income tax withholding at the source, and all
payments to an Employee in the course of the Employer's trade or business,
for which the Employer must furnish the Employee a written statement under
Code Sections 6041(d) and 6051(a)(3) (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses).
As long as the instructions to Form W-2, Box 10, are consistent with the
instructions for the 1990 or 1991 Form W-2, the Employer may treat the amount
reported in Box 10 as satisfying this definition. The Administrative
Committee will determine Compensation by disregarding any rules limiting the
remuneration included as wages based on the nature or location of the
employment or services performed. Compensation also includes elective
contributions made by the Employer on the Employee's behalf. "Elective
contributions" are amounts excludible from the Employee's gross income under
Code Sections 125, 402(e)(3), 402(h), 403(b) or 408(p), and contributed by
the Employer, at the Employee's election, to a Code Section 401(k)
arrangement, a Simplified Employee Pension, a SIMPLE plan, a cafeteria plan
or tax-sheltered annuity. A Compensation payment includes Compensation paid
by the Employer to an Employee through another person under the common
paymaster provisions in Code Sections 3121(s) and 3306(p).
Any reference in this Plan to Compensation is a reference to the
definition in this
2
<PAGE>
Section 1.10, unless the Plan reference specifies a modification to this
definition. The Administrative Committee will take into account only
Compensation actually paid for the relevant period.
SPECIAL DEFINITION FOR SALARY REDUCTION CONTRIBUTIONS. For purposes of
determining the Employee's salary reduction contributions under a salary
reduction agreement, "Compensation" means Compensation as defined in this
Section 1.10, determined prior to the reduction authorized by that salary
reduction agreement.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning on or
after January 1, 1997, the Administrative Committee shall not take into account
more than $160,000 (or such larger or smaller amount as the Commissioner of
Internal Revenue may prescribe) of any Participant's Compensation.
(2) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.10, except the Employer may elect
to include or to exclude elective contributions. The Employer's election
described above must be consistent and uniform with respect to all Employees
and all plans of the Employer for any particular Plan Year. The Employer,
irrespective of clause (2), may elect to exclude from this nondiscrimination
definition of Compensation any items of Compensation excludible under Code
Section 414(s) and the applicable Treasury regulations, provided such
adjusted definition conforms to the nondiscrimination requirements of those
regulations.
1.11 "ACCOUNT" means the separate account(s) which the Administrative
Committee or the Trustee maintains for a Participant under the Plan.
1.12 "ACCRUED BENEFIT" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.13 "NONFORFEITABLE" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.14 "PLAN YEAR" means the fiscal year of the Plan, a 12 consecutive
month period ending every December 31.
1.15 "EFFECTIVE DATE" of this Plan is January 1, 1999.
1.16 "PLAN ENTRY DATE" means the date(s) prescribed by Section 2.01.
1.17 "ACCOUNTING DATE" is the last day of the Plan Year. Unless
otherwise specified in the Plan, the Administrative Committee will make all Plan
allocations for a particular Plan Year as of the Accounting Date of that Plan
Year.
1.18 "TRUST" means the separate Trust created under the Plan.
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1.19 "TRUST FUND" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts. This
Plan creates a single Trust for all Employers participating under the Condor
Technology Solutions, Inc. 401(k) Retirement Savings Plan. However, the Trustee
will maintain separate records of account in order to reflect properly each
Participant's Accrued Benefit derived from each participating Employer.
1.20 "NONTRANSFERABLE ANNUITY" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.22 "CODE" means the Internal Revenue Code of 1986, as amended.
1.23 "SERVICE" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.
1.24 "HOUR OF SERVICE" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to payment,
for the performance of duties. The Administrative Committee credits Hours of
Service under this paragraph (a) to the Employee for the computation period in
which the Employee performs the duties, irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has received
an award. The Administrative Committee credits Hours of Service under this
paragraph (b) to the Employee for the computation period(s) to which the award
or the agreement pertains rather than for the computation period in which the
award, agreement or payment is made; and
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(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is terminated),
for reasons other than for the performance of duties during a computation
period, such as leave of absence, vacation, holiday, sick leave, illness,
incapacity (including disability), layoff, jury duty or military duty. The
Administrative Committee will credit no more than 501 Hours of Service under
this paragraph (c) to an Employee on account of any single continuous period
during which the Employee does not perform any duties (whether or not such
period occurs during a single computation period). The Administrative
Committee credits Hours of Service under this paragraph (c) in accordance
with the rules of paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2,
which the Plan, by this reference, specifically incorporates in full within
this paragraph (c).
The Administrative Committee will not credit an Hour of Service
under more than one of the above paragraphs. A computation period for
purposes of this Section 1.24 is the Plan Year, Year of Service period, Break
in Service period or other period, as determined under the Plan provision for
which the Administrative Committee is measuring an Employee's Hours of
Service. The Administrative Committee will resolve any ambiguity with respect
to the crediting of an Hour of Service in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Administrative Committee will
credit every Employee with Hours of Service on the basis of the "actual"
method. For purposes of the Plan, "actual" method means the determination of
Hours of Service from records of hours worked and hours for which the
Employer makes payment or for which payment is due from the Employer.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Administrative Committee must credit Hours of Service during an Employee's
unpaid absence period due to maternity or paternity leave. The Administrative
Committee considers an Employee on maternity or paternity leave if the
Employee's absence is due to the Employee's pregnancy, the birth of the
Employee's child, the placement with the Employee of an adopted child, or the
care of the Employee's child immediately following the child's birth or
placement. The Administrative Committee credits Hours of Service under this
paragraph on the basis of the number of Hours of Service the Employee would
receive if he were paid during the absence period or, if the Administrative
Committee cannot determine the number of Hours of Service the Employee would
receive, on the basis of 8 hours per day during the absence period. The
Administrative Committee will credit only the number (not exceeding 501) of
Hours of Service necessary to prevent an Employee's Break in Service. The
Administrative Committee credits all Hours of Service described in this
paragraph to the computation period in which the absence period begins or, if
the Employee does not need these Hours of Service to prevent a Break in
Service in the computation period in which his absence period begins, the
Administrative Committee credits these Hours of Service to the immediately
following computation period.
(C) QUALIFIED MILITARY SERVICE. Hour of Service also includes any Service the
Plan must credit in order to satisfy the crediting of Service requirements of
Code Section 414(u).
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1.25 "DISABILITY" means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Administrative Committee considers
will be of long continued duration. A Participant also is disabled if he incurs
the permanent loss or loss of use of a member or function of the body, or is
permanently disfigured, and incurs a Separation from Service. The Plan considers
a Participant disabled on the date the Administrative Committee determines the
Participant satisfies the definition of disability. The Administrative Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Administrative Committee will apply the provisions of
this Section 1.25 in a nondiscriminatory, consistent and uniform manner.
1.26 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer. The Plan takes into account
all service of all Employees with any entity acquired by (either by acquisition
of stock or assets) or merged into Condor Technology Solutions, Inc. or its
Related Employers for purposes of participation under Article II and for
purposes of vesting under Article V.
1.27 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code Section
414(c)) or an affiliated service group (as defined in Code Section 414(m) or in
Code Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours of
Service, determining Years of Service and Breaks in Service under Articles II
and V, applying the Coverage Test under Section 3.06(E), applying the
limitations on allocations in Part 2 of Article III, applying the top heavy
rules and the minimum allocation requirements of Article III, the definitions of
Employee, Highly Compensated Employee, Compensation and Leased Employee, and for
any other purpose required by the applicable Code section or by a Plan
provision. However, an Employer may contribute to the Plan and only by being a
signatory to a Participation Agreement to the Plan. If one or more of the
Employer's related group members become Participating Employers by executing a
Participation Agreement to this Plan, the term "Employer" includes the
participating related group members for all purposes of the Plan.
1.28 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee
of the Employer. A "Leased Employee" is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
Section 144(a)(3)) on a substantially full time basis for at least one year and
who performs such services under primary direction or control of the Employer.
If a Leased Employee is treated as an Employee by reason of this Section 1.28 of
the Plan, "Compensation" includes Compensation from the leasing organization
which is attributable to services performed for the Employer.
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(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective contributions
(as defined in Section 1.10).
(B) OTHER REQUIREMENTS. The Administrative Committee must apply this Section
1.28 in a manner consistent with Code Sections 414(n) and 414(o) and the
regulations issued under those Code sections.
1.29 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a Plan Year
if the top heavy ratio as of the Determination Date exceeds 60%. The Top Heavy
Ratio is a fraction, the numerator of which is the sum of the present value of
Accrued Benefits of all Key Employees as of the Determination Date and the
denominator of which is a similar sum determined for all Employees. The
Administrative Committee must include in the top heavy ratio, as part of the
present value of Accrued Benefits, any contribution not made as of the
Determination Date but includible under Code Section 416 and the applicable
Treasury regulations, and distributions made within the Determination Period.
The Administrative Committee must calculate the top heavy ratio by disregarding
the Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any
Non-Key Employee who was formerly a Key Employee, and by disregarding the
Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service with the
Employer during the Determination Period. The Administrative Committee must
calculate the top heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code Section
416 and the regulations under that Code section.
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If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Administrative Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Administrative Committee must take into
account distributions to a Participant, the Administrative Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Administrative Committee will calculate the present value of accrued
benefits under defined benefit plans or simplified employee pension plans
included within the group in accordance with the terms of those plans, Code
Section 416 and the regulations under that Code section. If a Participant in a
defined benefit plan is a Non-Key Employee, the Administrative Committee will
determine his accrued benefit under the accrual method, if any, which is
applicable uniformly to all defined benefit plans maintained by the Employer or,
if there is no uniform method, in accordance with the slowest accrual rate
permitted under the fractional rule accrual method described in Code Section
411(b)(1)(C). To calculate the present value of benefits from a defined benefit
plan, the Administrative Committee will use the actuarial assumptions (interest
and mortality only) prescribed by the defined benefit plan(s) to value benefits
for top heavy purposes. If an aggregated plan does not have a valuation date
coinciding with the Determination Date, the Administrative Committee must value
the Accrued Benefits in the aggregated plan as of the most recent valuation date
falling within the twelve-month period ending on the Determination Date, except
as Code Section 416 and applicable Treasury regulations require for the first
and second plan year of a defined benefit plan. The Administrative Committee
will calculate the top heavy ratio with reference to the Determination Dates
that fall within the same calendar year.
Definitions. For purposes of applying the provisions of this Section
1.29:
(a) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan Year in the
Determination Period: (i) has Compensation in excess of 50% of the dollar amount
prescribed in Code Section 415(b)(1)(A) (relating to defined benefit plans) and
is an officer of the Employer; (ii) has Compensation in excess of the dollar
amount prescribed in Code Section 415(c)(1)(A) (relating to defined contribution
plans) and is one of the Employees owning the ten largest interests in the
Employer; (iii) is a more than 5% owner of the Employer; or (iv) is a more than
1% owner of the Employer and has Compensation of more than $150,000. The
constructive ownership rules of Code Section 318 (or the principles of that
section, in the case of an unincorporated Employer,) will apply to determine
ownership in the Employer. The number of officers taken into account under
clause (i) will not exceed the greater of 3 or 10% of the total number (after
application of the Code Section 414(q) exclusions) of Employees, but no more
than 50 officers. The Administrative Committee will make the determination of
who is a Key Employee in accordance with Code Section 416(I)(1) and the
regulations under that Code section.
(b) "Non-Key Employee" is an employee who does not meet the definition
of Key Employee.
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(c) "Compensation" means Compensation as determined under Section 1.07
for purposes of identifying Highly Compensated Employees.
(d) "Required Aggregation Group" means: (1) each qualified plan of the
Employer in which at least one Key Employee participates at any time during the
Determination Period; and (2) any other qualified plan of the Employer which
enables a plan described in clause (1) to meet the requirements of Code
Section 401(a)(4) or of Code Section 410.
(e) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only if such
group would satisfy in the aggregate the requirements of Code Section
401(a)(4) and of Code Section 410. The Administrative Committee will
determine the Permissive Aggregation Group.
(f) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.27.
(g) "Determination Date" for any Plan Year is the Accounting Date of
the preceding Plan Year or, in the case of the first Plan Year of the Plan, the
Accounting Date of that Plan Year. The "Determination Period" is the 5 year
period ending on the Determination Date.
1.30 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER.
(A) TREATMENT OF EMPLOYERS. If more than one employer maintains this Plan, then
for purposes of determining Service and Hours of Service, the Administrative
Committee will treat all Employers maintaining this Plan as a single employer.
(B) PLAN ALLOCATIONS. The Administrative Committee must allocate all Employer
contributions and forfeitures to each Participant in the Plan, in accordance
with Article III, without regard to which contributing Employer employs the
Participant. A Participant's Compensation includes Compensation from all
participating Employers, irrespective of which Employers are contributing to the
Plan.
1.31 "PARTICIPATING EMPLOYER" has the meaning given in Section 1.02.
1.32 "RELATED EMPLOYER" has the meaning given in Section 1.27.
1.33 "SPONSOR" means Condor Technology Solutions, Inc.
* * * * * * * * * * * * * * *
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ARTICLE II - EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee (other than an Excluded Employee)
becomes a Participant in the Plan on the Plan Entry Date (if employed on that
date) immediately following the later of the date on which he completes 90 days
of Service or attains age 18. "Plan Entry Date" means the Effective Date and
January 1, April 1, July 1, October 1.
In the event of an acquistion by the Employer of an entity (whether by
stock sale or asset sale) which becomes a Participating Employer, then "Plan
Entry Date" means the first day of the month following the Participating
Employer's adoption of a Participation Agreement or as soon thereafter as
practical.
An Employee is an Excluded Employee if he is:
A member of a collective bargaining unit, unless the collective
bargaining agreement provides otherwise. An Employee is a member of a collective
bargaining unit if he is included in a unit of employees covered by an agreement
which the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers if there is evidence
that retirement benefits were the subject of good faith bargaining between such
employee representatives and such employer or employers. The term "employee
representatives" does not include an organization more than one half of the
members of which are owners, officers or executives of the Employer.
A nonresident alien who does not receive any earned income (as defined
in Code Section 911(d)(2)) from the Employer which constitutes United States
source income (as defined in Code Section 861(a)(3)).
A Leased Employee.
If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded
Employee, the Administrative Committee will limit that Participant's sharing in
the allocation of Employer contributions and Participant forfeitures, if any,
under the Plan by disregarding his Compensation paid by the Employer for
services rendered in his capacity as an Excluded Employee. However, during such
period of exclusion, the Participant, without regard to employment
classification, continues to receive credit for vesting under Article V for each
included Year of Service and the Participant's Account continues to share fully
in Trust Fund allocations under Section 9.11.
If an Excluded Employee who is not a Participant becomes eligible to participate
in the Plan by reason of a change in employment classification, he will
participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes into
account all of the Participant's included Years of Service with the Employer as
an Excluded Employee for purposes of vesting credit under Article V.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation
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in the Plan under Section 2.01, the Plan takes into account all of his Years of
Service with the Employer, except as provided in Section 2.03. "Year of Service"
means an eligibility computation period during which the Employee completes not
less than 1,000 Hours of Service. The initial eligibility computation period is
the first 12 consecutive month period measured from the Employment Commencement
Date. The Plan measures the subsequent periods by reference to the Plan Year,
beginning with the Plan Year which includes the first anniversary of the
Employee's Employment Commencement Date. "Employment Commencement Date" means
the date on which the Employee first performs an Hour of Service for the
Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in
the Plan, the Plan does not apply any Break in Service rule.
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
with the Employer terminates will re-enter the Plan as a Participant on the date
of his re-employment. An Employee who satisfies the Plan's eligibility
conditions but who terminates employment with the Employer prior to becoming a
Participant will become a Participant on the later of the Plan Entry Date on
which he would have entered the Plan had he not terminated employment or the
date of his re-employment. Any Employee who terminates employment prior to
satisfying the Plan's eligibility conditions becomes a Participant in accordance
with the provisions of Section 2.01.
* * * * * * * * * * * * * * *
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ARTICLE III - EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
THROUGH 3.06
3.01 AMOUNT.
(A) CONTRIBUTION FORMULA. For each Plan Year, the Employer will contribute to
the Trust the following amounts:
DEFERRAL CONTRIBUTIONS. The amount by which the Participants have
elected to reduce their Compensation for the Plan Year under their salary
reduction agreements on file with the Administrative Committee.
MATCHING CONTRIBUTIONS. An amount equal to a percentage the Employer
may from time to time deem advisable of the Participant's eligible
contributions. The Employer will determine the amount of its matching
contributions by disregarding Participants not entitled to an allocation of
matching contributions.
QUALIFIED NONELECTIVE CONTRIBUTIONS. The amount the Employer, in its
sole discretion, designates as qualified nonelective contributions.
NONELECTIVE CONTRIBUTIONS. For each Plan Year, the Employer will
contribute to the Trust the additional amount which the Employer may from time
to time deem advisable.
RESTRICTIONS ON CONTRIBUTIONS. Although the Employer may contribute to
this Plan irrespective of whether it has net profits, the Employer intends the
Plan to be a profit sharing plan for all purposes of the Code. The Employer may
not make a contribution to the Trust for any Plan Year to the extent the
contribution would exceed the Participant's Maximum Permissible Amounts. See
Part 2 of this Article III.
ELIGIBLE CONTRIBUTIONS. Under the matching contribution formula, a
Participant's "eligible contributions" are the deferral contributions allocated
to the Participant for the matching contributions allocation period. Eligible
contributions do not include deferral contributions that are excess deferrals
under Section 14.03. For this purpose: (a) excess deferrals relate first to
deferral contributions for the Plan Year not otherwise eligible for a matching
contribution; and (2) if the Plan Year is not a calendar year, the excess
deferrals for a Plan Year are the last deferrals made for a calendar year.
Notwithstanding any provision in this Article III to the contrary, the
Plan will provide contributions and Service credit with respect to qualified
military service in accordance with Code Section 414(u).
(B) RETURN OF CONTRIBUTIONS. The Employer contributes to this Plan on the
condition its contribution is not due to a mistake of fact and the Revenue
Service will not disallow the deduction for its contribution. The Trustee, upon
written request from the Employer, must return to the Employer the amount of the
Employer's contribution made by the Employer by
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mistake of fact or the amount of the Employer's contribution disallowed as a
deduction under Code Section 404. The Trustee will not return any portion of the
Employer's contribution under the provisions of this paragraph more than one
year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time prescribed
by the Code or applicable Treasury regulations.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. To make allocations under the Plan, the Administrative
Committee must establish the following accounts for each Participant: Deferral
Contributions Account, Regular Matching Contributions Account, Qualified
Nonelective Contributions Account, Employer Contributions Account.
DEFERRAL CONTRIBUTIONS. The Administrative Committee will allocate to
each Participant's Deferral Contributions Account the deferral contributions the
Employer makes to the Trust on behalf of the Participant. The Administrative
Committee will make this allocation as of the date the deferral contributions
are deposited to the Trust.
MATCHING CONTRIBUTIONS. The Administrative Committee will allocate
matching contributions as of the date the contributions is deposited to the
Trust. The matching contribution formula will be applied on a payroll by payroll
basis. The Administrative Committee will allocate the matching contributions to
the Regular Matching Contributions Account of each Participant who satisfies the
accrual requirements for matching contributions specified in Section 3.06.
QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Administrative Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of qualified nonelective
contributions. The Administrative Committee will make the allocation to each
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eligible Participant's Account in the same ratio that the Participant's
Compensation for the Plan Year bears to the total Compensation of all eligible
Participants for the Plan Year. For purposes of allocating qualified nonelective
contributions, the term "eligible Participant" means any Participant who is a
Nonhighly Compensated Employee and who satisfies the conditions of Section 3.06.
NONELECTIVE CONTRIBUTIONS. Subject to any restoration required
under Section 5.04, the Administrative Committee will allocate and credit each
annual Employer contribution (and Participant forfeitures, if any) to the
Account of each Participant who satisfies the conditions of Section 3.06.The
Administrative Committee will make this allocation in the same ratio that each
Participant's Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year.
(B) TOP HEAVY MINIMUM ALLOCATION.
(1) MINIMUM ALLOCATION. If the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed
by the Employer on the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year, irrespective of whether he satisfies the
Hours of Service condition under Section 3.06; and
(b) The top heavy minimum allocation is the lesser of 3% of
the Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key Employee.
However, if a defined benefit plan maintained by the Employer which benefits
a Key Employee depends on this Plan to satisfy the antidiscrimination rules
of Code Section 401(a)(4) or the coverage rules of Code Section 410 (or
another plan benefiting the Key Employee so depends on such defined benefit
plan), the top heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key Employees.
(2) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his failure to make elective
deferrals under a Code Section 401(k) arrangement or because of his failure to
make mandatory employee contributions. For purposes of clause (b),
"Compensation" means Compensation as defined in Section 1.10, except: (i)
Compensation does not include elective contributions; (ii) any exclusions from
Compensation (other than the exclusion of elective contributions) do not apply;
and (iii) any modification to the definition of Compensation in Section 3.06
does not apply.
(3) DETERMINING CONTRIBUTION RATES. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of Employer contributions
(not including Employer contributions to Social Security) and forfeitures
allocated to the Participant's Account for the Plan Year divided by his
Compensation for the entire Plan Year. However, for purposes of satisfying a
Participant's top heavy minimum allocation in Plan Years beginning after
December 31, 1988, a Participant's contribution rate does not include any
elective contributions under a Code Section 401(k) arrangement nor any Employer
matching contributions necessary to satisfy nondiscrimination requirements of
Code Section 401(k) or of Code Section 401(m). To
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determine a Participant's contribution rate, the Administrative Committee must
treat all qualified top heavy defined contribution plans maintained by the
Employer (or by any related Employers described in Section 1.27) as a single
plan.
(4) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Key Employee, the Plan does not
require any top heavy minimum allocation for the Plan Year, unless a top heavy
minimum allocation applies because of the maintenance by the Employer of more
than one plan.
(5) METHOD OF COMPLIANCE. The Plan will satisfy the top heavy minimum
allocation in accordance with this Section 3.04(B)(5). The Administrative
Committee first will allocate the Employer contributions (and Participant
forfeitures, if any) for the Plan Year in accordance with the allocation formula
under Section 3.04(A). The Employer then will contribute an additional amount
for the Account of any Participant entitled under this Section 3.04(B) to a top
heavy minimum allocation and whose contribution rate for the Plan Year, under
this Plan and any other plan aggregated under paragraph (3), is less than the
top heavy minimum allocation. The additional amount is the amount necessary to
increase the Participant's contribution rate to the top heavy minimum
allocation. The Administrative Committee will allocate the additional
contribution to the Account of the Participant on whose behalf the Employer
makes the contribution.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. Subject to any
restoration allocation required under Sections 5.04 or 9.14 and the special
forfeiture allocation for certain excess aggregate contributions described in
Section 14.05, the Administrative Committee first will use Participant
forfeitures to pay the Plan's ordinary and necessary administrative expenses for
the Plan Year. The Administrative Committee will then allocate a Participant
forfeiture in accordance with Section 3.04, to reduce the Employer matching
contributions and nonelective contribution for the Plan Year in which the
forfeiture occurs. The Administrative Committee will continue to hold the
undistributed, non-vested portion of a terminated Participant's Accrued Benefit
in his Account solely for his benefit until a forfeiture occurs at the time
specified in Section 5.09 or if applicable, until the time specified in Section
9.14.
3.06 ACCRUAL OF BENEFIT. The Administrative Committee will determine
the accrual of benefit (Employer contributions and Participant forfeitures) on
the basis of the Plan Year.
(A) COMPENSATION TAKEN INTO ACCOUNT. In allocating an Employer qualified
nonelective or nonelective contribution to a Participant's Account, the
Administrative Committee, except for purposes of determining the top heavy
minimum contribution under Section 3.04(B), will take into account only the
Compensation determined for the portion of the Plan Year in which the Employee
actually is a Participant.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the top heavy minimum allocation
requirement of Section 3.04(B), the Administrative Committee will not allocate
any portion of an Employer contribution for a Plan Year to any Participant's
Account if the Participant does not complete a minimum of 1,000 Hours of Service
during the Plan Year, unless the Participant terminates employment during the
Plan Year because of death or disability or because of the attainment of Normal
Retirement Age in the current Plan Year or in a prior Plan
15
<PAGE>
Year. This Hours of Service requirement does not apply to an allocation of
matching contributions or deferral contributions.
(C) EMPLOYMENT REQUIREMENT. A Participant who, during a particular Plan Year,
completes the Hours of Service requirement under Section 3.06(B) will not share
in the allocation of Employer contributions and Participant forfeitures, if any,
for that Plan Year unless he is employed by the Employer on the Accounting Date
of that Plan Year. This employment requirement does not apply if the Participant
terminates employment during the Plan Year because of death or disability or
because of the attainment of Normal Retirement Age in the current Plan Year or
in a prior Plan Year. This employment requirement does not apply to an
allocation of matching contributions or deferral contributions.
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 AND 3.08
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount
of Annual Additions which the Administrative Committee may allocate under this
Plan on a Participant's behalf for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount the Employer otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the Employer will reduce
the amount of its contribution so the Annual Additions for the Limitation Year
will equal the Maximum Permissible Amount. If an allocation of Employer
contributions, pursuant to Section 3.04, would result in an Excess Amount (other
than an Excess Amount resulting from the circumstances described in Section
3.07(B)) to the Participant's Account, the Administrative Committee will
reallocate the Excess Amount to the remaining Participants who are eligible for
an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Administrative Committee will make this reallocation
on the basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
(A) ESTIMATION OF COMPENSATION. Prior to the determination of the Participant's
actual Compensation for a Limitation Year, the Administrative Committee may
determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Administrative
Committee must make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Administrative Committee must reduce any
Employer contributions (including any allocation of forfeitures) based on
estimated annual Compensation by any Excess Amounts carried over from prior
years. As soon as is administratively feasible after the end of the Limitation
Year, the Administrative Committee will determine the Maximum Permissible Amount
for such Limitation Year on the basis of the Participant's actual Compensation
for such Limitation Year.
16
<PAGE>
(B) DISPOSITION OF EXCESS AMOUNT. If, pursuant to Section 3.07(A), or because of
the allocation of forfeitures, there is an Excess Amount with respect to a
Participant for a Limitation Year, the Administrative Committee will dispose of
such Excess Amount as follows:
(a) The Administrative Committee will return any nondeductible
voluntary Employee contributions to the Participant to the extent the return
would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation Year,
then the Administrative Committee will use the Excess Amount(s) to reduce future
Employer contributions (including any allocation of forfeitures) under the Plan
for the next Limitation Year and for each succeeding Limitation Year, as is
necessary, for the Participant. The Participant may elect to limit his
Compensation for allocation purposes to the extent necessary to reduce his
allocation for the Limitation Year to the Maximum Permissible Amount and
eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the Limitation
Year, then the Administrative Committee will hold the Excess Amount unallocated
in a suspense account. The Administrative Committee will apply the suspense
account to reduce Employer Contributions (including allocation of forfeitures)
for all remaining Participants in the next Limitation Year, and in each
succeeding Limitation Year if necessary. Neither the Employer nor any Employee
may contribute to the Plan for any Limitation Year in which the Plan is unable
to allocate fully a suspense account maintained pursuant to this paragraph (c).
(d) The Administrative Committee will not distribute any Excess
Amount(s) to Participants or to former Participants.
(C) MORE THAN ONE PLAN. The Employer contributes under other defined
contribution plans in addition to its contributions under this Plan. If the
Administrative Committee allocated an Excess Amount to a Participant's Account
on an allocation date of this Plan which coincides with an allocation date of
the other defined contribution plan, the Administrative Committee will attribute
the total Excess Amount allocated as of such date to the other defined
contribution plan. The Administrative Committee will determine the Excess Amount
by treating the Annual Additions attributable to a welfare benefit fund as
allocated first, irrespective of the actual allocation under the welfare benefit
fund.
(D) DEFINED BENEFIT PLAN LIMITATION. If the Participant presently participates,
or has ever participated under a defined benefit plan maintained by the
Employer, then the sum of the defined benefit plan fraction and the defined
contribution plan fraction for the Participant for that Limitation Year must not
exceed 1.0. To the extent necessary to satisfy this limitation, the Employer
will reduce the Participant's contributions or allocations under the defined
contribution plan under which the Participant participates.
17
<PAGE>
3.08 DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee contributions.
Except to the extent provided in Treasury regulations, Annual Additions include
excess contributions described in Code Section 401(k), excess aggregate
contributions described in Code Section 401(m) and excess deferrals described in
Code Section 402(g), irrespective of whether the plan distributes or forfeits
such excess amounts. Annual Additions also include Excess Amounts reapplied to
reduce Employer contributions under Section 3.07. Amounts allocated after March
31, 1984, to an individual medical account (as defined in Code Section
415(l)(2)) included as part of a defined benefit plan maintained by the Employer
are Annual Additions. Furthermore, Annual Additions include contributions paid
or accrued after December 31, 1985, for taxable years ending after December 31,
1985, attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, but only for purposes of the dollar limitation applicable to the
Maximum Permissible Amount.
(b) "Compensation" - For purposes of applying the limitations of Part 2
of this Article III, "Compensation" means Compensation as defined in Section
1.10, except Compensation does not include any exclusion, if any, from
Compensation.
(c) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, the $30,000 amount as adjusted under Code Section 415(d)), or (ii) 25%
of the Participant's Compensation for the Limitation Year. If there is a short
Limitation Year because of a change in Limitation Year, the Administrative
Committee will multiply the $30,000 (or adjusted) limitation by the following
fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
(d) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.27. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Administrative Committee will
determine related employers described in Section 1.27 by modifying Code Section
414(b) and (c) in accordance with Code Section 415(h).
(e) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(f) "Limitation Year" - The Plan Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year for which the Employer
makes the amendment, creating a short Limitation Year.
18
<PAGE>
(g) "Defined contribution plan" - A retirement plan which provides
for an individual account for each participant and for benefits based solely
on the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account. The
Administrative Committee must treat all defined contribution plans (whether
or not terminated) maintained by the Employer as a single plan. Solely for
purposes of the limitations of Part 2 of this Article III, the Administrative
Committee will treat employee contributions made to a defined benefit plan
maintained by the Employer as a separate defined contribution plan. The
Administrative Committee also will treat as a defined contribution plan an
individual medical account (as defined in Code Section 415(l)(2)) included as
part of a defined benefit plan maintained by the Employer and, for taxable
years ending after December 31, 1985, a welfare benefit fund under Code
Section 419(e) maintained by the Employer to the extent there are
post-retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)).
(h) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Administrative Committee
must treat all defined benefit plans (whether or not terminated) maintained by
the Employer as a single plan.
(i) "Defined benefit plan fraction" -
PROJECTED ANNUAL BENEFIT OF THE PARTICIPANT UNDER THE DEFINED BENEFIT PLAN(S)
- --------------------------------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation" in paragraph (l)) of
the dollar limitation in effect under Code Section 415(b)(1)(A) for
the Limitation Year, or (ii) 140% of the Participant's
average Compensation for his high three (3)
consecutive Years of Service
To determine the denominator of this fraction, the
Administrative Committee will make any adjustment required under Code
Section 415(b) and will determine a Year of Service as a Plan Year in
which the Employee completed at least 1,000 Hours of Service. The
"projected annual benefit" is the annual retirement benefit (adjusted
to an actuarially equivalent straight life annuity if the plan
expresses such benefit in a form other than a straight life annuity or
qualified joint and survivor annuity) of the Participant under the
terms of the defined benefit plan on the assumptions he continues
employment until his normal retirement age (or current age, if later)
as stated in the defined benefit plan, his compensation continues at
the same rate as in effect in the Limitation Year under consideration
until the date of his normal retirement age and all other relevant
factors used to determine benefits under the defined benefit plan
remain constant as of the current Limitation Year for all future
Limitation Years.
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<PAGE>
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the dollar limitation used in the denominator of this fraction will
not be less than the Participant's Current Accrued Benefit. A Participant's
Current Accrued Benefit is the sum of the annual benefits under such defined
benefit plans which the Participant had accrued as of the end of the 1986
Limitation Year (the last Limitation Year beginning before January 1, 1987),
determined without regard to any change in the terms or conditions of the Plan
made after May 5, 1986, and without regard to any cost of living adjustment
occurring after May 5, 1986. This Current Accrued Benefit rule applies only if
the defined benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 as in effect at the end of the 1986 Limitation
Year.
(j) "Defined contribution plan fraction"-
The sum, as of the close of the Limitation Year, as of the close of the
Limitation Year, OF THE ANNUAL ADDITIONS TO THE PARTICIPANT'S ACCOUNT UNDER THE
DEFINED CONTRIBUTION PLAN(S)
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service with the
Employer: (i) 125% (subject to the "100% limitation" in paragraph (l))
of the dollar limitation in effect under Code Section 415(c)(1)(A)
for the Limitation Year (determined without regard to
the special dollar limitations for employee stock
ownership plans), or (ii) 35% of the
Participant's Compensation for the
Limitation Year
For purposes of determining the defined contribution plan
fraction, the Administrative Committee will not recompute Annual
Additions in Limitation Years beginning prior to January 1, 1987, to
treat all Employee contributions as Annual Additions. If the Plan
satisfied Code Section 415 for Limitation Years beginning prior to
January 1, 1987, the Administrative Committee will redetermine the
defined contribution plan fraction and the defined benefit plan
fraction as of the end of the 1986 Limitation Year, in accordance with
this Section 3.19. If the sum of the redetermined fractions exceeds
1.0, the Administrative Committee will subtract permanently from the
numerator of the defined contribution plan fraction an amount equal to
the product of (1) the excess of the sum of the fractions over 1.0,
times (2) the denominator of the defined contribution plan fraction. In
making the adjustment, the Administrative Committee must disregard any
accrued benefit under the defined benefit plan which is in excess of
the Current Accrued Benefit. This Plan continues any transitional rules
applicable to the determination of the defined contribution plan
fraction under the Employer's Plan as of the end of the 1986 Limitation
Year.
(k) "100% limitation." If the 100% limitation applies, the
Administrative Committee must determine the denominator of the defined benefit
plan fraction and the denominator of the defined contribution plan fraction by
substituting 100% for 125%. The 100% limitation applies only if: (i) the Plan's
top heavy ratio exceeds 90%; or (ii) the Plan's top heavy ratio is greater than
60%, and the Employer does not provide extra minimum benefits which satisfy Code
Section 416(h)(2).
* * * * * * * * * * * * * * *
20
<PAGE>
ARTICLE IV - PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's consent and after filing with the Trustee the form prescribed by the
Administrative Committee, may contribute cash, loans or other property to the
Trust other than as a voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer either directly or
indirectly from one qualified plan to another qualified plan. Before accepting a
rollover contribution, the Trustee may require an Employee to furnish
satisfactory evidence that the proposed transfer is in fact a "rollover
contribution" which the Code permits an employee to make to a qualified plan. A
rollover contribution is not an Annual Addition under Part 2 of Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee, in its
sole discretion, agrees to invest the rollover contribution as part of the Trust
Fund. The Trustee will not have any investment responsibility with respect to a
Participant's segregated rollover Account. The Participant, however, from time
to time, may direct the Trustee in writing as to the investment of his
segregated rollover Account in property, or property interests, of any kind,
real, personal or mixed; provided however, the Participant may not direct the
Trustee to make loans to his Employer. A Participant's segregated rollover
Account alone will bear any extraordinary expenses resulting from investments
made at the direction of the Participant. As of the Accounting Date (or other
valuation date) for each Plan Year, the Administrative Committee will allocate
and credit the net income (or net loss) from a Participant's segregated rollover
Account and the increase or decrease in the fair market value of the assets of a
segregated Account solely to that Account. The Trustee is not liable nor
responsible for any loss resulting to any Beneficiary, nor to any Participant,
by reason of any sale or investment made or other action taken pursuant to and
in accordance with the direction of the Participant. In all other respects, the
Trustee will hold, administer and distribute a rollover contribution in the same
manner as any Employer contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent and
in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility conditions,
the Administrative Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
If the Employee has a Separation from Service prior to becoming a Participant,
the Trustee will distribute his rollover contribution Account to him as if it
were an Employer contribution Account.
4.02 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of his
Accrued Benefit is derived from his Participant contributions described in this
Article IV.
21
<PAGE>
4.03 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant,
by giving prior written notice to the Trustee, may withdraw all or any part of
the value of his Accrued Benefit derived from his Participant contributions
described in this Article IV. A distribution of Participant contributions must
comply with the joint and survivor requirements described in Article VI, if
those requirements apply to the Participant. A Participant may not exercise his
right to withdraw the value of his Accrued Benefit derived from his Participant
contributions more than once during any Plan Year. The Trustee, in accordance
with the direction of the Administrative Committee, will distribute a
Participant's unwithdrawn Accrued Benefit attributable to his Participant
contributions in accordance with the provisions of Article VI applicable to the
distribution of the Participant's Nonforfeitable Accrued Benefit.
4.04 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Administrative
Committee must maintain a separate Account(s) in the name of each Participant to
reflect the Participant's Accrued Benefit under the Plan derived from his
Participant contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the balance of his
separate Participant contribution Account(s).
If this Plan includes deductible employee contributions ("DECs") made
for certain taxable years beginning prior to January 1, 1987, the Administrative
Committee will continue to maintain a separate accounting for the Participant's
Accrued Benefit attributable to DECs, including DECs which are part of a
rollover contribution described in Section 4.01. The Administrative Committee
will treat the accumulated DECs as part of the Participant's Accrued Benefit for
all purposes of the Plan, except for purposes of determining the top heavy ratio
under Section 1.29. The Participant may not apply any portion of his accumulated
deductible employee contributions to the purchase of life insurance.
* * * * * * * * * * * * * * *
22
<PAGE>
ARTICLE V - TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is 65
years of age. A Participant's Accrued Benefit derived from Employer
contributions is 100% Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment
with the Employer terminates as a result of death or disability, the
Participant's Accrued Benefit derived from Employer contributions will be 100%
Nonforfeitable.
5.03 VESTING SCHEDULE.
(1) DEFERRAL CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. A Participant has a 100% Nonforfeitable interest at all
times in his Deferral Contributions Account and Qualified Nonelective
Contributions Account.
(2) MATCHING CONTRIBUTION ACCOUNT AND EMPLOYER CONTRIBUTIONS ACCOUNT.
Except as provided in Sections 5.01 and 5.02, for each Year of Service, a
Participant's Nonforfeitable percentage of his Matching Contribution Account and
Employer Contributions Account equals the percentage in the following vesting
schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE PERCENT OF NONFORFEITABLE
WITH THE EMPLOYER ACCRUED BENEFIT
----------------- -------------------------
<S> <C>
Less than 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0%
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 20%
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 40%
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . 60%
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . 80%
5 or more . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
</TABLE>
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially-vested Participant receives a cash-out distribution before he incurs a
Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
23
<PAGE>
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Administrative Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes restoration of
all Code Section 411(d)(6) protected benefits with respect to that restored
Accrued Benefit, in accordance with applicable Treasury regulations. The
Administrative Committee will not restore a re-employed Participant's Accrued
Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment
date with the Employer following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined
in Section 5.08). This condition also applies if the Participant makes repayment
within the Plan Year in which he incurs the Forfeiture Break in Service and that
Forfeiture Break in Service would result in a complete forfeiture of the amount
the Administrative Committee otherwise would restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Administrative
Committee will restore the Participant's Accrued Benefit as of the Plan Year
Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Administrative Committee, to the
extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the
Administrative Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain
for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
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<PAGE>
To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Administrative Committee to make the required
restoration, the Employer must contribute, without regard to any requirement or
condition of Section 3.01, the additional amount necessary to enable the
Administrative Committee to make the required restoration. If, for a particular
Plan Year, the Administrative Committee must restore the Accrued Benefit of more
than one re-employed Participant, then the Administrative Committee will make
the restoration allocations to each such Participant's Account in the same
proportion that a Participant's restored amount for the Plan Year bears to the
restored amount for the Plan Year of all re-employed Participants. The
Administrative Committee will not take into account any allocation under this
Section 5.04 in applying the limitation on allocations under Part 2 of Article
III.
(C) 0% VESTED PARTICIPANT. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. Under the deemed cash-out rule, the Administrative
Committee will treat the 0% vested Participant as having received a cash-out
distribution on the date of the Participant's Separation from Service or, if the
Participant's Account is entitled to an allocation of Employer contributions for
the Plan Year in which he separates from Service, on the last day of that Plan
Year. For purposes of applying the restoration provisions of this Section 5.04,
the Administrative Committee will treat the 0% vested Participant as repaying
his cash-out "distribution" on the first date of his re-employment with the
Employer.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Administrative
Committee restores the Participant's Accrued Benefit, as described in Section
5.04, the Trustee will invest the cash-out amount the Participant has repaid in
a segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Administrative Committee restores the
Participant's Accrued Benefit, the Participant's segregated Account remains a
part of the Trust, but it alone shares in any income it earns and it alone bears
any expense or loss it incurs. Unless the repayment qualifies as a rollover
contribution, the Administrative Committee will direct the Trustee to repay to
the Participant as soon as is administratively practicable the full amount of
the Participant's segregated Account if the Administrative Committee determines
either of the conditions of Section 5.04(A) prevents restoration as of the
applicable Accounting Date, notwithstanding the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any Plan Year during which an Employee completes not
less than 1,000 Hours of Service with the Employer.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service with the Employer.
25
<PAGE>
5.08 INCLUDED YEARS OF SERVICE - VESTING.
(A) INCLUDED YEARS OF SERVICE. For purposes of determining "Years of Service"
under Section 5.06, the Plan takes into account all Years of Service an Employee
completes with the Employer or Predecessor Employer.
(B) FORFEITURE BREAK IN SERVICE. For the sole purpose of determining a
Participant's Nonforfeitable percentage of his Accrued Benefit derived from
Employer contributions which accrued for his benefit prior to a Forfeiture Break
in Service, the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a Forfeiture Break
in Service when he incurs 5 consecutive Breaks in Service.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on the
earlier of:
(a) The last day of the Plan Year in which the Participant first incurs
a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Administrative Committee determines the percentage of a
Participant's Accrued Benefit forfeiture, if any, under this Section 5.09 solely
by reference to the vesting schedule of Section 5.03. A Participant will not
forfeit any portion of his Accrued Benefit for any other reason or cause except
as expressly provided by this Section 5.09 or as provided under Section 9.14.
* * * * * * * * * * * * * * *
26
<PAGE>
ARTICLE VI - TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless the Participant or the
Beneficiary elects in writing to a different time or method of payment, the
Administrative Committee will direct the Trustee to commence distribution of a
Participant's Nonforfeitable Accrued Benefit in accordance with this Section
6.01. A Participant must consent, in writing, to any distribution required under
this Section 6.01 if the present value of the Participant's Nonforfeitable
Accrued Benefit, at the time of the distribution to the Participant, exceeds
$5,000 and the Participant has not attained the later of Normal Retirement Age
or age 62. Furthermore, the Participant's spouse also must consent, in writing,
to any distribution, for which Section 6.04 requires the spouse's consent. For
all purposes of this Article VI, the term "annuity starting date" means the
first day of the first period for which the Plan pays an amount as an annuity or
in any other form but in no event is the "annuity starting date" earlier than a
Participant's Separation from Service with the Employer. A distribution date
under this Article VI, unless otherwise specified within the Plan, is each day
of the Plan Year, or as soon as administratively practicable following that
distribution date. For purposes of the consent requirements under this Article
VI, if the present value of the Participant's Nonforfeitable Accrued Benefit, at
the time of any distribution, exceeds $5,000, the Administrative Committee must
treat that present value as exceeding $5,000 for purposes of all subsequent Plan
distributions to the Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $5,000.
If the Participant's Separation from Service is for any reason other than death,
the Administrative Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum as soon as
administratively practicable following the Participant's Separation from
Service, but in no event later than the 60th day following the close of the Plan
Year in which the Participant attains Normal Retirement Age. If the Participant
is entitled to an allocation of Employer contributions or Participant
forfeitures for the Plan Year in which he has a Separation from Service, the
distribution may not occur earlier than the first day of the Plan Year beginning
after his Separation from Service.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $5,000. If the
Participant's Separation from Service is for any reason other than death, the
Administrative Committee will direct the Trustee to commence distribution of the
Participant's Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of an election by
the Participant, the Administrative Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum (or,
if applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's Separation
from Service.
(3) DISABILITY. If the Participant's Separation from Service is because
of his
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disability, the Administrative Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, at the same time as
any other Separation from Service, subject to the notice and consent
requirements of this Article VI and to the applicable mandatory commencement
dates described in Paragraph (1) or in Paragraph (2).
(B) REQUIRED BEGINNING DATE
(1) TIMING OF REQUIRED DISTRIBUTION. If any distribution commencement date
described under Paragraph (A) of this Section 6.01, either by Plan provision
or by Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Administrative Committee instead must direct the
Trustee to make distribution on the Participant's Required Beginning Date,
subject to the transitional election, if applicable, under Section 6.03(D). A
Participant's Required Beginning Date is the April 1 following the close of
the calendar year in which the Participant attains age 70 1/2 if the
Participant is a more than 5% owner with respect to the Plan Year ending in
that calendar year. For any other Participant, his Required Beginning Date is
the April 1 following the close of the calendar year in which the Participant
separates from Service or, if later, the April 1 following the close of the
calendar year in which the Participant attains age 70 1/2. A mandatory
distribution at the Participant's Required Beginning Date will be in lump sum
(or, if applicable, the normal annuity form of distribution required under
Section 6.04) unless the Participant, pursuant to the provisions of this
Article VI, makes a valid election to receive an alternative form of payment.
(2) PARTICIPANT ELECTION UPON ATTAINING AGE 70 1/2. A Participant upon
attaining age 70 1/2, until he retires, has a continuing election to receive
all or any portion of his Accrued Benefit. A Participant only may make one
withdrawal per Plan Year. The Trustee, as directed by the Administrative
Committee, will distribute the amount(s) withdrawn by a Participant in single
sum.
A Participant must make an election under this Section 6.01 (B)(2) on a
form prescribed by the Administrative Committee at any time during the Plan Year
for which his election is to be effective. In his written election, the
Participant must specify the percentage or dollar amount of his Accrued Benefit
he wishes the Trustee to distribute to him. The Participant's election relates
solely to the percentage or dollar amount specified in his election form and his
right to elect to receive an amount, if any, for a particular Plan Year greater
than the percentage or dollar amount specified in his election form terminates
on the Accounting Date of that Plan Year. The Trustee must make a distribution
to a Participant in accordance with his election under this Section 6.01(B)(2)
as soon as administratively practicable after the Participant files his written
election with the Administrative Committee. The Trustee will distribute the
balance of the Participant's Accrued Benefit not distributed pursuant to his
election(s) in accordance with the other distribution provisions of this Plan.
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(C) DEATH OF THE PARTICIPANT. The Administrative Committee will direct the
Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued Benefit
remaining in the Trust at the time of the Participant's death. Subject to the
requirements of Section 6.04, the Administrative Committee will determine the
death benefit by reducing the Participant's Nonforfeitable Accrued Benefit by
any security interest the Plan has against that Nonforfeitable Accrued Benefit
by reason of an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT
EXCEED $5,000. The Administrative Committee, subject to the requirements of
Section 6.04, must direct the Trustee to distribute the deceased Participant's
Nonforfeitable Accrued Benefit in a single cash sum, as soon as administratively
practicable following the Participant's death or, if later, the date on which
the Administrative Committee receives notification of or otherwise confirms the
Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$5,000. The Administrative Committee will direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit at the time and in the
form elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Administrative Committee will direct the
Trustee to distribute the Participant's undistributed Nonforfeitable Accrued
Benefit in a lump sum as soon as administratively practicable on or after the
first distribution date following the close of the Plan Year in which the
Participant's death occurs or, if later, the first distribution date following
the date the Administrative Committee receives notification of or otherwise
confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form
(other than a joint and survivor annuity) this Article VI would permit for a
Participant.
(D) DEFAULT ON A LOAN. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Administrative Committee pursuant to
Section 9.04, the Plan treats the default as a distributable event. The Trustee,
at the time of the default, will reduce the Participant's Nonforfeitable Accrued
Benefit by the lesser of the amount in default (plus accrued interest) or the
Plan's security interest in that Nonforfeitable Accrued Benefit. To the extent
the loan is attributable to the Participant's Deferral Contributions Account or
Qualified Matching Contributions Account or Qualified Nonelective Contributions
Account, the Trustee will not reduce the Participant's Nonforfeitable Accrued
Benefit unless the Participant has separated from Service or unless the
Participant has attained age 59 1/2.
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6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor expectancy of
the Participant and his Beneficiary; or (c) by payment in a life annuity, a
joint and 50% or 100% survivor annuity, or a life annuity with a guaranteed
payment of 5, 10, 15 or 20 years.
The distribution options permitted under this Section 6.02 are
available only if the present value of the Participant Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds $5,000. To
facilitate installment payments under this Article VI, the Administrative
Committee may direct the Trustee to segregate all or any part of the
Participant's Accrued Benefit in a separate Account. The Trustee will invest the
Participant's segregated Account in Federally insured interest bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. A segregated Account remains a part of the Trust, but it
alone shares in any income it earns, and it alone bears any expense or loss it
incurs. A Participant or Beneficiary may elect to receive an installment
distribution in the form of a Nontransferable Annuity Contract. Under an
installment distribution, the Participant or Beneficiary, at any time, may elect
to accelerate the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit, subject to the requirements of Section 6.04.
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(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Administrative
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of
payment which, as of the Required Beginning Date, does not satisfy the
minimum distribution requirements under Code Section 401(a)(9) and the
applicable Treasury regulations. The minimum distribution for a calendar year
equals the Participant's Nonforfeitable Accrued Benefit as of the latest
valuation date preceding the beginning of the calendar year divided by the
Participant's life expectancy or, if applicable, the joint and last survivor
expectancy of the Participant and his designated Beneficiary (as determined
under Article VIII, subject to the requirements of the Code Section 401(a)(9)
regulations). The Administrative Committee will increase the Participant's
Nonforfeitable Accrued Benefit, as determined on the relevant valuation date,
for contributions or forfeitures allocated after the valuation date and by
December 31 of the valuation calendar year, and will decrease the valuation
by distributions made after the valuation date and by December 31 of the
valuation calendar year. For purposes of this valuation, the Administrative
Committee will treat any portion of the minimum distribution for the first
distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In computing
a minimum distribution, the Administrative Committee must use the unisex life
expectancy multiples under Treas. Reg. Section 1.72-9. The Administrative
Committee, only upon the Participant's written request, will compute the
minimum distribution for a calendar year subsequent to the first calendar
year for which the Plan requires a minimum distribution by redetermining the
applicable life expectancy. However, the Administrative Committee may not
redetermine the joint life and last survivor expectancy of the Participant
and a nonspouse designated Beneficiary in a manner which takes into account
any adjustment to a life expectancy other than the Participant's life
expectancy.
If the Participant's spouse is not his designated Beneficiary, a
method of payment to the Participant (whether by Participant election or by
Administrative Committee direction) may not provide more than incidental
benefits to the Beneficiary. The Plan must satisfy the Minimum Distribution
Incidental Benefit ("MDIB") requirement in the Treasury regulations issued
under Code Section 401(a)(9) for distributions made on or after the
Participant's Required Beginning Date and before the Participant's death. To
satisfy the MDIB requirement, the Administrative Committee will compute the
minimum distribution required by this Section 6.02(A) by substituting the
applicable MDIB divisor for the applicable life expectancy factor, if the
MDIB divisor is a lesser number. Following the Participant's death, the
Administrative Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable life expectancy
factor and will disregard the MDIB factor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if
the distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries.
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The minimum distribution for the first distribution calendar year is
due by the Participant's Required Beginning Date. The minimum distribution for
each subsequent distribution calendar year, including the calendar year in which
the Participant's Required Beginning Date occurs, is due by December 31 of that
year. If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code Section 401(a)(9) and the
applicable Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had commenced
for the Participant. If the Participant's death occurs prior to his Required
Beginning Date, and the Participant had not commenced an irrevocable annuity
pursuant to Section 6.04, the method of payment to the Beneficiary, subject
to Section 6.04, must provide for completion of payment to the Beneficiary
over a period not exceeding: (i) 5 years after the date of the Participant's
death; or (ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficiary's life expectancy. The Administrative Committee may not direct
payment of the Participant's Nonforfeitable Accrued Benefit over a period
described in clause (ii) unless the Trustee will commence payment to the
designated Beneficiary no later than the December 31 following the close of
the calendar year in which the Participant's death occurred or, if later, and
the designated Beneficiary is the Participant's surviving spouse, December 31
of the calendar year in which the Participant would have attained age 702. If
the Trustee will make distribution in accordance with clause (ii), the
minimum distribution for a calendar year equals the Participant's
Nonforfeitable Accrued Benefit as of the latest valuation date preceding the
beginning of the calendar year divided by the designated Beneficiary's life
expectancy. The Administrative Committee must use the unisex life expectancy
multiples under Treas. Reg. Section 1.72-9 for purposes of applying this
paragraph. The Administrative Committee, only upon the written request of the
Participant or of the Participant's surviving spouse, will recalculate the
life expectancy of the Participant's surviving spouse not more frequently
than annually, but may not recalculate the life expectancy of a nonspouse
designated Beneficiary after the Trustee commences payment to the designated
Beneficiary. The Administrative Committee will apply this paragraph by
treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the
Beneficiary's written request, the Administrative Committee must direct the
Trustee to accelerate payment of all, or any portion, of the Participant's
unpaid Accrued Benefit, as soon as administratively practicable following the
effective date of that request.
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6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
than 30 days, before the Participant's annuity starting date, the Administrative
Committee must provide a benefit notice to a Participant who is eligible to make
an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains the later of Normal Retirement Age or age 62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Administrative Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
election. Any election under this Section 6.03 is subject to the requirements of
Section 6.02 and of Section 6.04. The Participant or Beneficiary must make an
election under this Section 6.03 by filing his election with the Administrative
Committee at any time before the Trustee otherwise would commence to pay a
Participant's Accrued Benefit in accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value of
a Participant's Nonforfeitable Accrued Benefit exceeds $5,000, he may elect to
have the Trustee commence distribution as of any distribution date following his
Separation from Service. However, if the Participant is entitled to an
allocation of Employer contributions or Participant forfeitures in the Plan Year
in which his Separation from Service occurs, the distribution may not commence
earlier than the first day of the Plan Year beginning after that Separation from
Service. The Participant may reconsider an election at any time prior to the
annuity starting date and elect to commence distribution as of any other
distribution date, but not earlier than the date described in the first sentence
of this Paragraph (A). Following his attainment of Normal Retirement Age, a
Participant who has separated from Service may elect distribution as of any
distribution date, irrespective of the restrictions otherwise applicable under
this Section 6.03(A). If the Participant is partially-vested in his Accrued
Benefit, an election under this Paragraph (A) to distribute prior to the
Participant's incurring a Forfeiture Break in Service (as defined in Section
5.08), must be in the form of a cash-out distribution (as defined in Article V).
A Participant may not receive a cash-out distribution if, prior to the time the
Trustee actually makes the cash-out distribution, the Participant returns to
employment with the Employer.
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE.
(1) DEFERRAL CONTRIBUTIONS ACCOUNT, QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. A Participant, until he retires, has a continuing
election to receive all or any portion of his, Qualified Nonelective
Contributions Account or Deferral Contributions Account if he has attained
age 59 1/2 or he satisfies the conditions for hardship as described in
paragraph (4).
(2) REGULAR MATCHING CONTRIBUTIONS AND EMPLOYER CONTRIBUTIONS
ACCOUNT. A Participant, until he retires, has a continuing election to
receive all or any portion of his Regular Matching Contributions Account or
his Employer Contributions Account if he has attained age 59 1/2 or he
satisfies the conditions for hardship as described in paragraph (4).
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<PAGE>
(3) PROCEDURE. A Participant must make an election under this Section
6.03(B) on a form prescribed by the Administrative Committee at any time during
the Plan Year for which his election is to be effective. In his written
election, the Participant must specify the percentage or dollar amount he wishes
the Trustee to distribute to him. The Participant's election relates solely to
the percentage or dollar amount specified in his election form and his right to
elect to receive an amount, if any, for a particular Plan Year greater than the
dollar amount or percentage specified in his election form terminates on the
Accounting Date. The Trustee must make a distribution to a Participant in
accordance with his election under this Section 6.03(B) within the 90 day period
(or as soon as administratively practicable) after the Participant files his
written election with the Trustee. The Trustee will distribute the balance of
the Participant's Accrued Benefit not distributed pursuant to his election(s) in
accordance with the other distribution provisions of this Plan.
(4) DEFINITION OF HARDSHIP. For purposes of this Section 6.03(B), a
hardship distribution must be on account of one or more of the following
immediate and heavy financial needs: (1) medical expenses described in Code
Section 213(d) incurred by the Participant, by the Participant's spouse, or
by any of the Participant's dependents; (2) the purchase (excluding mortgage
payments) of a principal residence for the Participant; (3) the payment of
post-secondary education tuition, for the next 12-month period, for the
Participant, for the Participant's spouse, or for any of the Participant's
dependents; (4) to prevent the eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's principal
residence; or (5) any other event designated by Treasury regulations for the
safe harbor definition of hardship.
RESTRICTIONS. The following restrictions apply to a Participant who
receives a hardship distribution: (a) the Participant may not make elective
deferrals or employee contributions to the Plan for the 12-month period
following the date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need (including any
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution); (c) the Participant
must have obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under this Plan and all other qualified
plans maintained by the Employer; and (d) the Participant agrees to limit
elective deferrals under this Plan and under any other qualified Plan maintained
by the Employer, for the Participant's taxable year immediately following the
taxable year of the hardship distribution, to the 402(g) limitation (as
described in Section 14.03), reduced by the amount of the Participant's elective
deferrals made in the taxable year of the hardship distribution. The suspension
of elective deferrals and employee contributions described in clause (a) also
must apply to all other qualified plans and to all nonqualified plans of
deferred compensation maintained by the Employer, other than any mandatory
employee contribution portion of a defined benefit plan, including stock option,
stock purchase and other similar plans, but not including health or welfare
benefit plans (other than the cash or deferred arrangement portion of a
cafeteria plan).
EARNINGS. For Plan Years beginning after December 31, 1988, a hardship
distribution may not include earnings on an Employee's elective deferrals
credited after December 31, 1988, and may not include qualified matching
contributions and qualified nonelective
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contributions, nor any earnings on such contributions, irrespective of when
credited.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $5,000, the Participant's Beneficiary may
elect to have the Trustee distribute the Participant's Nonforfeitable Accrued
Benefit in a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated in writing by
the Participant and not revoked as of his date of death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Sections 6.01 and
6.02, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Administrative Committee must
distribute the Participant's Nonforfeitable Accrued Benefit in accordance with
that designation, subject however, to the survivor requirements, if applicable,
of Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a
pre-1984 distribution designation, and the Administrative Committee will not
comply with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code Section 401(a)(9) as in
effect on December 31, 1983; (2) the Participant did not have an Accrued Benefit
as of December 31, 1983; (3) the distribution designation does not specify the
timing and form of the distribution and the death Beneficiaries (in order of
priority); (4) the substitution of a Beneficiary modifies the payment period of
the distribution; or, (5) the Participant (or Beneficiary) modifies or revokes
the distribution designation. In the event of a revocation, the Plan must
distribute, no later than December 31 of the calendar year following the year of
revocation, the amount which the Participant would have received under Section
6.02(A) if the distribution designation had not been in effect or, if the
Beneficiary revokes the distribution designation, the amount which the
Beneficiary would have received under Section 6.02(B) if the distribution
designation had not been in effect. The Administrative Committee will apply this
Section 6.03(D) to rollovers and transfers in accordance with Part J of the Code
Section 401(a)(9) Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Administrative Committee must direct the
Trustee to distribute a married or unmarried Participant's Nonforfeitable
Accrued Benefit in the form of a qualified joint and survivor annuity, unless
the Participant makes a valid waiver election as (and within the period)
described in Section 6.05. If, as of the annuity starting date, the Participant
is married, a qualified joint and survivor annuity is an immediate annuity which
is purchasable with the Participant's Nonforfeitable Accrued Benefit and which
provides a life annuity for the Participant and a survivor annuity payable for
the remaining life of the Participant's surviving spouse equal to 50% of the
amount of the annuity payable during the life of the Participant. If, as of the
annuity starting date, the Participant is not married, a qualified joint and
survivor annuity is an immediate life annuity for the Participant which is
purchasable with the Participant's Nonforfeitable Accrued Benefit. Upon a
Participant's separation from service, the Administrative Committee, without
Participant or spousal consent, must direct the Trustee to pay the Participant's
Nonforfeitable Accrued Benefit in a lump sum, in lieu of a qualified joint and
survivor annuity, in accordance with Section 6.01, if the Participant's
Nonforfeitable Accrued Benefit is not greater than $5,000. This Section 6.04(A)
applies only to a Participant who has completed at least one Hour of Service
with the Employer
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<PAGE>
after August 22, 1984.
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to his
annuity starting date, the Administrative Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the
Participant's Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the same
proportion as the Participant's Nonforfeitable Accrued Benefit is attributable
to those contributions. The portion of the Participant's Nonforfeitable Accrued
Benefit not payable under this paragraph is payable to the Participant's
Beneficiary, in accordance with the other provisions of this Article VI. If the
present value of the preretirement survivor annuity does not exceed $5,000, the
Administrative Committee, on or before the annuity starting date, must direct
the Trustee to make a lump sum distribution to the Participant's surviving
spouse, in lieu of a preretirement survivor annuity.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $5,000, the Participant's surviving spouse may elect to
have the Trustee commence payment of the preretirement survivor annuity at any
time following the date of the Participant's death, but not later than the
mandatory distribution periods described in Section 6.02, and may elect any of
the forms of payment described in Section 6.02, in lieu of the preretirement
survivor annuity. In the absence of an election by the surviving spouse, the
Administrative Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Administrative Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant would
have attained Normal Retirement Age; or (iv) the date the Participant would have
attained age 62.
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(D) SPECIAL RULES. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement survivor
annuity, the Administrative Committee must direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with Sections 6.01,
6.02 and 6.03. The Administrative Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03[B]) held by the Plan by reason of a
Participant loan to determine the value of the Participant's Nonforfeitable
Accrued Benefit distributable in the form of a qualified joint and survivor
annuity or preretirement survivor annuity, provided any post-August 18, 1985,
loan satisfied the spousal consent requirement described in Section 10.03[B] of
the Plan. For purposes of applying this Article VI, the Administrative Committee
treats a former spouse as the Participant's spouse or surviving spouse to the
extent provided under a qualified domestic relations order described in Section
6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply
separately to the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. At least
30 days (but not earlier than 90 days), before the Participant's annuity
starting date, the Administrative Committee must provide the Participant a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the Participant's right
to make, and the effect of, a revocation of a waiver election. The Plan does not
limit the number of times the Participant may revoke a waiver of the qualified
joint and survivor annuity or make a new waiver during the election period. The
Participant (and his spouse, if the Participant is married), may revoke an
election to receive a particular form of benefit at any time until the annuity
starting date. The Participant (and his spouse, if applicable) may waive the
30-day election period if the distribution of the elected form of benefit
commences more than 7 days after the Administrative Committee provides the
Participant (and his spouse, if applicable) the written explanation.
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A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this Section 6.05, has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form of
payment designated by the Participant or to any change in that designated form
of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary designation or
to any change in the Participant's Beneficiary designation. The spouse's consent
to a waiver of the qualified joint and survivor annuity is irrevocable, unless
the Participant revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary designation
made by the Participant, if the spouse acknowledges the right to limit that
consent to a specific designation but, in writing, waives that right. The
consent requirements of this Section 6.05 apply to a former spouse of the
Participant, to the extent required under a qualified domestic relations order
described in Section 6.07.
The Administrative Committee will accept as valid a waiver election
which does not satisfy the spousal consent requirements if the Administrative
Committee establishes the Participant does not have a spouse, the Administrative
Committee is not able to locate the Participant's spouse, the Participant is
legally separated or has been abandoned (within the meaning of State law) and
the Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the Treasury will excuse the consent requirement.
If the Participant's spouse is legally incompetent to give consent, the spouse's
legal guardian (even if the guardian is the Participant) may give consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The
Administrative Committee must provide a written explanation of the preretirement
survivor annuity to each married Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the Participant attains age 32 and ending on the last day of the Plan Year in
which the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (4) a reasonable period after a
fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Administrative Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from Service.
The written explanation must describe, in a manner consistent with Treasury
regulations, the terms and conditions of the preretirement survivor annuity
comparable to the explanation of the qualified joint and survivor annuity
required under Section 6.05. The Plan does not limit the number of times the
Participant may revoke a waiver of the preretirement survivor annuity or make a
new waiver during the election period. The election period for waiver of the
preretirement survivor annuity ends on the date of the Participant's death.
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A Participant's waiver election of the preretirement survivor annuity
is not valid unless (a) the Participant makes the waiver election no earlier
than the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the spouse
need not consent to the form of benefit payable to the designated Beneficiary.
The spouse's consent to the waiver of the preretirement survivor annuity is
irrevocable, unless the Participant revokes the waiver election. Irrespective of
the time of election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which he
attains age 35, the Administrative Committee will accept a waiver election as
respects the Participant's Accrued Benefit attributable to his Service prior to
his Separation from Service. Furthermore, if a Participant who has not separated
from Service makes a valid waiver election, except for the timing requirement of
clause (a), the Administrative Committee will accept that election as valid, but
only until the first day of the Plan Year in which the Participant attains age
35. A waiver election described in this paragraph is not valid unless made after
the Participant has received the written explanation described in this Section
6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained
in this Plan prevents the Trustee, in accordance with the direction of the
Administrative Committee, from complying with the provisions of a Qualified
Domestic Relations Order (as defined in Code Section 414(p)). This Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age (as defined under Code Section 414(p))
under the Plan. A distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (1) the order
specifies distribution at that time or permits an agreement between the Plan and
the alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $5,000, and the
order requires, the alternate payee consents to any distribution occurring prior
to the Participant's attainment of earliest retirement age. Nothing in this
Section 6.07 gives a Participant a right to receive distribution at a time
otherwise not permitted under the Plan nor does it permit the alternate payee to
receive a form of payment not otherwise permitted under the Plan.
The Administrative Committee must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Administrative Committee promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Administrative Committee must determine the
qualified status of the order and must notify the Participant and each alternate
payee, in writing, of its determination. The Administrative Committee must
provide notice under this paragraph by mailing to the individual's address
specified in the domestic relations order, or in a manner consistent with
Department of Labor regulations.
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If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Administrative Committee is making its
determination of the qualified status of the domestic relations order, the
Administrative Committee must make a separate accounting of the amounts payable.
If the Administrative Committee determines the order is a qualified domestic
relations order within 18 months of the date amounts first are payable following
receipt of the order, the Administrative Committee will direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrative Committee does not make its determination of the qualified status
of the order within the 18-month determination period, the Administrative
Committee will direct the Trustee to distribute the payable amounts in the
manner the Plan would distribute if the order did not exist and will apply the
order prospectively if the Administrative Committee later determines the order
is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Administrative Committee may direct the
Trustee to invest any partitioned amount in a segregated subaccount or separate
account and to invest the account in Federally insured, interest-bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. A segregated subaccount remains a part of the Trust, but it
alone shares in any income it earns, and it alone bears any expense or loss it
incurs. The Trustee will make any payments or distributions required under this
Section 6.07 by separate benefit checks or other separate distribution to the
alternate payee(s).
* * * * * * * * * * * * * * *
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ARTICLE VII - EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO ADMINISTRATIVE COMMITTEE. The Employer must supply
current information to the Administrative Committee as to the name, date of
birth, date of employment, annual compensation, leaves of absence, Years of
Service and date of termination of employment of each Employee who is, or who
will be eligible to become, a Participant under the Plan, together with any
other information which the Administrative Committee considers necessary. The
Employer's records as to the current information the Employer furnishes to the
Administrative Committee are conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility
to any of its Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of its Administrative Committee (unless the Employer
is the Administrative Committee).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and
saves harmless the Plan Administrator and the members of the Administrative
Committee, and each of them, from and against any and all loss resulting from
liability to which the Plan Administrator and the Administrative Committee, or
the members of the Administrative Committee, may be subjected by reason of any
act or conduct (except willful misconduct or gross negligence) in their official
capacities in the administration of this Trust or Plan or both, including all
expenses reasonably incurred in their defense, in case the Employer fails to
provide such defense. The indemnification provisions of this Section 7.03 do not
relieve the Plan Administrator or any Administrative Committee member from any
liability he may have under ERISA for breach of a fiduciary duty. Furthermore,
the Plan Administrator and the Administrative Committee members and the Employer
may execute a letter agreement further delineating the indemnification agreement
of this Section 7.03, provided the letter agreement must be consistent with and
does not violate ERISA. The indemnification provisions of this Section 7.03
extend to the Trustee (or to a Custodian, if any) solely to the extent provided
by a letter agreement executed by the Trustee (or Custodian) and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and re-investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Employer direction of investment, the
Trustee and the Employer must execute a letter agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.
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7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to amend the vesting schedule at any time, the Administrative Committee
will not apply the amended vesting schedule to reduce the Nonforfeitable
percentage of any Participant's Accrued Benefit derived from Employer
contributions (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less
than the Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. The Participant must file his election
with the Administrative Committee within 60 days of the latest of (a) the
Employer's adoption of the amendment; (b) the effective date of the amendment;
or (c) his receipt of a copy of the amendment. The election described in this
Section 7.05 does not apply to a Participant if the amended vesting schedule
provides for vesting at least as rapid at all times as the vesting schedule in
effect prior to the amendment. For purposes of this Section 7.05, an amendment
to the vesting schedule includes any Plan amendment which directly or indirectly
affects the computation of the Nonforfeitable percentage of an Employee's rights
to his Employer derived Accrued Benefit.
* * * * * * * * * * * * * * *
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ARTICLE VIII - PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any life
insurance proceeds payable to the Participant's Account) in the event of his
death and the Participant may designate the form and method of payment. The
Administrative Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Administrative
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's Beneficiary
designation. However, in the absence of spousal consent (as required by Article
VI) to the Participant's Beneficiary designation: (1) any waiver of the joint
and survivor annuity or of the preretirement survivor annuity is not valid; and
(2) if the Participant dies prior to his annuity starting date, the
Participant's Beneficiary designation will apply only to the portion of the
death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the Participant's surviving spouse is a primary
Beneficiary under the Participant's Beneficiary designation, the Trustee will
satisfy the spouse's interest in the Participant's death benefit first from the
portion which is payable as a preretirement survivor annuity.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02
in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children,
in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise. The Administrative Committee will direct the Trustee as to the method
and to whom the Trustee will make payment under this Section 8.02.
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8.03 PERSONAL DATA TO ADMINISTRATIVE COMMITTEE. Each Participant and
each Beneficiary of a deceased Participant must furnish to the Administrative
Committee such evidence, data or information as the Administrative Committee
considers necessary or desirable for the purpose of administering the Plan. The
provisions of this Plan are effective for the benefit of each Participant upon
the condition precedent that each Participant will furnish promptly full, true
and complete evidence, data and information when requested by the Administrative
Committee, provided the Administrative Committee advises each Participant of the
effect of his failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of
a deceased Participant must file with the Administrative Committee from time to
time, in writing, his post office address and any change of post office address.
Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Administrative
Committee, or as shown on the records of the Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating
to qualified domestic relations orders, neither a Participant nor a Beneficiary
may anticipate, assign or alienate (either at law or in equity) any benefit
provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan is
not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.06 LITIGATION AGAINST THE TRUST. A fiduciary may receive
reimbursement of expenses properly and actually incurred in the performance of
his duties with the Plan.
8.07 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Administrative Committee a written
claim for benefits, if the Participant or Beneficiary determines the
distribution procedures of the Plan have not provided him his proper
Nonforfeitable Accrued Benefit. The Administrative Committee must render a
decision on the claim within 60 days of the Claimant's written claim for
benefits. The Plan Administrator must provide adequate notice in writing to the
Claimant whose claim for benefits under the Plan the Administrative Committee
has denied. The Plan Administrator's notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Administrative Committee based its denial;
(c) A description of any additional material and information needed for
the Claimant to perfect his claim and an explanation of why the material or
information is needed; and
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(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Administrative Committee within 75 days
after receipt of the Plan Administrator's notice of denial of benefits. The Plan
Administrator's notice must further advise the Claimant that his failure to
appeal the action to the Administrative Committee in writing within the 75-day
period will render the Administrative Committee's determination final, binding
and conclusive.
If the Claimant should appeal to the Administrative Committee, he, or
his duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Administrative Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Administrative Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event may
the Administrative Committee render a decision respecting a denial for a claim
for benefits later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Administrative Committee and the name and address of
the Administrative Committee member to whom the Claimant may forward his appeal.
8.08 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right
to direct the Trustee with respect to the investment or re-investment of the
assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment, the Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan, containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the
Administrative Committee, may establish written procedures, incorporated
specifically as part of this Plan, relating to Participant direction of
investment under this Section 8.08. The Trustee will maintain a segregated
investment Account to the extent a Participant's Account is subject to
Participant self-direction. The Trustee is not liable for any loss, nor is the
Trustee liable for any breach, resulting from a Participant's direction of the
investment of any part of his directed Account.
The Administrative Committee, to the extent provided in a written loan
policy adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account under
the Plan.
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If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.
The Administrative Committee or duly authorized individuals appointed
by the Administrative Committee shall choose the allowable investment options
under the Plan.
* * * * * * * * * * * * * * *
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ARTICLE IX - ADMINISTRATIVE COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Administrative Committee to administer the Plan, the members of which may or may
not be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Administrative Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the
Administrative Committee. The members of the Administrative Committee will serve
without compensation for services as such, but the Employer will pay all
expenses of the Administrative Committee, except to the extent the Trust
properly pays for such expenses, pursuant to Article X.
9.02 TERM. Each member of the Administrative Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the
Administrative Committee, the remaining members of the Administrative Committee
may exercise any and all of the powers, authority, duties and discretion
conferred upon the Administrative Committee pending the filling of the vacancy.
9.04 GENERAL. The Administrative Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the
Administrative Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit and the
Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are not
inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and
documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution of
the Trust;
(f) To review and render decisions respecting a claim for (or denial of
a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
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(h) To engage the service of agents who may or may not be Employees of
the Employer whom it may deem advisable to assist it with the performance of its
duties;
(i) To engage the services of an Investment Manager or Managers (as
defined in ERISA Section 3(38)), each of whom will have full power and
authority to manage, acquire or dispose (or direct the Trustee with respect
to acquisition or disposition) of any Plan asset under its control;
(j) To establish, in its sole discretion, a nondiscriminatory policy
(see Section 9.04(A)) which the Trustee must observe in making loans, if any, to
Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and in accordance
with the provisions of the Code.
The Administrative Committee must exercise all of its powers, duties
and discretion under the Plan in a uniform and nondiscriminatory manner.
(A) LOAN POLICY. If the Administrative Committee adopts a loan policy, pursuant
to paragraph (j), the loan policy must be a written document and must include:
(1) the identity of the person or positions authorized to administer the
participant loan program; (2) a procedure for applying for the loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for determining a
reasonable rate of interest; (6) the types of collateral which may secure the
loan; and (7) the events constituting default and the steps the Plan will take
to preserve plan assets in the event of default. This Section 9.04 specifically
incorporates a written loan policy as part of the Employer's Plan.
9.05 FUNDING POLICY. The Administrative Committee will review, not less
often than annually, all pertinent Employee information and Plan data in order
to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Administrative Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Administrative Committee may
authorize any one of its members, or its Secretary, to sign on its behalf any
notices, directions, applications, certificates, consents, approvals, waivers,
letters or other documents. The Administrative Committee must evidence this
authority by an instrument signed by all members and filed with the Trustee.
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9.08 INTERESTED MEMBER. No member of the Administrative Committee may
decide or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Administrative Committee.
9.09 INDIVIDUAL ACCOUNTS. The Administrative Committee will maintain,
or direct the Trustee to maintain, a separate Account or multiple Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan. If a Participant re-enters the Plan subsequent to his having a
Forfeiture Break in Service, the Administrative Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break in
Service Accrued Benefit, unless the Participant's entire Accrued Benefit under
the Plan is 100% Nonforfeitable.
The Administrative Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Administrative Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Administrative Committee must maintain
records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the date of the distribution.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is each Accounting Date and each interim
valuation date determined under Section 10.14 or other Trust Agreement governing
this Plan. As of each valuation date the Administrative Committee must adjust
Accounts to reflect net income, gain or loss since the last valuation date. The
valuation period is the period beginning the day after the last valuation date
and ending on the current valuation date.
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(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The
Administrative Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing the
Accounts for any forfeitures arising under Section 5.09 or under Section 9.14,
for amounts charged during the valuation period to the Accounts in accordance
with Section 9.13 (relating to distributions) and Section 11.01 (relating to
insurance premiums), and for the cash value of incidental benefit insurance
contracts. The Administrative Committee then, subject to the restoration
allocation requirements of Section 5.04 or of Section 9.14, will allocate the
net income, gain or loss pro rata to the adjusted Participant Accounts. The
allocable net income, gain or loss is the net income (or net loss), including
the increase or decrease in the fair market value of assets, since the last
valuation date.
(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives all
income it earns and bears all expense or loss it incurs. The Administrative
Committee will adopt uniform and nondiscriminatory procedures for determining
income or loss of a segregated investment Account in a manner which reasonably
reflects investment directions relating to pooled investments and investment
directions occurring during a valuation period. As of the valuation date, the
Administrative Committee must reduce a segregated Account for any forfeiture
arising under Section 5.09 after the Administrative Committee has made all other
allocations, changes or adjustments to the Account for the Plan Year.
(C) ADDITIONAL RULES. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. This Section 9.11 applies solely to the
allocation of net income, gain or loss of the Trust. The Administrative
Committee will allocate the Employer contributions and Participant forfeitures,
if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each Participant
(and to each Beneficiary) a statement reflecting the condition of his Accrued
Benefit in the Trust as of that date and such other information ERISA requires
be furnished the Participant or Beneficiary. No Participant, except a member of
the Administrative Committee, has the right to inspect the records reflecting
the Account of any other Participant.
9.13 ACCOUNT CHARGED. The Administrative Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Administrative
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Administrative Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary.
* * * * * * * * * * * * * * *
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ARTICLE X - CUSTODIAN/TRUSTEE, POWERS AND DUTIES
THE PROVISIONS OF THIS ARTICLE X DO NOT BECOME EFFECTIVE UNLESS A TRUSTEE
EXECUTES THIS DOCUMENT SPECIFICALLY AGREEING TO BE BOUND BY THE TERMS AND
CONDITIONS OF THIS ARTICLE X. IF A SEPARATE TRUST AGREEMENT IS ENTERED INTO
BETWEEN THE EMPLOYER AND THE TRUSTEE, THE TERMS OF SUCH AGREEMENT ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO THIS PLAN.
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond for
the faithful performance of its duties under the Trust to the extent required by
ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. The Trustee is not obliged to collect any contributions from the Employer,
nor is obliged to see that funds deposited with it are deposited according to
the provisions of the Plan.
10.03 INVESTMENT POWERS.
(A) TRUSTEE POWERS. The Trustee has full discretion and authority with regard to
the investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Administrative
Committee direction of investment. The Trustee must coordinate its investment
policy with Plan financial needs as communicated to it by the Administrative
Committee. 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, put and call options
traded on a national exchange, United States retirement plan bonds, corporate
bonds, debentures, convertible debentures, commercial paper, U.S. Treasury
bills, U.S. Treasury notes and other direct or indirect obligations of the
United States Government or its agencies, improved or unimproved real estate
situated in the United States, limited partnerships, insurance contracts of any
type, mortgages, notes or other property of any kind, real or personal, to buy
or sell options on common stock on a nationally recognized exchange with or
without holding the underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities, and to
make any other investments the Trustee deems appropriate, as a prudent man would
do under like circumstances with due regard for the purposes of this Plan. Any
investment made or retained by the Trustee in good faith is proper but must be
of a kind constituting a diversification considered by law suitable for trust
investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any cash held in
the Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the
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United States or by a State, in any type of deposit of the Trustee (or of a bank
related to the Trustee within the meaning of Code Section 414(b)) at a
reasonable rate of interest or in a common trust fund, as described in Code
Section 584, or in a collective investment fund, the provisions of which govern
the investment of such assets and which the Plan incorporates by this reference,
which the Trustee (or its affiliate, as defined in Code Section 1504) maintains
exclusively for the collective investment of money contributed by the bank (or
the affiliate) in its capacity as trustee and which conforms to the rules of the
Comptroller of the Currency.
(d) 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 decides.
(e) To credit and distribute the Trust as directed by the
Administrative Committee. The Trustee is not 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 is accountable only to the Administrative
Committee for any payment or distribution made by it in good faith on the order
or direction of the Administrative Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands, in
its discretion.
(h) 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.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests in oil,
gas and other minerals; and to enter into operating agreements and to execute
division and transfer orders.
(j) To hold any securities or other property in the name of the Trustee
or its nominee, with depositories or agent depositories or in another form as it
may deem best, with or without disclosing the trust relationship.
(k) 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.
(l) 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.
(m) To file all tax returns required of the Trustee.
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(n) To furnish to the Employer, the Plan Administrator and the
Administrative Committee an annual statement of account showing the condition of
the Trust Fund and all investments, receipts, disbursements and other
transactions effected by the Trustee during the Plan Year covered by the
statement and also stating the assets of the Trust held at the end of the Plan
Year, which accounts are conclusive on all persons, including the Employer, the
Plan Administrator and the Administrative Committee, except as to any act or
transaction concerning which the Employer, the Plan Administrator or the
Administrative Committee files with the Trustee written exceptions or objections
within 90 days after the receipt of the accounts or for which ERISA authorizes a
longer period within which to object.
(o) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not obliged or
required to do so unless indemnified to its satisfaction.
(B) PARTICIPANT LOANS. This Section 10.03[B] specifically authorizes the Trustee
to make loans on a nondiscriminatory basis to a Participant or to a Beneficiary
in accordance with the loan policy established by the Administrative Committee,
provided: (1) the loan policy satisfies the requirements of Section 9.04; (2)
loans are available to all Participants and Beneficiaries on a reasonably
equivalent basis and are not available in a greater amount for Highly
Compensated Employees than for other Employees; (3) any loan is adequately
secured and bears a reasonable rate of interest; (4) the loan provides for
repayment within a specified time; (5) the default provisions of the note
prohibit offset of the Participant's Nonforfeitable Accrued Benefit prior to the
time the Trustee otherwise would distribute the Participant's Nonforfeitable
Accrued Benefit; (6) the amount of the loan does not exceed (at the time the
Plan extends the loan) the present value of the Participant's Nonforfeitable
Accrued Benefit; and (7) the loan otherwise conforms to the exemption provided
by Code Section 4975(d)(1). If the joint and survivor requirements of Article VI
apply to the Participant, the Participant may not pledge any portion of his
Accrued Benefit as security for a loan made after August 18, 1985, unless,
within the 90 day period ending on the date the pledge becomes effective, the
Participant's spouse, if any, consents (in a manner described in Section 6.05
other than the requirement relating to the consent of a subsequent spouse) to
the security or, by separate consent, to an increase in the amount of security.
If the Employer is an unincorporated trade or business, a Participant who is an
Owner-Employee may not receive a loan from the Plan, unless he has obtained a
prohibited transaction exemption from the Department of Labor. If the Employer
is an "S Corporation," a Participant who is a shareholder-employee (an employee
or an officer) who, at any time during the Employer's taxable year, owns more
than 5%, either directly or by attribution under Code Section 318(a)(1), of the
Employer's outstanding stock may not receive a loan from the Plan. If the
Employer is not an unincorporated trade or business nor an "S Corporation," this
Section 10.03[B] does not impose any restrictions on the class of Participants
eligible for a loan from the Plan.
(C) INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The Trustee may invest in qualifying Employer securities or qualifying
Employer real property, as defined in and as limited by ERISA. The aggregate
investments in qualifying Employer securities and in qualifying Employer real
property may not exceed 10% of the value of Plan assets.
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10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator,
Administrative Committee and the Employer at all reasonable times and may be
audited from time to time by any person or persons as the Employer, Plan
Administrator or Administrative Committee may specify in writing. The Trustee
must furnish the Plan Administrator or Administrative Committee with whatever
information relating to the Trust Fund the Plan Administrator or Administrative
Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. No person who is receiving full pay from the Employer may
receive compensation for services as Trustee. The Trustee will pay from the
Trust Fund all fees and expenses reasonably incurred by the Plan, to the extent
such fees and expenses are for the ordinary and necessary administration and
operation of the Plan, unless the Employer pays such fees and expenses. Any fee
or expense paid, directly or indirectly, by the Employer is not an Employer
contribution to the Plan, provided the fee or expense relates to the ordinary
and necessary administration of the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive notice
of process in any court proceeding involving the Plan, the Trust Fund or any
fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Administrative
Committee,, the Trustee, Custodian, Participants and Beneficiaries.
10.07 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, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at its fair
market value as determined by the Trustee. For purposes of a distribution to a
Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract
satisfies the requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the
Administrative Committee and then dispose of the payment in accordance with the
subsequent direction of the Administrative Committee.
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10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
is obligated 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 is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or of any portion of the Trust Fund with respect to which such
persons act as Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee may resign its position at any time by
giving 30 days' written notice in advance to the Employer and to the
Administrative Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and as
having filed its acceptance of appointment with the former Trustee.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee. In the event of the resignation
or removal of a Trustee, the Employer must appoint a successor Trustee if it
intends to continue the Plan. If two or more persons hold the position of
Trustee, in the event of the removal of one such person, during any period the
selection of a replacement is pending, or during any period such person is
unable to serve for any reason, the remaining person or persons will act as the
Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Administrative Committee without the signing or
filing of any further statement. The resigning or removed Trustee, upon receipt
of acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any successor
Trustee. Each successor Trustee has and enjoys all of the powers, both
discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or failure
to act of any predecessor Trustee, except as required under ERISA. With the
approval of the Employer and the Administrative Committee, a successor Trustee,
with respect to the Plan, may accept the account rendered and the property
delivered to it by a predecessor Trustee without incurring any liability or
responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on such
other valuation dates as directed by the Administrative Committee.
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10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY
TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the
acts or omissions of any Investment Manager the Administrative Committee may
appoint, nor is the Trustee under any obligation to invest or otherwise manage
any asset of the Plan which is subject to the management of a properly appointed
Investment Manager. The Administrative Committee, the Trustee and any properly
appointed Investment Manager may execute a letter agreement as a part of this
Plan delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager.
The limitation on liability described in this Section 10.15 also
applies to the acts or omissions of any ancillary trustee or independent
fiduciary properly appointed under Section 10.17 of the Plan. However, if a
discretionary Trustee, pursuant to the delegation described in Section 10.17 of
the Plan, appoints an ancillary trustee, the discretionary Trustee is
responsible for the periodic review of the ancillary trustee's actions and must
exercise its delegated authority in accordance with the terms of the Plan and in
a manner consistent with ERISA. The Employer, the discretionary Trustee and an
ancillary trustee may execute a letter agreement as a part of this Plan
delineating any indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as ancillary
trustee with respect to a designated portion of the Trust Fund. An ancillary
trustee must acknowledge in writing its acceptance of the terms and conditions
of its appointment as ancillary trustee and its fiduciary status under ERISA.
The ancillary trustee has the rights, powers, duties and discretion as the
Employer may delegate, subject to any limitations or directions specified in the
instrument evidencing appointment of the ancillary trustee and to the terms of
the Plan or of ERISA. The investment powers delegated to the ancillary trustee
may include any investment powers available under Section 10.03 of the Plan
including the right to invest any portion of the assets of the Trust Fund in a
common trust fund, as described in Code Section 584, or in any collective
investment fund, the provisions of which govern the investment of such assets
and which the Plan incorporates by this reference, but only if the ancillary
trustee is a bank or similar financial institution supervised by the United
States or by a State and the ancillary trustee (or its affiliate, as defined in
Code Section 1504) maintains the common trust fund or collective investment fund
exclusively for the collective investment of money contributed by the ancillary
trustee (or its affiliate) in a trustee capacity and which conforms to the rules
of the Comptroller of the Currency. The Employer also may appoint as an
ancillary trustee, the trustee of any group trust fund designated for investment
pursuant to the provisions of Section 10.16 of the Plan.
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The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the control
and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a Trustee under the Plan.
* * * * * * * * * * * * * * *
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ARTICLE XI - PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Plan does not provide Incidental Life
Insurance Benefits for Participants.
* * * * * * * * * * * * * * *
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ARTICLE XII - MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The
Administrative Committee and the Trustee are fully protected in acting and
relying upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
the Administrative Committee has any obligation or responsibility with respect
to any action required by the Plan to be taken by the Employer, any Participant
or eligible Employee, or for the failure of any of the above persons to act or
make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the Trustee
or the Administrative Committee to collect any contribution required under the
Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Administrative Committee need inquire
into or be responsible for any action or failure to act on the part of the
others, or on the part of any other person who has any responsibility regarding
the management, administration or operation of the Plan, whether by the express
terms of the Plan or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA. Any action required of a corporate Employer must
be by its Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Administrative
Committee, the Plan Administrator and the Employer in no way guarantee the Trust
Fund from loss or depreciation. The Employer does not guarantee the payment of
any money which may be or becomes due to any person from the Trust Fund. The
liability of the Administrative Committee and the Trustee to make any payment
from the Trust Fund at any time and all times is limited to the then available
assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the
Administrative Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the plural.
12.07 STATE LAW. Maryland law will determine all questions arising with
respect to the provisions of this Agreement except to the extent superseded by
Federal law.
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12.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or amendment
to the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
* * * * * * * * * * * * * * *
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ARTICLE XIII - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of any
asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any part
of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any
time) used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries. However, if the Commissioner of Internal
Revenue, upon the Employer's request for initial approval of this Plan,
determines that the Trust created under the Plan is not a qualified trust exempt
from Federal income tax, then (and only then) the Trustee, upon written notice
from the Employer, will return the Employer's contributions (and increment
attributable to the contributions) to the Employer. The Trustee must make the
return of the Employer contribution under this Section 13.01 within one year of
a final disposition of the Employer's request for initial approval of the Plan.
The Employer's Plan and Trust will terminate upon the Trustee's return of the
Employer's contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:
(a) To amend this Agreement in any manner it deems necessary or
advisable in order to qualify (or maintain qualification of)
this Plan and the Trust created under it under the provisions of
Code Section 401(a).
(b) To amend the Plan to allow the Plan to operate under a waiver of
the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or permit
any portion of the Trust Fund to revert to or become a property of the Employer.
The Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the affected member
of the Administrative Committee. The Employer must make all amendments in
writing. Each amendment must state the date to which it is either retroactively
or prospectively effective.
(A) CODE SECTION 411(d)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code Section
412(c)(8), and may not reduce or eliminate Code Section 411(d)(6) protected
benefits determined immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or eliminates Code
Section 411(d)(6) protected benefits if the amendment has the effect of either
(1) eliminating or reducing an early retirement benefit or a retirement-type
subsidy (as defined in Treasury regulations), or (2) except as provided by
Treasury regulations, eliminating an optional form of benefit. The
Administrative Committee must
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disregard an amendment to the extent application of the amendment would fail to
satisfy this paragraph. If the Administrative Committee must disregard an
amendment because the amendment would violate clause (1) or clause (2), the
Administrative Committee must maintain a schedule of the early retirement option
or other optional forms of benefit the Plan must continue for the affected
Participants.
13.03 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor
makes provision ot continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of the Plan
resulting from this paragraph (b) is not effective until compliance with any
applicable notice requirements under ERISA.
13.04 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Aricle V.
13.05 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets or loan on
behalf of an Employee prior to the date the Employee satisfies the Plan's
eligibility conditions. If the Trustee accepts such a direct transfer of plan
assets, the Administrative Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
In the event of a merger to this Plan of the assets of a prior plan
maintained by an entity whose stock or assets were acquired by the Sponsor or
Related Employer of the Sponsor, then any benefits required to be protected
pursuant to Code Section 411(d)(6) shall be setforth in Appendix A to this Plan
and shall be applicable only to Employees of the Related Employer who had
benefits merged into this Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party
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to a merger, consolidation or transfer of assets with a defined benefit plan,
except with respect to an elective transfer, or unless the transferred
benefits are in the form of paid-up individual annuity contracts gauranteeing
the payment of the transferred benefits in accordance with the terms of the
transferor plan and in a manner consistent with the Code and with ERISA. The
Trustee will hold, administer and distribute the transferred assets as a part
of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the
Trustee accepted the transfer in order to reflect the valuse of the
transferred assets. Unless a transfer of assets to this Plan is an elective
transfer, the Plan will preserve all Code Section 411(d)(6) protected
benefits with respect to those transferred assets, in the manner described in
Section 13.02. A transfer is an elective transfer if: (1) the transfer
satisfies the first paragraph of this Section 13.05; (2) the transfer is
voluntary, under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (4) the transfer satisfies
the applicable spousal consent requirements of the Code; (5) the transferor
plan satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (6) the
Participant has a right to immediate distribution fromt he transferor plan,
in lieu of the elective transfer; (7) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor plan for
which the Participant is eligible or the present value of the Participant's
accrued benefit under the transferor plan payable at the plan's normal
retirement age; (8) the Participant has a 100% Nonforfeitable interest in the
transferred benefit; and (9) the transfer otherwise satisfies applicable
Treasury regulations. An elective transfer may occur between qualified plans
of any type.
(B) DISTRIBUTION RESTRICTIONS UNDER Code Section 401(K). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the prsent value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $5,000, the Administrative Committee will
direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit to him in lump sum as soon as administratively
practicable after the Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000, the Participant or the Beneficiary, in addition
to the distribution events permitted under Article VI, may elect to
have the Trustee commence distribution of this Nonforfeitable Accrued
Benefit as soon as administratively practicable after the Plan
terminates.
To liquidate the Trust, the Administrative Committee will purchase a
deferred annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).
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The Trust will continue until the Trustee in accordance with the
direction of the Administrative Committee has distributed all of the benefits
under the Plan. On each valuation date, the Adminstrative Committee will credit
any part of a Participant's Accrued Benefit retained in the Trust with its
proportionate share of the Trust's income, expenses, gains and losses, both
realized and unrealized. Upon termination of the Plan, the amount, if any , in a
suspense account under Article III will revert to the Employer, subject to the
conditions of the Treasury regulations permitting such a reversion. A resolution
or amendment to freeze all future benefit accrual but otherwise to continue
maintenance of this Plan, is not a termination for purposes of this Section
13.06.
DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). The portion of
the Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions under a Code Section 401(k) arrangement (or to amouts treated
under the Code Section 401(k) arrangement as elective contributions) is not
distributable on account of Plan termination, as described in Section 13.06,
unless: (a) the Participant otherwise entitled under the Plan to a
distribution of that portion of his Nonforfeitable Accrued Benefit; or (b)
the Plan termination occurs without the establishment of a successor plan. A
successor plan under clause (b) is a defined contribution plan (other than an
ESOP maintained by the Employer (or by a related employer) at the time of the
termination of the Plan or within the period ending twelve months after the
final disposition of assets. A distribution made after March 31, 1988,
pursuant to clause (b), must be of a lump sum distribution to the Participant
of his Nonforfeitable Accrued Benefit.
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ARTICLE XIV - PROVISIONS RELATING TO CODE SECTION 401(k) AND TO CODE
SECTION 401(m)
14.01 Section 401(K) ARRANGEMENT. The Employer makes the deferral
contributions described in Section 3.01 pursuant to a 401(k) arrangement. An
Employee who is eligible to participate in the Plan may file a salary
reduction agreement with the Administrative Committee. The salary reduction
agreement may not be effective earlier than the following date which occurs
last: (i) the Employee's Plan Entry Date (or, in the case of a reemployed
Employee, his reparticipation date under Article II); (ii) the execution date
of the Employee's salary reduction agreement; (iii) the date the Employer
adopts the Code Section 401(k) arrangement by executing the Plan; or (iv) the
effective date of the Code Section 401(k) arrangement. The salary reduction
agreement will apply only to Compensation which becomes currently available
to the Employee after the effective date of the salary reduction agreement.
The Employer will apply a reduction election to all Compensation (and to
increases in such Compensation) unless the Employee specifies in his salary
reduction agreement to limit the election to certain Compensation.
An Employee's salary reduction contributions for the Plan Year, subject
to the elective deferral limitation of Section 14.03, may not exceed 15% of his
Compensation for the entire Plan Year. An Employee may modify his salary
reduction agreement, either to reduce or to increase the amount of deferral
contributions, as of any Entry Date. The Employee will make this modification by
filing a new salary reduction agreement with the Administrative Committee. An
Employee may revoke a salary reduction agreement as of any any Entry Date. An
Employee who revokes his salary reduction agreement may file a new salary
reduction agreement effective as of any Entry Date.
14.02 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.07 of the Plan.
(b) "Nonhighly Compensated Employee" means an Eligible Employee who is
not a Highly Compensated Employee and who is not a family member treated as a
Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described
in Section 14.04, an Employee who is eligible to participate in the Code Section
401(k) arrangement, irrespective of whether the Employer actually makes deferral
contributions on behalf of the Employee. For purposes of the ACP test described
in Section 14.05, an "Eligible Employee" means a Participant who is eligible to
receive an allocation of matching contributions (or would be eligible if he made
the type of contributions necessary to receive an allocation of matching
contributions) and a Participant who is eligible to make employee contributions,
irrespective of whether he actually makes employee contributions. An Employee
continues to be an Eligible Employee during a period the Plan suspends the
Employee's right to make elective deferrals or nondeductible contributions
following a hardship distribution.
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(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible Employees
who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, except as specifically provided under this
Article XIV, Compensation as defined for nondiscrimination purposes in
Section 1.10(B) of the Plan. To compute an Employee's ADP or ACP, the
Administrative Committee may limit Compensation taken into account to
Compensation received only for the portion of the Plan Year in which the
Employee was an Eligible Employee and only for the portion of the Plan Year
in which the Plan or the Code Section 401(k) arrangement was in effect.
(g) "Deferral contributions" means the sum of the deferral
contributions the Employer contributes to the Trust on behalf of an Eligible
Employee, pursuant to Section 3.01.
(h) "Elective deferrals" are the deferral contributions the Employer
contributes to the Trust at the election of an Eligible Employee. If the Code
Section 401(k) arrangement includes a cash or deferred feature, any portion
of a cash or deferred contribution contributed to the Trust because of the
Employee's failure to make a cash election is an elective deferral, but any
portion of a cash or deferred contribution over which the Employee does not
have a cash election is not an elective deferral. Elective deferrals do not
include amounts which have become currently available to the Employee prior
to the election nor amounts designated as employee contributions at the time
of deferral or contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code Section 401(k) arrangement or on
account of employee contributions. Matching contributions also include
Participant forfeitures allocated on account of such elective deferrals or
employee contributions.
(j) "Nonelective contributions" are contributions made by the Employer
which are not subject to a deferral election by an Employee and which are not
matching contributions.
(k) "Qualified matching contributions" are matching contributions which
are 100% Nonforfeitable at all times and which are subject to the distribution
restrictions described in paragraph (m). Matching contributions are not 100%
Nonforfeitable at all times if the Employee has a 100% Nonforfeitable interest
because of his Years of Service taken into account under a vesting schedule.
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(l) "Qualified nonelective contributions" are nonelective contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Nonelective contributions
are not 100% Nonforfeitable at all times if the Employee has a 100%
Nonforfeitable interest because of his Years of Service taken into account under
a vesting schedule. Any nonelective contributions allocated to a Participant's
Qualified Nonelective Contributions Account under the Plan automatically satisfy
the definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death, disability,
termination of employment, attainment of age 592, (2) financial hardship
satisfying the requirements of Code Section 401(k) and the applicable Treasury
regulations, (3) plan termination, without establishment of a successor defined
contribution plan (other than an ESOP), (4) a sale of substantially all of the
assets (within the meaning of Code Section 409(d)(2)) used in a trade or
business, but only to an employee who continues employment with the corporation
acquiring those assets, or (5) a sale by a corporation of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)), but only to an
employee who continues employment with the subsidiary. For Plan Years beginning
after December 31, 1988, a distribution on account of financial hardship, as
described in clause (2), may not include earnings on elective deferrals credited
as of a date later than December 31, 1988, and may not include qualified
matching contributions and qualified nonelective contributions, nor any earnings
on such contributions, credited after December 31, 1988. A plan does not violate
the distribution restrictions if, instead of the December 31, 1988, date in the
preceding sentence, the plan specifies a date not later than the end of the last
Plan Year ending before July 1, 1989. A distribution described in clauses (3),
(4) or (5), if made after March 31, 1988, must be a lump sum distribution, as
required under Code Section 401(k)(10).
(n) "Employee contributions" are contributions made by a Participant on
an after-tax basis, whether voluntary or mandatory, and designated, at the time
of contribution, as an employee (or nondeductible) contribution. Elective
deferrals and deferral contributions are not employee contributions.
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14.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals for a
calendar year may not exceed the 402(g) limitation. The 402(g) limitation is the
greater of $10,000 or the adjusted amount determined by the Secretary of the
Treasury. If the Employer determines the Employee's elective deferrals to the
Plan for a calendar year would exceed the 402(g) limitation, the Employer will
not make any additional elective deferrals with respect to that Employee for the
remainder of that calendar year, paying in cash to the Employee any amounts
which would result in the Employee's elective deferrals for the calendar year
exceeding the 402(g) limitation. If the Administrative Committee determines an
Employee's elective deferrals already contributed to the Plan for a calendar
year exceed the 402(g) limitation, the Administrative Committee will distribute
the amount in excess of the 402(g) limitation (the "excess deferral"), as
adjusted for allocable income, no later than April 15 of the following calendar
year. If the Administrative Committee distributes the excess deferral by the
appropriate April 15, it may make the distribution irrespective of any other
provision under this Plan or under the Code. The Administrative Committee will
reduce the amount of excess deferrals for a calendar year distributable to the
Employee by the amount of excess contributions (as determined in Section 14.04),
if any, previously distributed to the Employee for the Plan Year beginning in
that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction contributions
to a tax-sheltered annuity, irrespective of whether the Employer maintains the
other plan, he may provide the Administrative Committee a written claim for
excess deferrals made for a calendar year. The Employee must submit the claim no
later than the March 1 following the close of the particular calendar year and
the claim must specify the amount of the Employee's elective deferrals under
this Plan which are excess deferrals. If the Administrative Committee receives a
timely claim, it will distribute the excess deferral (as adjusted for allocable
income) the Employee has assigned to this Plan, in accordance with the
distribution procedure described in the immediately preceding paragraph.
(B) ALLOCABLE INCOME. For purposes of making a distribution of excess deferrals,
allocable income means net income or net loss allocable to the excess deferrals
for the calendar year in which the Employee made the excess deferral, determined
in a manner which is uniform, nondiscriminatory and reasonably reflective of the
manner used by the Plan to allocate income to Participant's accounts.
14.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Administrative Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not exceed
1.25 times the average ADP of the Nonhighly Compensated Group; or
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(ii) The average ADP for the Highly Compensated Group does not exceed
the average ADP for the Nonhighly Compensated Group by more than two percentage
points (or the lesser percentage permitted by the multiple use limitation in
Section 14.06) and the average ADP for the Highly Compensated Group is not more
than twice the average ADP for the Nonhighly Compensated Group.
(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. A Nonhighly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the 402(g) limitation
described in Section 14.03. In determining whether the Plan's Code Section
401(k) arrangement satisfies either ADP test, the Administrative Committee will
use the average ADP of the Nonhighly Compensated Group for the Plan Year
preceding the Plan Year of the calculation, unless the Employer elects to use
the current Plan Year's average ADP of the Nonhighly Compensated Group. An
Employer may not change an election to use current average ADP except as the
Treasury otherwise may provide.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the ADP of any Highly Compensated Employee, the deferral contributions taken
into account must include any elective deferrals made by the Highly
Compensated Employee under any other Code Section 401(k) arrangement
maintained by the Employer, unless the elective deferrals are to an ESOP. If
the plans containing the Code Section 401(k) arrangements have different plan
years, the Administrative Committee will determine the combined deferral
contributions on the basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN Code Section 401(K) ARRANGEMENTS. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code Section 401(k) arrangements under such plans to
determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. For Plan Years beginning after December 31, 1989, an
aggregation of Code Section 401(k) arrangements under this paragraph does not
apply to plans which have different plan years and, for Plan Years beginning
after December 31, 1988, the Administrative Committee may not aggregate an ESOP
(or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a
plan).
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(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.04, the Administrative Committee has elected to include qualified matching
contributions in the average ADP, the Administrative Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Administrative Committee will
treat the remaining portion of his excess contributions as attributable to
qualified nonelective contributions. The Administrative Committee will reduce
the amount of excess contributions for a Plan Year distributable to a Highly
Compensated Employee by the amount of excess deferrals (as determined in Section
14.03), if any, previously distributed to that Employee for the Employee's
taxable year ending in that Plan Year.
(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Administrative Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, the Trustee,
as directed by the Administrative Committee, must distribute the excess
contributions, as adjusted for allocable income, during the next Plan Year.
However, the Employer will incur an excise tax equal to 10% of the amount of
excess contributions for a Plan Year not distributed to the appropriate Highly
Compensated Employees during the first 2 1/2 months of that next Plan Year. The
excess contributions are the amount of deferral contributions made by the Highly
Compensated Employees which causes the Plan to fail to satisfy the ADP test. The
Administrative Committee will determine the amount of the excess contributions
by starting with the Highly Compensated Employee(s) who has the greatest ADP,
reducing his ADP (but not below the next highest ADP), then, if necessary,
reducing the ADP of the Highly Compensated Employee(s) at the next highest ADP,
including the ADP of the Highly Compensated Employee(s) whose ADP the
Administrative Committee already has reduced (but not below the next highest
ADP), and continuing in this manner until the average ADP for the Highly
Compensated Group satisfies the ADP test.
After the Administrative Committee has determined the excess
contribution amount, the trustee, as directed by the Administrative Committee,
then will distribute to each Highly Compensated Employee his respective share(s)
of the excess contributions. The Administrative Committee will determine the
respective share(s) of excess contributions by starting with the Highly
Compensated Employee(s) who has the highest elective contributions, reducing his
elective contributions (but not below the next highest level of elective
contributions), then, if necessary, reducing the elective contributions of the
Highly Compensated Employee(s) at the next highest level of elective
contributions including the elective contributions of me Highly Compensated
Employee(s) whose elective contributions the Administrative Committee already
has reduced (but not below the next highest level of elective contributions),
and continuing in this manner until the Trustee has distributed all excess
contributions.
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.04, the Administrative Committee must calculate
the allocable income for the Plan Year in which the excess contributions arose.
"Allocable income" means net income or net loss. To calculate allocable income
for the Plan Year, the Administrative Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner used by the Plan
to allocate
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income to Participants' Accounts.
(G) CORRECTION OF ANNUAL ADDITIONS LIMITATION. If, as a result of a reasonable
error in determining the amount of elective deferrals an Employee may make
without violating the limitations of Part 2 of Article III, an Excess Amount
results, the Administrative Committee will return the Excess Amount (as adjusted
for allocable income) attributable to the elective deferrals. The Administrative
Committee will make this distribution before taking any corrective steps
pursuant to Section 3.07. The Administrative Committee will disregard any
elective deferrals returned under this Section 14.04(G) for purposes of Sections
14.03, 14.04 and 14.05.
14.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Administrative Committee must determine whether the
annual Employer matching contributions (other than qualified matching
contributions used in the ADP test), if any, and the Employee contributions, if
any, satisfy either of the following average contribution percentage ("ACP")
tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25 times
the ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Nonhighly Compensated Group by more than two percentage points (or the
lesser percentage permitted by the multiple use limitation in Section 14.06) and
the ACP for the Highly Compensated Group is not more than twice the ACP for the
Nonhighly Compensated Group.
(A) CALCULATION OF ACP. The average contribution percentage for a group is the
average of the separate contribution percentages calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's contribution
percentage for a Plan Year is the ratio of the Eligible Employee's aggregate
contributions for the Plan Year to the Employee's Compensation for the Plan
Year. "Aggregate contributions" are matching contributions (other than qualified
matching contributions used in the ADP test) and employee contributions. For
aggregated family members treated as a single Highly Compensated Employee, the
contribution percentage of the family unit is the contribution percentage
determined by combining the aggregate contributions and Compensation of all
aggregated family members.
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The Administrative Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other than
qualified nonelective contributions used in the ADP test) or elective deferrals,
or both, made to this Plan or to any other qualified Plan maintained by the
Employer. The Administrative Committee may not include qualified nonelective
contributions in the ACP test unless the allocation of nonelective contributions
is nondiscriminatory when the Administrative Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Administrative Committee takes into account only the
nonelective contributions not used in either the ADP test or the ACP test. The
Administrative Committee may not include elective deferrals in the ACP test,
unless the Plan which includes the elective deferrals satisfies the ADP test
both with and without the elective deferrals included in this ACP test. For Plan
Years beginning after December 31, 1989, the Administrative Committee may not
include in the ACP test any qualified nonelective contributions or elective
deferrals under another qualified plan unless that plan has the same plan year
as this Plan. The Administrative Committee must maintain records to demonstrate
compliance with the ACP test, including the extent to which the Plan used
qualified nonelective contributions or elective deferrals to satisfy the test.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Administrative Committee will determine the combined aggregate contributions on
the basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a unit for
coverage or nondiscrimination purposes, the Employer must combine the plans to
determine whether either plan satisfies the ACP test. This aggregation rule
applies to the contribution percentage determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee or
a Nonhighly Compensated Employee. For Plan Years beginning after December 31,
1989, an aggregation of plans under this paragraph does not apply to plans which
have different plan years and, for Plan Years beginning after December 31, 1988,
the Administrative Committee may not aggregate an ESOP (or the ESOP portion of a
plan) with a non-ESOP plan (or non-ESOP portion of a plan).
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(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Administrative Committee
will determine excess aggregate contributions after determining excess deferrals
under Section 14.03 and excess contributions under Section 14.04. If the
Administrative Committee determines the Plan fails to satisfy the ACP test for a
Plan Year, it must distribute the excess aggregate contributions, as adjusted
for allocable income, during the next Plan Year. However, the Employer will
incur an excise tax equal to 10% of the amount of excess aggregate contributions
for a Plan Year not distributed to the appropriate Highly Compensated Employees
during the first 22 months of that next Plan Year. The excess aggregate
contributions are the amount of aggregate contributions allocated on behalf of
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ACP test. The Administrative Committee will distribute to each Highly
Compensated Employee his respective share of the excess aggregate contributions.
The Administrative Committee will determine the respective shares of excess
aggregate contributions by starting with the Highly Compensated Employee(s) who
has the greatest contribution percentage, reducing his contribution percentage
(but not below the next highest contribution percentage), then, if necessary,
reducing the contribution percentage of the Highly Compensated Employee(s) at
the next highest contribution percentage level (including the contribution
percentage of the Highly Compensated Employee(s) whose contribution percentage
the Administrative Committee already has reduced), and continuing in this manner
until the ACP for the Highly Compensated Group satisfies the ACP test. If the
Highly Compensated Employee is part of an aggregated family group, the
Administrative Committee, in accordance with the applicable Treasury
regulations, will determine each aggregated family member's allocable share of
the excess aggregate contributions assigned to the family unit.
(E) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.05, the Administrative Committee must calculate
the allocable income for the Plan Year in which the excess aggregate
contributions arose. "Allocable income" means net income or net loss. The
Administrative Committee will determine allocable income in the same manner as
described in Section 14.04(F) for excess contributions.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Administrative
Committee will treat a Highly Compensated Employee's allocable share of excess
aggregate contributions in the following priority: (1) first as attributable to
his employee contributions which are voluntary contributions, if any; (2) then
as matching contributions allocable with respect to excess contributions
determined under the ADP test; (3) then on a pro rata basis to matching
contributions and to the deferral contributions relating to those matching
contributions which the Administrative Committee has included in the ACP test;
(4) then on a pro rata basis to Employee contributions which are mandatory
contributions, if any, and to the matching contributions allocated on the basis
of those mandatory contributions; and (5) last to qualified nonelective
contributions used in the ACP test. To the extent the Highly Compensated
Employee's excess aggregate contributions are attributable to matching
contributions, and he is not 100% vested in his Accrued Benefit attributable to
matching contributions, the Administrative Committee will distribute only the
vested portion and forfeit the nonvested portion. The vested portion of the
Highly Compensated Employee's excess aggregate contributions attributable to
Employer matching contributions is the total amount of such excess aggregate
contributions (as adjusted for allocable income) multiplied
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by his vested percentage (determined as of the last day of the Plan Year for
which the Employer made the matching contribution). The Plan will allocate
forfeited excess aggregate contributions to reduce Employer matching
contributions for the Plan Year in which the forfeiture occurs.
14.06 MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in the ADP
test and in the ACP test, the sum of the Highly Compensated Group's ADP and ACP
may not exceed the multiple use limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the Nonhighly
Compensated Group for the Plan Year beginning with or within the Plan Year of
the Code Section 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
lesser of (i)(a) or (i)(b).
The Administrative Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the multiple use
limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the Nonhighly
Compensated Group for the Plan Year beginning with or within the Plan Year of
the Code Section 401(k) arrangement.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Administrative Committee will determine whether the Plan satisfies
the multiple use limitation after applying the ADP test under Section 14.04 and
the ACP test under Section 14.05 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.06, the
Administrative Committee determines the Plan has failed to satisfy the multiple
use limitation, the Administrative Committee will correct the failure by
treating the excess amount as excess contributions under Section 14.04 or as
excess aggregate contributions under Section 14.05, as it determines in its sole
discretion. This Section 14.06 does not apply unless, prior to application of
the multiple use limitation, the ADP and the ACP of the Highly Compensated Group
each exceeds 125% of the respective percentages for the Nonhighly Compensated
Group.
14.07 FORFEITURE OF MATCHING CONTRIBUTION. A Participant will forfeit
any matching contribution attributable to an excess contribution or to an excess
aggregate contribution unless distributed pursuant to Sections 14.04 or 14.05 of
the Plan.
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ARTICLE XV - EXTENSION OF PLAN TO RELATED EMPLOYERS
15.01 ADOPTION BY RELATED EMPLOYERS. By executing a Participant
Agreement, any Related Employer may adopt the Plan and qualify its Employees to
become Participants thereunder by taking proper corporate action to adopt the
Plan and making such contributions to the Trust Fund as the Sponsor or the board
of directors of the Related Employer may require. The Sponsor shall maintain an
Appendix B attached to this Plan which details the dates of participation for
each such Related Employer.
15.02 TERMINATION OF PARTICIPATION. The Plan will terminate with
respect to any Related Employer that has adopted the Plan pursuant to this
Section if the Related Employer ceases to be a Related Employer, revokes its
adoption of the Plan by appropriate corporate action, permanently discontinues
its contributions for its Employees, is judicially declared bankrupt, makes a
general assignment for the benefit of creditors, or is dissolved.
15.03 AUTHORITY. The Sponsor shall have the sole right to amend the
Plan ans shall act as the agent for each Related Employer that adopts the Plan
for all purposes of administration thereof.
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ARTICLE A
APPENDIX TO PLAN AND TRUST AGREEMENT
This Article is necessary to comply with the Unemployment Compensation
Amendments Act of 1992 and is an integral part of the plan and trust agreement.
A-1. APPLICATIONS. This Article applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this Article, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
A-2. DEFINITIONS.
(a) "Eligible rollover distribution." An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint 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 Code Section 401(a)(9); and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion of net
unrealized appreciation with respect to employer securities).
(b) "Eligible retirement plan." An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code
Section 401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(c) "Distributee." A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section
414(p), are distributees with regard to the interest of the spouse or former
spouse.
(d) "Direct rollover." A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
76
<PAGE>
ARTICLE B
APPENDIX TO PLAN AND TRUST AGREEMENT
This Article is necessary to comply with the Omnibus Budget
Reconciliation Act of 1993 (OBRA Section '93) and is an integral part of the
plan document.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000 , as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination period beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
77
<PAGE>
IN WITNESS WHEREOF, the Employer and the Trustee have executed this
Plan and Trust in Annapolis, Maryland this _____________ day of _____________,
1998.
Condor Technology Solutions, Inc.
By:
------------------------------------
"SPONSOR"
78
<PAGE>
APPENDIX A
SCHEDULE OF IRC SECTION 411(d)(6) PROTECTED BENEFITS
PURSUANT TO SECTION 13.05 OF THE PLAN
79
<PAGE>
APPENDIX B
SCHEDULE OF PARTICIPATING RELATED EMPLOYERS
<TABLE>
<CAPTION>
NAME OF PARTICIPATING EMPLOYER DATE OF PARTICIPATION
- ------------------------------ ----------------------
<S> <C>
Computer Hardware Maintenance Corporation, Inc. January 1, 1999
Corporate Access, Inc. January 1, 1999
Decision Support Technology, Inc. January 1, 1999
Federal Computer Corporation January 1, 1999
Global Core Strategies Acquisition, Inc. January 1, 1999
InVenture Group, Inc. January 1, 1999
Interactive Software Systems, Inc. January 1, 1999
LincSystems Corporation January 1, 1999
Louden Associates, Inc. January 1, 1999
MIS Technologies, Inc. January 1, 1999
Management Support Technology Corporation January 1, 1999
PowerCrew, Inc. January 1, 1999
U.S. Communications January 1, 1999
</TABLE>
80
<PAGE>
<PAGE>
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our reports as of the dates listed below and for the
companies listed below included in Condor Technology Solutions, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997 and our report dated
February 8, 1999, relating to the financial statements of Global Core
Strategies, Inc., which appear in the Company's Current Report on Form 8-K/A
filed on February 22, 1999.
<TABLE>
<CAPTION>
Company Date Page
------- ---- ----
<S> <C> <C>
Condor Technology Solutions, Inc. March 11, 1998 42
Computer Hardware Maintenance Company, Inc. March 13, 1998 64
Federal Computer Corporation March 25, 1998 77
Corporate Access, Inc. March 11, 1998 95
Interactive Software Systems Incorporated March 06, 1998 104
U.S. Communications, Inc. March 11, 1998 115
InVenture Group, Inc. March 11, 1998 125
MIS Technologies, Inc. March 11, 1998 135
</TABLE>
PricewaterhouseCoopers LLP
McLean, Virginia
February 26, 1999
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Condor Technology Solutions, Inc. on Form S-8 (the "Registration Statement") of
our report dated February 27, 1998 (relating to the financial statements of
Management Support Technology Corp. ("MST"), which report expresses an
unqualified opinion and includes explanatory paragraphs relating to the chief
executive officer/sole stockholder's compensation being at his sole discretion
and the acquisition of MST by Condor Technology Solutions, Inc. on February 10,
1998), appearing in the Annual Report on Form 10-K of Condor Technology
Solutions, Inc. for the year ended December 31, 1997.
Boston, Massachusetts
February 26, 1999
