<PAGE>
As filed with the Securities and Exchange Commission on November 17, 1997
Registration No. 333-________
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_______________________________________
HIGH COUNTRY BANCORP, INC.
___________________________
(Exact name of registrant as specified in its charter)
Colorado Applied for
-------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 W. 2nd Street
Salida, Colorado 81201-0309
(719) 539-2516
_______________________________
(Address of Principal Executive Office)
Salida Building & Loan Association 401(k) Profit Sharing Plan & Trust
-------------------------------------------------
(Full title of the plan)
__________________________________
with copies to:
Howard S. Parris, Esquire
Mr. Larry D. Smith President J. Mark Poerio, Esquire
Salida Building & Loan Association Housley Kantarian and Bronstein, P.C.
130 W. 2nd Street 1220 19th Street, N.W., Suite 700
Salida, Colorado 81201-0309
- -----------------------------------
(Name and address of agent for service) Washington, D.C. 20036
(719) 539-2516
__________________________________________________________
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Title of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered (1) registered (2) Per Share (3) Price Per Share (4) Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value
per share 90,055 $10 $ 900,550 $ 272.89
========================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests
available pursuant to the Salida Building & Loan Association 401(k) Profit
Sharing Plan & Trust (the "Plan"), as described herein.
(2) Estimates the maximum number of shares expected to be issued under the Plan
assuming that all employer and employee contributions to the Plan are used
to purchase shares of Common Stock of High Country Bancorp, Inc. in the
conversion of Salida Building & Loan Association from mutual to stock form
("Conversion"), together with an indeterminate number of shares which may
be necessary to adjust the number of additional shares of Common Stock
reserved for issuance pursuant to the Plan and being registered herein, as
the result of a stock split, stock dividend, reclassification,
recapitalization or similar adjustment(s) of the Common Stock of High
Country Bancorp, Inc.
(3) Estimated solely for the purpose of calculating the registration fee and
calculated pursuant to Rule 457(c) based on maximum subscription price of $
10.00 per share of the Common Stock of High Country Bancorp, Inc., as
currently offered in the Conversion.
(4) Estimated based on (2) and (3) above.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE AUTOMATICALLY UPON THE
DATE OF FILING, IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
- ------
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
- ------
*This Registration Statement relates to the registration of 90,055
shares of Common Stock, par value $.01 per share, of High Country Bancorp, Inc.
(the "Company") reserved for issuance and delivery under the Salida Building &
Loan Association 401(k) Profit Sharing Plan (the "Plan"). Documents containing
the information required by Part I of this Registration Statement will be sent
or given to participants in the Plan as specified by Rule 428(b)(1). Such
documents are not 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, in reliance on Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- ------
The Company became subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") on or about December 15, 1997
and, accordingly, will be filing periodic reports and other information with the
Commission. Reports, proxy statements and other information concerning the
Company filed with the Commission may be inspected and copies may be obtained
(at prescribed rates) at the Commission's Public Reference Section, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549.
The following document filed by the Company is incorporated in this
Registration Statement by reference: the Prospectus for the Common Stock,
included in the Company's Registration Statement (Commission File No. 333-34153)
ALL DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY AND THE PLAN PURSUANT TO
SECTIONS 13(A), 13(C), 14, AND 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AFTER THE DATE HEREOF AND PRIOR TO THE FILING OF A POST-EFFECTIVE
AMENDMENT WHICH INDICATES THAT ALL SECURITIES OFFERED HAVE BEEN SOLD OR WHICH
DEREGISTERS ALL SECURITIES THEN REMAINING UNSOLD SHALL BE DEEMED TO BE
INCORPORATED BY REFERENCE IN THIS REGISTRATION STATEMENT AND TO BE A PART HEREOF
FROM THE DATE OF FILING OF SUCH DOCUMENTS.
ITEM 4. DESCRIPTION OF SECURITIES
- ------
The information required by Item 202 of Regulation S-K is set forth in
the description of the Common Stock included in the Prospectus for the Common
Stock (dated October 24, 1997), as incorporated by reference under Item 3
hereof, such description being incorporated by reference herein.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ------
Directors, officers and employees of the Company and/or the Association
may be entitled to benefit from the indemnification provisions contained in the
Colorado Business Corporation Act (the "CBCA"), the Company's Articles of
Incorporation and federal regulations applicable to the Association. The general
effect of these provisions is summarized below:
COLORADO BUSINESS CORPORATION ACT
Sections 7-109-102 and 7-109-107 of the CBCA permit a Colorado
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any proceeding of any type, (other than an action by or in the
right of the corporation) by reason
<PAGE>
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, may not, of
itself, create a presumption that these standards have not been met.
A Colorado corporation may also indemnify any person who was or is a party
or is threatened to be made a party to any proceeding by or in the right of the
corporation by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation. However, no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought
determines upon application that such person is fairly and reasonably entitled
to be indemnified.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any proceeding
described above indemnification against expenses (including attorneys' fees)
actually and reasonably incurred by him is mandatory.
Any determination that indemnification of the director, officer, employee
or agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in subsections (a) and (b) must be made by a
majority of the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or if such a
quorum is not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or by
the stockholders.
Expenses (including attorneys' fees) incurred by an officer or director in
defending any civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
or proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation.
The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section is not exclusive.
In addition, a corporation shall have power to purchase and maintain
insurance against any liability of individuals whom the corporation is required
to indemnify.
ARTICLE XVII OF THE ARTICLES OF INCORPORATION
A. Persons. The Corporation shall indemnify, to the extent provided in
-------
paragraphs B, D or F:
(1) any person who is or was a director, officer, employee, or agent
of the Corporation; and
(2) any person who serves or served at the Corporation's request as a
director, officer, employee, agent, partner or trustee of another
corporation, partnership, joint venture, trust or other enterprise.
B. Extent -- Derivative Suits. In case of a threatened, pending or
--------------------------
completed action or suit by or in the right of the Corporation against a person
named in paragraph A by reason of his holding a position named in paragraph A,
the Corporation shall indemnify him if he satisfies the standard in paragraph C,
for expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred by him in connection with the
defense or settlement of the action or suit.
C. Standard -- Derivative Suits. In case of a threatened, pending or
----------------------------
completed action or suit by or in the right of the Corporation, a person named
in paragraph A shall be indemnified only if:
<PAGE>
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject of
the suit or action, and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, including, but not
limited to, the taking of any and all actions in connection with the
Corporation's response to any tender offer or any offer or proposal of
another party to engage in a Business Combination (as defined in Article
XV) not approved by the board of directors. However, he shall not be
indemnified in respect of any claim, issue or matter as to which he has
been adjudged liable to the Corporation unless (and only to the extent
that) the court in which the suit was brought shall determine, upon
application, that despite the adjudication but in view of all the
circumstances, he is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper.
D. Extent -- Nonderivative Suits. In case of a threatened, pending or
-----------------------------
completed suit, action or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the Corporation,
together hereafter referred to as a nonderivative suit, against a person named
in paragraph A by reason of his holding a position named in paragraph A, the
Corporation shall indemnify him if he satisfies the standard in paragraph E, for
amounts actually and reasonably incurred by him in connection with the defense
or settlement of the nonderivative suit, including, but not limited to (i)
expenses (including attorneys' fees), (ii) amounts paid in settlement, (iii)
judgments, and (iv) fines.
E. Standard -- Nonderivative Suits. In case of a nonderivative suit, a
-------------------------------
person named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject of
the nonderivative suit and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Corporation, including, but not
limited to, the taking of any and all actions in connection with the
Corporation's response to any tender offer or any offer or proposal of
another party to engage in a Business Combination (as defined in Article
XV) not approved by the board of directors and, with respect to any
criminal action or proceeding, he had no reasonable cause to believe his
conduct was unlawful. The termination of a nonderivative suit by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
---- ----------
equivalent shall not, in itself, create a presumption that the person
failed to satisfy the standard of this subparagraph E(2).
F. Determination That Standard Has Been Met. A determination that the
----------------------------------------
standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in subparagraph C(2) (second sentence), the determination may
be made by:
(1) the board of directors by a majority vote of a quorum consisting
of directors of the Corporation who were not parties to the action, suit or
proceeding; or
(2) independent legal counsel (appointed by a majority of the
disinterested directors of the Corporation, whether or not a quorum) in a
written opinion; or
(3) the stockholders of the Corporation.
G. Proration. Anyone making a determination under paragraph F may
---------
determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.
H. Advance Payment. The Corporation shall pay in advance any expenses
---------------
(including attorneys' fees) which may become subject to indemnification under
paragraphs A through G if:
(1) the board of directors authorizes the specific payment; and
(2) the person receiving the payment undertakes in writing to repay
the same if it is ultimately determined that he is not entitled to
indemnification by the Corporation under paragraphs A through G.
<PAGE>
I. Nonexclusive. The indemnification and advance payment of expenses
------------
provided by paragraphs A through H shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
J. Continuation. The indemnification provided by this Article XVII
------------
shall be deemed to be a contract between the Corporation and the persons
entitled to indemnification thereunder, and any repeal or modification of this
Article XVII shall not affect any rights or obligations then existing with
respect to any state of facts then or theretofore existing or any action, suit
or proceeding theretofore or thereafter brought based in whole or in part upon
any such state of facts. The indemnification and advance payment provided by
paragraphs A through H shall continue as to a person who has ceased to hold a
position named in paragraph A and shall inure to his heirs, executors and
administrators.
K. Insurance. The Corporation may purchase and maintain insurance on
---------
behalf of any person who holds or who has held any position named in paragraph
A, against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A through H.
L. Intention and Savings Clause. It is the intention of this Article
----------------------------
XVII to provide for indemnification to the fullest extent permitted by the
Business Corporation Act of the State of Colorado, and this Article XVII shall
be interpreted accordingly. If this Article XVII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation to the
full extent permitted by any applicable portion of this Article XVII that shall
not have been invalidated and to the full extent permitted by applicable law.
If the Business Corporation Act of the State of Colorado is amended, or other
Colorado law is enacted, to permit further or additional indemnification of the
persons defined in this Article XVII A, then the indemnification of such persons
shall be to the fullest extent permitted by the Business Corporation Act of the
State of Colorado, as so amended, or such other Colorado law.
Federal Regulations Providing for Indemnification of Directors and Officers of
- ------------------------------------------------------------------------------
Salida Building & Loan Association
- ----------------------------------
Federal regulations require that Salida Building & Loan Association (the
"Association") indemnify any person against whom an action is brought by reason
of that person's role as a director or officer of the Association for (i) any
judgments resulting from the action; (ii) reasonable costs and expenses
(including attorney's fees) incurred in connection with the defense or
settlement of such action; and (iii) reasonable costs and expenses (including
attorney's fees) incurred in connection with enforcing the individual's
indemnification rights against the Association, assuming a final judgment is
obtained in his favor.
The mandatory indemnification provided for by federal regulations is
limited to (i) actions where a final judgment on the merits is in favor of the
officer or director and (ii) in the case of a settlement, final judgment against
the director or officer or final judgment not on the merits, except as to where
the director or officer is found negligent or to have committed misconduct in
the performance of his or her duties, where a majority of the Board of Directors
of the Association determines that the director or officer was acting in good
faith within what he was reasonably entitled to believe was the scope of his or
her employment or authority for a purpose that was in the best interests of the
Association or its members or stockholders.
In addition, the Association has a directors' and officers' liability
policy providing for insurance against certain liabilities incurred by directors
and officers of the Association while serving in their capacities as such.
ITEM 7. EXCLUSION FROM REGISTRATION CLAIMED
- -------
Not applicable.
ITEM 8. EXHIBITS
- ------
The exhibit schedules filed as part of this registration statement are
as follows:
4.1 Salida Building & Loan Association 401(k) Profit Sharing Plan &
Trust (the "Plan")
4.2 Summary Plan Description of the Plan
<PAGE>
4.3 Form of Investment Election to be made available to Plan
Participants with respect to the investment of their accounts
under the Plan
5.1 Opinion of Housley Kantarian & Bronstein, P.C. as to the validity
of the Common Stock being registered
5.2 Favorable determination letter from the Internal Revenue Service
dated October 8, 1992 regarding the tax-qualification of the Plan
documents
23.1 Consent of Housley Kantarian & Bronstein, P.C. (appears in their
opinion filed as Exhibit 5.1)
23.2 Consent of Independent Certified Public Accountants
24 Power of Attorney (contained in the signature page to this
Registration Statement)
99.1 Copy of the Plan's most recent Annual Report, as filed with the
Internal Revenue Service on Form 5500.
ITEM 9. UNDERTAKINGS
- ------
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement --
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) 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.
(d) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph and other information necessary to ensure that all other information
in the prospectus is at least as current as the date of those financial
<PAGE>
statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to include
financial statements and information required by Section 10(a)(3) of the Act or
Rule 3-19 of this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Form F-3.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Town of Salida, State of Colorado, on November 13, 1997.
HIGH COUNTRY BANCORP, INC.
By: /s/ Larry D. Smith
--------------------------------
Larry D. Smith, President
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned Directors of High Country Bancorp, Inc., hereby
severally constitute and appoint Larry D. Smith, who may act, with full power of
substitution, our true and lawful attorney and agent, to do any and all things
in our names in the capacities indicated below which said Larry D. Smith, who
may act, may deem necessary or advisable to enable High Country Bancorp, Inc. to
comply with the Securities Act of 1933, as amended, and any rules, regulations
and requirements of the Securities and Exchange Commission, in connection with
the registration of High Country Bancorp, Inc. common stock, including
specifically, but not limited to, power and authority to sign for us in our
names in the capacities indicated below, the registration statement and any and
all amendments (including post-effective amendments) thereto; and we hereby
ratify and confirm all that said Larry D. Smith shall do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Larry D. Smith President and Chief Executive Officer November 13, 1997
- ------------------------
Larry D. Smith (Principal Executive Officer)
/s/ Frank. L. DeLay Chief Financial Officer November 13, 1997
- ------------------------
Frank L. DeLay (Principal Financial and Accounting Officer)
/s/ Scott G. Erchul Vice President and Director November 13, 1997
- ------------------------
Scott G. Erchul
/s/ Robert B. Mitchell Chairman of the Board November 13, 1997
- ------------------------
Robert B. Mitchell of Directors
/s/ Timothy R. Glenn Director November 13, 1997
- ------------------------
Timothy R. Glenn
/s/ Richard A. Young Director November 13, 1997
- ------------------------
Richard A. Young
/s/ Philip W. Harsh Director November 13, 1997
- ------------------------
Philip W. Harsh
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the undersigned
trustee of the Salida Building & Loan Association 401(k) Profit Sharing Plan &
Trust has duly caused this Registration Statement to be signed in the Town of
Salida, State of Colorado, on November 13, 1997.
Larry D. Smith, Richard A. Young, Robert
Mitchell, Philip Harsh, and Timothy Glenn,
acting together as Trustee of the Salida
Building & Loan Association 401(k) Profit
Sharing Plan & Trust
/s/ Larry D. Smith
--------------------------------------------
Larry D. Smith
/s/ Robert Mitchell
--------------------------------------------
Robert Mitchell
/s/ Timothy Glenn
--------------------------------------------
Timothy Glenn
/s/ Richard A. Young
--------------------------------------------
Richard A. Young
/s/ Phil Harsh
--------------------------------------------
Phil Harsh
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
4.1 Salida Building & Loan Association 401(k) Profit Sharing Plan &
Trust (the "Plan")
4.2 Summary Plan Description of the Plan
4.3 Form of Investment Election to be made available to Plan
Participants with respect to the investment of their accounts
under the Plan
5.1 Opinion of Housley Kantarian & Bronstein, P.C. as to the validity
of the Common Stock being registered
5.2 Favorable determination letter from the Internal Revenue Service
dated October 8, 1992 regarding the tax-qualification of the Plan
documents
23.1 Consent of Housley Kantarian & Bronstein, P.C. (appears in their
opinion filed as Exhibit 5.1)
23.2 Consent of Independent Certified Public Accountants
24 Power of Attorney (contained in the signature page to this
Registration Statement)
99.1 Copy of the Plan's most recent Annual Report, as filed with the
Internal Revenue Service on Form 5500.
<PAGE>
INCOME SECURITY GROUP, INC.
DEFINED CONTRIBUTION PROTOTYPE PLAN
AND
TRUST AGREEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ALPHABETICAL LISTING OF DEFINITIONS........................................... v
ARTICLE I, DEFINITIONS
1.01 Employer....................................................... 1.01
1.02 Trustee........................................................ 1.01
1.03 Plan........................................................... 1.01
1.04 Adoption Agreement............................................. 1.01
1.05 Plan Administrator............................................. 1.02
1.06 Advisory Committee............................................. 1.02
1.07 Employee....................................................... 1.02
1.08 Self-Employed Individual/Owner-Employee........................ 1.02
1.09 Highly Compensated Employee.................................... 1.02
1.10 Participant.................................................... 1.03
1.11 Beneficiary.................................................... 1.03
1.12 Compensation................................................... 1.03
1.13 Earned Income.................................................. 1.05
1.14 Account........................................................ 1.05
1.15 Accrued Benefit................................................ 1.05
1.16 Nonforfeitable................................................. 1.05
1.17 Plan Year/Limitation Year...................................... 1.05
1.18 Effective Date................................................. 1.05
1.19 Plan Entry Date................................................ 1.05
1.20 Accounting Date................................................ 1.05
1.21 Trust.......................................................... 1.05
1.22 Trust Fund..................................................... 1.05
1.23 Nontransferable Annuity........................................ 1.05
1.24 ERISA.......................................................... 1.06
1.25 Code........................................................... 1.06
1.26 Service........................................................ 1.06
1.27 Hour of Service................................................ 1.06
1.28 Disability..................................................... 1.07
1.29 Service for Predecessor Employer............................... 1.07
1.30 Related Employers.............................................. 1.07
1.31 Leased Employees............................................... 1.08
1.32 Special Rules for Owner-Employers.............................. 1.08
1.33 Determination of Top Heavy Status.............................. 1.09
1.34 Paired Plans................................................... 1.10
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 Eligibility.................................................... 2.01
2.02 Year of Service - Participation................................ 2.01
2.03 Break in Service - Participation............................... 2.01
2.04 Participation upon Re-employment............................... 2.02
2.05 Change in Employee Status...................................... 2.02
2.06 Election Not to Participate.................................... 2.02
</TABLE>
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ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 Amount......................................................... 3.01
3.02 Determination of Contribution.................................. 3.01
3.03 Time of Payment of Contribution................................ 3.01
3.04 Contribution Allocation........................................ 3.01
3.05 Forfeiture Allocation.......................................... 3.03
3.06 Accrual of Benefit............................................. 3.03
3.07 - 3.16 Limitations on Allocations................................ 3.05
3.17 Special Allocation Limitation.................................. 3.07
3.18 Defined Benefit Plan Limitation................................ 3.07
3.19 Definitions - Article III...................................... 3.07
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 Participant Nondeductible Contributions........................ 4.01
4.02 Participant Deductible Contributions........................... 4.01
4.03 Participant Rollover Contributions............................. 4.01
4.04 Participant Contribution - Forfeitability...................... 4.02
4.05 Participant Contribution - Withdrawal/Distribution............. 4.02
4.06 Participant Contribution - Accrued Benefit..................... 4.02
ARTICLE V, TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 Normal Retirement Age.......................................... 5.01
5.02 Participant Disability or Death................................ 5.01
5.03 Vesting Schedule............................................... 5.01
5.04 Cash-Out Distributions to Partially-Vested
Participants/Restoration of Forfeited Accrued Benefit.......... 5.01
5.05 Segregated Account for Repaid Amount........................... 5.03
5.06 Year of Service - Vesting...................................... 5.03
5.07 Break in Service - Vesting..................................... 5.03
5.08 Included Years of Service - Vesting............................ 5.03
5.09 Forfeiture Occurs.............................................. 5.03
ARTICLE VI, TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 Time of Payment of Accrued Benefit............................. 6.01
6.02 Method of Payment of Accrued Benefit........................... 6.03
6.03 Benefit Payment Elections...................................... 6.05
6.04 Annuity Distributions to Participants and Surviving Spouses.... 6.06
6.05 Waiver Election - Qualified Joint and Survivor Annuity......... 6.07
6.06 Waiver Election - Preretirement Survivor Annuity............... 6.08
6.07 Distributions Under Domestic Relations Orders.................. 6.09
ARTICLE VII, EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 Information to Committee....................................... 7.01
7.02 No Liability................................................... 7.01
7.03 Indemnity of Certain Fiduciaries............................... 7.01
7.04 Employer Direction of Investment............................... 7.01
7.05 Amendment to Vesting Schedule.................................. 7.01
</TABLE>
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ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 Beneficiary Designation....................................... 8.01
8.02 No Beneficiary Designation/Death of Beneficiary............... 8.01
8.03 Personal Data to Committee.................................... 8.02
8.04 Address for Notification...................................... 8.02
8.05 Assignment or Alienation...................................... 8.02
8.06 Notice of Change in Terms..................................... 8.02
8.07 Litigation Against the Trust.................................. 8.02
8.08 Information Available......................................... 8.02
8.09 Appeal Procedure for Denial of Benefits....................... 8.02
8.10 Participant Direction of Investment........................... 8.03
ARTICLE IX, ADVISORY COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses............................... 9.01
9.02 Term.......................................................... 9.01
9.03 Powers........................................................ 9.01
9.04 General....................................................... 9.01
9.05 Funding Policy................................................ 9.02
9.06 Manner of Action.............................................. 9.02
9.07 Authorized Representative..................................... 9.02
9.08 Interested Member............................................. 9.02
9.09 Individual Accounts........................................... 9.02
9.10 Value of Participant's Accrued Benefit........................ 9.02
9.11 Allocation and Distribution of Net Income Gain or Loss........ 9.03
9.12 Individual Statement.......................................... 9.03
9.13 Account Charged............................................... 9.03
9.14 Unclaimed Account Procedure................................... 9.04
ARTICLE X, CUSTODIAN/TRUSTEE, POWERS AND DUTIES
10.01 Acceptance.................................................... 10.01
10.02 Receipt of Contributions...................................... 10.01
10.03 Investment Powers............................................. 10.01
10.04 Records and Statements........................................ 10.05
10.05 Fees and Expenses from Fund................................... 10.06
10.06 Parties to Litigation......................................... 10.06
10.07 Professional Agents........................................... 10.06
10.08 Distribution of Cash or Property.............................. 10.06
10.09 Distribution Directions....................................... 10.06
10.10 Third Party/Multiple Trustees................................. 10.06
10.11 Resignation................................................... 10.06
10.12 Removal....................................................... 10.07
10.13 Interim Duties and Successor Trustee.......................... 10.07
10.14 Valuation of Trust............................................ 10.07
10.15 Limitation on Liability - If Investment Manager, Ancillary
Trustee or Independent Fiduciary Appointed.................... 10.07
10.16 Investment in Group Trust Fund................................ 10.07
</TABLE>
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<TABLE>
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10.17 Appointment of Ancillary Trustee or Independent Fiduciary..... 10.08
ARTICLE XI, PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 Insurance Benefit............................................. 11.01
11.02 Limitation on Life Insurance Protection....................... 11.01
11.03 Definitions................................................... 11.02
11.04 Dividend Plan................................................. 11.02
11.05 Insurance Company Not a Party to Agreement.................... 11.02
11.06 Insurance Company Not Responsible for Trustee's
Actions....................................................... 11.03
11.07 Insurance Company Reliance on Trustee's Signature............. 11.03
11.08 Acquittance................................................... 11.03
11.09 Duties of Insurance Company................................... 11.03
ARTICLE XII, MISCELLANEOUS
12.01 Evidence...................................................... 12.01
12.02 No Responsibility for Employer Action......................... 12.01
12.03 Fiduciaries Not Insurers...................................... 12.01
12.04 Waiver of Notice.............................................. 12.01
12.05 Successors.................................................... 12.01
12.06 Word Usage.................................................... 12.01
12.07 State Law..................................................... 12.01
12.08 Employer's Right to Participate............................... 12.01
12.09 Employment Not Guaranteed..................................... 12.02
ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 Exclusive Benefit............................................. 13.01
13.02 Amendment By Employer......................................... 13.01
13.03 Amendment By Regional Prototype Plan Sponsor.................. 13.02
13.04 Discontinuance................................................ 13.02
13.05 Full Vesting on Termination................................... 13.02
13.06 Merger/Direct Transfer........................................ 13.02
13.07 Termination................................................... 13.03
ARTICLE XIV, CODE (S)401(K) AND CODE (S)401(M) ARRANGEMENTS
14.01 Application................................................... 14.01
14.02 Code (S) 401(k) Arrangement................................... 14.01
14.03 Definitions................................................... 14.02
14.04 Matching Contributions/Employee Contributions................. 14.03
14.05 Time of Payment of Contributions.............................. 14.03
14.06 Special Allocation Provisions - Deferral Contributions,
Matching Contributions and Qualified Nonelective
Contributions................................................. 14.04
14.07 Annual Elective Deferral Limitation........................... 14.05
14.08 Actual Deferral Percentage ("ADP") Test....................... 14.06
14.09 Nondiscrimination Rules for Employer Matching
Contributions/
Participant Nondeductible Contributions....................... 14.07
14.10 Multiple Use Limitation....................................... 14.09
14.11 Distribution Restrictions..................................... 14.10
14.12 Special Allocation Rules...................................... 14.11
</TABLE>
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<TABLE>
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ARTICLE A - APPENDIX TO BASIC PLAN DOCUMENT............................. A-1
ARTICLE B - APPENDIX TO BASIC PLAN DOCUMENT............................. B-1
</TABLE>
v
<PAGE>
ALPHABETICAL LISTING OF DEFINITIONS
<TABLE>
<CAPTION>
PLAN DEFINITION SECTION REFERENCE
(PAGE NUMBER)
<S> <C>
100% Limitation.................................................. 3.19(l) (3.09)
Account............................................................. 1.14 (1.05)
Accounting Date..................................................... 1.20 (1.05)
Accrued Benefit..................................................... 1.15 (1.05)
Actual Deferral Percentage ("ADP") Test........................... 14.08 (14.06)
Adoption Agreement.................................................. 1.04 (1.01)
Advisory Committee.................................................. 1.06 (1.02)
Annual Addition.................................................. 3.19(a) (3.07)
Average Contribution Percentage Test.............................. 14.09 (14.07)
Beneficiary......................................................... 1.11 (1.03)
Break in Service for Eligibility Purposes........................... 2.03 (2.01)
Break in Service for Vesting Purposes............................... 5.07 (5.03)
Cash-out Distribution............................................... 5.04 (5.01)
Code................................................................ 1.25 (1.06)
Code (S)411(d)(6) Protected Benefits.............................. 13.02 (13.01)
Compensation........................................................ 1.12 (1.03)
Compensation for Code (S)401(k) Purposes....................... 14.03(f) (14.02)
Compensation for Code (S)415 Purposes............................ 3.19(b) (3.07)
Compensation for Top Heavy Purposes........................... 1.33(B)(3) (1.10)
Contract(s).................................................... 11.03(c) (11.02)
Custodian Designation.......................................... 10.03[B] (10.02)
Deemed Cash-out Rule............................................. 5.04(C) (5.02)
Deferral Contributions......................................... 14.03(g) (14.02)
Deferral Contributions Account.................................... 14.06 (14.04)
Defined Benefit Plan............................................. 3.19(i) (3.08)
Defined Benefit Plan Fraction.................................... 3.19(j) (3.08)
Defined Contribution Plan........................................ 3.19(h) (3.08)
Defined Contribution Plan Fraction............................... 3.19(k) (3.09)
Determination Date............................................ 1.33(B)(7) (1.10)
Disability.......................................................... 1.28 (1.07)
Distribution Date................................................... 6.01 (6.01)
Distribution Restrictions...................................... 14.03(m) (14.03)
Earned Income....................................................... 1.13 (1.05)
.................. ................................................. 1.18 (1.05)
Elective Deferrals............................................. 14.03(h) (14.02)
Elective Transfer.............................................. 13.06(A) (13.02)
Eligible Employee.............................................. 14.03(c) (14.02)
Employee............................................................ 1.07 (1.02)
Employee Contributions......................................... 14.03(n) (14.03)
Employer............................................................ 1.01 (1.01)
</TABLE>
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<TABLE>
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Employer Contribution Account..................................... 14.06 (14.04)
Employer for Code (S)415 Purposes................................ 3.19(c) (3.08)
Employer for Top Heavy Purposes............................... 1.33(B)(6) (1.10)
Employment Commencement Date........................................ 2.02 (2.01)
ERISA............................................................... 1.24 (1.06)
Excess Aggregate Contributions.................................... 14.09 (14.07)
Excess Amount.................................................... 3.19(d) (3.08)
Excess Contributions.............................................. 14.08 (14.06)
Exempt Participant.................................................. 8.01 (8.01)
Forfeiture Break in Service......................................... 5.08 (5.03)
Group Trust Fund.................................................. 10.16 (10.07)
Hardship...................................................... 6.01(A)(4) (6.02)
Hardship for Code (S)401(k) Purposes.............................. 14.11 (14.10)
Highly Compensated Employee......................................... 1.09 (1.02)
Highly Compensated Group....................................... 14.03(d) (14.02)
Hour of Service..................................................... 1.27 (1.06)
Incidental Insurance Benefits..................................... 11.01 (11.01)
Insurable Participant.......................................... 11.03(d) (11.02)
Investment Manager............................................... 9.04(i) (9.01)
Issuing Insurance Company...................................... 11.03(b) (11.02)
Joint and Survivor Annuity....................................... 6.04(A) (6.06)
Key Employee.................................................. 1.33(B)(1) (1.10)
Leased Employees.................................................... 1.31 (1.08)
Limitation Year.............................. 1.17 and 3.19(e) (1.05) and (3.08)
Loan Policy...................................................... 9.04(A) (9.02)
Mandatory Contributions........................................... 14.04 (14.03)
Mandatory Contributions Account................................... 14.04 (14.03)
Master or Prototype Plan......................................... 3.19(f) (3.08)
Matching Contributions......................................... 14.03(i) (14.02)
Maximum Permissible Amount....................................... 3.19(g) (3.08)
Minimum Distribution Incidental Benefit (MDIB)................... 6.02(A) (6.03)
Multiple Use Limitation........................................... 14.10 (14.09)
Named Fiduciary................................................ 10.03[D] (10.04)
Nonelective Contributions...................................... 14.03(j) (14.03)
Nonforfeitable...................................................... 1.16 (1.05)
Nonhighly Compensated Employee................................. 14.03(b) (14.02)
Nonhighly Compensated Group.................................... 14.03(e) (14.02)
Non-Key Employee.............................................. 1.33(B)(2) (1.10)
Nontransferable Annuity............................................. 1.23 (1.05)
Normal Retirement Age............................................... 5.01 (5.01)
Owner-Employee...................................................... 1.08 (1.02)
Paired Plans........................................................ 1.34 (1.10)
Participant......................................................... 1.10 (1.03)
Participant Deductible Contributions................................ 4.02 (4.01)
Participant Forfeiture.............................................. 3.05 (3.03)
Participant Loans.............................................. 10.03[E] (10.05)
Participant Nondeductible Contributions............................. 4.01 (4.01)
</TABLE>
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<TABLE>
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Permissive Aggregation Group.................................. 1.33(B)(5) (1.10)
Plan................................................................ 1.03 (1.01)
Plan Administrator.................................................. 1.05 (1.02)
Plan Entry Date..................................................... 1.19 (1.05)
Plan Year........................................................... 1.17 (1.05)
Policy......................................................... 11.03(a) (11.02)
Predecessor Employer................................................ 1.29 (1.07)
Preretirement Survivor Annuity................................... 6.04(B) (6.06)
Qualified Domestic Relations Order.................................. 6.07 (6.09)
Qualified Matching Contributions............................... 14.03(k) (14.03)
Qualified Nonelective Contributions............................ 14.03(l) (14.03)
Qualifying Employer Real Property.............................. 10.03[F] (10.05)
Qualifying Employer Securities................................. 10.03[F] (10.05)
Related Employers................................................... 1.30 (1.07)
Required Aggregation Group.................................... 1.33(B)(4) (1.10)
Required Beginning Date.......................................... 6.01(B) (6.02)
Rollover Contributions.............................................. 4.03 (4.01)
Self-Employed Individual............................................ 1.08 (1.02)
Service............................................................. 1.26 (1.06)
Term Life Insurance Contract...................................... 11.03 (11.02)
Top Heavy Minimum Allocation...................................... 304(B) (3.01)
Top Heavy Ratio..................................................... 1.33 (1.09)
Trust............................................................... 1.21 (1.05)
Trustee............................................................. 1.02 (1.01)
Trustee Designation............................................ 10.03[A] (10.01)
Trust Fund...........................................................1.21 (1.05)
Weighted Average Allocation Method................................ 14.12 (14.11)
Year of Service for Eligibility Purposes............................ 2.02 (2.01)
Year of Service for Vesting Purposes................................ 5.06 (5.03)
</TABLE>
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<PAGE>
INCOME SECURITY GROUP, INC.
---------------------------
DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST AGREEMENT
-------------------------------------------------------
BASIC PLAN DOCUMENT # 03
------------------------
Income Security Group, Inc., in its capacity as Regional Prototype Plan
---------------------------
Sponsor, establishes this Prototype Plan intended to conform to and qualify
under (S)401 and (S)501 of the Internal Revenue Code of 1986, as amended. An
Employer establishes a Plan and Trust under this Prototype Plan by executing an
Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of this
Plan, as a restated Plan, apply solely to an Employee whose employment with the
Employer terminates on or after the restated Effective Date of the Employer's
Plan. If an Employee's employment with the Employer terminates prior to the
restated Effective Date, that Employee is entitled to benefits under the Plan as
the Plan existed on the date of the Employee's termination of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means each employer who adopts this Plan by executing an
Adoption Agreement.
1.02 "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing accepts
the position of Trustee. The Employer must designate in its Adoption Agreement
whether the Trustee will administer the Trust as a discretionary Trustee or as a
nondiscretionary Trustee. If a person acts as a discretionary Trustee, the
Employer also may appoint a Custodian. See Article X.
1.03 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement under
which the Employer has elected to participate in this Prototype Plan. The
Employer must designate the name of the Plan in its Adoption Agreement. An
Employer may execute more than one Adoption Agreement offered under this
Prototype Plan, each of which will constitute a separate Plan and Trust
established or continued by that Employer. The Plan and the Trust created by
each adopting Employer is a separate Plan and a separate Trust, independent from
the plan and the trust of any other employer adopting this Prototype Plan. All
section references within the Plan are Plan section references unless the
context clearly indicates otherwise.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Prototype Plan. The terms of this Prototype Plan as modified by
the terms of an adopting Employer's Adoption Agreement constitute a separate
Plan and Trust to be construed as a single Agreement. Each elective provision of
the Adoption Agreement corresponds by section reference to the section of the
Plan which grants the election. Each Adoption Agreement offered under this
Prototype Plan is either a Nonstandardized Plan or a Standardized Plan, as
identified in the preamble to that Adoption Agreement. The provisions of this
Prototype Plan apply equally to Nonstandardized Plans and to Standardized Plans
unless otherwise specified.
1.01
<PAGE>
1.05 "Plan Administrator" is the Employer 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.
1.06 "Advisory Committee" means the Employer's Advisory Committee as
from time to time constituted.
1.07 "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption Agreement
any Employee, or class of Employees, not eligible to participate in the Plan. If
the Employer elects to exclude collective bargaining employees, the exclusion
applies to any employee of the Employer 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 unless the
collective bargaining agreement requires the employee to be included within the
Plan. The term "employee representatives" does not include any organization more
than half the members of which are owners, officers, or executives of the
Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and owns more than 10% of either the capital or profits interest of the
partnership.
1.09 "Highly Compensated Employee" means an Employee who, during the
Plan Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code (S)318, and applying the principles of Code (S)318,
for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year) and is part of the top-paid 20%
group of employees (based on Compensation for the relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed in
Code (S)415(b)(1)(A) (relating to defined benefit plans) and is an officer
of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in the
Plan Year but does not satisfy clause (b), (c) or (d) during the preceding 12-
month period and does not satisfy clause (a) in either period, the Employee is a
Highly Compensated Employee only if he is one of the 100 most highly compensated
Employees for the Plan Year. The number of officers taken into account under
clause (d) will not exceed the greater of 3 or 10% of the total number (after
application of the Code (S)414(q) exclusions) of Employees, but no more than 50
officers. If no Employee satisfies the Compensation requirement in clause (d)
for the relevant year, the Advisory Committee will treat the highest paid
officer as satisfying clause (d) for that year.
For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected in the
Employer's Adoption Agreement Section 1.12 do not apply, and Compensation must
include "elective contributions" (as defined in Section 1.12). The Advisory
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, the top 100 paid Employees, the number of officers includible in clause
(d) and the relevant Compensation, consistent with Code (S)414(q) and
regulations issued under that Code
1.02
<PAGE>
section. The Employer may make a calendar year election to determine the Highly
Compensated Employees for the Plan Year, as prescribed by Treasury regulations.
A calendar year election must apply to all plans and arrangements of the
Employer. For purposes of applying any nondiscrimination test required under the
Plan or under the Code, in a manner consistent with applicable Treasury
regulations, the Advisory Committee will treat a Highly Compensated Employee and
all family members (a spouse, a lineal ascendant or descendant, or a spouse of a
lineal ascendant or descendant) as a single Highly Compensated Employee, but
only if the Highly Compensated Employee is a more than 5% owner or is one of the
10 Highly Compensated Employees with the greatest Compensation for the Plan
Year. This aggregation rule applies to a family member even if that family
member is a Highly Compensated Employee without family aggregation.
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. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this Section 1.09 or received Compensation in excess of $50,000
during: (1) the year of his Separation from Service (or the prior year); or (2)
any year ending after his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.11 "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 Advisory 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.
1.12 "Compensation" means, except as provided in the Employer's Adoption
Agreement, the Participant's Earned Income, wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). The Employer must elect in its Adoption Agreement
whether to include elective contributions in the definition of Compensation.
"Elective contributions" are amounts excludible from the Employee's gross income
under Code (S)(S)125, 402(a)(8), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code (S)401(k) arrangement, a
Simplified Employee Pension, cafeteria plan or tax-sheltered annuity. The term
"Compensation" does not include:
(a) Employer contributions (other than "elective contributions," if
includible in the definition of Compensation under Section 1.12 of the
Employer's Adoption Agreement) to a plan of deferred compensation to the
extent the contributions are not included in the gross income of the
Employee for the taxable year in which contributed, on behalf of an
Employee to a Simplified Employee Pension Plan to the extent such
contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of whether
such amounts are includible in the gross income of the Employee when
distributed.
(b) Amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by an Employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a stock option described in Part II, Subchapter D, Chapter 1
of the Code.
1.03
<PAGE>
(d) Other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not
includible in the gross income of the Employee), or contributions made by
an Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code (S)403(b) (whether or not
the contributions are excludible from the gross income of the Employee),
other than "elective contributions," if elected in the Employer's Adoption
Agreement.
Any reference in this Plan to Compensation is a reference to the definition
in this Section 1.12, unless the Plan reference specifies a modification to this
definition. The Advisory Committee will take into account only Compensation
actually paid for the relevant period. A Compensation payment includes
Compensation by the Employer through another person under the common paymaster
provisions in Code (S)(S)3121 and 3306.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only the first
$200,000 (or beginning January 1, 1990, such larger amount as the Commissioner
of Internal Revenue may prescribe) of any Participant's Compensation. For any
Plan Year beginning prior to January 1, 1989, this $200,000 limitation (but not
the family aggregation requirement described in the next paragraph) applies only
if the Plan is top heavy for such Plan Year or operates as a deemed top heavy
plan for such Plan Year.
(2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY MEMBERS. The
$200,000 Compensation limitation applies to the combined Compensation of the
Employee and of any family member aggregated with the Employee under Section
1.09 who is either (i) the Employee's spouse; or (ii) the Employee's lineal
descendant under the age of 19. If, for a Plan Year, the combined Compensation
of the Employee and such family members who are Participants entitled to an
allocation for that Plan Year exceeds the $200,000 (or adjusted) limitation,
"Compensation" for each such Participant, for purposes of the contribution and
allocation provisions of Article III, means his Adjusted Compensation. Adjusted
Compensation is the amount which bears the same ratio to the $200,000 (or
adjusted) limitation as the affected Participant's Compensation (without regard
to the $200,000 Compensation limitation) bears to the combined Compensation of
all the affected Participants in the family unit. If the Plan uses permitted
disparity, the Advisory Committee must determine the integration level of each
affected family member Participant prior to the proration of the $200,000
Compensation limitation, but the combined integration level of the affected
Participants may not exceed $200,000 (or the adjusted limitation). The combined
Excess Compensation of the affected Participants in the family unit may not
exceed $200,000 (or the adjusted limitation) minus the affected Participants'
combined integration level (as determined under the preceding sentence). If the
combined Excess Compensation exceeds this limitation, the Advisory Committee
will prorate the Excess Compensation limitation among the affected Participants
in the family unit in proportion to each such individual's Adjusted Compensation
minus his integration level. If the Employer's Plan is a Nonstandardized Plan,
the Employer may elect to use a different method in determining the Adjusted
Compensation of the affected Participants by specifying that method in an
addendum to the Adoption Agreement, numbered Section 1.12.
(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12, except: (1) the Employer may elect
to include or to exclude elective contributions, irrespective of the Employer's
election in its Adoption Agreement regarding elective contributions; and (2) the
Employer will not give effect to any elections made in the "modifications to
Compensation definition" section of Adoption Agreement Section 1.12. The
Employer's election described in clause (1) must be consistent and uniform with
respect to all Employees and all plans of the Employer for any particular Plan
Year. If the Employer's Plan is a Nonstandardized Plan, the Employer,
irrespective of clause (2), may elect to exclude from this nondiscrimination
definition of Compensation any items of Compensation excludible under Code
(S)414(s) and the applicable Treasury regulations, provided such adjusted
definition conforms to the nondiscrimination requirements of those regulations.
1.04
<PAGE>
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income producing
factor. The Advisory Committee will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Advisory Committee will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code (S)164(f) for self-employment
taxes.
1.14 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employer's Plan.
1.15 "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.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable to the
limitations on allocations described in Article III. If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.
1.18 "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.
1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of
the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date of that
Plan Year.
1.21 "Trust" means the separate Trust created under the Employer's Plan.
1.22 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "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.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "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.
1.05
<PAGE>
1.27 "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 Advisory 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 Advisory 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
(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 Advisory 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
Advisory Committee credits Hours of Service under this paragraph (c) in
accordance with the rules of paragraphs (b) and (c) of Labor Reg.
(S)2530.200b-2, which the Plan, by this reference, specifically
incorporates in full within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more than
one of the above paragraphs. A computation period for purposes of this Section
1.27 is the Plan Year, Year of Service period, Break in Service period or other
period, as determined under the Plan provision for which the Advisory Committee
is measuring an Employee's Hours of Service. The Advisory 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 Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. 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.
If the Employer elects to apply an "equivalency" method, for each equivalency
period for which the Advisory Committee would credit the Employee with at least
one Hour of Service, the Advisory Committee will credit the Employee with: (i)
10 Hours of Service for a daily equivalency; (ii) 45 Hours of Service for a
weekly equivalency; (iii) 95 Hours of Service for a semimonthly payroll period
equivalency; and (iv) 190 Hours of Service for a monthly equivalency.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory 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 Advisory
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 Advisory 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 Advisory Committee will credit only the number
(not exceeding 501) of Hours of Service necessary to prevent an Employee's Break
in Service. The Advisory 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
Advisory Committee credits these Hours of Service to the immediately following
computation period.
1.06
<PAGE>
1.28 "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 Advisory 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 Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this Section
1.28 in a nondiscriminatory, consistent and uniform manner. If the Employer's
Plan is a Nonstandardized Plan, the Employer may provide an alternate definition
of disability in an addendum to its Adoption Agreement, numbered Section 1.28.
1.29 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. If the Employer does not
maintain the plan of a predecessor employer, the Plan does not credit service
with the predecessor employer, unless the Employer identifies the predecessor in
its Adoption Agreement and specifies the purposes for which the Plan will credit
service with that predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
-----------------
corporations (as defined in Code (S)414(b)), trades or businesses (whether or
not incorporated) which are under common control (as defined in Code (S)414(c))
or an affiliated service group (as defined in Code (S)414(m) or in Code
(S)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 Participation Test and 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 only by
being a signatory to the Execution Page of the Adoption Agreement or to a
Participation Agreement to the Employer's Adoption Agreement. If one or more of
the Employer's related group members become Participating Employers by executing
a Participation Agreement to the Employer's Adoption Agreement, the term
"Employer" includes the participating related group members for all purposes of
the Plan, and "Plan Administrator" means the Employer that is the signatory to
the Execution Page of the Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is a Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of its
Adoption Agreement, whether the Employees of related group members that are not
Participating Employers are eligible to participate in the Plan. Under a
Nonstandardized Plan, the Employer may elect to exclude from the definition of
"Compensation" for allocation purposes any Compensation received from a related
employer that has not executed a Participation Agreement and whose Employees are
not eligible to participate in the Plan.
1.31 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
(S)144(a)(3)) on a substantially full time basis for at least one year and who
performs services historically performed by employees in the Employer's business
field. If a Leased Employee is treated as an Employee by reason of this Section
1.31 of the Plan, "Compensation" includes Compensation from the leasing
organization which is attributable to services performed for the Employer.
1.07
<PAGE>
(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 (S)415(c)(3) plus elective contributions (as
defined in Section 1.12).
(B) OTHER REQUIREMENTS. The Advisory Committee must apply this Section 1.31 in
a manner consistent with Code (S)(S)414(n) and 414(o) and the regulations issued
under those Code sections. The Employer must specify in the Adoption Agreement
the manner in which the Plan will determine the allocation of Employer
contributions and Participant forfeitures on behalf of a Participant if the
Participant is a Leased Employee covered by a plan maintained by the leasing
organization.
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions
---------------------------------
and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an Owner-Employee
or for a group of Owner-Employees who controls the trade or business with
respect to which this Plan is established and the Owner-Employee or Owner-
Employees also control as Owner-Employees one or more other trades or
businesses, plans must exist or be established with respect to all the
controlled trades or businesses so that when the plans are combined they
form a single plan which satisfies the requirements of Code (S)401(a) and
Code (S)401(d) with respect to the employees of the controlled trades or
businesses.
(b) The Plan excludes an Owner-Employee or group of Owner-Employees if the
Owner-Employee or group of Owner-Employees controls any other trade or
business, unless the employees of the other controlled trade or business
participate in a plan which satisfies the requirements of Code (S)401(a)
and Code (S)401(d). The other qualified plan must provide contributions and
benefits which are not less favorable than the contributions and benefits
provided for the Owner-Employee or group of Owner-Employees under this
Plan, or if an Owner-Employee is covered under another qualified plan as an
Owner-Employee, then the plan established with respect to the trade or
business he does control must provide contributions or benefits as
favorable as those provided under the most favorable plan of the trade or
business he does not control. If the exclusion of this paragraph (b)
applies and the Employer's Plan is a Standardized Plan, the Employer may
not participate or continue to participate in this Prototype Plan and the
Employer's Plan becomes an individually-designed plan for purposes of
qualification reliance.
(c) For purposes of paragraphs (a) and (b) of this Section 1.32, an Owner-
Employee or group of Owner-Employees controls a trade or business if the
Owner-Employee or Owner-Employees together (1) own the entire interest in
an unincorporated trade or business, or (2) in the case of a partnership,
own more than 50% of either the capital interest or the profits interest in
the partnership.
1.33 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 Advisory
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 (S)416 and the applicable Treasury regulations, and
distributions made within the Determination Period. The Advisory 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
1.08
<PAGE>
has not received credit for at least one Hour of Service with the Employer
during the Determination Period. The Advisory 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 (S)416 and the
regulations under that Code section.
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 Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.33, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory 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
Advisory 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 (S)416 and the
regulations under that Code section. If a Participant in a defined benefit plan
is a Non-Key Employee, the Advisory 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 (S)411(b)(1)(C). If the Employer maintains a
defined benefit plan, the Employer must specify in Adoption Agreement Section
3.18 the actuarial assumptions (interest and mortality only) the Advisory
Committee will use to calculate the present value of benefits from a defined
benefit plan. If an aggregated plan does not have a valuation date coinciding
with the Determination Date, the Advisory 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
(S)416 and applicable Treasury regulations require for the first and second plan
year of a defined benefit plan. The Advisory Committee will calculate the top
heavy ratio with reference to the Determination Dates that fall within the same
calendar year.
(A) STANDARDIZED PLAN. If the Employer's Plan is a Standardized Plan, the Plan
operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code (S)401(k) arrangement, the Employer may elect
to apply the top heavy requirements only in Plan Years for which the Plan
actually is top heavy. Under a deemed top heavy plan, the Advisory Committee
need not determine whether the Plan actually is top heavy. However, if the
Employer, in Adoption Agreement Section 3.18, elects to override the 100%
limitation, the Advisory Committee will need to determine whether a deemed top
heavy Plan's top heavy ratio for a Plan Year exceeds 90%.
(B) DEFINITIONS. For purposes of applying the provisions of this Section 1.33:
(1) "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 (S)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 (S)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 (S)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 (S)414(q) exclusions) of Employees, but no more than 50
officers. The Advisory Committee will make the determination of who is a
Key Employee in accordance with Code (S)416(i)(1) and the regulations under
that Code section.
(2) "Non-Key Employee" is an employee who does not meet the definition of
Key Employee.
1.09
<PAGE>
(3) "Compensation" means Compensation as determined under Section 1.09 for
purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of the
Employer in which at least one Key Employee participates at any time during
the Determination Period; and (ii) any other qualified plan of the Employer
which enables a plan described in clause (i) to meet the requirements of
Code (S)401(a)(4) or of Code (S)410.
(5) "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 (S)401(a)(4)
and of Code (S)410. The Advisory Committee will determine the Permissive
Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.30.
(7) "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.
1.34 "Paired Plans" means the Employer has adopted two Standardized Plan
Adoption Agreements offered with this Prototype Plan, one Adoption Agreement
being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired
Pension Plan. A Paired Profit Sharing Plan may include a Code (S)401(k)
arrangement. A Paired Pension Plan must be a money purchase pension plan or a
target benefit pension plan. Paired Plans must be the subject of a favorable
opinion letter issued by the National Office of the Internal Revenue Service.
This Prototype Plan does not pair any of its Standardized Plan Adoption
Agreements with Standardized Plan Adoption Agreements under a defined benefit
prototype plan.
* * * * * * * * * * * * * * *
1.10
<PAGE>
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
-----------
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the participation
conditions in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
-------------------------------
participation in the Plan under Adoption Agreement 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 the number of Hours of Service
specified in the Employer's Adoption Agreement. The initial eligibility
computation period is the first 12 consecutive month period measured from the
Employment Commencement Date. The Plan measures succeeding eligibility
computation periods in accordance with the option selected by the Employer in
its Adoption Agreement. If the Employer elects to measure subsequent periods on
a Plan Year basis, an Employee who receives credit for the required number of
Hours of Service during the initial eligibility computation period and during
the first applicable Plan Year will receive credit for two Years of Service
under Article II. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer. If the Employer
elects a service condition under Adoption Agreement Section 2.01 based on
months, the Plan does not apply any Hour of Service requirement after the
completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in
--------------------------------
Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month period"
under this Section 2.03 is the same 12 consecutive month period for which the
Plan measures "Years of Service" under Section 2.02.
(A) 2-YEAR ELIGIBILITY. If the Employer elects a 2 years of service condition
for eligibility purposes under Adoption Agreement Section 2.01, the Plan treats
an Employee who incurs a one year Break in Service and who has never become a
Participant as a new Employee on the date he first performs an Hour of Service
for the Employer after the Break in Service.
(B) SUSPENSION OF YEARS OF SERVICE. The Employer must elect in its Adoption
Agreement whether a Participant will incur a suspension of Years of Service
after incurring a one year Break in Service. If this rule applies under the
Employer's Plan, the Plan disregards a Participant's Years of Service (as
defined in Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year of
Service following his Break in Service, the Plan restores that Participant's
pre-Break Years of Service (and the Participant resumes active participation in
the Plan) retroactively to the first day of the computation period in which the
Participant earns the first post-Break Year of Service. The initial computation
period under this Section 2.03(B) is the 12 consecutive month period measured
from the date the Participant first receives credit for an Hour of Service
following the one year Break in Service period. The Plan measures any subsequent
periods, if necessary, in a manner consistent with the computation period
selection in Adoption Agreement Section 2.02. This Section 2.03(B) does not
affect a Participant's vesting credit under Article V and, during a suspension
period, the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.11. Furthermore, this Section 2.03(B) will not
result in the restoration of any Year of Service disregarded under the Break in
Service rule of Section 2.03(A).
2.01
<PAGE>
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, subject to the Break in Service rule, if applicable, under
Section 2.03(B). 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, subject to the Break in Service rule, if applicable, under Section
2.03(B). Any Employee who terminates employment prior to satisfying the Plan's
eligibility conditions becomes a Participant in accordance with Adoption
Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
-------------------------
Separation from Service but ceases to be eligible to participate in the Plan, by
reason of employment within an employment classification excluded by the
Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Advisory
Committee determines a Participant's sharing in the allocation of Employer
contributions and Participant forfeitures, if applicable, 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.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a
---------------------------
Standardized Plan, the Plan does not permit an otherwise eligible Employee nor
any Participant to elect not to participate in the Plan. If the Employer's Plan
is a Nonstandardized Plan, the Employer must specify in its Adoption Agreement
whether an Employee eligible to participate, or any present Participant, may
elect not to participate in the Plan. For an election to be effective for a
particular Plan Year, the Employee or Participant must file the election in
writing with the Plan Administrator not later than the time specified in the
Employer's Adoption Agreement. The Employer may not make a contribution under
the Plan for the Employee or for the Participant for the Plan Year for which the
election is effective, nor for any succeeding Plan Year, unless the Employee or
Participant re-elects to participate in the Plan. After an Employee's or
Participant's election not to participate has been effective for at least the
minimum period prescribed by the Employer's Adoption Agreement, the Employee or
Participant may re-elect to participate in the Plan for any Plan Year and
subsequent Plan Years. An Employee or Participant may re-elect to participate in
the Plan by filing his election in writing with the Plan Administrator not later
than the time specified in the Employer's Adoption Agreement. An Employee or
Participant who re-elects to participate may again elect not to participate only
as permitted in the Employer's Adoption Agreement. If an Employee is a Self-
Employed Individual, the Employee's election (except as permitted by Treasury
regulations without creating a Code (S)401(k) arrangement with respect to that
Self-Employed Individual) must be effective no later than the date the Employee
first would become a Participant in the Plan and the election is irrevocable.
The Plan Administrator must furnish an Employee or a Participant any form
required for purposes of an election under this Section 2.06. An election timely
filed is effective for the entire Plan Year.
2.02
<PAGE>
A Participant who elects not to participate may not receive a distribution
of his Accrued Benefit attributable either to Employer or to Participant
contributions except as provided under Article IV or under Article VI. However,
for each Plan Year for which a Participant's election not to participate is
effective, the Participant's Account, if any, continues to share in Trust Fund
allocations under Article IX. Furthermore, the Employee or the Participant
receives vesting credit under Article V for each included Year of Service during
the period the election not to participate is effective.
* * * * * * * * * * * * * * *
2.03
<PAGE>
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
--------------------------------------------------------------------
THROUGH 3.06
- ------------
3.01 AMOUNT. For each Plan Year, the Employer contributes to the Trust
------
the amount determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a contribution to
the Trust for any Plan Year to the extent the contribution would exceed the
Participants' Maximum Permissible Amounts.
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 mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code (S)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. Subject to the consent of the
Trustee, the Employer may make its contribution in property rather than in cash,
provided the contribution of property is not a prohibited transaction under the
Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
-----------------------
(A) METHOD OF ALLOCATION. The Employer must specify in its Adoption Agreement
the manner of allocating each annual Employer contribution to this Trust.
(B) TOP HEAVY MINIMUM ALLOCATION. The Plan must comply with the provisions of
this Section 3.04(B), subject to the elections in the Employer's Adoption
Agreement.
(1) TOP HEAVY MINIMUM ALLOCATION UNDER STANDARDIZED PLAN. Subject to the
Employer's election under Section 3.04(B)(3), the top heavy minimum allocation
requirement applies to a Standardized Plan for each Plan Year, irrespective of
whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last day of the Plan
Year will receive a top heavy minimum allocation for that Plan Year. The
Employer may elect in Section 3.04 of its Adoption Agreement to apply this
paragraph (a) only to a Participant who is a Non-Key Employee.
3.01
<PAGE>
(b) Subject to any overriding elections in Section 3.18 of the Employer's
Adoption Agreement, the top heavy minimum allocation is the lesser of 3% of
the Participant's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Participant for
the Plan Year. However, if the Employee participates in Paired Plans, the
top heavy minimum allocation is 3% of his Compensation. If, under Adoption
Agreement Section 3.04, the Employer elects to apply paragraph (a) only to
a Participant who is a Non-Key Employee, the Advisory Committee will
determine the "highest contribution rate" described in the first sentence
of this paragraph (b) by reference only to the contribution rates of
Participants who are Key Employees for the Plan Year.
(2) TOP HEAVY MINIMUM ALLOCATION UNDER NONSTANDARDIZED PLAN. The top heavy
minimum allocation requirement applies to a Nonstandardized Plan only in Plan
Years for which the Plan is top heavy. Except as provided in the Employer's
Adoption Agreement, 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 of the Employer's Adoption
Agreement; 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
(S)401(a)(4) or the coverage rules of Code (S)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.
(3) SPECIAL ELECTION FOR STANDARDIZED CODE (S)401(K) PLAN. If the
Employer's Plan is a Standardized Code (S)401(k) Plan, the Employer may elect in
Adoption Agreement Section 3.04 to apply the top heavy minimum allocation
requirements of Section 3.04(B)(1) only for Plan Years in which the Plan
actually is a top heavy plan.
(4) 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 Compensation level or because
of his failure to make elective deferrals under a Code (S)401(k) arrangement or
because of his failure to make mandatory contributions. For purposes of
subparagraph (1)(b) or (2)(b), "Compensation" means Compensation as defined in
Section 1.12, except Compensation does not include elective contributions,
irrespective of whether the Employer has elected to include these amounts in
Section 1.12 of its Adoption Agreement, any exclusion selected in Section 1.12
of the Adoption Agreement (other than the exclusion of elective contributions)
does not apply, and any modification to the definition of Compensation in
Section 3.06 does not apply.
(5) DETERMINING CONTRIBUTION RATES. For purposes of this Section 3.04(B),
a Participant's contribution rate is the sum of all 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, the
Participant's contribution rate does not include any elective contributions
under a Code (S)401(k) arrangement nor any Employer matching contributions
allocated on the basis of those elective contributions or on the basis of
employee contributions, except a Nonstandardized Plan may include in the
contribution rate any matching contributions not necessary to satisfy the
nondiscrimination requirements of Code (S)401(k) or of Code (S)401(m).
3.02
<PAGE>
If the Employee is a Participant in Paired Plans, the Advisory Committee
will consider the Paired Plans as a single Plan to determine a Participant's
contribution rate and to determine whether the Plans satisfy this top heavy
minimum allocation requirement. To determine a Participant's contribution rate
under a Nonstandardized Plan, the Advisory Committee must treat all qualified
top heavy defined contribution plans maintained by the Employer (or by any
related Employers described in Section 1.30) as a single plan.
(6) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04 (B)(1)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), 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.
(7) ELECTION OF METHOD. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.
(a) If the Employer elects to make any necessary additional contribution
to this Plan, the Advisory Committee first will allocate the Employer
contributions (and Participant forfeitures, if any) for the Plan Year in
accordance with the provisions of Adoption Agreement Section 3.04. 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 (5), 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 Advisory Committee will allocate the additional
contribution to the Account of the Participant on whose behalf the Employer
makes the contribution.
(b) If the Employer elects to guarantee the top heavy minimum allocation
under another plan, this Plan does not provide the top heavy minimum
allocation and the Advisory Committee will allocate the annual Employer
contributions (and Participant forfeitures) under the Plan solely in
accordance with the allocation method selected under Adoption Agreement
Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
---------------------
Benefit forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Advisory 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. Except as provided under Section 5.04, a Participant will not
share in the allocation of a forfeiture of any portion of his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
------------------
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its Adoption
Agreement the Compensation the Advisory Committee is to take into account in
allocating an Employer contribution to a Participant's Account for the Plan Year
in which the Employee first becomes a Participant. For all other Plan Years, the
Advisory Committee will take into account only the Compensation determined for
the portion of the Plan Year in which the Employee actually is a Participant.
The Advisory Committee must take into account the Employee's entire Compensation
for the Plan Year to determine whether the Plan satisfies the top heavy minimum
allocation requirement of Section 3.04(B). The Employer, in an addendum to its
Adoption Agreement numbered 3.06(A), may elect to measure Compensation for the
Plan Year for allocation purposes on the basis of a specified period other than
the Plan Year.
3.03
<PAGE>
(B) HOURS OF SERVICE REQUIREMENT. Subject to the applicable minimum allocation
requirement of Section 3.04, the Advisory 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 the applicable minimum Hours of Service
requirement specified in the Employer's Adoption Agreement.
(C) EMPLOYMENT REQUIREMENT. If the Employer's Plan is a Standardized Plan, a
Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation of
Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan Year. If the
Employer's Plan is a Nonstandardized Plan, the Employer must specify in its
Adoption Agreement whether the Participant will accrue a benefit if he is not
employed by the Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a target benefit plan, whether
Nonstandardized or Standardized, the Plan conditions benefit accrual on
employment with the Employer on the last day of the Plan Year for the Plan Year
in which the Employer terminates the Plan.
(D) OTHER REQUIREMENTS. If the Employer's Adoption Agreement includes options
for other requirements affecting the Participant's accrual of benefits under the
Plan, the Advisory Committee will apply this Section 3.06 in accordance with the
Employer's Adoption Agreement selections.
(E) SUSPENSION OF ACCRUAL REQUIREMENTS UNDER NONSTANDARDIZED PLAN. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989,
the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan
satisfies the Participation Test if, on each day of the Plan Year, the number of
Employees who benefit under the Plan is at least equal to the lesser of 50 or
40% of the total number of Includible Employees as of such day. A Plan satisfies
the Coverage Test if, on the last day of each quarter of the Plan Year, the
number of Nonhighly Compensated Employees who benefit under the Plan is at least
equal to 70% of the total number of Includible Nonhighly Compensated Employees
as of such day. "Includible" Employees are all Employees other than: (1) those
Employees excluded from participating in the Plan for the entire Plan Year by
reason of the collective bargaining unit exclusion or the nonresident alien
exclusion under Adoption Agreement Section 1.07 or by reason of the
participation requirements of Sections 2.01 and 2.03; and (2) any Employee who
incurs a Separation from Service during the Plan Year and fails to complete at
least 501 Hours of Service for the Plan Year. A "Nonhighly Compensated Employee"
is an Employee who is not a Highly Compensated Employee and who is not a family
member aggregated with a Highly Compensated Employee pursuant to Section 1.09 of
the Plan.
For purposes of the Participation Test and the Coverage Test, an Employee
is benefiting under the Plan on a particular date if, under Adoption Agreement
Section 3.04, he is entitled to an allocation for the Plan Year. Under the
Participation Test, when determining whether an Employee is entitled to an
allocation under Adoption Agreement Section 3.04, the Advisory Committee will
disregard any allocation required solely by reason of the top heavy minimum
allocation, unless the top heavy minimum allocation is the only allocation made
under the Plan for the Plan Year.
If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Separation from Service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Includible
Employee who incurred an earlier Separation from Service, from the latest to the
earliest Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If two or more
Includible Employees have a Separation from Service on the same day, the
Advisory Committee will suspend the accrual requirements for all such Includible
Employees, irrespective of whether the Plan can satisfy the Participation Test
and the Coverage Test by accruing benefits for fewer than all such Includible
Employees. If the Plan suspends the accrual requirements for an Includible
Employee, that Employee will share in the allocation of Employer contributions
and Participant forfeitures, if any, without regard to the
3.04
<PAGE>
number of Hours of Service he has earned for the Plan Year and without regard to
whether he is employed by the Employer on the last day of the Plan Year. If the
Employer's Plan includes Employer matching contributions subject to Code
(S)401(m), this suspension of accrual requirements applies separately to the
Code (S)401(m) portion of the Plan, and the Advisory Committee will treat an
Employee as benefiting under that portion of the Plan if he is an Eligible
Employee for purposes of the Code (S)401(m) nondiscrimination test. The Employer
may modify the operation of this Section 3.06(E) by electing appropriate
modifications in Section 3.06 of its Adoption Agreement.
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 THROUGH 3.19
------------------------------------------------------
[Note: Sections 3.07 through 3.10 apply only to Participants in this Plan
who do not participate, and who have never participated, in another qualified
plan or in a welfare benefit fund (as defined in Code (S)419(e)) maintained by
the Employer.]
3.07 The amount of Annual Additions which the Advisory 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 3.10) to the Participant's Account, the Advisory 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 Advisory 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.
3.08 Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Advisory Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory 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.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum Permissible
Amount for such Limitation Year on the basis of the Participant's actual
Compensation for such Limitation Year.
3.10 If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Advisory Committee will dispose of such Excess Amount as
follows:
(a) The Advisory 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 Advisory 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. If the Employer's
Plan is a profit sharing plan, 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.
3.05
<PAGE>
(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 Advisory Committee will hold the Excess Amount
unallocated in a suspense account. The Advisory 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 Advisory Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
[Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or Prototype defined contribution
plans or welfare benefit funds (as defined in Code (S)419(e)) maintained by the
Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may not
exceed the Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's Accounts for the same Limitation Year
under this Plan and such other defined contribution plan. If the amount the
Employer otherwise would contribute to the Participant's Account under this Plan
would cause the Annual Additions for the Limitation Year to exceed this
limitation, the Employer will reduce the amount of its contribution so the
Annual Additions under all such plans 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 3.10) to the Participant's
Account, the Advisory 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 Advisory
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.
3.12 Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the Advisory Committee may determine the amounts
referred to in 3.11 above on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee will make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contribution
(including allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred to
in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such other
plans result in an Excess Amount, such Excess Amount will consist of the Amounts
last allocated. The Advisory Committee will determine the Amounts last allocated
by treating the Annual Additions attributable to a welfare benefit fund as
allocated first, irrespective of the actual allocation date under the welfare
benefit fund.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an Excess
Amount to a Participant on an allocation date of this Plan which coincides with
an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
3.06
<PAGE>
[Note: Section 3.17 applies only to Participants who, in addition to this
Plan, participate in one or more qualified plans which are qualified defined
contribution plans other than a Master or Prototype plan maintained by the
Employer during the Limitation Year.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions which
-----------------------------
the Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3.11
through 3.16, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
-------------------------------
defined benefit plan, or has ever maintained a defined benefit plan which the
Employer has terminated, then the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Participant for any Limitation
Year must not exceed 1.0. The Employer must provide in Adoption Agreement
Section 3.18 the manner in which the Plan will satisfy this limitation. The
Employer also must provide in its Adoption Agreement Section 3.18 the manner in
which the Plan will satisfy the top heavy requirements of Code (S)416 after
taking into account the existence (or prior maintenance) of the defined benefit
plan.
3.19 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 (S)401(k), excess aggregate
contributions described in Code (S)401(m) and excess deferrals described in
Code (S)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 3.10. Amounts allocated
after March 31, 1984, to an individual medical account (as defined in Code
(S)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 (S)419A(d)(3)) under a welfare benefit fund (as defined in Code
(S)419(e)) maintained by the Employer.
(b) "Compensation" - For purposes of applying the limitations of Part 2 of
this Article III, "Compensation" means Compensation as defined in Section
1.12, except Compensation does not include elective contributions,
irrespective of whether the Employer has elected to include these amounts
as Compensation under Section 1.12 of its Adoption Agreement, and any
exclusion selected in Section 1.12 of the Adoption Agreement (other than
the exclusion of elective contributions) does not apply.
(c) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.30. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.30 by modifying Code
(S)(S)414(b) and (c) in accordance with Code (S)415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer under Adoption
Agreement Section 1.17. All qualified plans of the Employer must use the
same Limitation 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.
(f) "Master or Prototype Plan" - A plan the form of which is the subject
of a favorable notification letter or a favorable opinion letter from the
Internal Revenue Service.
3.07
<PAGE>
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
(S)415(b)(1)(A)), 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 Advisory Committee will multiply the $30,000 (or
adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------------
12
(h) "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
Advisory 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 Advisory
Committee will treat employee contributions made to a defined benefit plan
maintained by the Employer as a separate defined contribution plan. The
Advisory Committee also will treat as a defined contribution plan an
individual medical account (as defined in Code (S)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
(S)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 (S)419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does not provide for
individual accounts for Employer contributions. The Advisory Committee must
treat all defined benefit plans (whether or not terminated) maintained by
the Employer as a single plan.
[Note: The definitions in paragraphs (j), (k) and (l) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]
(j) "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 (S) 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 Advisory Committee will
make any adjustment required under Code (S)415(b) and will determine a Year of
Service, unless otherwise provided in an addendum to Adoption Agreement Section
3.18, 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.
3.08
<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 (S)415 as in effect at the end of the 1986 Limitation Year.
(k) "Defined contribution plan fraction" -
The sum, 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(S)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
Advisory 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 (S)415 for Limitation Years
beginning prior to January 1, 1987, the Advisory 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 Advisory 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 Advisory 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.
(l) "100% limitation." If the 100% limitation applies, the Advisory 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%. If the Employer's Plan is a Standardized Plan, the 100% limitation applies
in all Limitation Years, subject to any override provisions under Section 3.18
of the Employer's Adoption Agreement. If the Employer overrides the 100%
limitation under a Standardized Plan, the Employer must specify in its Adoption
Agreement the manner in which the Plan satisfies the extra minimum benefit
requirement of Code (S)416(h) and the 100% limitation must continue to apply if
the Plan's top heavy ratio exceeds 90%. If the Employer's Plan is a
Nonstandardized Plan, 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 elect in its Adoption Agreement Section 3.18 to
provide extra minimum benefits which satisfy Code (S)416(h)(2).
* * * * * * * * * * * * * * *
3.09
<PAGE>
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit
---------------------------------------
Participant nondeductible contributions unless the Employer maintains its Plan
under a Code (S)401(k) Adoption Agreement. If the Employer does not maintain its
Plan under a Code (S)401(k) Adoption Agreement and, prior to the adoption of
this Prototype Plan, the Plan accepted Participant nondeductible contributions
for a Plan Year beginning after December 31, 1986, those contributions must
satisfy the requirements of Code (S)401(m). This Section 4.01 does not prohibit
the Plan's acceptance of Participant nondeductible contributions prior to the
first Plan Year commencing after the Plan Year in which the Employer adopts this
Prototype Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
------------------------------------
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must 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 4.03. The
Advisory 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 1.33. The Advisory Committee may not use DECs
to purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
----------------------------------
Employer's written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash 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 (or the
Named Fiduciary, in the case of a nondiscretionary Trustee designation), 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 Advisory 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 rollover 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 Advisory 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.
4.01
<PAGE>
4.04 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.
4.05 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 Advisory 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.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory 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).
* * * * * * * * * * * * * * *
4.02
<PAGE>
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal Retirement
---------------------
Age in its Adoption Agreement. 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. The Employer may elect in its
-------------------------------
Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be 100% Nonforfeitable if the Participant's
Separation from Service is a result of his death or his disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02, for
----------------
each Year of Service, a Participant's Nonforfeitable percentage of his Accrued
Benefit derived from Employer contributions equals the percentage in the vesting
schedule completed by the Employer in its Adoption Agreement.
(A) ELECTION OF SPECIAL VESTING FORMULA. If the Trustee makes a distribution
(other than a cash-out distribution described in Section 5.04) to a partially-
vested Participant, and the Participant has not incurred a Forfeiture Break in
Service at the relevant time, the Advisory Committee will establish a separate
Account for the Participant's Accrued Benefit. At any relevant time following
the distribution, the Advisory Committee will determine the Participant's
Nonforfeitable Accrued Benefit derived from Employer contributions in
accordance with the following formula: P(AB + (R x D)) - (R x D).
To apply this formula, "P" is the Participant's current vesting percentage
at the relevant time, "AB" is the Participant's Employer-derived Accrued Benefit
at the relevant time, "R" is the ratio of "AB" to the Participant's Employer-
derived Accrued Benefit immediately following the earlier distribution and "D"
is the amount of the earlier distribution. If, under a restated Plan, the Plan
has made distribution to a partially-vested Participant prior to its restated
Effective Date and is unable to apply the cash-out provisions of Section 5.04 to
that prior distribution, this special vesting formula also applies to that
Participant's remaining Account. The Employer, in an addendum to its Adoption
Agreement, numbered Section 5.03, may elect to modify this formula to read as
follows: P(AB + D) - D.
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.
(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 Advisory 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 (S)411(d)(6) protected benefits with respect to that restored Accrued
Benefit, in accordance with applicable Treasury regulations. The Advisory
Committee will not restore a re-employed Participant's Accrued Benefit under
this paragraph if:
5.01
<PAGE>
(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 Advisory 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 Advisory 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 Advisory Committee, to the extent necessary,
will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
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.
In an addendum to its Adoption Agreement numbered 5.04(B), the Employer may
eliminate as a means of restoration any of the amounts described in clauses (1),
(2) and (3) or may change the order of priority of these amounts. To the extent
the amounts described in clauses (1), (2) and (3) are insufficient to enable the
Advisory 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 Advisory Committee to make the
required restoration. If, for a particular Plan Year, the Advisory Committee
must restore the Accrued Benefit of more than one re-employed Participant, then
the Advisory 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 Advisory 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 Employer must specify in its Adoption Agreement
whether 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. If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a Separation from
Service, the Advisory Committee will apply the deemed cash-out rule as if the 0%
vested Participant received a cash-out distribution on the date of the
Participant's Separation from Service. If the Participant's Account is entitled
to an allocation of Employer contributions or Participant forfeitures for the
Plan Year in which he has a Separation from Service, the Advisory Committee will
apply the deemed cash-out rule as if the 0% vested Participant received a cash-
out distribution on the first day of the first Plan Year beginning after his
Separation from Service. For purposes of applying the restoration provisions of
this Section 5.04, the Advisory Committee will treat the 0% vested Participant
as repaying his cash-out "distribution" on the first date of his re-employment
with the Employer. If the deemed cash-out rule does not apply to the Employer's
Plan, a 0% vested Participant will not incur a forfeiture until he incurs a
Forfeiture Break in Service.
5.02
<PAGE>
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory 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 Advisory 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 Advisory 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 Advisory 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 12-consecutive month period designated in the
Employer's Adoption Agreement during which an Employee completes not less than
the number of Hours of Service (not exceeding 1,000) specified in the Employer's
Adoption Agreement. A Year of Service includes any Year of Service earned prior
to the Effective Date of the Plan, except as provided in Section 5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
--------------------------
Participant incurs a "Break in Service" if during any vesting computation period
he does not complete more than 500 Hours of Service. If, pursuant to Section
5.06, the Plan does not require more than 500 Hours of Service to receive credit
for a Year of Service, a Participant incurs a Break in Service in a vesting
computation period in which he fails to complete a Year of Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. 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 except:
(a) 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.
(b) The Plan disregards any Year of Service excluded under the Employer's
Adoption Agreement.
The Plan does not apply the Break in Service rule under Code
(S)411(a)(6)(B). Therefore, an Employee need not complete a Year of Service
after a Break in Service before the Plan takes into account the Employee's
otherwise includible Years of Service under this Article V.
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 vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory 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 does 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.
* * * * * * * * * * * * * * *
5.03
<PAGE>
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section
----------------------------------
6.03, the Participant or the Beneficiary elects in writing to a different time
or method of payment, the Advisory 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 $3,500 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. A distribution date under this
Article VI, unless otherwise specified within the Plan, is the date or dates the
Employer specifies in the Adoption Agreement, 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 $3,500,
the Advisory Committee must treat that present value as exceeding $3,500 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 $3,500. If
the Participant's Separation from Service is for any reason other than death,
the Advisory Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in a lump sum, on the distribution date the
Employer specifies in the Adoption Agreement, 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 has attained Normal Retirement Age at
the time of his Separation from Service, the distribution under this paragraph
will occur no later than the 60th day following the close of the Plan Year in
which the Participant's Separation from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. If the
Participant's Separation from Service is for any reason other than death, the
Advisory 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 Advisory 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 disability, the Advisory Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, on the distribution
date the Employer specifies in the Adoption Agreement, subject to the notice and
consent requirements of this Article VI and subject to the applicable mandatory
commencement dates described in Paragraphs (1) and (2).
(4) HARDSHIP. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may request a
distribution from his Nonforfeitable Accrued Benefit in an amount necessary to
satisfy a hardship, if the Employer elects in the Adoption Agreement to permit
hardship distributions. Unless the Employer elects otherwise in the Adoption
Agreement, a hardship distribution must be on account of any of the following:
(a) medical expenses; (b) the purchase (excluding mortgage payments) of the
Participant's principal residence; (c) post-secondary education tuition, for the
next semester or quarter, for the Participant or for the Participant's spouse,
children or dependents; (d) to prevent the eviction of the Participant from his
principal residence or the foreclosure on the mortgage of the Participant's
principal residence; (e) funeral expenses of the Participant's family member; or
(f) the Participant's disability. A partially-vested Participant may not receive
a hardship distribution described in this Paragraph (A)(4) prior to incurring a
Forfeiture Break in Service, unless
6.01
<PAGE>
the hardship distribution is a cash-out distribution (as defined in Article V).
The Advisory Committee will direct the Trustee to make the hardship distribution
as soon as administratively practicable after the Participant makes a valid
request for the hardship distribution.
(B) REQUIRED BEGINNING DATE. 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 Advisory 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. However, if the Participant, prior
to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988,
and, for the five Plan Year period ending in the calendar year in which he
attained age 70 1/2 and for all subsequent years, the Participant was not a more
than 5% owner, the Required Beginning Date is the April 1 following the close of
the calendar year in which the Participant separates from Service or, if
earlier, the April 1 following the close of the calendar year in which the
Participant becomes a more than 5% owner. Furthermore, if a Participant who was
not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a
Separation from Service prior to January 1, 1989, his Required Beginning Date is
April 1, 1990. 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.
(C) DEATH OF THE PARTICIPANT. The Advisory 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 Advisory 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
$3,500. The Advisory 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 sum, as soon as administratively practicable
following the Participant's death or, if later, the date on which the Advisory
Committee receives notification of or otherwise confirms the Participant's
death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500.
The Advisory 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 Advisory Committee will direct the Trustee to distribute the
Participant's undistributed Nonforfeitable Accrued Benefit in a lump sum on 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 Advisory 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.
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; or (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. The Employer may elect in its Adoption
Agreement to modify the methods of payment available under this Section 6.02.
6.02
<PAGE>
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 $3,500. To facilitate
installment payments under this Article VI, the Advisory 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.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory 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 (S)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
(S)401(a)(9) regulations). The Advisory 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 Advisory
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 Advisory Committee must use the unisex life expectancy
multiples under Treas. Reg. (S)1.72-9. The Advisory 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 Advisory 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 Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code (S)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 Advisory 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 Advisory
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. The Advisory Committee must determine whether benefits to the
Beneficiary are incidental as of the date the Trustee is to commence payment of
the retirement benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
6.03
<PAGE>
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 (S)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 (S)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
Advisory 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 70 1/2. 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 Advisory Committee must use the unisex life
expectancy multiples under Treas. Reg. (S)1.72-9 for purposes of applying this
paragraph. The Advisory 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 Advisory 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
Advisory 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.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
-------------------------
than 30 days, before the Participant's annuity starting date, the Advisory
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 Advisory 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 Advisory 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.
6.04
<PAGE>
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value
of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect
to have the Trustee commence distribution as of any distribution date permitted
under the Employer's Adoption Agreement Section 6.03. 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 permitted under the
Employer's Adoption Agreement Section 6.03. 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. 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 elections under
Adoption Agreement Section 6.03.
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. The Employer must
specify in its Adoption Agreement the distribution election rights, if any, a
Participant has prior to his Separation from Service. A Participant must make an
election under this Section 6.03(B) on a form prescribed by the Advisory
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.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $3,500, 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 Advisory 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 Advisory 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 (S)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 Advisory Committee will apply this
Section 6.03(D) to rollovers and transfers in accordance with Part J of the Code
(S)401(a)(9) Treasury regulations.
6.05
<PAGE>
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
-----------------------------------------------------------
(A) JOINT AND SURVIVOR ANNUITY. The Advisory 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 (described in Section 6.05) within the
90 day period ending on the annuity starting date. 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. On or before the annuity starting
date, the Advisory 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 $3,500. This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after August 22, 1984.
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to his
annuity starting date, the Advisory 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 $3,500, the
Advisory 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. This Section 6.04(B) applies only
to a Participant who dies after August 22, 1984, and either (i) completes at
least one Hour of Service with the Employer after August 22, 1984, or (ii)
separated from Service with at least 10 Years of Service (as defined in Section
5.06) and completed at least one Hour of Service with the Employer in a Plan
Year beginning after December 31, 1975.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, 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
Advisory 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 Advisory 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.
6.06
<PAGE>
(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 Advisory 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 Advisory Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03[E]) 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[E] of
the Plan. For purposes of applying this Article VI, the Advisory 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.
(E) PROFIT SHARING PLAN ELECTION. If this Plan is a profit sharing plan, the
Employer must elect the extent to which the preceding provisions of Section 6.04
apply. If the Employer elects to apply this Section 6.04 only to a Participant
described in this Section 6.04(E), the preceding provisions of this Section 6.04
apply only to the following Participants: (1) a Participant as respects whom the
Plan is a direct or indirect transferee from a plan subject to the Code (S)417
requirements and the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section 13.06; (2) a
Participant who elects a life annuity distribution (if Section 6.02 or Section
13.02 of the Plan requires the Plan to provide a life annuity distribution
option); and (3) a Participant whose benefits under a defined benefit plan
maintained by the Employer are offset by benefits provided under this Plan. If
the Employer elects to apply this Section 6.04 to all Participants, the
preceding provisions of this Section 6.04 apply to all Participants described in
the first two paragraphs of this Section 6.04, without regard to the limitations
of this Section 6.04(E). Sections 6.05 and 6.06 only apply to Participants to
whom the preceding provisions of this Section 6.04 apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not
------------------------------------------------------
earlier than 90 days, but not later than 30 days, before the Participant's
annuity starting date, the Advisory 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.
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.
6.07
<PAGE>
The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory 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 Advisory
------------------------------------------------
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
Advisory 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.
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 Advisory 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 Advisory 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 Advisory
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Code (S)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 (S)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 $3,500, and the order requires, the
alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. The Employer, in an
addendum to its Adoption Agreement numbered 6.07, may elect to limit
distribution to an alternate payee only when the Participant has attained his
earliest retirement age under the Plan. 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.
6.08
<PAGE>
The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Advisory 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 Advisory Committee must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of its
determination. The Advisory 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.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Advisory
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
Advisory Committee will direct the Trustee to distribute the payable amounts in
accordance with the order. If the Advisory Committee does not make its
determination of the qualified status of the order within the 18-month
determination period, the Advisory 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 Advisory
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 Advisory 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).
* * * * * * * * * * * * * * *
6.09
<PAGE>
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
------------------------
information to the Advisory 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 Advisory Committee considers necessary. The Employer's records as to the
current information the Employer furnishes to the Advisory 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 Advisory Committee (unless the Employer is
the Advisory Committee), the Trustee, the Custodian, if any, or the Plan
Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and
--------------------------------
saves harmless the Plan Administrator and the members of the Advisory Committee,
and each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Advisory Committee, or the members of the
Advisory 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 Advisory Committee member from any liability he may have
under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator
and the Advisory 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.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
-----------------------------
right to amend the vesting schedule at any time, the Advisory 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. For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least 5 Years of Service with the Employer. The
Participant must file his election with the Advisory 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
Advisory Committee, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the
7.01
<PAGE>
amendment, the appropriate form upon which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. 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. Furthermore, the
Advisory Committee must treat any shift in the vesting schedule, due to a change
in the Plan's top heavy status, as an amendment to the vesting schedule for
purposes of this Section 7.05.
* * * * * * * * * * * * * * *
7.02
<PAGE>
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
Advisory Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Advisory
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.
(B) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan, the
Beneficiary designation of a married Exempt Participant is not valid unless the
Participant's spouse consents (in a manner described in Section 6.05) to the
Beneficiary designation. An "Exempt Participant" is a Participant who is not
subject to the joint and survivor requirements of Article VI. The spousal
consent requirement in this paragraph does not apply if the Exempt Participant
and his spouse are not married throughout the one year period ending on the date
of the Participant's death, or if the Participant's spouse is the Participant's
sole primary Beneficiary.
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, unless the Employer specifies a different
order of priority in an addendum to its Adoption Agreement, 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 or unless the Employer provides otherwise in its Adoption Agreement.
If the Plan is a profit sharing plan, and the Plan includes Exempt Participants,
the Employer may not specify a different order of priority in the Adoption
Agreement unless the Participant's surviving spouse will be first in the
different order of priority. The Advisory Committee will direct the Trustee as
to the method and to whom the Trustee will make payment under this Section 8.02.
8.01
<PAGE>
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary
--------------------------
of a deceased Participant must furnish to the Advisory Committee such evidence,
data or information as the Advisory 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 Advisory Committee, provided the Advisory
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 Advisory 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 Advisory 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 (S)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 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
-------------------------
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
----------------------------
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
---------------------
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 8.08 in his office, or in such
other place or places as he may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary the
Plan Administrator must furnish him with a copy of any item listed in this
Section 8.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
---------------------------------------
Beneficiary ("Claimant") may file with the Advisory 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 Advisory 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 Advisory 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 Advisory
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
8.02
<PAGE>
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory 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 Advisory Committee in writing within
the 75-day period will render the Advisory Committee's determination final,
binding and conclusive.
If the Claimant should appeal to the Advisory 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
Advisory 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 Advisory 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 Advisory 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 Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 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
Advisory Committee, may establish written procedures, incorporated specifically
as part of this Plan, relating to Participant direction of investment under this
Section 8.10. 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 Advisory 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.
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 (S)408(m)) as
a deemed distribution to the Participant for Federal income tax purposes.
* * * * * * * * * * * * * * *
8.03
<PAGE>
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
-------------------------------
Advisory 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 Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without compensation
for services as such, but the Employer will pay all expenses of the Advisory
Committee, except to the extent the Trust properly pays for such expenses,
pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
----
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
------
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and
-------
duties:
(a) To select a Secretary, who need not be a member of the Advisory
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;
(h) To engage the service of agents 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 (S)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 Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.01
<PAGE>
(A) LOAN POLICY. If the Advisory 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 Advisory 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 Advisory 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 Advisory 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 Advisory Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory 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 Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory 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 Advisory 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 Advisory 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 Advisory 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 Advisory 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 valuation date immediately preceding the
date of the distribution. Any distribution (other than a distribution from a
segregated Account) made to a Participant (or to his Beneficiary) more than 90
days after the most recent valuation date may include interest on the amount of
the distribution as an expense of the Trust Fund. The interest, if any, accrues
from such valuation date to the date of the distribution at the rate established
in the Employer's Adoption Agreement.
9.02
<PAGE>
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. As of each valuation date the
Advisory 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.
(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The Advisory
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
Advisory 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 Advisory
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
Advisory Committee must reduce a segregated Account for any forfeiture arising
under Section 5.09 after the Advisory 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. If the Employer maintains its Plan under a Code
(S)401(k) Adoption Agreement, the Employer may specify in its Adoption Agreement
alternate valuation provisions authorized by that Adoption Agreement. This
Section 9.11 applies solely to the allocation of net income, gain or loss of the
Trust. The Advisory 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 Advisory Committee, has the right to inspect the records reflecting the
Account of any other Participant.
9.13 ACCOUNT CHARGED. The Advisory 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 Advisory 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 Advisory Committee to search for, or to ascertain the whereabouts
of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Advisory Committee within 6 months from the date of mailing of
the notice, the Advisory Committee will treat the Participant's or Beneficiary's
unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed
payable Accrued Benefit in accordance with Section 3.05. A forfeiture under this
9.03
<PAGE>
paragraph will occur at the end of the notice period or, if later, the earliest
date applicable Treasury regulations would permit the forfeiture. Pending
forfeiture, the Advisory Committee, following the expiration of the notice
period, may direct the Trustee to segregate the Nonforfeitable Accrued Benefit
in a segregated Account and to invest that segregated Account in Federally
insured interest bearing savings accounts or time deposits (or in a combination
of both), or in other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.14
makes a claim, at any time, for his forfeited Accrued Benefit, the Advisory
Committee must restore the Participant's or Beneficiary's forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the Accrued Benefit
forfeited, unadjusted for any gains or losses occurring subsequent to the date
of the forfeiture. The Advisory Committee will make the restoration during the
Plan Year in which the Participant or Beneficiary makes the claim, first from
the amount, if any, of Participant forfeitures the Advisory Committee otherwise
would allocate for the Plan Year, then from the amount, if any, of the Trust
Fund net income or gain for the Plan Year and then from the amount, or
additional amount, the Employer contributes to enable the Advisory Committee to
make the required restoration. The Advisory Committee must direct the Trustee to
distribute the Participant's or Beneficiary's restored Accrued Benefit to him
not later than 60 days after the close of the Plan Year in which the Advisory
Committee restores the forfeited Accrued Benefit. The forfeiture provisions of
this Section 9.14 apply solely to the Participant's or to the Beneficiary's
Accrued Benefit derived from Employer contributions.
* * * * * * * * * * * * * * *
9.04
<PAGE>
ARTICLE X
CUSTODIAN/TRUSTEE, POWERS AND DUTIES
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] DISCRETIONARY TRUSTEE DESIGNATION. If the Employer, in Adoption Agreement
Section 1.02, designates the Trustee to administer the Trust as a discretionary
Trustee, then 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 Advisory Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Advisory 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 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
(S)414(b)) at a reasonable rate of interest or in a common trust fund, as
described in Code (S)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 (S)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.
10.01
<PAGE>
(e) To credit and distribute the Trust as directed by the Advisory
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 Advisory
Committee for any payment or distribution made by it in good faith on the
order or direction of the Advisory 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.
(n) To furnish to the Employer, the Plan Administrator and the Advisory
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 Advisory Committee, except as to any act or
transaction concerning which the Employer, the Plan Administrator or the
Advisory 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] NONDISCRETIONARY TRUSTEE DESIGNATION/APPOINTMENT OF CUSTODIAN. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funds contributed to it.
A nondiscretionary Trustee, as directed trustee of the funds held by it under
the Employer's Plan, is authorized and empowered, by way of limitation, with the
following powers, rights and duties, each of which the nondiscretionary Trustee
exercises solely as directed trustee in accordance with the written direction of
the Named Fiduciary (except to the extent a Plan asset is subject to the control
and management of a properly appointed Investment Manager or subject to Advisory
Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any common or preferred
stocks, open-end or closed-end
10.02
<PAGE>
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 options 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 Named Fiduciary deems appropriate.
(b) To retain in cash so much of the Trust Fund as the Named Fiduciary may
direct in writing to satisfy liquidity needs of the Plan and to deposit any
cash held in the Trust Fund in a bank account at reasonable interest,
including, specific authority to invest in any type of deposit of the
Trustee (or of a bank related to the Trustee within the meaning of Code
(S)414(b)) at a reasonable rate of interest.
(c) To 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 Named Fiduciary
directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
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 Advisory
Committee for any payment or distribution made by it in good faith on the
order or direction of the Advisory Committee.
(e) To borrow money, to assume indebtedness, extend mortgages and encumber
by mortgage or pledge.
(f) 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, provided the exercise of any such
powers is in accordance with and at the written direction of the Named
Fiduciary.
(g) 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, provided the exercise of any such
powers is in accordance with and at the written direction of the Named
Fiduciary.
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories or in another form as the Named Fiduciary may deem best, with
or without disclosing the custodial relationship.
(i) 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 a court of competent jurisdiction
makes final adjudication.
(j) To file all tax returns required of the Trustee.
10.03
<PAGE>
(k) To furnish to the Named Fiduciary, the Employer, the Plan Administrator
and the Advisory Committee an annual statement of account showing the
condition of the Trust Fund and all investments, receipts, disbursements
and other transactions effected by the nondiscretionary 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 Named Fiduciary, the Employer, the Plan
Administrator and the Advisory Committee, except as to any act or
transaction concerning which the Named Fiduciary, the Employer, the Plan
Administrator or the Advisory Committee files with the nondiscretionary
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.
(l) 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.
APPOINTMENT OF CUSTODIAN. The Employer may appoint a Custodian under the
Plan, the acceptance by the Custodian indicated on the execution page of the
Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B]. The Custodian
accepts the terms of the Plan and Trust by executing the Employer's Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the Trustee's
liability by Plan provision also acts as a limitation of the Custodian's
liability. Any action taken by the Custodian at the discretionary Trustee's
direction satisfies any provision in the Plan referring to the Trustee's taking
that action.
MODIFICATION OF POWERS/LIMITED RESPONSIBILITY. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the powers
of the Custodian or nondiscretionary Trustee to any combination of powers listed
within this Section 10.03[B]. If there is a Custodian or a nondiscretionary
Trustee under the Employer's Plan, then the Employer, in adopting this Plan
acknowledges the Custodian or nondiscretionary Trustee has no discretion with
respect to the investment or re-investment of the Trust Fund and that the
Custodian or nondiscretionary Trustee is acting solely as custodian or as
directed trustee with respect to the assets comprising the Trust Fund.
[C] LIMITATION OF POWERS OF CERTAIN CUSTODIANS. If a Custodian is a bank which,
under its governing state law, does not possess trust powers, then paragraphs
(a), (c), (e), (f), (g) of Section 10.03[B], Section 10.16 and Article XI do not
apply to that bank and that bank only has the power and authority to exercise
the remaining powers, rights and duties under Section 10.03[B].
[D] NAMED FIDUCIARY/LIMITATION OF LIABILITY OF NONDISCRETIONARY TRUSTEE OR
CUSTODIAN. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's 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 Participant or Advisory Committee
direction of investment. If the Employer appoints a Custodian, the Named
Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another person or persons
to serve as Named Fiduciary, the Named Fiduciary under the Plan is the president
of a corporate Employer, the managing partner of a partnership Employer or the
sole proprietor, as appropriate. The Named Fiduciary will exercise its
management and control of the Trust Fund through its written direction to the
nondiscretionary Trustee or to the Custodian, whichever applies to the
Employer's Plan.
10.04
<PAGE>
The nondiscretionary Trustee or Custodian has no duty to review or to make
recommendations regarding investments made at the written direction of the Named
Fiduciary. The nondiscretionary Trustee or Custodian must retain any investment
obtained at the written direction of the Named Fiduciary until further directed
in writing by the Named Fiduciary to dispose of such investment. The
nondiscretionary Trustee or Custodian is not liable in any manner or for any
reason for making, retaining or disposing of any investment pursuant to any
written direction described in this paragraph. Furthermore, the Employer agrees
to indemnify and to hold the nondiscretionary Trustee or Custodian harmless from
any damages, costs or expenses, including reasonable counsel fees, which the
nondiscretionary Trustee or Custodian may incur as a result of any claim
asserted against the nondiscretionary Trustee, the Custodian or the Trust
arising out of the nondiscretionary Trustee's or Custodian's compliance with any
written direction described in this paragraph.
[E] PARTICIPANT LOANS. This Section 10.03[E] 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 Advisory 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 (S)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 (S)318(a)(1), of the
Employer's outstanding stock 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 not an unincorporated trade or business nor an "S Corporation," this
Section 10.03[E] does not impose any restrictions on the class of Participants
eligible for a loan from the Plan.
[F] INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The investment options in this Section 10.03[F] include the ability to
invest in qualifying Employer securities or qualifying Employer real property,
as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to
permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
----------------------
the Plan must be open to the inspection of the Plan Administrator, the Advisory
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 Advisory
Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.
10.05
<PAGE>
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
---------------------------
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee or Custodian. No person who is receiving full pay
from the Employer may receive compensation for services as Trustee or as
Custodian. 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 Advisory 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 Advisory Committee
and then dispose of the payment in accordance with the subsequent direction of
the Advisory Committee.
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 or Custodian may resign its position at any
-----------
time by giving 30 days' written notice in advance to the Employer and to the
Advisory 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. The
Employer, in its sole discretion, may replace a Custodian. If the Employer does
not replace a Custodian, the discretionary Trustee will assume possession of
Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in advance
-------
to the Trustee, may remove any Trustee or Custodian. 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.
10.06
<PAGE>
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 Advisory 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 Advisory 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 in writing by the Advisory Committee or as required
by the Employer's Adoption Agreement.
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 Advisory 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 Advisory 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 Employer, by adopting this Plan,
------------------------------
specifically authorizes the Trustee to invest all or any portion of the assets
comprising the Trust Fund in any group trust fund which at the time of the
investment provides for the pooling of the assets of plans qualified under Code
(S)401(a). This authorization applies solely to a group trust fund exempt from
taxation under Code (S)501(a) and the trust agreement of which satisfies the
requirements of Revenue Ruling 81-100. The provisions of the group trust fund
agreement, as amended from time to time, are by this reference incorporated
within this Plan and Trust. The provisions of the group trust fund will govern
any investment of Plan assets in that fund. The Employer must specify in an
attachment to its adoption agreement the group trust fund(s) to which this
authorization applies. If the Trustee is acting as a nondiscretionary Trustee,
the investment in the group trust fund is available only in accordance with a
proper direction, by the Named Fiduciary, in accordance with Section 10.03[B].
Pursuant to paragraph (c) of Section 10.03[A] of the Plan, a Trustee has the
authority to invest in certain common trust funds and collective investment
funds without the need for the authorizing addendum described in this Section
10.16.
Furthermore, at the Employer's direction, 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.
10.07
<PAGE>
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 (S)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 (S)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.
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 discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.
If the U.S. Department of Labor ("the Department") requires engagement of an
independent fiduciary to have control or management of all or a portion of the
Trust Fund, the Employer will appoint such independent fiduciary, as directed by
the Department. The independent fiduciary will have the duties, responsibilities
and powers prescribed by the Department and will exercise those duties,
responsibilities and powers in accordance with the terms, restrictions and
conditions established by the Department and, to the extent not inconsistent
with ERISA, the terms of the Plan. The independent fiduciary must accept its
appointment in writing and must acknowledge its status as a fiduciary of the
Plan.
* * * * * * * * * * * * * * *
10.08
<PAGE>
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental life
-----------------
insurance benefits for insurable Participants who consent to life insurance
benefits by signing the appropriate insurance company application form. The
Trustee will not purchase any incidental life insurance benefit for any
Participant prior to an allocation to the Participant's Account. At an insured
Participant's written direction, the Trustee will use all or any portion of the
Participant's nondeductible voluntary contributions, if any, to pay insurance
premiums covering the Participant's life. This Section 11.01 also authorizes the
purchase of life insurance, for the benefit of the Participant, on the life of a
family member of the Participant or on any person in whom the Participant has an
insurable interest. However, if the policy is on the joint lives of the
Participant and another person, the Trustee may not maintain that policy if that
other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account of
the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit insurance
contract covering the life of a Participant against the Account of that
Participant. The Trustee will hold all incidental benefit insurance contracts
issued under the Plan as assets of the Trust created under the Plan.
(A) INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance premiums paid
for the benefit of a Participant, at all times, may not exceed the following
percentages of the aggregate of the Employer's contributions allocated to any
Participant's Account: (i) 49% in the case of the purchase of ordinary life
insurance contracts; or (ii) 25% in the case of the purchase of term life
insurance or universal life insurance contracts. If the Trustee purchases a
combination of ordinary life insurance contract(s) and term life insurance or
universal life insurance contract(s), then the sum of one-half of the premiums
paid for the ordinary life insurance contract(s) and the premiums paid for the
term life insurance or universal life insurance contract(s) may not exceed 25%
of the Employer contributions allocated to any Participant's Account.
(B) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. If the Employer's Plan is a
profit sharing plan, the incidental insurance benefits requirement does not
apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least two
years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
-------------------------------------------
continue any life insurance protection for any Participant beyond his annuity
starting date (as defined in Article VI). If the Trustee holds any incidental
benefit insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the Trustee must
proceed as follows:
(a) If the entire cash value of the contract(s) is vested in the
terminating Participant, or if the contract(s) will have no cash value at
the end of the policy year in which termination of employment occurs, the
Trustee will transfer the contract(s) to the Participant endorsed so as to
vest in the transferee all right, title and interest to the contract(s),
free and clear of the Trust; subject however, to restrictions as to
surrender or payment of benefits as the issuing insurance company may
permit and as the Advisory Committee directs;
11.01
<PAGE>
(b) If only part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee, to the extent the Participant's
interest in the cash value of the contract(s) is not vested, may adjust the
Participant's interest in the value of his Account attributable to Trust
assets other than incidental benefit insurance contracts and proceed as in
(a), or the Trustee must effect a loan from the issuing insurance company
on the sole security of the contract(s) for an amount equal to the
difference between the cash value of the contract(s) at the end of the
policy year in which termination of employment occurs and the amount of the
cash value that is vested in the terminating Participant, and the Trustee
must transfer the contract(s) endorsed so as to vest in the transferee all
right, title and interest to the contract(s), free and clear of the Trust;
subject however, to the restrictions as to surrender or payment of benefits
as the issuing insurance company may permit and the Advisory Committee
directs;
(c) If no part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee must surrender the contract(s) for
cash proceeds as may be available.
In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
11.02 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the joint and survivor annuity requirements, if
applicable, of Article VI. In this regard, the Trustee either must convert such
a contract to cash and distribute the cash instead of the contract, or before
making the transfer, require the issuing company to delete the unauthorized
method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
-----------
(a) "Policy" means an ordinary life insurance contract or a term life
insurance contract issued by an insurer on the life of a Participant.
(b) "Issuing insurance company" is any life insurance company which has
issued a policy upon application by the Trustee under the terms of this
Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In the event of
any conflict between the provisions of this Plan and the terms of any
contract or policy of insurance issued in accordance with this Article XI,
the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an insurance
company, upon an application being submitted in accordance with the Plan,
will issue insurance coverage, either as a standard risk or as a risk in an
extra mortality classification.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
-------------
Advisory Committee directs the Trustee to the contrary. The Trustee must use all
dividends for a contract to purchase insurance benefits or additional insurance
benefits for the Participant on whose life the insurance company has issued the
contract. Furthermore, the Trustee must arrange, where possible, for all
policies issued on the lives of Participants under the Plan to have the same
premium due date and all ordinary life insurance contracts to contain guaranteed
cash values with as uniform basic options as are possible to obtain. The term
"dividends" includes policy dividends, refunds of premiums and other credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
------------------------------------------
solely in its capacity as an issuing insurance company, is a party to this
Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
-------------------------------------------------------
insurance company, solely in its capacity as an issuing insurance company, need
examine the terms of this Agreement nor is responsible for any action taken by
the Trustee.
11.02
<PAGE>
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the purpose
-------------------------------------------------
of making application to an insurance company and in the exercise of any right
or option contained in any policy, the insurance company may rely upon the
signature of the Trustee and is saved harmless and completely discharged in
acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all liability
-----------
for any amount paid to the Trustee or paid in accordance with the direction of
the Trustee, and is not obliged to see to the distribution or further
application of any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep such
---------------------------
records, make such identification of contracts, funds and accounts within funds,
and supply such information as may be necessary for the proper administration of
the Plan under which it is carrying insurance benefits.
Note: The provisions of this Article XI are not applicable, and the Plan may
not invest in insurance contracts, if a Custodian signatory to the Adoption
Agreement is a bank which has not acquired trust powers from its governing state
banking authority.
* * * * * * * * * * * * * * *
11.03
<PAGE>
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
Advisory 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
-------------------------------------
Advisory 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
Advisory 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 Advisory 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 Advisory 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
Advisory 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 Advisory
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. The law of the state of the Employer's principal place of
---------
business (unless otherwise designated in an addendum to the Employer's Adoption
Agreement) will determine all questions arising with respect to the provisions
of this Agreement except to the extent superseded by Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
-------------------------------
qualify or to maintain qualification or if the Employer makes any amendment or
modification to a provision of this Plan (other than a proper completion of an
elective provision under the Adoption Agreement or the attachment of an addendum
authorized by the Plan or by the Adoption Agreement), the Employer may no longer
participate under this Prototype Plan. Furthermore, if the Employer no longer is
a client of the Regional Prototype Sponsor, subsequent amendments to this
Prototype Plan by the Regional Prototype Sponsor, pursuant to Section 13.03 of
the Plan, will result in the discontinuance of the Employer's participation in
this Prototype Plan unless it resumes its client relationship with the Regional
Prototype Sponsor. If the Employer is not entitled to participate under this
Prototype Plan, the Employer's Plan is an individually-designed plan and the
reliance procedures specified in the applicable Adoption Agreement no longer
will apply.
12.01
<PAGE>
12.09 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.
* * * * * * * * * * * * * * *
12.02
<PAGE>
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 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 the elective provisions of the Adoption 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 (S)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 Advisory
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Advisory Committee. The Employer
must make all amendments in writing. Each amendment must state the date to which
it is either retroactively or prospectively effective. See Section 12.08 for the
effect of certain amendments adopted by the Employer.
(A) CODE (S)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
(S)412(c)(8), and may not reduce or eliminate Code (S)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
(S)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 Advisory Committee
must disregard an amendment to the extent application of the amendment would
fail to satisfy this paragraph. If the Advisory Committee must disregard an
amendment because the amendment would violate clause (1) or clause (2), the
Advisory Committee must maintain a schedule of the early retirement option or
other optional forms of benefit the Plan must continue for the affected
Participants.
13.01
<PAGE>
13.03 AMENDMENT BY REGIONAL PROTOTYPE PLAN SPONSOR. The Regional Prototype
--------------------------------------------
Plan Sponsor, without the Employer's consent, may amend the Plan and Trust, from
time to time, in order to conform the Plan and Trust to any requirement for
qualification of the Plan and Trust under the Internal Revenue Code. The
Regional Prototype Plan Sponsor may not amend the Plan in any manner which would
modify any election made by the Employer under the Plan without the Employer's
written consent. Furthermore, the Regional Prototype Plan Sponsor may not amend
the Plan in any manner which would violate the proscription of Section 13.02. A
Trustee does not have the power to amend the Plan or Trust.
13.04 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 to 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.
13.05 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 Article V.
13.06 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 (S)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 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
Advisory 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.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party 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
guaranteeing 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 value of the transferred assets.
Unless a transfer of assets to this Plan is an elective transfer, the Plan will
preserve all Code (S)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 13.06; (2) the transfer is voluntary, under a fully informed election by
the Participant; (3) the Participant has an alternative that retains his Code
(S)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
13.02
<PAGE>
requirements; (6) the Participant has a right to immediate distribution from the
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 that
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. Any direct transfer of assets from a defined
benefit plan after August 9, 1988, which does not satisfy the requirements of
this paragraph will render the Employer's Plan individually-designed. See
Section 12.08.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE (S)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 (S)401(k)
arrangement, the distribution restrictions of Code (S)(S)401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.07 TERMINATION.
-----------
(A) PROCEDURE. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Advisory 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 $3,500, the Participant or the Beneficiary, in addition to
the distribution events permitted under Article VI, may elect to have the
Trustee commence distribution of his Nonforfeitable Accrued Benefit as soon
as administratively practicable after the Plan terminates.
To liquidate the Trust, the Advisory 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 $3,500 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of the preceding
provisions of this Section 13.07 and the distribution provisions of Article VI,
the Advisory Committee will direct the Trustee to distribute each Participant's
Nonforfeitable Accrued Benefit, in lump sum, as soon as administratively
practicable after the termination of the Plan, irrespective of the present value
of the Participant's Nonforfeitable Accrued Benefit and whether the Participant
consents to that distribution. This paragraph does not apply if: (1) the Plan
provides an annuity option; or (2) as of the period between the Plan termination
date and the final distribution of assets, the Employer maintains any other
defined contribution plan (other than an ESOP). The Employer, in an addendum to
its Adoption Agreement numbered 13.07, may elect not to have this paragraph
apply.
The Trust will continue until the Trustee in accordance with the direction
of the Advisory Committee has distributed all of the benefits under the Plan. On
each valuation date, the Advisory 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 13.07.
13.03
<PAGE>
(B) DISTRIBUTION RESTRICTIONS UNDER CODE (S)401(K). If the Employer's Plan
includes a Code (S)401(k) arrangement or if transferred assets described in
Section 13.06 are subject to the distribution restrictions of Code
(S)(S)401(k)(2) and (10), the special distribution provisions of this Section
13.07 are subject to the restrictions of this paragraph. The portion of the
Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions (or to amounts treated under the Code (S)401(k) arrangement as
elective contributions) is not distributable on account of Plan termination, as
described in this Section 13.07, unless: (a) the Participant otherwise is
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 distribution of assets. A distribution made after March
31, 1988, pursuant to clause (b), must be part of a lump sum distribution to the
Participant of his Nonforfeitable Accrued Benefit.
* * * * * * * * * * * * * * *
13.04
<PAGE>
ARTICLE XIV
CODE (S)401(K) AND CODE (S)401(M) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's Plan only if
-----------
the Employer is maintaining its Plan under a Code (S)401(k) Adoption Agreement.
14.02 CODE (S)401(k) ARRANGEMENT. The Employer will elect in Section 3.01 of
--------------------------
its Adoption Agreement the terms of the Code (S)401(k) arrangement, if any,
under the Plan. If the Employer's Plan is a Standardized Plan, the Code
(S)401(k) arrangement must be a salary reduction arrangement. If the Employer's
Plan is a Nonstandardized Plan, the Code (S)401(k) arrangement may be a salary
reduction arrangement or a cash or deferred arrangement.
(A) SALARY REDUCTION ARRANGEMENT. If the Employer elects a salary reduction
arrangement, any Employee eligible to participate in the Plan may file a salary
reduction agreement with the Advisory 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 (S)401(k) arrangement by executing the Adoption Agreement; or (iv) the
effective date of the Code (S)401(k) arrangement, as specified in the Employer's
Adoption Agreement. Regarding clause (i), an Employee subject to the Break in
Service rule of Section 2.03(B) of the Plan may not enter into a salary
reduction agreement until the Employee has completed a sufficient number of
Hours of Service to receive credit for a Year of Service (as defined in Section
2.02) following his reemployment commencement date. A salary reduction agreement
must specify the amount of Compensation (as defined in Section 1.12) or
percentage of Compensation the Employee wishes to defer. 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. The Employer will
specify in Adoption Agreement Section 3.01 the rules and restrictions applicable
to the Employees salary reduction agreements.
(B) CASH OR DEFERRED ARRANGEMENT. If the Employer elects a cash or deferred
arrangement, a Participant may elect to make a cash election against his
proportionate share of the Employer's Cash or Deferred Contribution, in
accordance with the Employer's elections in Adoption Agreement Section 3.01. A
Participant's proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred Contribution which
bears the same ratio that the Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan Year. For purposes of
determining each Participant's proportionate share of the Cash or Deferred
Contribution, a Participant's Compensation is his Compensation as determined
under Section 1.12 of the Plan (as modified by Section 3.06 for allocation
purposes), excluding any effect the proportionate share may have on the
Participant's Compensation for the Plan Year. The Advisory Committee will
determine the proportionate share prior to the Employer's actual contribution to
the Trust, to provide the Participants the opportunity to file cash elections.
The Employer will pay directly to the Participant the portion of his
proportionate share the Participant has elected to receive in cash.
(C) ELECTION NOT TO PARTICIPATE. A Participant's or Employee's election not to
participate, pursuant to Section 2.06, includes his right to enter into a salary
reduction agreement or to share in the allocation of a Cash or Deferred
Contribution, unless the Participant or Employee limits the effect of the
election to the non-401(k) portions of the Plan.
14.01
<PAGE>
14.03 DEFINITIONS. For purposes of this Article XIV:
-----------
(a) "Highly Compensated Employee" means an Eligible Employee who satisfies the
definition in Section 1.09 of the Plan. Family members aggregated as a single
Employee under Section 1.09 constitute a single Highly Compensated Employee,
whether a particular family member is a Highly Compensated Employee or a
Nonhighly Compensated Employee without the application of family aggregation.
(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 14.08, an Employee who is eligible to enter into a salary reduction
agreement for the Plan Year, irrespective of whether he actually enters into
such an agreement, and a Participant who is eligible for an allocation of the
Employer's Cash or Deferred Contribution for the Plan Year. For purposes of the
ACP test described in Section 14.09, 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
nondeductible contributions, irrespective of whether he actually makes
nondeductible 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.
(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 in this Article XIV,
Compensation as defined for nondiscrimination purposes in Section 1.12(B) of the
Plan. To compute an Employee's ADP or ACP, the Advisory 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 (S)401(k) arrangement was
in effect.
(g) "Deferral contributions" are Salary Reduction Contributions and Cash or
Deferred Contributions the Employer contributes to the Trust on behalf of an
Eligible Employee, irrespective of whether, in the case of Cash or Deferred
Contributions, the contribution is at the election of the Employee. For Salary
Reduction Contributions, the terms "deferral contributions" and "elective
deferrals" have the same meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions and that
portion of any Cash or Deferred Contribution which the Employer contributes to
the Trust at the election of an Eligible Employee. 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. However, 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 nondeductible 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 (S)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.
14.02
<PAGE>
(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. Any matching contributions allocated to a
Participant's Qualified Matching Contributions Account under the Plan
automatically satisfy the definition of qualified matching contributions.
(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 or attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Code (S)401(k) and the
applicable Treasury regulations, (3) a 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 (S)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 (S)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 (S)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. Participant nondeductible contributions, made pursuant to
Section 4.01 of the Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may
---------------------------------------------
elect in Adoption Agreement Section 3.01 to provide matching contributions. The
Employer also may elect in Adoption Agreement Section 4.01 to permit or to
require a Participant to make nondeductible contributions.
(A) MANDATORY CONTRIBUTIONS. Any Participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of the
Plan, to reflect the Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section 4.05, may
prescribe special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from Service.
Following his Separation from Service, the general distribution provisions of
Article VI apply to the distribution of the Participant's Mandatory
Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
--------------------------------
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction Contributions,
Cash or Deferred Contributions, Employer matching contributions (including
qualified Employer matching contributions) and qualified Employer nonelective
contributions no later than the time prescribed by the
14.03
<PAGE>
Code or by applicable Treasury regulations. Salary Reduction Contributions and
Cash or Deferred Contributions are Employer contributions for all purposes under
this Plan, except to the extent the Code or Treasury regulations prohibit the
use of these contributions to satisfy the qualification requirements of the
Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRAL CONTRIBUTIONS, MATCHING
----------------------------------------------------------------
CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make allocations under
- -----------------------------------------------------
the Plan, the Advisory Committee must establish a Deferral Contributions
Account, a Qualified Matching Contributions Account, a Regular Matching
Contributions Account, a Qualified Nonelective Contributions Account and an
Employer Contributions Account for each Participant.
(A) DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant. The
Advisory Committee will make this allocation as of the last day of each Plan
Year unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.
(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption Agreement
whether the Advisory Committee will allocate matching contributions to the
Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will make this
allocation as of the last day of each Plan Year unless, in Adoption Agreement
Section 3.04, the Employer elects more frequent allocation dates for matching
contributions.
(1) To the extent the Employer makes matching contributions under a fixed
matching contribution formula, the Advisory Committee will allocate the
matching contribution to the Account of the Participant on whose behalf the
Employer makes that contribution. A fixed matching contribution formula is
a formula under which the Employer contributes a certain percentage or
dollar amount on behalf of a Participant based on that Participant's
deferral contributions or nondeductible contributions eligible for a match,
as specified in Section 3.01 of the Employer's Adoption Agreement. The
Employer may contribute on a Participant's behalf under a specific matching
contribution formula only if the Participant satisfies the accrual
requirements for matching contributions specified in Section 3.06 of the
Employer's Adoption Agreement and only to the extent the matching
contribution does not exceed the Participant's annual additions limitation
in Part 2 of Article III.
(2) To the extent the Employer makes matching contributions under a
discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each Participant who
satisfies the accrual requirements for matching contributions specified in
Section 3.06 of the Employer's Adoption Agreement. The allocation of
discretionary matching contributions to a Participant's Account is in the
same proportion that each Participant's eligible contributions bear to the
total eligible contributions of all Participants. If the discretionary
formula is a tiered formula, the Advisory Committee will make this
allocation separately with respect to each tier of eligible contributions,
allocating in such manner the amount of the matching contributions made
with respect to that tier. "Eligible contributions" are the Participant's
deferral contributions or nondeductible contributions eligible for an
allocation of matching contributions, as specified in Section 3.01 of the
Employer's Adoption Agreement.
If the matching contribution formula applies both to deferral contributions
and to Participant nondeductible contributions, the matching contributions apply
first to deferral contributions. Furthermore, the matching contribution formula
does not apply to deferral contributions that are excess deferrals under Section
14.07. 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 elective deferrals made for a calendar
year. Under a Standardized Plan, an Employee forfeits any matching contribution
attributable to an excess contribution or to an excess aggregate contribution,
unless distributed pursuant to Sections 14.08 or 14.09. Under a Nonstandardized
Plan, this forfeiture rule applies only if specified in Adoption Agreement
Section 3.06. The provisions of Section 3.05 govern the treatment of any
forfeiture described in this paragraph, and the Advisory Committee will compute
a Participant's ACP under 14.09
14.04
<PAGE>
by disregarding the forfeiture.
(C) 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 Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's Adoption Agreement.
The Advisory Committee will make the allocation to each 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.
The Advisory Committee will determine a Participant's Compensation in accordance
with the general definition of Compensation under Section 1.12 of the Plan, as
modified by the Employer in Sections 1.12 and 3.06 of its Adoption Agreement.
(D) NONELECTIVE CONTRIBUTIONS. To the extent the Employer makes nonelective
contributions for the Plan Year which, at the time of contribution, it does not
designate as qualified nonelective contributions, the Advisory Committee will
allocate those contributions in accordance with the elections under Section 3.04
of the Employer's Adoption Agreement. For purposes of the special
nondiscrimination tests described in Sections 14.08 and 14.09, the Advisory
Committee may treat nonelective contributions allocated under this paragraph as
qualified nonelective contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
-----------------------------------
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals for a
calendar year beginning after December 31, 1986, may not exceed the 402(g)
limitation. The 402(g) limitation is the greater of $7,000 or the adjusted
amount determined by the Secretary of the Treasury. If, pursuant to a salary
reduction agreement or pursuant to a cash or deferral election, the Employer
determines the Employee's elective deferrals to the Plan for a calendar year
would exceed the 402(g) limitation, the Employer will suspend the Employee's
salary reduction agreement, if any, until the following January 1 and pay in
cash the portion of a cash or deferral election which would result in the
Employee's elective deferrals for the calendar year exceeding the 402(g)
limitation. If the Advisory Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Advisory 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 Advisory 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 Advisory 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 14.08), 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 (S)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 Advisory 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 Advisory 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
pursuant to this Section 14.07, 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 Participants' Accounts.
14.05
<PAGE>
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
---------------------------------------
Advisory Committee must determine whether the Plan's Code (S)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
(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 14.10) 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. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the ADP
determined by combining the deferral contributions and Compensation of all
aggregated family members. 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 14.07(A).
The Advisory Committee, in a manner consistent with Treasury regulations,
may determine the ADPs of the Eligible Employees by taking into account
qualified nonelective contributions or qualified matching contributions, or
both, made to this Plan or to any other qualified Plan maintained by the
Employer. The Advisory Committee may not include qualified nonelective
contributions in the ADP test unless the allocation of nonelective contributions
is nondiscriminatory when the Advisory Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Advisory Committee takes into account only the nonelective
contributions not used in either the ADP test described in this Section 14.08 or
the ACP test described in Section 14.09. For Plan Years beginning after December
31, 1989, the Advisory Committee may not include in the ADP test any qualified
nonelective contributions or qualified matching contributions under another
qualified plan unless that plan has the same plan year as this Plan. The
Advisory Committee must maintain records to demonstrate compliance with the ADP
test, including the extent to which the Plan used qualified nonelective
contributions or qualified matching contributions to satisfy the test.
For Plan Years beginning prior to January 1, 1992, the Advisory Committee
may elect to apply a separate ADP test to each component group under the Plan.
Each component group separately must satisfy the commonality requirement of the
Code (S)401(k) regulations and the minimum coverage requirements of Code
(S)410(b). A component group consists of all the allocations and other benefits,
rights and features provided that group of Employees. An Employee may not be
part of more than one component group. The correction rules described in this
Section 14.08 apply separately to each component group.
(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 (S)401(k) arrangement maintained by the Employer,
unless the elective deferrals are to an ESOP. If the plans containing the Code
(S)401(k) arrangements have different plan years, the Advisory 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 (S)401(K) ARRANGEMENTS. If the Employer treats
two plans as a unit for coverage or nondiscrimination purposes, the Employer
must combine the Code (S)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 (S)401(k) arrangements under this paragraph does not apply to plans which
have different plan
14.06
<PAGE>
years and, for Plan Years beginning after December 31, 1988, the Advisory
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).
(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory 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 Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory 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 14.07), 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 Advisory Committee determines
the Plan fails to satisfy the ADP test for a Plan Year, it 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 Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess contributions. The Advisory
Committee will determine the respective shares of 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
level (including the ADP of the Highly Compensated Employee(s) whose ADP the
Advisory Committee already has reduced), and continuing in this manner until the
average ADP for the Highly Compensated Group satisfies the ADP test. If the
Highly Compensated Employee is part of an aggregated family group, the Advisory
Committee, in accordance with the applicable Treasury regulations, will
determine each aggregated family member's allocable share of the excess
contributions assigned to the family unit.
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.08, the Advisory 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 Advisory Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner used by the Plan
to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
---------------------------------------------
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
- -----------------------------------------------------
after December 31, 1986, the Advisory Committee must determine whether the
annual Employer matching contributions (other than qualified matching
contributions used in the ADP under Section 14.08), 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
14.10) 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
14.07
<PAGE>
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 Employer matching
contributions (other than qualified matching contributions used in the ADP test
under Section 14.08) and employee contributions (as defined in Section 14.03).
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.
The Advisory 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 under Section 14.08) or elective
deferrals, or both, made to this Plan or to any other qualified Plan maintained
by the Employer. The Advisory Committee may not include qualified nonelective
contributions in the ACP test unless the allocation of nonelective contributions
is nondiscriminatory when the Advisory Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Advisory Committee takes into account only the nonelective
contributions not used in either the ADP test described in Section 14.08 or the
ACP test described in this Section 14.09. The Advisory 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
Advisory 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 Advisory 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. For Plan Years beginning prior to January 1, 1992, the
component group testing rule permitted under Section 14.08(A) also applies to
the ACP test under this Section 14.09.
(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
Advisory 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 Advisory 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).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee will
determine excess aggregate contributions after determining excess deferrals
under Section 14.07 and excess contributions under Section 14.08. If the
Advisory 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 2 1/2 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 Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess aggregate contributions. The
Advisory 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
14.08
<PAGE>
(including the contribution percentage of the Highly Compensated Employee(s)
whose contribution percentage the Advisory 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 Advisory 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 14.09, the Advisory 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 Advisory Committee
will determine allocable income in the same manner as described in Section
14.08(F) for excess contributions.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory 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 described in Section 14.08; (3) then on a pro rata basis to
matching contributions and to the deferral contributions relating to those
matching contributions which the Advisory 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 Advisory 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 by his vested
percentage (determined as of the last day of the Plan Year for which the
Employer made the matching contribution). The Employer will specify in Adoption
Agreement Section 3.05 the manner in which the Plan will allocate forfeited
excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December 31,
-----------------------
1988, if at least one Highly Compensated Employee is includible in the ADP test
under Section 14.08 and in the ACP test under Section 14.09, 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 (S)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 (S)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 Advisory 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 (S)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 (S)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 Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and the
ACP test under Section 14.09 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.10, the Advisory
Committee determines
14.09
<PAGE>
the Plan has failed to satisfy the multiple use limitation, the Advisory
Committee will correct the failure by treating the excess amount as excess
contributions under Section 14.08 or as excess aggregate contributions under
Section 14.09, as it determines in its sole discretion. This Section 14.10 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.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section 6.03
-------------------------
the Adoption Agreement the distribution events permitted under the Plan. The
distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.
(A) HARDSHIP DISTRIBUTIONS FROM DEFERRAL CONTRIBUTIONS ACCOUNT. The
Employer must elect in Adoption Agreement Section 6.03 whether a Participant may
receive hardship distributions from his Deferral Contributions Account prior to
the Participant's Separation from Service. Hardship distributions from the
Deferral Contributions Account must satisfy the requirements of this Section
14.11. A hardship distribution option may not apply to the Participant's
Qualified Nonelective Contributions Account or Qualified Matching Contributions
Account, except as provided in paragraph (3).
(1) DEFINITION OF HARDSHIP. A hardship distribution under this Section
14.11 must be on account of one or more of the following immediate and heavy
financial needs: (1) medical care described in Code (S)213(d) incurred by the
Participant, by the Participant's spouse, or by any of the Participant's
dependents, or necessary to obtain such medical care; (2) the purchase
(excluding mortgage payments) of a principal residence for the Participant; (3)
the payment of post-secondary education tuition and related educational fees,
for the next 12-month period, for the Participant, for the Participant's spouse,
or for any of the Participant's dependents (as defined in Code (S)152); (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
need prescribed by the Revenue Service in a revenue ruling, notice or other
document of general applicability which satisfies the safe harbor definition of
hardship.
(2) 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 (determined at the time of the loan) 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 14.07), 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).
(3) EARNINGS. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings on an
Employee's elective deferrals credited after December 31, 1988. Qualified
matching contributions and qualified nonelective contributions, and any earnings
on such contributions, credited as of December 31, 1988, are subject to the
hardship withdrawal only if the Employer specifies in an addendum to this
Section 14.11. The addendum may modify the December 31, 1988, date for purposes
of determining credited amounts provided the date is not later than the end of
the last Plan Year ending before July 1, 1989.
14.10
<PAGE>
(B) DISTRIBUTIONS AFTER SEPARATION FROM SERVICE. Following the Participant's
Separation from Service, the distribution events applicable to the Participant
apply equally to all of the Participant's Accounts, except as elected in Section
6.03 of the Employer's Adoption Agreement.
(C) 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 Advisory Committee will return the Excess Amount (as adjusted for
allocable income) attributable to the elective deferrals. The Advisory Committee
will make this distribution before taking any corrective steps pursuant to
Section 3.10 or to Section 3.16. The Advisory Committee will disregard any
elective deferrals returned under this Section 14.11(C) for purposes of Sections
14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code (S)401(k) arrangement provides
------------------------
for salary reduction contributions, if the Plan accepts Employee contributions,
pursuant to Adoption Agreement Section 4.01, or if the Plan allocates matching
contributions as of any date other than the last day of the Plan Year, the
Employer must elect in Adoption Agreement 9.11 whether any special allocation
provisions will apply under Section 9.11 of the Plan. For purposes of the
elections:
(a) A "segregated Account" direction means the Advisory Committee will
establish a segregated Account for the applicable contributions made on the
Participant's behalf during the Plan Year. The Trustee must invest the
segregated Account in Federally insured interest bearing savings account(s)
or time deposits, or a combination of both, or in any other fixed income
investments, unless otherwise specified in the Employer's Adoption
Agreement. As of the last day of each Plan Year (or, if earlier, an
allocation date coinciding with a valuation date described in Section
9.11), the Advisory Committee will reallocate the segregated Account to the
Participant's appropriate Account, in accordance with Section 3.04 or
Section 4.06, whichever applies to the contributions.
(b) A "weighted average allocation" method will treat a weighted portion of
the applicable contributions as if includible in the Participant's Account
as of the beginning of the valuation period. The weighted portion is a
fraction, the numerator of which is the number of months in the valuation
period, excluding each month in the valuation period which begins prior to
the contribution date of the applicable contributions, and the denominator
of which is the number of months in the valuation period. The Employer may
elect in its Adoption Agreement to substitute a weighting period other than
months for purposes of this weighted average allocation.
* * * * * * * * * * * * * * *
14.11
<PAGE>
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 basic plan document.
Section 12.08 applies to any modification or amendment of this Article.
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 life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Code (S)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 (S)408(a), an individual
retirement annuity described in Code (S)408(b), an annuity plan described in
Code (S)403(a), or a qualified trust described in Code (S)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 (S)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.
A-1
<PAGE>
ARTICLE B
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Omnibus Budget Reconciliation
Act of 1993 (OBRA '93) and is an integral part of the basic plan document.
Section 12.08 applies to any modification or amendment of this Article.
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.
B-1
<PAGE>
SPECIAL MEETING OF THE OFFICERS AND BOARD OF DIRECTORS OF
SALIDA BUILDING & LOAN ASSOCIATION
RESOLUTION FOR AMENDING ADOPTION AGREEMENT
BY RESOLUTION PAGES
A special meeting of the Officers of Salida Building & Loan Association,
organized and existing under and by virtue of the laws of the State of Colorado
was held on the ___________________________________ day of ____________________
___________________________________, 1995, pursuant to a consent to hold the
meeting without prior notice, such consent indicated by the signatures of all
Officers and Board Members to these minutes.
There were present at the meeting the following Officers and Board Members:
The Chairman announced that the only order of business was the
consideration by the Board of an amendment to Section 1.17(b) of the
Corporation's existing retirement plan. The Chairman further explained that the
Corporation could make the necessary amendment by replacing certain pages of the
plan's adoption agreement. The Chairman then circulated the proposed amendment
to the Directors. After a brief discussion of the proposed amendment, motion was
made, seconded and it was unanimously:
RESOLVED, THAT THE CORPORATION ADOPT THE AMENDMENT TO SECTION 1.17(B)
OF THE CORPORATION'S RETIREMENT PLAN CIRCULATED AT THIS MEETING, THE
AMENDMENT TO BE EFFECTIVE FOR THE PLAN YEAR COMMENCING JULY 1, 1995. TO
EFFECT THE AMENDMENT, THE SECRETARY WILL SUBSTITUTE AMENDED PAGE 2 OF THE
PLAN'S ADOPTION AGREEMENT IN CIRCULATION FOR THE CORRESPONDING PAGE
PRESENTLY WITHIN THE ADOPTION AGREEMENT. THE SECRETARY WILL RETAIN ONE
COPY OF THE PAGE REMOVED AS A PART OF THE PERMANENT RECORD OF THE
CORPORATION.
FURTHER RESOLVED, THAT THE PLAN AMEND ITS PLAN YEAR AS FOLLOWS: A
SHORT PLAN YEAR FROM JANUARY 1, 1995 TO JUNE 30, 1995 WILL EXIST, AND
THAT ALL SUBSEQUENT PLAN YEARS WILL END ON EACH JUNE 30.
There being no further business to come before the meeting, it was, upon motion
duly made, seconded and unanimously adopted, adjourned.
______________________
Secretary
CONSENT TO HOLD SPECIAL MEETING
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
SPECIAL MEETING OF THE BOARD OF DIRECTORS OF
SALIDA BUILDING AND LOAN ASSOCIATION
A special meeting of the Board of Directors of Salida Building and Loan
Association, organized and existing under and by virtue of the laws of the State
of Colorado, was held on the 10th day of June, 1994, pursuant to a consent to
hold the meeting without prior notice, such consent indicated by the
signature(s) of all Directors to these minutes.
There were present at the meeting the following Directors:
Larry D. Smith
Robert Mitchell
Timothy Glenn
Richard A. Young
Phil Harsh
constituting all of the Directors of the Corporation. Upon motion duly made,
seconded and unanimously adopted, Larry D. Smith was chosen as Chairman and was
chosen as Secretary of the meeting.
The Chairman announced that the first order of business was the
consideration by the Board of a proposed employee retirement plan. The Chairman
then circulated the proposed retirement plan among the Directors and explained
the manner in which the proposed retirement plan would benefit the Corporation's
employees. After an explanation by the Chairman of the terms of the proposed
retirement plan, motion was made, seconded and it was unanimously:
RESOLVED, THAT THE PRESIDENT OF THIS CORPORATION BE, AND IS AUTHORIZED
AND DIRECTED TO EXECUTE AND DELIVER THAT CERTAIN EMPLOYEE RETIREMENT PLAN
DESIGNATED AS SALIDA BUILDING AND LOAN ASSOCIATION 401(K) PROFIT SHARING
PLAN & TRUST, THE PLAN AS ADOPTED TO BE EFFECTIVE FOR THE PLAN YEAR
COMMENCING ON THE DAY OF , 19 . THE PRESIDENT WAS FURTHER AUTHORIZED AND
DIRECTED TO INSTRUCT COUNSEL TO SUBMIT THE PLAN AND OTHER NECESSARY DATA
TO THE INTERNAL REVENUE SERVICE AND REQUEST APPROVAL OF THE PLAN. THE
SECRETARY IS DIRECTED TO GIVE PROPER AND TIMELY NOTICE TO ALL INTERESTED
PARTIES OF THE REQUEST FOR APPROVAL OF THE PLAN. THE SECRETARY IS FURTHER
DIRECTED TO RETAIN A COPY OF THE PLAN IN THE BUSINESS OFFICE OF THE
CORPORATION FOR INSPECTION BY PARTICIPANTS UNDER THE PLAN.
RESOLVED FURTHER, THAT SALIDA BUILDING AND LOAN ASSOCIATION BE
APPOINTED AS THE ADVISORY COMMITTEE OF THE PLAN, TO SERVE UNTIL
APPOINTMENT OF A SUCCESSOR AND THAT SALIDA BUILDING AND LOAN ASSOCIATION
BE APPOINTED AND CONFIRMED AS THE PLAN ADMINISTRATOR AND THAT LARRY D.
SMITH, RICHARD A. YOUNG, ROBERT MITCHELL AND TIMOTHY GLENN, PHIL HARSH BE
APPOINTED AND CONFIRMED AS TRUSTEE OF THE TRUST CREATED UNDER THE PLAN.
There being no further business to come before the meeting, it was, upon
motion duly made, seconded and unanimously adopted, adjourned.
_______________________
Secretary
<PAGE>
CONSENT TO HOLD SPECIAL MEETING
____________________
Larry D. Smith
____________________
Robert Mitchell
____________________
Timothy Glenn
____________________
Richard A. Young
____________________
Phil Harsh
<PAGE>
ADOPTION AGREEMENT #006
---
STANDARDIZED CODE (S)401(K) PLAN
(PAIRED PROFIT SHARING PLAN)
The undersigned, Salida Building and Loan Association ("Employer"), by
------------------------------------
executing this Adoption Agreement, elects to become a participating
Employer in the Income Security Group, Inc. Defined Contribution Prototype Plan
---------------------------
(basic plan document #03) by adopting the accompanying Plan and Trust in full as
--
if the Employer were a signatory to that Agreement. The Employer makes the
following elections granted under the provisions of the Prototype Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a)
-------
or (b))
[X] (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
[_] (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan.
[Note: The Employer may not elect Option (b) if a Custodian executes the
Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is Salida
---- ------
Building and Loan Association 401(k) Profit Sharing Plan & Trust.
- ----------------------------------------------------------------
1.07 EMPLOYEE. The following Employees are not eligible to participate in
--------
the Plan: (Choose (a) or at least one of (b) or (c))
[_] (a) No exclusions.
[X] (b) Collective bargaining employees (as defined in Section 1.07 of the
Plan). [Note: If the Employer excludes union employees from the Plan, the
Employer must be able to provide evidence that retirement benefits were
the subject of good faith bargaining.]
[_] (c) Nonresident aliens who do not receive any earned income (as defined
in Code (S)911(d)(2)) from the Employer which constitutes United States
source income (as defined in Code (S)861(a)(3)).
RELATED EMPLOYERS/LEASED EMPLOYEES. An Employee of any member of the Employer's
related group (as defined in Section 1.30 of the Plan), and any Leased Employee
treated as an Employee under Section 1.31 of the Plan, is eligible to
participate in the Plan, unless excluded by reason of Options (b) or (c).
[Note: A related group member may not contribute to this Plan unless it executes
a Participation Agreement, even if its Employees are Participants in the Plan.]
1.12 COMPENSATION.
------------
TREATMENT OF ELECTIVE CONTRIBUTIONS. (Choose (a) or (b))
[_] (a) "Compensation" includes elective contributions made by the Employer on
the Employee's behalf.
[X] (b) "Compensation" does not include elective contributions.
MODIFICATIONS TO COMPENSATION DEFINITION. (Choose (c) or at least one of (d) and
(e))
[_] (c) No modifications other than as elected under Options (a) or (b).
1
<PAGE>
[_] (d) The Plan excludes Compensation in excess of $_________.
[X] (e) In lieu of the definition in Section 1.12 of the Plan, Compensation
means any earnings reportable as W-2 wages for Federal income tax
withholding purposes, subject to any other election under this Adoption
Agreement Section 1.12.
SPECIAL DEFINITION FOR SALARY REDUCTION CONTRIBUTIONS. An Employee's salary
reduction agreement applies to his Compensation determined prior to the
reduction authorized by that salary reduction agreement, with the following
exceptions: (Choose (f) or any combination of (g) and (h), if applicable)
[X] (f) No exceptions.
[_] (g) The dollar limitation described in Option (d) does not apply.
[_] (h) If the Employee makes elective contributions to another plan
maintained by the Employer, the Advisory Committee will determine the
amount of the Employee's salary reduction contribution for the withholding
period: (Choose (1) or (2))
[_] (1) After the reduction for such period of elective contributions to
the other plan(s).
[_] (2) Prior to the reduction for such period of elective contributions
to the other plan(s).
1.17 PLAN YEAR/LIMITATION YEAR.
PLAN YEAR. Plan Year means: (Choose (a) or (b))
[_] (a) The 12 consecutive month period ending every______.
[X] (b) (Specify) Amended July 1, 1995, a short plan year from January 1,
1995-June 30, 1995 will exist, all subsequent Plan Years will end on
June 30..
LIMITATION YEAR. The Limitation Year is: (Choose (c) or (d))
[X] (c) The Plan Year.
[_] (d) The 12 consecutive month period ending every 0.
1.18 EFFECTIVE DATE.
NEW PLAN. The "Effective Date" of the Plan is________.
RESTATED PLAN. The restated Effective Date is July 1, 1994. This Plan is a
substitution and amendment of an existing retirement plan(s) originally
established October 19, 1979. [Note: See the Effective Date Addendum.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose
---------------
(a) or (b))
[X] (a) The actual method.
2
<PAGE>
[_] (b) The _ equivalency method, except:
[_] (1) No exceptions.
[ ] (2) The actual method applies for purposes of: (Choose at least one)
[_] (i) Participation under Article II.
[_] (ii) Vesting under Article V.
[_] (iii) Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll
periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
--------------------------------
service the Plan must credit by reason of Section 1.29 of the Plan, the Plan
credits Service with the following predecessor employer(s): N/A _______________.
Service with the designated predecessor employer(s) applies: (Choose at least
one of (a) or (b))
[_] (a) For purposes of participation under Article II.
[_] (b) For purposes of vesting under Article V.
[Note: If the Plan does not credit any predecessor service under this provision,
insert "N/A" in the first blank line. The Employer may attach a schedule to
this Adoption Agreement, in the same format as this Section 1.29, designating
additional predecessor employers and the applicable service crediting
elections.]
1.31 LEASED EMPLOYEES. If a Leased Employee participates in a safe harbor
----------------
money purchase plan (as described in Section 1.31) maintained by the leasing
organization, but the Employer is not eligible for the safe harbor plan
exception: (Choose (a) or (b))
[_] (a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without taking into
account the Leased Employee's allocation under the safe harbor plan.
[X] (b) The Advisory Committee will reduce the Leased Employee's allocation
of Employer nonelective contributions (other than designated qualified
nonelective contributions) under this Plan by the Leased Employee's
allocation under the safe harbor plan, but only to the extent that
allocation is attributable to the Leased Employee's service provided to
the Employer. [Note: The Employer may not elect Option (b) if a Paired
Plan or any other plan of the Employer makes a similar reduction for the
same plan of the leasing organization.]
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
-----------
ELIGIBILITY CONDITIONS. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose (a) or (b) or both)
[X] (a) Attainment of age 18 (specify age, not exceeding 21).
3
<PAGE>
[X] (b) Service requirement. (Choose (1), (2) or (3))
[X] (1) One Year of Service.
[_] (2) months (not exceeding 12) following the Employee's Employment
Commencement Date.
[_] (3) One Hour of Service.
PLAN ENTRY DATE. "Plan Entry Date" means the Effective Date and: (Choose (c),
(d) or (e))
[X] (c) Semi-annual Entry Dates. The first day of the Plan Year and the first
day of the seventh month of the Plan Year.
[_] (d) The first day of the Plan Year.
[_] (e) (Specify entry dates)_______________________________.
TIME OF PARTICIPATION. An Employee will become a Participant, unless excluded
under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on
that date): (Choose (f), (g) or (h))
[X] (f) immediately following
[_] (g) immediately preceding
[_] (h) nearest
the date the Employee completes the eligibility conditions described in Options
(a) and (b) of this Adoption Agreement Section 2.01. [Note: The Employer must
coordinate the selection of (f), (g) or (h) with the "Plan Entry Date" selection
in (c), (d) or (e). Unless otherwise excluded under Section 1.07, the Employee
must become a Participant by the earlier of: (1) the first day of the Plan Year
beginning after the date the Employee completes the age and service requirements
of Code (S)410(a); or (2) 6 months after the date the Employee completes those
requirements.]
DUAL ELIGIBILITY. The eligibility conditions of this Section 2.01 apply to:
(Choose (i) or (j))
[X] (i) All Employees of the Employer, except: (Choose (1) or (2))
[X] (1) No exceptions.
[_] (2) Employees who are Participants in the Plan as of the Effective
Date.
[_] (j) Solely to an Employee employed by the Employer after
___________________. If the Employee was employed by the Employer on or
before the specified date, the Employee will become a Participant: (Choose
(1) or (2))
[_] (1) On the latest of the Effective Date, his Employment Commencement
Date or the date he attains age ______ (not to exceed 21).
[_] (2) Under the eligibility conditions in effect under the Plan prior
to the restated Effective Date. If the restated Plan required more
than one Year of Service to participate, the eligibility condition
under this Option (2) for participation in the Code (S)401(k)
arrangement under this Plan is one Year of Service for Plan Years
beginning after December 31, 1988. [For restated plans only]
4
<PAGE>
2.02 YEAR OF SERVICE - PARTICIPATION.
-------------------------------
HOURS OF SERVICE. An Employee must complete: (Choose (a) or (b))
[X] (a) 1,000 Hours of Service
[_] (b) _____ Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [Note: The Hours of Service requirement may not exceed 1,000.]
ELIGIBILITY COMPUTATION PERIOD. After the initial eligibility computation
period described in Section 2.02 of the Plan, the Plan measures the eligibility
computation period as: (Choose (c) or (d))
[X] (c) The 12 consecutive month period beginning with each anniversary of an
Employee's Employment Commencement Date.
[_] (d) The Plan Year, beginning with the Plan Year which includes the first
anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described
--------------------------------
in Section 2.03(B) of the Plan: (Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan.
[_] (b) Applies to the Employer's Plan.
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT.
------
PART I. [OPTIONS (A) THROUGH (G)] AMOUNT OF EMPLOYER'S CONTRIBUTION. The
Employer's annual contribution to the Trust will equal the total amount of
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions, as determined under this Section
3.01. (Choose any combination of (a), (b), (c) and (d), or choose (e))
[X] (a) DEFERRAL CONTRIBUTIONS (CODE (S)401(K) ARRANGEMENT). The Employer
must contribute the amount by which the Participants have reduced their
Compensation for the Plan Year, pursuant to their salary reduction
agreements on file with the Advisory Committee. A reference in the Plan
to salary reduction contributions is a reference to these amounts.
[X] (b) MATCHING CONTRIBUTIONS. The Employer will make matching
contributions in accordance with the formula(s) elected in Part II of this
Adoption Agreement Section 3.01.
[X] (c) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS. The Employer, in its
sole discretion, may contribute an amount which it designates as a
qualified nonelective contribution.
[X] (d) NONELECTIVE CONTRIBUTIONS.
[X] (1) Discretionary contribution. The amount (or additional amount)
the Employer may from time to time deem advisable.
5
<PAGE>
[_] (2)_____% of the Compensation of all Participants under the Plan,
determined for the Employer's taxable year for which it makes the
contribution. [Note: The percentage selected may not exceed 15%.]
[_] (3)_____% of Net Profits but not more than $______.
[_] (e) FROZEN PLAN. This Plan is a frozen Plan effective ____. The Employer
will not contribute to the Plan effective with respect to any period
following the stated date.
NET PROFITS. The Employer: (Choose (f) or (g))
[X] (f) Need not have Net Profits to make its annual contribution under this
Plan.
[_] (g) Must have current or accumulated Net Profits $____ to make the
following contributions: exceeding (Choose at least one of (1), (2) and
(3))
[_] (1) Matching contributions described in Option. (b), except:_____________
______________________________________________.
[_] (2) Qualified nonelective contributions described in Option (c).
[_] (3) Nonelective contributions described in Option________.
"Net Profits" means the Employer's net income or profits for any taxable year
determined by the Employer upon the basis of its books of account in accordance
with generally accepted accounting practices consistently applied without any
deductions for Federal and state taxes upon income or for contributions made by
the Employer under this Plan or under any other employee benefit plan the
Employer maintains. The term "Net Profits" specifically excludes n/a. [Note:
---
Enter "N/A" if no exclusions apply.]
If the Employer requires Net Profits for matching contributions and the Employer
does not have sufficient Net Profits under Option (g), it will reduce the
matching contribution under a fixed formula on a prorata basis for all
Participants. A Participant's share of the reduced contribution will bear the
same ratio as the matching contribution the Participant would have received if
Net Profits were sufficient bears to the total matching contribution all
Participants would have received if Net Profits were sufficient. If more than
one member of a related group (as defined in Section 1.30) execute this Adoption
Agreement, each participating member will determine Net Profits separately but
will not apply this reduction unless, after combining the separately determined
Net Profits, the aggregate Net Profits are insufficient to satisfy the matching
contribution liability. "Net Profits" includes both current and accumulated Net
Profits.
PART II. [OPTIONS (H) AND (I)] MATCHING CONTRIBUTION FORMULA. [Note: If the
Employer elected Option (b), complete Options (h) and (i).]
[X] (h) AMOUNT OF MATCHING CONTRIBUTIONS. Subject to Option (i), for each Plan
Year, the Employer's matching contribution is: (Choose any combination of
(1), (2), (3) and (4))
[_] (1) An amount equal to____% of each Participant's salary reduction
contributions for the Plan Year.
[_] (2) An amount equal to____% of each Participant's first tier of
salary reduction contributions . for the Plan Year, plus the
following matching percentage(s) for the following subsequent tiers
of salary reduction contributions for the Plan Year:_______________
___________________________________________________________________
____________________________.
6
<PAGE>
[X] (3) Discretionary formula.
[X] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of
the Participant's salary reduction contributions for the Plan
Year.
[_] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of
each tier of the Participant's salary reduction contributions for
the Plan Year.
[Note: Under Options (2) or (3)(ii), the matching percentage for any
subsequent tier of salary reduction contributions may not exceed the
matching percentage for any prior tier.]
[_] (4) A Participant's matching contributions may not:
[_] (i) Exceed ___________________________________________________
_________.
[_] (ii) Be less than _____________________________________________
_________.
[X] (i) AMOUNT OF SALARY REDUCTION CONTRIBUTIONS TAKEN INTO ACCOUNT. When
determining a Participant's salary reduction contributions taken into
account under the matching contributions formula(s), the following rules
apply: (Choose any combination of (1) through (3))
[X] (1) The Advisory Committee will take into account all salary
reduction contributions credited for the Plan Year.
[_] (2) The Advisory Committee will disregard salary reduction
contributions exceeding__________________________________________
________________________________________________________________.
[_] (3) The Advisory Committee will treat as the first tier of salary
reduction contributions, amount not exceeding. _________________
The subsequent tiers of salary reduction an contributions are:__
________________________________________________________________.
PART III. [OPTION (J).]. SPECIAL RULES FOR CODE (S)401(K) ARRANGEMENT.
(Choose (j), if applicable)
[X] (j) SALARY REDUCTION AGREEMENTS. The following rules and restrictions
apply to an Employee's salary reduction agreement: (Make a selection under
(1), (2), (3) and (4))
(1) Limitation on amount. The Employee's salary reduction contributions:
(Choose (i) or at least one of (ii) or (iii))
[_] (i) No maximum limitation other than as provided in the Plan.
[X] (ii) May not exceed 15% of Compensation for the Plan Year, subject to
the annual additions limitation described in Part 2 of Article
III and the 402(g) limitation described in Section 14.07 of the
Plan.
[_] (iii) Based on percentages of Compensation must equal at least _______
_____________________________________________________________________.
7
<PAGE>
(2) An Employee may revoke, on a prospective basis, a salary reduction
agreement: (Choose (i), (ii), (iii) or (iv))
[_] (i) Once during any Plan Year but not later than ______________
of the Plan Year.
[X] (ii) As of any Plan Entry Date.
[_] (iii) As of the first day of any month.
[_] (iv) (Specify, but must be at least once per Plan Year) _______
____________.
(3) An Employee who revokes his salary reduction agreement may file a new
salary reduction agreement with an effective date: (Choose (i), (ii), (iii)
or (iv))
[_] (i) No earlier than the first day of the next Plan Year.
[X] (ii) As of any subsequent Plan Entry Date.
[_] (iii) As of the first day of any month subsequent to the month
in which he revoked an Agreement.
[_] (iv) (Specify, but must be at least once per Plan Year
following the Plan Year of revocation)___________________________
_________________________________________________________________
(4) A Participant may increase or may decrease, on a prospective basis,
his salary reduction percentage or dollar amount: (Choose (i), (ii), (iii)
or (iv))
[_] (i) As of the beginning of each payroll period.
[_] (ii) As of the first day of each month.
[X] (iii) As of any Plan Entry Date.
[_] (iv) (Specify, but must permit an increase or a decrease at
least once per Plan Year) ______________________________________
________________________________________________________________.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate deferral
-----------------------
contributions, matching contributions, qualified nonelective contributions and
nonelective contributions in accordance with Section 14.06 of the Plan and the
elections under this Adoption Agreement Section 3.04.
PART I. [OPTIONS (A) THROUGH (D)]. SPECIAL ACCOUNTING ELECTIONS. (Choose
whichever elections are applicable to the Employer's Plan)
[X] (a) MATCHING CONTRIBUTIONS ACCOUNT. The Advisory Committee will allocate
matching contributions to a Participant's: (Choose (1) or (2); (3) is
available only in addition to (1))
[X] (1) Regular Matching Contributions Account.
8
<PAGE>
[_] (2) Qualified Matching Contributions Account.
[_] (3) Except, matching contributions under Option(s) of Adoption
Agreement Section 3.01 are allocableto the Qualified Matching
Contributions Account.
[_] (b) SPECIAL ALLOCATION DATES FOR SALARY REDUCTION CONTRIBUTIONS. The
Advisory Committee will allocate salary reduction contributions as of
the Accounting Date and as of the following additional allocation
dates : ______________________________________________________________
_____________________________________________________________.
[_] (c) SPECIAL ALLOCATION DATES FOR MATCHING CONTRIBUTIONS. The Advisory
Committee will allocate matching contributions as of the Accounting
Date and as of the following additional allocation dates:____________
____________________________________________________________________.
[X] (d) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS - DEFINITION OF
PARTICIPANT. For purposes of allocating the designated qualified
nonelective contribution, "Participant" means: (Choose (1) or (2))
[_] (1) All Participants.
[X] (2) Participants who are Nonhighly Compensated Employees.
PART II. METHOD OF ALLOCATION - NONELECTIVE CONTRIBUTION. Subject to any
restoration allocation required under Section 5.04, the Advisory Committee will
allocate and credit the annual nonelective contributions (and Participant
forfeitures treated as nonelective contributions) to the Employer Contributions
Account of each Participant who satisfies the conditions of Section 3.06, in
accordance with the method selected under this Part II. (Choose an allocation
method under (e), (f), (g) or (h); (i) is mandatory if the Employer elects (f),
(g) or (h))
[X] (e) NONINTEGRATED ALLOCATION FORMULA. The Advisory Committee will allocate
the annual nonelective contributions 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.
[_] (f) TWO-TIERED INTEGRATED ALLOCATION FORMULA - MAXIMUM DISPARITY. First,
the Advisory Committee will allocate the annual nonelective contributions
in the same ratio that each Participant's Compensation plus Excess
Compensation for the Plan Year bears to the total Compensation plus Excess
Compensation of all Participants for the Plan Year. The allocation under
this paragraph, as a percentage of each Participant's Compensation plus
Excess Compensation, must not exceed the applicable percentage (5.7%, 5.4%
or 4.3%) listed under the Maximum Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions 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.
[_] (g) THREE-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the annual nonelective contributions 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. The allocation
under this paragraph, as a percentage of each Participant's Compensation
may not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under
the Maximum Disparity Table following Option (i).
9
<PAGE>
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's Excess
Compensation for the Plan Year bears to the total Excess Compensation of
all Participants for the Plan Year. The allocation under this paragraph, as
a percentage of each Participant's Excess Compensation, may not exceed the
allocation percentage in the first paragraph.
Finally, the Advisory Committee will allocate any remaining nonelective
contributions 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.
[_] (h) FOUR-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the annual nonelective contributions 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, but not exceeding
3% of each Participant's Compensation.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's Excess
Compensation for the Plan Year bears to the total Excess Compensation of
all Participants for the Plan Year, but not exceeding 3% of each
Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the annual
contributions in the same ratio that each Participant's Compensation plus
Excess Compensation for the Plan Year bears to the total Compensation plus
Excess Compensation of all Participants for the Plan Year. The allocation
under this paragraph, as a percentage of each Participant's Compensation
plus Excess Compensation, must not exceed the applicable percentage (2.7%,
2.4% or 1.3%) listed under the Maximum Disparity Table following Option
(i).
The Advisory Committee then will allocate any remaining nonelective
contributions 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.
[_] (i) EXCESS COMPENSATION. For purposes of Option (f), (g) or (h), "Excess
Compensation" means Compensation in excess of the following Integration
Level: (Choose (1) or (2))
[_] (1) % (not exceeding 100%) of the taxable wage base, as determined
under Section 230 of the Social Security Act, in effect on the first
day of the Plan Year: (Choose any combination of (i) and (ii) or
choose (iii))
[_] (i) Rounded to ___________________ (but not exceeding the
taxable wage base).
[ ] (ii) But not greater than $ _______.
[ ] (iii) Without any further adjustment or limitation.
[_] (2) $ ________ [Note: Not exceeding the taxable wage base for the
Plan Year in which this Adoption Agreement first is effective.]
10
<PAGE>
MAXIMUM DISPARITY TABLE. For purposes of Options (f), (g) and (h), the
applicable percentage is:
<TABLE>
<CAPTION>
Integration Level (as Applicable Percentages for Applicable Percentages
percentage of taxable wage base) Option (f) or Option (g) for Option (h)
- -------------------------------- --------------------------- -----------------------
<S> <C> <C>
100% 5.7% 2.7%
More than 80% but less than 100% 5.4% 2.4%
More than 20% (but not less than $10,001)
and not more than 80% 4.3% 1.3%
20% (or $10,000, if greater) or less 5.7% 2.7%
</TABLE>
TOP HEAVY MINIMUM ALLOCATION - APPLICATION OF REQUIREMENT. The Plan applies the
top heavy minimum allocation requirements of Section 3.04(B)(1): (Choose (j) or
(k))
[_] (j) In all Plan Years. A Participant is entitled to the top heavy
minimum allocation if he is employed by the Employer on the last day of
the Plan Year, unless: (Choose (1) or (2))
[_] (1) No exceptions.
[_] (2) The Participant is a Key Employee for the Plan Year. [Note: If the
Employer selects this Option (2), it will have to determine for each
Plan Year who are the Key Employees under the Plan.]
[X] (k) Only in Plan Years for which the Plan is top heavy. A Participant is
entitled to the top heavy minimum allocation if he is employed by the
Employer on the last day of the Plan Year, unless he is a Key Employee.
[Note: Option (k) will require the Advisory Committee to determine whether
the Plan is top heavy for a Plan Year.]
TOP HEAVY MINIMUM ALLOCATION - METHOD OF COMPLIANCE. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum allocation
to which he is entitled under Section 3.04(B): (Choose (l) or (m))
[X] (l) The Employer will make any necessary additional contribution to the
Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan.
[_] (m) The Employer will satisfy the top heavy minimum allocation under the
Paired Pension Plan the Employer also maintains under this Prototype Plan.
However, the Employer will make any necessary additional contribution to
satisfy the top heavy minimum allocation for an Employee covered only
under this Plan and not under the Paired Pension Plan. See Section
3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan which is not a Paired Pension Plan
offered under this Prototype Plan, the Employer may provide in an addendum to
this Adoption Agreement, numbered Section 3.04, any modifications to the Plan
necessary to satisfy the top heavy requirements under Code (S)416.
RELATED EMPLOYERS. If two or more related employers (as defined in Section
1.30) contribute to this Plan, the Advisory Committee must allocate all Employer
contributions and forfeitures to each Participant in the Plan, in accordance
with the elections in this Adoption Agreement Section 3.04, without regard to
which contributing related group member employs the Participant. A
Participant's Compensation includes Compensation from all related employers,
irrespective of which related employers are contributing to the Plan. The
signatory Employer and any Participating Employer(s) will satisfy any fixed
matching contribution formula under Adoption Agreement Section 3.01 as agreed
upon by those Employers.
11
<PAGE>
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required
---------------------
under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant
forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) and (d) are
optional in addition to (a) or (b))
[X] (a) As an Employer nonelective contribution for the Plan Year in which
the forfeiture occurs, as if the Participant forfeiture were an additional
nonelective contribution for that Plan Year.
[ ] (b) To reduce the Employer matching contributions and nonelective
contributions for the Plan Year: (Choose (1) or (2))
[ ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[ ] (c) To the extent attributable to matching contributions: (Choose
(1), (2) or (3))
[ ] (1) In the manner elected under Options (a) or (b).
[ ] (2) First to reduce Employer matching contributions for the Plan Year:
(Choose (i) or (ii))
[ ] (i) in which the forfeiture occurs,
[ ] (ii) immediately following the Plan Year in which the forfeiture
occurs, then as elected in Options (a) or (b).
[ ] (3) As a discretionary matching contribution for the Plan Year in
which the forfeiture occurs, in lieu of the manner elected under
Options (a) or (b).
[ ] (d) First to reduce the Plan's ordinary and necessary administrative
expenses for the Plan Year, and then will allocate any remaining
forfeitures in the manner described in Options (a), (b) or (c), whichever
applies. If the Employer elects Option (c), the forfeitures used to reduce
Plan expenses: (Choose (1) or (2))
[ ] (1) relate proportionately to forfeitures described in Option (c) and
to forfeitures described in Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option ____.
ALLOCATION OF FORFEITED EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will allocate any forfeited excess aggregate contributions (as described in
Section 14.09): (Choose (e), (f) or (g))
[X] (e) To reduce Employer matching contributions for the Plan Year: (Choose
(1) or (2))
[X] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[ ] (f) As Employer discretionary matching contributions for the Plan Year in
which forfeited, except the Advisory Committee will not allocate these
forfeitures to the Highly Compensated Employees who incurred the
forfeitures.
12
<PAGE>
[ ] (g) In accordance with Options (a) through (d), whichever applies, except
the Advisory Committee will not allocate these forfeitures under Option (a)
or under Option (c)(3) to the Highly Compensated Employees who incurred the
forfeitures.
3.06 ACCRUAL OF BENEFIT.
------------------
COMPENSATION TAKEN INTO ACCOUNT. For the Plan Year in which the Employee first
becomes a Participant, the Advisory Committee will determine the allocation of
any designated qualified nonelective contribution or nonelective contribution by
taking into account: (Choose (a) or (b))
[ ] (a) The Employee's Compensation for the entire Plan Year.
[ ] (b) The Employee's Compensation for the portion of the Plan Year in which
the Employee actually is a Participant in the Plan, except: (Choose (1) or
(2))
[X] (1) No exceptions.
[ ] (2) For purposes of the first 3% of Compensation allocated under
Option (e), (g) or (h) of Adoption Agreement Section 3.04, whichever
applies, the Advisory Committee will take into account the Employee's
Compensation for the entire Plan Year.
ACCRUAL REQUIREMENTS. To receive an allocation of designated qualified
nonelective contributions, nonelective contributions and Participant forfeitures
treated as nonelective contributions for the Plan Year, a Participant must
satisfy the accrual requirements of this paragraph. If the Participant is
employed by the Employer on the last day of the Plan Year, the Participant must
complete at least one Hour of Service for that Plan Year. If the Participant
terminates employment with the Employer during the Plan Year, the Participant
must complete at least 501 Hours of Service (not exceeding 501) during the Plan
---
Year, except: (Choose (c) or (d))
[ ] (c) No exceptions.
[X] (d) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of: (Choose at least one of (1),
(2) and (3))
[X] (1) Death.
[X] (2) Disability.
[X] (3) Attainment of Normal Retirement Age in the current Plan Year or
in a prior Plan Year.
SPECIAL ACCRUAL REQUIREMENTS FOR MATCHING CONTRIBUTIONS. To receive an
allocation of matching contributions (and forfeitures applied to reduce matching
contributions) a Participant must satisfy the following condition(s): (Choose
(e) or any combination of (f), (g) and (h))
[X] (e) No conditions other than making salary reduction contributions.
[ ] (f) The accrual requirements prescribed for an allocation of nonelective
contributions.
[ ] (g) The Participant does not revoke his salary reduction agreement
effective during the Plan Year.
[ ] (h) The Participant is not a Highly Compensated Employee for the Plan
Year. This Option (h) applies to: (Choose (1) or (2))
[ ] (1) All matching contributions.
13
<PAGE>
[ ] (2) Matching contributions described in Option(s) ________of Adoption
Agreement Section 3.01.
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15
-----------------------------
apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or
(c))
[ ] (a) The product of:
(i) the total Excess Amount allocated as of such date (including any
amount which the Advisory Committee would have allocated but for the
limitations of Code (S)415), times
(ii) the ratio of (1) the amount allocated to the Participant as of
such date under this Plan divided by (2) the total amount allocated as
of such date under all qualified defined contribution plans
(determined without regard to the limitations of Code (S)415).
[X] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
[Note: If the Employer adopts Paired Plans available under this Prototype Plan,
the Employer must coordinate its elections under Section 3.15 of each Adoption
Agreement.]
3.18 DEFINED BENEFIT PLAN LIMITATION.
-------------------------------
APPLICATION OF LIMITATION. The limitation under Section 3.18 of the Plan:
(Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan because the Employer does not
maintain and never has maintained a defined benefit plan covering any
Participant in this Plan.
[ ] (b) Applies to the Employer's Plan. To the extent necessary to satisfy the
limitation under Section 3.18, the Employer will reduce: (Choose (1) or
(2))
[ ] (1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[ ] (2) Its contribution or allocation on behalf of the Participant to the
defined contribution plan under which the Participant participates and
then, if necessary, the Participant's projected annual benefit under
the defined benefit plan under which the Participant participates.
[Note: If the Employer selects (a), the remaining options in this Section 3.18
do not apply to the Employer's Plan.]
OVERRIDE OF 100% LIMITATION. The Employer elects: (Choose (c) or (d))
[ ] (c) To apply the 100% limitation described in Section 3.19(l) of the Plan
in all Limitation Years. [Note: This election will avoid having to
calculate the Plan's top heavy ratio for any year, unless the Employer has
elected Adoption Agreement Section 3.04(k).]
14
<PAGE>
[_] (d) Not to apply the 100% limitation for Limitation Years in which the
Plan's top heavy ratio (as determined under Section 1.33 of the Plan) does
not exceed 90%, but only if the defined benefit plan satisfies the extra
minimum benefit requirements of Code (S)416(h)(2) (and the applicable
Treasury regulations) after taking into account the Employer's election
under Options (e), (f), (g) or (h) of this Section 3.18. To determine the
top heavy ratio, the Advisory Committee will use the following interest
rate and mortality assumptions to value accrued benefits under a defined
benefit plan: ____________________________________________________________
__________________________________________________________________________
_______________________. [Note: This election will require the Advisory
Committee to calculate the Plan's top heavy ratio.]
COORDINATION WITH TOP HEAVY MINIMUM ALLOCATION. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan
with the following modifications: (Choose (e), (f), (g) or (h))
[_] (e) No modifications.
[_] (f) By substituting 4% for 3% in Paragraph (b) of Section 3.04(B)(1) or
of Section 3.04(B)(2) of the Plan, whichever applies, but only for any
Plan Year in which Option (d) applies to override the 100% limitation.
[_] (g) By increasing the top heavy minimum allocation to 5% for any Plan Year
in which the 100% limitation applies, and to 7 1/2% for any Plan Year in
which Option (d) applies to override the 100% limitation. The increased
percentage under this Option (g) applies irrespective of whether the
highest contribution rate for the Plan Year is less than that increased
percentage.
[_] (h) By eliminating the top heavy minimum allocation. [Note: The Employer
may not select this Option (h) if the defined benefit plan does not
guarantee the top heavy minimum benefit under Code (S)416 for every
Participant in this Plan who is a Non-Key Employee.]
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code (S)416,
the Employer must provide the appropriate provisions in an addendum to this
Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or (b))
---------------------------------------
[X] (a) Does not permit Participant nondeductible contributions.
[_] (b) Permits Participant nondeductible contributions, pursuant to Section
14.04 of the Plan.
ALLOCATION DATES. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the following
additional allocation dates: (Choose (c) or (d))
[_] (c) No other allocation dates.
[ ] (d) (Specify)____________________________________________________________
As of an allocation date, the Advisory Committee will credit all nondeductible
contributions made for the relevant allocation period. Unless otherwise
specified in (d), a nondeductible contribution relates to an allocation period
only if actually made to the Trust no later than 30 days after that allocation
period ends.
15
<PAGE>
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a)
-----------------
or (b))
[_] (a) ______ [State age, but may not exceed age 65].
[X] (b) The later of the date the Participant attains 65 years of age or the
--
5th anniversary of the first day of the Plan Year in which the Participant
---
commenced participation in the Plan. [The age selected may not exceed age
65 and the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section
-------------------------------
5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c))
[_] (a) Does not apply.
[X] (b) Applies to death.
[X] (c) Applies to disability.
5.03 VESTING SCHEDULE.
----------------
DEFERRAL CONTRIBUTIONS ACCOUNT/QUALIFIED MATCHING CONTRIBUTIONS
ACCOUNT/QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT. A Participant has a 100%
Nonforfeitable interest at all times in his Deferral Contribution Account, his
Qualified Matching Contributions Account and in his Qualified Nonelective
Contributions Account.
REGULAR MATCHING CONTRIBUTIONS ACCOUNT/EMPLOYER CONTRIBUTIONS ACCOUNT. With
respect to a Participant's Regular Matching Contributions Account and Employer
Contributions Account, the Employer elects the following vesting schedule:
(Choose (a) or (b); (c) and (d) are available only as additional options)
[_] (a) Immediate vesting. 100% Nonforfeitable at all times.
[X] (b) Graduated Vesting Schedules.
TOP HEAVY SCHEDULE TOP HEAVY SCHEDULE
(MANDATORY) (OPTIONAL)
<TABLE>
<CAPTION>
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
------- ---------- ------- ----------
<S> <C> <C> <C>
Less than 1 00% Less than 1 00%
1................... 00% 1................... 00%
2................... 20% 2................... 00%
3................... 40% 3................... 20%
4................... 60% 4................... 40%
5................... 80% 5................... 60%
6 or more........... 100% 6 .................. 80%
7 or more........... 100%
</TABLE>
16
<PAGE>
[_] (c) Special vesting election for Regular Matching Contributions Account.
In lieu of the election under Options (a) or (b), the Employer elects the
following vesting schedule for a Participant's Regular Matching
Contributions Account: (Choose (1) or (2))
[_] (1) 100% Nonforfeitable at all times.
[_] (2) In accordance with the vesting schedule described in the addendum
to this Adoption Agreement, numbered 5.03(c). [Note: If the Employer
elects this Option (c)(2), the addendum must designate the applicable
vesting schedule(s) using the same format as used in Option (b).]
[Note: Under Options (b) and (c)(2), the Employer must complete a Top Heavy
Schedule which satisfies Code (S)416. The Employer, at its option, may complete
a Non Top Heavy Schedule only if the Employer elected Adoption Agreement Section
3.04(k). The Non Top Heavy Schedule must satisfy Code (S)411(a)(2). Also see
Section 7.05 of the Plan.]
[X] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under
Option (c)(2)) applies: (Choose (1) or (2))
[ ] (1) Only in a Plan Year for which the Plan is top heavy.
[X] (2) In the Plan Year for which the Plan first is top heavy and then
in all subsequent Plan Years. [Note: The Employer may not elect Option
(d) unless it has completed a Non Top Heavy Schedule.]
MINIMUM VESTING. (Choose (e) or (f))
[X] (e) The Plan does not apply a minimum vesting rule.
[_] (f) A Participant's Nonforfeitable Accrued Benefit will never be
less than the lesser of $______ or his entire Accrued Benefit, even if
the application of a graduated vesting schedule under Options (b) or (c)
would result in a smaller Nonforfeitable Accrued Benefit.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/ RESTORATION OF
-----------------------------------------------------------------------
FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section
- -------------------------
5.04(C) of the Plan: (Choose (a) or (b))
[_] (a) Does not apply.
[X] (b) Will apply to determine the timing of forfeitures for 0% vested
Participants. A Participant is not a 0% vested Participant if he has a
Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
-------------------------
VESTING COMPUTATION PERIOD. The Plan measures a Year of Service on the basis of
the following 12 consecutive month periods: (Choose (a) or (b))
[_] (a) Plan Years.
[X] (b) Employment Years. An Employment Year is the 12 consecutive month
period measured from the Employee's Employment Commencement Date and each
successive 12 consecutive month period measured from each anniversary of
that Employment Commencement Date.
17
<PAGE>
HOURS OF SERVICE. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
[X] (c) 1,000 Hours of Service.
[_] (d) _____ Hours of Service. [Note: The Hours of Service requirement
may not exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes
-----------------------------------
the following Years of Service: (Choose (a) or at least one of (b), (c) and (d))
[X] (a) None other than as specified in Section 5.08(a) of the Plan.
[_] (b) Any Year of Service before the Participant attained the age of .
[Note: The age selected may not exceed age 18.]
[_] (c) Any Year of Service during the period the Employer did not maintain
this Plan or a predecessor plan.
[_] (d) Any Year of Service before a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the Break. This exception
applies only if the Participant is 0% vested in his Accrued Benefit derived
from Employer contributions at the time he has a Break in Service.
Furthermore, the aggregate number of Years of Service before a Break in
Service do not include any Years of Service not required to be taken into
account under this exception by reason of any prior Break in Service.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
CODE (S)411(D)(6) PROTECTED BENEFITS. The elections under this Article VI may
not eliminate Code (S)411(d)(6) protected benefits. To the extent the elections
would eliminate a Code (S)411(d)(6) protected benefit, see Section 13.02 of the
Plan. Furthermore, if the elections liberalize the optional forms of benefit
under the Plan, the more liberal options apply on the later of the adoption date
or the effective date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
----------------------------------
DISTRIBUTION DATE. A distribution date under the Plan means As soon as
----------
administratively practicable in the first Plan Year beginningafter the
- ----------------------------------------------------------------------
Participant's separation from Service. [Note: The Employer must specify the
- -------------------------------------
appropriate date(s). The specified distribution dates primarily establish
annuity starting dates and the notice and consent periods prescribed by the
Plan. The Plan allows the Trustee an administratively practicable period of
time to make the actual distribution relating to a particular distribution
date.]
NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500. Subject to the limitations
of Section 6.01(A)(1), the distribution date for distribution of a
Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c) or
(d))
[X] (a) When administratively practicable following the Accounting Date of the
---------------------------------------------------------------
first Plan Year beginning after the Participant's Separation from Service.
[_] (b) _________________________________________________________following the
Participant's Separation from Service.
[_] (c) _________________________________________________________
of the Plan Year after the Participant incurs Break(s) in Service (as
defined in Article V).
18
<PAGE>
[_] (d) __________________________following the Participant's attainment of
Normal Retirement Age, but not earlier than_________days following his
Seperation from Service.
NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. See the elections under Section
6.03.
DISABILITY. The distribution date, subject to the limitations of Section
6.01(A)(3), is: (Choose (e) or (f))
[_] (e) ___________________________________________________after the
Participant terminates employment because of disability.
[X] (f) The same as if the Participant had terminated employment without
disability.
HARDSHIP. (Choose (g) or (h))
[X] (g) The Plan does not permit a hardship distribution to a Participant who
has separated from Service.
[_] (h) The Plan permits a hardship distribution to a Participant who has
separated from Service in accordance with the hardship distribution policy
stated in: (Choose (1) or (2))
[_] (1) Section 6.01(A)(4) of the Plan.
[_] (2) Section 14.11 of the Plan.
DEFAULT ON A LOAN. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to Section
9.04, the Plan: (Choose (i) or (j))
[X] (i) 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, 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.
[_] (j) Does not treat the default as a distributable event. When an otherwise
distributable event first occurs pursuant to Section 6.01 or Section 6.03
of the Plan, the Trustee 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.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply
------------------------------------
Section 6.02 of the Plan with the following modifications: (Choose (a) or (b))
[X] (a) No modifications.
[_] (b) The Plan permits the following annuity options:_______________________
___________________________________.
Any Participant who elects a life annuity option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See Section
6.04(E). [Note: The Employer may specify additional annuity options in an
addendum to this Adoption Agreement, numbered 6.02(b).]
19
<PAGE>
6.03 BENEFIT PAYMENT ELECTIONS.
-------------------------
PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may elect
to commence distribution of his Nonforfeitable Accrued Benefit: (Choose (a) or
(b))
[_] (a) As of any distribution date, but not earlier than___________________of
the____________________Plan Year beginning after the Participant's Separation
from Service.
[X] (b) As of the following date(s): (Choose at least one of Options (1)
through (5))
[X] (1) As of any distribution date after the close of the Plan Year in which
the Participant attains Normal Retirement Age.
[X] (2) Any distribution date following his Separation from Service.
[_] (3) Any distribution date in the_________Plan Year(s) beginning after
his Separation from Service.
[ ] (4) Any distribution date in the Plan Year after the Participant incurs
________Break(s) in Service (as defined in Article V).
[X] (5) Any distribution date following attainment of age 59.5 and completion
of at least 5 Years of Service (as defined in Article V).
The distribution events described in the election(s) made under Options (a)
or (b) apply equally to all Accounts maintained for the Participant.
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - REGULAR MATCHING
CONTRIBUTIONS ACCOUNT AND EMPLOYER CONTRIBUTIONS ACCOUNT. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Regular Matching Contributions Account and Employer Contributions
Account prior to his Separation from Service: (Choose (c) or at least one of (d)
through (f))
[_] (c) No distribution options prior to Separation from Service.
[_] (d) Attainment of Specified Age. Until he retires, the Participant has a
continuing election to receive all or any portion of his Nonforfeitable
interest in these Accounts after he attains: (Choose (1) or (2))
[_] (1) Normal Retirement Age.
[_] (2) ______ years of age and is at least ______% vested in these Accounts.
[Note: If the percentage is less than 100%, see the special vesting formula
in Section 5.03.]
[_] (e) After a Participant has participated in the Plan for a period of not
less than ______ years and he is 100% vested in these Accounts, until he
retires, the Participant has a continuing election to receive all or any
portion of the Accounts. [Note: The number in the blank space may not be
less than 5.]
[X] (f) Hardship. A Participant may elect a hardship distribution prior to his
Separation from Service in accordance with the hardship distribution
policy: (Choose (1) or (2); (3) is available only in addition to (1) or
(2))
[_] (1) Under Section 6.01(A)(4) of the Plan.
20
<PAGE>
[X] (2) Under Section 14.11 of the Plan.
[X] (3) In no event may a Participant receive a hardship distribution
before he is at least 100% vested in these Accounts. [Note: If the
---
percentage in the blank is less than 100%, see the special vesting
formula in Section 5.03.]
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - DEFERRAL CONTRIBUTIONS
ACCOUNT, QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. Subject to the restrictions of Article VI, the following
distribution options apply to a Participant's Deferral Contributions Account,
Qualified Matching Contributions Account and Qualified Nonelective Contributions
Account prior to his Separation from Service: (Choose (g) or at least one of (h)
or (i))
[_] (g) No distribution options prior to Separation from Service.
[X] (h) Until he retires, the Participant has a continuing election to receive
all or any portion of these Accounts after he attains: (Choose (1) or (2))
[X] (1) The later of Normal Retirement Age or age 59 1/2.
[_] (2) Age______(at least 59 1/2).
[X] (i) Hardship. A Participant, prior to his Separation from Service, may
elect a hardship distribution in accordance with the hardship distribution
policy under Section 14.11 of the Plan.
SALE OF TRADE OR BUSINESS/SUBSIDIARY. If the Employer sells substantially all
of the assets (within the meaning of Code (S)409(d)(2)) used in a trade or
business or sells a subsidiary (within the meaning of Code (S)409(d)(3)), a
Participant who continues employment with the acquiring corporation is eligible
for distribution from his Deferral Contributions Account, Qualified Matching
Contributions Account and Qualified Nonelective Contributions Account: (Choose
(j) or (k))
[X] (j) Only as described in this Adoption Agreement Section 6.03 for
distributions prior to Separation from Service.
[_] (k) As if he has a Separation from Service. After March 31, 1988, a
distribution authorized solely by reason of this Option (k) must constitute
a lump sum distribution, determined in a manner consistent with Code
(S)401(k)(10) and the applicable Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity
-----------------------------------------------------------
distribution requirements of Section 6.04: (Choose (a) or (b))
[X] (a) Apply only to a Participant described in Section 6.04(E) of the Plan
(relating to the profit sharing exception to the joint and survivor
requirements).
[_] (b) Apply to all Participants.
21
<PAGE>
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a
--------------------------------------
distribution from a segregated Account and other than a corrective distribution
described in Sections 14.07, 14.08, 14.09 or 14.10 of the Plan) occurs more than
90 days after the most recent valuation date, the distribution will include
interest at: (Choose (a) or (b))
[X] (a) 0% per annum. [Note: The percentage may equal 0%.]
-
[_] (b) The 90 day Treasury bill rate in effect at the beginning of the
current valuation period.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant to
------------------------------------------------------
Section 14.12, to determine the allocation of net income, gain or loss: (Choose
only those items, if any, which are applicable to the Employer's Plan)
[X] (a) For salary reduction contributions, the Advisory Committee
will: (Choose (1), (2), (3) or (4))
[X] (1) Apply Section 9.11 without modification.
[_] (2) Use the segregated account approach described in Section 14.12.
[_] (3) Use the weighted average method described in Section 14.12, based on
a__________________ weighting period.
[_] (4) Treat as part of the relevant Account at the beginning of the
valuation period ___________% of the salary reduction contributions:(Choose
(i) or(ii))
[_] (i) made during that valuation period.
[_] (ii) made by the following specified time:__________________________
[X] (b) For matching contributions, the Advisory Committee will: (Choose (1),
(2) or (3))
[X] (1) Apply Section 9.11 without modification.
[_] (2) Use the weighted average method described in Section 14.12, based
on a_______________ weighting period.
[_] (3) Treat as part of the relevant Account at the beginning of the
valuation period _________% of the matching contributions allocated
during the valuation period.
[X] (c) For Participant nondeductible contributions, the Advisory Committee
will: (Choose (1), (2), (3) or (4))
[X] (1) Apply Section 9.11 without modification.
[_] (2) Use the segregated account approach described in Section 14.12 .
[_] (3) Use the weighted average method described in Section 14.12, based
on a __________ weighting period.
22
<PAGE>
[_] (4) Treat as part of the relevant Account at the beginning of the
valuation period ________% of the Participant nondeductible
contributions: (Choose (i) or (ii))
[_] (i) made during that valuation period.
[_] (ii) made by the following specified time:________________________.
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee
------------------
must value the Trust Fund on the following valuation date(s): (Choose (a) or
(b))
[X] (a) No other mandatory valuation dates.
[_] (b) (Specify)_____________________________________________________________
______________________.
23
<PAGE>
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the restated
effective date for at least one of the provisions listed in this addendum. In
lieu of the restated Effective Date in Adoption Agreement Section 1.18, the
following special effective dates apply: (Choose whichever elections apply)
[_] (a) COMPENSATION DEFINITION. The Compensation definition of Section 1.12
(other than the $200,000 limitation) is effective for Plan Years beginning
after ____________________. [Note: May not be effective later than the
first day of the first Plan Year beginning after the Employer executes this
Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if
applicable.]
[_] (b) ELIGIBILITY CONDITIONS. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning
after ____________________.
[_] (c) SUSPENSION OF YEARS OF SERVICE. The suspension of Years of Service
rule elected under Adoption Agreement Section 2.03 is effective for Plan
Years beginning after ____________________.
[_] (d) CONTRIBUTION/ALLOCATION FORMULA. The contribution formula elected
under Adoption Agreement Section 3.01 and the method of allocation elected
under Adoption Agreement Section 3.04 is effective for Plan Years beginning
after ____________________.
[_] (e) ACCRUAL REQUIREMENTS. The accrual requirements of Section 3.06 are
effective for Plan Years beginning after ____________________. [Note: If
the effective date is later than Plan Years beginning after December 31,
1989, the accrual requirements in the Plan prior to its restatement may not
be more restrictive for post-1989 Plan Years than the requirements
permitted under Adoption Agreement Section 3.06.]
[_] (f) ELIMINATION OF NET PROFITS. The requirement for the Employer not to
have net profits to contribute to this Plan is effective for Plan Years
beginning after ____________________. [Note: The date specified may not be
earlier than December 31, 1985.]
[_] (g) VESTING SCHEDULE. The vesting schedule elected under Adoption
Agreement Section 5.03 is effective for Plan Years beginning after
____________________.
[_] (h) ALLOCATION OF EARNINGS. The special allocation provisions elected
under Adoption Agreement Section 9.11 are effective for Plan Years
beginning after ____________________.
For Plan Years prior to the special Effective Date, the terms of the Plan
prior to its restatement under this Adoption Agreement will control for purposes
of the designated provisions. A special Effective Date may not result in the
delay of a Plan provision beyond the permissible Effective Date under any
applicable law requirements.
24
<PAGE>
EXECUTION PAGE
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Prototype Plan and Trust. The Employer hereby agrees to the provisions of this
Plan and Trust, and in witness of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee (and
Custodian, if applicable) signified its acceptance, on this 13th day of
----
September, 1994.
- --------- --
Name and EIN of Employer: Salida Building and Loan Association 84-0311998
-----------------------------------------------
Signed: /s/ Larry D. Smith
-----------------------------------------------------------------
Larry D. Smith
Name(s) of Trustee: Larry D. Smith , Richard A. Young , Robert Mitchell ,
-----------------------------------------------------
Timothy Glenn, Phil Harsh
- -------------------------
Signed: /s/ Larry D. Smith , /s/ Richard A. Young , /s/ Robert Mitchell ,
-----------------------------------------------------------------
/s/ Timothy Glenn, /s/ Phil Harsh
-----------------------------------------------------------------
Name of Custodian:_________________________________________________________
Signed:____________________________________________________________________
[Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03
of the Plan.]
PLAN NUMBER. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 001.
---
USE OF ADOPTION AGREEMENT. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Regional Prototype Plan Sponsor's recordkeeping purposes and does not
necessarily correspond to the plan number the Employer designated in the prior
paragraph. The Regional Prototype Plan Sponsor offers the following Paired
Pension Plan(s) with this Paired Profit Sharing Plan, identified by 3-digit
adoption agreement number: 004.
RELIANCE ON NOTIFICATION LETTER. If the Employer does not maintain (and has
never maintained) any other plan other than this Plan and a Paired Pension Plan,
it may rely on the Regional Prototype Plan Sponsor's notification letter
covering this Plan for purposes of plan qualification. For this purpose, the
Employer has not maintained another plan if this Plan, or the Paired Pension
Plan, amended and restated that prior plan and the prior plan was the same type
of plan as the restated plan. If the Employer maintains or has maintained
another plan other than a Paired Pension Plan, including a welfare benefit fund,
as defined in Code (S)419(e), which provides post-retirement medical benefits
for key employees (as defined in Code (S)419A(d)(3)), or an individual medical
account (as defined in Code (S)415(l)(2)), the Employer may not rely on this
Plan's qualified status unless it obtains a determination letter from the
applicable IRS Key District office.
25
<PAGE>
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement, elects
to become a Participating Employer in the Plan identified in Section 1.03 of the
accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Prototype
Plan as made by Salida Building and Loan Association, the Signatory Employer to
------------------------------------
the Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: ____________________.
2. The undersigned Employer's adoption of this Plan constitutes:
[_] (a) The adoption of a new plan by the Participating Employer.
[_] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as______________________, and having
an original effective date of_________.
Dated this________day of_______,19__.
Name of Participating Employer:________________
_______________________________________________
Signed:______________________________
Participating Employer's EIN: __________
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE ADOPTION
AGREEMENT AND BY THE TRUSTEE.
Name of Signatory Employer: Salida Building and Loan
------------------------
Association
-----------
Accepted:__________________
[Date] Signed:_______________________________________
Name(s) of Trustee:___________________________
Accepted:___________________
[Date] Signed:_______________________________________
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important
Prototype Plan information.
26
<PAGE>
SUMMARY PLAN DESCRIPTION
FOR THE
SALIDA BUILDING AND LOAN ASSOCIATION 401(K) PROFIT SHARING PLAN & TRUST
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
(1) GENERAL........................................................................................... 1
(2) IDENTIFICATION OF PLAN............................................................................ 1
(3) TYPE OF PLAN...................................................................................... 1
(4) PLAN ADMINISTRATOR................................................................................ 1
(5) TRUSTEE/TRUST FUND................................................................................ 2
(6) HOURS OF SERVICE.................................................................................. 2
(7) ELIGIBILITY TO PARTICIPATE........................................................................ 2
(8) EMPLOYER'S CONTRIBUTIONS.......................................................................... 3
(9) EMPLOYEE CONTRIBUTIONS............................................................................ 5
(10) VESTING IN EMPLOYER CONTRIBUTIONS................................................................. 5
(11) PAYMENT OF BENEFITS AFTER TERMINATION OF EMPLOYMENT............................................... 7
(12) PAYMENT OF BENEFITS PRIOR TO TERMINATION OF EMPLOYMENT............................................ 9
(13) DISABILITY BENEFITS............................................................................... 10
(14) PAYMENT OF BENEFITS UPON DEATH.................................................................... 10
(15) DISQUALIFICATION OF PARTICIPANT STATUS - LOSS OR DENIAL OF BENEFITS............................... 11
(16) CLAIMS PROCEDURE.................................................................................. 11
(17) RETIRED PARTICIPANT, SEPARATED PARTICIPANT WITH VESTED BENEFIT, BENEFICIARY RECEIVING
BENEFITS.......................................................................................... 12
(18) PARTICIPANT'S RIGHTS UNDER ERISA.................................................................. 12
(19) FEDERAL INCOME TAXATION OF BENEFITS PAID.......................................................... 13
(20) PARTICIPANT LOANS................................................................................. 13
</TABLE>
<PAGE>
SUMMARY PLAN DESCRIPTION
(1) GENERAL. The legal name, address and Federal employer identification number
of the Employer are -
Salida Building and Loan Association
P.O. Box 309, 103 W 2nd Street
Salida, Colorado 81201
84-0311998
The Employer has established a retirement plan ("Plan") to supplement your
income upon retirement. In addition to retirement benefits, the Plan may
provide benefits in the event of your death or disability or in the event of
your termination of employment prior to normal retirement. If after reading
this summary you have any questions, please ask the Plan Administrator. We
emphasize this summary plan description is a highlight of the more important
provisions of the Plan. If there is a conflict between a statement in this
summary plan description and in the Plan, the terms of the Plan control.
(2) IDENTIFICATION OF PLAN. The Plan is known as -
Salida Building and Loan Association 401(k) Profit Sharing Plan & Trust
The Employer has assigned 001 as the Plan identification number. The plan year
is the period on which the Plan maintains its records: First Plan Year will be
7/1/94 to 12/31/94. Subsequent Plan Years will be the 12 consecutive month
period ending each 12/31
(3) TYPE OF PLAN. The Plan is commonly known as a Code section 401(k) profit
sharing plan. Section (8), "Employer's Contributions," explains how you share in
the Employer's annual contributions to the trust fund and the extent to which
the Employer has an obligation to make annual contributions to the trust fund.
Under this Plan, there is no fixed dollar amount of retirement benefits. Your
actual retirement benefit will depend on the amount of your account balance at
the time of retirement. Your account balance will reflect the annual
allocations, the period of time you participate in the Plan and the success of
the Plan in investing and reinvesting the assets of the trust fund.
Furthermore, a governmental agency known as the Pension Benefit Guaranty
Corporation (PBGC) insures the benefits payable under plans which provide for
fixed and determinable retirement benefits. The Plan does not provide a fixed
and determinable retirement benefit. Therefore, the PBGC does not include this
Plan within its insurance program.
(4) PLAN ADMINISTRATOR. The Employer is the Plan Administrator. The
Employer's telephone number is (719) 539-2516. The Employer has designated
Larry Smith to assist the Employer with the duties of Plan Administrator. You
may contact Larry Smith at the Employer's address. The Plan Administrator is
responsible for providing you and other participants information regarding your
rights and benefits under the Plan. The Plan Administrator also has the primary
authority for filing the various reports, forms and returns with the Department
of Labor and the Internal Revenue Service.
The name of the person designated as agent for service of legal process and the
address where a processor may serve legal process upon the Plan are -
Larry Smith
<PAGE>
Salida Building and Loan Association
P.O. Box 309, 103 W 2nd Street
Salida, Colorado 81201
A legal processor may also serve the Trustee of the Plan or the Plan
Administrator.
The Plan permits the Employer to appoint an Advisory Committee to assist in the
administration of the Plan. The Advisory Committee has the responsibility for
making all discretionary determinations under the Plan and for giving
distribution directions to the Trustee. If the Employer does not appoint an
Advisory Committee, the Plan Administrator assumes these responsibilities. The
members of the Advisory Committee may change from time to time. You may obtain
the names of the current members of the Advisory Committee from the Plan
Administrator.
(5) TRUSTEE/TRUST FUND. The Employer has appointed -
Larry D. Smith Salida Building and Loan Association
Richard A. Young P.O. Box 309, 103 W 2nd Street
Robert Mitchell Salida, Colorado 81201
William Fagala, Timothy Glenn
to hold the office of Trustee. The Trustee will hold all amounts the Employer
contributes to it in a trust fund. Upon the direction of the Advisory
Committee, the Trustee will make all distribution and benefit payments from the
trust fund to participants and beneficiaries. The Trustee will maintain trust
fund records on a plan year basis.
(6) HOURS OF SERVICE. The Plan and this summary plan description include
references to hours of service. To become eligible to participate in the Plan,
to advance on the vesting schedule or to share in the allocation of Employer
contributions for a plan year, the Plan requires you to complete a minimum
number of hours of service during a specified period. The sections covering
eligibility to participate, vesting and employer contributions explain this
aspect of the Plan in the context of those topics. However, hour of service has
the same meaning for all purposes of the Plan.
The Department of Labor, in its regulations, has prescribed various methods
under which the Employer may credit hours of service. The Employer has selected
the "actual" method for crediting hours of service. Under the actual method, you
will receive credit for each hour for which the Employer pays you, directly or
indirectly, or for which you are entitled to payment, for the performance of
your employment duties. You also will receive credit for certain hours during
which you do not work if the Employer pays you for those hours, such as paid
vacation.
If an employee's absence from employment is due to maternity or paternity leave,
the employee will receive credit for unpaid hours of service related to his
leave, not to exceed 501 hours. The Advisory Committee will credit these hours
of service to the first period during which the employee otherwise would incur a
1-year break in service as a result of the unpaid absence.
(7) ELIGIBILITY TO PARTICIPATE. To become a participant, an employee must
complete one year of service and attain age 18. You do not have to complete any
form for entry into the Plan. You will become a
2
<PAGE>
Participant on the the first day of the plan year or the first day of the
seventh month of the plan year immediately following your completion of the age
and service requirement.
The Plan defines "year of service" as a 12-month eligibility service period in
which you work at least 1,000 hours for the Employer. The first eligibility
service period starts on your first day of employment with the Employer. For
example, if you begin work on February 15 and work 1,000 hours from that
February 15 through the following February 14, you would enter the Plan on the
first day or the first day of the seventh month of the Plan Year immediately
following the completion of the one year of service. After the first 12-month
eligibility service period, the Plan will measure your eligibility service
period on an anniversary basis. In the prior example, on an anniversary basis,
the Plan would measure the 12-month periods beginning each February 15. The
Plan will need to measure more than one 12-month period, for example, if you do
not complete a year of service in the first 12-month period.
The example in the prior paragraph assumes you are at least age 18 when you
complete the service requirement. If you have not attained age 18 when you
complete the service requirement, then you will become a participant in the Plan
on the the first day of the plan year or the first day of the seventh month of
the plan year immediately following your attainment of age 18.
If you terminate employment after becoming a Participant in the Plan and later
return to employment, you will re-enter the Plan on your re-employment date.
Also, if you terminate employment after satisfying the Plan's eligibility
conditions but before actually becoming a participant in the Plan, you will
become a participant in the Plan on the later of your scheduled entry date or
your reemployment date.
The following employees are not eligible to participate in the plan:
employees working in a classification of employees covered by a collective
bargaining agreement.
If by reason of this exclusion, you should become ineligible to participate in
the Plan, you may not receive an allocation of the Employer's contribution
during the period of your exclusion, but during this period your account balance
will continue to share in trust fund earnings or losses.
(8) EMPLOYER'S CONTRIBUTIONS. 401(K) ARRANGEMENT. This Plan includes a
"401(k) arrangement," under which you may elect to have the employer contribute
a portion of your compensation to the Plan. The contributions the Employer
makes under your election are "elective deferrals." The Advisory Committee will
allocate your elective deferrals to a separate account designated by the Plan as
your Deferral Contributions Account.
As a participant in the Plan, you may enter into a salary reduction agreement
with the Employer. The Advisory Committee will give you a salary reduction
agreement form which will explain your salary reduction options. The Employer
will withhold from your pay the amount you have agreed to have the Employer
contribute as elective deferrals.
Your salary reduction agreement remains in effect until you revoke the
agreement. You may revoke your salary reduction agreement as of any Plan Entry
Date. If you revoke your salary reduction agreement, you may file a new
agreement with an effective date as of any subsequent Plan Entry Date. You may
increase or decrease your salary reduction percentage or dollar amount as of any
Plan Entry Date. Your salary reduction contributions may not exceed 15% of your
Compensation for the Plan Year.
3
<PAGE>
For any calendar year, your elective deferrals may not exceed a specific dollar
amount determined by the Internal Revenue Service. If your elective deferrals
for a particular calendar year exceed the dollar limitation in effect for that
calendar year, the Plan will refund the excess amount, plus any earnings (or
loss) allocated to that excess amount. If you participate in another "401(k)
arrangement" or in similar arrangements under which you elect to have an
employer contribute on your behalf, your total elective deferrals may not exceed
the dollar limitation in effect for that calendar year. The Form W-2 you
receive from each employer for the calendar year will report the amount of your
elective deferrals for that calendar year under that employer's plan. If your
total exceeds the dollar limitation in effect for that calendar year you should
decide which plan you wish to designate as the plan with the excess amount. If
you designate this Plan as holding the excess amount for a calendar year, you
must notify the Advisory Committee of that designation by March 1 of the
following calendar year. The Trustee then will distribute the excess amount to
you, plus earnings (or loss) allocated to that excess amount.
MATCHING CONTRIBUTIONS. For each plan year, the Employer will contribute to the
Plan an amount of matching contributions determined by the Employer at its
discretion. The Employer may choose not to make matching contributions for a
particular plan year. The Advisory Committee will allocate the matching
contributions on the basis of the participant's "eligible contributions." A
participant's "eligible contributions" equal the participant's elective
deferrals for the plan year (other than any elective deferrals which exceed the
dollar limitation determined by the Internal Revenue Service). A participant's
share of the matching contributions is equal to his share of the total eligible
contributions made by all participants. For example, if your eligible
contributions equal 10% of the total eligible contributions made by all
participants, your account would receive an allocation of 10% of the total
amount of matching contributions made by the Employer for the plan year. The
Advisory Committee allocates your share of these matching contributions to your
Regular Matching Contributions Account.
QUALIFIED NONELECTIVE CONTRIBUTIONS. The Plan permits the Employer to
contribute a discretionary amount for a plan year which the Employer will
designate as qualified nonelective contributions. If the Employer makes
qualified nonelective contributions for a plan year, the Advisory Committee will
allocate those contributions to the separate accounts of those participants who
are eligible for an allocation for the plan year but who are not highly
compensated employees for that plan year. The law defines highly compensated
employees to include most owners and officers of the Employer and employees
whose compensation for the plan year exceeds certain dollar limitations
prescribed by the Internal Revenue Service. Also, a family member of a highly
compensated employee may be a highly compensated employee under the Plan.
The Advisory Committee will base a participant's allocation of qualified
nonelective contributions upon the participant's share of the total compensation
paid during that plan year to all participants eligible for the allocation. For
example, if your compensation for a particular plan year equals 10% of total
compensation for all participants eligible for the allocation, the Advisory
Committee would allocate 10% of the total qualified nonelective contributions to
your Qualified Nonelective Contributions Account.
EMPLOYER'S NONELECTIVE CONTRIBUTIONS. Each plan year, the Employer will make
nonelective contributions to the Plan in the amount determined by the Employer
at its discretion. The Employer may choose not to make nonelective
contributions to the Plan for a particular plan year.
For each plan year the Employer makes nonelective contributions to the Plan, the
Advisory Committee will allocate this contribution to the separate accounts
maintained for participants. The Advisory Committee
4
<PAGE>
will base your allocation upon your proportionate share of the total
compensation paid during that plan year to all participants in the Plan. For
example, if your compensation for that plan year is 10% of the total
compensation for all participants for that particular plan year, the Advisory
Committee will allocate 10% of the total Employer contribution for the plan year
to your separate account.
ALLOCATION OF FORFEITURES. The Plan allocates participant forfeitures as if the
forfeitures were additional Employer nonelective contributions for the plan year
in which the forfeitures occur.
COMPENSATION. The Plan defines compensation as the employee's total amount of
earnings reportable as W-2 wages for Federal income tax withholding purposes.
With limited exceptions, the Plan includes an employee's compensation only for
the part of the plan year in which he actually is a participant.
CONDITIONS FOR ALLOCATION. Generally, your account is entitled to an allocation
of Employer contributions for each plan year in which you are a participant.
However, in the year you terminate employment with the Employer, with limited
exceptions, you must complete at least 501 hours of service to be entitled to an
allocation.
The contribution allocations described in this Section (8) may vary for certain
employees if the Plan is top heavy. Generally, the Plan is top heavy if more
than 60% of the Plan's assets are allocated to the accounts of key employees
(certain owners and officers). If the Plan is top heavy, any participant who is
not a key employee and who is employed on the last day of the plan year, may not
receive a contribution allocation which is less than a certain minimum. Usually
that minimum is 3%, but if the contribution allocation for the plan year is less
than 3% for all the key employees, the top heavy minimum is the smaller
allocation rate. If you are a participant in the Plan, your allocation
described in this Section (8) in most cases will be equal to or greater than the
top heavy minimum contribution allocation. The Plan also may vary the
definition of the top heavy minimum contribution to take into account another
plan maintained by the Employer.
The law limits the amount of "additions" (other than trust earnings) which the
Plan may allocate to your account under the Plan. Your additions may never
exceed 25% of your compensation for a particular plan year, but may be less if
25% of your compensation exceeds a dollar amount announced by the Internal
Revenue Service each year. The Plan may need to reduce this limitation if you
participate (or have participated) in any other plans maintained by the
Employer. The discussion of Plan allocations in this Section (8) is subject to
this limitation.
(9) EMPLOYEE CONTRIBUTIONS. The Plan does not permit nor require you to make
employee contributions to the trust fund. "Employee contributions" are
contributions made by an employee for which the employee does not receive an
income tax deduction. The only source of contributions under the Plan is the
annual Employer contribution, including the "elective deferrals" made at your
election under the 401(k) arrangement described in Section (8). "Elective
deferrals" are not "employee contributions" for purposes of the Plan.
(10) VESTING IN EMPLOYER CONTRIBUTIONS. Your interest in the contributions
the Employer makes to the Plan for your benefit becomes 100% vested when you
attain normal retirement age (as defined in Section
5
<PAGE>
(11)). Prior to normal retirement age, your interest in the contributions the
employer makes on your behalf become vested in accordance with the following
schedule:
<TABLE>
<CAPTION>
PERCENT OF
YEARS OF SERVICE NONFORFEITABLE INTEREST
---------------- -----------------------
<S> <C>
Less than 1 . . . . . . . . . . . . . . . . . . . . . . . 00%
1 . . . . . . . . . . . . . . . . . . . . . . . . . . 00%
2 . . . . . . . . . . . . . . . . . . . . . . . . . . 00%
3 . . . . . . . . . . . . . . . . . . . . . . . . . . 20%
4 . . . . . . . . . . . . . . . . . . . . . . . . . . 40%
5 . . . . . . . . . . . . . . . . . . . . . . . . . . 60%
6 . . . . . . . . . . . . . . . . . . . . . . . . . . 80%
7 or more . . . . . . . . . . . . . . . . . . . . . . 100%
</TABLE>
100% VESTING FOR DEFERRAL CONTRIBUTIONS ACCOUNT. The vesting schedule does not
apply to your Deferral Contributions Account described in Section (8). Instead,
you are 100% vested at all times in your Deferral Contributions Account.
SPECIAL VESTING RULE FOR DEATH OR DISABILITY. If you die or become disabled
while still employed by the Employer, your entire Plan interest becomes 100%
vested, even if you otherwise would have a vested interest less than 100%.
TOP HEAVY VESTING RULE. If the Plan becomes top heavy, a different vesting
schedule applies. In the event that schedule becomes effective, the Advisory
Committee will notify all participants in writing of the new schedule.
YEAR OF SERVICE. To determine your percentage under a vesting schedule, a year
of service means a 12-month vesting service period in which you complete at
least 1,000 hours of service. The Plan measures the vesting service period as
the participant's employment year. A participant's employment year is the 12-
month period beginning on his employment commencement date and each 12-month
period beginning on the anniversary of his employment commencement date. If you
complete at least 1,000 hours of service during an employment year, you will
receive credit for a year of service even though you are not employed by the
Employer on the last day of that employment year.
You will receive credit for years of service with the Employer prior to the time
the Employer established the Plan and for years of service prior to the time you
became a participant in the Plan.
The Plan provides two methods of vesting forfeiture which may apply before a
participant becomes 100% vested in his entire interest under the Plan. The
primary method of vesting forfeiture is the "forfeiture break in service" rule.
The secondary method of forfeiture is the "cash out" rule. Also see Section
(15) relating to loss or denial of benefits.
6
<PAGE>
FORFEITURE BREAK IN SERVICE RULE. Termination of employment alone will not
result in forfeiture under the Plan unless you do not return to employment with
the Employer before incurring a "forfeiture break in service." A "forfeiture
break in service" is a period of 5 consecutive vesting service periods in which
you do not work more than 500 hours in each vesting service period comprising
the 5 year period.
EXAMPLE. Assume you are 60% vested in your account balance. After working 400
hours during a particular vesting service period, you terminate employment and
perform no further service for the Employer during the next 4 vesting service
periods. Under this example, you would have a "forfeiture break in service"
during the fourth vesting service period following the vesting service period in
which you terminated employment because you did not work more than 500 hours
during each vesting service period of 5 consecutive vesting service periods.
Consequently, you would forfeit the 40% non-vested portion of your account. If
you had returned to employment with the Employer at any time during the 5
consecutive vesting service periods and worked more than 500 hours during any
vesting service period within that 5-year period, you would not incur a
forfeiture under the "forfeiture break in service" rule.
CASH OUT RULE. The cash out rule applies if you terminate employment and
receive a total distribution of the vested portion of your account balance
before you incur a forfeiture break in service. For example, assume you
terminated employment during a particular vesting service period after
completing 800 hours of service. Assume further the total value of your account
balance is $6,000 in which you have a 60% vested interest. Before you incur a
forfeiture break in service, you receive a distribution of the $3,600 vested
portion ($6,000 X 60%) of your account balance. Upon payment of the $3,600
vested portion of your account balance, you would forfeit the $2,400 nonvested
portion. If you return to employment before you incur a "forfeiture break in
service," you may have the Plan restore your "cash out" forfeiture by repaying
the amount of the distribution you received attributable to Employer
contributions. This repayment right applies only if you do not incur a
"forfeiture break in service." You must make this repayment no later than the
date 5 years after you return to employment with the Employer. Upon your
reemployment with the Employer, you may request the Advisory Committee to
provide you a full explanation of your rights regarding this repayment option.
If the vested portion of your account balance does not exceed $3,500, the Plan
will distribute that vested portion to you in a lump sum, without your consent.
This involuntary cash-out distribution will result in the forfeiture of your
nonvested account balance, in the same manner as an employee who voluntarily
elects a cash-out distribution. Also, upon reemployment you would have the same
repayment option as an employee who elected a cash-out distribution, if you
return to employment before incurring a "forfeiture break in service."
If you are 0% vested in your entire interest in the Plan, the Plan will treat
you as having received a cash-out distribution of $0. This "distribution"
results in a forfeiture of your entire Plan interest. Normally, this forfeiture
occurs on the date you terminate employment with the Employer. However, if you
are entitled to an allocation of Employer contributions for the plan year in
which you terminate employment with the Employer, this forfeiture occurs as of
the first day of the next plan year. If you return to employment before you
incur a forfeiture break in service, the Plan will restore this forfeiture, as
if you repaid a cash-out distribution.
(11) PAYMENT OF BENEFITS AFTER TERMINATION OF EMPLOYMENT. After you terminate
employment with the Employer, the time at which the Plan will commence
distribution to you and the form of that distribution depends on whether your
vested account balance exceeds $3,500. If you receive a distribution from the
Plan before you attain age 59-1/2, the law imposes a 10% penalty on the amount
of the distribution you
7
<PAGE>
receive to the extent you must include the distribution in your gross income,
unless you qualify for an exception from this penalty. You should consult a tax
advisor regarding this 10% penalty. This summary makes references to your normal
retirement age. Normal retirement age under this Plan is the later of the date
you attain age 65 or the 5th anniversary of the first day of the plan year in
which you became a participant in the Plan.
If your vested account balance does not exceed $3,500, the Plan will distribute
that portion to you, in lump sum, on When administratively practicable following
the Accounting Date of the first plan year beginning after you terminate
employment with the Employer, or as soon as administratively practicable
following that date. If you already have attained normal retirement age when
you terminate employment, the Plan must make this distribution no later than the
60th day following the close of the plan year in which your employment
terminates, even if the normal distribution date would occur later. The Plan
does not permit you to receive distribution in any form other than a lump sum if
your vested account balance does not exceed $3,500.
If your vested account balance exceeds $3,500, the Plan will commence
distribution to you at the time you elect to commence distribution. The Plan
permits you to elect distribution:
as of any distribution date following your attainment of normal
retirement age.
as of any distribution date following your termination of employment
with the Employer.
as of any distribution date following attainment of age 59.5 if, at
the time you terminate employment with the Employer, you have
completed at least 5 years of service.
A "distribution date" under the Plan means As soon as administratively
practicable in the first Plan Year beginning after the Participant's separation
from Service. You may not actually receive distribution on the distribution
date you elect. The Plan provides the Trustee an administratively reasonable
time following a particular distribution date to make actual distribution to a
participant.
No later than 30 days prior to your earliest possible distribution date, the
Advisory Committee will provide you a notice explaining your right to elect
distribution from the Plan and the forms necessary to make your election. If
you do not make a distribution election, the Plan will commence distribution to
you on the 60th day following the close of the plan year in which the latest of
three events occurs: (1) your attainment of normal retirement age; (2) your
attainment of age 62; or (3) your termination of employment with the Employer.
To determine whether your vested account balance exceeds $3,500, the Plan
normally looks to the last valuation of your account prior to the scheduled
distribution date.
With limited exceptions, you may not commence distribution of your vested
account balance later than April 1 of the calendar year following the calendar
year in which you attain age 70-1/2, even if you have not terminated employment
with the Employer. This required distribution date overrides any contrary
distribution date described in this summary. If the Employer terminates the
Plan before you receive complete distribution of your vested benefits, the Plan
might make distribution to you before you otherwise would elect distribution.
Upon Plan termination, if your vested account balance exceeds $3,500, you will
receive an explanation of your distribution rights.
8
<PAGE>
For purposes of making a distribution of any portion of your vested account
balance, the Plan refers to the latest valuation of your account balance. The
Plan requires valuation of the trust fund, and adjustment of participant's
accounts, as of the last day of each plan year. The Advisory Committee also may
require a valuation on any other date. You will not receive any adjustment to
your account balance for trust fund earnings after the latest valuation date. In
general, the Plan allocates trust fund earnings, gains or losses for a valuation
period on the basis of each participant's opening account balance at the
beginning of the valuation period, less any distributions and charges to each
participant's account during the valuation period.
FORMS OF BENEFIT PAYMENT. If your vested account balance exceeds $3,500, the
Plan permits you to elect distribution under any one of the following methods:
(a) Lump sum.
(b) Part lump sum and part installments, as described in (c).
(c) Installment payments (annually, quarterly or monthly) over a
specified period of time, not exceeding your life expectancy or
the joint life expectancy of you and your designated beneficiary.
Under an installment distribution, the Advisory Committee may direct to have the
Plan segregate the amount owed to you in a separate account apart from other
trust fund assets. Your separate account will continue to draw interest during
the period the Plan is making retirement payments to you. If the Plan does not
segregate the amount owed to you in a separate account, your retirement account
will remain a part of the trust fund and continue to share in trust fund
earnings, gains or losses.
The benefit payment rules described in Sections (11) through (14) reflect the
current Plan provisions. If an Employer amends its Plan to change benefit
payment options, some options may continue for those participants or
beneficiaries who have account balances at the time of the change. If an
eliminated option continues to apply to you, the information you receive from
the Advisory Committee at the time you are first eligible for distribution from
the Plan will include an explanation of that option.
(12) PAYMENT OF BENEFITS PRIOR TO TERMINATION OF EMPLOYMENT.
DISTRIBUTIONS FROM YOUR EMPLOYER CONTRIBUTIONS ACCOUNT AND MATCHING
CONTRIBUTIONS ACCOUNT. Prior to your termination of employment with the
Employer, you may elect to withdraw all or any portion of your Employer
Contributions Account and Matching Contributions Account:
if you incur a hardship and you are at least 100% vested in your
account balance. A hardship distribution must be on account of any of
the following: (a) deductible medical expenses incurred by the
participant, by the participant's spouse, or by any of the
participant's dependents; (b) the purchase (excluding mortgage
payments) of a principal residence for the participant; (c) the
payment of post-secondary education tuition, for the next semester or
for the next quarter, for the participant or for the participant's
spouse, or for any of the participant's dependents; (d) to prevent the
eviction of the participant from his principal residence or the
foreclosure on the mortgage of the participant's principal residence.
To qualify for this hardship distribution, the participant may not
make elective
9
<PAGE>
deferrals or employee contributions to the Plan for the 12-month
period following the date of his hardship distribution, the
participant first must obtain all other available distributions and
all nontaxable loans currently available under the Plan and all other
qualified plans maintained by the Employer, and a special limitation
may apply to the participant's elective deferrals in the following
taxable year.
The Advisory Committee will provide you a withdrawal election form. Other than
the withdrawal right described in this Section (12) and the post-age 70-1/2
distribution requirement described in Section (11), the Plan does not permit you
to receive payment of any portion of your account balance for any other reason,
unless you terminate employment with the Employer.
DISTRIBUTIONS FROM YOUR DEFERRAL CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. Prior to your termination of employment with the
Employer, you may elect to withdraw all or any portion of your Deferral
Contributions Account and Qualified Nonelective Contributions Account:
if you have attained the later of normal retirement age or age 59-1/2.
if you incur a hardship. A hardship distribution is available only
from your Deferral Contributions Account. A hardship distribution must
be on account of any of the following: (a) deductible medical expenses
incurred by the participant, by the participant's spouse, or by any of
the participant's dependents; (b) the purchase (excluding mortgage
payments) of a principal residence for the participant; (c) the
payment of post-secondary education tuition, for the next semester or
for the next quarter, for the participant or for the participant's
spouse, or for any of the participant's dependents; (d) to prevent the
eviction of the participant from his principal residence or the
foreclosure on the mortgage of the participant's principal residence.
To qualify for this hardship distribution, 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, the
participant first must obtain all other available distributions and
all nontaxable loans currently available under the Plan and all other
qualified plans maintained by the Employer, and a special limitation
may apply to the participant's elective deferrals in the following
taxable year.
The Advisory Committee will provide you a withdrawal election form. Other than
the withdrawal right described in this Section (12) and the post-age 70-1/2
distribution requirement described in Section (11), the Plan does not permit you
to receive payment of any portion of your account balance for any other reason,
unless you terminate employment with the Employer.
(13) DISABILITY BENEFITS. If you terminate employment because of disability,
the Plan will pay your vested account balance to you in lump sum at the same
time as it would pay your vested account balance for any other termination of
employment. However, if your vested account balance exceeds $3,500, the
disability distribution rules are subject to any election requirements described
in Section (11). In general, disability under the Plan means because of a
physical or mental disability you are unable to perform the duties of your
customary position of employment for an indefinite period which, in the opinion
of the Advisory Committee, will be of long continued duration. The Advisory
Committee also considers you disabled if you terminate employment because of a
permanent loss or loss of use of a member or function of your body or a
permanent disfigurement. The Advisory Committee may require a physical
examination in order to confirm the disability.
10
<PAGE>
(14) PAYMENT OF BENEFITS UPON DEATH. If you die prior to receiving all of
your benefits under the Plan, the Plan will pay the balance of your account to
your beneficiary. If the Employer permits the Trustee to purchase life
insurance on your life with a portion of your account balance, your account
balance also will receive any life insurance proceeds payable by reason of your
death.
The Advisory Committee will provide you with an appropriate form for naming a
beneficiary. If you are married, your spouse must consent to the designation of
any nonspouse beneficiary. If your vested account balance payable to your
designated beneficiary does not exceed $3,500, the Plan will pay the benefit, in
lump sum, to your designated beneficiary as soon as administratively practicable
after your death. If your vested account balance payable to your designated
beneficiary exceeds $3,500, the Plan will pay the benefit to your designated
beneficiary, in the form and at the time elected by the beneficiary, unless,
prior to your death, you specify the timing and form of the beneficiary's
distribution. The benefit payment election generally must complete distribution
of your account balance within five years of your death, unless distribution
commences within one year of your death to your designated beneficiary or unless
benefits had commenced prior to your death under the mandatory post-age 70-1/2
distribution requirements described in Section (11).
(15) DISQUALIFICATION OF PARTICIPANT STATUS - LOSS OR DENIAL OF BENEFITS.
There are no specific Plan provisions which disqualify you as a participant or
which cause you to lose plan benefits, except as provided in Sections (7) and
(10). However, if you become disabled and do not receive compensation from the
Employer, you will not receive an allocation of the Employer's contribution to
the Plan during the period of disability. In addition, if your Plan benefits
become payable after termination of employment and the Advisory Committee is
unable to locate you at your last address of record, you may forfeit your
benefits under the Plan. Therefore, it is very important that you keep the
Employer apprised of your mailing address even after you have terminated
employment. Finally, if the Employer terminates the Plan, which it has the
right to do, you would receive benefits under the Plan based on your account
balance accumulated to the date of the termination of the Plan. Termination of
the Plan could occur before you attain normal retirement age. If the Employer
terminates the Plan, your account will become 100% vested, if not already 100%
vested, unless you forfeited the nonvested portion prior to the termination
date.
The termination of the Plan does not permit you to receive a distribution from
your Deferral Contributions Account and Qualified Nonelective Contributions
Account unless: (1) you otherwise have the right to a distribution, as described
in Sections (11) and (12); or (2) the Employer does not maintain a successor
defined contribution plan. If you are able to receive a distribution only
because the Employer does not maintain a successor defined contribution plan,
you must agree to take that distribution as part of a lump sum payment of your
entire account balance under the Plan. The Trustee will transfer to the
successor defined contribution plan any portion of your interest the Plan is
unable to distribute to you.
The fact that the Employer has established this Plan does not confer any right
to future employment with the Employer. Furthermore, you may not assign your
interest in the Plan to another person or use your Plan interest as collateral
for a loan from a commercial lender.
(16) CLAIMS PROCEDURE. You need not file a formal claim with the Advisory
Committee in order to receive your benefits under the Plan. When an event
occurs which entitles you to a distribution of your benefits under the Plan, the
Advisory Committee automatically will notify you regarding your distribution
rights. However, if you disagree with the Advisory Committee's determination of
the amount of your benefits under the Plan or with respect to any other decision
the Advisory Committee may make regarding your
11
<PAGE>
interest in the Plan, the Plan contains the appeal procedure you should follow.
In brief, if the Advisory Committee of the Plan determines it should deny
benefits to you, the Plan Administrator will give you written notice of the
specific reasons for the denial. The notice will refer you to the pertinent
provisions of the Plan supporting the Advisory Committee's decision. If you
disagree with the Advisory Committee, you, or a duly authorized representative,
must appeal the adverse determination in writing to the Advisory Committee
within 75 days after the receipt of the notice of denial of benefits. If you
fail to appeal a denial within the 75-day period, the Advisory Committee's
determination will be final and binding.
If you appeal to the Advisory Committee, you, or your duly authorized
representative, must submit the issues and comments you feel are pertinent to
permit the Advisory Committee to re-examine all facts and make a final
determination with respect to the denial. The Advisory Committee, in most
cases, will make a decision within 60 days of a request on appeal unless special
circumstances would make the rendering of a decision within the 60-day period
unfeasible. In any event, the Advisory Committee must render a decision within
120 days after its receipt of a request for review. The same procedures apply
if, after your death, your beneficiary makes a claim for benefits under the
Plan.
(17) RETIRED PARTICIPANT, SEPARATED PARTICIPANT WITH VESTED BENEFIT,
BENEFICIARY RECEIVING BENEFITS. If you are a retired participant or beneficiary
receiving benefits, the benefits you presently are receiving will continue in
the same amount and for the same period provided in the mode of settlement
selected at retirement. If you are a separated participant with a vested
benefit, you may obtain a statement of the dollar amount of your vested benefit
upon request to the Plan Administrator. There is no Plan provision which
reduces, changes, terminates, forfeits, or suspends the benefits of a retired
participant, a beneficiary receiving benefits or a separated participant's
vested benefit amount, except as provided in Section (15).
(18) PARTICIPANT'S RIGHTS UNDER ERISA. As a participant in this Plan, you are
entitled to certain rights and protections under the Employee Retirement Income
Security Act of 1974 (ERISA). ERISA provides that all Plan participants are
entitled to:
(a) Examine, without charge, at the Plan Administrator's office and at other
specified locations (such as worksites), all Plan documents, including
insurance contracts and copies of all documents filed by the Plan with the
U.S. Department of Labor, such as detailed annual reports and plan
descriptions.
(b) Obtain copies of all Plan documents and other Plan information upon written
request to the Plan Administrator. The Plan Administrator may make a
reasonable charge for the copies.
(c) Receive a summary of the Plan's annual financial report. ERISA requires
the Plan Administrator to furnish each participant with a copy of this
summary annual report.
(d) Obtain a statement telling you that you have a right to receive a
retirement benefit at the normal retirement age under the Plan and what
your benefit could be at normal retirement age if you stop working under
the Plan now. If you do not have a right to a retirement benefit, the
statement will advise you of the number of additional years you must work
to receive a retirement benefit. You must request this statement in
writing. The law does not require the Plan Administrator to give this
statement more than once a year. The Plan must provide the statement free
of charge.
12
<PAGE>
In addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit plan.
The people who operate this Plan, called "fiduciaries" of the Plan, have a duty
to do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your Employer, your union or any other person
may fire you or otherwise discriminate against you in any way to prevent you
from obtaining a retirement benefit or from exercising your rights under ERISA.
If your claim for a retirement benefit is denied in whole or in part, you must
receive a written explanation of the reason for the denial. You have the right
to have the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive the
materials within 30 days, you may file suit in a Federal court. In such a case,
the court may require the Plan Administrator to provide the materials and pay
you up to $100 a day until you receive the materials, unless the materials were
not sent because of reasons beyond the control of the Plan Administrator. If
you have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or Federal court. If it should happen that Plan
fiduciaries misuse the Plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a Federal court. The court will decide who
should pay court costs and legal fees. If you are successful, the court may
order the person you have sued to pay these costs and fees. If you lose, the
court may order you to pay these costs and fees, for example, if it finds your
claim is frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
(19) FEDERAL INCOME TAXATION OF BENEFITS PAID. Existing Federal income tax
laws do not require you to report as income the portion of the annual Employer
contribution allocated to your account. However, when the Plan later
distributes your account balance to you, such as upon your retirement, you must
report as income the Plan distributions you receive. The Federal tax laws may
permit you to report a Plan distribution under a special averaging provision.
Also, it may be possible for you to defer Federal income taxation of a
distribution by making a "rollover" contribution to your own rollover individual
retirement account.
Mandatory income tax withholding rules apply to some distributions you do not
rollover directly to an individual retirement account or to another plan. At
the time you receive a distribution, you also will receive a notice discussing
withholding requirement and the options available to you. We emphasize you
should consult your own tax adviser with respect to the proper method of
reporting any distribution you receive from the Plan.
(20) PARTICIPANT LOANS. This Plan permits the Advisory Committee to adopt a
policy under which the Plan may make loans to participants and beneficiaries. A
copy of the loan policy adopted by the Advisory Committee is attached to this
summary plan description as Exhibit A.
* * * * * * * * * * * * * * *
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<PAGE>
ACKNOWLEDGEMENT OF RECEIPT OF
-----------------------------
SUMMARY PLAN DESCRIPTION OF THE
-------------------------------
SALIDA BUILDING AND LOAN ASSOCIATION 401(K) PROFIT SHARING PLAN & TRUST
-----------------------------------------------------------------------
I hereby acknowledge receipt of a copy of the Summary Plan Description
("SPD") on the above plan. I received a copy of the SPD on the date indicated
below.
Dated:______________________
_________________________________
Participant's Name - Printed
_________________________________
Signature of Participant
<PAGE>
EXHIBIT "A"
LOAN POLICY
The Advisory Committee has adopted the following loan policy to make loans
available to participants and beneficiaries under the Plan.
1. LOAN APPLICATION. Any Plan participant may apply for a loan from the
Plan. For purposes of this loan policy, the term "participant" means any
participant or beneficiary who is party in interest (as determined under ERISA
(S)3(14)) with respect to the Plan. A participant must apply for each loan in
writing with an application which specifies the amount of the loan desired, the
requested duration for the loan and the source of security for the loan. The
Advisory Committee will not approve any loan if a participant is not
creditworthy.
In order to be creditworthy, the participant must have established in his
or her community, a reputation which would entitle him or her to a similar loan
from a commercial or business lender. In applying for the loan from the Plan,
each participant must give full authority to investigate his of her
creditworthiness.
2. LIMITATION ON LOAN AMOUNT/PURPOSE OF LOAN. The Advisory Committee will
not approve any loan to a participant in an amount which exceeds 50% of his or
her nonforfeitable accrued benefit (account balance), as reflected by the books
and records of the Plan. The maximum aggregate dollar amount of loans
outstanding to any participant may not exceed $50,000 as aggregated with all
participant loans from other employer qualified plans, reduced by the excess of
the participant's highest outstanding participant loan balance during the 12-
month period ending on the date of the loan over the participant's current
outstanding participant loan balance on the date of the loan. A participant may
not request a loan for less than $1,000.
A participant loan may be for the purpose of one or any combination of the
following reasons: (1) the purchase, construction or improvement of a residence
or other real estate; (2) the purchase of a vehicle (including an automobile,
van, truck or recreational vehicle); (3) tuition and other educational expenses;
(4) medical and dental expenses; or (5) funeral expenses of a family member.
3. EVIDENCE AND TERMS OF LOAN. The Advisory Committee will document every
loan in the form of a promissory note signed by the participant for the face
amount of the loan, together with a commercially reasonable rate of interest.
The Advisory Committee will determine the appropriate interest rate by obtaining
at least one quote from a financial institution, as chosen by the Advisory
Committee, that is in the business of lending money. The interest rate quote(s)
must take into account the term of the loan, the security on that loan, the
creditworthiness of the participant, whether the interest rate is adjustable
during the term of the loan, and the intended use of the loan proceeds, if
known, and must reflect a commercially reasonable rate for the geographical
region in which the participant lives. If participants in the Plan live in
different geographical regions, the Advisory Committee may establish a uniform
commercially reasonable interest rate applicable to all regions based on
information obtained from at least one region in which participants live. The
Advisory Committee must reevaluate interest rates for loans made more than one
month since the last loan made by the Plan.
A loan may provide a fixed rate of interest or an adjustable rate of
interest, as negotiated between the Advisory Committee and the participant. The
Advisory Committee will determine whether the interest rate is commercially
reasonable at the time it approves the loan and, in the case of an adjustable
rate loan, at the time of each scheduled adjustment. The loan must provide at
least quarterly payments under a level amortization schedule.
The loan may permit a suspension of payments for a period not exceeding one
year which occurs during an approved leave of absence. The Advisory Committee
will fix the term for repayments of any loan, however, in no instance may the
term of repayment be greater than five years, unless the loan qualifies as a
home loan. The Advisory Committee may fix the term for repayment of a home loan
for a period not to exceed 10 years. A "home loan" is a loan used to acquire a
dwelling unit which, within a
<PAGE>
reasonable time, the participant will use as a principal residence.
Participants should note the law treats the amount of any loan (other than
a "home loan") not repaid five years after the date of the loan as a taxable
distribution on the last day of the five year period or, if sooner, at the time
the loan is in default. If a participant extends a non-home loan having a five
year or less repayment term beyond five years, the balance of the loan at the
time of the extension is a taxable distribution to the participant.
4. SECURITY FOR LOAN. A participant must secure each loan with an
irrevocable pledge and assignment of 50% of the nonforfeitable amount of the
borrowing participant's accrued benefit under the Plan or other security (e.g.,
principal residence) the Advisory Committee accepts and finds to be adequate, or
both 50% of the participant's accrued benefit and other security. The Advisory
Committee may request the borrowing participant to secure each loan with
additional collateral acceptable to the Advisory Committee or to substitute
collateral given for the loan.
5. FORM OF PLEDGE. If the participant secures the loan wholly or partly
with 50% of his vested accrued benefit, the pledge and assignment of that
portion of his accrued benefit will be in the form attached to this Loan Policy.
6. DEFAULT/RISK OF LOSS. The Advisory Committee will treat this loan in
default if:
(a) any scheduled payment remains unpaid more than 60 days;
(b) the making or furnishing of any representation or statement to
the Plan by or on behalf of the participant which proves to have
been false in any material respect when made or furnished;
(c) loss, theft, damage, destruction, sale or encumbrance to or of
any of the collateral, or the making of any levy seizure or
attachment thereof or thereon;
(d) death, dissolution, insolvency, business failure, appointment of
receiver of any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceeding
under any bankruptcy or insolvency laws of, by or against the
participant.
The participant will have the opportunity to repay the loan, resume current
status of the loan by paying any missed payment plus interest or, if
distribution is available under the plan, request distribution of the note. If
the loan remains in default, the Advisory Committee has the option of
foreclosing on any other security it holds or, to the extent a distribution to
the participant is permissible under the Plan, offset the participant's vested
account balance by the outstanding balance of the loan. The Advisory Committee
will treat the note as repaid to the extent of any permissible offset. Pending
final disposition of the note, the participant remains obligated for any unpaid
principal and accrued interest.
The Plan intends this loan program not to place other participants at risk
with respect to their interests in the Plan. In this regard, the Advisory
Committee will administer any participant loan as a participant directed
investment of that portion of the participant's vested account balance equal to
the outstanding principal balance of the loan. The Plan will credit that portion
of the participant's interest with the interest earned on the note and with
principal payments received by the participant. The Plan also will charge that
portion of the participant's account balance with expenses directly related to
the organization, maintenance and collection of the note.
* * * * * * * * * *
<PAGE>
SUMMARY OF MATERIAL MODIFICATION
FOR THE
SALIDA BUILDING & LOAN ASSOCIATION
401(K) PROFIT SHARING PLAN & TRUST
Effective July 1, 1995, the Plan will amend it Plan Year as follows:
A short Plan Year from January 1, 1995 to June 30, 1995 will exist, and all
subsequent Plan Years will end each June 30.
<PAGE>
SUMMARY OF MATERIAL MODIFICATION
FOR THE
SALIDA BUILDING & LOAN ASSOCIATION
401(K) PROFIT SHARING PLAN & TRUST
EFFECTIVE WITH THE RESIGNATION OF WILLIAM FAGALA FROM THE BOARD OF DIRECTORS,
MR. FAGALA HAS BEEN REMOVED AS A PLAN TRUSTEE. PHIL HARSH HAS BEEN APPOINTED AS
A NEW MEMBER OF THE ADVISORY COMMITTEE OF THE PLAN, TO SERVE UNTIL APPOINTMENT
OF A SUCCESSOR. LARRY D. SMITH, RICHARD A. YOUNG, ROBERT MITCHELL, TIMOTHY
GLENN AND PHIL HARSH ARE NOW THE APPOINTED AND CONFIRMED PLAN TRUSTEES, WHO WILL
SERVE UNTIL THE APPOINTMENTS OF SUCCESSORS.
<PAGE>
EXHIBIT 4.3
SALIDA BUILDING AND LOAN ASSOCIATION
401(K) PROFIT SHARING PLAN & TRUST
===============================================================================
Employee Name (Please Print)
- -------------------------------------------------------------------------------
Street Address
- -------------------------------------------------------------------------------
City, State, Zip
- -------------------------------------------------------------------------------
Social Security Number
- -------------------------------------------------------------------------------
Home Phone Number Work Phone Number
===============================================================================
EMPLOYEE SALARY REDUCTION ELECTION
For Period Beginning ______________________________ (Please fill in date)
You may increase or decrease your salary reduction percentage or dollar amount
as of any January 1, April 1, July 1 or October 1.
---------------------------------------
You may revoke prospectively your Salary Reduction Agreement as of any January
-------
1, April 1, or July 1 or October 1. Once you revoke your Agreement, you may not
- ----------------------------------
file a new Agreement earlier than the next January 1 or July 1.
-------------------
PLEASE WITHHOLD FROM MY COMPENSATION EACH PAY PERIOD AN AMOUNT EQUAL TO:
[_] ______________% OR [_] $____________ OR [_] I DO NOT WISH TO PARTICIPATE
---
Signed _________________________________ Date___________________
Please return this form to Frank DeLay of the Advisory Committee within one
week.
<PAGE>
SALIDA BUILDING AND LOAN ASSOCIATION 401(K) PROFIT SHARING PLAN & TRUST
===============================================================================
Employee Name (Please Print)
- -------------------------------------------------------------------------------
Street Address
- -------------------------------------------------------------------------------
City, State, Zip
- -------------------------------------------------------------------------------
Social Security Number
- -------------------------------------------------------------------------------
Home Phone Number Work Phone Number
===============================================================================
You may change the percentage you have allocated to the various investment
options as of any January 1, April 1, July 1 or October 1.
---------------------------------------
[_] I have received and reviewed a copy of the current prospectus on each mutual
fund in which I am investing.
INVESTMENT ELECTION
===============================================================================
Investment Options -- Employee Salary Reduction --
For Period Beginning________ -- Loan Repayment --
(Please fill in date)
===============================================================================
Flex Fund Account
- -------------------------------------------------------------------------------
Money Market Account
- -------------------------------------------------------------------------------
Stock Account
- -------------------------------------------------------------------------------
High Country Bancorp Stock
===============================================================================
Percentage Totals for Employee Salary
Reduction, Employer Match and Employer
Profit Sharing Must Add Up to 100%. 100%
===============================================================================
INVESTMENT EXCHANGE ELECTION
===============================================================================
Current Investment Options for For Period Beginning__________
--Employee Salary Reduction -- (Please fill in date)
-- Loan Repayment -- All Exchanges from one account to another
will be on a 100% basis only.
- -------------------------------------------------------------------------------
[_] FLEX FUND ACCOUNT [_] No change [_] Money Market Account
[_] Stock Account [_] High Country Bancorp
Stock
- -------------------------------------------------------------------------------
[_] MONEY MARKET ACCOUNT [_] No change [_] Flex Fund Account
[_] Stock Account [_] High Country Bancorp
Stock
- -------------------------------------------------------------------------------
[_] STOCK ACCOUNT [_] No change [_] Flex Fund Account [_] Money
Market Account [_] High Country Bancorp Stock
- --------------------------------------------------------------------------------
[_] HIGH COUNTRY BANCORP [_] No change [_] Flex Fund Account [_] Money
STOCK Market Account [_] Stock Account
================================================================================
Signed _____________________________ Date_________________
Please return this form to Frank DeLay of the Advisory Committee within one
week.
<PAGE>
Exhibit 5.1
November 14, 1997
Board of Directors
Salida Building & Loan Association
130 W. 2nd Street
Salida, Colorado 81201-0309
Re: Registration Statement on Form S-8
----------------------------------
Salida Building & Loan Association 401(k) Profit Sharing Plan & Trust
Gentlemen:
We have acted as special counsel to High Country Bancorp, Inc., a Colorado
corporation (the "Company"), in connection with the preparation of the above-
referenced Registration Statement (the "Registration Statement") being filed
herewith under the Securities Act of 1933, as amended, relating to participation
interests in the Salida Building & Loan Association 401(k) Profit Sharing Plan &
Trust (the "Plan") and the sale to Plan participants of shares of common stock,
par value $.01 per share (the "Common Stock") of the Company, all as more fully
described in the Registration Statement. You have requested the opinion of this
firm with respect to certain legal aspects of the proposed offering.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is part of the Registration
Statement.
Very truly yours,
Housley Kantarian & Bronstein, P.C.
By /s/ Howard S. Parris
-------------------------------
Howard S. Parris, Esquire
<PAGE>
Exhibit 5.2
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
1100 COMMERCE STREET
DALLAS, TX 75242
Employer Identification Number:
84-1139122
Date: OCT 08 1992 File Folder Number:
840018880
Person to Contact:
ROBERT PAUL
INCOME SECURITY GROUP INC Contact Telephone Number:
3200 CHERRY CREEK SO DR 640 (512) 794-3160
DENVER, CO 80209 Plan Name:
REGIONAL PROTOTYPE STD 401K
Letter Serial Number:
D7751249
401(a)(31) Model Amendment
401(a)(17) Model Amendment
Dear Applicant:
The form of plan, identified above, and the related trust or custodial
account are acceptable under sections 401(a), 403(a), and 501(a) of the Internal
Revenue Code for use by employers for the benefit of their employees. This
letter relates only to the acceptability of the form of the plan under the
Internal Revenue Code. It is not a determination of the effect of other Federal
or local statutes.
You must furnish a copy of this letter and the enclosed publication to each
employer who adopts this plan. You must also send a copy of this letter, a copy
of the approved form of the plan, and any approved amentments and related
documents to each key District Director of the Internal Revenue Services in
whose jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or determination
on whether an employer's plan qualifies under Code section 401(a). However, an
employer who adopts this plan will be considered to have a plan qualified under
Code section 401(a) provided all the terms of the plan are followed and the
eligibility requirements and contribution or benefit provisions are not more
favorable for highly compensated employees than for other employees.
Except as stated below, the key District Director will not issue a
determination letter for this plan.
This letter does not apply to the form of the plan for purposes of Code
section 401(a)(16) if: (1) an employer ever maintained another qualified plan
for one or more employees who are covered by the plan, other than a specified
paired plan within the meaning of section 4.12 of Rev. Proc. 89-13, 1989-1 C.B.
801; or (2) after December 31, 1985, the employer maintained a welfare benefit
fund described in Code section 419(e), which provides postretirement medical
benefits allocated to separate accounts for key employees as defined in Code
section 419(d)(3).
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1 C.B.
801, your application was received before March 31, 1991.
<PAGE>
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
An employer that has adopted a standardized plan may not rely on this
letter with respect to: (1) whether any amendment or series of amendments is
nondiscriminatory in effect; or (2) whether the plan satisfies the effective
availability requirement of Q & A - 2(a)(3) of section 401(a)-4 of the
regulations with respect to any benefit, right or feature; or (3) whether any
provision or amendment granting past service credit has the effect of
discriminating significantly in favor of highly compensation employees, except
to the extent the provision or amendment satisfies the safe harbor in 1.401(a)-5
of the proposed regulations and is not part of a pattern of amendments that
discriminates in favor of highly compensated employees.
An employer that has adopted a standardized plan as an amendment to a plan
other than a standardized plan may not rely on this letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of Reg. 1.401(a)-4 Q & A -
2(a)(2)(ii).
The employer may request a determination: (1) as to whether the plan,
considered with all related qualified plans and, if appropriate, welfare benefit
funds, satisfies the requirements of Code section 401(a)(16) as to limitations
on benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
The information in the enclosed addendum is considered an integral part of
this letter. Please be sure to read it and also provide a copy of it to each
employer who adopts this plan.
We have sent a copy of this letter to your representative as indicated in
your power of attorney.
If you have any questions on the IRS processing of the case, please call
the above telephone number. If you write, please provide your telephone number
with the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent records.
Sincerely yours,
/s/ Gary O. Booth
Gary O. Booth
District Director
Enclosure(s)
Publication 1488
Addendum
<PAGE>
INCOME SECURITY GROUP INC
This letter considers the amendments made to comply with Section 5.05 in Revenue
Procedure 92-41, 1991-21 I.R.B. 23.
This letter supersedes letter dated September 17, 1992.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
November 17, 1997
The Board of Directors
High Country Bancorp, Inc.
We consent to the incorporation by reference in this Registration Statement of
High Country Bancorp, Inc. on Form S-8, regarding Salida Building & Loan
Association 401(k) Profit Sharing Plan & Trust, of our report dated July 31,
1997, on our audits of the consolidated financial statements of Salida Building
& Loan Association as of June 30, 1997 and 1996, and for the two years then
ended, which report was included in the Prospectus for the common stock of High
Country Bancorp, Inc. and incorporated by reference herein.
GRIMSLEY, WHITE & COMPANY
/s/ Grimsley, White & Company
--------------------------------
<PAGE>
<TABLE>
<CAPTION>
Form 5500-C/R Return/Report of Employee Benefit Plan OMB Nos. 1210-0016
<S> <C> <C>
Department of the Treasury (With fewer than 100 participants) 1210-0089
Internal Revenue Service This form is required to be filed under sections 104 and 4065 of the Employee
---------- Retirement Income Security Act of 1974 and sections 6039D, 6047(e), -----------------
Department of Labor 6057(b), and 6058(a) of the Internal Revenue Code. 1996
Pension and Welfare Benefits
Administration See separate instructions. -----------------
---------- This Form is Open
Pension Benefit Guaranty Corporation to Public Inspection.
- ------------------------------------------------------------------------------------------------------------------------------------
For the calendar plan year 1996 or fiscal plan year beginning July 1 , 1996, and ending June 30 , 1997
- ------------------------------------------------------------------------------------------------------------------------------------
If A(1) through A(4), B, C, and/or D do not apply to this year's return/report For IRS Use Only
leave the boxes unmarked. EP-ID
You must check either box A(5) or A(6), whichever is applicable. See instructions. -------------------------------------------
A This return/report is: (5) Form 5500-C filer check here. . . . [_]
(1) [_] the first return/report filed for the plan; (Complete only pages 1 and 3 through 6)
(2) [_] an amended return/report (Code section 6039D filers see
(3) [_] the final return/report filed for the plan; or instructions on page 5.)
(4) [_] a short plan year return/report (less than 12 months). (6) Form 5500-R filer check here. . . . [X]
(Complete only pages 1 and 2. Detach
pages 3 through 6 before filing.) If
you checked box (1) or (3), you must
file a Form 5500-C. (See page 6 of the
instructions.)
IF ANY INFORMATION ON A PREPRINTED PAGE 1 IS INCORRECT, CORRECT IT. IF ANY INFORMATION IS MISSING, ADD IT. PLEASE USE RED INK WHEN
MAKING THESE CHANGES AND INCLUDE THE PREPRINTED PAGE 1 WITH YOUR COMPLETED RETURN/REPORT.
B Check here if any information reported in 1a, 2a, 2b, or 5a changed since the last return/report for this plan . . . . . [_]
C If your plan year changed since the last return/report, check here. . . . . . . . . . . . . . . . . . . . . . . . . . . . [_]
D If you filed for an extension of time to file this return/report, check here and attach a copy of the approved extension. [_]
- ------------------------------------------------------------------------------------------------------------------------------------
1a Name and address of plan sponsor (employer, if for a single-employer plan) 1b Employer identification number (EIN)
(Address should include room or suite no.) 84 0311998
--------------------------------------------
1c Sponsor's telephone number
Salida Building & Loan Association 719-539-2516
--------------------------------------------
P.O. Box 309
Salida, Colorado 81201 1d Business code (see instructions,
page 17)
6120
--------------------------------------------
1e CUSIP issuer number
- ------------------------------------------------------------------------------------------------------------------------------------
2a Name and address of administrator (if same as plan sponsor, enter "Same") 2b Administrator's EIN
--------------------------------------------
SAME
2c Administrator's telephone number
- ------------------------------------------------------------------------------------------------------------------------------------
3 If you are filing this page without the preprinted historical plan information and the name, address, and EIN of the plan
sponsor or plan administrator has changed since the last return/report filed for this plan, enter the information from the last
return/report on lines 3a and/or 3b and complete line 3c.
a Sponsor ________________________________________________ EIN _________________ Plan number ________________
b Administrator ________________________________ EIN ____________________________________________
c If line 3a indicates a change in the sponsor's name, address, and EIN, is this a change in sponsorship only? (See line 3c on
page 8 of the instructions for the definition of sponsorship.) Enter "Yes" or "No."
- ------------------------------------------------------------------------------------------------------------------------------------
4 ENTITY CODE. (If not shown, enter the applicable code from page 8 of the instructions.) A
- ------------------------------------------------------------------------------------------------------------------------------------
5a Name of plan Salida Building & Loan Association 401(k) Profit Sharing Plan 5b Effective date of plan
-------------------------------------------------------------------- (mo., day, yr.)
and Trust 07-01-79
--------------------------------------------
--------------------------------------------------------------------------------- 5c Three-digit
All filers must complete 6a through 6d, as applicable. plan number 001
6a [_] Welfare benefit plan 6b [X] Pension benefit plan ------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(If the correct codes are not preprinted below, enter the applicable codes from [2] [_] [_] [_] [_] [_] [_] [_]
page 8 of the instructions in the boxes.) [_] [_] [_] [_] [_] [_] [_] [_]
6-defined contribution plan/multiple employer-other
6c Pension plan features. (If the correct codes are not preprinted below, enter the applicable
pension plan feature codes from page 8 of the instructions in the boxes.) [C] [G] [L] [_] [_] [_] [_] [_]
6d [_] Fringe benefit plan. Attach Schedule F (Form 5500). See instructions.
- ------------------------------------------------------------------------------------------------------------------------------------
Caution: A penalty for the late or incomplete filing of this return/report will be assessed unless reasonable cause is established.
- ------------------------------------------------------------------------------------------------------------------------------------
Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report,
including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete.
Signature of employer/plan sponsor -------------------------------------------- Date ---------------------------------------------
Type or print name of individual signing for employer/plan sponsor Lorin Smith, President
---------------------------------------------------------------
Signature of plan administrator _____________________________________________________ Date _________________________
Type or print name of individual signing for plan administrator Lorin Smith
- ------------------------------------------------------------------------------------------------------------------------------------
For Paperwork Reduction Act Notice, see page 1 of the instructions. Cat No. 10957K Form 5500-C/R (1996)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Form 5500-C/R (1996) Form 5500-R filers, complete pages 1 and 2 only. Form 5500-C filers, complete page 1, Page 2
skip page 2, and complete pages 3 through 6.
- ------------------------------------------------------------------------------------------------------------------------------------
6e Check investment arrangement below
(1) [_] Master trust (2) [_] Common/Collective trust (3) [_] Pooled separate account
- ------------------------------------------------------------------------------------------------------------------------------------
7a Total participants: (1) At the beginning of plan year 28 (2) At the end of plan year 28
b Enter number of participants with account balances at the end of the plan year (defined benefit plans do not
complete this item) 28
c (1) Were any participants in the pension benefit plan separated from service with a deferred vested
benefit for which a Schedule SSA (Form 5500) is required to be attached?.......................... 7c(1) (_)Yes (X)No
(2) If "Yes," enter the number of separated participants required to be reported
- ------------------------------------------------------------------------------------------------------------------------------------
8a Was this plan terminated during this plan year or any prior plan year? If "Yes," enter the year......... 8a (_)Yes (X)No
b Were all the plan assets either distributed to participants or beneficiaries, transferred to another
plan, or brought under the control of PBGC?...................................................................... 8b N/A
c If line 8a is "yes" and the plan is covered by PBGC, is the plan continuing to file PBGC Form 1 and
pay premiums until the end of the plan year in which assets are distributed or brought under the
control of PBGC?................................................................................................. 8c N/A
- ------------------------------------------------------------------------------------------------------------------------------------
9 Is this a plan established or maintained pursuant to one or more collective bargaining agreements?....... 9 (_)Yes (X)No
- ------------------------------------------------------------------------------------------------------------------------------------
10 If any benefits are provided by an insurance company, insurance service, or similar organization, enter the number
of Schedules A (Form 5500), Insurance Information, that are attached. If none, enter - 0 -. - 0 -
- ------------------------------------------------------------------------------------------------------------------------------------
11a (1) Were any plan amendments adopted during this plan year?....................................... 11a(1) (_)Yes (X)No
(2) Enter the date the most recent amendment was adopted Month 06 Day 10 Year 1995
-- -- ----
b If line 11a is "Yes," did any amendment result in a retroactive reduction of accrued benefits for any participant?
............................................................................................................... 11b N/A
c If line 11a is "Yes," did any amendment change the information contained in the latest summary plan description or
summary description of modifications available at the time of the amendment?................................... 11c N/A
d If line 11c is "Yes," has a summary plan description or summary description of modifications that reflects the plan
amendments referred to on line 11c been both furnished to participants and filed with the Department of Labor?
............................................................................................................... 11d N/A
- ------------------------------------------------------------------------------------------------------------------------------------
12a If this is a pension benefit plan subject to the minimum funding standards, has the plan experienced a funding
deficiency for this plan year? (See instructions.)............................................................ 12a N/A
b If line 12a is "Yes," have you filed Form 5330 to pay the excise tax?.......................................... 12b N/A
c Is the plan administrator making an election under section 412(c)(8) for an amendment adopted after the end of the
plan year? (See instructions.)........................................................................ 12c (_)Yes (X)No
d If a change in the actuarial funding method was made for the plan year pursuant to a Revenue Procedure providing
automatic approval for the change, indicate whether the plan sponsor/administrator agrees to the change..........12d N/A
- ------------------------------------------------------------------------------------------------------------------------------------
13a Total plan assets as of the beginning 533,172 and end 673,292 of the plan year
b Total liabilities as of the beginning 0 and end 0 of the plan year
c Net assets as of the beginning 533,172 and end 673,292 of the plan year
- ------------------------------------------------------------------------------------------------------------------------------------
14 For this plan year, enter: a Plan income 157,120 d Plan contributions 87,144
b Expenses 17,000 e Total benefits paid 15,446
c Net income (loss)(subtract 14b from 14a) 140,120
- ------------------------------------------------------------------------------------------------------------------------------------
15 You may NOT use N/A in response to lines 15a through 15o. If you check "Yes," you must enter a dollar amount in the
amount column. During this plan year:
</TABLE>
<PAGE>
<TABLE>
<S> <C>
a Was this plan covered by a fidelity bond?................................................... 15a (X)Yes (_)No 2,000,000Amount
---------------
b If line 15a is "Yes," enter the name of the surety company COLUMBIA CASUALTY
c Was there any loss to the plan, whether or not reimbursed, caused by fraud or dishonesty?..................... 15c (_)Yes (X)No
d Was there any sale, exchange, or lease of any property between the plan and the employer, any fiduciary, any of the
five most highly paid employees of the employer, any owner of a 10% or more interest in the employer, or relatives
of any such persons?......................................................................................... 15d (_)Yes (X)No
e Was there any loan or extension of credit by the plan to the employer, any fiduciary, any of the five most highly
paid employees of the employer, any owner of a 10% or more interest in the employer, or relatives of any such
persons?..................................................................................................... 15e (_)Yes (X)No
f Did the plan acquire or hold any employer security or employer real property?................................. 15f (_)Yes (X)No
g Has the plan granted an extension on any delinquent loan owed to the plan?.................................... 15g (_)Yes (X)No
h Were any participant contributions transmitted to the plan more than 31 days after receipt or withholding by the
employer?..................................................................................................... 15h (_)Yes (X)No
i Were any loans by the plan or fixed income obligations due the plan classified as uncollectible or in default as of
the close of the plan year?................................................................................... 15i (_)Yes (X)No
j Has any plan fiduciary had a financial interest in excess of 10% in any party providing services to the plan or
received anything of value from any such party?............................................................... 15j (_)Yes (X)No
k Did the plan at any time hold 20% or more of its assets in any single security, debt, mortgage, parcel of real
estate, or partnership/joint venture interests?............................................................... 15k (_)Yes (X)No
l Did the plan at any time engage in any transaction or series of related transactions involving 20% or more of the
current value of plan assets?................................................................................. 15l (_)Yes (X)No
m Were there any noncash contributions made to the plan the value of which was set without an appraisal by an
independent third party?...................................................................................... 15m (_)Yes (X)No
n Were there any purchases of nonpublicly traded securities by the plan the value of which was set without an
appraisal by an independent third party?...................................................................... 15n (_)Yes (X)No
o Has the plan reduced or failed to provide any benefit when due under the plan because of insufficient assets?
............................................................................................................ 15o (_)Yes (X)No
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16a Is the plan covered under the Pension Benefit Guaranty Corporation termination insurance program? (_)Yes (X)No
(_)Not determined
b If line 16a is "Yes" or "Not determined," enter the employer identification number and the plan number used to
identify it. Employer identification number Plan number
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</TABLE>
