As filed with the Securities and Exchange Commission on July 10, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------
MIDWEST BANC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3252484
(State or Other Jurisdiction 501 West North Avenue (I.R.S. Employer
of Incorporation or Organization) Melrose Park, Illinois 60160 Identification
No.)
(Address, including zip code of registrant's principal executive office)
--------------------
MIDWEST BANC HOLDINGS, INC.
EMPLOYEES' RETIREMENT PLAN
(Full title of the plan)
----------
Robert L. Woods
President and Chief Executive Officer
MIDWEST BANC HOLDINGS, INC.
501 West North Avenue
Melrose Park, Illinois 60160
(708) 865-1053
(Name, address and telephone number, including area code, of agent for service)
Copies To:
Steven J. Gray, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Suite 2500
Chicago, Illinois 60601
(312) 609-7500
----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Amount to Proposed Maximum Proposed Maximum Amount of
Title of Securities be Offering Aggregate Offering Registration
to Be Registered Registered(1) Price Per Share (2) Price (2) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 100,000 $17.875 $1,787,500 $528
$.01 per share
- ------------------------------------------------------------------------------------------------------------------------------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
====================================================================================================================================
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Note: The documents containing the information required by this section will
be given to employees eligible to participate in the Midwest Banc
Holdings, Inc. Employees' Retirement Plan (the "401(k) Plan") and are
not required to be filed with the Securities and Exchange Commission
(the "Commission") as a part of the Registration Statement.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Midwest Banc
Holdings, Inc., a Delaware corporation (the "Company") are incorporated, as of
their respective dates, in this Registration Statement by reference:
A. The Prospectus, dated February 23, 1998, filed pursuant to
Rule 424(b)(4) in connection with the Company's Registration
Statement on Form S-1, as amended (Reg. No. 333-42827).
B. All other reports filed by the Company pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934
("Exchange Act") since February 23, 1998.
C. The description of the Company's Common Stock contained in the
Company's Registration Statement filed with the Commission
pursuant to Section 12 of the Exchange Act on Form 8-A
(Reg. No. 001-13735) and all amendments or reports
filed for the purpose of updating such description.
D. The 401(k) Plan Annual Report on Form 11-K (Reg. No.
001-13735) for the year ended December 31, 1997, filed
pursuant to Section 15(d) of the Exchange Act.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold are incorporated by reference in this
Registration Statement and are a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Certificate of Incorporation provides that no Director of the
Company will be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a Director; provided, however,
that Directors will have liability (i) for any breach of a Director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law ("DGCL"),
or (iv) for any transaction from which the Director derived an improper personal
benefit.
The By-Laws provide that the Company will indemnify, to the full extent
permitted under the DGCL, any person made or threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a Director, officer, employee or agent of the Company, or is or was serving
at the Company's request as a Director, officer, employee or agent of another
corporation or other enterprise against liabilities and expenses reasonably
incurred or paid by such person in connection with such action, suit or
proceeding. Expenses incurred in defending a civil, criminal, administrative,
investigative or other action, suit or proceeding may be paid by the Company in
advance of a final disposition in accordance with the DGCL. The indemnification
and advancement of expenses provided by the By-Laws are not to be deemed
exclusive of any other rights to which any person indemnified may be entitled
under any
2
<PAGE>
by-law, statute, agreement, vote of stockholders, or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and will continue as to a person who
has ceased to be such Director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person. The
Company may purchase and maintain insurance on behalf of any indemnified person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the By-Laws. The
provisions of the By-Laws are deemed a contract between the Company and each
Director, officer, employee and agent who serves in any such capacity at any
time while the By-Laws and relevant provisions of the DGCL, or other applicable
law, if any, are in effect, and any repeal or modification of any such law or of
the By-Laws will not affect any right or obligations then existing with respect
to any state of facts then or theretofore existing or any action, suit or
proceeding theretofore or thereafter brought or threatened based in whole or in
part upon such state of facts.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3.1 of Registration
Statement No. 333-42827).
4.2 By-Laws, as amended (incorporated by reference to Exhibit 3.2
of Registration Statement No. 333-42827).
4.3 Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.1 of Registration Statement 333-42827).
23 Consent of Crowe, Chizek and Company LLP.
24 Power of Attorney (included on the signature pages of the
Registration Statement).
99 The Midwest Banc Holdings, Inc. Employees' Retirement Plan.
The Registrant hereby undertakes that it will submit or has submitted
the 401(k) 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 401(k) 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 to include any material
information with respect to the plan of distribution
not previously disclosed in the Registration
Statement or any material change to such information
in the Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof; and
(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 and each filing of the Plan's annual
report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new
registration statement relating to the
3
<PAGE>
securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against policy as expressed in the Act and will be governed
by the final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Melrose Park, State of Illinois, on this 10th
day of July, 1998.
MIDWEST BANC HOLDINGS, INC.
By:/s/ Robert L. Woods
-----------------------------------------
Robert L. Woods
President and Chief Executive Officer
We, the undersigned directors of Midwest Banc Holdings, Inc., and each
of us, do hereby constitute and appoint each and any of Robert L. Woods and
Edward H. Sibbald, our true and lawful attorney and agent, with full power of
substitution and resubstitution, to do any and all acts and things in our name
and behalf in any and all capacities and to execute any and all instruments for
us in our names in any and all capacities, which attorney and agent may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically, but without limitation, power and authority
to sign for us or any of us in our names in the capacities indicated below, any
and all amendments (including post-effective amendments) hereto; and we do
hereby ratify and confirm all that said attorney and agent, or his substitute,
shall do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ E.V. Silveri
- ------------------------ Chairman of the Board July 1, 1998
E.V. Silveri
/s/ Robert L. Woods
- ------------------------ Director, President and July 1, 1998
Robert L. Woods Chief Executive Officer
/s/ Angelo A. DiPaolo
- ------------------------ Director July 3, 1998
Angelo A. DiPaolo
/s/ Daniel Nagle
- ------------------------ Director July 6, 1998
Daniel Nagle
/s/ Joseph Rizza
- ------------------------ Director July 2, 1998
Joseph Rizza
5
<PAGE>
Signature Title Date
/s/ LeRoy Rosasco
- ------------------------ Director July 3, 1998
LeRoy Rosasco
/s/ Robert D. Small
- ------------------------ Director July 2, 1998
Robert D. Small
/s/ Leon Wolin
- ------------------------ Director July 2, 1998
Leon Wolin
/s/ Edward H. Sibbald
- ------------------------ Executive Vice President July 1, 1998
Edward H. Sibbald and Chief Financial Officer
/s/ Daniel R. Kadolph
- ------------------------ Vice President and Comptroller July 1, 1998
Daniel R. Kadolph
Pursuant to the requirements of the Securities Act of 1933, the trustee
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Melrose Park, State of
Illinois, on the 10th day of July, 1998.
MIDWEST BANC HOLDINGS, INC.
EMPLOYEES' RETIREMENT PLAN
MIDWEST TRUST SERVICES, INC.
By:/s/ Brad A. Luecke
-----------------------------
Brad A. Luecke, Trust Officer
6
<PAGE>
INDEX TO EXHIBITS
Exhibit Description of Exhibit
Number
4.1 Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3.1 of Registration
Statement No. 333-42827).
4.2 By-Laws, as amended (incorporated by reference to Exhibit 3.2
of Registration Statement No. 333-42827).
4.3 Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.1 of Registration Statement 333-42827).
23 Consent of Crowe, Chizek and Company LLP.
24 Power of Attorney (included on the signature pages of the
Registration Statement).
99 The Midwest Banc Holdings, Inc. Employees' Retirement Plan.
7
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Midwest Banc Holdings, Inc.
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 16, 1998 except for Note 9, as
to which the date is January 30, 1998 relating to the consolidated financial
statements of Midwest Banc Holdings, Inc. (formerly First Midwest Corporation of
Delaware) and subsidiaries which is included on page F-2 of the Prospectus dated
February 23, 1998 constituting part of the Midwest Banc Holdings Registration
Statement on Form S-1.
We also consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated May 21, 1998 relating to the financial
statements of First Midwest Corporation of Delaware Employees' Retirement Plan
contained in Form 11-K.
Crowe, Chizek and Company LLP
Oak Brook, Illinois
July 7, 1998
EXHIBIT 99
FIRST MIDWEST CORPORATION OF DELAWARE
EMPLOYEES' RETIREMENT PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS........................................8
2.2 DETERMINATION OF TOP-HEAVY STATUS..................................8
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.......................11
2.4 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY............12
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES.....................12
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR............................12
2.7 RECORDS AND REPORTS...............................................13
2.8 APPOINTMENT OF ADVISERS...........................................14
2.9 INFORMATION FROM EMPLOYER.........................................14
2.10 PAYMENT OF EXPENSES...............................................14
2.11 MAJORITY ACTIONS..................................................14
2.12 CLAIMS PROCEDURE..................................................14
2.13 CLAIMS REVIEW PROCEDURE...........................................15
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY.........................................15
3.2 APPLICATION FOR PARTICIPATION.....................................15
i
<PAGE>
TABLE OF CONTENTS (cont.)
Page
----
3.3 EFFECTIVE DATE OF PARTICIPATION...................................16
3.4 DETERMINATION OF ELIGIBILITY......................................16
3.5 TERMINATION OF ELIGIBILITY........................................16
3.6 OMISSION OF ELIGIBLE EMPLOYEE.....................................16
3.7 INCLUSION OF INELIGIBLE EMPLOYEE..................................16
3.8 ELECTION NOT TO PARTICIPATE.......................................17
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION...................17
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION...........................17
4.3 AMOUNT OF EMPLOYER'S CONTRIBUTION.................................19
4.4 TIME OF PAYMENT OF NON-ELECTIVE CONTRIBUTION......................20
4.5 TIME OF PAYMENT OF ELECTIVE CONTRIBUTION..........................20
4.7 ACTUAL DEFERRAL PERCENTAGE TESTS..................................23
4.8 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS....................24
4.9 MAXIMUM CONTRIBUTION PERCENTAGE...................................25
4.10 ADJUSTMENT FOR EXCESSIVE CONTRIBUTION PERCENTAGE..................26
4.11 MAXIMUM ANNUAL ADDITIONS..........................................27
4.12 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.........................31
4.13 TRANSFERS FROM QUALIFIED PLANS....................................32
4.14 DIRECTED INVESTMENT ACCOUNT.......................................33
ii
<PAGE>
TABLE OF CONTENTS (cont.)
Page
----
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND.......................................34
5.2 METHOD OF VALUATION...............................................34
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.........................34
6.2 DETERMINATION OF BENEFITS UPON DEATH..............................35
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY..................36
6.4 DETERMINATION OF BENEFITS UPON TERMINATION........................36
6.5 DISTRIBUTION OF BENEFITS..........................................39
6.6 DISTRIBUTION OF BENEFITS UPON DEATH...............................40
6.7 TIME OF SEGREGATION OR DISTRIBUTION...............................41
6.8 DISTRIBUTION FOR MINOR BENEFICIARY................................41
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN....................42
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP.................................42
6.11 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS.........................42
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.............................42
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE.......................43
iii
<PAGE>
TABLE OF CONTENTS (cont.)
Page
----
7.3 OTHER POWERS OF THE TRUSTEE.......................................43
7.4 LOANS TO PARTICIPANTS.............................................46
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS..........................47
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES.....................47
7.7 ANNUAL REPORT OF THE TRUSTEE......................................47
7.8 AUDIT.............................................................48
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE....................49
7.10 TRANSFER OF INTEREST..............................................49
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT.........................................................50
8.2 TERMINATION.......................................................50
8.3 MERGER OR CONSOLIDATION...........................................51
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS .............................................51
9.2 ALIENATION........................................................51
9.3 CONSTRUCTION OF PLAN..............................................52
9.4 GENDER AND NUMBER.................................................52
9.5 LEGAL ACTION......................................................52
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS............................52
iv
<PAGE>
TABLE OF CONTENTS (cont.)
Page
----
9.7 BONDING...........................................................53
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE........................53
9.9 INSURER'S PROTECTIVE CLAUSE ......................................53
9.10 RECEIPT AND RELEASE FOR PAYMENTS .................................53
9.11 ACTION BY THE EMPLOYER............................................54
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY ...............54
9.13 HEADINGS..........................................................54
9.14 APPROVAL BY INTERNAL REVENUE SERVICE..............................54
9.15 UNIFORMITY........................................................55
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS.......................................55
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS...........................55
10.3 DESIGNATION OF AGENT..............................................56
10.4 EMPLOYEE TRANSFERS................................................56
10.5 PARTICIPATING EMPLOYERS CONTRIBUTION..............................56
10.6 AMENDMENT.........................................................57
10.7 DISCONTINUANCE OF PARTICIPATION...................................57
10.8 ADMINISTRATOR'S AUTHORITY.........................................57
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE.................57
v
<PAGE>
FIRST MIDWEST CORPORATION
EMPLOYEES' RETIREMENT PLAN
THIS AGREEMENT, hereby made and entered into this 1st day of August,
1987, by and between First Midwest Corporation of Delaware (herein referred to
as the "Employer") and Unibanc Trust Company (herein referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer desires to recognize the contribution made to its
successful operation by its employees and to reward such contribution by means
of a Profit Sharing Plan for those employees who shall qualify as Participants
hereunder;
NOW, THEREFORE, effective August 1, 1987, (hereinafter called the
"Effective Date"), the Employer hereby establishes a Profit Sharing Plan and
creates this trust (which plan and trust are hereinafter called the "Plan") for
the exclusive benefit of the Participants and their Beneficiaries, and the
Trustee hereby accepts the Plan on the following terms:
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 person designated by the Employer
pursuant to Section 2.4 to administer the Plan on behalf of the Employer.
1.3 "Affiliated Employer" shall mean the Employer and any corporation
which is a member of a controlled group of corporations (as defined in Code
Section 414(b)) which include 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; and 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 2.2.
1.5 "Anniversary Date" means December 31st.
<PAGE>
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 total
compensation paid by the Employer for a Plan Year. Amounts contributed by the
Employer under the within Plan, except for Employees Compensation that is
deferred pursuant to Section 4.2, and any non-taxable fringe benefits shall not
be considered as Compensation.
For a Participant's initial year of participation, Compensation shall
be recognized for the entire Plan Year.
For Plan Years beginning after December 31, 1988, Compensation in
excess of $200,000 shall be disregarded. Such amount shall be adjusted at the
same time and in such manner as permitted under Code Section 415(d). However,
for Plan Years beginning prior to January 1, 1989, the $200,000 limit on
Compensation shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.9 "Deferred Compensation" with respect to any Participant means that
portion of such Participant's total Compensation paid by the Employer for a Plan
Year that such Participant has elected to defer pursuant to Section 4.2.
1.10 "Early Retirement Date" means the first day of the month (prior to
Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains his 55th birthday. A Participant shall
become fully Vested upon satisfying this requirement.
A Former Participant who terminates after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.11 "Elective Contribution" means the Employer's contributions to the
Plan that are made pursuant to the Participant's deferral election provided in
Section 4.2.
1.12 "Eligible Employee" means any Employee who has satisfied the
provisions of Section 3.1.
1.13 "Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. Employees
shall include leased employees within the meaning of Code Section 414(n)(2)
unless such leased employees are covered by a plan described in Code Section
414(n)(5) and such leased employees, with respect to services performed after
December 31, 1986, do not constitute more than 20% of the recipient's nonhighly
compensated work force.
2
<PAGE>
1.14 "Employer" means First Midwest Corporation of Delaware and any
Participating Employer (as defined in Section 10.1) which shall adopt this Plan;
and any predecessor which has maintained this Plan. The Employer is a
corporation with principal offices in the State of Illinois.
1.15 "Employer Contribution" means the Employer's contributions to the
Plan that are made pursuant to Section 4.1 and which are subject to the
Participant's deferral election in Section 4.2.
1.16 "Family Member" shall mean an individual described in Code Section
414(q)(6)(B).
1.17 "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.
1.18 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.19 "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
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.
1.20 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason. For purposes of Section
1.22, a "Former Participant" shall be treated as Highly Compensated Participant
if such "Former Participant" was a Highly Compensated Participant when he
separated from service with the Employer or was a Highly Compensated Participant
at any time after attaining age 55.
1.21 "415 Compensation" means compensation as defined in Section
4.11(d).
1.22 "Highly Compensated Participant" means any Participant or Former
Participant who is a highly compensated-employee as defined in Code Section
414(q). Generally, any Participant or Former Participant is considered a Highly
Compensated Participant if during the Plan Year or the preceding Plan Year such
Participant or Former Participant:
(a) was at any time a "five percent owner" as defined in
Section 1.25(c).
3
<PAGE>
(b) received "415 Compensation" from the Employer in excess of
$75,000. In determining whether an individual has "415 Compensation" of more
than $75,000, "415 Compensation" from each employer required to be aggregated
under Code Sections 414(b), (c), and (m) shall be taken into account.
(c) received "415 Compensation" from the Employer in excess of
$50,000 and was in the top-paid group of Employees for the Plan Year. An
Employee is in the top-paid group consisting of the top twenty (20) percent of
the Employees when ranked on the basis of "415 Compensation" paid during the
Plan Year. In determining whether an individual has "415 Compensation" of more
than $50,000, "415 Compensation" from each employer required to be aggregated
under Code Section 414(b), (c), and (m) shall be taken into account.
(d) was at any time an officer as defined in Section 1.25(a).
1.23 "Hour of Service" shall mean (1) each hour for which an Employee
is directly or indirectly compensated or entitled to compensation by the
Employer for the performance of duties during the applicable computation period;
(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; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages.
An Hour of Service must be counted for the purpose of determining a
Year of Service, a year of participation for purposes of accrued benefits, a
1-Year Break in Service, and employment commencement date (or reemployment
commencement date). The provisions of Department of Labor regulations
2530.200b-2(b) and (c) are incorporated herein by reference.
1.24 "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.
1.25 "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 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 150 percent of the amount in effect under Code
Section 415(c)(1)(A) for any such Plan Year.
4
<PAGE>
(b) one of the ten (10) 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 (1/2) 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 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),
and (m) 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),
and (m) 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),
and (m) shall be taken into account.
1.26 "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.
1.27 "Non-Elective Contribution" means the Employer's contributions to
the Plan other than those made pursuant to the Participant's deferral election
provided for in Section 4.2.
1.28 "Non-Highly Compensated Participant" means any Participant or
Former Participant who is neither a Highly Compensated Participant nor a Family
Member.
1.29 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.30 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age (65th
birthday). A Participant shall become fully Vested in his Account upon attaining
his Normal Retirement Age.
5
<PAGE>
1.31 "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
leaves of absence."
"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" shall mean, 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.
1.32 "Participant's Account" shall mean 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's Non-Elective
Contributions.
1.33 "Participant's Combined Account" shall mean the total aggregate
amount of each Participant's Elective Account and Participant's Account.
1.34 "Participant's Elective Account" shall mean 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's Elective Contributions.
1.35 "Plan" shall mean this instrument, including all amendments
thereto.
1.36 "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,
except for the first Plan Year which commenced August 1st (also applicable prior
to the Effective Date of this Plan).
6
<PAGE>
1.37 "Predecessor Account" shall mean the account established and
maintained by the Administrator for each Participant with respect to his
interest in the Plan prior to the effective date of this Amendment and
Restatement. A Participant shall be 100% Vested in this account.
1.38 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to time.
1.39 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.40 "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, Early or Late Retirement Date
(see Section 6.1).
1.41 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.42 "Suspense Account" means the total forfeitable portion of all
Former Participants' Accounts which has not yet become a Forfeiture during any
Plan Year.
1.43 "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.
1.44 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.45 "Top Heavy Plan Year" means that, for a particular Plan Year
commencing after December 31, 1983, the Plan is a Top Heavy Plan.
1.46 "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.
1.47 "Trustee" means the person or entity named as trustee herein, and
any successors.
1.48 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.49 "Vested" means the portion of a Participant's Account that is
nonforfeitable.
7
<PAGE>
1.50 "Year of Service" shall mean 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.
For vesting purposes a Year of Service shall be a Plan Year in which an
Employee completes 1000 Hours of Service.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
(a) For any Top Heavy Plan Year, the Plan shall provide the
following:
(1) special vesting requirements of Code Section 416(b)
pursuant to Section 6.4 of the Plan;
(2) special minimum allocation requirements of Code
Section 416(c) pursuant to Section 4.6 of the Plan;
(3) for Plan Years beginning prior to January 1,
1989, special Compensation and "415 Compensation" requirements of Code
Section 416(d).
2.2 DETERMINATION OF TOP-HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
commencing after December 31, 1983, 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 as 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, for Plan Years beginning
after December 31, 1984, if a Participant or former Participant has not received
any "415 Compensation" from any Employer
8
<PAGE>
maintaining the Plan (other than benefits under the Plan) at any time during the
five year period ending on the Determination Date, the Aggregate Account and/or
Present Value of 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.
(b) This Plan shall be a Super Top-Heavy Plan for any Plan
Year commencing after December 31, 1983, 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 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 made prior to January 1, 1984, and distributions under a
terminated plan which if it had not been terminated would have been
required to be included in an Aggregation Group, 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
deductible employee contributions shall not be 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 for rollovers or plan-to-plan
9
<PAGE>
transfers, it shall always consider such rollover or plan-to-plan
transfer 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 accepted
after December 31, 1983 as part of the Participant's Aggregate Account
balance. However, rollovers or plan-to-plan transfers accepted prior to
January 1, 1984 shall be considered 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 (2)
employers are to be treated as the same employer in (5) and (6) above,
all employers aggregated under Code Section 414(b), (c) or (m) 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 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.
10
<PAGE>
(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).
(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.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) 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 assure that the Plan is being operated for
the exclusive benefit of the Participants and their Beneficiaries in accordance
with the terms of this Agreement, the Code, and the Act.
(b) 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.
11
<PAGE>
(c) 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.
2.4 ASSIGNMENT AND DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator,
shall promptly designate in writing a successor to this position. If the
Employer does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.6 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 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
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
12
<PAGE>
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) to determine all questions relating to the eligibility of
Employees to participate or remain a Participant hereunder;
(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 Trust Fund;
(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.
(j) to assist any Participant regarding his rights, benefits,
or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, 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.
13
<PAGE>
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, and advisers, and other persons
as the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require; and
the Administrator shall advise the Trustee of such of the foregoing facts as may
be pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 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 including, but not limited to, fees of
accountants, counsel, and other specialists, and other costs of administering
the Plan. Until paid, the expenses shall constitute a liability of the Trust
Fund. However, the Employer may reimburse the Trust Fund for any administration
expense incurred. Any administration expense paid to the Trust Fund as a
reimbursement shall not be considered as an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with the Administrator
on forms supplied by the Employer. 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 the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
14
<PAGE>
2.13 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 2.12
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 2.12. 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 160 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 employee who has completed one (1) Year of Service and has reached
his 21st birthday shall be eligible to participate hereunder as of the date he
has satisfied such requirements.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible Employee must
make application to the Employer for participation in the Plan and agree to the
terms hereof. In the event any Employee otherwise qualified to become a
Participant fails to file such application, the Employer shall file such
application on behalf of such Employee on a nondiscriminatory basis. Upon the
acceptance of any benefits under this Plan, such Employee shall automatically be
bound by the terms and conditions of this Agreement and all amendments hereto.
15
<PAGE>
3.3 EFFECTIVE DATE OF PARTICIPATION
An Employee who has become eligible to be a Participant 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 the 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).
3.4 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 in accordance with this Agreement and the Act. Such determination
shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
Eligible Employee to a noneligible 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 this Agreement.
Additionally, his interest in the Plan shall continue to share in the earnings
of the Trust Fund.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Fiscal 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.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Fiscal 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
for the Fiscal Year in which the discovery is made.
16
<PAGE>
3.8 ELECTION NOT TO PARTICIPATE
Notwithstanding Section 3.2, 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 before the
beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For the Fiscal Year during which the Plan is adopted and each Fiscal
Year thereafter, 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 the
Employer's Elective Contribution, plus
(b) A matching contribution equal to 50% of the Deferred
Compensation of all Participants eligible to share in allocations, which amount
shall be deemed the Employer's Non-Elective Contribution, plus
Except, however, in applying the matching contribution
percentage specified above, only salary reductions up to 20% of Compensation
shall be considered.
(c) A discretionary amount which amount shall be deemed the
Employer's Non-Elective Contribution.
(d) Notwithstanding the above, however, the Employer's
contribution for any Fiscal Year shall be made out of current or accumulated Net
Profit and shall not exceed the maximum amount allowable as a deduction to the
Employer under the provisions of Code Section 404. All contributions by the
Employer shall be made in cash or in such property as is acceptable to the
Trustee.
(e) Except, however, to the extent necessary to provide the
top heavy minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is deductible
under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a portion of his
Compensation by up to the maximum amount which will not cause the Plan to
violate the provisions of Sections 4.7(a) and 4.11, or cause the Plan to exceed
the maximum amount allowable as a deduction to the Employer under Code Section
404.
17
<PAGE>
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.
(c) Amounts held in the Participant's Elective Account may not
be distributable prior to the earlier of:
(1) his termination of employment, Total and Permanent
Disability or death;
(2) his attainment of age 59 1/2;
(3) termination of the Plan without establishment of
successor plan by the Employer or an Affiliated Employer;
(4) the date of the sale 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)) with respect to a
Participant who continues employment with the corporation acquiring
such assets;
(5) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an Affiliated Employer
with respect to a Participant who continues employment with such
subsidiary; or
(6) proven financial hardship, subject to the
limitations of Section 4.2(j).
(d) A Participant's Deferred Compensation made pursuant to
this Section shall not exceed $7,000 for the taxable year of the Participant.
This dollar limitation shall be adjusted annually as provided in Code Section
415(d) pursuant to Regulations. The adjusted limitation shall be effective as of
January 1st of each calendar year.
(e) In the event that the dollar limitation provided for in
Section 4.2(d) is exceeded, the Administrator shall direct the Trustee to
distribute such excess amount, and any income allocable to such amount, to the
Participant not later than the first April 15th following the close of the
Participant's taxable year. If there is a loss allocable to such excess amount,
the distribution shall in no event be less than the lesser of the Participant's
Elective Account or the Participant's Deferred Compensation for the Plan Year.
18
<PAGE>
(f) In the event that a Participant is also a participant in
(1) another qualified cash or deferred arrangement (as defined in Code Section
401(k)), (2) a simplified employee pension (as defined in Code Section 408(k)),
or (3) a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)) and the elective deferrals, as defined in Code Section 402(g)(3),
made under such other arrangement(s) and this Plan cumulatively exceed $7,000
(or such amount adjusted annually as 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 his 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. Such amount shall
then be distributed in the same manner as provided in Section 4.2(e).
(g) 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 pursuant to Section 6.5.
(h) All amounts allocated to a Participant's Elective Account
may be treated as a Directed Investment Account pursuant to Section 4.14.
(i) 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
4.6 have been made.
(j) The Administrator, at the request of the Participant,
shall direct the Trustee to distribute to any Participant or his Beneficiary in
any one Fiscal Year up to 100% of his Participant's Elective Account, valued as
of the last Anniversary Date, in the case of proven extreme financial necessity.
For Plan Years beginning after December 31, 1988, such distribution shall be
limited solely to the Participant's Deferred Compensation for all Plan Years
without regard to any earnings on such Deferred Compensation. Withdrawal under
this Section shall only be authorized in the event of financial hardship
resulting from accident to or sickness of a Participant or his dependents; or
financial hardship resulting from the establishing or preserving of the home in
which the Participant resides, provided funds are not reasonably available from
other financial resources 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 and
the Participant's Elective Account shall be reduced accordingly.
4.3 AMOUNT OF EMPLOYER'S CONTRIBUTION
The Employer shall determine the amount of any profit sharing
contribution to be made to the Plan. In determining such contribution, the
Employer shall be entitled to rely upon an estimate of the total Compensation
for all Participants and of the amounts contributable by it. The Employer's
determination of such contribution shall be binding on all Participants, the
Employer, and the Trustee. Such determination shall be final and conclusive and
shall not be subject to change as a result of a subsequent audit by the Internal
Revenue Service or as a result of any subsequent adjustment of the Employer's
records. The Trustee shall have no right or duty to inquire into the
19
<PAGE>
amount of the Employer's contribution or the method used in determining the
amount of the Employer's contribution, but shall be accountable only for funds
actually received by the Trustee.
4.4 TIME OF PAYMENT OF NON-ELECTIVE CONTRIBUTION
The Employer shall pay to the Trustee its Non-Elective Contribution to
the Plan for each Fiscal Year within the time prescribed by law, including
extensions of time, for the filing of the Employer's federal income tax return
for the Fiscal Year.
4.5 TIME OF PAYMENT OF ELECTIVE CONTRIBUTION
The Employer shall pay to the Trustee its Elective Contribution to the
Plan for each Fiscal Year not later than 30 days (or within the time prescribed
by regulations issued by the Secretary of the Treasury) after the Plan Year for
which they are deemed to be paid.
Except, however, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee with reasonable promptness, and
in any event will be paid by the end of the succeeding month following such
payroll deductions.
4.6 ALLOCATION OF CONTRIBUTION, EARNINGS AND FORFEITURES
(a) The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall credit as of
each Anniversary Date all amounts allocated to each such Participant as
hereafter set forth. However, the Administrator may separately account for that
portion of each Participant's Account attributable to Top Heavy Plan Years and
Non-Top Heavy Plan Years.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of the
Employer's contribution for each Fiscal Year. Within 45 days after the date of
receipt by the Administrator of such information, the Administrator shall
allocate such contribution as follows:
(1) With respect to the Employer's 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's Non-Elective
Contribution pursuant to Section 4.1(b), to each Participant's Account
in the same proportion that each such Participant's Deferred
Compensation for the year bears to the total Deferred Compensation of
all Participants for such year.
In making the matching allocation provided above,
only Deferred Compensation up to 20% of a Participant's Compensation
shall be considered.
20
<PAGE>
(3) With respect to the Employer's Non-Elective
Contribution pursuant to Section 4.1(c), 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.
Except for the first Plan Year ending December 31,
1987, a Participant who performs less than a Year of Service during any
Plan Year shall not share in the Employer's Non-Elective Contribution
made pursuant to Section 4.1(c) for that year, unless required pursuant
to Section 4.6(g).
(c) As of each Anniversary Date or other valuation date,
before 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.
(d) 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(d). The remaining Forfeitures, if any, 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. Provided, however, that in the event the allocation
of Forfeitures provided herein shall cause the "annual addition" (as defined in
Section 4.11) to any Participant's Account to exceed the amount allowable by the
Code, the excess shall be reallocated in accordance with Section 4.12.
Except, however, a Participant who performs less than a Year of Service during
any Plan Year shall not share in the Plan Forfeitures for that year, unless
required pursuant to Section 4.6(g).
(e) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's 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". However, if (i) the sum of the
Employer's 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 (ii) 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's 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 each Key Employee. However,
for Plan Years beginning after December 31, 1988, in determining whether a
Non-Key Employee has received the required minimum allocation, such Non-Key
Employees Deferred Compensation shall not be taken into account.
21
<PAGE>
Except, 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 providing such benefits included
with this Plan in a Required Aggregation Group.
(f) For purposes of the minimum allocations set forth above,
the percentage allocated to the Participant's Account of any Key Employee shall
be equal to the ratio of the sum of the Employer's contribution and Forfeitures
allocated on behalf of such Key Employee divided by the "415 compensation" for
such Key Employee.
(g) For any Top-Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's 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) to the Plan and (3) been excluded from participation because of their
level of Compensation.
(h) For the purposes of this Section, "415 compensation" shall
be as defined in Section 4.11(d), and shall, for Plan Years beginning prior to
January 1, 1989, be limited to $200,000 in Top-Heavy Plan Years. Thereafter,
"415 Compensation" shall be limited to $200,000 in all Plan Years (unless
adjusted in such manner as permitted under Code Section 415(d)).
(i) Any Participant who terminated employment during the Plan
Year for reasons other than death, Total and Permanent Disability or retirement
shall not share in the allocations of the Employer's discretionary Contributions
and Forfeitures. Further, if any nonsegregated account of a Participant has been
distributed prior to the subsequent Anniversary Date or other valuation date, no
earnings and losses shall be credited.
(j) Participants who terminated employment 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.
(k) Participants who terminated employment during the Plan
Year shall share in the matching contributions made by the Employer for the year
of termination without regard to the Hours of Service credited.
(l) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death shall share in the allocations of
contributions and Forfeitures provided for in this Section regardless of whether
they completed a Year of Service during the Plan Year.
(m) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of Total and Permanent Disability shall
share in the allocations of contributions and Forfeitures provided for in this
Section regardless of whether they completed a Year of Service during the Plan
Year.
22
<PAGE>
(n) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of retirement shall share in the
allocations of contributions and Forfeitures provided for in this Section
regardless of whether they completed a Year of Service during the Plan Year.
(o) 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.
4.7 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer 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 1.5, 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 three percentage points or such lesser amount determined
pursuant to Regulations to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Participant.
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 2.5.
(b) For the purposes of this Section the following definitions
shall apply:
(1) "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 contributions allocated to each Participant's Elective
Account (unreduced by distributions made pursuant to Sections 4.2(e)
and 4.2(f)) for such Plan Year, to such Participant's Compensation for
such Plan Year. For Plan Years beginning after December 31, 1986 and
for the purpose of determining the "Actual Deferral Percentage" of a
Highly Compensated Participant, the Elective Contributions and
Compensation of such Highly Compensated Participant shall include the
Elective Contributions and Compensation
23
<PAGE>
of Family Members, and such affected Family Members shall be
disregarded in determining the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group.
(2) Highly Compensated Participant means a Participant
defined in Section 1.24. However, for Plan Years beginning prior to
January 1, 1987, "Highly Compensated Participant" means any Participant
who receives with respect to Compensation that is taken into account
prior to the deferral election, more Compensation than two-thirds of
all other Participants. Both 1/3 and 2/3 of all the Participants shall
be rounded to the nearest integer.
(c) For the purposes of Sections 4.7(a) and 4.8, 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.
(d) For the purposes of this Section, 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), the cash or deferred arrangements
included in such plans shall be treated as one arrangement.
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred arrangements
of the Employer or an Affiliated Employer, all such cash or deferred
arrangements shall be treated as one (1) cash or deferred arrangement for the
purpose of determining the deferral percentage with respect to such Highly
Compensated Participant.
(f) Notwithstanding the above, the determination and treatment
of Elective Contributions and "Actual Deferral Percentage" of any Participant
shall satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.
4.8 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
contributions made pursuant to Section 4.6 do not satisfy one of the tests set
forth in Section 4.7(a), the Administrator shall adjust either the Employer's
Elective Contribution or the Employer's Non-Elective Contribution pursuant to
the options set forth below:
(a) On or before the 15th day of the third month following the
end of each Plan Year, but in no event later than the close of the following
Plan Year, each Highly Compensated Participant, beginning with the participant
having the highest "Actual Deferral Percentage", shall have his portion of
excess Deferred Compensation (and any income allocable to such portion)
distributed to him until one of the tests set forth in Section 4.7(a) is
satisfied.
(b) Within 30 days after the end of the Plan Year, a portion
of the Employer's Non-Elective Contribution shall be deemed an Employer Elective
Contribution for purposes of Section 4.7(a) and for vesting and withdrawal
purposes pursuant to Section 4.2. Such portion shall
24
<PAGE>
be equal to an amount necessary to satisfy one of the test set forth in Section
4.7(a), and shall be reallocated to the Participant's Elective Account. Such
reallocation of the Employer's Non-Elective Contribution shall be made on behalf
of Non-Highly Compensated Participants.
(c) Within 30 days after the end of the Plan Year, the
Employer shall make a 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 deemed an Employer Elective
Contribution and allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Deferred Compensation for the year bears to the total
Deferred Compensation of all Non-Highly Compensated Participants.
4.9 MAXIMUM CONTRIBUTION PERCENTAGE
(a) The "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
or such lesser amount determined pursuant to Regulations to prevent the
multiple use of this alternative limitation with respect to any Highly
Compensated Participant.
(b) For the purposes of this Section and Section 4.10,
"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)
of:
(1) the sum of the matching contributions pursuant to
Section 4.1 contributed under the Plan on behalf of each such
Participant for such Plan Year; to
(2) the Participant's Compensation for such Plan Year.
(c) For purpose of determining the "Contribution Percentage",
the Administrator may elect pursuant to Regulations to take into account
elective deferrals (as defined in Code Section 402(g)(3)(A)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C)) contributed
to any plan maintained by the Employer. In addition, the "Contribution
Percentage" for a Highly Compensated Participant shall be determined by
including matching contributions pursuant to Section 4.1 and Compensation of
Family Members, and such affected Family Members shall be disregarded in
determining the "Contribution Percentage of Non-Highly Compensated Participants.
In all cases the determination and treatment of the
25
<PAGE>
"Contribution Percentage" of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
(d) For purposes of this Section, if two or more plans of the
Employer to which matching contributions, Employee contributions, or elective
deferrals are made are treated as one plan for purposes of Code Section 410(b),
such plans shall be treated as one plan for purposes of this Section 4.9. In
addition, if a Highly Compensated Participant participates in two or more plans
described in Code Section 401(a) or arrangements described in Code Section
401(k) which are maintained by the Employer or an Affiliated Employer to which
such contributions are made, all such contributions shall be aggregated for
purposes of this Section 4.9.
(e) For purposes of Sections 4.9(a) and 4.10, a Highly
Compensated Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have matching contributions pursuant to Section 4.1
allocated to his account for the Plan Year.
4.10 ADJUSTMENT FOR EXCESSIVE CONTRIBUTION PERCENTAGE
(a) In the event that the "Contribution Percentage" for the
Highly Compensated Participant group exceeds the "Contribution Percentage" for
the Non-Highly Compensated Participant group pursuant to Section 4.9(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 group the amount of "Excess Aggregate Contributions" (and any income
allocable to such contributions) or, if forfeitable, forfeit such "Excess
Aggregate Contributions". Such distribution or forfeiture shall be made on
behalf of the Highly Compensated Participant group in order of their
"Contribution Percentages" beginning with the highest of such percentages.
Forfeitures of "Excess Aggregate Contributions" shall be treated in accordance
with Section 4.6. However, no such forfeiture may be allocated to a Highly
Compensated Participant whose contributions are reduced pursuant to this
Section.
(b) For the purposes of this Section, "Excess Aggregate
Contributions" means, with respect to any Plan Year, the excess of:
(1) the aggregate amount of contributions pursuant to
Sections 4.9(b)(1) and 4.9(c) actually made on behalf of the Highly
Compensated Participant group for such Plan Year, over
(2) the maximum amount of such contributions permitted
under the limitations of Section 4.9(a).
(c) The determination of the amount of "Excess Aggregate
Contributions" with respect to any Plan Year shall be made after:
26
<PAGE>
(1) first determining the excess contributions pursuant to
Section 4.2(d), and
(2) then determining the excess annual allocations
pursuant to Section 4.7(a).
4.11 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 (or, if greater, one-fourth of the dollar
limitation in effect under Code Section 415(b)(1)(A)) or (2) twenty-five percent
(25%) of the Participant's "415 compensation" for such "limitation year".
(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(1)(1) 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 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 419A9(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(1)(1).
(c) For purposes of applying the limitations of Code Section
415, the following are not "annual additions": (1) transfer of funds from one
qualified plan to another; (2) rollover contributions (as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3); (3) repayments of loans
made to a Participant from the Plan; (4) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (5) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); (6) Employee contributions to a simplified employee
pension allowed as a deduction under Code Section 219(a); and (7) deductible
Employee contributions to a qualified Plan.
(d) For purposes of applying the limitations of Code Section
415, "415 compensation" shall include the Participant's wages, salaries, fees
for professional service and other amounts for personal services actually
rendered in the course of employment with an Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses and in the case of a Participant who is an Employee
within the meaning of Code Section 401(c)(1) and the regulations thereunder, the
Participant's earned income (as described in Code Section 401(c)(2) and the
regulations thereunder)) paid during the "limitation year".
27
<PAGE>
"415 compensation" shall exclude (1) (A) contributions made by the Employer to a
plan of deferred compensation to the extent that, before the application of the
Code Section 415 limitations to the Plan, the contributions are not includable
in the gross income of the Employee for the taxable year in which contributed,
(B) Employer contributions made on behalf of an Employee to a simplified
employee pension plan described in Code Section 408(k) to the extent such
contributions are deductible by the Employee under Code Section 219(a), (C) any
distributions from a plan of deferred compensation regardless of whether such
amounts are includable in the gross income of the Employee when distributed
except that any amounts received by an Employee pursuant to an unfunded
non-qualified plan to the extent such amounts are includable in the gross income
of the Employee; (2) amounts realized from the exercise of a non-qualified stock
option or when restricted stock (or property) held by an Employee either becomes
freely transferable or is no longer subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and (4) other amounts which receive
special tax benefits, such as premiums for group term life insurance (but only
to the extent that the premiums are not includable in the gross income of the
Employee), or contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of any annuity contract described in
Code Section 403(b) (whether or not the contributions are excludable from the
gross income of the Employee). For Plan Years beginning after December 31, 1988,
"415 Compensation" shall be limited to $200,000 (unless adjusted in the same
manner as permitted under Code Section 415(d)).
(e) For purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(f) The dollar limitation under Code Section 415(b)(1)(A)
stated in paragraph (a)(1) above shall be adjusted annually as provided in Code
Section 415(d) pursuant to the Regulations. The adjusted limitation is effective
as of January 1st of each calendar year and is applicable to "limitation years"
ending with or within that calendar year.
(g) For the purpose of this Article, 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.
(h) For the purposes 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)) or is a member of an affiliated service group
(as defined by Code Section 414(m)), all Employees of such Employers shall be
considered to be employed by a single Employer.
(i) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, all Employers of a Participant who maintain this Plan will
be considered to be a single Employer.
28
<PAGE>
(j) (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 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.
(k) Subject to the exception in Section 4.11(o) below, 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.
(l) (1) The defined benefit plan fraction for any "limitation
year" is a fraction (A) the numerator of which is the "projected annual
benefit" of the Participant under the Plan (determined as of the close
of the "limitation year"), and (B) the denominator of which is the
greater of the product of 1.25 multiplied by the "protected current
accrued benefit" or the lesser of: (i) the product of 1.25 multiplied
by the maximum dollar limitation provided under Code Section
415(b)(1)(A) for such "limitation year", or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Code
Section 415(b)(1)(B) for such "limitation year".
(2) For purposes of applying the limitations of Code
Section 415, the "projected annual benefit" for any Participant is the
benefit, payable annually, under the terms of the Plan determined
pursuant to Regulation 1.415-7(b)(3).
(3) For purposes of applying the limitations of Code
Section 415, "protected current accrued benefit" for any Participant in
a defined benefit plan in existence
29
<PAGE>
on July 1, 1982, shall be the accrued benefit, payable annually,
provided for under question T-3 of Internal Revenue Service Notice
83-10.
(m) (1) The defined contribution plan fraction for any
"limitation year" is a fraction (A) the numerator of which is the sum
of the "annual additions" to the Participant's accounts as of the close
of the "limitation year" and (B) the denominator of which is the sum of
the lesser of the following amounts determined for such year and each
prior year of service with the Employer: (i) the product of 1.25
multiplied by the dollar limitation in effect under Code Section
415(c)(1)(A) for such "limitation year" (determined without regard to
Code Section 415(c)(6)), or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under Code Section 415(c)(1)(B)
for such "limitation year".
(2) Notwithstanding the foregoing, the numerator of the
defined contribution plan fraction shall be adjusted pursuant to
Regulation 1.415-7(d)(1) and questions T-6 and T-7 of Internal Revenue
Service Notice 83-10.
(3) For defined contribution plans in effect on or before
July 1, 1982, the Administrator may elect, for any "limitation year"
ending after December 31, 1982, that the amount taken into account in
the denominator for every Participant for all "limitation years" ending
before January 1, 1983 shall be an amount equal to the product of (A)
the denominator for the "limitation year" ending in 1982 determined
under the law in effect for the "limitation year" ending in 1982
multiplied by (B) the "transition fraction".
(4) For purposes of the preceding paragraph, the term
"transition fraction" shall mean a fraction (A) the numerator of which
is the lesser of (i) $51,875 or (ii) 1.4 multiplied by twenty-five
percent (25%) of the Participant's "415 compensation" for the
"limitation year" ending in 1981, and (B) the denominator of which is
the lesser of (i) $41,500 or (ii) twenty-five percent (25%) of the
Participant's "415 compensation" for the "limitation year" ending in
1981.
(5) Notwithstanding the foregoing, for any "limitation
year" in which the Plan is a Top Heavy Plan, $41,500 shall be
substituted for $51,875 in determining the "transition fraction" unless
the extra minimum allocation is being provided pursuant to Section 4.6.
However, for any "limitation year" in which this Plan is a Super Top
Heavy Plan, $41,500 shall be substituted for $51,875 in any event.
(n) Notwithstanding the foregoing, for any "limitation year"
in which the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25 in
paragraph l(1) and m(1) unless the extra minimum allocation is being provided
pursuant to Section 4.6. However, for any "limitation year" in which the Plan is
a Super Top-Heavy Plan, 1.0 shall be substituted for 1.25 in any event.
(o) If (1) the substitution of 1.00 for 1.25 and $41,500 for
$51,875 above or (2) the excess benefit accruals or "annual additions" provided
for in Internal Revenue Service Notice 82-19 cause the 1.0 limitation to be
exceeded for any Participant in any "limitation year",
30
<PAGE>
such Participant shall be subject to the following restrictions for each future
"limitation year" until the 1.0 limitation is satisfied: (A) the Participant's
accrued benefit under the defined benefit plan shall not increase (B) no "annual
additions" may be credited to a Participant's accounts and (C) no Employee
contributions (voluntary or mandatory) shall be made under any defined benefit
plan or any defined contribution plan of the Employer.
(p) 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 for Plan Years beginning after December 31, 1986.
4.12 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, 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) return any voluntary
Employee contributions credited for the "limitation year" to the extent that the
return would reduce the "excess amount" in the Participant's accounts (2) hold
any "excess amount" remaining after the return of any voluntary Employee
contributions in a "Section 415 suspense account" (3) 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 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 4.11.
(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.
(d) The Plan may not distribute "excess amounts" to
Participants or Former Participants.
4.13 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified corporate and, after December 31, 1983,
noncorporate plans, provided that the trust from which such funds are
transferred permits the transfer to be made and, in the opinion of legal counsel
31
<PAGE>
for the Employer, the transfer will not jeopardize the tax exempt status of
the Plan or Trust or create adverse tax consequences to 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 such amounts shall
not be subject to Forfeiture for any reason and may not be withdrawn by or
distributed to the Participant, in whole or in part, except as provided in
Paragraph (c) of this Section.
(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 Participant's Rollover Account shall be used to provide
additional benefits to the Participant.
(d) The Administrator may direct that employee transfers made
after the first month of the Plan Year pursuant to this Section 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 the first day of the following Plan Year, at which time they will be
invested as determined by the Administrator pursuant to Section 4.13(e).
(e) Unless the Administrator directs that the Participant's
Rollover Account 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, it shall be invested as part of the general
Trust Fund and shall share in earnings and losses. Except, however, deposits
into the general Trust Fund after the first month of the Plan Year shall not
share in earnings and losses for such year.
(f) All amounts allocated to a Participant's Rollover Account
may be treated as a Directed Investment Account pursuant to Section 4.14.
(g) For purposes of this Section the term "amounts transferred
from another qualified corporate and noncorporate plan" shall mean: (i) amounts
transferred to this Plan directly from another qualified corporate (and, after
December 31, 1983, noncorporate) plan; (ii) lump sum distributions received by
an Employee from another qualified Plan which are eligible for tax free rollover
to a qualified corporate or noncorporate plan and which are transferred by the
Employee to this Plan within sixty (60) days following his receipt thereof;
(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 corporate (and, after December 31, 1983, noncorporate) plan as
a lump sum distribution (B) were eligible for tax free rollover to a qualified
corporate or noncorporate 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
32
<PAGE>
Employee to this Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account. 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) For purposes of this Section, the term "qualified
corporate or noncorporate plan" shall mean any tax qualified plan under Code
Section 401(a).
(i) Notwithstanding anything herein to the contrary, this Plan
shall not accept any direct or indirect transfers after January 1, 1985 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.
4.14 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion may determine
that all Participants be permitted to direct the Trustee as to the investment of
all or a portion of the Vested interest in any one or more of their individual
account balances. If such authorization is given by the Administrator,
Participants may, subject to a procedure established and applied in a uniform
nondiscriminatory manner, direct the Trustee in writing to invest their account
in specific assets including Employer securities or real property and other
investments permitted under the Plan. To the extent so directed, the Trustees
are relieved of their fiduciary responsibilities as provided in Section 404 of
the Act. That portion of the Vested account of any Participant so directing will
thereupon be considered a Directed Investment Account which shall not share in
Trust Fund earnings, nor shall such account be taken into consideration for
purposes of Section 4.6(i).
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment. Transfers
between the Participant's regular account and his Directed Investment Account
shall be charged and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund Earnings, but shall be charged
or credited as appropriate with the net earnings, gains, losses and expenses as
well as any appreciation or depreciation in market value during each Plan Year
attributable to such account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary
Date, and at such other date or dates deemed necessary by the Administrator,
herein called "valuation date", to determine the net worth of the assets
comprising the Trust Fund as it exists on the "valuation date" prior to taking
into consideration any contribution to be allocated for that Plan Year. In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as
33
<PAGE>
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.
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 or Early Retirement
Date. Upon such Normal Retirement Date or Early Retirement Date, all amounts
credited to such Participant's Account shall become distributable. 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
shall continue until his Late Retirement Date. Upon a Participant's Retirement
Date, or as soon thereafter as is practicable, the Trustee shall distribute all
amounts credited to such Participant's 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 Account shall become fully Vested. On or before the Anniversary
Date coinciding with or next following such death, 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 Account to the
Participant's Beneficiary.
(b) On or before the Anniversary Date coinciding with or next
following the death of a Former Participant, the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, shall distribute any remaining amounts
credited to the account of such deceased Former Participant to such Former
Participant's Beneficiary.
34
<PAGE>
(c) 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.
(d) 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:
(i) the spouse has waived her right to be the
Participant's Beneficiary, or
(ii) the Participant has no spouse, or
(iii)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 such change or
revocation. 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.
(e) 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.
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 such change or
revocation. 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.
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 separation from service, all amounts credited to such
Participant's Account shall become fully Vested. On or before the Anniversary
Date coinciding with or next following the event of 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 Account as though he had retired.
35
<PAGE>
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any reason other
than death, Total and Permanent Disability or retirement, the Administrator may
direct the Trustee to segregate the amount of the Vested portion of such
Terminated Participant's Account and invest the aggregate amount thereof in a
separate, federally insured savings account, certificate of deposit, common or
collective trust fund of a bank or a deferred annuity. In the event the Vested
portion of a Participant's Account is not segregated, the amount shall remain in
a separate account for the Terminated Participant and share in allocations per
Section 4.6 until such time as a distribution is made to the Terminated
Participant. The amount of the Terminated Participant's Account which is not
Vested shall be credited to the Suspense Account (which will always share in
gains and losses of the trust) and shall, subsequently, be allocated to the
accounts of the remaining Participants in accordance with the terms of the Plan
at such time as the amount becomes a Forfeiture.
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, Early or
Normal Retirement). However, at the election of the Participant, the
Administrator may direct the Trustee to cause the entire Vested portion of the
Terminated Participant's Combined Account to be payable to such Terminated
Participant.
However, a Terminated Participant's Vested benefit derived
from Employer and Employee contributions may not be paid without his written
consent if the value exceeds $3,500. For Plan Years beginning prior to January
l, 1985, this amount shall be reduced to $1,750. Written consent of the
Participant to the distribution must be obtained not more than 90 days before
commencement of the distribution.
If the value of a Terminated Participant's Vested benefit
derived from Employer and Employee contributions is $3,500 or less, the
Administrator shall direct the Trustee to cause the entire Vested benefit to be
paid to such Participant without regard to the Participant's election or the
consent of said Participant's spouse.
(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 schedule:
Vesting Schedule
Years of Service Percentage
1 0%
2 0%
3 0%
4 50%
5 100%
36
<PAGE>
(c) Notwithstanding the vesting provided for in paragraph (b)
above, for any Top Heavy Plan Year, the Vested portion of the Participant's
Account of any Participant who has an Hour of Service after the Plan becomes top
heavy 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 schedule:
Vesting Schedule
Years of Service Percentage
1 - 2 0%
3 100%
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) The computation of Participant's nonforfeitable percentage
of his interest in the Plan shall not be reduced as the result or any direct or
indirect amendment to this Article. In the event that this Agreement is amended
to change or modify any vesting schedule, a Participant with at least five (5)
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. For Plan Years beginning after December 31, 1988, three (3)
shall be substituted for five (5) in the preceding sentence. 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:
(i) the adoption date of the amendment,
(ii) the effective date of the amendment, or
(iii) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
(e) (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.
(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 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 end of a period of five (5) consecutive 1-Year Breaks in Service.
In the event the Former Participant does repay the full amount
distributed to him, the undistributed portion of the Participant's
37
<PAGE>
Account must be restored in full, unadjusted by any gains or losses
occurring subsequent to the Anniversary Date or other valuation date
preceding his termination.
(3) If any Former Participant is reemployed by the
Employer 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) Each non-vested Former Participant shall lose credits
otherwise allowable under (i) above, if his 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 completes one (1) Year of
Service for eligibility purposes following his reemployment with the
Employer, he shall participate in the Plan retroactively from his date
of reemployment;
(v) If a Former Participant completes a Year of Service
(a 1-Year Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively from the
first day of the Plan Year during which he completes one (l)-Year of
Service.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of a
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 or more of
the following methods:
(i) One lump-sum payment in cash or in property;
(ii) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments, after first having (A)
segregated the aggregate amount thereof in a separate, federally
insured savings account or certificate of deposit in a bank or savings
and loan association, money market certificate or other liquid
short-term security or (B) purchased a nontransferable annuity contract
providing for such payment. The period over which such payment is to be
made shall not extend
38
<PAGE>
beyond the Participant's life expectancy (or the life expectancy of the
Participant and his designated Beneficiary).
(b) Any distribution to a Participant shall require such
Participant's consent if such distribution commences prior to the later of his
Normal Retirement Age or age 62. Failure to consent shall be deemed to be an
election to defer the commencement of payment of any benefit.
(c) If the Participant's entire interest is to be distributed
in other than a lump sum, then the amount to be distributed each year must be at
least an amount equal to the quotient obtained by dividing the Participant's
entire interest by the life expectancy of the Participant or the joint and last
survivor expectancy of the Participant and his designated Beneficiary.
(d) If a Participant's retirement benefit is to be distributed
to him and his Beneficiaries over a period in excess of the Participant's then
life expectancy, the then present value of the payments to be made over the
period of the Participant's then life expectancy must be more than fifty percent
(50%) of the then present value of the total payments to be made to the
Participant and his Beneficiaries.
(e) Notwithstanding any provision in the Plan to the contrary,
a Participant's benefits shall be distributed to him not later than April 1 of
the calendar year following the later of (i) the calendar in year in which he
attains age seventy and one-half (70-1/2), or (ii) in the case of a Participant
other than a "five (5) percent owner" (as defined in Section 1.23(c)), the
calendar year in which he retires. Alternatively, distributions to a Participant
must begin no later than the April 1 following such calendar year and must be
made over the life of the Participant (or lives of the Participant and the
Participant's designated Beneficiary) or the life expectancy of the Participant
(or the life expectancies of the Participant and his designated Beneficiary).
For Plan Years beginning after December 31, 1988, 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 calendar year in which the Participant
attained age 66 1/2 or any subsequent Plan Year.
(e) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may be redetermined, but not more
frequently than annually, and in accordance with such rules as may be prescribed
by Treasury regulations. Further, life expectancy and joint and last survivor
expectancy shall be computed using the return multiples of Regulation 1.72-9.
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 by either of the following methods,
(i) One lump sum payment in cash or in property;
39
<PAGE>
(ii)Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be determined by the
Participant or his Beneficiary, and in installments as nearly
equal as practicable. After periodic installments commence,
the Beneficiary shall have the right to direct the Trustee to
reduce the period over which such periodic installments shall
be made, and the Trustee shall adjust the cash amount of such
periodic installments accordingly.
(2) In the event the death benefit payable pursuant to
Section 6.2 is payable in installments, then, upon the death of the
Participant, the Administrator shall direct the Trustee to segregate
into a separate Trust Fund(s) the death benefit, and the Trustee shall
invest such segregated Trust Funds separately, and the funds
accumulated in such Trust Fund(s) shall be used for the payment of the
installments hereinabove provided.
(3) The Administrator, at the election of the
Participant's Beneficiary, shall direct the Trustee to (1) accelerate
any installment payment to a Participant's Beneficiary or (2) at any
time, purchase for the benefit of the Participant's Beneficiary an
annuity with all monies or property held in the segregated Trust
Fund(s).
(h) If the distribution of a Participant's interest has begun
in accordance with a method selected in Section 6.5 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.
(i) If a Participant dies before he has begun to receive any
distributions of his interest under the Plan, his death benefit shall be
distributed to his Beneficiaries within 5 years after his death.
(j) The 5-year distribution requirement of Section 6.6(i)
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 be distributed over the life of such designated Beneficiary (or over
a period not extending beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later than one (1) year after
the date of the Participant's death (or such later date as may be prescribed by
Treasury regulations).
Except, however, in the event the Participant's spouse is his
Beneficiary, the requirement that distributions commence within one year of a
Participant's death shall not apply. In lieu thereof, such distribution must
commence no later than the date on which the deceased Participant would have
attained age seventy and one-half (70 1/2). If the surviving spouse dies before
the distributions to such spouse begin, then the 5-year distribution requirement
of Section 6.6(i) shall apply as if the spouse were the Participant.
(k) For the purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may be redetermined, but not more
frequently than annually and in accordance
40
<PAGE>
with such rules as may be prescribed by Treasury regulations. Further, life
expectancy and joint and last survivor expectancy shall be computed using the
return multiples of Regulation 1.72-9.
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 or to commence a series of payments on or as of an
Anniversary Date, the distribution or series of payments may be made or begun on
such date or as soon thereafter as is practicable, but in no event later than
180 days after the Anniversary Date. Except, 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 begin not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs:
(1) the date on which the Participant attains the earlier
of age 65 or the Normal Retirement Age specified herein,
(2) the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) 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 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 expiration of five (5)
years after it shall become payable, 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 reallocated in the same manner 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.
41
<PAGE>
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
The Administrator, at the election of the Participant, shall direct the
Trustee to distribute to any Participant or his Beneficiary in any one Fiscal
Year up to 100% of his Participant's Account, valued as of the last Anniversary
Date or other valuation date, in the case of proven financial necessity.
Provided, however, that no such distribution may be made to any Participant
unless his Participant's Account has become fully Vested. Withdrawal under this
Section shall be authorized in the event of financial hardship resulting from
accident to or sickness of a Participant or his dependents, or financial
hardship resulting from the establishing or preserving of the home in which the
Participant resides. Distribution paid pursuant to this Section shall be deemed
to be made as of the first day of the Plan Year and the Participant's Account
shall be reduced accordingly. No distribution shall be made pursuant to this
Section unless the balance in the Participant's Account has accumulated for at
least two (2) years or the Participant has completed 5 years of participation in
the Plan.
6.11 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
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" as those terms are defined in Code
Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) 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 an Investment Manager if the Trustee should appoint
such manager as to all or a portion of the assets of the Plan;
(b) 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;
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Fiscal Year a written
annual report per Section 7.6.
(d) 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.
42
<PAGE>
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 this 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.
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 this
Agreement, shall have the following powers and authorities, to be exercised in
the Trustee's sole discretion:
(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;
(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
43
<PAGE>
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 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 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
44
<PAGE>
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.
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) 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.
(q) 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;
(r) Directed Investment Account. The powers granted to the
Trustee shall be exercised in the sole fiduciary discretion of the Trustee.
However, if Participants are so empowered by the Administrator, each Participant
may direct the Trustee to separate and keep separate all or a portion of his
share of his account; and further each Participant is authorized and empowered,
in his sole and absolute discretion, to give directions to the Trustee in such
form as the Trustee may require concerning the investment of the Participant's
Directed Investment Account, which directions must be followed by the Trustee
subject, however, to restrictions on payment of life insurance premiums. Neither
the Trustee nor any other persons including the Administrator or otherwise shall
be under any duty to question any such direction of the Participant or to review
any securities or other property, real or personal, or to make any suggestions
to the Participant in connection therewith; and the Trustee shall comply as
promptly as practicable with directions given by the Participant hereunder. Any
such direction may be of a continuing nature or otherwise and may be revoked by
the Participant at any time in such form as the Trustee may require. The Trustee
shall not be responsible or liable for any loss or expense which may arise from
or result from compliance with any directions from the Participant nor shall the
Trustee be responsible for, 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. 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 inappropriate. Any costs and expenses related to compliance with
the Participant's directions shall be borne by the Participant's Directed
Investment Account.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's sole discretion, 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, officers, or shareholders in an amount greater than the
amount
45
<PAGE>
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 shall not be granted to any Participant or his
Beneficiary that provide for a repayment period extending beyond such
Participant's Normal Retirement Date.
(c) Loans made pursuant to this Section shall be limited to
the lesser of:
(i) $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
(ii) the greater of (A) one-half (1/2) of the present
value of the Vested interest of such Participant's Account maintained
on behalf of the Participant under the Plan or (B) $10,000.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be unreduced.
(d) 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. Except, 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.
Any loan made pursuant to this Section after August 18, 1985
where the Vested interest of the Participant is used to secure such loan shall
require the written consent of the Participant's spouse. Such written consent
must be obtained within the 90 day period prior to the date the loan is made.
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 this Plan. In addition,
46
<PAGE>
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 sixty (60) days after the later of the Anniversary Date or
receipt of the Employer's contribution for each Fiscal Year, the Trustee shall
furnish to the Employer and Administrator a written statement of account with
respect to the Fiscal 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) and 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 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 each of the following statements, schedules or lists,
or any others that are required by Section 103 of the
47
<PAGE>
Act 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:
(i) statement of the assets and liabilities of the Plan;
(ii) statement of changes in net assets available to the
Plan;
(iii)statement of receipts and disbursements, a schedule
of all assets held for investment purposes, a schedule of all loans or
fixed income obligations in default at the close of the Plan Year;
(iv) a list of all leases in default or uncollectible
during the Plan Year;
(v) the most recent annual statement of assets and
liabilities of any bank common or collective trust fund in which Plan
assets are invested or such information regarding separate accounts or
trusts with a bank or insurance company as the Trustee and
Administrator deem necessary; and
(vi) a schedule of each transaction or series of
transactions involving an amount in excess of three percent (3%) of
Plan assets.
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 Section 103 of the Act 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
Section 103(b) of the Act within one hundred twenty (120) days after the end of
the Plan Year or such other date as may be prescribed under regulations of the
Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Employer has the right at any time to appoint
Trustees.
(b) 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.
(c) 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.
(d) 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
48
<PAGE>
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.
(e) 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.
(f) 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 Fiscal Year during which he served as
Trustee. This statement shall be either (i) included as part of the annual
statement of account for the Fiscal 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 Fiscal 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 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, upon a 1-Year Break in
Service of a Participant, 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.
The Trustee may accept funds transferred from such trusts or a
"conduit" Individual Retirement Account for the account of a Participant under
this Plan, provided the conditions precedent to such transfer set forth in
Section 4.13 are satisfied. In the event of such a transfer under this Plan, the
Trustee shall maintain a separate, nonforfeitable "Participant's Rollover
Account" for the amount transferred. The Trustee may act upon the direction of
the Administrator without determining the facts concerning a transfer.
49
<PAGE>
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
The Employer shall have the right at any time to amend the Plan.
However, no such amendment shall authorize or permit 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 purposes other than for the exclusive benefit of
the Participants or their Beneficiaries or estates; no such amendment shall
cause any reduction in the amount credited to the account of any Participant or
cause or permit any portion of the Trust Fund to revert to or become the
property of the Employer; and no such amendment which affects the rights, duties
or responsibilities of the Trustee and Administrator may be made without 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.
For the purposes of this Section, a Plan amendment which has the
effect of eliminating or reducing an early retirement benefit, eliminating an
optional form of benefit (as provided in Treasury regulations) or restricting,
directly or indirectly, the benefit provided to any Participant prior to the
amendment shall be treated as reducing the amount credited to the account of a
Participant.
8.2 TERMINATION
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.
A complete discontinuance of the Employer's contributions to the Plan shall be
deemed to constitute a termination. Upon any termination (full or partial) or
complete discontinuance of contributions, all amounts credited to the affected
Participants' Accounts shall become 100% Vested 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. Upon such
termination of the Plan, the Employer, by written notice to the Trustee and
Administrator, may direct either:
(a) complete distribution of the assets in the Trust Fund to
the Participants, in cash or in kind, in a manner consistent with the
requirements of Section 6.5; or
(b) continuation of the Trust created by this agreement and
the distribution of benefits at such time and in such manner as though the Plan
had not been terminated.
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,
50
<PAGE>
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.
ARTICLE IX
MISCELLANEOUS
9.1 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.
9.2 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, for any reason, under any provision of
this Agreement. 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 indebtedness shall be paid by the Trustee to the
Trustee or the Administrator, at the direction of the Administrator, to apply
against or discharge such indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the Administrator
that such indebtedness is to be deducted in whole or part from his Participant's
Combined Account. If the Participant or Beneficiary does not agree that the
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 2.12 and 2.13.
(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
51
<PAGE>
"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.
9.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of Illinois, other than its laws respecting choice
of law, to the extent not preempted by the Act.
9.4 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.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or 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.
9.6 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 Section 403(c)(2)(A) of the
Act, 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.
9.7 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
52
<PAGE>
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 Section 412(a)(2) of the Act),
and the bond shall be in a form approved by the Secretary of Labor.
Notwithstanding anything in this Agreement 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.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer 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 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.
9.9 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.
9.10 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 this Agreement, 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.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of this Agreement 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.
53
<PAGE>
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under this
Agreement. In general, the Employer shall have the sole responsibility for
making the contributions provided for under Section 4.1; and shall have the sole
authority to appoint and remove the Trustee, the Administrator, and any
Investment Manager which may be provided for under this Agreement; to formulate
the Plan's "funding policy and method"; and to amend or terminate, in whole or
in part, this Agreement. The Administrator shall have the sole responsibility
for the administration of this Agreement, which responsibility is specifically
described in this Agreement. The Trustee shall have the sole responsibility of
management of the assets held under the Trust, except 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 this Agreement. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of this Agreement, 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 this Agreement, and is not required under this Agreement
to inquire into the propriety of any such direction, information or action. It
is intended under this Agreement that each named Fiduciary shall be responsible
for the proper exercise of its own powers, duties, responsibilities and
obligations under this Agreement. No named Fiduciary guarantees 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.
9.13 HEADINGS
The headings and subheadings of this Agreement have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if,
pursuant to an application filed by or in behalf of the Plan, the Commissioner
of Internal Revenue Service or his delegate should determine that the Plan does
not initially qualify as a tax-exempt plan and trust under Sections 401 and 501
of the Code, and such determination is not contested, or if contested, is
finally upheld, then the Plan shall be void ab initio and all amounts
contributed to the Plan by the Employer, less expenses paid, shall be returned
within one year and the Plan shall terminate, and the Trustee shall be
discharged from all further obligations.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 4.1(f), 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 a final determination of the
54
<PAGE>
disallowance, whether by agreement within the Internal Revenue Service or by
final decision of a court of competent jurisdiction, 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.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity (provided an
Owner-Employee of such entity does not participate in the Plan for Plan Years
beginning before January 1, 1984), 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.
10.2 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.
(c) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Employee-Participants of the
Participating Employer by which the forfeiting Participant was employed, except
if the Forfeiture is for an Employee whose Employer is a member of an affiliated
or controlled group, then said Forfeiture shall be allocated, based on
Compensation to all Participant Accounts of Participating Employers who are
members of the affiliated or controlled group. Should an Employee of one
("First") Employer be transferred to an associated ("Second") Employer (the
Employer, an affiliate or subsidiary), 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 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 amount so transferred.
55
<PAGE>
(d) 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.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of 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.
10.4 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 thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYERS CONTRIBUTION
Any contribution or Forfeiture subject to allocation during each Plan
Year shall be allocated among all Participants of all Participating 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.
10.6 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.
56
<PAGE>
10.7 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. 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 for purposes other than for
the exclusive benefit of the Employees of such Participating Employer.
10.8 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.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from
making a contribution to the Trust Fund which it would otherwise have made under
the Plan by reason of having no current or accumulated earnings or profits, or
because such earnings or profits are less than the contribution which it would
otherwise have made, then, pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented from making may
be made, for the benefit of the participating employees of such Participating
Employer, by the other Participating Employers who are members of the same
affiliated group within the meaning of Code Section 1504 to the extent of their
current or accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the proportion of its
total current and accumulated earnings or profits remaining after adjustment for
its contribution to the Plan made without regard to this paragraph which the
total prevented contribution bears to the total current and accumulated earnings
or profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not reimburse the contributing Participating
Employers.
57
<PAGE>
AMENDMENT TO THE
FIRST MIDWEST CORPORATION
OF DELAWARE
EMPLOYEES' RETIREMENT PLAN
Effective July 1, 1994, the First Midwest Corporation of Delaware
Employees' Retirement Plan (the "Plan") is hereby amended as follows:
1. SECTION 4.1(b) IS HEREBY AMENDED TO READ AS FOLLOWS:
(b) A matching contribution equal to the amount set forth in the
following table for all Participants eligible to share in allocations, as a
percentage of the Participant's Deferred Compensation:
Deferred Compensation Match
--------------------- -----
1% 2%
2% 3%
3% 4%
4% or more 5%
2. SECTIONS 6.4(b) AND (c) ARE HEREBY AMENDED TO READ AS FOLLOWS:
(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 schedule:
Vesting Schedule
Years of Service Percentage
---------------- ----------
1 0%
2 33.3%
3 66.7%
4 or more 100%
(c) Notwithstanding the vesting provided for in paragraph (b) above,
for any Top Heavy Plan Year, the Vested portion of the Participant's Account of
any Participant who has an Hour of Service after the Plan becomes top heavy
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 schedule:
<PAGE>
Vesting Schedule
Years of Service Percentage
---------------- ----------
1 0%
2 33 1/3%
3 100%
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.
Executed effective as of the 1st day of July, 1994.
FIRST MIDWEST CORPORATION OF DELAWARE
By: /s/
--------------------------------------
Senior Vice President - Administration
<PAGE>
SPECIAL AMENDMENT TO THE
FIRST MIDWEST CORPORATION OF DELAWARE
EMPLOYEES' RETIREMENT PLAN
Effective as provided in this Amendment, the First Midwest Corporation
of Delaware Employees' Retirement Plan (the "Plan") is hereby amended as
follows:
1. EFFECTIVE AS OF JANUARY 1, 1994, SECTION 1.8 - "COMPENSATION" IS
AMENDED BY THE ADDITION OF THE FOLLOWING LANGUAGE AT THE END OF SAID DEFINITION:
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the
annual compensation of each employee taken into account under the Plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
for increases in the cost of living in accordance with section
401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth in
this provision.
If compensation for any prior determination period is taken
into account in determining an employee's benefits accruing in the
current Plan Year, the compensation for that prior determination period
is subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
2. EFFECTIVE JANUARY 1, 1987, SECTION 4.7 - ACTUAL DEFERRAL PERCENTAGE
TESTS - IS AMENDED SO THAT SUBSECTION 4.7(a) READS AS FOLLOWS:
(a) Maximum Annual Allocation: The "Actual Deferral
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
1
<PAGE>
(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.
3. EFFECTIVE JANUARY 1, 1993, ARTICLE 6 - DETERMINATION AND
DISTRIBUTION OF BENEFITS - IS AMENDED IN THE FOLLOWING PARTICULARS:
(a) SECTION 6.5 - DISTRIBUTIONS OF BENEFITS - IS AMENDED TO ADD A NEW
SECTION 6.5(f) TO READ AS FOLLOWS:
(f) Effective January 1, 1993, any distribution made
pursuant to this Article 6 shall, to the extent required by law, be
eligible for a direct rollover at the individual's election in
accordance with the provisions of Section 6.12.
(b) A NEW SECTION 6.12 IS ADDED TO READ AS FOLLOWS:
6.12 Eligible Rollover Distributions.
(a) This Section 6.12 applies to distributions made
on or after January 1, 1993. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's election
under this Article 6, a distributee may elect, at the time and in the
manner prescribed by the Committee, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(b) Eligible rollover distribution: An eligible
rollover distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); and the
portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) Eligible retirement plan: An eligible retirement
plan is an individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the case of
an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
2
<PAGE>
(d) Distributee: A distributee includes an employee
or former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p), are distributees
with regard to the interest of the spouse or former spouse.
(e) Direct rollover: A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
4. EFFECTIVE JANUARY 1, 1989, SECTION 6.10 - ADVANCE DISTRIBUTION FOR
HARDSHIP - IS AMENDED TO ADD THE FOLLOWING PARAGRAPHS TO READ AS FOLLOWS:
Notwithstanding the foregoing, beginning with the
1989 Plan Year, a Participant who has not attained age 59 1/2 may upon
the determination by the Administrator that he has incurred a financial
hardship, make a hardship withdrawal from his Elective Account. In any
case where the Participant claims financial hardship, he shall submit a
written request for such distribution in accordance with procedures
prescribed by the Administrator. The Administrator shall determine
whether the Participant has a "financial hardship" on the basis of such
written request in accordance with this Section 6.10, and such
determination shall be made in a uniform and nondiscriminatory manner.
The Administrator shall only make a determination of "financial
hardship" if the distribution to be made is made on account of an
immediate and heavy financial need of the Participant and the funds
distributed are necessary to satisfy the Participant's need.
(i) The determination of whether a Participant has an
immediate and heavy financial need is to be made by the Administrator
on the basis of all relevant facts and circumstances. A distribution
will be deemed to be on account of an immediate and heavy financial
need if made on account of:
(A) Medical expenses described in Section
213(d) of the Code incurred by the Participant, the
Participant's spouse or any dependents of the Participant (as
defined in Section 152 of the Code);
(B) The purchase (excluding mortgage
payments) of a principal residence for the Participant;
(C) Tuition due for the next semester or
quarter or similar period of post-secondary education for the
Participant, the Participant's spouse, children or dependents;
(D) The need to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or
3
<PAGE>
(E) Any other event or expense deemed an
immediate and heavy financial need by the Department of the
Treasury.
(ii) The determination of whether a distribution is
necessary to satisfy the immediate and heavy financial need of the
Participant shall be made by the Administrator on the basis of all
relevant facts and circumstances. The Administrator shall determine
that a distribution is necessary to satisfy the financial need if the
Participant reasonably demonstrates that all of the following
requirements are satisfied:
(A) The distribution is not in excess of the
amount of the immediate and heavy financial need of the
Participant;
(B) The Participant has obtained all
distributions (other than hardship distributions), and all
nontaxable loans currently available under the Plan;
(C) The Participant will not make any
Elective Contributions or Employee Contributions for twelve
months after receiving the hardship distribution; and
(D) The Participant's Elective Contributions
in the calendar year following the calendar year of the
hardship distribution do not exceed the limitation in Code
Section 402(g)(1) applicable to such following calendar year,
minus the amount of his Elective Contributions for the
calendar year of the hardship distribution.
Distributions from the Participant's Elective Account
because of hardship pursuant to paragraph (b) shall not exceed the
lesser of:
(i) the amount of the immediate and heavy
financial need;
(ii) the balance of the Participant's
Elective Account at the time of the distribution; or
(iii) with respect to distributions on or
after January 1, 1989, (A) the sum of the Participant's
Elective Account as of December 31, 1988 plus the
Participant's Elective Contributions made on or after January
1, 1989, reduced by (B) the aggregate amount distributed from
the Participant's Elective Account on or after January 1,
1989.
4
<PAGE>
5. EFFECTIVE JANUARY 1, 1989, SECTION 7.4 - LOANS TO PARTICIPANTS - IS
AMENDED TO REVISE SUBSECTION 7.4(c)(ii) TO READ AS FOLLOWS:
(ii) the greater of one-half (1/2) of the present value of the
Vested interest of such Participant's Account maintained on behalf of
the Participant under the Plan or (B) $10,000; provided that for loans
granted on or after October 19, 1989, the amount of any loan shall be
limited to one-half (1/2) of the present value of the vested interest
of such Participant's Account maintained on behalf of the Participant
under the Plan.
6. EFFECTIVE DECEMBER 31, 1994, AN APPENDIX A SHALL BE ADDED TO THE
PLAN TO READ AS FOLLOWS:
APPENDIX A
APPLICABLE TO
THE NATIONAL BANK OF MONMOUTH
This Appendix A sets forth provisions applicable to Participants in the
Plan who were employees of The National Bank of Monmouth ("Monmouth") on
December 30, 1994, and who became Participants in the Plan on December 31, 1994,
and whose assets and liabilities were subsequently transferred from The National
Bank of Monmouth 401(k) Plan to the Trust ("Former Monmouth Participants").
Except to the extent expressly modified by this Appendix A, the provisions of
the Plan, including the Appendices thereto, shall apply to the participation of
such Former Monmouth Participants. The provisions of this Appendix A are
intended to preserve such benefits under the Monmouth Plan as are required to be
preserved under Code Section 411(d)(6), and shall, unless provided otherwise, be
effective as of December 31, 1994.
A.1 A new definition of Monmouth Plan shall be added to read as follows:
"Monmouth Plan" means The National Bank of Monmouth 401(k)
Plan as in effect on December 30, 1994, just prior to its merger into
this Plan.
5
<PAGE>
A.2 A new definition of Qualified Joint and Survivor Annuity shall be
added to read as follows:
"Qualified Joint and Survivor Annuity" for a married
Participant is an annuity for the life of a Participant with payments
continued upon the death of the Participant for the life of his spouse
in an amount which is 1/2 of the amount payable while the Participant
was living and for an unmarried Participant is an annuity for the life
of the Participant only.
A.3 Section 2.1A shall be added to read as follows:
2.1A Special Provision Applicable to The National Bank of
Monmouth. Notwithstanding the foregoing provisions of Section 3.1, a
Former Monmouth Participant who is an Eligible Employee on December 31,
1994, shall become a Participant as of such date.
A.4 A Former Monmouth Participant may elect to receive the value of his
Accounts under Section 6.1 of the Plan in the form of a lump sum,
installment payments or in the form of an annuity contract upon
termination of employment. If a Participant elects to receive such an
annuity, the requirements of the following Sections 6.5A and 6.5B
apply. If a Participant does not elect to receive the annuity, Sections
6.5A and 6.5B shall not apply.
6.5A Qualified Joint and Survivor Annuity.
(a) If a Participant elects an annuity distribution,
distribution of the portion of his Account attributable to the annuity
shall be made in the form of a Qualified Joint and Survivor Annuity
unless the Participant has elected not to receive a Qualified Joint and
Survivor Annuity pursuant to subsection (c) below.
(b) Benefits payable in the form of a Qualified Joint
and Survivor Annuity shall be paid by distributing to the Participant
the annuity contract. Any such annuity contract shall be nonassignable
and non-commutable and shall be subject to the election, consent,
written explanation and Survivor Annuity requirements set forth in
Section 6.5B. Delivery of such contract shall be in full satisfaction
of the rights of the Participant hereunder and upon delivery of any
such contract, the Participant shall look solely to the insurer issuing
such contract for the payment of benefits.
(c) A Participant may, within 90 days before his
Annuity Starting Date (the "Election Period"), elect not to receive a
Qualified Joint and Survivor Annuity. Such election may be revoked at
any time during the Election Period and if so revoked the Participant's
benefit shall automatically be paid in the form of a Qualified Joint
and Survivor Annuity unless he again elects within the Election Period
not to receive his benefit in such form. Elections and revocations may
continue to be made under this Section within the Election Period.
Subject to the requirements of Section 6.5A(e), annuity payments may be
made over one of the following periods:
6
<PAGE>
(1) the life of the Participant;
(2) the lives of the Participant and a
designated beneficiary, with the amount payable to the
designated beneficiary equal to 50% or 100% of the amount
payable to the Participant;
(3) a period certain not extending
beyond the life expectancy of the Participant; and
(4) a period certain not extending
beyond the life expectancy of the Participant and designated
beneficiary.
(d) The Administrator shall furnish each Participant
a general written explanation of the terms and conditions of the
Qualified Joint and Survivor Annuity, the Participant's right to make
and the effect of an election to waive it, the rights of the
Participant's spouse, the Participant's right to revoke an election to
waive the Qualified Joint and Survivor Annuity and the effect of such a
revocation. This general explanation shall be furnished to a
Participant within a reasonable period before the Participant's Annuity
Starting Date.
(e) Any election under subsections 6.5A(c) or 6.5B(d)
must have the consent of the Participant's spouse to be effective
unless, at the time of filing such election, the Participant
established to the satisfaction of the Administrator that the consent
of the spouse could not be obtained because such spouse could not be
located or by reason of such other circumstances as may be prescribed
by regulations. Any consent (or establishment that the consent could
not be obtained) shall be effective only with respect to such spouse.
Such consent shall be in writing, witnessed by a Plan representative or
notary public, acknowledging the effect of the election and the
designation of the specific non-spouse beneficiary, including any class
of beneficiary or any contingent beneficiary, to receive the
Participant's Accounts in the Trust Fund in the event of the
Participant's death, and shall be irrevocable with respect to such form
and beneficiary designation.
6.5B Surviving Spouse Survivor Annuity.
(a) The Accounts of a Participant who dies prior to
his Annuity Starting Date, who is married on the date of his death and
who has elected to receive his Accounts in the form of an annuity shall
be distributed in the form of an annuity for the life of his surviving
spouse ("Survivor Annuity") unless such Participant has elected not to
have benefits paid in the form of a Survivor Annuity pursuant to
subsection (d) below.
(b) Benefits payable in the form of a Survivor
Annuity shall be paid by distributing to the surviving spouse of the
Participant the annuity contract. Such annuity contract shall provide
for level monthly payments for the life of the surviving spouse
commencing as soon as practicable thereafter. Any such annuity contract
shall be
7
<PAGE>
nonassignable and non-commutable. Delivery of any such contract shall
be in full satisfaction of the rights of the Participant's spouse.
(c) Notwithstanding subsection (b) above, the
surviving spouse of a Participant may elect to receive a distribution
of the balance of the deceased Participant's Accounts in one lump sum,
installments or in the form of an annuity over a period certain not
greater than his life expectancy, subject to the requirements of
Section 6.5(c). Such election shall be made by filing an election with
the Administrator at such time and in such manner as the Administrator
shall provide.
(d) A Participant may elect not to have a Survivor
Annuity paid to his surviving spouse. Such election may be made at any
time during the Election Period described in subsection (e) below. To
be effective any such election shall require the consent of the
Participant's spouse as provided in Section 6.5A(e). Any such election
may be revoked by the Participant within the Election Period.
(e) The Election Period shall commence on the first
day of the Plan Year in which the Participant attains age 35 and end on
the earlier of: (i) the date of the Participant's death or (ii) his
Annuity Starting Date; provided that, in the case of a Participant who
separates from service prior to attaining age 35, the Election Period
shall commence on the date of his separation from service.
(f) The Administrator shall furnish each Participant
a general written explanation of the terms and conditions of the
Survivor Annuity, the Participant's right to make and the effect of an
election to waive it, the rights of the Participant's spouse, the
Participant's right to revoke an election to waive the Survivor Annuity
and the effect of such a revocation.
A.5 In the event a Former Monmouth Participant dies prior to commencement
of his benefits, and the balance of the Participant's Accounts was not
distributed in accordance with Section 6.5B, the beneficiary may
receive the balance of such Participant's Accounts under Section 6.6 of
the Plan in the form of a lump sum, installments or an annuity
contract. The annuity may be for the life of the beneficiary or over a
period certain not extending beyond the life expectancy of the
beneficiary, subject to the requirements of Section 6.6. If the
beneficiary is the Participant's surviving spouse, or if the
Participant has not designated the form of distribution prior to his
death, the designated beneficiary must elect the method of
distribution no later than the date such distributions are required to
begin in accordance with Section 6.6.
A.6 Section 8.3A shall be added to read as follows:
8.3A Merger. Effective as of December 31, 1994, the Monmouth
Plan shall be merged into this Plan with all accrued benefits under the
Monmouth Plan becoming accrued benefits under this Plan. To the extent
required by law or otherwise appropriate, the
8
<PAGE>
provisions of this Appendix and the applicable provisions of the Plan
(including those relating to the Tax Reform Act of 1986 and related
laws and regulations) shall be deemed to apply retroactively to the
Monmouth Plan.
9
