As filed with the Securities and Exchange Commission on April 15, 1999
REGISTRATION NO. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BAY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0046244
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1001 HIGHWAY 146 SOUTH
LAPORTE, TEXAS 77571
(281) 471-4400
(Address of registrant's Principal Executive Offices)
BAY BANCSHARES, INC. EMPLOYEE SAVINGS PLAN
(Full Title of Plan)
KIM E. LOVE
BAY BANCSHARES, INC.
1001 HIGHWAY 146 SOUTH
LAPORTE, TEXAS 77571
(Name, and address of agent for service)
281-471-4400
(Telephone number, including area code, of agent for service)
COPY TO:
WILLIAM T. LUEDKE IV
BRACEWELL & PATTERSON, L.L.P.
SOUTH TOWER, PENNZOIL PLACE
711 LOUISIANA STREET, SUITE 2900
HOUSTON, TEXAS 77002-2781
(713) 223-2900
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED AMOUNT OF
TITLE OF AMOUNT TO OFFERING MAXIMUM AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE (2) OFFERING PRICE(2) FEE
- ---------------------------------------- ---------------- ------------------- ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share 200,000 $13.125 $2,625,000 $730
======================================== ================ =================== ================= ============
</TABLE>
(1) Pursuant to Rule 457(h)(1), the registration fee is calculated with
respect to shares to be purchased pursuant to the Bay Bancshares, Inc.
Employee Savings Plan (the "Plan"). In addition, pursuant to Rule 416(c)
of the Securities Act of 1933, as amended (the "Act"), this Registration
Statement also covers an indeterminate amount of interests to be offered
or sold pursuant to the Plan which is described herein.
(2) The proposed maximum offering price per share and the proposed maximum
aggregate offering price are (a) calculated, pursuant to Rule 457(h)(1),
by multiplying the number of shares to be registered by the average of the
high and low prices of a share of Common Stock, as reported on The Nasdaq
Stock Market, Inc., on April 7, 1999, which was $13.00, and (b) provided
herein for the sole purpose of determining the registration fee. Pursuant
to Rule 457(h)(2), no separate fee is required with respect to the Plan
interests.
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<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. PLAN INFORMATION.*
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* The information required by Items 1 and 2 of Part I of Form S-8 is omitted
from this Registration Statement in accordance with the Note to Part 1 of
Form S-8 and Rule 428 promulgated under the Securities Act of 1933, as
amended (the "Securities Act").
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Bay Bancshares, Inc., a Texas corporation, (the "Company") and the Bay
Bancshares, Inc. Employee Savings Plan (the "Plan"), hereby incorporate by
reference into this registration statement (the "Registration Statement"):
(i) the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1998, as filed with the Securities and
Exchange Commission (the "Commission") on March 30, 1999;
(ii) the Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1998, as filed with the Commission on
November 13, 1998;
(iii) the Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 1998, as filed with the Commission on August
14, 1998;
(iv) the Company's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1998, as filed with the Commission on May 11,
1998; and
(v) the description of the Company's Common Stock, par value $1.00
per share, contained in the Company's Form 8-A, dated October
31, 1997, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Company or the Plan with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), subsequent to the filing date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement 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.
The Company will provide, without charge, to each participant in the Plan,
on written or oral request of such person, a copy of any or all of the documents
(without exhibits, unless such exhibits are specifically incorporated by
reference), incorporated by reference pursuant to this Item 3. All such requests
should be directed to Bay Bancshares, Inc., 1001 Highway 146 South, LaPorte,
Texas 77571, Attention: Kim E. Love, Controller. The phone number at that
address is (281) 471-4400.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") and Amended and Restated Bylaws ("Bylaws") require
the Company to indemnify officers and directors of the Registrant to the fullest
extent permitted by Article 2.02-1 of the Texas Business Corporation Act
("TBCA") of the State of Texas. Generally, Article 2.02-1 of the TBCA permits a
corporation to indemnify a person who was, is, or is threatened to be a named
defendant or respondent in a proceeding because the person was or is a director
or officer if it is determined that such person (i) conducted himself in good
faith, (ii) reasonably believed (a) in the case of conduct in his official
capacity as a director or officer of the corporation, that his conduct was in
the corporation's best interests, or (b) in the case of other situations, that
his conduct was at least not opposed to the corporation's best interests, and
(iii) in the case of any criminal proceeding, had no reasonable cause to believe
that his conduct was unlawful. In addition, the TBCA requires a corporation to
indemnify a director or officer for any action that such director or officer is
wholly successful in defending on the merits.
The Company's Articles of Incorporation provide that a director of the
Company will not be liable to the corporation for monetary damages for an act or
omission in the director's capacity as a director, except to the extent not
permitted by law. Texas law does not permit exculpation of liability in the case
of (i) a breach of the director's duty of loyalty to the corporation or its
shareholders, (ii) an act or omission not in good faith that involves
intentional misconduct or a knowing violation of the law, (iii) a transaction
from which a director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's office, (iv) an
act or omission for which the liability of the director is expressly provided by
statute, or (v) an act related to an unlawful stock repurchase or dividend.
The Company may provide liability insurance for each director and officer
for certain losses arising from claims or changes made against them while acting
in their capabilities as directors or officers of the Company, whether or not
the Company would have the power to indemnify such person against such
liability, as permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference from Exhibit 3.1 to the Company's
Registration Statement on Form S-1; Registration No. 333-36185).
4.2 Amended and Restated Bylaws of the Company (incorporated by
reference from Exhibit 3.2 to the Company's Registration Statement
on Form S-1; Registration No. 333-36185).
4.3* Bay Bancshares, Inc. Employee Savings Plan.
4.4* First Amendment to the Bay Bancshares, Inc. Employee Savings Plan.
4.5* Second Amendment to the Bay Bancshares, Inc. Employee Savings Plan.
23* Consent of Grant Thornton LLP.
24* Power of Attorney (included on page II-5).
- -----
*Filed Herewith.
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<PAGE>
The registrant will submit or has submitted the Plan and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely manner and has made
or will make all changes required by the IRS in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act 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 this 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 a prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (A)(1)(i) and (A)(1)(ii) of this
section do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act, that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such
II-3
<PAGE>
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.
[SIGNATURE PAGE FOLLOWS]
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<PAGE>
SIGNATURES
THE REGISTRANT. 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 OR AMENDMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF LAPORTE, STATE OF
TEXAS ON THE 15TH DAY OF APRIL, 1999.
BAY BANCSHARES, INC.
(Registrant)
By: /s/ LARRY D. WRIGHT
Larry D. Wright
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Larry D. Wright and Kim E. Love, with full power to each of them to act without
the other, the undersigned's true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for the undersigned and in the
undersigned's name, place and stead, in any and all capacities (until revoked in
writing), to sign this Registration Statement and any and all amendments
(including post-effective amendments) thereto, to file the same, together with
all exhibits thereto and documents in connection therewith, with the Securities
and Exchange Commission, to sign any and all applications, registration
statements, notices and other documents necessary or advisable to comply with
the applicable state securities authorities, granting unto said attorney-in-fact
and agent, or his or their substitute or substitutes, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises in order to effectuate the same as fully to all
intents and purposes as the undersigned might or could do if personally present,
thereby ratifying and confirming all that said attorneys-in-fact and agents, or
his or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES INDICATED AND ON THE 15TH DAY OF APRIL, 1999.
SIGNATURE TITLE
--------- -----
/s/ LARRY D. WRIGHT President and Chief Executive Officer
Larry D. Wright (Principal Executive Officer)
/s/ KIM E. LOVE Controller
Kim E. Love (Principal Financial Officer/
Principal Accounting Officer)
/s/ KNOX W. ASKINS Director
Knox W. Askins
/s/ ALBERT D. FIELDS Director
Albert D. Fields
/s/ EDDIE V. GRAY Director
Eddie V. Gray
/s/ DOUG LATIMER Director
Doug Latimer
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<PAGE>
/S/ LINDSAY R. PFEIFFER Director
Lindsay R. Pfeiffer
/S/ KEN STRUM Director
Ken Strum
/S/ JAMES N. WALLACE Director
James N. Wallace
/S/ RUEDE M. WHEELER, D.D.S. Director
Ruede M. Wheeler, D.D.S.
II-6
<PAGE>
SIGNATURES
THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
PLAN ADMINISTRATOR HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE
CITY OF LAPORTE, STATE OF TEXAS ON THE 15TH DAY OF APRIL, 1999.
BAY BANCSHARES, INC. EMPLOYEE SAVINGS PLAN
(PLAN)
Bay Bancshares, Inc., as Plan Administrator
By:/s/ LARRY D. WRIGHT
Name: Larry D. Wright
Title: President
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<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
4.1 Amended and Restated Articles of Incorporation of the
Company (incorporated by reference from Exhibit 3.1 to
the Company's Registration Statement on Form S-1
Registration No. 333-36185).
4.2 Amended and Restated Bylaws of the Company (incorporated
by reference from Exhibit 3.2 to the Company's
Registration Statement on Form S-1, Registration No.
333- 36185).
4.3* Bay Bancshares, Inc. Employee Savings Plan.
4.4* First Amendment to the Bay Bancshares, Inc. Employee
Savings Plan.
4.5* Second Amendment to the Bay Bancshares, Inc. Employee
Savings Plan.
23* Consent of Grant Thornton LLP.
24* Power of Attorney (included on page II-5).
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*Filed Herewith
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EXHIBIT 4.3
BAY BANCSHARES, INC. EMPLOYEES SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.................. 16
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY...................... 17
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR....................... 17
2.4 RECORDS AND REPORTS.......................................... 19
2.5 APPOINTMENT OF ADVISERS...................................... 19
2.6 PAYMENT OF EXPENSES.......................................... 19
2.7 CLAIMS PROCEDURE............................................. 19
2.8 CLAIMS REVIEW PROCEDURE...................................... 20
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY.................................... 20
3.2 EFFECTIVE DATE OF PARTICIPATION.............................. 21
3.3 DETERMINATION OF ELIGIBILITY................................. 21
3.4 TERMINATION OF ELIGIBILITY................................... 21
3.5 OMISSION OF ELIGIBLE EMPLOYEE................................ 22
3.6 INCLUSION OF INELIGIBLE EMPLOYEE............................. 22
3.7 ELECTION NOT TO PARTICIPATE.................................. 22
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION................ 22
<PAGE>
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION...................... 23
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION..................... 27
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS..................................................... 28
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS............................. 31
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS............... 34
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS......................... 35
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE
TESTS........................................................ 37
4.9 MAXIMUM ANNUAL ADDITIONS..................................... 39
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.................... 43
4.11 TRANSFERS FROM QUALIFIED PLANS............................... 44
4.12 VOLUNTARY CONTRIBUTIONS...................................... 46
4.13 DIRECTED INVESTMENT ACCOUNT.................................. 47
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND.................................. 47
5.2 METHOD OF VALUATION.......................................... 48
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.................... 48
6.2 DETERMINATION OF BENEFITS UPON DEATH......................... 48
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY............. 50
6.4 DETERMINATION OF BENEFITS UPON TERMINATION................... 50
6.5 DISTRIBUTION OF BENEFITS..................................... 54
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.......................... 56
<PAGE>
6.7 TIME OF SEGREGATION OR DISTRIBUTION.......................... 57
6.8 DISTRIBUTION FOR MINOR BENEFICIARY........................... 58
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN............... 58
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP............................ 58
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION.............. 60
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE........................ 60
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE.................. 62
7.3 OTHER POWERS OF THE TRUSTEE.................................. 62
7.4 LOANS TO PARTICIPANTS........................................ 65
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS..................... 67
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES................ 67
7.7 ANNUAL REPORT OF THE TRUSTEE................................. 67
7.8 AUDIT........................................................ 68
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE............... 69
7.10 TRANSFER OF INTEREST......................................... 70
7.11 DIRECT ROLLOVER.............................................. 70
7.12 EMPLOYER SECURITIES.......................................... 71
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT.................................................... 71
8.2 TERMINATION.................................................. 72
8.3 MERGER OR CONSOLIDATION...................................... 73
<PAGE>
ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS.................................. 73
9.2 DETERMINATION OF TOP HEAVY STATUS............................ 73
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS......................................... 77
10.2 ALIENATION................................................... 77
10.3 CONSTRUCTION OF PLAN......................................... 78
10.4 GENDER AND NUMBER............................................ 78
10.5 LEGAL ACTION................................................. 78
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS....................... 79
10.7 BONDING...................................................... 79
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE................... 79
10.9 INSURER'S PROTECTIVE CLAUSE.................................. 80
10.10 RECEIPT AND RELEASE FOR PAYMENTS............................. 80
10.11 ACTION BY THE EMPLOYER....................................... 80
10.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY............................................... 80
10.13 HEADINGS..................................................... 81
10.14 APPROVAL BY INTERNAL REVENUE SERVICE......................... 81
10.15 UNIFORMITY................................................... 82
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS.................................. 82
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS...................... 82
<PAGE>
11.3 DESIGNATION OF AGENT......................................... 83
11.4 EMPLOYEE TRANSFERS........................................... 83
11.5 PARTICIPATING EMPLOYER CONTRIBUTION.......................... 84
11.6 AMENDMENT.................................................... 84
11.7 DISCONTINUANCE OF PARTICIPATION.............................. 84
11.8 ADMINISTRATOR'S AUTHORITY.................................... 85
<PAGE>
BAY BANCSHARES, INC. EMPLOYEES SAVINGS PLAN
THIS AGREEMENT, hereby made and entered into this 31st day of
December, 1997, by and between Bay Bancshares, Inc. (herein referred to as the
"Employer") and American Industries Trust Company (herein referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan
and Trust effective January 1, 1988, as amended and restated effective August 1,
1993 known as Bay Bancshares, Inc. Employees Savings Plan (herein referred to as
the "Plan") in recognition of the contribution made to its successful operation
by its employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability
to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective January 1, 1997, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions of the
Plan pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity has
been designated by the Employer pursuant to Section 2.2 to administer the Plan
on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 9.2.
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1.5 "Anniversary Date" means December 31.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation
must be determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation
shall be made by:
(a) excluding overtime.
(b) excluding commissions.
(c) excluding discretionary bonuses.
(d) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
For a Participant's initial year of participation, Compensation
shall be recognized for the entire Plan Year.
Compensation in excess of $150,000 shall be disregarded. Such amount
shall be adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
For purposes of this Section, if the Plan is a plan described in
Code Section 413(c) or 414(f) (a plan maintained by
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<PAGE>
more than one Employer), the limitation applies separately with respect to the
Compensation of any Participant from each Employer maintaining the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then, for Plan
Years prior to the Plan Year which includes the adoption date of this amendment
and restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.12 "Elective Contribution" means the Employer contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.1(c) and Section
4.6(b) which is used to satisfy the "Actual Deferral Percentage" tests shall be
considered an Elective Contribution for purposes of the Plan. Any contributions
deemed to be Elective Contributions (whether or not used to satisfy the "Actual
Deferral Percentage" tests) shall be subject to the requirements of Sections
4.2(b) and 4.2(c) and shall further be required to satisfy the nondiscrimination
requirements of Regulation 1.401(k)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.13 "Eligible Employee" means any Employee.
Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this
Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and
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414(o)(2) unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and such Leased Employees do not constitute more than 20% of
the recipient's non-highly compensated work force.
1.15 "Employer" means Bay Bancshares, Inc. and any successor which shall
maintain this Plan; and any predecessor which has maintained this Plan. The
Employer is a corporation, with principal offices in the State of Texas. In
addition, where appropriate, the term Employer shall include any Participating
Employer (as defined in Section 11.1) which shall adopt this Plan.
1.16 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a) (determined
by reducing contributions made on behalf of Highly Compensated Participants in
order of their contribution percentages beginning with the highest of such
percentages).
1.17 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests
made on behalf of Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section 4.5(a) (determined
by reducing contributions made on behalf of Highly Compensated Participants in
order of the actual deferral percentages beginning with the highest of such
percentages). Excess Contributions shall be treated as an "annual addition"
pursuant to Section 4.9(b).
1.18 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 9.2 and 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
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1.19 "Family Member" means, with respect to an affected Participant, such
Participant's spouse and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.22 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion
of a Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(g)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.23 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. "415
Compensation" must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the
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employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "415 Compensation" means compensation determined
pursuant to the Plan then in effect.
1.25 "414(s) Compensation" with respect to any Participant means such
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be disregarded.
Such amount shall be adjusted for increases in the cost of living in accordance
with Code Section 401(a)(17), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for the Plan Year beginning
with or within such calendar year. For any short Plan Year the "414(s)
Compensation" limit shall be an amount equal to the "414(s) Compensation" limit
for the calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year by twelve
(12).
If, in connection with the adoption of this amendment and
restatement, the definition of "414(s) Compensation" has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "414(s) Compensation" means compensation determined
pursuant to the Plan then in effect.
1.26 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year"
or "look-back year" were "five percent owners" as defined in Section
1.32(c).
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(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $80,000 and were in
the Top Paid Group of Employees during the "look-back year."
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately preceding
twelve-month period. However, for purposes of (b) above, the "look-back year"
shall be the calendar year beginning within the twelve-month period immediately
preceding the "determination year."
Notwithstanding the above, for the first Plan Year beginning after
December 31, 1996, the "look-back year" shall be the calendar year ending with
or within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period").
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amount specified in (b) above shall be adjusted at such time
and in the same manner as under Code Section 415(d), except that the base period
shall be the calendar quarter ending September 30, 1996. In the case of such an
adjustment, the dollar limit which shall be applied is the limit for the
calendar year in which the "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who
are non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.27 "Highly Compensated Former Employee" means a former Employee who had
a separation year prior to the "determination
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year" and was a Highly Compensated Employee in the year of separation from
service or in any "determination year" after attaining age 55. Notwithstanding
the foregoing, an Employee who separated from service prior to 1987 will be
treated as a Highly Compensated Former Employee only if during the separation
year (or year preceding the separation year) or any year after the Employee
attains age 55 (or the last year ending before the Employee's 55th birthday),
the Employee either received "415 Compensation" in excess of $50,000 or was a
"five percent owner." For purposes of this Section, "determination year," "415
Compensation" and "five percent owner" shall be determined in accordance with
Section 1.26. Highly Compensated Former Employees shall be treated as Highly
Compensated Employees. The method set forth in this Section for determining who
is a "Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition
is applicable.
1.28 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.29 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an
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Employee for medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made
by or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.30 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.31 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation
in effect under Code Section 415(c)(1)(A) for the calendar year in
which such Plan Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is
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considered as owning within the meaning of Code Section 318) more
than five percent (5%) of the outstanding stock of the Employer or
stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five percent
(5%) of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than one percent (1%)
of the outstanding stock of the Employer or stock possessing more
than one percent (1%) of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated business,
any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an individual
has "415 Compensation" of more than $150,000, "415 Compensation"
from each employer required to be aggregated under Code Sections
414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.33 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.34 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed
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for the recipient employer shall be treated as provided by the recipient
employer. A Leased Employee shall not be considered an Employee of the
recipient:
(a) if such employee is covered by a money purchase pension
plan providing:
(1) a non-integrated employer contribution rate of at least
10% of compensation, as defined in Code Section 415(c)(3), but
including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2)
that are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.35 "Non-Elective Contribution" means the Employer contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.36 "Non-Highly Compensated Participant" means any Participant who is not
a Highly Compensated Employee.
1.37 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.38 "Normal Retirement Age" means the Participant's 65th birthday, or his
5th anniversary of joining the Plan, if later. A Participant shall become fully
Vested in his Participant's Account upon attaining his Normal Retirement Age.
1.39 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.40 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
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leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement of a child
with the Employee in connection with the adoption of such child, or any absence
for the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.41 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.42 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.13 and observed by the Administrator and
applied to Participants who have Participant Directed Accounts.
1.43 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Employer Non-Elective Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b), Employer discretionary
contributions made pursuant to Section 4.1(d) and any Employer Qualified
Non-Elective Contributions.
1.44 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.45 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the
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Participant has directed the investment in accordance with the Participant
Direction Procedure.
1.46 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Elective
Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to such Elective Contributions pursuant to Section
4.2 and any Employer Qualified Non-Elective Contributions.
1.47 "Plan" means this instrument, including all amendments thereto.
1.48 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.49 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(c) and Section 4.6(b) and Section
4.8(h). Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests.
1.50 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.51 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.52 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.53 "Super Top Heavy Plan" means a plan described in Section 9.2(b).
1.54 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.55 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.56 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
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1.57 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for this purpose in accordance with
Section 1.26) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section
861(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied
on a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.58 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
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1.59 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.60 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.61 "USERRA" means the Uniformed Services Employment and Reemployment
Rights Act of 1994. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
1.62 "USERRA" means the Uniformed Services Employment and Reemployment
Rights Act of 1994. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
1.63 "Valuation Date" means March 31st, June 30th, September 30, December
31st and such other date or dates deemed necessary by the Administrator. The
Valuation Date may include any day during the Plan Year that the Trustee, any
transfer agent appointed by the Trustee or the Employer and any stock exchange
used by such agent are open for business.
1.64 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.65 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.12.
1.66 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service. The participation computation period beginning
after a 1-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of the date on which
the Employee first performed an Hour of Service. An Employee who is credited
with the required Hours of Service in both the initial computation period (or
the computation period beginning after a 1-Year Break in Service) and the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service, shall be
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credited with two (2) Years of Service for purposes of eligibility to
participate.
For vesting purposes, the computation periods shall be the Plan
Year, including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set
forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c). However,
in determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered
to appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit
of the Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may appoint
counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or
desirable in connection with the exercise of its fiduciary duties
under this Plan. The Employer may compensate such agents or advisers
from the assets of the Plan as fiduciary expenses (but not including
any business (settlor) expenses of the Employer), to the extent not
paid by the Employer.
(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide direction to the Trustee with respect to any
or all of the Plan assets. Such appointment shall be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets
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with respect to which the Investment Manager or other agent shall
have authority to direct the investment.
(c) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short run
need for liquidity (e.g., to pay benefits) or whether liquidity is a
long run goal and investment growth (and stability of same) is a
more current need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and goals to
the Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding policy and
method" shall not, however, constitute a directive to the Trustee as
to investment of the Trust Funds. Such "funding policy and method"
shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(d) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been delegated
or allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint
any person, including, but not limited to, the Employees of the Employer, to
perform the duties of the Administrator. Any person so appointed shall signify
his acceptance by filing written acceptance with the Employer. Upon the
resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or
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advisable to carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his duties under
this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any Participant
shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable
to be contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding
the short and long-term liquidity needs of the Plan in order that
the Trustee can exercise any investment discretion in a manner
designed to accomplish specific objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their
Compensation deferred or paid to them in cash;
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(j) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, or any person or persons retained or
appointed by any Named Fiduciary incident to the exercise of their duties under
the Plan, including, but not limited to, fees of accountants, counsel,
Investment Managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Administrator or the Trustee in carrying out the
instructions of Participants as to the directed investment of their accounts and
other specialists and their agents, and other costs of administering the Plan.
Until paid, the expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect
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the claim will be provided. In addition, the claimant shall be furnished with an
explanation of the Plan's claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and
has attained age 21 shall be eligible to participate hereunder as of the date he
has satisfied such requirements. However, any Employee who was a Participant in
the Plan prior to the effective date of this amendment and restatement shall
continue to participate in the Plan.
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3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
earlier of the first day of the Plan Year or the first day of the seventh month
of such Plan Year coinciding with or next following the date such Employee met
the eligibility requirements of Section 3.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred).
Effective October 1, 1997, an Eligible Employee shall become a
Participant as of the January 1st, March 1st, July 1st, or October 1st
coinciding with or next following the date such Employee met the eligibility
requirements of Section 3.1, provided said Employee was still employed as of
such date (or if not employed on such date, as of the date of rehire if a 1-Year
Break in Service has not occurred).
In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee
for participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible Employee,
such Former Participant shall continue to vest in his interest in
the Plan for each Year of Service completed while a noneligible
Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan.
Additionally, his interest in the Plan shall continue to share in
the earnings of the Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate,
such Employee will participate immediately upon returning to an
eligible class of Employees.
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3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has been
made, the Employer shall not be entitled to recover the contribution made with
respect to the ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of
all Participants made pursuant to Section 4.2(a), which amount shall
be deemed an Employer Elective Contribution.
(b) On behalf of each Participant who is eligible to share
in matching contributions for the Plan Year, a matching contribution
equal to 50% of each such Participant's Deferred Compensation, which
amount shall be deemed an Employer Non-Elective Contribution.
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Matching Contributions may be in the form of Employer Securities as
described in Section 7.2 at the discretion of the Employer.
Except, however, in applying the matching percentage
specified above, only salary reductions up to 6% of annual
Compensation shall be considered.
(c) On behalf of each Non-Highly Compensated Participant who
is eligible to share in the Qualified Non-Elective Contribution for
the Plan Year, a discretionary Qualified Non-Elective Contribution
equal to a uniform percentage of each eligible individual's
Compensation, the exact percentage, if any, to be determined each
year by the Employer. Any Employer Qualified Non-Elective
Contribution shall be deemed an Employer Elective Contribution.
(d) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(e) Additionally, to the extent necessary, the Employer
shall contribute to the Plan the amount necessary to provide the top
heavy minimum contribution. All contributions by the Employer shall
be made in cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1% to 15% of
his Compensation which would have been received in the Plan Year,
but for the deferral election. A deferral election (or modification
of an earlier election) may not be made with respect to Compensation
which is currently available on or before the date the Participant
executed such election. For purposes of this Section, Compensation
shall be determined prior to any reductions made pursuant to Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
The amount by which Compensation is reduced shall be
that Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that Participant's
Elective Account.
(b) The balance in each Participant's Elective Account shall
be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
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(c) Notwithstanding anything in the Plan to the contrary,
amounts held in the Participant's Elective Account may not be
distributable (including any offset of loans) earlier than:
(1) a Participant's separation from service,
Total and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is described
in Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity
that is not an Affiliated Employer of substantially all of
the assets (within the meaning of Code Section 409(d)(2))
used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the
disposition with respect to a Participant who continues
employment with the corporation acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to
an entity which is not an Affiliated Employer but only with
respect to a Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a Participant, subject
to the limitations of Section 6.10.
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans, contracts or
arrangements of the Employer maintaining this Plan shall not exceed,
during any taxable year of the Participant, the limitation imposed
by Code Section 402(g), as in effect at the beginning of such
taxable year. If such dollar limitation is exceeded, a Participant
will be deemed to have notified the Administrator of such excess
amount which shall be distributed in a manner consistent with
Section 4.2(f). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in accordance
with Regulations.
(e) In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to
Section 6.10(b) or pursuant to
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Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by
the Employer, then such Participant shall not be permitted to elect
to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section
402(g) shall be reduced, with respect to the Participant's taxable
year following the taxable year in which the hardship distribution
was made, by the amount of such Participant's Deferred Compensation,
if any, pursuant to this Plan (and any other plan maintained by the
Employer) for the taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension
(as defined in Code Section 408(k)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed
by Code Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not later than
March 1 following the close of the Participant's taxable year,
notify the Administrator in writing of such excess and request that
his Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator may
direct the Trustee to distribute such excess amount (and any Income
allocable to such excess amount) to the Participant not later than
the first April 15th following the close of the Participant's
taxable year. Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be treated as a pro
rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred
Compensation under the Plan for the taxable year (and any Income
allocable to such excess amount). Any distribution on or before the
last day of the Participant's taxable year must satisfy each of the
following conditions:
(1) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as
Excess Deferred Compensation; and
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(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f)
shall be made first from unmatched Deferred Compensation and,
thereafter, from Deferred Compensation which is matched. Matching
contributions which relate to such Deferred Compensation shall be
forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below zero,
by any distribution of Excess Contributions pursuant to Section
4.6(a) for the Plan Year beginning with or within the taxable year
of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate, or other short-term debt security acceptable to the
Trustee until such time as the allocations pursuant to Section 4.4
have been made.
(j) The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with
the following:
(1) A Participant must make his initial salary deferral
election within a reasonable time, not to exceed thirty (30)
days, after entering the Plan pursuant to Section 3.2. If
the Participant fails to make an initial salary deferral
election within such time, then such Participant may
thereafter make an election in accordance with the rules
governing modifications. The Participant shall make such an
election by entering into a written salary reduction
agreement with the Employer and filing such agreement with
the Administrator. Such election shall initially be
effective beginning with the pay period following the
acceptance of the salary reduction agreement by the
Administrator, shall not have retroactive effect and shall
remain in force until revoked.
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(2) A Participant may modify a prior election during the
Plan Year and concurrently make a new election by filing a
written notice with the Administrator within a reasonable
time before the pay period for which such modification is to
be effective. However, modifications to a salary deferral
election shall only be permitted quarterly, during election
periods established by the Administrator prior to the first
day of each Plan Year quarter. Any modification shall not
have retroactive effect and shall remain in force until
revoked.
(3) A Participant may elect to prospectively revoke his
salary reduction agreement in its entirety at any time
during the Plan Year by providing the Administrator with
thirty (30) days written notice of such revocation (or upon
such shorter notice period as may be acceptable to the
Administrator). Such revocation shall become effective as of
the beginning of the first pay period coincident with or
next following the expiration of the notice period.
Furthermore, the termination of the Participant's
employment, or the cessation of participation for any
reason, shall be deemed to revoke any salary reduction
agreement then in effect, effective immediately following
the close of the pay period within which such termination or
cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to
the Plan for each Plan Year within the time prescribed by law, including
extensions of time, for the filing of the Employer federal income tax return for
the Fiscal Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer general assets, but
in any event within ninety (90) days from the date on which such amounts would
otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the close of such Plan
Year.
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4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit all amounts allocated to each such Participant as set
forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer contributions for each Plan Year. Within
a reasonable period of time after the date of receipt by the
Administrator of such contributions and information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's
Deferred Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(b), to each Participant's
Account in accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year shall
be eligible to share in the matching contribution for the
Plan Year.
(3) With respect to the Employer Qualified Non-Elective
Contribution made pursuant to Section 4.1(c), to each
Participant's Elective Account when used to satisfy the
"Actual Deferral Percentage" tests or Participant's Account
in accordance with Section 4.1(c).
Any Non-Highly Compensated Participant actively employed
during the Plan Year shall be eligible to share in the
Qualified Non-Elective Contribution for the Plan Year.
(4) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(d), to each Participant's
Account in the same proportion that each such Participant's
Compensation for the year bears to the total Compensation of
all Participants for such year.
Only Participants who have completed a Year of Service
during the Plan Year and are actively employed on the last
day of the Plan Year shall be eligible to share in the
discretionary contribution for the year.
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(c) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section 6.4(g)(2).
The remaining Forfeitures, if any, shall be allocated to
Participants' Accounts in the following manner:
(1) Forfeitures attributable to Employer matching
contributions made pursuant to Section 4.1(b) shall be
allocated among the Participants' Accounts in the same
proportion that each such Participant's Compensation for the
year bears to the total Compensation of all Participants for
the year.
Except, however, Participants who are not eligible to
share in matching contributions (whether or not a deferral
election was made or suspended pursuant to Section 4.2(e))
for a Plan Year shall not share in Plan Forfeitures
attributable to Employer matching contributions for that
year.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(d) shall be added
to any Employer discretionary contribution for the Plan Year
in which such Forfeitures occur and allocated among the
Participants' Accounts in the same manner as any Employer
discretionary contribution.
Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.9) to any Participant's Account to exceed the
amount allowable by the Code, the excess shall be reallocated in
accordance with Section 4.10.
(d) For any Top Heavy Plan Year, Non-Key Employees not
otherwise eligible to share in the allocation of contributions and
Forfeitures as provided above, shall receive the minimum allocation
provided for in Section 4.4(g) if eligible pursuant to the
provisions of Section 4.4(i).
(e) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement
(Normal or Late), Total and Permanent Disability or death shall
share in the allocation of contributions and Forfeitures for that
Plan Year.
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(f) As of each Valuation Date, after allocation of Employer
contributions and Forfeitures, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated accounts as of
such date. Earnings or losses with respect to a Participant's
Directed Account shall be allocated in accordance with Section 4.13.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any earnings and
losses (net appreciation or net depreciation) of the Trust Fund in
the same manner provided above. Each segregated account maintained
on behalf of a Participant shall be credited or charged with its
separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be
equal to at least three percent (3%) of such Non-Key Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group). However,
if (1) the sum of the Employer contributions and Forfeitures
allocated to the Participant's Combined Account of each Key Employee
for such Top Heavy Plan Year is less than three percent (3%) of each
Key Employee's "415 Compensation" and (2) this Plan is not required
to be included in an Aggregation Group to enable a defined benefit
plan to meet the requirements of Code Section 401(a)(4) or 410, the
sum of the Employer contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be
equal to the largest percentage allocated to the Participant's
Combined Account of any Key Employee. However, in determining
whether a Non-Key Employee has received the required minimum
allocation, such Non-Key Employee's Deferred Compensation and
matching contributions needed to satisfy the "Actual Contribution
Percentage" tests pursuant to Section 4.7(a) shall not be taken into
account.
However, no such minimum allocation shall be required
in this Plan for any Non-Key Employee who participates in another
defined contribution plan subject to Code Section 412 included with
this Plan in a Required Aggregation Group.
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(h) For purposes of the minimum allocations set forth above,
the percentage allocated to the Participant's Combined Account of
any Key Employee shall be equal to the ratio of the sum of the
Employer contributions and Forfeitures allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(i) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Non-Key Employees who are Participants and who are employed
by the Employer on the last day of the Plan Year, including Non-Key
Employees who have (1) failed to complete a Year of Service; and (2)
declined to make mandatory contributions (if required) or, in the
case of a cash or deferred arrangement, elective contributions to
the Plan.
(j) For the purposes of this Section, "415 Compensation"
shall be limited to $150,000. Such amount shall be adjusted for
increases in the cost of living in accordance with Code Section
401(a)(17), except that the dollar increase in effect on January 1
of any calendar year shall be effective for the Plan Year beginning
with or within such calendar year. For any short Plan Year the "415
Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of
full months in the short Plan Year by twelve (12).
(k) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the
Plan Year shall share in the salary reduction contributions made by
the Employer for the year of termination without regard to the Hours
of Service credited.
(l) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall
be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan
Year, the annual allocation derived from Employer
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Elective Contributions to a Participant's Elective Account shall
satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the
"Actual Deferral Percentage" of the Non-Highly Compensated
Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group shall not be more than two percentage
points. Additionally, the "Actual Deferral Percentage" for
the Highly Compensated Participant group shall not exceed
the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The
provisions of Code Section 401(k)(3) and Regulation
1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 4.2
and to make Employee contributions or to receive matching
contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer shall
have a combination of his Elective Contributions and his
Employee contributions and matching contributions reduced
pursuant to Section 4.6(a) and Regulation 1.401(m)-2, the
provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group for a
Plan Year, the average of the ratios, calculated separately for each
Participant in such group, of the amount of Employer Elective
Contributions allocated to each Participant's Elective Account for
such Plan Year, to such Participant's "414(s) Compensation" for such
Plan Year. The actual deferral ratio for each Participant and the
"Actual Deferral Percentage" for each group shall be calculated to
the nearest one-hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred Compensation to
the
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extent such excess amounts are made under this Plan or any other
plan maintained by the Employer.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
(d) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include
cash or deferred arrangements are considered one plan for the
purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)), the cash or deferred arrangements
included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be
considered as a single arrangement for purposes of determining
whether or not such arrangements satisfy Code Sections 401(a)(4),
410(b) and 401(k). In such a case, the cash or deferred arrangements
included in such plans and the plans including such arrangements
shall be treated as one arrangement and as one plan for purposes of
this Section and Code Sections 401(a)(4), 410(b) and 401(k). Plans
may be aggregated under this paragraph (e) only if they have the
same plan year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be combined
with this Plan for purposes of determining whether the employee
stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more cash or
deferred arrangements (other than a cash or deferred arrangement
which is part of an employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) of the Employer or an Affiliated
Employer, all such cash or deferred arrangements shall be treated as
one cash or deferred arrangement for the purpose of determining the
actual deferral ratio with respect to such Highly Compensated
Participant. However, if the cash or deferred arrangements have
different plan years, this paragraph shall be applied by treating
all cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
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4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer Elective
Contributions made pursuant to Section 4.4 do not satisfy one of the tests set
forth in Section 4.5(a), the Administrator shall adjust Excess Contributions
pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the largest amount of Elective Contributions
shall have a portion of his Elective Contributions distributed to
him until the total amount of Excess Contributions has been
distributed, or until the amount of his Elective Contributions
equals the Elective Contributions of the Highly Compensated
Participant having the second largest amount of Elective
Contributions. This process shall continue until the total amount of
Excess Contributions has been distributed. In determining the amount
of Excess Contributions to be distributed with respect to an
affected Highly Compensated Participant as determined herein, such
amount shall be reduced pursuant to Section 4.2(f) by any Excess
Deferred Compensation previously distributed to such affected Highly
Compensated Participant for his taxable year ending with or within
such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than
the close of the Plan Year following the
Plan Year to which they are allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of
Excess Contributions shall be treated as a pro rata
distribution of Excess Contributions and Income.
(3) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related matching
contribution is distributed as an Excess Aggregate
Contribution pursuant to Section 4.8.
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(b) Within twelve (12) months after the end of the Plan
Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an
amount sufficient to satisfy one of the tests set forth in Section
4.5(a). Such contribution shall be allocated to the Participant's
Elective Account of each Non-Highly Compensated Participant in the
same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
(c) If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.5(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the
order provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly
Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the
Non-Highly Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus 2
percentage points. However, to prevent the multiple use of
the alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 4.2
or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under
this Plan or under any plan maintained by the Employer or an
Affiliated Employer shall have a combination of his Elective
Contributions and his Employee contributions and matching
contributions reduced pursuant to Regulation 1.401(m)-2 and
Section 4.8(a). The provisions of Code Section 401(m) and
Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
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<PAGE>
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with respect
to the Highly Compensated Participant group and Non-Highly
Compensated Participant group, the average of the ratios (calculated
separately for each Participant in each group rounded to the nearest
one-hundredth of one percent) of:
(1) the sum of Employer matching contributions made pursuant
to Section 4.1(b) on behalf of each such Participant for
such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution
Percentage," only Employer matching contributions contributed to the
Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer
matching contributions pursuant to Section 4.1(b) allocated to their
accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined
in Code Section 401(m)(4)(C)) contributed to any plan maintained by
the Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching contributions
subject to Regulation 1.401(m)-1(b)(5) which is incorporated herein
by reference. However, the Plan Year must be the same as the plan
year of the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the Employer
to which matching contributions, Employee contributions, or both,
are made are treated as one plan for purposes of Code Sections
401(a)(4) or 410(b) (other than the average benefits test under Code
Section 410(b)(2)(A)(ii)), such plans shall be treated as one plan.
In addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or
not such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m).
In such a case, the aggregated plans must satisfy this Section and
Code Sections 401(a)(4), 410(b) and 401(m) as though such aggregated
plans were a single plan. Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
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Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section
and Code Sections 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a Participant
under two or more plans (other than an employee stock ownership plan
as defined in Code Section 4975(e)(7) or 409) which are maintained
by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall
be aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans have
different plan years, this paragraph shall be applied by treating
all plans ending with or within the same calendar year as a single
plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant shall
include any Employee eligible to have Employer matching
contributions pursuant to Section 4.1(b) (whether or not a deferral
election was made or suspended pursuant to Section 4.2(e)) allocated
to his account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution Percentage"
for the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.7(a), the Administrator (on or before
the fifteenth day of the third month following the end of the Plan
Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the largest amount of contributions
determined pursuant to Section 4.7(b)(1), his Vested portion of such
contributions (and Income allocable to such contributions) and, if
forfeitable, forfeit such non-Vested portion of such contributions
attributable to Employer matching contributions (and Income
allocable to such forfeitures) until the total amount of Excess
Aggregate Contributions has been distributed, or until his remaining
amount equals the amount of contributions determined pursuant to
Section 4.7(b)(1) of the Highly Compensated Participant having the
second largest amount of contributions. This process shall continue
until the total amount of Excess Aggregate Contributions has been
distributed.
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<PAGE>
If the correction of Excess Aggregate Contributions
attributable to Employer matching contributions is not in proportion
to the Vested and non-Vested portion of such contributions, then the
Vested portion of the Participant's Account attributable to Employer
matching contributions after the correction shall be subject to
Section 6.5(f).
(b) Any distribution and/or forfeiture of less than the
entire amount of Excess Aggregate Contributions (and Income) shall
be treated as a pro rata distribution and/or forfeiture of Excess
Aggregate Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution
of Excess Aggregate Contributions (and Income). Forfeitures of
Excess Aggregate Contributions shall be treated in accordance with
Section 4.4. However, no such forfeiture may be allocated to a
Highly Compensated Participant whose contributions are reduced
pursuant to this Section.
(c) Excess Aggregate Contributions, including forfeited
matching contributions, shall be treated as Employer contributions
for purposes of Code Sections 404 and 415 even if distributed from
the Plan.
Forfeited matching contributions that are reallocated
to Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated
and for the Participants from whose Accounts they are forfeited.
(d) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after
first determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as
defined in Code Section 401(k)) maintained by the Employer that ends
with or within the Plan Year.
(e) If during a Plan Year the projected aggregate amount of
Employer matching contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.7(a), cause the Plan to fail such
tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.8(a) each
affected Highly Compensated Participant's projected share of such
contributions by an amount
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<PAGE>
necessary to satisfy one of the tests set forth in
Section 4.7(a).
(f) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of
the tests set forth in Section 4.7(a). Such contribution shall be
allocated to the Participant's Account of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants. A
separate accounting of any special Qualified Non-Elective
Contribution shall be maintained in the Participant's Account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any "limitation
year" shall equal the lesser of: (1) $30,000 adjusted annually as
provided in Code Section 415(d) pursuant to the Regulations, or (2)
twenty-five percent (25%) of the Participant's "415 Compensation"
for such "limitation year." For any short "limitation year," the
dollar limitation in (1) above shall be reduced by a fraction, the
numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section
415, "annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions,
(2) Employee contributions, (3) forfeitures, (4) amounts allocated,
after March 31, 1984, to an individual medical account, as defined
in Code Section 415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit plan (as defined in Code Section 419(e)) maintained
by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise
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<PAGE>
treated as an "annual addition" under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is not
an "annual addition." In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in Code Sections 402(e)(6), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received
by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs);
(4) repayments of distributions received by an Employee pursuant to
Code Section 411(a)(3)(D) (mandatory contributions); and (5)
Employee contributions to a simplified employee pension excludable
from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not)
ever maintained by the Employer shall be treated as one defined
contribution plan.
(f) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or businesses
under common control (as defined by Code Section 1563(a) or Code
Section 414(b) and (c) as modified by Code Section 415(h)), is a
member of an affiliated service group (as defined by Code Section
414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all
Employees of such Employers shall be considered to be employed by a
single Employer.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will be
considered to be a separate Employer.
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(h)(1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions" under
this Plan shall equal the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously credited
to such Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date,
"annual additions" will be credited to the Participant's
accounts under the defined contribution plan subject to Code
Section 412 prior to crediting "annual additions" to the
Participant's accounts under the defined contribution plan
not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date, the
maximum "annual additions" under this Plan shall equal the
product of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously
credited under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations
of Code Section 415 and (ii) the denominator of which is
such "annual additions" for all plans described in this
subparagraph.
(i) If an Employee is (or has been) a Participant in one or
more defined benefit plans and one or more defined contribution
plans maintained by the Employer, the sum of the defined benefit
plan fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(j) The defined benefit plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the
Participant's projected annual benefits under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent
of the dollar limitation determined for the "limitation year" under
Code Sections 415(b) and (d) or 140 percent
41
<PAGE>
of the highest average compensation, including any
adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation
year" beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code
Section 415 for all "limitation years" beginning before January 1,
1987.
(k) The defined contribution plan fraction for any
"limitation year" is a fraction, the numerator of which is the sum
of the annual additions to the Participant's Account under all the
defined contribution plans (whether or not terminated) maintained by
the Employer for the current and all prior "limitation years"
(including the annual additions attributable to the Participant's
nondeductible Employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the
annual additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts, as
defined in Code Section 415(l)(2), maintained by the Employer), and
the denominator of which is the sum of the maximum aggregate amounts
for the current and all prior "limitation years" of service with the
Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any
"limitation year" is the lesser of 125 percent of the dollar
limitation determined under Code Sections 415(b) and (d) in effect
under Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the
first day of the first "limitation year" beginning after December
31, 1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction and
the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
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<PAGE>
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the
end of the last "limitation year" beginning before January 1, 1987,
and disregarding any changes in the terms and conditions of the Plan
made after May 5, 1986, but using the Code Section 415 limitation
applicable to the first "limitation year" beginning on or after
January 1, 1987. The annual addition for any "limitation year"
beginning before January 1, 1987 shall not be recomputed to treat
all Employee contributions as annual additions.
(l) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or other
facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause the
maximum "annual additions" to be exceeded for any Participant, the
Administrator shall (1) distribute any elective deferrals (within
the meaning of Code Section 402(g)(3)) or return any Employee
contributions (whether voluntary or mandatory), and for the
distribution of gains attributable to those elective deferrals and
Employee contributions, to the extent that the distribution or
return would reduce the "excess amount" in the Participant's
accounts (2) hold any "excess amount" remaining after the return of
any elective deferrals or voluntary Employee contributions in a
"Section 415 suspense account" (3) use the "Section 415 suspense
account" in the next "limitation year" (and succeeding "limitation
years" if necessary) to reduce Employer contributions for that
Participant if that Participant is covered by the Plan as of the end
of the "limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in the
next "limitation year" (and succeeding "limitation years" if
necessary) to all Participants in the Plan before any Employer or
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Employee contributions which would constitute "annual additions" are
made to the Plan for such "limitation year" (4) reduce Employer
contributions to the Plan for such "limitation year" by the amount
of the "Section 415 suspense account" allocated and reallocated
during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any,
of (1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitations of
Code Section 415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of
"excess amounts" for all Participants in the Plan during the
"limitation year." The "Section 415 suspense account" shall not
share in any earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Eligible Employees,
provided that the trust from which such funds are transferred
permits the transfer to be made and the transfer will not jeopardize
the tax exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be set
up in a separate account herein referred to as a "Participant's
Rollover Account." Such account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may
not be withdrawn by, or distributed to the Participant, in whole or
in part, except as provided in paragraphs (c) and (d) of this
Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(3)), including amounts treated
as elective contributions, which are transferred from another
qualified plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation 1.401(k)-1(d).
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(d) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the
amount credited to the Participant's Rollover Account. Any
distributions of amounts held in a Participant's Rollover Account
shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in determining whether
an involuntary cash-out of benefits without Participant consent may
be made.
(e) The Administrator may direct that employee transfers
made after a valuation date be segregated into a separate account
for each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan association,
money market certificate, or other short term debt security
acceptable to the Trustee until such time as the allocations
pursuant to this Plan have been made, at which time they may remain
segregated or be invested as part of the general Trust Fund, to be
determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a). The
term "amounts transferred from other qualified plans" shall mean:
(i) amounts transferred to this Plan directly from another qualified
plan; (ii) distributions from another qualified plan which are
eligible rollover distributions and which are either transferred by
the Employee to this Plan within sixty (60) days following his
receipt thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual retirement
account has no assets other than assets which (A) were previously
distributed to the Employee by another qualified plan as a lump-sum
distribution (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee
to this Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account.
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(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish
that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee to
provide an opinion of counsel satisfactory to the Employer that the
amounts to be transferred meet the requirements of this Section.
(h) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a defined
benefit plan, money purchase plan (including a target benefit plan),
stock bonus or profit sharing plan which would otherwise have
provided for a life annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of
any "Section 411(d)(6) protected benefit" as described in Section
8.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) Any voluntary Employee contributions prior to the first
day of the Plan Year beginning in 1987 shall be maintained in each
Participant's Voluntary Contribution Account. The balance in each
Participant's Voluntary Contribution Account shall be fully Vested
at all times and shall not be subject to Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies
the provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. If the Administrator maintains sub-accounts
with respect to voluntary contributions (and earnings thereon) which
were made on or before a specified date, a Participant shall be
permitted to designate which sub-account shall be the source for his
withdrawal.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Voluntary Contribution
Account shall be used to
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provide additional benefits to the Participant or his Beneficiary.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by
the Administrator (the Participant Direction Procedures) and applied
in a uniform nondiscriminatory manner, direct the Trustee to invest
all of their accounts in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction
Procedures. That portion of the interest of any Participant so
directing will thereupon be considered a Participant's Directed
Account.
(b) As of each Valuation Date, all Participant Directed
Accounts shall be charged or credited with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in
the market value using publicly listed fair market values when
available or appropriate.
(1) To the extent that the assets in a Participant's
Directed Account are accounted for as pooled assets or
investments, the allocation of earnings, gains and losses of
each Participant's Directed Account shall be based upon the
total amount of funds so invested, in a manner proportionate
to the Participant's share of such pooled investment.
(2) To the extent that the assets in the Participant's
Directed Account are accounted for as segregated assets, the
allocation of earnings, gains and losses from such assets
shall be made on a separate and distinct basis.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust Fund as it
exists on the Valuation Date. In determining such net worth, the Trustee shall
value the assets comprising the Trust Fund at their fair market value as of the
Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund. The Trustee may
update the value of any shares held in the Participant Directed Account by
reference to the number of shares held by that Participant, priced at the market
value as of the Valuation Date.
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5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date,
or as soon thereafter as is practicable, the Trustee shall distribute, at the
election of the Participant, all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any remaining
Vested amounts credited to the
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accounts of a deceased Former Participant to such Former
Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of
the value of the account of a deceased Participant or Former
Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to
this Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there is
no "qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant
may at any time revoke his designation of a Beneficiary or change
his Beneficiary by filing written notice of such revocation or
change with the Administrator. However, the Participant's spouse
must again consent in writing to any change in Beneficiary unless
the original consent acknowledged that the spouse had the right to
limit consent only to a specific Beneficiary and that the spouse
voluntarily elected to relinquish such right. In the event no valid
designation of Beneficiary exists at the time of the Participant's
death, the death benefit shall be payable to his estate.
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(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge the
effect of such waiver, and be witnessed by a Plan representative or
a notary public. Further, the spouse's consent must be irrevocable
and must acknowledge the specific nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior
to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other than death, Total and Permanent
Disability or retirement, such Participant shall be entitled to such
benefits as are provided hereinafter pursuant to this Section 6.4.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained
in the employ of the Employer (upon the Participant's death, Total
and Permanent Disability or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct the
Trustee to cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such Terminated
Participant. Any distribution under this paragraph shall be made in
a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause
the entire Vested benefit to be paid to such Participant in a single
lump sum.
For purposes of this Section 6.4, if the
value of a Terminated Participant's Vested benefit is
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zero, the Terminated Participant shall be deemed to have received a
distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account shall be
a percentage of the total amount credited to his Participant's
Account determined on the basis of the Participant's number of Years
of Service according to the following schedules:
Vesting Schedule
Employer Discretionary Contributions
Years of Service Percentage
---------------- ----------
Less than 3 0 %
3 20 %
4 40 %
5 60 %
6 80 %
7 100 %
Vesting Schedule
Matching Contributions
Years of Service Percentage
---------------- ----------
Less than 3 0 %
3 20 %
4 40 %
5 60 %
6 80 %
7 100 %
(c) Notwithstanding the vesting attributable to Employer
matching and discretionary contributions provided for in paragraph
6.4(b) above, for any Top Heavy Plan Year, the Vested portion of the
Participant's Account attributable to Employer matching and
discretionary contributions of any Participant who has an Hour of
Service after the Plan becomes top heavy shall be a percentage of
the amount credited to his Participant's Account attributable to
Employer matching and discretionary contributions determined on the
basis of the Participant's number of Years of Service according to
the following schedule:
Vesting Schedule
Years of Service Percentage
---------------- ----------
Less than 2 0 %
2 20 %
3 40 %
4 60 %
5 80 %
6 100 %
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If in any subsequent Plan Year, the Plan ceases to be
a Top Heavy Plan, the Administrator shall revert to the vesting
schedule in effect before this Plan became a Top Heavy Plan. Any
such reversion shall be treated as a Plan amendment pursuant to the
terms of the Plan.
(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer contributions to the Plan or
upon any full or partial termination of the Plan, all amounts
credited to the account of any affected Participant shall become
100% Vested and shall not thereafter be subject to Forfeiture.
(f) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Plan. For this
purpose, the Plan shall be treated as having been amended if the
Plan provides for an automatic change in vesting due to a change in
top heavy status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period
may elect to have his nonforfeitable percentage computed under the
Plan without regard to such amendment. If a Participant fails to
make such election, then such Participant shall be subject to the
new vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end 60 days
after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g)(1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue
to participate in the Plan in the same manner as if such termination
had not occurred.
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(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in
Service, and such Former Participant had received, or was
deemed to have received, a distribution of his entire Vested
interest prior to his reemployment, his forfeited account
shall be reinstated only if he repays the full amount
distributed to him before the earlier of five (5) years
after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the
first period of five (5) consecutive 1-Year Breaks in
Service commencing after the distribution, or in the event
of a deemed distribution, upon the reemployment of such
Former Participant. In the event the Former Participant does
repay the full amount distributed to him, or in the event of
a deemed distribution, the undistributed portion of the
Participant's Account must be restored in full, unadjusted
by any gains or losses occurring subsequent to the Valuation
Date coinciding with or preceding his termination. The
source for such reinstatement shall first be any Forfeitures
occurring during the year. If such source is insufficient,
then the Employer shall contribute an amount which is
sufficient to restore any such forfeited Accounts provided,
however, that if a discretionary contribution is made for
such year pursuant to Section 4.1(d), such contribution
shall first be applied to restore any such Accounts and the
remainder shall be allocated in accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall
include Years of Service prior to his 1-Year Break in
Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service shall be
used for computing Years of Service for eligibility
and for vesting purposes only after he has been
employed for one (1) Year of Service following the
date of his reemployment with the Employer;
(ii) Any Former Participant who under the Plan does
not have a nonforfeitable right to any interest in the
Plan resulting from Employer contributions shall lose
credits otherwise allowable under (i) above if his
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consecutive 1-Year Breaks in Service equal or exceed
the greater of (A) five (5) or (B) the aggregate
number of his pre-break Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance
attributable to pre-break service shall not be
increased as a result of post-break service;
(iv) If a Former Participant is reemployed by the
Employer, he shall participate in the Plan immediately
on his date of reemployment;
(v) If a Former Participant (a 1-Year Break in Service
previously occurred, but employment had not
terminated) is credited with an Hour of Service after
the first eligibility computation period in which he
incurs a 1-Year Break in Service, he shall participate
in the Plan immediately.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount to which he is entitled under the Plan
in one lump-sum payment in cash.
(b) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution occurs prior to the later of his Normal Retirement Age
or age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
distribution of any benefit. However, any election to defer
the receipt of benefits shall not apply with respect to
distributions which are required under Section 6.5(c).
(2) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more than 90
days before the date the distribution commences.
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(3) Written consent of the Participant to the distribution
must not be made before the Participant receives the notice
and must not be made more than 90 days before the date the
distribution commences.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not
consent to the distribution.
Any such distribution may commence less than 30 days after
the notice required under Regulation 1.411(a)-11(c) is given,
provided that: (1) the Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and (2) the Participant, after receiving the
notice, affirmatively elects a distribution.
(c) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall be made
in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed or must
begin to be distributed to him not later than April 1st of
the calendar year following the later of (i) the calendar
year in which the Participant attains age 70 1/2 or (ii) the
calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case
of a Participant who is a "five (5) percent owner" at any
time during the five (5) Plan Year period ending in the
calendar year in which he attains age 70 1/2 or, in the case
of a Participant who becomes a "five (5) percent owner"
during any subsequent Plan Year, clause (ii) shall no longer
apply and the required beginning date shall be the April 1st
of the calendar year following the calendar year in which
such subsequent Plan Year ends. Such distributions shall be
equal to or greater than any required distribution.
Notwithstanding the foregoing, clause (ii) above shall not
apply to any Participant unless the Participant had attained
age 70 1/2 before January 1, 1988 and was not a "five (5)
percent owner" at any time during the Plan Year ending with
or within the
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calendar year in which the Participant attained
age 66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries
shall only be made in accordance with the incidental death
benefit requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse shall not be redetermined in
accordance with Code Section 401(a)(9)(D). Life expectancy and joint
and last survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or
spouse shall comply with all of the requirements of the Plan.
(f) If a distribution is made at a time when a Participant
is not fully Vested in his Participant's Account and the Participant
may increase the Vested percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested portion
of the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance
at the relevant time, D is the amount of distribution, and R
is the ratio of the account balance at the relevant time to
the account balance after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall
be paid to the Participant's Beneficiary in one lump-sum payment in
cash subject to the rules of Section 6.6(b).
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(b) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder. If it is determined pursuant to Regulations that the
distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to
him, the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution selected
pursuant to Section 6.5 as of his date of death. If a Participant
dies before he has begun to receive any distributions of his
interest under the Plan or before distributions are deemed to have
begun pursuant to Regulations, then his death benefit shall be
distributed to his Beneficiaries by December 31st of the calendar
year in which the fifth anniversary of his date of death occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion may, at the
election of the Participant (or the Participant's designated
Beneficiary), be distributed over a period not extending beyond the
life expectancy of such designated Beneficiary provided such
distribution begins not later than December 31st of the calendar
year immediately following the calendar year in which the
Participant died. However, in the event the Participant's spouse
(determined as of the date of the Participant's death) is his
Beneficiary, the requirement that distributions commence within one
year of a Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1) December
31st of the calendar year immediately following the calendar year in
which the Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such spouse begin,
then the 5-year distribution requirement of this Section shall apply
as if the spouse was the Participant.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is
to make a distribution the distribution may be made as soon as is practicable.
However, unless a Former Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more than
incidental), the payment of benefits shall occur not later than the 60th day
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after the close of the Plan Year in which the latest of the following events
occurs: (a) the date on which the Participant attains the earlier of age 65 or
the Normal Retirement Age specified herein; (b) the 10th anniversary of the year
in which the Participant commenced participation in the Plan; or (c) the date
the Participant terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored
unadjusted for earnings or losses.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute to any Participant in any one
Plan Year up to the lesser of 100% of his Participant's Elective
Account valued as of the last Valuation Date or the amount necessary
to satisfy the immediate and heavy financial need of the
Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later,
the Valuation Date immediately preceding the date of distribution,
and the Participant's Elective Account shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the
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Participant, his spouse, or any of his dependents (as
defined in Code Section 152) or necessary for these persons
to obtain medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage
payments);
(3) Payment of tuition, related educational fees, and room
and board expenses for the next twelve (12) months of
post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on
the mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's
representation and such other facts as are known to the
Administrator, determines that all of the following conditions are
satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The
amount of the immediate and heavy financial need may include
any amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably anticipated to result
from the distribution;
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable (at the time
of the loan) loans currently available under all plans
maintained by the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective deferrals
and voluntary Employee contributions will be suspended for
at least twelve (12) months after receipt of the hardship
distribution or, the Participant, pursuant to a legally
enforceable agreement, will suspend his elective deferrals
and voluntary Employee contributions to the Plan and all
other plans maintained by the Employer for at least twelve
(12) months after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may
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not make elective deferrals for the Participant's taxable
year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of
such Participant's elective deferrals for the taxable year
of the hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited, as of the date of distribution, to the Participant's
Elective Account as of the end of the last Plan Year ending before
July 1, 1989, plus the total Participant's Deferred Compensation
after such date, reduced by the amount of any previous distributions
pursuant to this Section.
(d) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories of
responsibilities:
(1) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and control
the Plan assets subject, however, to the direction of a
Participant with respect to his Participant Directed
Accounts, the Employer or an Investment Manager appointed by
the Employer or any agent of the Employer;
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(2) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in
the event of their death, to their Beneficiaries; and
(3) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan
Year a written annual report per Section 7.7.
(b) In the event that the Trustee shall be directed by a
Participant (pursuant to the Participant Direction Procedures), or
the Employer, or an Investment Manager or other agent appointed by
the Employer with respect to the investment of any or all Plan
assets, the Trustee shall have no liability with respect to the
investment of such assets, but shall be responsible only to execute
such investment instructions as so directed.
(1) The Trustee shall be entitled to rely fully on the
written instructions of a Participant (pursuant to the
Participant Direction Procedures), or the Employer, or any
Fiduciary or nonfiduciary agent of the Employer, in the
discharge of such duties, and shall not be liable for any
loss or other liability, resulting from such direction (or
lack of direction) of the investment of any part of the Plan
assets.
(2) The Trustee may delegate the duty to execute such
instructions to any nonfiduciary agent, which may be an
affiliate of the Trustee or any Plan representative.
(3) The Trustee may refuse to comply with any direction from
the Participant in the event the Trustee, in its sole and
absolute discretion, deems such directions improper by
virtue of applicable law. The Trustee shall not be
responsible or liable for any loss or expense which may
result from the Trustee's refusal or failure to comply with
any directions from the Participant.
(4) Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's
Directed Account, unless
paid by the Employer.
(c) If there shall be more than one Trustee, they shall act
by a majority of their number, but may authorize one or more of them
to sign papers on their behalf.
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7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to
keep the Trust Fund invested without distinction between principal
and income and in such securities or property, real or personal,
wherever situated, as the Trustee shall deem advisable, including,
but not limited to, stocks, common or preferred, bonds and other
evidences of indebtedness or ownership, and real estate or any
interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments,
the Trustee shall not be restricted to securities or other property
of the character expressly authorized by the applicable law for
trust investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times the
Plan may qualify as a qualified Profit Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant
to the terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a
custodial, clerical and record-keeping nature.
(c) The Trustee may from time to time transfer to a common,
collective, pooled trust fund or money market fund maintained by any
corporate Trustee or affiliate thereof hereunder, all or such part
of the Trust Fund as the Trustee may deem advisable, and such part
or all of the Trust Fund so transferred shall be subject to all the
terms and provisions of the common, collective, pooled trust fund or
money market fund which contemplate the commingling for investment
purposes of such trust assets with trust assets of other trusts. The
Trustee may transfer any part of the Trust Fund intended for
temporary investment of cash balances to a money market fund
maintained by American Industries Trust Company or its affiliates.
The Trustee may, from time to time, withdraw from such common,
collective, pooled trust fund or money market fund all or such part
of the Trust Fund as the Trustee may deem advisable.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of the Plan,
shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
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(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges, subscription rights or other options, and to make any
payments incidental thereto; to oppose, or to consent to, or
otherwise participate in, corporate reorganizations or other changes
affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an owner
with respect to stocks, bonds, securities, or other property.
However, the Trustee shall not vote proxies relating to securities
for which it has not been assigned full investment management
responsibilities. In those cases where another party has such
investment authority or discretion, the Trustee will deliver all
proxies to said party who will then have full responsibility for
voting those proxies;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one or more
of the Trustee's nominees, and to hold any investments in bearer
form, but the books and records of the Trustee shall at all times
show that all such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in
such amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or propriety
of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to
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time, deem to be in the best interests of the Plan,
without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may
deem advisable any securities or other property received or acquired
as Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(i) To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative proceedings, and
to represent the Plan in all suits and legal and administrative
proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may
or may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment of
the Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at
any time or from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect, receive,
and settle for the proceeds of all such annuity or other Contracts
as and when entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the Trustee's
bank;
(m) To invest in Treasury Bills and other forms of United
States government obligations;
(n) To invest in shares of investment companies registered
under the Investment Company Act of 1940, including any money market
fund advised by or offered through American Industries Trust
Company;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if
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the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(p) To deposit monies in federally insured savings accounts
or certificates of deposit in banks or savings and loan
associations;
(q) To pool all or any of the Trust Fund, from time to time,
with assets belonging to any other qualified employee pension
benefit trust created by the Employer or an affiliated company of
the Employer, and to commingle such assets and make joint or common
investments and carry joint accounts on behalf of this Plan and such
other trust or trusts, allocating undivided shares or interests in
such investments or accounts or any pooled assets of the two or more
trusts in accordance with their respective interests;
(r) To appoint a nonfiduciary agent or agents to assist the
Trustee in carrying out any investment instructions of Participants
and of any Investment Manager or Fiduciary, and to compensate such
agent(s) from the assets of the Plan, to the extent not paid by the
Employer;
(s) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the Plan.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee at the direction of the Plan Administrator
may make loans to Participants and Beneficiaries under the following
circumstances: (1) loans shall be made available to all Participants
and Beneficiaries on a reasonably equivalent basis; (2) loans shall
not be made available to Highly Compensated Employees in an amount
greater than the amount made available to other Participants and
Beneficiaries; (3) loans shall bear a reasonable rate of interest;
(4) loans shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the
Participant during the one year
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period ending on the day before the date on which such loan
is made, over the outstanding balance of loans from the Plan
to the Participant on the date on which such loan was made,
or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant under the
Plan.
For purposes of this limit, all plans of the Employer
shall be considered one plan.
(c) Loans shall provide for level amortization with payments
to be made not less frequently than quarterly over a period not to
exceed five (5) years. However, loans used to acquire any dwelling
unit which, within a reasonable time, is to be used (determined at
the time the loan is made) as a principal residence of the
Participant shall provide for periodic repayment over a reasonable
period of time that may exceed five (5) years. For this purpose, a
principal residence has the same meaning as a principal residence
under Code Section 1034. Loan repayments will be suspended under
this Plan as permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed on or after the last day of
the first Plan Year beginning after December 31, 1988 shall be made
pursuant to a Participant loan program. Such loan program shall be
established in writing and must include, but need not be limited to,
the following:
(1) the identity of the person or positions
authorized to administer the Participant loan
program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will
be taken to preserve Plan assets.
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Such Participant loan program shall be contained in a
separate written document which, when properly executed, is hereby
incorporated by reference and made a part of the Plan. Furthermore,
such Participant loan program may be modified or amended in writing
from time to time without the necessity of amending this Section.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time
to time, in accordance with the terms of the Plan, make payments out of the
Trust Fund. The Trustee shall not be responsible in any way for the application
of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan Year, the
Trustee shall furnish to the Employer and Administrator a written statement of
account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(c) the increase, or decrease, in the value of
the Trust Fund;
(d) all payments and distributions made from the Trust Fund;
and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith upon its
receipt of each such statement of account, shall acknowledge receipt
thereof in writing and advise the Trustee and/or Administrator of
its
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approval or disapproval thereof. Failure by the Employer to
disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall be
binding as to all matters embraced therein as between the Employer
and the Trustee to the same extent as if the account of the Trustee
had been settled by judgment or decree in an action for a judicial
settlement of its account in a court of competent jurisdiction in
which the Trustee, the Employer and all persons having or claiming
an interest in the Plan were parties; provided, however, that
nothing herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by
the Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and
records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan
Year, furnish to the Administrator and the Trustee a report of his
audit setting forth his opinion as to whether any statements,
schedules or lists that are required by Act Section 103 or the
Secretary of Labor to be filed with the Plan's annual report, are
presented fairly in conformity with generally accepted accounting
principles applied consistently. All auditing and accounting fees
shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund.
(b) If some or all of the information necessary to enable
the Administrator to comply with Act Section 103 is maintained by a
bank, insurance company, or similar institution, regulated and
supervised and subject to periodic examination by a state or federal
agency, it shall transmit and certify the accuracy of that
information to the Administrator as provided in Act Section 103(b)
within one hundred twenty (120) days after the end of the Plan Year
or by such other date as may be prescribed under regulations of the
Secretary of Labor.
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7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at his last
known address, at least thirty (30) days before its effective date,
a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of
any Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining
Trustee or Trustees shall have full authority to act under the terms
of the Plan.
(d) The Employer may designate one or more successors prior
to the death, resignation, incapacity, or removal of a Trustee. In
the event a successor is so designated by the Employer and accepts
such designation, the successor shall, without further act, become
vested with all the estate, rights, powers, discretions, and duties
of his predecessor with the like effect as if he were originally
named as Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such,
he shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year
during which he served as Trustee. This statement shall be either
(i) included as part of the annual statement of account for the Plan
Year required under Section 7.7 or (ii) set forth in a special
statement. Any such special statement of account should be rendered
to the Employer no later than the due date of the annual statement
of account for the Plan Year. The procedures set forth in Section
7.7 for the approval by the Employer of annual statements of account
shall apply to any special statement of account rendered hereunder
and approval by the Employer of any such special statement in the
manner provided in Section 7.7 shall have the same effect upon the
statement as the Employer's approval of an annual statement of
account. No successor to the
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Trustee shall have any duty or responsibility to investigate the
acts or transactions of any predecessor who has rendered all
statements of account required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.11 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid directly
to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) For purposes of this Section the following definitions
shall apply:
(1) 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 Section 401(a)(9); the
portion of any other distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities); and any other distribution that is reasonably
expected to total less than $200 during a year.
(2) An eligible retirement plan is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity
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described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
(3) A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the spouse
or former spouse.
(4) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
7.12 EMPLOYER SECURITIES
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities" as such term is defined in the Act, provided, however, that
the Trustee shall not be permitted to acquire any qualifying Employer securities
immediately after the acquisition of such securities or property, the fair
market value of all qualifying Employer securities held by the Trustee hereunder
should amount to more than the fair market value of all the assets held in
Participants' matching contribution account.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend
the Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of
the Trustee and Administrator, other than an amendment to remove the
Trustee or Administrator, may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
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(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such
part as is required to pay taxes and administration expenses) to be
used for or diverted to any purpose other than for the exclusive
benefit of the Participants or their Beneficiaries or estates; or
causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to
revert to or become property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective to the
extent it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section
411(d)(6) protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits are
preserved with respect to benefits accrued as of the later of the
adoption date or effective date of the amendment. "Section 411(d)(6)
protected benefits" are benefits described in Code Section
411(d)(6)(A), early retirement benefits and retirement-type
subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator
written notice of such termination. Upon any full or partial
termination, all amounts credited to the affected Participants'
Combined Accounts shall become 100% Vested as provided in Section
6.4 and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5. Distributions to a Participant shall be
made in cash or through the purchase of irrevocable nontransferable
deferred commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in the
reduction of "Section 411(d)(6) protected benefits" in accordance
with Section 8.1(c).
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8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its
assets and/or liabilities may be transferred to any other plan and trust only if
the benefits which would be received by a Participant of this Plan, in the event
of a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.4 of the Plan.
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee for any prior Plan
Year, such Participant's Present Value of Accrued Benefit and/or
Aggregate Account balance shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy or Super
Top Heavy Plan (or whether any Aggregation Group which includes this
Plan is a Top Heavy Group). In addition, if a Participant or Former
Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period ending
on the Determination Date, any accrued benefit for such Participant
or Former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy or Super
Top Heavy Plan.
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(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present Value
of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's Aggregate Account as
of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the
most recent valuation occurring within a twelve (12) month
period ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of
any contributions actually made after the Valuation Date but
due on or before the Determination Date, except for the
first Plan Year when such adjustment shall also reflect the
amount of any contributions made after the Determination
Date that are allocated as of a date in that first Plan
Year.
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4)
preceding Plan Years. However, in the case of distributions
made after the Valuation Date and prior to the Determination
Date, such distributions are not included as distributions
for top heavy purposes to the extent that such distributions
are already included in the Participant's Aggregate Account
balance as of the Valuation Date. Notwithstanding anything
herein to the contrary, all distributions, including
distributions under a terminated plan which if it had not
been terminated would have been required to be included in
an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of
life insurance policies) of a Participant's account balance
because of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
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considered to be a part of the Participant's Aggregate
Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always
consider such rollovers or plan-to-plan transfers as a
distribution for the purposes of this Section. If this Plan
is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or
plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made
to a plan maintained by the same employer), if this Plan
provides the rollover or plan-to-plan transfer, it shall not
be counted as a distribution for purposes of this Section.
If this Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate
Account balance, irrespective of the date on which such
rollover or plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers
are to be treated as the same employer in (5) and (6) above,
all employers aggregated under Code Section 414(b), (c), (m)
and (o) are treated as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in
which a Key Employee is a participant in the Plan Year
containing the Determination Date or any of the four
preceding Plan Years, and each other plan of the Employer
which enables any plan in which a Key Employee participates
to meet the requirements of Code Sections 401(a)(4) or 410,
will be required to be aggregated. Such group shall be known
as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in
the group will be considered a Top Heavy
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Plan if the Required Aggregation Group is a Top Heavy Group.
No plan in the Required Aggregation Group will be considered
a Top Heavy Plan if the Required Aggregation Group is not a
Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions
of Code Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation
Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are
Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan
of the Employer if it was maintained within the last five
(5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the
last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee, shall be as determined using
the single accrual method used for all plans of the Employer and
Affiliated Employers, or if no such single method exists, using a
method which results in benefits accruing not more rapidly than the
slowest accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall be
determined as of the most recent Valuation Date that falls within or
ends with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined benefit
plan.
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(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit
which shall be payable out of the Trust Fund to any person
(including a Participant or his Beneficiary) shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void; and no such benefit shall in any manner be
liable for, or subject to, the debts, contracts, liabilities,
engagements, or torts of any such person, nor shall it be subject to
attachment or legal process for or against such person, and the same
shall not be recognized by the Trustee, except to such extent as may
be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a result of a
loan from the Plan. At the time a distribution is to be made to or
for a Participant's or Beneficiary's benefit, such proportion of the
amount distributed as shall equal such loan indebtedness shall be
paid by the Trustee to the Trustee or the Administrator, at the
direction of the Administrator,
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to apply against or discharge such loan indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must be
given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or Beneficiary
does not agree that the loan indebtedness is a valid claim against
his Vested Participant's Combined Account, he shall be entitled to a
review of the validity of the claim in accordance with procedures
provided in Sections 2.7 and 2.8.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to
the extent provided under a "qualified domestic relations order," a
former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of Texas, other than its laws respecting choice of
law, to the extent not preempted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the Administrator, they shall
be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.
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10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or
of the Trust, by termination of either, by power of revocation or
amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or
income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any
losses attributable thereto must reduce the amount so returned.
10.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor their
successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such
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Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
10.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
10.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan or as accepted by or assigned to them pursuant to any
procedure provided under the Plan, including but not limited to any agreement
allocating or delegating their responsibilities, the terms of which are
incorporated herein by reference. In general, unless otherwise indicated herein
or pursuant to such agreements, the Employer shall have the duties specified in
Article II hereof, as the same may be allocated or delegated thereunder,
including but not limited to the responsibility for making the contributions
provided for under Section 4.1; and shall have the authority to appoint and
remove the Trustee and
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the Administrator; to formulate the Plan's "funding policy and method"; and to
amend or terminate, in whole or in part, the Plan. The Administrator shall have
the responsibility for the administration of the Plan, including but not limited
to the items specified in Article II of the Plan, as the same may be allocated
or delegated thereunder. The Trustee shall have the responsibility of management
and control of the assets held under the Trust, except to the extent directed
pursuant to Article II or with respect to those assets, the management of which
has been assigned to an Investment Manager, who shall be solely responsible for
the management of the assets assigned to it, all as specifically provided in the
Plan and any agreement with the Trustee. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan as
specified or allocated herein. No named Fiduciary shall guarantee the Trust Fund
in any manner against investment loss or depreciation in asset value. Any person
or group may serve in more than one Fiduciary capacity. In the furtherance of
their responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
10.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed by
law for filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
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(b) Notwithstanding any provisions to the contrary, except
Sections 3.5, 3.6, and 4.1(e), any contribution by the Employer to
the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any
such deduction is disallowed, the Employer may, within one (1) year
following the disallowance of the deduction, demand repayment of
such disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution may not
be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity, whether an affiliate
or subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to
use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions made
by Participating Employers, as well as all increments thereof.
However, the assets of the Plan shall, on an ongoing basis, be
available to pay benefits to all Participants and Beneficiaries
under the Plan without regard to the Employer or Participating
Employer who contributed such assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer, shall not affect such
Participant's rights
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under the Plan, and all amounts credited to such Participant's
Combined Account as well as his accumulated service time with the
transferor or predecessor, and his length of participation in the
Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants of
the Employer or Participating Employer by which the forfeiting
Participant was employed, except if the Forfeiture is for an
Employee whose Employer is an Affiliated Employer, then said
Forfeiture shall inure to the benefit of the Participants of those
Employers who are Affiliated Employers. Should an Employee of one
("First") Employer be transferred to an associated ("Second")
Employer which is an Affiliated Employer, such transfer shall not
cause his account balance (generated while an Employee of "First"
Employer) in any manner, or by any amount to be forfeited. Such
Employee's Participant Combined Account balance for all purposes of
the Plan, including length of service, shall be considered as though
he had always been employed by the "Second" Employer and as such had
received contributions, forfeitures, earnings or losses, and
appreciation or depreciation in value of assets totaling the amount
so transferred.
(e) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total amount
standing to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this
Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall
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thereupon become obligated hereunder with respect to such Employee in the same
manner as was the Participating Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall
be allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall
be a Participating Employer hereunder shall only be by the written action of
each and every Participating Employer and with the consent of the Trustee where
such consent is necessary in accordance with the terms of this Plan.
11.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or
revoke its participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 8.1(c). If no
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of Article VII hereof.
In no such event shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted to purposes other
than for the exclusive benefit of the Employees of such Participating Employer.
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11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
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IN WITNESS WHEREOF, this Plan has been executed the day and year
first above written.
Bay Bancshares, Inc.
By /s/ALICE WORTHINGTON
EMPLOYER
American Industries Trust
Company
By /s/ELIGIBLE
TRUSTEE
ATTEST /s/LINDA J. BRYANT
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EXHIBIT 4.4
FIRST AMENDMENT
BAY BANCSHARES, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Bay Bancshares, Inc. (the "Company") has previously adopted and is
presently maintaining the Bay Bancshares, Inc. Employee Savings Plan; and
WHEREAS, the Plan reserves to the Company the right to amend its Plan at
any time and to any lawful extent deemed advisable by appropriate amendment; and
WHEREAS, the Company now desires to amend its Plan in order to revise the
definition of Employee specified in the Plan and revise the language concerning
maximum annual additions and combined 415(e) limitations under the Plan in order
to receive a favorable letter of determination from the Internal Revenue
Service:
NOW, THEREFORE, the Bay Bancshares, Inc. Employee Savings Plan is hereby
amended effective as specified below in the following particulars, but only the
following particulars; to wit:
SECTION 1.14, CONCERNING THE DEFINITION OF EMPLOYEE, IS AMENDED
EFFECTIVE AS OF JANUARY 1, 1997 TO READ AS FOLLOWS:
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer. Employee shall include Leased Employees within the
meaning of Code Section 414(n)(2) and 414(o)(2) unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and
such Leased Employees do not constitute more than 20% of the recipient's
non-highly compensated work force.
SECTION 4.9, CONCERNING MAXIMUM ANNUAL ADDITIONS, IS AMENDED IN ITS
ENTIRETY EFFECTIVE JANUARY 1, 2000 TO READ AS FOLLOWS:
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (1) $30,000 adjusted
annually as provided in Code Section 415(d) pursuant to the
Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year." For
any short "limitation year," the dollar limitation in (1) above
shall be reduced by a fraction, the numerator of which is the
number of full months in the short "limitation year" and the
denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section
415, "annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions,
(2) Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical
account, as defined in Code
<PAGE>
Section 415(1)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3))
under a welfare benefit plan (as defined in Code Section 419(e))
maintained by the Employer. Except, however, the "415
Compensation" percentage limitation referred to in paragraph
(a)(2) above shall not apply to: (1) any contribution for medical
benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is otherwise treated as an "annual
addition," or (2) any amount otherwise treated as an "annual
addition" under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is
not an "annual addition." In addition, the following are not
Employee contributions for the purposes of Section 4.9(b)(2): (1)
rollover contributions (as defined in Code Sections 402(e)(6),
403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans made
to a Participant from the Plan; (3) repayments of distributions
received by an Employee pursuant to Code Section 411(a)(7)(B)
(cash-outs); (4) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code Section
408(k)(6).
(d) For purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(e) For the purposes of this Section, all qualified defined
contribution plans (whether terminated or not) ever maintained by
the Employer shall be treated as one defined contribution plan.
(f) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section
1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group (as
defined by Code Section 414(m)), or is a member of a group of
entities required to be aggregated pursuant to Regulations under
Code Section 414(o), all Employees of such Employers shall be
considered to be employed by a single Employer.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will
be considered to be a separate Employer.
(h) (1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions" under
this Plan shall equal the maximum "annual additions" for the
"limitation year"
<PAGE>
minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date,
"annual additions" will be credited to the Participant's
accounts under the defined contribution plan subject to Code
Section 412 prior to crediting "annual additions" to the
Participant's account under the defined contribution plan
not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date, the
maximum "annual additions" under this Plan shall equal the
product of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously
credited under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations
of Code Section 415 and (ii) the denominator of which is
such "annual additions" for all plans described in this
subparagraph.
(i) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder,
the terms of which are specifically incorporated herein by
reference.
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed in six (6) original
counterparts by the undersigned Company acting herein by and through its duly
authorized officers on this the 18th day of August, 1998.
BAY BANCSHARES, INC.
BY: ______________________________
ATTEST:
_______________________________
BAYSHORE NATIONAL BANK
BY: ______________________________
ATTEST:
_______________________________
Accepted by the Trustee on this the ___ Day of ___________________, 19__.
AMERICAN INDUSTRIES TRUST
COMPANY
BY: _____________________________
Stephen S. Hand, President
ATTEST:
_______________________________
EXHIBIT 4.5
SECOND AMENDMENT TO
BAY BANCSHARES, INC. EMPLOYEE SAVINGS PLAN
BY THIS AGREEMENT, Bay Bancshares, Inc. Employee Savings Plan
(herein referred to as the "Plan") is hereby amended as follows, effective as of
the dates specified herein:
1. Section 1.8, the fourth subparagraph concerning the definition of
Compensation is amended effective January 1, 1997 to read as follows:
Compensation in excess of $160,000 shall be disregarded. Such amount
shall be adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
2. Section 1.20, concerning the definition of Fiduciary is amended effective
November 1, 1998 to read as follows:
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
3. Section 1.24 is amended effective January 1, 1998, to add the following
paragraph:
For Plan Years beginning after December 31, 1997, "415 Compensation"
includes amounts which are contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b),
and Employee contributions described in Code Section 414(h)(2) that are treated
as Employer contributions.
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4. Section 2.2(c), concerning Powers and Responsibilities of the Employer is
amended effective November 1, 1998 to read as follows:
(c) The Employer shall establish a "funding policy and method,"
i.e., it shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goals and investment
growth (and stability of same) is a more current need, or shall appoint a
qualified person to do so. the Employer or other Administrator as appointed
pursuant to Section 2.2 shall be responsible for determining investment of the
Trust Fund and in the event Participants are permitted to direct the investment
of their Accounts, shall determine the investment options available to
Participants.
5. Section 2.3, concerning Powers and Duties of the Administrator is amended
effective November 1, 1998 to add an additional subparagraph (k) to the end
thereof to read as follows:
(k) to direct the Trustee with regard to all investments of the
Trust Fund or to determine available investment options for Participants for
purposes of directing investment of their individual Accounts.
6. Section 3.1, the second paragraph, is amended effective October 1, 1997 to
clarify a typographical error to read as follows:
Effective October 1, 1997, an Eligible Employee shall become a
Participant as of the January 1st, April 1st, July 1st, or October 1st
coinciding with or next following the date such Employee met the eligibility
requirements of Section 3.1, provided said Employee was still employed as of
such date (or if not employed on such date, as of the date of rehire if a 1-Year
Break in Service has not occurred).
7. Section 4.2, subparagraph (i), concerning Participant's Salary Reduction
Election is amended effective January 1, 1997 to read as follows:
(i) Employer Elective Contributions made pursuant to this Section
may be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term debt security at the
direction of the Administrator until such time as the allocations pursuant to
Section 4.4 have been made.
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8. For Plan Years beginning after December 31, 1999, Section 4.9 shall be
amended to delete subparagraphs (e), (i), (j),and (k). Thereafter the remaining
subparagraphs will be redesignated as (e) through (i).
9. Section 4.11, subparagraph (e) concerning Transfers from Qualified Plans is
amended effective January 1, 1997 to read as follows:
(e) The Administrator may direct that such transfers made after a
Valuation date be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short term debt
security until such time as the allocations pursuant to this Plan have been
made, at which time they may remain segregated or be invested as part of the
general Trust Fund, to be determined by the Administrator.
10. Section 4.13, subparagraph (a), concerning Directed Investment Account is
amended effective January 1, 1998 to read as follows:
(a) Participants may, subject to a procedure established by the
Administrator (the Participant Direction Procedures) and applied in a uniform
nondiscriminatory manner, direct the Trustee to invest all of their accounts in
specific assets, specific funds or other investments permitted under the Plan
including Employer securities as described in Section 7.12. That portion of the
interest of any Participant so directing will thereupon be considered a
Participant's Directed Account.
11. Section 5.2, concerning Method of Valuation is amended effective January 1,
1998 to read as follows:
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at its bid price next preceding the close of business
on the Valuation Date, which bid price shall be obtained from a registered
broker or an investment banker. In determining the fair market value of assets
other than securities for which trading or bid prices can be obtained, the
Administrator shall employ one or more
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appraisers for that purpose and the Trustee shall be entitled to relay on the
values established by such appraiser or appraisers without further inquiry.
12. Section 6.5(c)(1) is amended effective with the first Plan Year beginning
after December 31, 1996, by the addition of the following paragraph:
However, any Participant who is not a "five (5) percent owner" and
who attains age 70 1/2 in or after a calendar year that begins after the later
of (i) December 31, 1998, or (ii) the adoption date of this amendment and
restatement, provided that the adoption date is no later than the last day of
any remedial amendment period that applies to the Plan for changes under the
Small Business Job Protection Act of 1996, shall have his benefits distributed
in accordance with the first sentence of this subparagraph (1). Notwithstanding
the foregoing, any Participant who is not a "five (5) percent owner" shall
continue receiving, or, if applicable, be entitled to receive, benefit
distributions or, he may elect to defer benefit distributions until the April
1st of the calendar year following the calendar year in which the Participant
retires.
13. Article VII, concerning Trustee is amended in its entirety effective
November 1, 1998 to read as follows:
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories of
responsibilities:
(1) Upon direction from the Employer, Administrator, Investment
Manager (as appointed by the Employer or Administrator), or
Participant (to the extent Participants are entitled to direct the
investment of any portion or all of their Aggregate Account), the
Trustee shall invest; the Trust Fund in accordance with such
direction. Such investment direction shall be in writing or may be
made by telephonic, electronic, or such other transmission
acceptable to the Trustee;
(2) At the direction of the Administrator, to pay benefits required
under the Plan to be paid to Participants, or, in the event of their
death, to their Beneficiaries or alternate payee pursuant to
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a qualified domestic relations order as defined in the Act; and
(3) To maintain records of receipts and disbursements and furnish to
the Employer and Administrator for each Plan Year a written annual
report as described in Section 7.7 and such other reports as from
time to time are requested by the Employer or Administrator.
(b) The Trustee shall have no liability with respect to the
investment of the Trust Fund, but shall only be responsible to execute
such investment instructions as so directed in accordance with this
Article.
(1) The Trustee shall be entitled to rely fully on the written
investment instructions provided by the Employer, Administrator,
Investment Manager, or Participant, as applicable, and the Trustee
shall not be liable for any loss or other liability, resulting from
such direction (or lack of direction) of the investment of any part
of the Trust Fund.
(2) The Trustee shall not be required to take any legal action to
collect, preserve or maintain any Trust Fund property unless the
Trustee has been indemnified by the Employer or Administrator, with
respect to any expenses or losses to which the Trustee may be
subjected by taking such action. Any property acquired by the
Trustee through the enforcement or compromise of any claim the
Trustee has as Trustee will become a part of the Trust Fund. The
Trustee shall be responsible only for the property actually received
by it hereunder.
(3) The Trustee shall have no duty or responsibility to compute or
determine any contribution to be made to the Plan by the Employer,
or to bring any action or proceeding to enforce the collection of
any contribution to the Plan.
(4) The Trustee shall not be liable for any act or omission by the
Trustee because of any direction of the Employer, Administrator,
Investment Manager appointed by the Employer or Administrator, or
their duly authorized agents or representatives; nor for any act or
omission of the Employer, Administrator, Investment Manager
appointed by the Employer or Administrator or
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their duly authorized agents or representatives, except to the
extent required by the Act and any other applicable state or federal
law, which liability cannot be waived.
(5) The Employer shall indemnify and hold harmless the Trustee from
and against any and all loss resulting from liability to which the
Trustee may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in performance of its duties
under the Plan, including all court costs and other expenses
reasonably incurred in the Trustee's defense, in the event the
Employer fails to provide such defense. The indemnification
provisions of this Section do not relieve the Trustee from any
liability, to the extent that a court of competent jurisdiction from
which no appeal can be taken, enters a final judgment that the
actions or omissions were the result of gross negligence or willful
misconduct.
(6) The Trustee may refuse to comply with any investment direction
if the Trustee, in its sole discretion, deems such direction
improper by virtue of applicable law. The Trustee shall not be
responsible or liable for any loss or expense which may result from
the Trustee's refusal or failure to comply with such direction.
(7) Any costs and expenses related to compliance with investment
directions provided by the Participant, if applicable, shall be
borne by the Participant's Directed Account, unless paid by the
Employer.
(c) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign
papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) Subject to the investment direction provided to the Trustee in
accordance with this Article, the Trustee shall invest and reinvest the
Trust Fund to keep the Trust Fund invested without distinction between
principal and income and in such securities or property, real or personal,
wherever situated, at the written direction of the Employer,
Administrator, Investment Manager appointed by the Employer or
Administrator or the investment direction of a
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Participant if permitted by the Administrator, including, but not limited
to, stocks, common or preferred, bonds and other evidences of indebtedness
or ownership, and real estate or any interest therein. Investments shall
be limited to property of such character as permitted under applicable law
and regulation for the Trust Fund.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the
duties of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) Subject to the investment direction provided to the Trustee in
accordance with this Article, the Trustee may from time to time invest any
portion or all of the Trust Fund in a common, collective, pooled trust
fund or money market fund maintained by any corporate Trustee, and such
part of the Trust Fund so invested shall be subject to all the terms and
provisions of the common, collective, pooled trust fund or money market
fund which contemplate the commingling for investment purposes of such
trust assets with trust assets of other qualified plans.
(d) In the event insurance on the live of Participants may be
purchased under the Plan, the Trustee, at the direction of the
Administrator, shall apply for, own, and pay premiums on such Contracts.
If a life insurance Policy is to be purchased for a Participant, the
aggregate premium for ordinary life insurance for each Participant must be
less than 50% of the aggregate of the contributions and Forfeitures to the
credit of the Participant at any particular time. If term insurance is
purchased with such contributions, the aggregate premium must be less than
25% of the aggregate contributions and Forfeitures allocated to a
Participant's Combined Account. If both term insurance and ordinary life
insurance are purchased with such contributions, the amount expended for
term insurance plus one-half (1/2) of the premium for ordinary life
insurance may not in the aggregate exceed 25% of the aggregate
contributions and Forfeitures allocated to a Participant's Combined
Account. The Trustee must convert the entire value of the life insurance
Contracts at or before retirement into cash or provide for a periodic
income so that no portion of such value may be used to continue life
insurance protection beyond retirement, or distribute the Contracts to the
Participant. In the event of any conflict between the terms of this Plan
and the terms of any insurance
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Contract purchased hereunder, the Plan provisions shall control.
7.3 OTHER POWERS OF THE TRUSTEE
Subject to the investment direction provided to the Trustee in
accordance with this Article, the Trustee, in addition to all powers and
authorities under common law, statutory authority, including the Act, and other
provisions of the Plan, shall have the following powers and authority:
(a) To purchase, or subscribe for, any securities
or other property and to retain the same;
(b) To sell, exchange, convey, transfer, grant options to purchase,
or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money
or to inquire into the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
(c) Upon the written direction of the Administrator or an Investment
Manager, to vote any stocks, bonds, or other securities including
qualifying employer securities; to give general or special proxies or
powers of attorney with or without power of substitution; to exercise any
conversion privileges, subscription rights or other options, and to make
any payments incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate powers, and to pay any assessments
or charges in connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be registered in
the Trustee's own name or in the name of one or more of the Trustee's
nominees, and to hold any investments in bearer form, but the books and
records of the Trustee shall at all times show that all such investments
are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions as the Administrator shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no
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person lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity, expediency,
or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances
as the Administrator may, from time to time, deem to be in the best
interests of the Plan, without liability for interest thereon;
(g) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(h) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or defend
suits or legal or administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
(i) At its sole discretion, the Trustee may employ suitable agents
and counsel with respect to any matter regarding the Plan and the Trustees
duties or responsibilities hereunder and to pay their reasonable expenses
and compensation from the Trust Fund to the extent such expenses are not
paid by the Employer, and such agent or counsel may or may not be agent or
counsel for the Employer;
(j) To apply for and procure from responsible insurance companies,
to be selected by the Administrator, as an investment of the Trust Fund
such annuity, or other Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or from time to
time, whatever rights and privileges may be granted under such annuity, or
other Contracts; to collect, receive, and settle for the proceeds of all
such annuity or other Contracts as and when entitled to do so under the
provisions thereof;
(k) To invest in Treasury Bills and other forms of United States
government obligations;
(l) To invest in shares of investment companies registered under the
Investment Company Act of 1940;
(m) To sell, purchase and acquire put or call options if the options
are traded on and purchased through a national securities exchange
registered under
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the Securities Exchange Act of 1934, as amended, or, if the options are
not traded on a national securities exchange, are guaranteed by a member
firm of the New York Stock Exchange;
(n) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(o) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee at the direction of the Administrator, and pursuant
to a loan program established by the Administrator, may make loans to
Participants and Beneficiaries under the following circumstances: (1)
loans shall be made available to all Participants and Beneficiaries on a
reasonably equivalent basis; (2) loans shall not be made available to
Highly Compensated Employees in an amount greater than the amount made
available to other Participants and Beneficiaries; (3) loans shall bear a
reasonable rate of interest; (4) loans shall be adequately secured; and
(5) shall provide for repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant during
the one year period ending on the day before the date on which such
loan is made, over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan.
(c) Loans shall provide for level amortization with payments to be
made not less frequently than
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quarterly over a period not to exceed five (5) years. However, loans used
to acquire any dwelling unit which, within a reasonable time, is to be
used (determined at the time the loan is made) as a principal residence of
the Participant, shall provide for periodic repayment over a reasonable
period of time that may exceed five (5) years. For this purpose, a
principal residence has the same meaning as a principal residence under
Code Section 1034. Loan repayments will be suspended under this Plan as
permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed on or after the last day of the
first Plan Year beginning after December 31, 1988 shall be made pursuant
to a Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered;
(5) the procedure under the program for determining a reasonable
rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve the Trust Fund.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated by
reference and made a part of the Plan. Furthermore, such Participant loan
program may be modified or amended by the Administrator in writing from
time to time without the necessity of amending this Section.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time
to time, in accordance with the terms of the Plan, make payments out of the
Trust Fund. The Trustee
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shall not be responsible in any way for the application of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer or Administrator and the
Trustee. An individual serving as Trustee who already receives full-time pay
from the Employer shall not receive compensation from the Plan. In addition, the
Trustee shall be reimbursed for any reasonable expenses, including reasonable
counsel fees incurred by it as Trustee. Such compensation and expenses shall be
paid from the Trust Fund unless paid by the Employer. All taxes of any kind and
all kinds whatsoever that may be levied or assessed under existing or future
laws upon, or in respect of, the Trust Fund or the income thereof, shall be paid
from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan Year, the
Trustee shall furnish to the Employer and Administrator a written statement of
account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of
the Trust Fund;
(d) all payments and distributions made from the Trust Fund; and
(e) such further information as the Trustee or Administrator may
from time to time deem appropriate. The Employer and Administrator, upon
receipt of such Trustee's statement, shall advise the Trustee of its
approval or disapproval thereof. Failure by the Employer or Administrator
to disapprove of any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The
approval by the Employer and Administrator of any statement of account
shall be binding as to all matters embraced therein as between the
Employer, Administrator and the Trustee to the same extent as if the
account of the Trustee had been settled by judgment or decree in
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an action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer, Administrator and all
persons having or claiming an interest in the Plan were parties; provided,
however, that nothing herein contained shall deprive the Trustee of its
right to have its accounts judicially settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator shall
engage an independent qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of the Plan in
accordance with generally accepted auditing standards, within a reasonable
period after the close of the Plan Year, furnish to the Administrator and
the Trustee an audit report setting forth an opinion as to whether any
statements, schedules or lists that are required by Act Section 103 or the
Secretary of Labor to be filed with the Plan's annual report, are
presented fairly in conformity with generally accepted accounting
principles applied consistently. All auditing and accounting fees shall be
an expense of and may, at the election of the Administrator, be paid from
the Trust Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the Administrator
as provided in Act Section 103(b) within one hundred twenty (120) days
after the end of the Plan Year or by such other date as may be prescribed
under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer
a written notice of resignation, at least thirty (30) days before its
effective date, unless a shorter period of notice is agreed to by the
Employer.
(b) The Employer may remove the Trustee by delivering to the Trustee
a written notice of removal at least thirty (30) days before its effective
date,
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unless a shorter period of notice is agreed to by the Trustee.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor shall be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering same
to the Employer, shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his predecessor with
like respect as if he were originally named as a Trustee herein. Until
such a successor is appointed, the remaining Trustee or Trustees shall
have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successor trustees prior
to the death, resignation, incapacity, or removal of a Trustee. In the
event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his predecessor
with the like effect as if originally named as Trustee herein immediately
upon the death, resignation, incapacity, or removal of the predecessor
trustee.
(e) Whenever any Trustee hereunder ceases to serve as such, the
Trustee shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year during
which it served as Trustee. This statement shall be either (i) included as
part of the annual statement of account for the Plan Year required under
Section 7.7 or (ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer and Administrator
no later than the due date of the annual statement of account for the Plan
Year. The procedures set forth in Section 7.7 for the approval by the
Employer and Administrator of annual statements of account shall apply to
any special statement of account rendered hereunder and approval by the
Employer and Administrator of any such special statement in the manner
provided in Section 7.7 shall have the same effect upon the statement as
the Employer's and Administrator's approval of an annual statement of
account. No successor to the Trustee shall have any duty or responsibility
to investigate the acts or transactions of any predecessor who has
rendered all statements of account required by Section 7.7 and this
subparagraph.
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7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.11 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution
which satisfies such minimum dollar amount requirements as imposed by law
or regulation paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) For purposes of this Section the following definitions shall
apply:
(1) 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 Section 401(a)(9); the portion of any other distribution
that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities); and any other distribution that is reasonably
expected to total less than $200 during a year.
(2) An eligible retirement plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan
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described in Code Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is
an individual retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as
defined in Code Section 414(p), are distributees with regard to the
interest of the spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall at the written direction of the Employer,
Administrator, or as may be directed from time to time by Participants, acquire
and hold "qualifying Employer securities" and "qualifying Employer real
property," as those terms are defined in the Act, and such acquisition and
holding of Employer securities may be up to one-hundred (100%) of the fair
market value of the Trust Fund.
14. Section 10.12 concerning Named Fiduciaries and Allocation of Responsibility
is amended effective November 1, 1998 in its entirety to read as follows:
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are the Employer and the
Administrator. The named Fiduciaries shall have only those specific powers,
duties, responsibilities, and obligations as are specifically given them under
the Plan or as accepted by or assigned to them pursuant to any procedure
provided under the Plan, including but not limited to any agreement allocating
or delegating their responsibilities, the terms of which are incorporated herein
by reference. In general, unless otherwise indicated herein or pursuant to such
agreements, the Employer shall have the duties specified in Article II hereof,
as the same may be allocated or delegated thereunder, including but not limited
to the responsibility for making the contributions provided for under Section
4.1; and shall have the authority to
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appoint and remove the Trustee and Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the responsibility for the administration of
the Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder.
The Trustee hereunder shall be a directed, nondiscretionary trustee
and shall act with regard to investment, liquidation, and reinvestment of the
Trust Fund only upon written direction of the Employer, Administrator,
Investment Manager, or individual participants who under the terms of the Plan
may from time to time be given the authority to direct investment of their
Accounts.
Each named Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary and the Trustee may rely upon any such
direction, information or action of a named Fiduciary as being proper under the
Plan, and is not required under the Plan to inquire into the propriety of any
such direction, information or action.
It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under the Plan as specified or allocated herein. No named
Fiduciary nor the Trustee shall guarantee the Trust Fund in any manner against
investment loss or depreciation in asset value. Any person or group may serve in
more than one Fiduciary capacity. In the furtherance of their responsibilities
hereunder, the "named Fiduciaries" shall be empowered to interpret the Plan and
Trust and to resolve ambiguities, inconsistencies and omissions, which findings
shall be binding, final and conclusive.
17
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed this 23rd
day of February, 1999.
Signed, sealed, and delivered in the presence of:
BAY BANCSHARES, INC.
By: _______________________
EMPLOYER
ATTEST___________________
BAYSHORE NATIONAL BANK
By: _______________________
EMPLOYER
ATTEST: ____________________
Accepted by the Trustee on this the _____ Day of ____________, 1998.
American Industries Trust
Company
By: _______________________
Stephen S. Hand,
President
ATTEST: ____________________
18
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 22, 1999, accompanying the
consolidated financial statements included in the Annual Report of Bay
Bancshares, Inc. and Subsidiaries on Form 10-KSB for the year ended December 31,
1998. We hereby consent to the incorporation by reference of said report in the
Registration Statement of Bay Bancshares, Inc. and Subsidiaries on Form S-8.
/s/ GRANT THORNTON LLP
GRANT THORNTON LLP
Houston, Texas
April 15, 1999
