<PAGE> 1
As filed with the Securities and Exchange Commission on January 21, 1999
Registration No. 333-______
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------
THE BANC CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 63-1201350
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
17 NORTH TWENTIETH STREET
BIRMINGHAM, ALABAMA 35203
(Address of Principal Executive Offices)
(Zip Code)
THE BANC CORPORATION 401(K) PLAN
(Full Title of the Plan)
JAMES A. TAYLOR, JR.
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
THE BANC CORPORATION
17 NORTH TWENTIETH STREET
BIRMINGHAM, ALABAMA 35203
(Name and Address of Agent for Service)
(205) 326-2265
(Telephone Number, including Area Code, of Agent for Service)
The Commission is requested to send copies of all notices and other
communications to:
F. HAMPTON MCFADDEN, JR., ESQ.
HASKELL SLAUGHTER & YOUNG, L.L.C.
1200 AMSOUTH/HARBERT PLAZA
1901 SIXTH AVENUE NORTH
BIRMINGHAM, ALABAMA 35203
TEL: (205) 251-1000
FAX: (205) 324-1133
-------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================----------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share (1) Price Registration Fee
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 200,000 $12.28 $2,456,250 $683.00
per share shares (2)
=======================================================================================================================
</TABLE>
(1) In accordance with Rules 457(c) and (h) under the Securities Act of
1933, as amended, solely for the purpose of calculating the
registration fee, the maximum offering price per share is based on the
average of the high and low sales prices of the Registrant's Common
Stock as reported on the Nasdaq National Market on January 19, 1999.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating officers and employees as specified
by Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities
Act"). The documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II below, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Banc Corporation, a Delaware corporation (the "Company"), hereby
incorporates by reference into this Registration Statement on Form S-8 (the
"Registration Statement") the following documents which have heretofore been
filed by the Company with the Securities and Exchange Commission (the
"Commission"):
(a) The Company's Prospectus filed as part of the Company's
Registration Statement on Form S-1 (Reg. No. 333-67011), as
filed with the Commission on November 9, 1998.
(b) The Company's Current Report on Form 8-K dated as of October
30, 1998.
(c) The Company's Current Report on Form 8-K dated as of December
10, 1998.
(d) The description of securities to be registered contained in
the Registration Statement filed with the Commission on Form
8-A under the Securities Exchange Act of 1934 (the "Exchange
Act") and declared effective on November 4, 1998, including
any amendment or reports filed for the purpose of updating
such description.
(e) All documents subsequently filed by the Company or The Banc
Corporation 401(k) Plan pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statements contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to the
extent that a statement contained herein (or in any other subsequently filed
document which is also incorporated by reference herein) modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Registration Statement except as so modified or
superseded.
II-2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain legal matters with respect to the validity of the shares of
Company Common Stock offered hereby will be passed upon for the Company by
Haskell Slaughter & Young, L.L.C., Birmingham, Alabama. Representatives of
Haskell Slaughter & Young, L.L.C. beneficially own 16,650 shares of Company
Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporate Law ("DGCL")
permits a Delaware corporation in its certificate of incorporation to limit or
eliminate, subject to certain statutory limitations, the personal liability of
their directors in certain circumstances in accordance with the statutory
provisions therein set forth. The Company's Restated Certificate of
Incorporation (the "Certificate") contains a provision eliminating or limiting
director liability to the Company and its stockholders for monetary damages
arising from acts or omissions in the director's capacity as a director. The
provision does not, however, eliminate or limit the personal liability of a
director (i) for any breach of such director's fiduciary 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 DGCL making directors personally liable, under a negligence
standard, for unlawful dividends or unlawful stock purchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. This provision offers persons who serve on the Board of Directors of
the Company protection against awards of monetary damages resulting from
breaches of their duty of care (except as indicated above). As a result of this
provision, the ability of the Company or a stockholder thereof to successfully
prosecute an action against a director for a breach of his duty of care is
limited. However, this provision does not affect the availability of equitable
remedies such as an injunction or rescission based upon a director's breach of
his duty of care. The SEC has taken the position that the provision will have
no effect on claims arising under the federal securities laws.
Section 145 of the DGCL grants corporations the right to indemnify
their directors, officers, employees and agents in accordance with the
provisions therein set forth. Section 9.2 of the Company's Certificate provides
for mandatory indemnification rights, subject to limited exceptions, to any
director, officer, employee, or agent of the Company who, by reason of the fact
that he or she is a director, officer, employee, or agent of the Company, is
involved in a legal proceeding of any nature. Such indemnification rights
include reimbursement for expenses incurred by such director, officer,
employee, or agent in advance of the final disposition of such proceeding in
accordance with the applicable provisions of the DGCL.
The Company intends to enter into agreements with all of its directors
and its executive officers pursuant to which the Company will agree to
indemnify such directors and executive officers against liability incurred by
them by reason of their services as a director to the fullest extent allowable
under applicable law. In addition, the Company has purchased insurance
containing customary terms and
II-3
<PAGE> 4
conditions as permitted by Delaware law on behalf of its directors and
executive officers, which may cover liabilities under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<S> <C>
(4)-1 The Banc Corporation Restated Certificate of
Incorporation, filed as Exhibit (3)-1 to the
Company's Registration Statement on Form S-4
(Registration No. 333-58493) is incorporated herein
by reference.
(4)-2 The Banc Corporation 401(k) Plan.
(5) Opinion of Haskell Slaughter & Young, L.L.C. as to
the legality of The Banc Corporation Common Stock
being registered.
(23)-1 Consent of Ernst & Young LLP, Independent Auditors.
(23)-2 Consent of Dudley, Hopton-Jones, Sims & Freeman,
PLLP, Independent Auditors.
(23)-3 Consent of Maudlin & Jenkins, L.L.C., Independent
Public Accountants.
(23)-4 Consent of Cochran, Wheeler & Kennedy, P.C.,
Independent Auditors.
(23)-5 Consent of Saltmarsh, Cleveland & Gund, Independent
Auditors.
(23)-6 Consent of Haskell Slaughter & Young, L.L.C.
(included in Exhibit 5).
24 Powers of Attorney (set forth on the signature page
of this Registration Statement).
</TABLE>
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
II-4
<PAGE> 5
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any 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 Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or, otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnifica tion against such liabilities (other
than payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Birmingham, State of Alabama, on January 21,
1999.
THE BANC CORPORATION
By /s/ JAMES A. TAYLOR
--------------------------------------
James A. Taylor
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James A. Taylor and David R. Carter, and
each or either of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any subsequent
registration statements relating to the offering to which this Registration
Statement relates, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully and to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or either of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board and
/s/ James A. Taylor Chief Executive officer
- -------------------------------------------- (Principal Executive Officer) January 21, 1999
James A. Taylor
Executive Vice President,
/s/ David R. Carter Chief Financial Officer and Director
- -------------------------------------------- (Principal Financial and
David R. Carter Accounting Officer) January 21, 1999
/s/ J. Daniel Sizemore President, Chief Operating Officer January 21, 1999
- -------------------------------------------- and Director
J. Daniel Sizemore
/s/ James A. Taylor, Jr. Executive Vice President, January 21, 1999
- -------------------------------------------- General Counsel, Secretary and Director
James A. Taylor, Jr.
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ James R. Andrews, M.D. Director January 21, 1999
- --------------------------------------------
James R. Andrews, M.D.
/s/ Charles Barkley Director January 21, 1999
- --------------------------------------------
Charles Barkley
/s/ Neal R. Berte Director January 21, 1999
- --------------------------------------------
Neal R. Berte
/s/ W. T. Campbell, Jr. Director January 21, 1999
- --------------------------------------------
W. T. Campbell, Jr.
/s/ Peter N. Dichiara Director January 21, 1999
- --------------------------------------------
Peter N. Dichiara
/s/ Terry DuBose Director January 21, 1999
- --------------------------------------------
Terry DuBose
/s/ K. Earl Durden Director January 21, 1999
- --------------------------------------------
K. Earl Durden
/s/ Steven C. Hays Director January 21, 1999
- --------------------------------------------
Steven C. Hays
/s/ Larry R. House Director January 21, 1999
- --------------------------------------------
Larry R. House
/s/ Thomas E. Jernigan, Jr. Director January 21, 1999
- --------------------------------------------
Thomas E. Jernigan, Jr.
/s/ Randall E. Jones Director January 21, 1999
- --------------------------------------------
Randall E. Jones
/s/ James Mailon Kent, Jr. Director January 21, 1999
- --------------------------------------------
James Mailon Kent, Jr.
/s/ Mayer Mitchell Director January 21, 1999
- --------------------------------------------
Mayer Mitchell
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ Ronald W. Orso, M.D. Director January 21, 1999
- --------------------------------------------
Ronald W. Orso, M.D.
/s/ Harold W. Ripps Director January 21, 1999
- --------------------------------------------
Harold W. Ripps
/s/ Richard M. Scrushy Director January 21, 1999
- --------------------------------------------
Richard M. Scrushy
/s/ Michael E. Stephens Director January 21, 1999
- --------------------------------------------
Michael E. Stephens
/s/ Larry D. Striplin, Jr. Director January 21, 1999
- --------------------------------------------
Larry D. Striplin, Jr.
/s/ Marie Swift Director January 21, 1999
- --------------------------------------------
Marie Swift
/s/ T. Mandell Tillman Director January 21, 1999
- --------------------------------------------
T. Mandell Tillman
/s/ Johnny Wallis Director January 21, 1999
- --------------------------------------------
Johnny Wallis
</TABLE>
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, the
Trustee and the Plan Administrator set forth below have duly caused this
Registration Statement to be signed on their behalf by the undersigned,
thereunto duly authorized, in the City of Birmingham, State of Alabama, on
January 21, 1999.
THE BANC CORPORATION 401(K) PLAN
By /s/ William K. Keith
----------------------------------------
Trustee, President and CEO
Trust Company of
Sterne, Agee & Leach, Inc.
By /s/ James A. Taylor, Jr.
----------------------------------------
Plan Administrator, Executive Vice
President, General Counsel and
Secretary
The Banc Corporation
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
- ---------------- ---------------------- -----------
<S> <S> <C>
(4)-1 The Banc Corporation Restated Certificate of Incorporation, filed as Exhibit
(3)-1 to the Company's Registration Statement on Form S-4 (Registration No.
333-58493) is incorporated herein by reference.
(4)-2 The Banc Corporation 401(k) Plan.
(5) Opinion of Haskell Slaughter & Young, L.L.C. as to the legality of The Banc
Corporation Common Stock being registered.
(23)-1 Consent of Ernst & Young LLP, Independent Auditors.
(23)-2 Consent of Dudley, Hopton-Jones, Sims & Freeman, PLLP, Independent
Auditors.
(23)-3 Consent of Maudlin & Jenkins, L.L.C., Independent Public Accountants.
(23)-4 Consent of Cochran, Wheeler & Kennedy, P.C., Independent Auditors.
(23)-5 Consent of Saltmarsh, Cleveland & Gund, Independent Auditors.
(23)-6 Consent of Haskell Slaughter & Young, L.L.C. (included in Exhibit 5).
24 Powers of Attorney (set forth on the signature page of this Registration
Statement).
</TABLE>
<PAGE> 1
Exhibit (4)-2
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
NONSTANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST/CUSTODIAL ACCOUNT
SPONSORED BY
THE TRUST COMPANY OF STERNE AGEE & LEACH, INC.
The Employer named below hereby establishes a Cash or Deferred Profit-Sharing
Plan for eligible Employees as provided in this Adoption Agreement and the
accompanying Basic Prototype Plan and Trust/Custodial Account Basic Plan
Document #04.
1. EMPLOYER INFORMATION
NOTE: If multiple Employers are adopting the Plan, complete this section
based on the lead Employer. Additional Employers may adopt this Plan
by attaching executed signature pages to the back of the Employer's
Adoption Agreement.
(a) NAME AND ADDRESS:
THE BANC CORPORATION
17 NORTH 20TH STREET
BIRMINGHAM, AL 35203
(b) TELEPHONE NUMBER: 205-326-2265
(c) TAX ID NUMBER: 63-1201350
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[X] (iii) Corporation
[ ] (iv) "S" Corporation (formerly known as Subchapter S)
1
<PAGE> 2
Prototype Cash or
Deferred Profit-
Sharing Plan #004
[ ] (v) Other:
(e) NAME(S) OF INDIVIDUAL(S) AUTHORIZED TO ISSUE INSTRUCTIONS TO THE
TRUSTEE/CUSTODIAN:
JAMES A. TAYLOR, JR.
(f) NAME OF PLAN: THE BANC CORPORATION 401(K) PLAN
(g) THREE DIGIT PLAN NUMBER FOR ANNUAL RETURN/REPORT: 001
2. EFFECTIVE DATE
(a) This is a new Plan having an effective date of JANUARY 1, 1999.
(b) This is an amended Plan.
The effective date of the original Plan was .
The effective date of the amended Plan is .
(c) If different from above, the Effective Date for the Plan's Elective
Deferral provisions shall be .
3. DEFINITIONS
(a) "Collective or Commingled Funds" (Applicable to institutional
Trustees only.) Investment in collective or commingled funds as
permitted at paragraph 13.3(b) of the Basic Plan Document #04 shall
only be made to the following specifically named fund(s):
Funds made available after the execution of this Adoption Agreement
will be listed on schedules attached to the end of this Adoption
Agreement.
(b) "Compensation" Compensation shall be determined on the basis of the:
[X] (i) Plan Year.
[ ] (ii) Employer's Taxable Year.
[ ] (iii) Calendar Year.
2
<PAGE> 3
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
Compensation shall be determined on the basis of the following
safe-harbor definition of Compensation in IRS Regulation Section
1.414(s)-1(c):
[ ] (iv) Code Section 6041 and 6051 Compensation,
[ ] (v) Code Section 3401(a) Compensation, or
[X] (vi) Code Section 415 Compensation.
Compensation [X] shall [ ] shall not include Employer contributions
made pursuant to a Salary Savings Agreement which are not includable
in the gross income of the Employee for the reasons indicated in the
definition of Compensation at 1.12 of the Basic Plan Document #04.
For purposes of the Plan, Compensation shall be limited to $, the
maximum amount which will be considered for Plan purposes. [If an
amount is specified, it will limit the amount of contributions
allowed on behalf of higher compensated Employees. Completion of
this section is not intended to coordinate with the $200,000 of Code
Section 415(d), thus the amount should be less than $200,000 as
adjusted for cost-of-living increases.]
(iii) Exclusions From Compensation:
(1) overtime.
(2) bonuses.
(3) commissions.
<TABLE>
<CAPTION>
Type of Contribution(s) Exclusion(s)
----------------------- ------------
<S> <C>
Elective Deferrals [Section 7(b)]
Matching Contributions [Section 7(c)]
Qualified Non-Elective Contributions [Section 7(d)]
and Non-Elective Contributions [Section 7(e)]
</TABLE>
(c) "Entry Date"
[ ] (i) The first day of the Plan Year nearest the date on which
an Employee meets the eligibility requirements.
3
<PAGE> 4
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
[X] (ii) The earlier of the first day of the Plan Year or the
first day of the seventh month of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
[ ] (iii) The first day of the Plan Year following the date on
which the Employee meets the eligibility requirements. If
this election is made, the Service requirement at
4(a)(ii) may not exceed 1/2 year and the age requirement
at 4(b)(ii) may not exceed 20-1/2.
[ ] (iv) The first day of the month coinciding with or following
the date on which an Employee meets the eligibility
requirements.
[ ] (v) The first day of the Plan Year, or the first day of the
fourth month, or the first day of the seventh month or
the first day of the tenth month, of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
(d) "Hours of Service" Shall be determined on the basis of the method
selected below. Only one method may be selected. The method selected
shall be applied to all Employees covered under the Plan as follows:
[X] (i) On the basis of actual hours for which an Employee is
paid or entitled to payment.
[ ] (ii) On the basis of days worked. An Employee shall be
credited with ten (10) Hours of Service if under
paragraph 1.42 of the Basic Plan Document #04 such
Employee would be credited with at least one (1) Hour of
Service during the day.
[ ] (iii) On the basis of weeks worked. An Employee shall be
credited with forty-five (45) Hours of Service if under
paragraph 1.42 of the Basic Plan Document #04 such
Employee would be credited with at least one (1) Hour of
Service during the week.
[ ] (iv) On the basis of semi-monthly payroll periods. An
Employee shall be credited with ninety-five (95) Hours of
Service if under paragraph 1.42 of the Basic Plan
Document #04 such Employee would be credited with at
least one (1) Hour of Service during the semi-monthly
payroll period.
[ ] (v) On the basis of months worked. An Employee shall be
credited with one-hundred-ninety (190) Hours of Service
if under paragraph 1.42 of the Basic Plan Document #04
such Employee would be credited with at least one (1)
Hour of Service during the month.
4
<PAGE> 5
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
(e) "Limitation Year" The 12-consecutive month period commencing on
JANUARY 1 and ending on DECEMBER 31.
(f) "Net Profit"
[X] (i) Not applicable (profits will not be required for any
contributions to the Plan).
[ ] (ii) As defined in paragraph 1.49 of the Basic Plan Document
#04.
[ ] (iii) Shall be defined as: (Only use if definition in
paragraph 1.49 of the Basic Plan Document #04 is to be
superseded.)
(g) "Plan Year" The 12-consecutive month period commencing on JANUARY 1
and ending on DECEMBER 31.
(h) "Qualified Early Retirement Age" For purposes of making
distributions under the provisions of a Qualified Domestic Relations
Order, the Plan's Qualified Early Retirement Age with regard to the
Participant against whom the order is entered [X] shall [ ] shall
not be the date the order is determined to be qualified. If "shall"
is elected, this will only allow payout to the alternate payee(s).
(i) "Qualified Joint and Survivor Annuity" The safe-harbor provisions of
paragraph 8.7 of the Basic Plan Document #04 [ ] are [X] are not
applicable. If not applicable, the survivor annuity shall be 50%
(50%, 66-2/3%, 75% or 100%) of the annuity payable during the lives
of the Participant and Spouse. If no answer is specified, 50% will
be used.
(j) "Taxable Wage Base" [paragraph 1.79]
[X] (i) Not Applicable - Plan is not integrated with Social
Security.
[ ] (ii) The maximum earnings considered wages for such Plan Year
under Code Section 3121(a).
[ ] (iii) % (not more than 100%) of the amount considered wages
for such Plan Year under Code Section 3121(a).
[ ] (iv) $, provided that such amount is not in excess of the
amount determined under paragraph 3(j)(ii) above.
5
<PAGE> 6
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
[ ] (v) For the 1989 Plan Year $10,000. For all subsequent Plan
Years, 20% of the maximum earnings considered wages for
such Plan Year under Code Section 3121(a).
NOTE: Using less than the maximum at (ii) may result in a change in
the allocation formula in Section 7.
(k) "Valuation Date(s)" Allocations to Participant Accounts will be done
in accordance with Article V of the Basic Plan Document #04:
(i) Daily (v) Quarterly
(ii) Weekly (vi) Semi-Annually
(iii) Monthly (vii) Annually
(iv) Bi-Monthly
Indicate Valuation Date(s) to be used by specifying option from list
above:
<TABLE>
<CAPTION>
Type of Contribution(s) Valuation Date(s)
----------------------- -----------------
<S> <C>
After-Tax Voluntary Contributions [Section 6(b)] N/A
Elective Deferrals [Section 6(a)] I
Matching Contributions [Section 7(c)] I
Qualified Non-Elective Contributions [Section 7(d)] N/A
Non-Elective Contributions [Section 7(e), (f), (g)] N/A
Minimum Top-Heavy Contributions [Section 7(i)] I
</TABLE>
(l) "Year of Service"
(i) For Eligibility Purposes: The 12-consecutive month period
during which an Employee is credited with 1000 (not more than
1,000) Hours of Service.
(ii) For Allocation Accrual Purposes: The 12-consecutive month
period during which an Employee is credited with 1000 (not
more than 1,000) Hours of Service.
6
<PAGE> 7
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
(iii) For Vesting Purposes: The 12-consecutive month period during
which an Employee is credited with 1000 (not more than 1,000)
Hours of Service.
4. ELIGIBILITY REQUIREMENTS
(a) Service:
[ ] (i) The Plan shall have no service requirement.
[X] (ii) The Plan shall cover only Employees having completed at
least 1 [not more than three (3)] Years of Service. If
more than one (1) is specified, for Plan Years beginning
in 1989 and later, the answer will be deemed to be one
(1).
NOTE: If the eligibility period selected is less than one year, an
Employee will not be required to complete any specified number of
Hours of Service to receive credit for such period.
(b) Age:
[ ] (i) The Plan shall have no minimum age requirement.
[X] (ii) The Plan shall cover only Employees having attained age
21 (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the age and service
requirements with the following exceptions:
[ ] (i) No exceptions.
[X] (ii) The Plan shall exclude Employees included in a unit of
Employees covered by a collective bargaining agreement
between the Employer and Employee Representatives, if
retirement benefits were the subject of good faith
bargaining. For this purpose, the term "Employee
Representative" does not include any organization more
than half of whose members are Employees who are owners,
officers, or executives of the Employer.
[X] (iii) The Plan shall exclude Employees who are nonresident
aliens and who receive no earned income from the Employer
which constitutes income from sources within the United
States.
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[ ] (iv) The Plan shall exclude from participation any
nondiscriminatory classification of Employees determined
as follows:
_________________________________
_________________________________
(d) Employees on Effective Date:
[ ] (i) Not Applicable. All Employees will be required to
satisfy both the age and Service requirements specified
above.
[X] (ii) Employees employed on the Plan's Effective Date do not
have to satisfy the Service requirements specified above.
[X] (iii) Employees employed on the Plan's Effective Date do not
have to satisfy the age requirements specified above.
5. RETIREMENT AGES
(a) Normal Retirement Age:
If the Employer imposes a requirement that Employees retire upon
reaching a specified age, the Normal Retirement Age selected below
may not exceed the Employer imposed mandatory retirement age.
[X] (i) Normal Retirement Age shall be 65 (not to exceed age 65).
[ ] (ii) Normal Retirement Age shall be the later of attaining
age (not to exceed age 65) or the (not to exceed the 5th)
anniversary of the first day of the first Plan Year in
which the Participant commenced participation in the
Plan.
(b) Early Retirement Age:
[ ] (i) Not Applicable.
[X] (ii) The Plan shall have an Early Retirement Age of 55 (not
less than 55) and completion of 6 Years of Service.
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6. EMPLOYEE CONTRIBUTIONS
[X] (a) Participants shall be permitted to make Elective
Deferrals in any amount from 1% up to 15% of their
Compensation.
If (a) is applicable, Participants shall be permitted to
amend their Salary Savings Agreements to change the
contribution percentage as provided below:
[ ] (i) On the Anniversary Date of the Plan,
[ ] (ii) On the Anniversary Date of the Plan and on the
first day of the seventh month of the Plan
Year,
[X] (iii) On the Anniversary Date of the Plan and on the
first day of each calendar quarter, or
[ ] (iv) Upon 30 days notice to the Employer.
[ ] (b) Participants shall be permitted to make after tax
Voluntary Contributions.
[ ] (c) Participants shall be required to make after tax
Voluntary Contributions as follows (Thrift Savings Plan):
[ ] (i) % of Compensation.
[ ] (ii) A percentage determined by the Employee on his
or her enrollment form.
[X] (d) If necessary to pass the Average Deferral Percentage
Test, Participants [ ] may [X] may not have Elective
Deferrals recharacterized as Voluntary Contributions.
NOTE: The Average Deferral Percentage Test will apply to
contributions under (a) above. The Average Contribution
Percentage Test will apply to contributions under (b)
and (c) above, and may apply to (a).
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7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE: The Employer shall make contributions to the Plan in accordance
with the formula or formulas selected below. The Employer's
contribution shall be subject to the limitations contained in
Articles III and X. For this purpose, a contribution for a Plan Year
shall be limited for the Limitation Year which ends with or within
such Plan Year. Also, the integrated allocation formulas below are
for Plan Years beginning in 1989 and later. The Employer's
allocation for earlier years shall be as specified in its Plan prior
to amendment for the Tax Reform Act of 1986.
(a) Profits Requirement:
(i) Current or Accumulated Net Profits are required for:
[ ] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective Contributions.
[ ] (C) discretionary contributions.
(ii) No Net Profits are required for:
[X] (A) Matching Contributions.
[N/A] (B) Qualified Non-Elective Contributions.
[N/A] (C) discretionary contributions.
NOTE: Elective Deferrals can always be contributed regardless of
profits.
[X] (b) Salary Savings Agreement:
The Employer shall contribute and allocate to each Participant's
account an amount equal to the amount withheld from the Compensation
of such Participant pursuant to his or her Salary Savings Agreement.
If applicable, the maximum percentage is specified in Section 6
above.
An Employee who has terminated his or her election under the Salary
Savings Agreement other than for hardship reasons may not make
another Elective Deferral:
[ ] (i) until the first day of the next Plan Year.
[ ] (ii) until the first day of the next valuation period.
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[X] (iii) for a period of 6 month(s) (not to exceed 12 months).
[X] (c) Matching Employer Contribution [See paragraphs (h) and (i)]:
[ ] (i) PERCENTAGE MATCH: The Employer shall contribute and
allocate to each eligible Participant's account an amount
equal to % of the amount contributed and allocated in
accordance with paragraph 7(b) above and (if checked) %
of [ ] the amount of Voluntary Contributions made in
accordance with paragraph 4.1 of the Basic Plan Document
#04. The Employer shall not match Participant Elective
Deferrals as provided above in excess of $ or in excess
of % of the Participant's Compensation or if applicable,
Voluntary Contributions in excess of $ or in excess of %
of the Participant's Compensation. In no event will the
match on both Elective Deferrals and Voluntary
Contributions exceed a combined amount of $ or %.
[X] (ii) DISCRETIONARY MATCH: The Employer shall contribute and
allocate to each eligible Participant's account a
percentage of the Participant's Elective Deferral
contributed and allocated in accordance with paragraph
7(b) above. The Employer shall set such percentage prior
to the end of the Plan Year. The Employer shall not match
Participant Elective Deferrals in excess of $ or in
excess of 6% of the Participant's Compensation.
[ ] (iii) TIERED MATCH: The Employer shall contribute and allocate
to each Participant's account an amount equal to % of the
first % of the Participant's Compensation, to the extent
deferred.
% of the next % of the Participant's Compensation, to the
extent deferred.
% of the next % of the Participant's Compensation, to the
extent deferred.
NOTE: Percentages specified in (iii) above may not increase as the
percentage of Participant's contribution increases.
[ ] (iv) FLAT DOLLAR MATCH: The Employer shall contribute and
allocate to each Participant's account $ if the
Participant defers at least 1% of Compensation.
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[ ] (v) PERCENTAGE OF COMPENSATION MATCH: The Employer shall
contribute and allocate to each Participant's account %
of Compensation if the Participant defers at least 1% of
Compensation.
[ ] (vi) PROPORTIONATE COMPENSATION MATCH: The Employer shall
contribute and allocate to each Participant who defers at
least 1% of Compensation, an amount determined by
multiplying such Employer Matching Contribution by a
fraction the numerator of which is the Participant's
Compensation and the denominator of which is the
Compensation of all Participants eligible to receive such
an allocation. The Employer shall set such discretionary
contribution prior to the end of the Plan Year.
[X] (vii) QUALIFIED MATCH: Employer Matching Contributions will be
treated as Qualified Matching Contributions to the extent
specified below:
[ ] (A) All Matching Contributions.
[X] (B) None.
[ ] (C) % of the Employer's Matching Contribution.
[ ] (D) Up to % of each Participant's Compensation.
[ ] (E) The amount necessary to meet the [ ] Average
Deferral Percentage (ADP) Test, [ ] Average
Contribution Percentage (ACP) Test, [ ] Both the
ADP and ACP Tests.
(viii) MATCHING CONTRIBUTION COMPUTATION PERIOD: The time
period upon which matching contributions will be based
shall be
[ ] (A) weekly
[ ] (B) bi-weekly
[ ] (C) semi-monthly
[ ] (D) monthly
[ ] (E) quarterly
[ ] (F) semi-annually
[X] (G) annually
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(ix) ELIGIBILITY FOR MATCH: Employer Matching Contributions,
whether or not Qualified, will only be made on Employee
Contributions not withdrawn prior to the end of the [ ]
valuation period [X] Plan Year.
[ ] (d) Qualified Non-Elective Employer Contribution - [See paragraphs (h)
and (i)] These contributions are fully vested when contributed.
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each eligible
Employee in proportion to his or her Compensation as a percentage of
the Compensation of all eligible Employees. This part of the
Employer's contribution and the allocation thereof shall be
unrelated to any Employee contributions made hereunder. The amount
of Qualified non-Elective Contributions taken into account for
purposes of meeting the ADP or ACP test requirements is:
[ ] (i) All such Qualified non-Elective Contributions.
[ ] (ii) The amount necessary to meet [ ] the ADP test, [ ] the
ACP test, [ ] Both the ADP and ACP tests.
Qualified non-Elective Contributions will be made to:
[ ] (iii) All Employees eligible to participate.
[ ] (iv) Only non-Highly Compensated Employees eligible to
participate.
[ ] (e) Additional Employer Contribution Other Than Qualified Non-Elective
Contributions - Non-Integrated [See paragraphs (h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each eligible
Employee in proportion to his or her Compensation as a percentage of
the Compensation of all eligible Employees. This part of the
Employer's contribution and the allocation thereof shall be
unrelated to any Employee contributions made hereunder.
[ ] (f) Additional Employer Contribution - Integrated Allocation Formula
[See paragraphs (h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution. The Employer's contribution for the Plan
Year plus any forfeitures shall be allocated to the accounts of
eligible Participants as follows:
(i) First, to the extent contributions and forfeitures are
sufficient, all Participants will receive an allocation equal
to 3% of their Compensation.
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(ii) Next, any remaining Employer Contributions and forfeitures
will be allocated to Participants who have Compensation in
excess of the Taxable Wage Base (excess Compensation). Each
such Participant will receive an allocation in the ratio that
his or her excess compensation bears to the excess
Compensation of all Participants. Participants may only
receive an allocation of 3% of excess Compensation.
(iii) Next, any remaining Employer contributions and forfeitures
will be allocated to all Participants in the ratio that their
Compensation plus excess Compensation bears to the total
Compensation plus excess Compensation of all Participants.
Participants may only receive an allocation of up to 2.7% of
their Compensation plus excess Compensation, under this
allocation method. If the Taxable Wage Base defined at Section
3(j) is less than or equal to the greater of $10,000 or 20% of
the maximum, the 2.7% need not be reduced. If the amount
specified is greater than the greater of $10,000 or 20% of the
maximum Taxable Wage Base, but not more than 80%, 2.7% must be
reduced to 1.3%. If the amount specified is greater than 80%
but less than 100% of the maximum Taxable Wage Base, the 2.7%
must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy minimum
contribution or benefit is provided under another Plan [see
Section 11(c)(ii)] covering the same Employees, sub-paragraphs
(i) and (ii) above may be disregarded and 5.7%, 4.3% or 5.4%
may be substituted for 2.7%, 1.3% or 2.4% where it appears in
(iii) above.
(iv) Next, any remaining Employer contributions and forfeitures
will be allocated to all Participants (whether or not they
received an allocation under the preceding paragraphs) in the
ratio that each Participant's Compensation bears to all
Participants' Compensation.
[ ] (g) Additional Employer Contribution-Alternative Integrated Allocation
Formula. [See paragraph (h) and (i)]
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The Employer shall have the right to make an additional
discretionary contribution. To the extent that such contributions
are sufficient, they shall be allocated as follows:
% of each eligible Participant's Compensation plus % of Compensation
in excess of the Taxable Wage Base defined at Section 3(j) hereof.
The percentage on excess compensation may not exceed the lesser of
(i) the amount first specified in this paragraph or (ii) the greater
of 5.7% or the percentage rate of tax under Code Section 3111(a) as
in effect on the first day of the Plan Year attributable to the Old
Age (OA) portion of the OASDI provisions of the Social Security Act.
If the Employer specifies a Taxable Wage Base in Section 3(j) which
is lower than the Taxable Wage Base for Social Security purposes
(SSTWB) in effect as of the first day of the Plan Year, the
percentage contributed with respect to excess Compensation must be
adjusted. If the Plan's Taxable Wage Base is greater than the larger
of $10,000 or 20% of the SSTWB but not more than 80% of the SSTWB,
the excess percentage is 4.3%. If the Plan's Taxable Wage Base is
greater than 80% of the SSTWB but less than 100% of the SSTWB, the
excess percentage is 5.4%.
NOTE: Only one plan maintained by the Employer may be integrated
with Social Security.
(h) Allocation of Excess Amounts (Annual Additions)
In the event that the allocation formula above results in an Excess
Amount, such excess shall be:
[ ] (i) placed in a suspense account accruing no gains or losses
for the benefit of the Participant.
[X] (ii) reallocated as additional Employer contributions to all
other Participants to the extent that they do not have
any Excess Amount.
(i) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the sum of the
contributions and forfeitures as allocated to eligible Employees
under paragraphs 7(d), 7(e), 7(f), 7(g) and 9 of this Adoption
Agreement shall not be less than the amount required under paragraph
14.2 of the Basic Plan document #04. Top-Heavy minimums will be
allocated to:
[ ] (i) all eligible Participants.
[X] (ii) only eligible non-Key Employees who are Participants.
(j) Return of Excess Contributions and/or Excess Aggregate
Contributions:
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In the event that one or more Highly Compensated Employees is
subject to both the ADP and ACP tests and the sum of such tests
exceeds the Aggregate Limit, the limit will be satisfied by reducing
the:
[ ] (i) the ADP of the affected Highly Compensated Employees.
[ ] (ii) the ACP of the affected Highly Compensated Employees.
[X] (iii) a combination of the ADP and ACP of the affected Highly
Compensated Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
[ ] (a) The Employer will not allocate Employer related contributions
to Employees who terminate during a Plan Year, unless required
to satisfy the requirements of Code Section 401(a)(26) and
410(b). (These requirements are effective for 1989 and
subsequent Plan Years.)
[X] (b) The Employer will allocate Employer matching and other related
contributions as indicated below to Employees who terminate
during the Plan Year as a result of:
Matching Other
[X] [ ] (i) Retirement.
[X] [ ] (ii) Disability.
[X] [ ] (iii) Death.
[ ] [ ] (iv) Other termination of employment provided that
the Participant has completed a Year of Service as
defined for Allocation Accrual Purposes.
[ ] [ ] (v) Other termination of employment even though the
Participant has not completed a Year of Service.
[ ] [ ] (vi) Termination of employment (for any reason)
provided that the Participant had completed a Year
of Service for Allocation Accrual Purposes.
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9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to forfeitures of amounts
other than Excess Aggregate Contributions.
(a) Allocation Alternatives:
If forfeitures are allocated to Participants, such allocation shall
be done in the same manner as the Employer's contribution.
[ ] (i) Not Applicable. All contributions are always fully
vested.
[ ] (ii) Forfeitures shall be allocated to Participants in the
same manner as the Employer's contribution.
If allocation to other Participants is selected, the
allocation shall be as follows:
[1] Amount attributable to Employer discretionary
contributions and Top-Heavy minimums will be
allocated to:
[ ] all eligible Participants under the Plan.
[ ] only those Participants eligible for an
allocation of Employer contributions in the
current year.
[ ] only those Participants eligible for an
allocation of matching contributions in the
current year.
[2] Amounts attributable to Employer Matching
contributions will be allocated to:
[ ] all eligible Participants.
[ ] only those Participants eligible for
allocations of matching contributions in the
current year.
[X] (iii) Forfeitures shall be applied to reduce the Employer's
contribution for such Plan Year.
[ ] (iv) Forfeitures shall be applied to offset administrative
expenses of the Plan. If forfeitures exceed these
expenses, (iii) above shall apply.
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(b) Date for Reallocation:
NOTE: If no distribution has been made to a former Participant,
sub-section (i) below will apply to such Participant even if the
Employer elects (ii), (iii) or (iv) below as its normal
administrative policy.
[ ] (i) Forfeitures shall be reallocated at the end of the Plan
Year during which the former Participant incurs his or
her fifth consecutive one year Break In Service.
[ ] (ii) Forfeitures will be reallocated immediately (as of the
next Valuation Date).
[ ] (iii) Forfeitures shall be reallocated at the end of the Plan
Year during which the former Employee incurs his or her
(1st, 2nd, 3rd, or 4th) consecutive one year Break In
Service.
[X] (iv) Forfeitures will be reallocated immediately (as of the
Plan Year end).
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive 1-year Breaks in
Service, the Funds for restoration of account balances will be
obtained from the following resources in the order indicated (fill
in the appropriate number):
[1] (i) Current year's forfeitures.
[2] (ii) Additional Employer contribution.
[3] (iii) Income or gain to the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall be:
[X] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures under the Plan,
to the Matching Contribution account of each non-highly
compensated Participant who made Elective Deferrals or
Voluntary Contributions in the ratio which each such
Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for such Plan
Year. Such forfeitures cannot be allocated to the account
of any Highly Compensated Employee.
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Forfeitures of Excess Aggregate Contributions will be so applied at
the end of the Plan Year in which they occur.
10. CASH OPTION
[ ] (a) The Employer may permit a Participant to elect to defer to the
Plan, an amount not to exceed % of any Employer paid cash
bonus made for such Participant for any year. A Participant
must file an election to defer such contribution at least
fifteen (15) days prior to the end of the Plan Year. If the
Employee fails to make such an election, the entire Employer
paid cash bonus to which the Participant would be entitled
shall be paid as cash and not to the Plan. Amounts deferred
under this section shall be treated for all purposes as
Elective Deferrals. Notwithstanding the above, the election to
defer must be made before the bonus is made available to the
Participant.
[X] (b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS
[X] This is the only Plan the Employer maintains or ever maintained,
therefore, this section is not applicable.
[ ] The Employer does maintain or has maintained another Plan
(including a Welfare Benefit Fund or an individual medical account
(as defined in Code Section 415(l)(2)), under which amounts are
treated as Annual Additions) and has completed the proper sections
below.
Complete (a), (b) and (c) only if the Employer maintains or ever
maintained another qualified plan, including a Welfare Benefit Fund
or an individual medical account [as defined in Code Section
415(l)(2)] in which any Participant in this Plan is (or was) a
participant or could possibly become a participant.
(a) If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer, other than a Master or
Prototype Plan:
[ ] (i) the provisions of Article X of the Basic Plan Document
#04 will apply, as if the other plan were a Master or
Prototype Plan.
[ ] (ii) Attach provisions stating the method under which the
plans will limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any Excess
Amounts, in a manner that precludes Employer discretion.
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(b) If a Participant is or ever has been a participant in a Defined
Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0 limitation of Code
Section 415(e). Such language must preclude Employer discretion. The
Employer must also specify the interest and mortality assumptions
used in determining Present Value in the Defined Benefit Plan.
(c) The minimum contribution or benefit required under Code Section 416
relating to Top-Heavy Plans shall be satisfied by:
[ ] (i) this Plan.
[ ] (ii)
(Name of other qualified plan of the Employer).
[ ] (iii) Attach provisions stating the method under which the
minimum contribution and benefit provisions of Code
Section 416 will be satisfied. If a Defined Benefit Plan
is or was maintained, an attachment must be provided
showing interest and mortality assumptions used in the
Top-Heavy Ratio.
12. VESTING
Employees shall have a fully vested and nonforfeitable interest in any
Employer contribution and the investment earnings thereon made in
accordance with paragraphs (select one or more options) [ ] 7(c), [ ]
7(e), [ ] 7(f), [ ] 7(g) and [ ] 7(i) hereof. Contributions under
paragraph 7(b), 7(c)(vii) and 7(d) are always fully vested. If one or more
of the foregoing options are not selected, such Employer contributions
shall be subject to the vesting table selected by the Employer.
Each Participant shall acquire a vested and nonforfeitable percentage in
his or her account balance attributable to Employer contributions and the
earnings thereon under the procedures selected below except with respect
to any Plan Year during which the Plan is Top-Heavy, in which case the
Two-twenty vesting schedule [Option (b)(iv)] shall automatically apply
unless the Employer has already elected a faster vesting schedule. If the
Plan is switched to option (b)(iv), because of its Top-Heavy status, that
vesting schedule will remain in effect even if the Plan later becomes
non-Top-Heavy until the Employer executes an amendment of this Adoption
Agreement indicating otherwise.
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(a) Computation Period:
The computation period for purposes of determining Years of Service
and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from
Employer contributions:
[ ] (i) shall not be applicable since Participants are always
fully vested,
[ ] (ii) shall commence on the date on which an Employee first
performs an Hour of Service for the Employer and each
subsequent 12-consecutive month period shall commence on
the anniversary thereof, or
[X] (iii) shall commence on the first day of the Plan Year during
which an Employee first performs an Hour of Service for
the Employer and each subsequent 12-consecutive month
period shall commence on the anniversary thereof.
A Participant shall receive credit for a Year of Service if he or she
completes at least 1,000 Hours of Service [or if lesser, the number of
hours specified at 3(l)(iii) of this Adoption Agreement] at any time
during the 12-consecutive month computation period. Consequently, a Year
of Service may be earned prior to the end of the 12-consecutive month
computation period and the Participant need not be employed at the end of
the 12-consecutive month computation period to receive credit for a Year
of Service.
(b) Vesting Schedules:
NOTE: The vesting schedules below only apply to a Participant who has at
least one Hour of Service during or after the 1989 Plan Year. If
applicable, Participants who separated from Service prior to the
1989 Plan Year will remain under the vesting schedule as in effect
in the Plan prior to amendment for the Tax Reform Act of 1986.
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(i) Full and immediate vesting.
Years of Service
<TABLE>
<CAPTION>
1 2 3 4 5 6 7
-- --- --- -- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
(ii) % 100%
(iii) % % 100%
(iv) % 20% 40% 60% 80% 100%
(v) % % 20% 40% 60% 80% 100%
(vi) 10% 20% 30% 40% 60% 80% 100%
(vii) 20% 40% 60% 80% 100%
-- --- --- -- --- --- ---
(viii) % % % % % % 100%
</TABLE>
NOTE: The percentages selected for schedule (viii) may not be less for any
year than the percentages shown at schedule (v).
[X] All contributions other than those which are fully vested when
contributed will vest under schedule VII above.
[ ] Contributions other than those which are fully vested when
contributed will vest as provided below:
<TABLE>
<CAPTION>
Vesting
Option Selected Type Of Employer Contribution
--------------- -----------------------------
<S> <C>
______________ 7(c) Employer Match on Salary Savings
______________ 7(c) Employer Match on Employee Voluntary
______________ 7(e) Employer Discretionary
______________ 7(f) & (g) Employer Discretionary - Integrated
</TABLE>
(c) Service disregarded for Vesting:
[X] (i) Not Applicable. All Service shall be considered.
[ ] (ii) Service prior to the Effective Date of this Plan or a
predecessor plan shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
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[ ] (iii) Service prior to a Participant having attained age 18
shall be disregarded when computing a Participant's
vested and nonforfeitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for eligibility, Hours
of Service shall include Service with the following predecessor
organization(s):
(These hours will also be used for vesting purposes.)
WARRIOR CAPITAL CORPORATION, COMMERICAL BANCSHARES OF ROANOKE, INC.
CITY NATIONAL CORPORATION, FIRST CITIZENS BANCORP, INC., COMMERCE BANK,
AND ANY OTHER PREDECESSOR ORGANIZATION ACQUIRED BY THE BANC CORPORATION
AS APPROVED BY THE BOARD.
14. ROLLOVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, as described at paragraph 4.3 of the Basic
Plan Document #04, [X] shall [ ] shall not be permitted. If
permitted, Employees [ ] may [X] may not make Rollover Contributions
prior to meeting the eligibility requirements for participation in
the Plan.
(b) Transfer Contributions, as described at paragraph 4.4 of the Basic
Plan Document #04 [X] shall [ ] shall not be permitted. If
permitted, Employees [ ] may [X] may not make Transfer Contributions
prior to meeting the eligibility requirements for participation in
the Plan.
NOTE: Even if available, the Employer may refuse to accept such
contributions if its Plan meets the safe-harbor rules of paragraph
8.7 of the Basic Plan Document #04.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Basic Plan
Document #04, [X] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.5 of the Basic Plan
Document #04, [X] are [ ] are not permitted. If permitted, repayments of
principal and interest shall be repaid to [X] the Participant's segregated
account or [ ] the general Fund.
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17. INSURANCE POLICIES
The insurance provisions of paragraph 13.6 of the Basic Plan Document #04
[ ] shall [X] shall not be applicable.
18. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth in paragraph
13.7 of the Basic Plan Document #04, [x] shall [ ] shall not be
applicable.
19. EMPLOYEE INVESTMENT DIRECTION
(a) The Employee investment direction provisions, as set forth in
paragraph 13.8 of the Basic Plan Document #04, [X] shall [ ] shall
not be applicable.
If applicable, Participants may direct their investments:
[X] (i) among funds offered by the Trustee.
[ ] (ii) among any allowable investments.
(b) Participants may direct the following kinds of contributions and the
earnings thereon (check all applicable):
[X] (i) All Contributions
[ ] (ii) Elective Deferrals
[ ] (iii) Employee Voluntary Contributions (after-tax)
[ ] (iv) Employee Mandatory Contributions (after-tax)
[ ] (v) Employer Qualified Matching Contributions
[ ] (vi) Other Employer Matching Contributions
[ ] (vii) Employer Qualified Non-Elective Contributions
[ ] (viii) Employer Discretionary Contributions
[ ] (ix) Rollover Contributions
24
<PAGE> 25
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
[ ] (x) Transfer Contributions
[ ] (xi) All of above which are checked, but only to the extent
that the Participant is vested in those contributions.
NOTE: To the extent that Employee investment direction was previously
allowed, the Trustee shall have the right to either make the assets
part of the general Trust, or leave them as separately invested
subject to the rights of paragraph 13.8.
20. EARLY PAYMENT OPTION
(a) A Participant who separates from Service prior to retirement, death
or Disability [X] may [ ] may not make application to the Employer
requesting an early payment of his or her vested account balance.
(b) A Participant who has attained age 59-1/2 and who has not separated
from Service [ ] may [X] may not obtain a distribution of his or her
vested Employer contributions. Distribution can only be made if the
Participant is 100% vested.
(c) A Participant who has attained the Plan's Normal Retirement Age and
who has not separated from Service [X] may [ ] may not receive a
distribution of his or her vested account balance.
NOTE: If the Participant has had the right to withdraw his or her account
balance in the past, this right may not be taken away.
Notwithstanding the above, to the contrary, required minimum
distributions will be paid. For timing of distributions, see item
21(a) below.
21. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination for other than death, Disability or
retirement, benefits shall be paid:
[ ] (i) As soon as administratively feasible, following the
close of the valuation period during which a
distribution is requested or is otherwise payable.
[ ] (ii) As soon as administratively feasible following the close
of the Plan Year during which a distribution is requested
or is otherwise payable.
[X] (iii) As soon as administratively feasible, following the date
on which a distribution is requested or is otherwise
payable.
25
<PAGE> 26
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
[ ] (iv) As soon as administratively feasible, after the close of
the Plan Year during which the Participant incurs
consecutive one-year Breaks in Service.
[ ] (v) Only after the Participant has achieved the Plan's
Normal Retirement Age, or Early Retirement Age, if
applicable.
In cases of death, Disability or retirement, benefits shall be paid:
[ ] (vi) As soon as administratively feasible, following the
close of the valuation period during which a distribution
is requested or is otherwise payable.
[ ] (vii) As soon as administratively feasible following the close
of the Plan Year during which a distribution is requested
or is otherwise payable.
[X] (viii) As soon as administratively feasible, following the date
on which a distribution is requested or is otherwise
payable.
(b) Optional Forms of Payment:
[X] (i) Lump Sum.
[X] (ii) Installment Payments.
[X] (iii) Life Annuity*.
[X] (iv) Life Annuity Term Certain*.
Life Annuity with payments
guaranteed for years (not to exceed 20 years, specify all
applicable).
[X] (v) Joint and [X] 50%, [ ] 66-2/3%, [ ] 75% or [ ] 100%
survivor annuity* (specify all applicable).
[X] (vi) Other form(s) specified: ANY FORM OF ANNUITY AVAILABLE
*Not available in Plan meeting provisions of paragraph 8.7 of Basic
Plan
(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan, Participants
and/or their Spouse (Surviving Spouse) [X] shall [ ] shall not have
the right to have their life expectancy recalculated annually.
26
<PAGE> 27
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
If "shall",
[ ] only the Participant shall be recalculated.
[ ] both the Participant and Spouse shall be recalculated.
[X] who is recalculated shall be determined by the Participant.
22. SPONSOR CONTACT
Employers should direct questions concerning the language contained in and
qualification of the Prototype to:
ELIZABETH L. MOZLEY
(Job Title) ASSISTANT VICE PRESIDENT
(Phone Number) 205-414-3300
In the event that the Sponsor amends, discontinues or abandons this
Prototype Plan, notification will be provided to the Employer's address
provided on the first page of this Agreement.
27
<PAGE> 28
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
23. SIGNATURES:
DUE TO THE SIGNIFICANT TAX RAMIFICATIONS, THE SPONSOR RECOMMENDS THAT
BEFORE YOU EXECUTE THIS ADOPTION AGREEMENT, YOU CONTACT YOUR ATTORNEY OR
TAX ADVISOR, IF ANY.
(a) EMPLOYER:
Name and address of Employer if different than specified in Section
1 above.
This agreement and the corresponding provisions of the Plan and
Trust/Custodial Account Basic Plan Document #04 were adopted by the
Employer the 21st day of January, 1999.
Signed for the Employer by: JAMES A. TAYLOR, JR.
Title: EXECUTIVE VICE PRESIDENT
Signature: /s/ James A. Taylor, Jr.
--------------------------------
THE EMPLOYER UNDERSTANDS THAT ITS FAILURE TO PROPERLY COMPLETE THE
ADOPTION AGREEMENT MAY RESULT IN DISQUALIFICATION OF ITS PLAN.
Employer's Reliance: The adopting Employer may not rely on an
opinion letter issued by the National Office of the Internal Revenue
Service as evidence that the Plan is qualified under Code Section
401. In order to obtain reliance with respect to Plan qualification,
the Employer must apply to the appropriate Key District Office for a
determination letter.
This Adoption Agreement may only be used in conjunction with Basic
Plan Document #04.
28
<PAGE> 29
PROTOTYPE CASH OR
DEFERRED PROFIT-
SHARING PLAN #004
[X] (b) TRUSTEE:
Name of Trustee:
THE TRUST COMPANY OF STERNE, AGEE & LEACH, INC.
The assets of the Fund shall be invested in accordance with
paragraph 13.3 of the Basic Plan Document #04 as a Trust. As such,
the Employer's Plan as contained herein was accepted by the Trustee
the 21st day of January, 1999.
Signed for the Trustee by: WILLIAM W. KEITH
Title: PRESIDENT & CEO
Signature: /s/ William W. Keith
--------------------- --------------------
[ ] (c) CUSTODIAN:
Name of Custodian: THE TRUST COMPANY OF STERNE, AGEE & LEACH, INC.
The assets of the Fund shall be invested in accordance with
paragraph 13.4 of the Basic Plan Document #04 as a Custodial
Account. As such, the Employer's Plan as contained herein was
accepted by the Custodian the 21st day of January, 1999.
Signed for the Custodian by: WILLIAM K. KEITH
Title: PRESIDENT & CEO
Signature: /s/ William W. Keith
--------------------- --------------------
(d) SPONSOR:
The Employer's Agreement and the corresponding provisions of the
Plan and Trust/Custodial Account Basic Plan Document #04 were
accepted by the Sponsor the 21st day of January, 1999.
Signed for the Sponsor by: ELIZABETH L. MOZLEY
Title: ASSISTANT VICE PRESIDENT & TRUST OFFICER
Signature: /s/ Elizabeth L. Mozley
----------------------------------------------
29
<PAGE> 30
EXHIBIT (4)-2
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN
AND TRUST/CUSTODIAL ACCOUNT
SPONSORED BY
THE TRUST COMPANY OF STERNE, AGEE & LEACH, INC.
BIRMINGHAM, ALABAMA
BASIC PLAN DOCUMENT #04
FEBRUARY 1993
COPYRIGHT 1993 THE MCKAY HOCHMAN COMPANY, INC.
<PAGE> 31
THIS DOCUMENT IS COPYRIGHTED UNDER THE LAWS OF THE UNITED STATES. USE,
DUPLICATION OR REPRODUCTION, INCLUDING THE USE OF ELECTRONIC MEANS, IS
PROHIBITED BY LAW WITHOUT THE EXPRESS CONSENT OF THE AUTHOR.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PARAGRAPH PAGE
--------- ----
ARTICLE I
DEFINITIONS
<S> <C> <C>
1.1 Actual Deferral Percentage 1
1.2 Adoption Agreement 1
1.3 Aggregate Limit 1
1.4 Annual Additions 2
1.5 Annuity Starting Date 2
1.6 Applicable Calendar Year 2
1.7 Applicable Life Expectancy 2
1.8 Average Contribution Percentage (ACP) 2
1.9 Average Deferral Percentage (ADP) 2
1.10 Break In Service 2
1.11 Code 3
1.12 Compensation 3
1.13 Contribution Percentage 4
1.14 Custodian 5
1.15 Defined Benefit Plan 5
1.16 Defined Benefit (Plan) Fraction 5
1.17 Defined Contribution Dollar Limitation 5
1.18 Defined Contribution Plan 5
1.19 Defined Contribution (Plan) Fraction 5
1.20 Designated Beneficiary 6
1.21 Disability 6
1.22 Distribution Calendar Year 6
1.23 Early Retirement Age 6
1.24 Earned Income 6
1.25 Effective Date 6
1.26 Election Period 6
1.27 Elective Deferral 6
1.28 Eligible Participant 7
1.29 Employee 7
1.30 Employer 7
1.31 Entry Date 7
1.32 Excess Aggregate Contributions 7
1.33 Excess Amount 7
1.34 Excess Contribution 7
1.35 Excess Elective Deferrals 8
1.36 Family Member 8
1.37 First Distribution Calendar Year 8
1.38 Fund 8
1.39 Hardship 8
1.40 Highest Average Compensation 8
1.41 Highly Compensated Employee 8
1.42 Hour Of Service 8
1.43 Key Employee 9
1.44 Leased Employee 10
1.45 Limitation Year 10
</TABLE>
<PAGE> 32
<TABLE>
<S> <C> <C>
1.46 Master Or Prototype Plan 10
1.47 Matching Contribution 10
1.48 Maximum Permissible Amount 10
1.49 Net Profit 10
1.50 Normal Retirement Age 10
1.51 Owner-Employee 10
1.52 Paired Plans 10
1.53 Participant 11
1.54 Participant's Benefit 11
1.55 Permissive Aggregation Group 11
1.56 Plan 11
1.57 Plan Administrator 11
1.58 Plan Year 11
1.59 Present Value 11
1.60 Projected Annual Benefit 11
1.61 Qualified Deferred Compensation Plan 11
1.62 Qualified Domestic Relations Order 11
1.63 Qualified Early Retirement Age 12
1.64 Qualified Joint And Survivor Annuity 12
1.65 Qualified Matching Contribution 12
1.66 Qualified Non-Elective Contributions 12
1.67 Qualified Voluntary Contribution 12
1.68 Required Aggregation Group 12
1.69 Required Beginning Date 12
1.70 Rollover Contribution 12
1.71 Salary Savings Agreement 13
1.72 Self-Employed Individual 13
1.73 Service 13
1.74 Shareholder Employee 13
1.75 Simplified Employee Pension Plan 13
1.76 Sponsor 13
1.77 Spouse (Surviving Spouse) 13
1.78 Super Top-Heavy Plan 13
1.79 Taxable Wage Base 13
1.80 Top-Heavy Determination Date 13
1.81 Top-Heavy Plan 13
1.82 Top-Heavy Ratio 14
1.83 Top-Paid Group 15
1.84 Transfer Contribution 15
1.85 Trustee 15
1.86 Valuation Date 15
1.87 Vested Account Balance 15
1.88 Voluntary Contribution 16
1.89 Welfare Benefit Fund 16
1.90 Year Of Service 16
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C>
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation 17
2.2 Change In Classification Of Employment 17
2.3 Computation Period 17
2.4 Employment Rights 17
2.5 Service With Controlled Groups 17
2.6 Owner-Employees 17
2.7 Leased Employees 18
2.8 Thrift Plans 18
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount 19
3.2 Expenses And Fees 19
3.3 Responsibility For Contributions 19
3.4 Return Of Contributions 19
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions 20
4.2 Qualified Voluntary Contributions 20
4.3 Rollover Contribution 20
4.4 Transfer Contribution 21
4.5 Employer Approval Of Transfer Contributions 21
4.6 Elective Deferrals 21
4.7 Required Voluntary Contributions 22
4.8 Direct Rollover of Benefits 22
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts 23
5.2 Adjustments To Participant Accounts 23
5.3 Allocating Employer Contributions 24
5.4 Allocating Investment Earnings And Losses 24
5.5 Participant Statements 24
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits 25
6.2 Early Retirement Benefits 25
6.3 Benefits On Termination Of Employment 25
6.4 Restrictions On Immediate Distributions 26
6.5 Normal Form Of Payment 27
6.6 Commencement Of Benefits 27
6.7 Claims Procedures 27
6.8 In-Service Withdrawals 28
6.9 Hardship Withdrawal 29
</TABLE>
<PAGE> 34
<TABLE>
<S> <C> <C>
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements 31
7.2 Minimum Distribution Requirements 31
7.3 Limits On Distribution Periods 31
7.4 Required Distributions On Or After The Required Beginning Date 31
7.5 Required Beginning Date 32
7.6 Transitional Rule 33
7.7 Designation Of Beneficiary For Death Benefit 34
7.8 Nonexistence Of Beneficiary 34
7.9 Distribution Beginning Before Death 34
7.10 Distribution Beginning After Death 34
7.11 Distribution Of Excess Elective Deferrals 35
7.12 Distributions of Excess Contributions 35
7.13 Distribution Of Excess Aggregate Contributions 36
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions 37
8.2 Payment Of Qualified Joint And Survivor Annuity 37
8.3 Payment Of Qualified Pre-Retirement Survivor Annuity 37
8.4 Qualified Election 37
8.5 Notice Requirements For Qualified Joint And Survivor Annuity 38
8.6 Notice Requirements For Qualified Pre-Retirement Survivor Annuity 38
8.7 Special Safe-Harbor Exception For Certain Profit-Sharing Plans 38
8.8 Transitional Joint And Survivor Annuity Rules 39
8.9 Automatic Joint And Survivor Annuity And Early Survivor Annuity 39
8.10 Annuity Contracts 40
ARTICLE IX
VESTING
9.1 Employee Contributions 41
9.2 Employer Contributions 41
9.3 Computation Period 41
9.4 Requalification Prior To Five Consecutive One-Year Breaks In Service 41
9.5 Requalification After Five Consecutive One-Year Breaks In Service 41
9.6 Calculating Vested Interest 41
9.7 Forfeitures 41
9.8 Amendment Of Vesting Schedule 42
9.9 Service With Controlled Groups 42
</TABLE>
<PAGE> 35
<TABLE>
<S> <C> <C>
ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only 43
10.2 Disposition Of Excess Annual Additions 43
10.3 Participation In This Plan And Another Master and Prototype Defined
Contribution Plan, Welfare Benefit Fund Or Individual Medical
Account Maintained By The Employer 44
10.4 Disposition Of Excess Annual Additions Under Two Plans 44
10.5 Participation In This Plan And Another Defined Contribution
Plan Which Is Not A Master Or Prototype Plan 45
10.6 Participation In This Plan And A Defined Benefit Plan 45
10.7 Average Deferral Percentage (ADP) Test 45
10.8 Special Rules Relating To Application Of ADP Test 45
10.9 Recharacterization 46
10.10 Average Contribution Percentage (ACP) Test 47
10.11 Special Rules Relating To Application Of ACP Test 47
. ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator 49
11.2 Trustee/Custodian 49
11.3 Administrative Fees And Expenses 50
11.4 Division Of Duties And Indemnification 50
ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 The Fund 52
12.2 Control Of Plan Assets 52
12.3 Exclusive Benefit Rules 52
12.4 Assignment And Alienation Of Benefits 52
12.5 Determination Of Qualified Domestic Relations Order(QDRO) 52
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards 54
13.2 Funding Arrangement 54
13.3 Investment Alternatives Of The Trustee 54
13.4 Investment Alternatives Of The Custodian 55
13.5 Participant Loans 55
13.6 Insurance Policies 56
13.7 Employer Investment Direction 58
13.8 Employee Investment Direction 58
</TABLE>
<PAGE> 36
<TABLE>
<S> <C> <C>
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules 60
14.2 Minimum Contribution 60
14.3 Minimum Vesting 60
14.4 Limitations On Allocations 60
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor 61
15.2 Amendment By Employer 61
15.3 Termination 61
15.4 Qualification Of Employer's Plan 61
15.5 Mergers And Consolidations 61
15.6 Resignation And Removal 62
15.7 Qualification Of Prototype 62
ARTICLE XVI
GOVERNING LAW 63
</TABLE>
<PAGE> 37
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN AND TRUST/CUSTODIAL
ACCOUNT
SPONSORED BY
THE TRUST COMPANY OF STERNE, AGEE & LEACH, INC.
The Sponsor hereby establishes the following Prototype Retirement Plan and
Trust/Custodial Account for use by those of its customers who qualify and wish
to adopt a qualified retirement program. Any Plan and Trust/Custodial Account
established hereunder shall be administered for the exclusive benefit of
Participants and their beneficiaries under the following terms and conditions:
ARTICLE I
DEFINITIONS
1.1 ACTUAL DEFERRAL PERCENTAGE The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the amount of Employer contributions [as defined at (c) and
(d)] actually paid over to the Fund on behalf of such
Participant for the Plan Year to
(b) the Participant's Compensation for such Plan Year.
Compensation will only include amounts for the period during
which the Employee was eligible to participate.
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's
deferral election, including Excess Elective Deferrals, but
excluding Elective Deferrals that are either taken into
account in the Contribution Percentage test (provided the ADP
test is satisfied both with and without exclusion of these
Elective Deferrals) or are returned as excess Annual
Additions; and
(d) at the election of the Employer, Qualified Non-Elective
Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who would be
a Participant but for the failure to make Elective Deferrals shall be treated as
a Participant on whose behalf no Elective Deferrals are made.
1.2 ADOPTION AGREEMENT The document attached to this Plan by which an Employer
elects to establish a qualified retirement plan and trust/custodial account
under the terms of this Prototype Plan and Trust/Custodial Account.
1.3 AGGREGATE LIMIT The sum of:
(a) 125 percent of the greater of the ADP of the non-Highly
Compensated Employees for the Plan Year or the ACP of
non-Highly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement as described
in Code Section 401(k) or Code Section 402(h)(1)(B), and
(b) the lesser of 200% or two percent plus the lesser of such ADP
or ACP.
Alternatively, the aggregate limit can be determined by substituting "the lesser
of 200% or 2 percent plus" for "125% of" in (a) above, and substituting "125%
of" for "the lesser of 200% or 2 percent plus" in (b) above.
1
<PAGE> 38
1.4 ANNUAL ADDITIONS The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions,
(b) Employee Contributions (under Article IV),
(c) forfeitures,
(d) amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code Section 415(l)(2), which
is part of a pension or annuity plan maintained by the
Employer (these amounts are treated as Annual Additions to a
Defined Contribution Plan though they arise under a Defined
Benefit Plan), and
(e) amounts derived from contributions paid or accrued after 1985,
in taxable years ending after 1985, which are either
attributable to post-retirement medical benefits allocated to
the account of a Key Employee, or to a Welfare Benefit Fund
maintained by the Employer, are also treated as Annual
Additions to a Defined Contribution Plan. For purposes of this
paragraph, an Employee is a Key Employee if he or she meets
the requirements of paragraph 1.43 at any time during the Plan
Year or any preceding Plan Year. Welfare Benefit Fund is
defined at paragraph 1.89.
Excess amounts applied in a Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year, pursuant to the
provisions of Article X.
1.5 ANNUITY STARTING DATE The first day of the first period for which an amount
is paid as an annuity or in any other form.
1.6 APPLICABLE CALENDAR YEAR The First Distribution Calendar Year, and in the
event of the recalculation of life expectancy, such succeeding calendar year. If
payments commence in accordance with paragraph 7.4(e) before the Required
Beginning Date, the Applicable Calendar Year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest, the Applicable
Calendar Year is the year of purchase.
1.7 APPLICABLE LIFE EXPECTANCY Used in determining the required minimum
distribution. The life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's) birthday in the Applicable
Calendar Year reduced by one for each calendar year which has elapsed since the
date life expectancy was first calculated. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life expectancy as so
recalculated. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
1.8 AVERAGE CONTRIBUTION PERCENTAGE (ACP) The average of the Contribution
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.9 AVERAGE DEFERRAL PERCENTAGE (ADP) The average of the Actual Deferral
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.10 BREAK IN SERVICE A 12-consecutive month period during which an Employee
fails to complete more than 500 Hours of Service.
1.11 CODE The Internal Revenue Code of 1986, including any amendments.
1.12 COMPENSATION The Employer may select one of the following three safe-harbor
definitions of Compensation in the Adoption Agreement. Compensation shall only
include amounts earned while a Participant if Plan Year is chosen as the
applicable computation period.
2
<PAGE> 39
(a) CODE SECTION 3401(A) WAGES. Compensation is defined as wages
within the meaning of Code Section 3401(a) for the purposes of
Federal income tax withholding at the source but determined
without regard to any rules that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed [such as the exception
for agricultural labor in Code Section 3401(a)(2)].
(b) CODE SECTION 6041 AND 6051 WAGES. Compensation is defined as
wages as defined in Code Section 3401(a) and all other
payments of compensation to an Employee by the Employer (in
the course of the Employer's trade or business) for which the
Employer is required to furnish the employee a written
statement under Code Section 6041(d) and 6051(a)(3).
Compensation must be determined without regard to any rules
under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed [such as the exception
for agricultural labor in Code Section 3401(a)(2)].
(c) CODE SECTION 415 COMPENSATION. For purposes of applying the
limitations of Article X and Top-Heavy Minimums, the
definition of Compensation shall be Code Section 415
Compensation defined as follows: a Participant's Earned
Income, wages, salaries, and fees for professional services
and other amounts received (without regard to whether or not
an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are
includable in gross income [including, but not limited to,
commissions paid salesmen, Compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or
other expense allowances under a nonaccountable plan (as
described in Regulation 1.62-2(c)], and excluding the
following:
1. Employer contributions to a plan of deferred
compensation which are not includable in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
Simplified Employee Pension Plan or any distributions
from a plan of deferred compensation,
2. Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture,
3. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
4. other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in Code
Section 403(b) (whether or not the contributions are
actually excludible from the gross income of the
Employee).
For purposes of applying the limitations of Article X and Top-Heavy Minimums,
the definition of Compensation shall be Code Section 415 Compensation described
in this paragraph 1.12(c). Also, for purposes of applying the limitations of
Article X, Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year. Notwithstanding the preceding
sentence, Compensation for a Participant in a defined contribution plan who is
permanently and totally disabled [as defined in Code Section 22(e)(3)] is the
Compensation such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid immediately before
becoming permanently and totally disabled. Such imputed Compensation for the
disabled Participant may be taken into account only if the participant is not a
Highly Compensated Employee [as defined in Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the applicable period in the Adoption Agreement,
the Plan Year shall be used. Unless otherwise specified by the Employer in the
Adoption Agreement, Compensation shall be determined as provided in Code
3
<PAGE> 40
Section 3401(a) [as defined in this paragraph 1.12(a)]. In nonstandardized
Adoption Agreement 002, the Employer may choose to eliminate or exclude
categories of Compensation which do not violate the provisions of Code Sections
401(a)(4), 414(s) the regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under the
Plan (including benefits under Article XIV) for any year shall not exceed
$200,000, as adjusted under Code Section 415(d). In determining the Compensation
of a Participant for purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the end of the Plan year. If, as
a result of the application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion of Compensation
up to the integration level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this section prior to
the application of this limitation.
If a Plan has a Plan Year that contains fewer than 12 calendar months, then the
annual Compensation limit for that period is an amount equal to the $200,000 as
adjusted for the calendar year in which the Compensation period begins,
multiplied by a fraction the numerator of which is the number of full months in
the Short Plan Year and the denominator of which is 12. If Compensation for any
prior Plan Year is taken into account in determining an Employee's contributions
or benefits for the current year, the Compensation for such prior year is
subject to the applicable annual Compensation limit in effect for that prior
year. For this purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000.
Compensation shall not include deferred Compensation other than contributions
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
402(h)(1)(B), a cafeteria plan under Code Section 125 or a tax-deferred annuity
under Code Section 403(b). Unless elected otherwise by the Employer in the
Adoption Agreement, these deferred amounts will be considered as Compensation
for Plan purposes. These deferred amounts are not counted as Compensation for
purposes of Articles X and XIV. When applicable to a Self-Employed Individual,
Compensation shall mean Earned Income.
1.13 CONTRIBUTION PERCENTAGE The ratio (expressed as a percentage and calculated
separately for each Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined
at (c)-(f)] for the Plan Year, to
(b) the Participant's Compensation for the Plan Year. Compensation
will only include amounts for the period during which the
Employee was eligible to participate.
Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Employee Voluntary Contributions, Matching
Contributions, and Qualified Matching Contributions (to the
extent not taken into account for purposes of the ADP test)
made under the Plan on behalf of the Participant for the Plan
Year,
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's account which
shall be taken into account in the year in which such
forfeiture is allocated,
(e) at the election of the Employer, Qualified Non-Elective
Contributions, and
(f) the Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met
before the Elective Deferrals are used in the
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ACP test and continues to be met following the exclusion of
those Elective Deferrals that are used to meet the ACP test.
Contribution Percentage Amounts shall not include Matching Contributions,
whether or not Qualified, that are forfeited either to correct Excess Aggregate
Contributions, or because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
1.14 CUSTODIAN The Sponsor of this Prototype Plan, or if applicable, an
affiliate or successor, shall serve as Custodian, if a Custodian is appointed in
the Adoption Agreement.
1.15 DEFINED BENEFIT PLAN A Plan under which a Participant's benefit is
determined by a formula contained in the Plan and no individual accounts are
maintained for Participants.
1.16 DEFINED BENEFIT (PLAN) FRACTION A fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the Defined Benefit
Plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of the Highest Average Compensation, including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after 1986, in one or more Defined
Benefit Plans maintained by the Employer which were in existence on May 6, 1986,
the denominator of this fraction will not be less than 125 percent of the sum of
the annual benefits under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the Defined Benefit Plans individually and in the
aggregate satisfied the requirements of Section 415 for all Limitation Years
beginning before 1987.
1.17 DEFINED CONTRIBUTION DOLLAR LIMITATION Thirty thousand dollars ($30,000) or
if greater, one-fourth of the defined benefit dollar limitation set forth in
Code Section 415(b)(1) as in effect for the Limitation Year.
1.18 DEFINED CONTRIBUTION PLAN A Plan under which individual accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such Plan is based solely on the fair market value
of his or her account balance.
1.19 DEFINED CONTRIBUTION (PLAN) FRACTION A Fraction, the numerator of which is
the sum of the Annual Additions to the Participant's account under all the
Defined Contribution Plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible Employee contributions
to all Defined Benefit Plans, whether or not terminated, maintained by the
Employer, and the Annual Additions attributable to all Welfare Benefit Funds, as
defined in paragraph 1.89 and individual medical accounts, as defined in Code
Section 415(l)(2), maintained by the Employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior
Limitation Years of service with the Employer (regardless of whether a Defined
Contribution Plan was maintained by the Employer). The maximum aggregate amount
in the Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after 1986, in one or more Defined Contribution Plans
maintained by the Employer which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this fraction will be
permanently subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the end of the
last Limitation Year beginning before 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 6, 1986, but using the Section
415 limitation applicable to the first Limitation Year beginning on or after
January 1, 1987.
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The Annual Addition for any Limitation Year beginning before 1987, shall not be
re-computed to treat all Employee Contributions as Annual Additions.
1.20 DESIGNATED BENEFICIARY The individual who is designated as the beneficiary
under the Plan in accordance with Code Section 401(a)(9) and the regulations
thereunder.
1.21 DISABILITY An illness or injury of a potentially permanent nature, expected
to last for a continuous period of not less than 12 months, certified by a
physician selected by or satisfactory to the Employer, which prevents the
Employee from engaging in any occupation for wage or profit for which the
Employee is reasonably fitted by training, education or experience.
1.22 DISTRIBUTION CALENDAR YEAR A calendar year for which a minimum distribution
is required.
1.23 EARLY RETIREMENT AGE The age set by the Employer in the Adoption Agreement
(but not less than 55), which is the earliest age at which a Participant may
retire and receive his or her benefits under the Plan.
1.24 EARNED INCOME Net earnings from self-employment in the trade or business
with respect to which the Plan is established, determined without regard to
items not included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material
income-producing factor. Earned income shall be reduced by contributions made by
an Employer to a qualified plan to the extent deductible under Code Section 404.
For tax years beginning after 1989, net earnings shall be determined taking into
account the deduction for one-half of self-employment taxes allowed to the
Employer under Code Section 164(f) to the extent deductible.
1.25 EFFECTIVE DATE The date on which the Employer's retirement plan or
amendment to such plan becomes effective. For amendments reflecting statutory
and regulatory changes post Tax Reform Act of 1986, the Effective Date will be
the earlier of the date upon which such amendment is first administratively
applied or the first day of the Plan Year following the date of adoption of such
amendment.
1.26 ELECTION PERIOD The period which begins on the first day of the Plan Year
in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to the first
day of the Plan Year in which age 35 is attained, the Election Period shall
begin on the date of separation, with respect to the account balance as of the
date of separation.
1.27 ELECTIVE DEFERRAL Employer contributions made to the Plan at the election
of the Participant, in lieu of cash Compensation. Elective Deferrals shall also
include contributions made pursuant to a Salary Savings Agreement or other
deferral mechanism, such as a cash option contribution. With respect to any
taxable year, a Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as described in Code
Section 401(k), any simplified employee pension cash or deferred arrangement as
described in Code Section 402(h)(1)(B), any eligible deferred compensation plan
under Code Section 457, any plan as described under Code Section 501(c)(18), and
any Employer contributions made on the behalf of a Participant for the purchase
of an annuity contract under Code Section 403(b) pursuant to a Salary Savings
Agreement. Elective Deferrals shall not include any deferrals properly
distributed as Excess Annual Additions.
1.28 ELIGIBLE PARTICIPANT Any Employee who is eligible to make a Voluntary
Contribution, or an Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution Percentage), or to receive a
Matching Contribution (including forfeitures) or a Qualified Matching
Contribution. If a Voluntary Contribution or Elective Deferral is required as a
condition of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made such a contribution shall be treated as an
Eligible Participant even though no Voluntary Contributions or Elective
Deferrals are made.
1.29 EMPLOYEE Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated service
group [as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or
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business which is under common control [as defined in Code Section 414(c)],
Leased Employees [as defined in Code Section 414(n)] and any Employee required
to be aggregated by Code Section 414(o). All such Employees shall be treated as
employed by a single Employer.
1.30 EMPLOYER The Self-Employed Individual, partnership, corporation or other
organization which adopts this Plan including any firm that succeeds the
Employer and adopts this Plan. For purposes of Article X, Limitations on
Allocations, Employer shall mean the Employer that adopts this Plan, and all
members of a controlled group of corporations [as defined in Code Section 414(b)
as modified by Code Section 415(h)], all commonly controlled trades or
businesses [as defined in Code Section 414(c) as modified by Code Section
415(h)] or affiliated service groups [as defined in Code Section 414(m)] of
which the adopting Employer is a part, and any other entity required to be
aggregated with the Employer pursuant to regulations under Code Section 414(o).
1.31 ENTRY DATE The date on which an Employee commences participation in the
Plan as determined by the Employer in the Adoption Agreement.
1.32 EXCESS AGGREGATE CONTRIBUTIONS The excess, with respect to any Plan Year,
of:
(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.35 and then determining Excess Contributions
pursuant to paragraph 1.34.
1.33 EXCESS AMOUNT The excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
1.34 EXCESS CONTRIBUTION With respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions actually taken
into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
1.35 EXCESS ELECTIVE DEFERRALS Those Elective Deferrals that are includable in a
Participant's gross income under Code Section 402(g) to the extent such
Participant's Elective Deferrals for a taxable year exceed the dollar limitation
under such Code Section. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no later than the
first April 15th following the close of the Participant's taxable year.
1.36 FAMILY MEMBER The Employee's Spouse, any lineal descendants and ascendants
and the Spouse of such lineal descendants and ascendants.
1.37 FIRST DISTRIBUTION CALENDAR YEAR For distributions beginning before the
Participant's death, the First Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the First Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to paragraph 7.10.
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1.38 FUND All contributions received by the Trustee/Custodian under this Plan
and Trust/Custodial Account, investments thereof and earnings and appreciation
thereon.
1.39 HARDSHIP An immediate and heavy financial need of the Employee where such
Employee lacks other available resources.
1.40 HIGHEST AVERAGE COMPENSATION The average Compensation for the three
consecutive Years of Service with the Employer that produces the highest
average. A Year of Service with the Employer is the 12-consecutive month period
defined in the Adoption Agreement.
1.41 HIGHLY COMPENSATED EMPLOYEE Any Employee who performs service for the
Employer during the determination year and who, during the immediate prior year:
(a) received Compensation from the Employer in excess of $75,000
[as adjusted pursuant to Code Section 415(d)]; or
(b) received Compensation from the Employer in excess of $50,000
[as adjusted pursuant to Code Section 415(d)] and was a member
of the Top-Paid Group for such year; or
(c) was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the dollar
limitation in effect under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly Compensated
during the preceding Plan Year shall not be treated as a Highly Compensated
Employee with respect to the current Plan Year unless such Employee is a member
of the 100 Employees paid the greatest Compensation during the year for which
such determination is being made.
(d) Employees who are five percent (5%) Owners at any time during
the immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees and
Highly Compensated former Employees.
1.42 HOUR OF SERVICE
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the computation
period in which the duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service shall be credited under this paragraph for
any single continuous period (whether or not such period
occurs in a single computation period). Hours under this
paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service shall not be credited both under
paragraph (a) or paragraph (b), as the case may be, and under
this paragraph (c).
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These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the
award, agreement or payment is made.
(d) Hours of Service shall be credited for employment with the
Employer and with other members of an affiliated service group
[as defined in Code Section 414(m)], a controlled group of
corporations [as defined in Code Section 414(b)], or a group
of trades or businesses under common control [as defined in
Code Section 414(c)] of which the adopting Employer is a
member, and any other entity required to be aggregated with
the Employer pursuant to Code Section 414(o) and the
regulations thereunder. Hours of Service shall also be
credited for any individual considered an Employee for
purposes of this Plan under Code Section 414(n) or Code
Section 414(o) and the regulations thereunder.
(e) Solely for purposes of determining whether a Break in Service,
as defined in paragraph 1.10, for participation and vesting
purposes has occurred in a computation period, an individual
who is absent from work for maternity or paternity reasons
shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence by reason of the
pregnancy of the individual, by reason of a birth of a child
of the individual, by reason of the placement of a child with
the individual in connection with the adoption of such child
by such individual, or for purposes of caring for such child
for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited in the computation period in which the
absence begins if the crediting is necessary to prevent a
Break in Service in that period, or in all other cases, in the
following computation period. No more than 501 hours will be
credited under this paragraph.
(f) Hours of Service shall be determined on the basis of the
method selected in the Adoption Agreement.
1.43 KEY EMPLOYEE Any Employee or former Employee (and the beneficiaries of such
employee) who at any time during the determination period was an officer of the
Employer if such individual's annual compensation exceeds 50% of the dollar
limitation under Code Section 415(b)(1)(A) (the defined benefit maximum annual
benefit), an owner (or considered an owner under Code Section 318) of one of the
ten largest interests in the employer if such individual's compensation exceeds
100% of the dollar limitation under Code Section 415(c)(1)(A), a 5% owner of the
Employer, or a 1% owner of the Employer who has an annual compensation of more
than $150,000. For purposes of determining who is a Key Employee, annual
compensation shall mean Compensation as defined for Article X, but including
amounts deferred through a salary reduction agreement to a cash or deferred plan
under Code Section 401(k), a Simplified Employee Pension Plan under Code Section
408(k), a cafeteria plan under Code Section 125 or a tax-deferred annuity under
Code Section 403(b). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Code Section 416(i)(1) and the
regulations thereunder.
1.44 LEASED EMPLOYEE Any person (other than an Employee of the recipient) who,
pursuant to an agreement between the recipient and any other person ("leasing
organization"), has performed services for the recipient [or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)] on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the business field
of the recipient Employer.
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1.45 LIMITATION YEAR The calendar year or such other 12-consecutive month period
designated by the Employer in the Adoption Agreement for purposes of determining
the maximum Annual Addition to a Participant's account. All qualified plans
maintained by the Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the amendment is
made.
1.46 MASTER OR PROTOTYPE PLAN A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.47 MATCHING CONTRIBUTION An Employer contribution made to this or any other
defined contribution plan on behalf of a Participant on account of an Employee
Voluntary Contribution made by such Participant, or on account of a
Participant's Elective Deferral, under a Plan maintained by the Employer.
1.48 MAXIMUM PERMISSIBLE AMOUNT The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the plan for any
Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section 401(h) or
Code Section 419A(f)(2)] which is otherwise treated as an Annual Addition under
Code Section 415(l)(1) or 419(d)(2). If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year divided by 12.
1.49 NET PROFIT The current and accumulated operating earnings of the Employer
before Federal and State income taxes, excluding nonrecurring or unusual items
of income, and before contributions to this and any other qualified plan of the
Employer. Alternatively, the Employer may fix another definition in the Adoption
Agreement.
1.50 NORMAL RETIREMENT AGE The age, set by the Employer in the Adoption
Agreement, at which a Participant may retire and receive his or her benefits
under the Plan.
1.51 OWNER-EMPLOYEE A sole proprietor, or a partner owning more than 10% of
either the capital or profits interest of the partnership.
1.52 PAIRED PLANS Two or more Plans maintained by the Sponsor designed so that a
single or any combination of Plans adopted by an Employer will meet the
antidiscrimination rules, the contribution and benefit limitations, and the
Top-Heavy provisions of the Code.
1.53 PARTICIPANT Any Employee who has met the eligibility requirements and is
participating in the Plan.
1.54 PARTICIPANT'S BENEFIT The account balance as of the last Valuation Date in
the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the account balance as of the dates in the valuation
calendar year after the Valuation Date and decreased by distributions made in
the valuation calendar year after the Valuation Date. A special exception exists
for the second distribution Calendar Year. For purposes of this paragraph, if
any portion of the minimum distribution for the First Distribution Calendar Year
is made in the second Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution made in the second
distribution calendar year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
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1.55 PERMISSIVE AGGREGATION GROUP Used for Top-Heavy testing purposes, it is the
Required Aggregation Group of plans plus any other plan or plans of the Employer
which, when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Code Sections 401(a)(4) and 410.
1.56 PLAN The Employer's retirement plan as embodied herein and in the Adoption
Agreement.
1.57 PLAN ADMINISTRATOR The Employer.
1.58 PLAN YEAR The 12-consecutive month period designated by the Employer in the
Adoption Agreement.
1.59 PRESENT VALUE Used for Top-Heavy test and determination purposes, when
determining the Present Value of accrued benefits, with respect to any Defined
Benefit Plan maintained by the Employer, interest and mortality rates shall be
determined in accordance with the provisions of the respective plan. If
applicable, interest and mortality assumptions will be specified in Section 11
of the Adoption Agreement.
1.60 PROJECTED ANNUAL BENEFIT Used to test the maximum benefit which may be
obtained from a combination of retirement plans, it is the annual retirement
benefit (adjusted to an actuarial equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or Qualified
Joint and Survivor Annuity) to which the Participant would be entitled under the
terms of a Defined Benefit Plan or plans, assuming:
(a) the Participant will continue employment until Normal
Retirement Age under the plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits
under the plan will remain constant for all future Limitation
Years.
1.61 QUALIFIED DEFERRED COMPENSATION PLAN Any pension, profit-sharing, stock
bonus, or other plan which meets the requirements of Code Section 401 and
includes a trust exempt from tax under Code Section 501(a) or any annuity plan
described in Code Section 403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in Code Section 408(a), an individual retirement annuity (IRA) as
described in Code Section 408(b), an annuity plan as described in Code Section
403(a), or a qualified trust as described in Code Section 401(a), which accepts
Eligible Rollover Distributions. However in the case of an Eligible Rollover
Distribution to a Surviving Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
1.62 QUALIFIED DOMESTIC RELATIONS ORDER A QDRO is a signed Domestic Relations
Order issued by a State Court which creates, recognizes or assigns to an
alternate payee(s) the right to receive all or part of a Participant's Plan
benefit and which meets the requirements of Code Section 414(p). An alternate
payee is a Spouse, former Spouse, child, or other dependent who is treated as a
beneficiary under the Plan as a result of the QDRO.
1.63 QUALIFIED EARLY RETIREMENT AGE For purposes of paragraph 8.9, Qualified
Early Retirement Age is the latest of:
(a) the earliest date, under the Plan, on which the Participant
may elect to receive retirement benefits, or
(b) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(c) the date the Participant begins participation.
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1.64 QUALIFIED JOINT AND SURVIVOR ANNUITY An immediate annuity for the life of
the Participant with a survivor annuity for the life of the Participant's Spouse
which is at least one-half of but not more than the amount of the annuity
payable during the joint lives of the Participant and the Participant's Spouse.
The exact amount of the Survivor Annuity is to be specified by the Employer in
the Adoption Agreement. If not designated by the Employer, the Survivor Annuity
will be 1/2 of the amount paid to the Participant during his or her lifetime.
The Qualified Joint and Survivor Annuity will be the amount of benefit which can
be provided by the Participant's Vested Account Balance.
1.65 QUALIFIED MATCHING CONTRIBUTION Matching Contributions which when made are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k).
1.66 QUALIFIED NON-ELECTIVE CONTRIBUTIONS Contributions (other than Matching
Contributions or Qualified Matching Contributions) made by the Employer and
allocated to Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are nonforfeitable when
made; and that are distributable only in accordance with the distribution
provisions that are applicable to Elective Deferrals and Qualified Matching
Contributions.
1.67 QUALIFIED VOLUNTARY CONTRIBUTION A tax-deductible voluntary Employee
contribution. These contributions may no longer be made to the Plan.
1.68 REQUIRED AGGREGATION GROUP Used for Top-Heavy testing purposes, it consists
of:
(a) each qualified plan of the Employer in which at least one Key
Employee participates or participated at any time during the
determination period (regardless of whether the plan has
terminated), and
(b) any other qualified plan of the Employer which enables a plan
described in (a) to meet the requirements of Code Sections
401(a)(4) or 410.
1.69 REQUIRED BEGINNING DATE The date on which a Participant is required to take
his or her first minimum distribution under the Plan. The rules are set forth at
paragraph 7.5.
1.70 ROLLOVER CONTRIBUTION A contribution made by a Participant of an amount
distributed to such Participant from another Qualified Deferred Compensation
Plan in accordance with Code Sections 402(a)(5), (6), and (7).
An Eligible Rollover Distribution is any distribution of all or any portion of
the balance to the credit of the Participant except that an Eligible Rollover
Distribution does not include:
(a) 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 Participant or
the joint lives (or joint life expectancies) of the
Participant and the Participant's Designated Beneficiary, or
for a specified period of ten years or more;
(b) any distribution to the extent such distribution is required
under Code Section 401(a)(9); and
(c) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to Employer
securities).
A Direct Rollover is a payment by the plan to the Eligible Retirement Plan
specified by the Participant.
1.71 SALARY SAVINGS AGREEMENT An agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to withhold a
specified percentage of his or her Compensation for deposit to the Plan on
behalf of such Employee.
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1.72 SELF-EMPLOYED INDIVIDUAL An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no Net Profit for the taxable year.
1.73 SERVICE The period of current or prior employment with the Employer. If the
Employer maintains a plan of a predecessor employer, Service for such
predecessor shall be treated as Service for the Employer.
1.74 SHAREHOLDER EMPLOYEE An Employee or Officer who owns [or is considered as
owning within the meaning of Code Section 318(a)(1)], on any day during the
taxable year of an electing small business corporation (S Corporation), more
than 5% of such corporation's outstanding stock.
1.75 SIMPLIFIED EMPLOYEE PENSION PLAN An individual retirement account which
meets the requirements of Code Section 408(k), and to which the Employer makes
contributions pursuant to a written formula. These plans are considered for
contribution limitation and Top-Heavy testing purposes.
1.76 SPONSOR The Trust Company of Sterne, Agee & Leach, Inc., or any
successor(s) or assign(s).
1.77 SPOUSE (SURVIVING SPOUSE) The Spouse or Surviving Spouse of the
Participant, provided that a former Spouse will be treated as the Spouse or
Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic Relations
Order as described in Code Section 414(p).
1.78 SUPER TOP-HEAVY PLAN A Plan described at paragraph 1.81 under which the
Top-Heavy Ratio [as defined at paragraph 1.82] exceeds 90%.
1.79 TAXABLE WAGE BASE For plans with an allocation formula which takes into
account the Employer's contribution under the Federal Insurance Contributions
Act (FICA), the maximum amount of earnings which may be considered wages for
such Plan Year under the Social Security Act [Code Section 3121(a)(1)], or the
amount elected by the Employer in the Adoption Agreement.
1.80 TOP-HEAVY DETERMINATION DATE For any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year of the
Plan, the last day of that year.
1.81 TOP-HEAVY PLAN For any Plan Year beginning after 1983, the Employer's Plan
is top-heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and
this Plan is not part of any required Aggregation Group or
Permissive Aggregation Group of Plans.
(b) If the Employer's plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group
and the Top-Heavy Ratio for the group of plans exceeds 60%.
(c) If the Employer's plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and
the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60%.
1.82 TOP-HEAVY RATIO
(a) If the Employer maintains one or more Defined Contribution
plans (including any Simplified Employee Pension Plan) and the
Employer has not maintained any Defined Benefit Plan which
during the 5-year period ending on the Determination Date(s)
has or has had accrued benefits, the Top-Heavy Ratio for this
Plan alone, or for the Required or Permissive Aggregation
Group as appropriate, is a fraction,
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(1) the numerator of which is the sum of the account
balances of all Key Employees as of the Determination
Date(s) [including any part of any account balance
distributed in the 5-year period ending on the
Determination Date(s)], and
(2) the denominator of which is the sum of all account
balances [including any part of any account balance
distributed in the 5-year period ending on the
Determination Date(s)], both computed in accordance
with Code Section 416 and the regulations thereunder.
Both the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into
account on that date under Code Section 416 and the
regulations thereunder.
(b) If the Employer maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more Defined
Benefit Plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated Defined
Contribution Plan or Plans for all Key Employees, determined
in accordance with (a) above, and the Present Value of accrued
benefits under the aggregated Defined Benefit Plan or Plans
for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under
the aggregated Defined Contribution Plan or Plans for all
Participants, determined in accordance with (a) above, and the
Present Value of accrued benefits under the Defined Benefit
Plan or Plans for all Participants as of the Determination
Date(s), all determined in accordance with Code Section 416
and the regulations thereunder. The accrued benefits under a
Defined Benefit Plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the 5-year period ending on the
Determination Date.
(c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 and
the regulations thereunder for the first and second plan years
of a Defined Benefit Plan. The account balances and accrued
benefits of a participant (1) who is not a Key Employee but
who was a Key Employee in a prior year, or (2) who has not
been credited with at least one hour of service with any
Employer maintaining the Plan at any time during the 5-year
period ending on the Determination Date, will be disregarded.
The calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are taken into
account will be made in accordance with Code Section 416 and
the regulations thereunder. Qualified Voluntary Employee
Contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the
value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall
within the same calendar year. The accrued benefit of a
Participant other than a Key Employee shall be determined
under (1) the method, if any, that uniformly applies for
accrual purposes under all Defined Benefit Plans maintained by
the Employer, or (2) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code Section
411(b)(1)(C).
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1.83 TOP-PAID GROUP The group consisting of the top 20% of Employees when ranked
on the basis of Compensation paid during such year. For purposes of determining
the number of Employees in the group (but not who is in it), the following
Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17-1/2 hours per week.
(c) Employees who normally do not work more than 6 months during
any year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered by
an agreement between employee representatives and the
Employer, where retirement benefits were the subject of good
faith bargaining and provided that 90% or more of the
Employer's Employees are covered by the agreement.
(f) Employees who are nonresident aliens and who receive no earned
income which constitutes income from sources within the United
States.
1.84 TRANSFER CONTRIBUTION A non-taxable transfer of a Participant's benefit
directly from a Qualified Deferred Compensation Plan to this Plan.
1.85 TRUSTEE The Sponsor of this Prototype Plan shall serve as Trustee.
1.86 VALUATION DATE The last day of the Plan Year or such other date as agreed
to by the Employer and the Trustee/Custodian on which Participant accounts are
revalued in accordance with Article V hereof. For Top-Heavy purposes, the date
selected by the Employer as of which the Top-Heavy Ratio is calculated.
1.87 VESTED ACCOUNT BALANCE The aggregate value of the Participant's Vested
Account Balances derived from Employer and Employee contributions (including
Rollovers), whether vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The provisions of
Article VIII shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time of death
or distribution.
1.88 VOLUNTARY CONTRIBUTION An Employee contribution made to the Plan by or on
behalf of a Participant that is included in the Participant's gross income in
the year in which made and that is maintained under a separate account to which
earnings and losses are allocated.
1.89 WELFARE BENEFIT FUND Any fund that is part of a plan of the Employer, or
has the effect of a plan, through which the Employer provides welfare benefits
to Employees or their beneficiaries. For these purposes, Welfare Benefits means
any benefit other than those with respect to which Code Section 83(h) (relating
to transfers of property in connection with the performance of services), Code
Section 404 (relating to deductions for contributions to an Employee's trust or
annuity and Compensation under a deferred payment plan), Code Section 404A
(relating to certain foreign deferred compensation plans) apply. A "Fund" is any
social club, voluntary employee benefit association, supplemental unemployment
benefit trust or qualified group legal service organization described in Code
Section 501(c)(7), (9), (17) or (20); any trust, corporation, or other
organization not exempt from income tax, or to the extent provided in
regulations, any account held for an Employer by any person.
1.90 YEAR OF SERVICE A 12-consecutive month period during which an Employee is
credited with not less than 1,000 (or such lesser number as specified by the
Employer in the Adoption Agreement) Hours of Service.
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 PARTICIPATION Employees who meet the eligibility requirements in the
Adoption Agreement on the Effective Date of the Plan shall become Participants
as of the Effective Date of the Plan. If so elected in the Adoption Agreement,
all Employees employed on the Effective Date of the Plan may participate, even
if they have not satisfied the Plan's specified eligibility requirements. Other
Employees shall become Participants on the Entry Date coinciding with or
immediately following the date on which they meet the eligibility requirements.
The Employee must satisfy the eligibility requirements specified in the Adoption
Agreement and be employed on the Entry Date to become a Participant in the Plan.
In the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have previously become a Participant had he or she been
in the eligible class. A former Participant shall again become a Participant
upon returning to the employ of the Employer at the next Entry Date or if
earlier, the next Valuation Date. For this purpose, Participant's Compensation
and Service shall be considered from date of rehire.
2.2 CHANGE IN CLASSIFICATION OF EMPLOYMENT In the event a Participant becomes
ineligible to participate because he or she is no longer a member of an eligible
class of Employees, such Employee shall participate upon his or her return to an
eligible class of Employees.
2.3 COMPUTATION PERIOD To determine Years of Service and Breaks in Service for
purposes of eligibility, the 12-consecutive month period shall commence on the
date on which an Employee first performs an Hour of Service for the Employer and
each anniversary thereof, such that the succeeding 12-consecutive month period
commences with the employee's first anniversary of employment and so on. If,
however, the period so specified is one year or less, the succeeding
12-consecutive month period shall commence on the first day of the Plan Year
prior to the anniversary of the date they first performed an Hour of Service
regardless of whether the Employee is entitled to be credited with 1,000 (or
such lesser number as specified by the Employer in the Adoption Agreement) Hours
of Service during their first employment year.
2.4 EMPLOYMENT RIGHTS Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.5 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
credited for purposes of determining an Employee's eligibility to participate.
2.6 OWNER-EMPLOYEES If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and the Plan
established for other trades or businesses must, when looked at as a single
Plan, satisfy Code Sections 401(a) and (d) for the Employees of this and all
other trades or businesses.
If the Plan provides contributions or benefits for one or more Owner-Employees
who control one or more other trades or businesses, the Employees of the other
trades or businesses must be included in a Plan which satisfies Code Sections
401(a) and (d) and which provides contributions and benefits not less favorable
than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled, and the individual controls a
trade or business, then the contributions or benefits of the Employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him or her under the most favorable plan of the trade or
business which is not controlled.
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For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.7 LEASED EMPLOYEES Any Leased Employee shall be treated as an Employee of the
recipient Employer; however, contributions or benefits provided by the leasing
organization which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient Employer. A Leased
Employee shall not be considered an Employee of the recipient if such Employee
is covered by a money purchase pension plan providing:
(a) a non-integrated Employer contribution rate of at least 10% of
Compensation, [as defined in Code Section 415(c)(3) but
including amounts contributed by the Employer pursuant to a
salary reduction agreement, which are excludable from the
Employee's gross income under a cafeteria plan covered by Code
Section 125, a cash or deferred profit-sharing plan under
Section 401(k) of the Code, a Simplified Employee Pension Plan
under Code Section 402(h)(1)(B ) and a tax-sheltered annuity
under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more than
twenty percent (20%) of the recipient's non-highly compensated work force.
2.8 THRIFT PLANS If the Employer makes an election in the Adoption Agreement to
require Voluntary Contributions to participate in this Plan, the Employer shall
notify each eligible Employee in writing of his or her eligibility for
participation at least 30 days prior to the appropriate Entry Date. The Employee
shall indicate his or her intention to join the Plan by authorizing the Employer
to withhold a percentage of his or her Compensation as provided in the Plan.
Such authorization shall be returned to the Employer at least 10 days prior to
the Employee's Entry Date. The Employee may decline participation by so
indicating on the enrollment form or by failure to return the enrollment form to
the Employer prior to the Employee's Entry Date. If the Employee declines to
participate, such Employee shall be given the opportunity to join the Plan on
the next Entry Date. The taking of a Hardship Withdrawal under the provisions of
paragraph 6.9 will impact the Participant's ability to make these contributions.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 AMOUNT The Employer intends to make periodic contributions to the Plan in
accordance with the formula or formulas selected in the Adoption Agreement.
However, the Employer's contribution for any Plan Year shall be subject to the
limitations on allocations contained in Article X.
3.2 EXPENSES AND FEES The Employer shall also be authorized to reimburse the
Fund for all expenses and fees incurred in the administration of the Plan or
Trust/Custodial Account and paid out of the assets of the Fund. Such expenses
shall include, but shall not be limited to, fees for professional services,
printing and postage. Brokerage commissions may not be reimbursed.
3.3 RESPONSIBILITY FOR CONTRIBUTIONS Neither the Trustee/Custodian nor the
Sponsor shall be required to determine if the Employer has made a contribution
or if the amount contributed is in accordance with the Adoption Agreement or the
Code. The Employer shall have sole responsibility in this regard. The
Trustee/Custodian shall be accountable solely for contributions actually
received by it, within the limits of Article XI.
3.4 RETURN OF CONTRIBUTIONS Contributions made to the Fund by the Employer shall
be irrevocable except as provided below:
(a) Any contribution forwarded to the Trustee/Custodian because of
a mistake of fact, provided that the contribution is returned
to the Employer within one year of the contribution.
(b) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Internal Revenue Code, any contribution made incident to that
initial qualification by the Employer must be returned to the
Employer within one year after the date the initial
qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan
is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(c) Contributions forwarded to the Trustee/Custodian are presumed
to be deductible and are conditioned on their deductibility.
Contributions which are determined to not be deductible will
be returned to the Employer.
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ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 VOLUNTARY CONTRIBUTIONS An Employee may make Voluntary Contributions to the
Plan established hereunder if so authorized by the Employer in a uniform and
nondiscriminatory manner. Such contributions are subject to the limitations on
Annual Additions and are subject to antidiscrimination testing.
4.2 QUALIFIED VOLUNTARY CONTRIBUTIONS A Participant may no longer make Qualified
Voluntary Contributions to the Plan. Amounts already contributed may remain in
the Trust Fund/Custodial Account until distributed to the Participant. Such
amounts will be maintained in a separate account which will be nonforfeitable at
all times. The account will share in the gains and losses of the Trust in the
same manner as described at paragraph 5.4 of the Plan. No part of the Qualified
Voluntary Contribution account will be used to purchase life insurance. Subject
to Article VIII, Joint and Survivor Annuity Requirements (if applicable), the
Participant may withdraw any part of the Qualified Voluntary Contribution
account by making a written application to the Plan Administrator.
4.3 ROLLOVER CONTRIBUTION Unless provided otherwise in the Adoption Agreement, a
Participant may make a Rollover Contribution to any Defined Contribution Plan
established hereunder of all or any part of an amount distributed or
distributable to him or her from a Qualified Deferred Compensation Plan
provided:
(a) the amount distributed to the Participant is deposited to the
Plan no later than the sixtieth day after such distribution
was received by the Participant,
(b) the amount distributed is not one of a series of substantially
equal periodic payments made for the life (or life expectancy)
of the Participant or the joint lives (or joint life
expectancies) of the Participant and the Participant's
Designated Beneficiary, or for a specified period of ten years
or more;
(c) the amount distributed is not required under Code Section
401(a)(9);
(d) if the amount distributed included property such property is
rolled over, or if sold the proceeds of such property may be
rolled over,
(e) the amount distributed is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
In addition, if the Adoption Agreement allows Rollover Contributions, the Plan
will also accept any Eligible Rollover Distribution (as defined at paragraph
1.70) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (e) and additionally meet
the requirements of paragraph (f):
(f) The distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and
was distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan
termination, or in the case of a profit-sharing or
stock bonus plan, a complete discontinuance of
contributions under such plan within the meaning of
Code Section 402(a)(6)(A), or
(2) in one or more distributions which constitute a
qualified lump sum distribution within the meaning of
Code Section 402(e)(4)(A), determined without
reference to subparagraphs (B) and (H).
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Such Rollover Contribution may also be made through an individual retirement
account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is made
in accordance with the rules provided under paragraphs (a) through (e) and the
Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions, which relate to distributions prior to January 1, 1993, may be
made through an IRA in accordance with paragraphs (a) through (f) and additional
requirements as provided in the previous sentence. The Trustee/Custodian shall
not be held responsible for determining the tax-free status of any Rollover
Contribution made under this Plan.
4.4 TRANSFER CONTRIBUTION Unless provided otherwise in the Adoption Agreement a
Participant may, subject to the provisions of paragraph 4.5, also arrange for
the direct transfer of his or her benefit from a Qualified Deferred Compensation
Plan to this Plan. For accounting and record keeping purposes, Transfer
Contributions shall be treated in the same manner as Rollover Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in which
the Employee was directing the investments of his or her account, the Employer
may continue to permit the Employee to direct his or her investments in
accordance with paragraph 13.7 with respect only to such Transfer Contribution.
Notwithstanding the above, the Employer may refuse to accept such Transfer
Contributions.
4.5 EMPLOYER APPROVAL OF TRANSFER CONTRIBUTIONS The Employer maintaining a
Safe-Harbor Profit-Sharing Plan in accordance with the provisions of paragraph
8.7, acting in a nondiscriminatory manner, may in its sole discretion refuse to
allow Transfer Contributions to its profit-sharing plan, if such contributions
are directly or indirectly being transferred from a defined benefit plan, a
money purchase pension plan (including a target benefit plan), a stock bonus
plan, or another profit-sharing plan which would otherwise provide for a life
annuity form of payment to the Participant.
4.6 ELECTIVE DEFERRALS A Participant may enter into a Salary Savings Agreement
with the Employer authorizing the Employer to withhold a portion of such
Participant's Compensation not to exceed $7,000 per calendar year as adjusted
under Code Section 415(d) or, if lesser, the percentage of Compensation
specified in the Adoption Agreement and to deposit such amount to the Plan. No
Participant shall be permitted to have Elective Deferrals made under this Plan
or any other qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year. Thus, the $7,000 limit may be reduced if a
Participant contributes pre-tax contributions to qualified plans of this or
other Employers. Any such contribution shall be credited to the Employee's
Salary Savings Account. Unless otherwise specified in the Adoption Agreement, a
Participant may amend his or her Salary Savings Agreement to increase, decrease
or terminate the percentage upon 30 days written notice to the Employer. If a
Participant terminates his or her agreement, such Participant shall not be
permitted to put a new Salary Savings Agreement into effect until the first pay
period in the next Plan Year, unless otherwise stated in the Adoption Agreement.
The Employer may also amend or terminate said agreement on written notice to the
Participant. If a Participant has not authorized the Employer to withhold at the
maximum rate and desires to increase the total withheld for a Plan Year, such
Participant may authorize the Employer upon 30 days notice to withhold a
supplemental amount up to 100% of his or her Compensation for one or more pay
periods. In no event may the sum of the amounts withheld under the Salary
Savings Agreement plus the supplemental withholding exceed 25% of a
Participant's Compensation for a Plan Year. The Employer may also recharacterize
as after-tax Voluntary Contributions all or any portion of amounts previously
withheld under any Salary Savings Agreement within the Plan Year as provided for
at paragraph 10.9. This may be done to insure that the Plan will meet one of the
antidiscrimination tests under Code Section 401(k). Elective Deferrals shall be
deposited in the Trust within 30 days after being withheld from the
Participant's pay.
4.7 REQUIRED VOLUNTARY CONTRIBUTIONS If the Employer makes a thrift election in
the Adoption Agreement, each eligible Participant shall be required to make
Voluntary Contributions to the Plan for credit to his or her account as provided
in the Adoption Agreement. Such Voluntary Contributions shall be withheld from
the Employee's Compensation and shall be transmitted by the Employer to the
Trustee/Custodian as agreed between the Employer and Trustee/Custodian. A
Participant may discontinue participation or change his or her Voluntary
Contribution percentage by so advising the Employer at least 10 days prior to
the date on which such discontinuance or change is to be effective. If a
Participant discontinues his or her Voluntary Contributions, such Participant
may not again authorize Voluntary
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Contributions for a period of one year from the date of discontinuance. A
Participant may voluntarily change his or her Voluntary Contribution percentage
once during any Plan Year and may also agree to have a reduction in his or her
contribution, if required to satisfy the requirements of the ACP test.
4.8 DIRECT ROLLOVER OF BENEFITS Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Participant's election under this
paragraph, for distributions made on or after January 1, 1993, a Participant may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant in a Direct Rollover. Any
portion of a distribution which is not paid directly to an Eligible Retirement
Plan shall be distributed to the Participant. For purposes of this paragraph, a
Surviving Spouse or a Spouse or former Spouse who is an alternate payee under a
Qualified Domestic Relations Order as defined in Code Section 414(p), will be
permitted to elect to have any Eligible Rollover Distribution paid directly to
an individual retirement account (IRA) or an individual retirement annuity
(IRA).
The plan provisions otherwise applicable to distributions continue to apply to
Rollover and Transfer Contributions.
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ARTICLE V
PARTICIPANT ACCOUNTS
5.1 SEPARATE ACCOUNTS The Employer shall establish a separate bookkeeping
account for each Participant showing the total value of his or her interest in
the Fund. Each Participant's account shall be separated for bookkeeping purposes
into the following sub-accounts:
(a) Employer contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts including
required contributions and, if applicable, either repayments
of loans previously defaulted on and treated as "deemed
distributions" on which a tax report has been issued, and
amounts paid out upon a separation from service which have
been included in income and which are repaid after being
re-hired by the Employer).
(c) Qualified Voluntary Contributions (if the Plan previously
accepted these).
(d) Rollover Contributions and Transfer Contributions.
5.2 ADJUSTMENTS TO PARTICIPANT ACCOUNTS As of each Valuation Date of the Plan,
the Employer shall add to each account:
(a) the Participant's share of the Employer's contribution and
forfeitures as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer
Contributions made by the Participant,
(c) any repayment of amounts previously paid out to a Participant
upon a separation from Service and repaid by the Participant
since the last Valuation Date, and
(d) the Participant's proportionate share of any investment
earnings and increase in the fair market value of the Fund
since the last Valuation Date, as determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's
account since the last Valuation Date, and
(f) the Participant's proportionate share of any decrease in the
fair market value of the Fund since the last Valuation Date,
as determined at paragraph 5.4.
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5.3 ALLOCATING EMPLOYER CONTRIBUTIONS The Employer's contribution shall be
allocated to Participants in accordance with the allocation formula selected by
the Employer in the Adoption Agreement, and the minimum contribution and
allocation requirements for Top-Heavy Plans. Beginning with the 1990 Plan Year
and thereafter, for plans on Standardized Adoption Agreement 001, Participants
who are credited with more than 500 Hours of Service or are employed on the last
day of the Plan Year must receive a full allocation of Employer contributions.
In Nonstandardized Adoption Agreement 002, Employer contributions shall be
allocated to the accounts of Participants employed by the Employer on the last
day of the Plan Year unless indicated otherwise in the Adoption Agreement. In
the case of a non-Top-Heavy, Nonstandardized Plan, Participants must also have
completed a Year of Service unless otherwise specified in the Adoption
Agreement. For Nonstandardized Adoption Agreement 002, the Employer may only
apply the last day of the Plan Year and Year of Service requirements if the Plan
satisfies the requirements of Code Sections 401(a)(26) and 410(b) and the
regulations thereunder including the exception for 401(k) plans. If, when
applying the last day and Year of Service requirements, the Plan fails to
satisfy the aforementioned requirements, additional Participants will be
eligible to receive an allocation of Employer Contributions until the
requirements are satisfied. Participants who are credited with a Year of
Service, but not employed at Plan Year end, are the first category of additional
Participants eligible to receive an allocation. If the requirements are still
not satisfied, Participants credited with more than 500 Hours of Service and
employed at Plan Year end are the next category of Participants eligible to
receive an allocation. Finally, if necessary to satisfy the said requirements,
any Participant credited with more than 500 Hours of Service will be eligible
for an allocation of Employer Contributions. The Service requirement is not
applicable with respect to any Plan Year during which the Employer's Plan is
Top-Heavy.
5.4 ALLOCATING INVESTMENT EARNINGS AND LOSSES A Participant's share of
investment earnings and any increase or decrease in the fair market value of the
Fund shall be based on the proportionate value of all active accounts (other
than accounts with segregated investments) as of the last Valuation Date less
withdrawals since the last Valuation Date. If Employer contributions are made
monthly, quarterly, or on some other systematic basis, the adjusted value of
such accounts for allocation of investment income and gains or losses shall
include one-half the Employer contributions for such period. If Employer
contributions are not made on a systematic basis, it is assumed that they are
made at the end of the valuation period and therefore will not receive an
allocation of investment earnings and gains or losses for such period. Account
balances not yet forfeited shall receive an allocation of earnings and/or
losses. Accounts with segregated investments shall receive only the income or
loss on such segregated investments.
Alternatively, at the Plan Administrator's option, all Employer contributions
will be credited with an allocation of the actual investment earnings and gains
and losses from the actual date of deposit of each such contribution until the
end of the period. Accounts with segregated investments shall receive only the
income or loss on such segregated investments. In no event shall the selection
of a method of allocating gains and losses be used to discriminate in favor of
the Highly Compensated Employees.
5.5 PARTICIPANT STATEMENTS Upon completing the allocations described above for
the Valuation Date coinciding with the end of the Plan Year, the Employer shall
prepare a statement for each Participant showing the additions to and
subtractions from his or her account since the last such statement and the fair
market value of his or her account as of the current Valuation Date. Employers
so choosing may prepare Participant statements for each Valuation Date.
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ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 NORMAL RETIREMENT BENEFITS A Participant shall be entitled to receive the
balance held in his or her account from Employer contributions upon attaining
Normal Retirement Age or at such earlier dates as the provisions of this Article
VI may allow. If the Participant elects to continue working past his or her
Normal Retirement Age, he or she will continue as an active Plan Participant and
no distribution shall be made to such Participant until his or her actual
retirement date unless the employer elects otherwise in the Adoption Agreement,
or a minimum distribution is required by law. Settlement shall be made in the
normal form, or if elected, in one of the optional forms of payment provided
below.
6.2 EARLY RETIREMENT BENEFITS If the Employer so provides in the Adoption
Agreement, an Early Retirement Benefit will be available to individuals who meet
the age and Service requirements. An individual who meets the Early Retirement
Age requirements and separates from Service, will become fully vested,
regardless of any vesting schedule which otherwise might apply. If a Participant
separates from Service before satisfying the age requirements, but after having
satisfied the Service requirement, the Participant will be entitled to elect an
Early Retirement benefit upon satisfaction of the age requirement.
6.3 BENEFITS ON TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment prior to Normal
Retirement Age, such Participant shall be entitled to receive
the vested balance held in his or her account payable at
Normal Retirement Age in the normal form, or if elected, in
one of the optional forms of payment provided hereunder. If
applicable, the Early Retirement Benefit provisions may be
elected. Notwithstanding the preceding sentence, a former
Participant may, if allowed in the Adoption Agreement, make
application to the Employer requesting early payment of any
deferred vested and nonforfeitable benefit due.
(b) If a Participant terminates employment, and the value of that
Participant's Vested Account Balance derived from Employer and
Employee contributions is not greater than $3,500, the
Participant may receive a lump sum distribution of the value
of the entire vested portion of such account balance and the
non-vested portion will be treated as a forfeiture. The
Employer shall continue to follow their consistent policy, as
may be established, regarding immediate cash-outs of Vested
Account Balances of $3,500 or less. For purposes of this
Article, if the value of a Participant's Vested Account
Balance is zero, the Participant shall be deemed to have
received a distribution of such Vested Account Balance
immediately following termination. Likewise, if the
Participant is reemployed prior to incurring 5 consecutive
1-year Breaks in Service they will be deemed to have
immediately repaid such distribution. For Plan Years beginning
prior to 1989, a Participant's Vested Account Balance shall
not include Qualified Voluntary Contributions. Notwithstanding
the above, if the Employer maintains or has maintained a
policy of not distributing any amounts until the Participant's
Normal Retirement Age, the Employer can continue to uniformly
apply such policy.
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(c) If a Participant terminates employment with a Vested Account
Balance derived from Employer and Employee contributions in
excess of $3,500, and elects (with his or her Spouse's
consent, if required) to receive 100% of the value of his or
her Vested Account Balance in a lump sum, the non-vested
portion will be treated as a forfeiture. The Participant (and
his or her Spouse, if required) must consent to any
distribution, when the Vested Account Balance described above
exceeds $3,500 or if at the time of any prior distribution it
exceeded $3,500. For purposes of this paragraph, for Plan
Years beginning prior to 1989, a Participant's Vested Account
Balance shall not include Qualified Voluntary Contributions.
(d) Distribution of less than 100% of the Participant's Vested
Account Balance shall only be permitted if the Participant is
fully vested upon termination of employment.
(e) If a Participant who is not 100% vested receives or is deemed
to receive a distribution pursuant to this paragraph and
resumes employment covered under this Plan, the Participant
shall have the right to repay to the Plan the full amount of
the distribution attributable to Employer contributions on or
before the earlier of the date that the Participant incurs 5
consecutive 1-year Breaks in Service following the date of
distribution or five years after the first date on which the
Participant is subsequently reemployed. In such event, the
Participant's account shall be restored to the value thereof
at the time the distribution was made and may further be
increased by the Plan's income and investment gains and/or
losses on the undistributed amount from the date of
distribution to the date of repayment.
(f) A Participant shall also have the option, to postpone payment
of his or her Plan benefits until the first day of April
following the calendar year in which he or she attains age
70-1/2. Any balance of a Participant's account resulting from
his or her Employee contributions not previously withdrawn, if
any, may be withdrawn by the Participant immediately following
separation from Service.
(g) If a Participant ceases to be an active Employee as a result
of a Disability as defined at paragraph 1.21, such Participant
shall be able to make an application for a disability
retirement benefit payment. The Participant's account balance
will be deemed "immediately distributable" as set forth in
paragraph 6.4, and will be fully vested pursuant to paragraph
9.2.
6.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) An account balance is immediately distributable if any part of
the account balance could be distributed to the Participant
(or Surviving Spouse) before the Participant attains (or would
have attained if not deceased) the later of the Normal
Retirement Age or age 62.
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(b) If the value of a Participant's Vested Account Balance derived
from Employer and Employee Contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the
account balance is immediately distributable, the Participant
and his or her Spouse (or where either the Participant or the
Spouse has died, the survivor) must consent to any
distribution of such account balance. The consent of the
Participant and the Spouse shall be obtained in writing within
the 90-day period ending on the annuity starting date, which
is the first day of the first period for which an amount is
paid as an annuity or any other form. The Plan Administrator
shall notify the Participant and the Participant's Spouse of
the right to defer any distribution until the Participant's
account balance is no longer immediately distributable. Such
notification shall include a general description of the
material features, and an explanation of the relative values
of, the optional forms of benefit available under the plan in
a manner that would satisfy the notice requirements of Code
Section 417(a)(3), and shall be provided no less than 30 days
and no more than 90 days prior to the annuity starting date.
(c) Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a
qualified Joint and Survivor Annuity while the account balance
is immediately distributable. Furthermore, if payment in the
form of a Qualified Joint and Survivor Annuity is not required
with respect to the Participant pursuant to paragraph 8.7 of
the Plan, only the Participant need consent to the
distribution of an account balance that is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition, upon termination of this Plan
if the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's account balance may,
without the Participant's consent, be distributed to the
Participant or transferred to another Defined Contribution
Plan [other than an employee stock ownership plan as defined
in Code Section 4975(e)(7)] within the same controlled group.
(d) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first
day of the first Plan Year beginning after 1988, the
Participant's Vested Account Balance shall not include amounts
attributable to Qualified Voluntary Contributions.
6.5 NORMAL FORM OF PAYMENT The normal form of payment for a profit- sharing plan
satisfying the requirements of paragraph 8.7 hereof shall be a lump sum with no
option for annuity payments. For all other plans, the normal form of payment
hereunder shall be a Qualified Joint and Survivor Annuity as provided under
Article VIII. A Participant whose Vested Account Balance derived from Employer
and Employee contributions exceeds $3,500, or if at the time of any prior
distribution it exceeded $3,500, shall (with the consent of his or her Spouse)
have the right to receive his or her benefit in a lump sum or in monthly,
quarterly, semi-annual or annual payments from the Fund over any period not
extending beyond the life expectancy of the Participant and his or her
Beneficiary. For purposes of this paragraph, for Plan Years prior to 1989, a
Participant's Vested Account Balance shall not include Qualified Voluntary
Contributions. The normal form of payment shall be automatic, unless the
Participant files a written request with the Employer prior to the date on which
the benefit is automatically payable, electing a lump sum or installment payment
option. No amendment to the Plan may eliminate one of the optional distribution
forms listed above.
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6.6 COMMENCEMENT OF BENEFITS
(a) Unless the Participant elects otherwise, distribution of
benefits will begin no later than the 60th day after the close
of the Plan Year in which the latest of the following events
occurs:
(1) the Participant attains age 65 (or normal retirement
age if earlier),
(2) the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant
and Spouse (if necessary) to consent to a distribution while a
benefit is immediately distributable, within the meaning of
paragraph 6.4 hereof, shall be deemed an election to defer
commencement of payment of any benefit sufficient to satisfy
this paragraph.
6.7 CLAIMS PROCEDURES Upon retirement, death, or other severance of employment,
the Participant or his or her representative may make application to the
Employer requesting payment of benefits due and the manner of payment. If no
application for benefits is made, the Employer shall automatically pay any
vested benefit due hereunder in the normal form at the time prescribed at
paragraph 6.4. If an application for benefits is made, the Employer shall
accept, reject, or modify such request and shall notify the Participant in
writing setting forth the response of the Employer and in the case of a denial
or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on
which the denial is based,
(c) provide a description of any additional material or
information necessary for the Participant or his
representative to perfect the claim and an explanation of why
such material or information is necessary, and
(d) explain the Plan's claim review procedure as contained in this
Plan.
In the event the request is rejected or modified, the Participant or his or her
representative may within 60 days following receipt by the Participant or
representative of such rejection or modification, submit a written request for
review by the Employer of its initial decision. Within 60 days following such
request for review, the Employer shall render its final decision in writing to
the Participant or representative stating specific reasons for such decision. If
the Participant or representative is not satisfied with the Employer's final
decision, the Participant or representative can institute an action in a federal
court of competent jurisdiction; for this purpose, process would be served on
the Employer.
6.8 IN-SERVICE WITHDRAWALS An Employee may withdraw all or any part of the fair
market value of his or her Mandatory Contributions, Voluntary Contributions,
Qualified Voluntary Contributions or Rollover Contributions, upon written
request to the Employer. Transfer Contributions, which originate from a Plan
meeting the safe-harbor provisions of paragraph 8.7, may also be withdrawn by an
Employee upon written request to the Employer. Transfer Contributions not
meeting the safe-harbor provisions may only be withdrawn upon retirement, death,
Disability, termination or termination of the Plan, and will be subject to
Spousal consent requirements contained in Code Sections 411(a)(11) and 417. No
such withdrawals are permitted from a money purchase plan until the participant
reaches Normal Retirement Age. Such request shall include the Employee's
address, social security number, birthdate, and amount of the withdrawal. If at
the time a distribution of Qualified Voluntary Contributions is received the
Participant has not attained age 59-1/2 and is not disabled, as defined at Code
Section 22(e)(3), the Participant will be subject to a federal income tax
penalty, unless
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the distribution is rolled over to a qualified plan or individual retirement
plan within 60 days of the date of distribution. A Participant may withdraw all
or any part of the fair market value of his or her pre-1987 Voluntary
Contributions with or without withdrawing the earnings attributable thereto.
Post-1986 Voluntary Contributions may only be withdrawn along with a portion of
the earnings thereon. The amount of the earnings to be withdrawn is determined
by using the formula: DA [1-(V / V+E)], where DA is the distribution amount, V
is the amount of Voluntary Contributions and V+E is the amount of Voluntary
Contributions plus the earnings attributable thereto. A Participant withdrawing
his or her other contributions prior to attaining age 59-1/2, will be subject to
a federal tax penalty to the extent that the withdrawn amounts are includable in
income. Unless the Employer provides otherwise in the Adoption Agreement, any
Participant in a profit-sharing plan who is 100% fully vested in his or her
Employer contributions may withdraw all or any part of the fair market value of
any of such contributions that have been in the account at least two years, plus
the investment earnings thereon, after attaining 59-1/2 without separation from
Service. Such Employer contributions may not have been used to satisfy the
antidiscrimination test of Code Section 401(k). Such distributions shall not be
eligible for redeposit to the Fund. A withdrawal under this paragraph shall not
prohibit such Participant from sharing in any future Employer Contribution he or
she would otherwise be eligible to share in. A request to withdraw amounts
pursuant to this paragraph must if applicable, be consented to by the
Participant's Spouse. The consent shall comply with the requirements of
paragraph 6.4 relating to immediate distributions. Elective Deferrals, Qualified
Non-elective Contributions, and Qualified Matching Contributions, and income
allocable to each are not distributable to a Participant or his or her
Beneficiary or Beneficiaries, in accordance with such Participant's or
Beneficiary's or Beneficiaries' election, earlier than upon separation from
Service, death, or Disability. Such amounts may also be distributed upon:
(a) Termination of the Plan without the establishment of another
Defined Contribution Plan.
(b) The disposition by a corporation to an unrelated corporation
of substantially all of the assets [within the meaning of Code
Section 409(d)(2)] used in a trade or business of such
corporation if such corporation continues to maintain this
Plan after the disposition, but only with respect to Employees
who continue employment with the corporation acquiring such
assets.
(c) The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary [within the
meaning of Code Section 409(d)(3)] if such corporation
continues to maintain this plan, but only with respect to
Employees who continue employment with such subsidiary.
(d) The attainment of age 59-1/2.
(e) The Hardship of the Participant as described in paragraph 6.9.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the Spousal and Participant consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417.
6.9 HARDSHIP WITHDRAWAL If permitted by the Trustee/Custodian and the Employer
in the Adoption Agreement, a Participant may request a Hardship withdrawal prior
to attaining age 59-1/2. If the Participant has not attained age 59-1/2, the
Participant may be subject to a federal income tax penalty. Such request shall
be in writing to the Employer who shall have sole authority to authorize a
hardship withdrawal, pursuant to the rules below. Hardship withdrawals may
include Elective Deferrals regardless of when contributed and any earnings
accrued and credited thereon as of the last day of the Plan Year ending before
July 1, 1989 and Employer related contributions, including but not limited to
Employer Matching Contributions, plus the investment earnings thereon to the
extent vested. Qualified Matching Contributions, Qualified Non-Elective
Contributions and Elective Deferrals reclassified as Voluntary Contributions
plus the investment earnings thereon are only available for Hardship withdrawal
prior to age 59-1/2 to the extent that they were credited to the Participant's
Account as of the last day of the Plan Year ending prior to July 1, 1989. The
Plan Administrator may limit withdrawals to Elective Deferrals and the earnings
thereon as stipulated above. Hardship withdrawals are subject to the Spousal
consent requirements contained in Code Sections 401(a)(11) and 417. Only the
following reasons are valid to obtain hardship withdrawal:
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(a) medical expenses [within the meaning of Code Section 213(d)],
incurred or necessary for the medical care, of the
Participant, his or her Spouse, children and other dependents,
(b) the purchase (excluding mortgage payments) of the principal
residence for the Participant,
(c) payment of tuition and related educational expenses for the
next twelve (12) months of post-secondary education for the
Participant, his or her Spouse, children or other dependents,
or
(d) the need to prevent eviction of the Employee from or a
foreclosure on the mortgage of, the Employee's principal
residence.
Furthermore, the following conditions must be met in order for a withdrawal to
be authorized:
(e) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans maintained by the Employer,
(f) all plans maintained by the Employer provide that the
Employee's Elective Deferrals and Voluntary Contributions will
be suspended for twelve months after the receipt of the
Hardship distribution,
(g) the distribution is not in excess of the amount of the
immediate and heavy financial need [(a) through (d)] above,
and
(h) all plans maintained by the Employer provide that an Employee
may not make Elective Deferrals for the Employee's taxable
year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code
Section 402(g) for such taxable year, less the amount of such
Employee's pre-tax contributions for the taxable year of the
hardship distribution.
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100% of the account balance derived from Employer
contributions and the Participant may increase the nonforfeitable percentage in
the account:
(a) A separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(b) At any relevant time the Participant's nonforfeitable portion
of the separate account will be equal to an amount ("X")
determined by the formula:
X = P [AB + (R X D)] - (R X D)
For purposes of applying the formula: "P" is the nonforfeitable percentage at
the relevant time, "AB" is the account balance at the relevant time, "D" is the
amount of the distribution and "R" is the ratio of the account balance at the
relevant time to the account balance after distribution.
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ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 JOINT AND SURVIVOR ANNUITY REQUIREMENTS All distributions made under the
terms of this Plan must comply with the provisions of Article VIII including, if
applicable, the safe harbor provisions thereunder.
7.2 MINIMUM DISTRIBUTION REQUIREMENTS All distributions required under this
Article shall be determined and made in accordance with the minimum distribution
requirements of Code Section 401(a)(9) and the regulations thereunder, including
the minimum distribution incidental benefit rules found at Regulations Section
1.401(a)(9)-2. The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required Beginning Date. Life
expectancy and joint and last survivor life expectancy are computed by using the
expected return multiples found in Tables V and VI of Regulations Section
1.72-9.
7.3 LIMITS ON DISTRIBUTION PERIODS As of the First Distribution Calendar Year,
distributions if not made in a single-sum, may only be made over one of the
following periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of
the participant, or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
beneficiary.
7.4 REQUIRED DISTRIBUTIONS ON OR AFTER THE REQUIRED BEGINNING DATE
(a) If a participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of
the Participant and the Participant's Designated Beneficiary
or (2) a period not extending beyond the life expectancy of
the Designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the First Distribution Calendar Year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the Applicable Life Expectancy.
(b) For calendar years beginning before 1989, if the Participant's
Spouse is not the Designated Beneficiary, the method of
distribution selected must have assured that at least 50% of
the Present Value of the amount available for distribution was
to be paid within the life expectancy of the Participant.
(c) For calendar years beginning after 1988, the amount to be
distributed each year, beginning with distributions for the
First Distribution Calendar Year shall not be less than the
quotient obtained by dividing the Participant's benefit by the
lesser of (1) the Applicable Life Expectancy or (2) if the
Participant's Spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in
Q&A-4 of Regulations Section 1.401(a)(9)-2. Distributions
after the death of the Participant shall be distributed using
the Applicable Life Expectancy as the relevant divisor without
regard to Regulations Section 1.401(a)(9)-2.
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(d) The minimum distribution required for the Participant's First
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum
distribution for other calendar years, including the minimum
distribution for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must be made on
or before December 31 of that Distribution Calendar Year.
(e) If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements
of Code Section 401(a)(9) and the Regulations thereunder.
(f) For purposes of determining the amount of the required
distribution for each Distribution Calendar Year, the account
balance to be used is the account balance determined as of the
last valuation preceding the Distribution Calendar Year. This
balance will be increased by the amount of any contributions
or forfeitures allocated to the account balance after the
valuation date in such preceding calendar year. Such balance
will also be decreased by distributions made after the
Valuation Date in such preceding Calendar Year.
(g) For purposes of subparagraph 7.4(f), if any portion of the
minimum distribution for the First Distribution Calendar Year
is made in the second Distribution Calendar Year on or before
the Required Beginning Date, the amount of the minimum
distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
7.5 REQUIRED BEGINNING DATE
(a) General Rule. The Required Beginning Date of a Participant is
the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
(b) Transitional Rules. The Required Beginning Date of a
Participant who attains age 70-1/2 before 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of
a Participant who is not a 5-percent owner is the
first day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70-1/2 occurs. In the case of a
Participant who is not a 5-percent owner who attains
age 70-1/2 during 1988 and who has not retired as of
January 1, 1989, the Required Beginning Date is April
1, 1990.
(2) 5-percent owners. The Required Beginning Date of a
Participant who is a 5-percent owner during any year
beginning after 1979, is the first day of April
following the later of:
(i) the calendar year in which the Participant
attains age 70-1/2, or
(ii) the earlier of the calendar year with or
within which ends the plan year in which the
Participant becomes a 5-percent owner, or
the calendar year in which the Participant
retires.
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(c) A Participant is treated as a 5-percent owner for purposes of
this Paragraph if such Participant is a 5-percent owner as
defined in Code Section 416(i) (determined in accordance with
Code Section 416 but without regard to whether the Plan is
Top-Heavy) at any time during the Plan Year ending with or
within the calendar year in which such Owner attains age
66-1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under this
paragraph, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent
year.
7.6 TRANSITIONAL RULE
(a) Notwithstanding the other requirements of this Article and
subject to the requirements of Article VIII, Joint and
Survivor Annuity Requirements, distribution on behalf of any
Employee, including a 5-percent owner, may be made in
accordance with all of the following requirements (regardless
of when such distribution commences):
(1) The distribution by the Trust is one which would not
have disqualified such Trust under Code Section
401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose
interest in the Trust is being distributed or, if the
Employee is deceased, by a beneficiary of such
Employee.
(3) Such designation was in writing, was signed by the
Employee or the beneficiary, and was made before
1984.
(4) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(5) The method of distribution designated by the Employee
or the beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect
to the distributions to be made upon the death of the
Employee.
(c) For any distribution which commences before 1984, but
continues after 1983, the Employee or the beneficiary, to whom
such distribution is being made, will be presumed to have
designated the method of distribution under which the
distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in subparagraphs (a)(1) and (5) above.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the
regulations thereunder. If a designation is revoked subsequent
to the date distributions are required to begin, the Trust
must distribute by the end of the calendar year following the
calendar year in which the revocation
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occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Code Section
401(a)(9) and the regulations thereunder, but for the section
242(b)(2) election of the Tax Equity and Fiscal Responsibility
Act of 1982. For calendar years beginning after 1988, such
distributions must meet the minimum distribution incidental
benefit requirements in section 1.401(a)(9)-2 of the Income
Tax Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However, the
mere substitution or addition of another beneficiary (one not
named in the designation) under the designation will not be
considered to be a revocation of the designation, so long as
such substitution or addition does not alter the period over
which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is transferred
or rolled over from one plan to another plan, the rules in Q&A
J-2 and Q&A J-3 of the regulations shall apply.
7.7 DESIGNATION OF BENEFICIARY FOR DEATH BENEFIT Each Participant shall file a
written designation of beneficiary with the Employer upon qualifying for
participation in this Plan. Such designation shall remain in force until revoked
by the Participant by filing a new beneficiary form with the Employer. The
Participant may elect to have a portion of his or her account balance invested
in an insurance contract. If an insurance contract is purchased under the Plan,
the Trustee must be named as Beneficiary under the terms of the contract.
However, the Participant shall designate a Beneficiary to receive the proceeds
of the contract after settlement is received by the Trustee. Under a
profit-sharing plan satisfying the requirements of paragraph 8.7, the Designated
Beneficiary shall be the Participant's Surviving Spouse, if any, unless such
Spouse properly consents otherwise.
7.8 NONEXISTENCE OF BENEFICIARY Any portion of the amount payable hereunder
which is not disposed of because of the Participant's or former Participant's
failure to designate a beneficiary, or because all of the Designated
Beneficiaries predeceased the Participant, shall be paid to his or her Spouse.
If the Participant had no Spouse at the time of death, payment shall be made to
the personal representative of his or her estate in a lump sum.
7.9 DISTRIBUTION BEGINNING BEFORE DEATH If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
7.10 DISTRIBUTION BEGINNING AFTER DEATH If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance with (a) or (b)
below:
(a) If any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the life
expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately following
the calendar year in which the Participant died;
(b) If the Designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the later
of (1) December 31 of the calendar year immediately following
the calendar year in which the participant died or (2)
December 31 of the calendar year in which the Participant
would have attained age 70-1/2.
If the Participant has not made an election pursuant to this paragraph 7.10 by
the time of his or her death, the Participant's Designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the participant. If the Participant has no
Designated Beneficiary, or
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if the Designated Beneficiary does not elect a method of distribution, then
distribution of the Participant's entire interest must be completed by December
31 of the calendar year containing the fifth anniversary of the Participant's
death.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of this
paragraph with the exception of paragraph (b) therein, shall be applied as if
the Surviving Spouse were the Participant. For the purposes of this paragraph
and paragraph 7.9, distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if the preceding
sentence is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an annuity described in
paragraph 7.4(e) irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is payable to
either a minor or an individual who has been declared incompetent, the benefits
shall be paid to the legally appointed guardian for the benefit of said minor or
incompetent individual, unless the court which appointed the guardian has
ordered otherwise.
7.11 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
(a) Notwithstanding any other provision of the Plan, Excess
Elective Deferrals plus any income and minus any loss
allocable thereto, shall be distributed no later than April
15, 1988, and each April 15 thereafter, to Participants to
whose accounts Excess Elective Deferrals were allocated for
the preceding taxable year, and who claim Excess Elective
Deferrals for such taxable year. Excess Elective Deferrals
shall be treated as Annual Additions under the Plan, unless
such amounts are distributed no later than the first April
15th following the close of the Participant's taxable year. A
Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other
plans of this Employer.
(b) Furthermore, a Participant who participates in another plan
allowing Elective Deferrals may assign to this Plan any Excess
Elective Deferrals made during a taxable year of the
Participant, by notifying the Plan Administrator of the amount
of the Excess Elective Deferrals to be assigned. The
Participant's claim shall be in writing; shall be submitted to
the Plan Administrator not later than March 1 of each year;
shall specify the amount of the Participant's Excess Elective
Deferrals for the preceding taxable year; and shall be
accompanied by the Participant's written statement that if
such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code Sections 401(k), 408(k)
[Simplified Employee Pensions], or 403(b) [annuity programs
for public schools and charitable organizations] will exceed
the $7,000 limit as adjusted under Code Section 415(d) imposed
on the Participant by Code Section 402(g) for the year in
which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or
loss up to the end of the taxable year, during which such
excess was deferred. Income or loss will be calculated under
the method used to calculate investment earnings and losses
elsewhere in the Plan.
(d) If the Participant receives a return of his or her Elective
Deferrals, the amount of such contributions which are returned
must be brought into the Employee's taxable income.
7.12 DISTRIBUTIONS OF EXCESS CONTRIBUTIONS
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(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. If
such excess amounts are distributed more than 2-1/2 months
after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed
on the Employer maintaining the Plan with respect to such
amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions
of the Excess Contributions attributable to each of such
Employees. Excess Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of Code Section 414(q)(6) in the manner prescribed by
the regulations.
(b) Excess Contributions (including the amounts recharacterized)
shall be treated as Annual Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss
up to the end of the Plan Year. Income or loss will be
calculated under the method used to calculate investment
earnings and losses elsewhere in the Plan.
(d) Excess Contributions shall be distributed from the
Participant's Elective Deferral account and Qualified Matching
Contribution account (if applicable) in proportion to the
Participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test) for the
Plan Year. Excess Contributions shall be distributed from the
Participant's Qualified Non-Elective Contribution account only
to the extent that such Excess Contributions exceed the
balance in the Participant's Elective Deferral account and
Qualified Matching Contribution account.
7.13 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if
not forfeitable, distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the preceding Plan
Year. Excess Aggregate Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of Code Section 414(q)(6) in the manner prescribed by
the regulations. If such Excess Aggregate Contributions are
distributed more than 2-1/2 months after the last day of the
Plan Year in which such excess amounts arose, a ten (10)
percent excise tax will be imposed on the Employer maintaining
the Plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions under the
plan.
(b) Excess Aggregate Contributions shall be adjusted for any
income or loss up to the end of the Plan Year. The income or
loss allocable to Excess Aggregate Contributions is the sum of
income or loss for the Plan Year allocable to the
Participant's Voluntary Contribution account, Matching
Contribution account (if any, and if all amounts therein are
not used in the ADP test) and, if applicable, Qualified
Non-Elective Contribution account and Elective Deferral
account. Income or loss will be calculated under the method
used to calculate investment earnings and losses elsewhere in
the Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the accounts of non-Highly Compensated
Employees or applied to reduce Employer contributions, as
elected by the employer in the Adoption Agreement.
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(d) Excess Aggregate Contributions shall be forfeited if such
amount is not vested. If vested, such excess shall be
distributed on a pro-rata basis from the Participant's
Voluntary Contribution account (and, if applicable, the
Participant's Qualified Non-Elective Contribution account,
Matching Contribution account, Qualified Matching Contribution
account, or Elective Deferral account, or both).
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ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 APPLICABILITY OF PROVISIONS The provisions of this Article shall apply to
any Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984 and such other Participants as provided in
paragraph 8.8.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day period
ending on the Annuity Starting Date, a married Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity and
an unmarried Participant's Vested Account Balance will be paid in the form of a
life annuity. The Participant may elect to have such annuity distributed upon
attainment of the Early Retirement Age under the Plan.
8.3 PAYMENT OF QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY Unless an optional form
of benefit has been selected within the Election Period pursuant to a Qualified
Election, if a Participant dies before benefits have commenced then the
Participant's Vested Account Balance shall be paid in the form of an annuity for
the life of the Surviving Spouse. The Surviving Spouse may elect to have such
annuity distributed within a reasonable period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the Election
Period as of the end of any current Plan Year may make a special qualified
election to waive the qualified Pre-retirement Survivor Annuity for the period
beginning on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of the Qualified
Pre-retirement Survivor Annuity in such terms as are comparable to the
explanation required under paragraph 8.5. Qualified Pre-retirement Survivor
Annuity coverage will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Article.
8.4 QUALIFIED ELECTION A Qualified Election is an election to either waive a
Qualified Joint and Survivor Annuity or a qualified pre-retirement survivor
annuity. Any such election shall not be effective unless:
(a) the Participant's Spouse consents in writing to the election;
(b) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which
may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any
further spousal consent);
(c) the Spouse's consent acknowledges the effect of the election;
and
(d) the Spouse's consent is witnessed by a Plan representative or
notary public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity
shall not be effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further spousal consent). If
it is established to the satisfaction of the Plan Administrator that there is no
Spouse or that the Spouse cannot be located, a waiver will be deemed a Qualified
Election. Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall be
effective only with respect to such Spouse. A consent that permits designations
by the Participant without any requirement of further consent by such Spouse
must acknowledge that the Spouse has the right to limit consent to a specific
beneficiary, and a specific form of benefit where applicable, and that the
Spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this provision shall
be valid unless the Participant has received notice as provided in paragraphs
8.5 and 8.6 below.
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8.5 NOTICE REQUIREMENTS FOR QUALIFIED JOINT AND SURVIVOR ANNUITY In the case of
a Qualified Joint and Survivor Annuity, the Plan Administrator shall, no less
than 30 days and no more than 90 days prior to the Annuity Starting date,
provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(b) the Participant's right to make and the effect of an election
to waive the Qualified Joint and Survivor Annuity form of
benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
8.6 NOTICE REQUIREMENTS FOR QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY In the
case of a qualified pre-retirement survivor annuity as described in paragraph
8.3, the Plan Administrator shall provide each Participant within the applicable
period for such Participant a written explanation of the qualified
pre-retirement survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of paragraph
8.5 applicable to a Qualified Joint and Survivor Annuity. The applicable period
for a Participant is whichever of the following periods ends last:
(a) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after this Article first applies to
the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation
from Service in the case of a Participant who separates from
Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the events described in (b) and (c) is the end of the two-year period
beginning one-year prior to the date the applicable event occurs, and ending
one-year after that date. In the case of a Participant who separates from
Service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to separation and
ending one year after separation. If such a Participant subsequently returns to
employment with the Employer, the applicable period for such Participant shall
be re-determined.
8.7 SPECIAL SAFE-HARBOR EXCEPTION FOR CERTAIN PROFIT-SHARING PLANS
(a) This paragraph shall apply to a Participant in a
profit-sharing plan, and to any distribution, made on or after
the first day of the first plan year beginning after 1988,
from or under a separate account attributable solely to
Qualified Voluntary contributions, as maintained on behalf of
a Participant in a money purchase pension plan, (including a
target benefit plan) if the following conditions are
satisfied:
(1) the Participant does not or cannot elect payments in
the form of a life annuity; and
(2) on the death of a Participant, the Participant's
Vested Account Balance will be paid to the
Participant's Surviving Spouse, but if there is no
Surviving Spouse, or if the Surviving Spouse has
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consented in a manner conforming to a Qualified
Election, then to the Participant's Designated
Beneficiary.
The Surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the 90-day period
following the date of the Participant's death. The account
balance shall be adjusted for gains or losses occurring after
the Participant's death in accordance with the provisions of
the Plan governing the adjustment of account balances for
other types of distributions. These safe-harbor rules shall
not be operative with respect to a Participant in a
profit-sharing plan if that plan is a direct or indirect
transferee of a Defined Benefit Plan, money purchase plan, a
target benefit plan, stock bonus plan, or profit-sharing plan
which is subject to the survivor annuity requirements of Code
Section 401(a)(11) and Code Section 417, and would therefore
have a Qualified Joint and Survivor Annuity as its normal form
of benefit.
(b) The Participant may waive the spousal death benefit described
in this paragraph at any time provided that no such waiver
shall be effective unless it satisfies the conditions
(described in paragraph 8.4) that would apply to the
Participant's waiver of the Qualified Pre-Retirement Survivor
Annuity.
(c) If this paragraph 8.7 is operative, then all other provisions
of this Article other than paragraph 8.8 are inoperative.
8.8 TRANSITIONAL JOINT AND SURVIVOR ANNUITY RULES Special transition rules apply
to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous paragraphs of this Article, must be given the
opportunity to elect to have the prior paragraphs of this
Article apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor Plan in a
Plan Year beginning on or after January 1, 1976 and such
Participant had at least 10 Years of Service for vesting
purposes when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor Plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance
with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and
(b) above] must be afforded to the appropriate Participants
during the period commencing on August 23, 1984 and ending on
the date benefits would otherwise commence to said
Participants.
8.9 AUTOMATIC JOINT AND SURVIVOR ANNUITY AND EARLY SURVIVOR ANNUITY Any
Participant who has elected pursuant to paragraph 8.8(b) and any Participant who
does not elect under paragraph 8.8(a) or who meets the requirements of paragraph
8.8(a), except that such Participant does not have at least 10 years of vesting
Service when he or she separates from Service, shall have his or her benefits
distributed in accordance with all of the following requirements if benefits
would have been payable in the form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
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(1) begins to receive payments under the Plan on or after
Normal Retirement Age, or
(2) dies on or after Normal Retirement Age while still
working for the Employer, or
(3) begins to receive payments on or after the Qualified
Early Retirement Age, or
(4) separates from Service on or after attaining Normal
Retirement (or the Qualified Early Retirement Age)
and after satisfying the eligibility requirements for
the payment of benefits under the Plan and thereafter
dies before beginning to receive such benefits,
then such benefits will be received under this Plan in the
form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the Election Period.
The Election Period must begin at least 6 months before the
Participant attains Qualified Early Retirement Age and end not
more than 90 days before the commencement of benefits. Any
election will be in writing and may be changed by the
Participant at any time.
(b) Election of Early Survivor Annuity. A Participant who is
employed after attaining the Qualified Early Retirement Age
will be given the opportunity to elect, during the Election
Period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and Survivor
Annuity if the Participant had retired on the day before his
or her death. Any election under this provision will be in
writing and may be changed by the Participant at any time. The
Election Period begins on the later of:
(1) the 90th day before the Participant attains the
Qualified Early Retirement Age, or
(2) the date on which participation begins, and ends on
the date the Participant terminates employment.
8.10 ANNUITY CONTRACTS Any annuity contract distributed under this Plan must be
nontransferable. The terms of any annuity contract purchased and distributed by
the Plan to a Participant or Spouse shall comply with the requirements of this
Plan.
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ARTICLE IX
VESTING
9.1 EMPLOYEE CONTRIBUTIONS A Participant shall always have a 100% vested and
nonforfeitable interest in his or her Elective Deferrals, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions, and
Transfer Contributions plus the earnings thereon. No forfeiture of Employer
related contributions (including any minimum contributions made under paragraph
14.2) will occur solely as a result of an Employee's withdrawal of any Employee
contributions.
9.2 EMPLOYER CONTRIBUTIONS A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the table selected in the Adoption Agreement,
provided that if a Participant is not already fully vested, he or she shall
become so upon attaining Normal Retirement Age, Early Retirement Age, on death
prior to normal retirement, on retirement due to Disability, or on termination
of the Plan.
9.3 COMPUTATION PERIOD The computation period for purposes of determining Years
of Service and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from Employer
contributions shall be determined by the Employer in the Adoption Agreement. In
the event a former Participant with no vested interest in his or her Employer
contribution account requalifies for participation in the Plan after incurring a
Break in Service, such Participant shall be credited for vesting with all
pre-break and post-break Service.
9.4 REQUALIFICATION PRIOR TO FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE The
account balance of such Participant shall consist of any undistributed amount in
his or her account as of the date of re-employment plus any future contributions
added to such account plus the investment earnings on the account. The Vested
Account Balance of such Participant shall be determined by multiplying the
Participant's account balance (adjusted to include any distribution or redeposit
made under paragraph 6.3) by such Participant's vested percentage. All Service
of the Participant, both prior to and following the break, shall be counted when
computing the Participant's vested percentage.
9.5 REQUALIFICATION AFTER FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE If such
Participant is not fully vested upon re-employment, a new account shall be
established for such Participant to separate his or her deferred vested and
nonforfeitable account, if any, from the account to which new allocations will
be made. The Participant's deferred account to the extent remaining shall be
fully vested and shall continue to share in earnings and losses of the Fund.
When computing the Participant's vested portion of the new account, all
pre-break and post-break Service shall be counted. However, notwithstanding this
provision, no such former Participant who has had five consecutive one-year
Breaks in Service shall acquire a larger vested and nonforfeitable interest in
his or her prior account balance as a result of requalification hereunder.
9.6 CALCULATING VESTED INTEREST A Participant's vested and nonforfeitable
interest shall be calculated by multiplying the fair market value of his or her
account attributable to Employer contributions on the Valuation Date preceding
distribution by the decimal equivalent of the vested percentage as of his or her
termination date. The amount attributable to Employer contributions for purposes
of the calculation includes amounts previously paid out pursuant to paragraph
6.3 and not repaid. The Participant's vested and nonforfeitable interest, once
calculated above, shall be reduced to reflect those amounts previously paid out
to the Participant and not repaid by the Participant. The Participant's vested
and nonforfeitable interest so determined shall continue to share in the
investment earnings and any increase or decrease in the fair market value of the
Fund up to the Valuation Date preceding or coinciding with payment.
9.7 FORFEITURES Any balance in the account of a Participant who has separated
from Service to which he or she is not entitled under the foregoing provisions,
shall be forfeited and applied as provided in the Adoption Agreement. A
forfeiture may only occur if the Participant has received a distribution from
the Plan or if the Participant has incurred five consecutive 1-year Breaks in
Service. Furthermore, a Highly Compensated Employee's Matching Contributions may
be forfeited, even if vested, if the contributions to which they relate are
Excess Deferrals, Excess Contributions or Excess Aggregate Contributions.
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9.8 AMENDMENT OF VESTING SCHEDULE No amendment to the Plan shall have the effect
of decreasing a Participant's vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the date it
becomes effective. Further, if the vesting schedule of the Plan is amended, or
the Plan is amended in any way that directly or indirectly affects the
computation of any Participant's nonforfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting schedule,
each Participant with at least three Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment, to have
his or her nonforfeitable percentage computed under the Plan without regard to
such amendment. For Participants who do not have at least one Hour of Service in
any Plan Year beginning after 1988, the preceding sentence shall be applied by
substituting "Five Years of Service" for "Three Years of Service" where such
language appears. The period during which the election may be made shall
commence with the date the amendment is adopted and shall end on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of the
amendment by the Employer or the Trustee/Custodian. If the
Trustee/Custodian is asked to so notify, the Fund will be
charged for the costs thereof.
No amendment to the Plan shall be effective to the extent that it has the effect
of decreasing a Participant's accrued benefit. Notwithstanding the preceding
sentence, a Participant's account balance may be reduced to the extent permitted
under section 412(c)(8) of the Code (relating to financial hardships). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's account balance or eliminating an optional form of benefit, with
respect to benefits attributable to service before the amendment, shall be
treated as reducing an accrued benefit.
9.9 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
considered for purposes of determining a Participant's nonforfeitable
percentage.
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ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 PARTICIPATION IN THIS PLAN ONLY If the Participant does not participate in
and has never participated in another qualified plan, a Welfare Benefit Fund (as
defined in paragraph 1.89) or an individual medical account, as defined in Code
Section 415(l)(2), maintained by the adopting Employer, which provides an Annual
Addition as defined in paragraph 1.4, the amount of Annual Additions which may
be credited to the Participant's account for any Limitation Year will not exceed
the lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be contributed
or allocated to the Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. Prior to determining
the Participant's actual Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimate of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
10.2 DISPOSITION OF EXCESS ANNUAL ADDITIONS If, pursuant to paragraph 10.1 or as
a result of the allocation of forfeitures, there is an Excess Amount, the excess
will be disposed of under one of the following methods as determined in the
Adoption Agreement. If no election is made in the Adoption Agreement then method
"(a)" below shall apply.
(a) Suspense Account Method
(1) Any nondeductible Employee Voluntary, Required
Voluntary Contributions and unmatched Elective
Deferrals to the extent they would reduce the Excess
Amount will be returned to the Participant. To the
extent necessary to reduce the Excess Amount,
non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was
a corresponding match.
(2) If after the application of paragraph (1) an Excess
Amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the
Excess Amount in the Participant's account will be
used to reduce Employer contributions (including any
allocation of forfeitures) for such Participant in
the next Limitation Year, and each succeeding
Limitation Year if necessary;
(3) If after the application of paragraph (1) an Excess
Amount still exists, and the Participant is not
covered by the Plan at the end of the Limitation
Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be
applied to reduce future Employer contributions
(including allocation of any forfeitures) for all
remaining Participants in the next Limitation Year,
and each succeeding Limitation Year if necessary;
(4) If a suspense account is in existence at any time
during the Limitation Year pursuant to this
paragraph, it will not participate in the allocation
of investment gains and losses. If a suspense account
is in existence at any time during a particular
Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants'
accounts before any Employer contributions or any
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Employee Contributions may be made to the Plan for
that Limitation Year. Excess amounts may not be
distributed to Participants or former Participants.
(b) Spillover Method
(1) Any nondeductible Employee Voluntary, Required
Voluntary Contributions and unmatched Elective
Deferrals to the extent they would reduce the Excess
Amount will be returned to the Participant. To the
extent necessary to reduce the Excess Amount,
non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was
a corresponding match.
(2) Any Excess Amount which would be allocated to the
account of an individual Participant under the Plan's
allocation formula will be reallocated to other
Participants in the same manner as other Employer
contributions. No such reallocation shall be made to
the extent that it will result in an Excess Amount
being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated
under (1) above, the suspense account provisions of
(a) above will apply.
10.3 PARTICIPATION IN THIS PLAN AND ANOTHER MASTER AND PROTOTYPE DEFINED
CONTRIBUTION PLAN, WELFARE BENEFIT FUND OR INDIVIDUAL MEDICAL ACCOUNT MAINTAINED
BY THE EMPLOYER The Annual Additions which may be credited to a Participant's
account under this Plan for any Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a Participant's
account under the other Master or Prototype Defined Contribution Plans, Welfare
Benefit Funds, and individual medical accounts as defined in Code Section
415(l)(2), maintained by the Employer, which provide an Annual Addition as
defined in paragraph 1.4 for the same Limitation Year. If the Annual Additions,
with respect to the Participant under other Defined Contribution Plans and
Welfare Benefit Funds maintained by the Employer, are less than the Maximum
Permissible Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this limitation,
the amount contributed or allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other Defined Contribution Plans and Welfare Benefit Funds in the
aggregate are equal to or greater than the Maximum Permissible Amount, no amount
will be contributed or allocated to the Participant's account under this Plan
for the Limitation Year. Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in paragraph 10.1.
As soon as administratively feasible after the end of the Limitation Year, the
Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual Compensation for the Limitation Year.
10.4 DISPOSITION OF EXCESS ANNUAL ADDITIONS UNDER TWO PLANS If, pursuant to
paragraph 10.3 or as a result of forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the Annual
Additions last allocated except that Annual Additions attributable to a Welfare
Benefit Fund or Individual Medical Account as defined in Code Section 415(l)(2)
will be deemed to have been allocated first regardless of the actual allocation
date. If an Excess Amount was allocated to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan, the Excess
Amount attributed to this Plan will be the product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
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(1) the Annual Additions allocated to the Participant for
the Limitation Year as of such date under the Plan,
to
(2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date
under this and all the other qualified Master or
Prototype Defined Contribution Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 PARTICIPATION IN THIS PLAN AND ANOTHER DEFINED CONTRIBUTION PLAN WHICH IS
NOT A MASTER OR PROTOTYPE PLAN If the Participant is covered under another
qualified Defined Contribution Plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be credited to the
Participant's account under this Plan for any Limitation Year will be limited in
accordance with paragraphs 10.3 and 10.4 as though the other plan were a Master
or Prototype Plan, unless the Employer provides other limitations in the
Adoption Agreement.
10.6 PARTICIPATION IN THIS PLAN AND A DEFINED BENEFIT PLAN If the Employer
maintains, or at any time maintained, a qualified Defined Benefit Plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. For any Plan Year during which the Plan is Top-Heavy, the
Defined Benefit and Defined Contribution Plan Fractions shall be calculated in
accordance with Code Section 416(h). The Annual Additions which may be credited
to the Participant's account under this Plan for any Limitation Year will be
limited in accordance with the provisions set forth in the Adoption Agreement.
10.7 AVERAGE DEFERRAL PERCENTAGE (ADP) TEST With respect to any Plan Year, the
Average Deferral Percentage for Participants who are Highly Compensated
Employees and the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees must satisfy one of the following tests:
(a) BASIC TEST - The Average Deferral Percentage for Participants
who are Highly Compensated Employees for the Plan Year is not
more than 1.25 times the Average Deferral Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year, or
(b) ALTERNATIVE TEST - The Average Deferral Percentage for
Participants who are Highly Compensated Employees for the Plan
Year does not exceed the Average Deferral Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year by more than 2 percentage points provided that
the Average Deferral Percentage for Participants who are
Highly Compensated Employees is not more than 2.0 times the
Average Deferral Percentage for Participants who are
non-Highly Compensated Employees.
10.8 SPECIAL RULES RELATING TO APPLICATION OF ADP TEST
(a) The Actual Deferral Percentage for any Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals (and Qualified
Non-Elective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) allocated to his or her accounts
under two or more arrangements described in Code Section
401(k), that are maintained by the Employer, shall be
determined as if such Elective Deferrals (and, if applicable,
such Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee participates in
two or more cash or deferred arrangements that have different
Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement.
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(b) In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b), only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such Code Sections only if aggregated with
this Plan, then this Section shall be applied by determining
the Actual Deferral Percentage of Employees as if all such
plans were a single plan. For Plan Years beginning after 1989,
plans may be aggregated in order to satisfy Code Section
401(k) only if they have the same Plan Year.
(c) For purposes of determining the Actual Deferral Percentage of
a Participant who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Elective
Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Non-Elective
Contributions and Qualified Matching Contributions, or both)
for the Plan Year of Family Members as defined in paragraph
1.36 of this Plan. Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who are
non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees. In the event of repeal of the
family aggregation rules under Code Section 414(q)(6), all
applications of such rules under this Plan will cease as of
the effective date of such repeal.
(d) For purposes of determining the ADP test, Elective Deferrals,
Qualified Non-Elective Contributions and Qualified Matching
Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to
which contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(f) The determination and treatment of the Actual Deferral
Percentage amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
10.9 RECHARACTERIZATION If the Employer allows for Voluntary Contributions in
the Adoption Agreement, a Participant may treat his or her Excess Contributions
as an amount distributed to the Participant and then contributed by the
Participant to the Plan. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective Deferrals. Amounts may
not be recharacterized by a Highly Compensated Employee to the extent that such
amount in combination with other Employee Contributions made by that Employee
would exceed any stated limit under the Plan on Voluntary Contributions.
Recharacterization must occur no later than two and one-half months after the
last day of the Plan Year in which such Excess Contributions arose and is deemed
to occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the Participant's
tax year in which the Participant would have received them in cash.
10.10 AVERAGE CONTRIBUTION PERCENTAGE (ACP) TEST If the Employer makes Matching
Contributions or if the Plan allows Employees to make Voluntary Contributions
the Plan must meet additional nondiscrimination requirements provided under Code
Section 401(m). If Employee Contributions (including any Elective Deferrals
recharacterized as Voluntary Contributions) are made pursuant to this Plan, then
in addition to the ADP test referenced in paragraph 10.7, the Average
Contribution Percentage test is also applicable. The Average Contribution
Percentage for Participants who are Highly Compensated Employees for each Plan
Year and the Average Contribution Percentage for Participants who are Non-Highly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
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<PAGE> 83
(a) BASIC TEST - The Average Contribution Percentage for
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(b) ALTERNATIVE TEST - The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the Average Contribution
Percentage for Participants who are Highly Compensated
Employees does not exceed the Average Contribution Percentage
for Participants who are non-Highly Compensated Employees by
more than two (2) percentage points.
10.11 SPECIAL RULES RELATING TO APPLICATION OF ACP TEST
(a) If one or more Highly Compensated Employees participate in
both a cash or deferred arrangement and a plan subject to the
ACP test maintained by the Employer and the sum of the ADP and
ACP of those Highly Compensated Employees subject to either or
both tests exceeds the Aggregate Limit, then the ADP or ACP of
those Highly Compensated Employees who also participate in a
cash or deferred arrangement will be reduced (beginning with
such Highly Compensated Employee whose ADP or ACP is the
highest) as set forth in the Adoption Agreement so that the
limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amounts is
reduced shall be treated as an Excess Aggregate Contribution.
The ADP and ACP of the Highly Compensated Employees are
determined after any corrections required to meet the ADP and
ACP tests. Multiple use does not occur if both the ADP and ACP
of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the non-Highly Compensated
Employees.
(b) For purposes of this Article, the Contribution Percentage for
any Participant who is a Highly Compensated Employee and who
is eligible to have Contribution Percentage Amounts allocated
to his or her account under two or more plans described in
Code Section 401(a), or arrangements described in Code Section
401(k) that are maintained by the Employer, shall be
determined as if the total of such Contribution Percentage
Amounts was made under each Plan. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(c) In the event that this Plan satisfies the requirements of Code
Sections 401(a)(4), 401(m), or 410(b) only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such Code Sections only if aggregated with
this Plan, then this Section shall be applied by determining
the Contribution Percentage of Employees as if all such plans
were a single plan. For plan years beginning after 1989, plans
may be aggregated in order to satisfy Code Section 401(m) only
if the aggregated plans have the same Plan Year.
(d) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most
highly-paid, Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and Compensation
for the Plan Year of Family Members as defined in Paragraph
1.36 of this Plan. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as
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<PAGE> 84
separate Employees in determining the Contribution Percentage
both for Participants who are non-Highly Compensated Employees
and for Participants who are Highly Compensated Employees. In
the event of repeal of the family aggregation rules under Code
Section 414(q)(6), all applications of such rules under this
Plan will cease as of the effective date of such repeal.
(e) For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the
Plan Year in which contributed to the trust. Matching
Contributions and Qualified Non-Elective Contributions will be
considered made for a Plan Year if made no later than the end
of the twelve-month period beginning on the day after the
close of the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(g) The determination and treatment of the Contribution Percentage
of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(h) Qualified Matching Contributions and Qualified Non-Elective
Contributions used to satisfy the ADP test may not be used to
satisfy the ACP test.
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ARTICLE XI
ADMINISTRATION
11.1 PLAN ADMINISTRATOR The Employer shall be the named fiduciary and Plan
Administrator. These duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, or any
other party needed to administer the Plan,
(b) directing the Trustee/Custodian with respect to payments from
the Fund,
(c) communicating with Employees regarding their participation and
benefits under the Plan, including the administration of all
claims procedures,
(d) filing any returns and reports with the Internal Revenue
Service, Department of Labor, or any other governmental
agency,
(e) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party appointed by
the Employer under paragraph (a),
(f) establishing a funding policy and investment objectives
consistent with the purposes of the Plan and the Employee
Retirement Income Security Act of 1974, and
(g) construing and resolving any question of Plan interpretation.
The Plan Administrator's interpretation of Plan provisions
including eligibility and benefits under the Plan is final,
and unless it can be shown to be arbitrary and capricious will
not be subject to "de novo" review.
11.2 TRUSTEE/CUSTODIAN The Trustee/Custodian shall be responsible for the
administration of investments held in the Fund. These duties shall include:
(a) receiving contributions under the terms of the Plan,
(b) making distributions from the Fund in accordance with written
instructions received from an authorized representative of the
Employer, and
(c) keeping accurate records reflecting its administration of the
Fund and making such records available to the Employer for
review and audit. Within 90 days after each Plan Year, and
within 90 days after its removal or resignation, the
Trustee/Custodian shall file with the Employer an accounting
of its administration of the Fund during such year or from the
end of the preceding Plan Year to the date of removal or
resignation. Such accounting shall include a statement of cash
receipts and disbursements since the date of its last
accounting and shall contain an asset list showing the fair
market value of investments held in the Fund as of the end of
the Plan Year. The value of marketable investments shall be
determined using the most recent price quoted on a national
securities exchange or over the counter market. The value of
non-marketable investments shall be determined in the sole
judgement of the Trustee/Custodian which determination shall
be binding and conclusive. The value of investments in
securities or obligations of the Employer in which there is no
market shall be determined in the sole judgement of the
Employer and the Trustee/Custodian shall have no
responsibility with respect to the valuation of such
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<PAGE> 86
assets. The Employer shall review the Trustee/Custodian's
accounting and notify the Trustee/Custodian in the event of
its disapproval of the report within 90 days, providing the
Trustee/Custodian with a written description of the items in
question. The Trustee/Custodian shall have 60 days to provide
the Employer with a written explanation of the items in
question. If the Employer again disapproves, the
Trustee/Custodian shall file its accounting in a court of
competent jurisdiction for audit and adjudication.
(d) employing such agents, attorneys or other professionals as the
Trustee may deem necessary or advisable in the performance of
its duties.
The Trustee's/Custodian's duties shall be limited to those described above. The
Employer shall be responsible for any other administrative duties required under
the Plan or by applicable law.
11.3 ADMINISTRATIVE FEES AND EXPENSES All reasonable costs, charges and expenses
incurred by the Trustee/Custodian in connection with the administration of the
Fund and all reasonable costs, charges and expenses incurred by the Plan
Administrator in connection with the administration of the Plan (including fees
for legal services rendered to the Trustee/Custodian or Plan Administrator) may
be paid by the Employer, but if not paid by the Employer when due, shall be paid
from the Fund. Such reasonable compensation to the Trustee/Custodian as may be
agreed upon from time to time between the Employer and the Trustee/Custodian and
such reasonable compensation to the Plan Administrator as may be agreed upon
from time to time between the Employer and Plan Administrator may be paid by the
Employer, but if not paid by the Employer when due shall be paid by the Fund.
The Trustee shall have the right to liquidate trust assets to cover its fees.
Notwithstanding the foregoing, no compensation other than reimbursement for
expenses shall be paid to a Plan Administrator who is the Employer or a
full-time Employee of the Employer. In the event any part of the Trust/Custodial
Account becomes subject to tax, all taxes incurred will be paid from the Fund
unless the Plan Administrator advises the Trustee/Custodian not to pay such tax.
11.4 DIVISION OF DUTIES AND INDEMNIFICATION
(a) The Trustee/Custodian shall have the authority and discretion
to manage and govern the Fund to the extent provided in this
instrument, but does not guarantee the Fund in any manner
against investment loss or depreciation in asset value, or
guarantee the adequacy of the Fund to meet and discharge all
or any liabilities of the Plan.
(b) The Trustee/Custodian shall not be liable for the making,
retention or sale of any investment or reinvestment made by
it, as herein provided, or for any loss to, or diminution of
the Fund, or for any other loss or damage which may result
from the discharge of its duties hereunder except to the
extent it is judicially determined that the Trustee/Custodian
has failed to exercise the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character with
like aims.
(c) The Employer warrants that all directions issued to the
Trustee/Custodian by it or the Plan Administrator will be in
accordance with the terms of the Plan and not contrary to the
provisions of the Employee Retirement Income Security Act of
1974 and regulations issued thereunder.
(d) The Trustee/Custodian shall not be answerable for any action
taken pursuant to any direction, consent, certificate, or
other paper or document on the belief that the same is genuine
and signed by the proper person. All directions by the
Employer, Participant or the Plan Administrator shall be in
writing. The Employer shall deliver to the Trustee/Custodian
certificates evidencing the individual or individuals
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<PAGE> 87
authorized to act as set forth in the Adoption Agreement or as
the Employer may subsequently inform the Trustee/Custodian in
writing and shall deliver to the Trustee/Custodian specimens
of their signatures.
(e) The duties and obligations of the Trustee/Custodian shall be
limited to those expressly imposed upon it by this instrument
or subsequently agreed upon by the parties. Responsibility for
administrative duties required under the Plan or applicable
law not expressly imposed upon or agreed to by the
Trustee/Custodian, shall rest solely with the Employer.
(f) The Trustee shall be indemnified and saved harmless by the
Employer from and against any and all liability to which the
Trustee/Custodian may be subjected, including all expenses
reasonably incurred in its defense, for any action or failure
to act resulting from compliance with the instructions of the
Employer, the employees or agents of the Employer, the Plan
Administrator, or any other fiduciary to the Plan, and for any
liability arising from the actions or non-actions of any
predecessor Trustee/Custodian or fiduciary or other
fiduciaries of the Plan.
(g) The Trustee/Custodian shall not be responsible in any way for
the application of any payments it is directed to make or for
the adequacy of the Fund to meet and discharge any and all
liabilities under the Plan.
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ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 THE FUND The Fund shall consist of all contributions made under Article III
and Article IV of the Plan and the investment thereof and earnings thereon. All
contributions and the earnings thereon less payments made under the terms of the
Plan, shall constitute the Fund. The Fund shall be administered as provided in
this document.
12.2 CONTROL OF PLAN ASSETS The assets of the Fund or evidence of ownership
shall be held by the Trustee/Custodian under the terms of the Plan and
Trust/Custodial Account. If the assets represent amounts transferred from
another trustee/custodian under a former plan, the Trustee/Custodian named
hereunder shall not be responsible for the propriety of any investment under the
former plan.
12.3 EXCLUSIVE BENEFIT RULES No part of the Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, former
Participants with a vested interest, and the beneficiary or beneficiaries of
deceased Participants having a vested interest in the Fund at death.
12.4 ASSIGNMENT AND ALIENATION OF BENEFITS No right or claim to, or interest in,
any part of the Fund, or any payment from the Fund, shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution, or levy of any kind. The
Trustee/Custodian shall not recognize any attempt to assign, transfer, sell,
mortgage, pledge, hypothecate, commute, or anticipate the same, except to the
extent required by law. The preceding sentences shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order, as defined in
Code Section 414(p), or any domestic relations order entered before January 1,
1985 which the Plan attorney and Plan Administrator deem to be qualified.
12.5 DETERMINATION OF QUALIFIED DOMESTIC RELATIONS ORDER(QDRO) A Domestic
Relations Order shall specifically state all of the following in order to be
deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the
Participant and of each alternate payee covered by the QDRO.
However, if the QDRO does not specify the current mailing
address of the alternate payee, but the Plan Administrator has
independent knowledge of that address, the QDRO will still be
valid.
(b) The dollar amount or percentage of the Participant's benefit
to be paid by the Plan to each alternate payee, or the manner
in which the amount or percentage will be determined.
(c) The number of payments or period for which the order applies.
(d) The specific plan (by name) to which the Domestic Relations
Order applies.
The Domestic Relations Order shall not be deemed a QDRO if it requires the Plan
to provide:
(e) any type or form of benefit, or any option not already
provided for in the Plan;
(f) increased benefits, or benefits in excess of the Participant's
vested rights;
(g) payment of a benefit earlier than allowed by the Plan's
earliest retirement provisions or in the case of a
profit-sharing plan, prior to the allowability of in-service
withdrawals, or
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(h) payment of benefits to an alternate payee which are required
to be paid to another alternate payee under another QDRO.
Promptly, upon receipt of a Domestic Relations Order ("Order") which may or may
not be "Qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt, and include a copy of
this paragraph 12.5. The Plan Administrator shall then forward the Order to the
Plan's legal counsel for an opinion as to whether or not the Order is in fact
"Qualified" as defined in Code Section 414(p). Within a reasonable time after
receipt of the Order, not to exceed 60 days, the Plan's legal counsel shall make
a determination as to its "Qualified" status and the Participant and any
alternate payee(s) shall be promptly notified in writing of the determination.
If the "Qualified" status of the Order is in question, there will be a delay in
any payout to any payee including the Participant, until the status is resolved.
In such event, the Plan Administrator shall segregate the amount that would have
been payable to the alternate payee(s) if the Order had been deemed a QDRO. If
the Order is not Qualified, or the status is not resolved (for example, it has
been sent back to the Court for clarification or modification) within 18 months
beginning with the date the first payment would have to be made under the Order,
the Plan Administrator shall pay the segregated amounts plus interest to the
person(s) who would have been entitled to the benefits had there been no Order.
If a determination as to the Qualified status of the Order is made after the
18-month period described above, then the Order shall only be applied on a
prospective basis. If the Order is determined to be a QDRO, the Participant and
alternate payee(s) shall again be notified promptly after such determination.
Once an Order is deemed a QDRO, the Plan Administrator shall pay to the
alternate payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as to the Order's
qualification.
Unless specified otherwise in the Adoption Agreement, the earliest retirement
age with regard to the Participant against whom the order is entered shall be
the date the order is determined to be qualified. This will only allow payouts
to alternate payee(s) and not the Participant.
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ARTICLE XIII
INVESTMENTS
13.1 FIDUCIARY STANDARDS The Trustee/Custodian shall invest and reinvest
principal and income in the same Fund in accordance with the investment
objectives established by the Employer, provided that:
(a) such investments are prudent under the Employee Retirement
Income Security Act of 1974 and the regulations thereunder,
(b) such investments are sufficiently diversified or otherwise
insured or guaranteed to minimize the risk of large losses,
and
(c) such investments are similar to those which would be purchased
by another professional money manager for a like plan with
similar investment objectives.
13.2 FUNDING ARRANGEMENT The Employer shall, in the Adoption Agreement, appoint
the Sponsor to serve as either Trustee or Custodian of the Fund. If the Sponsor
is appointed Trustee, the Fund shall be invested in any of the alternatives
available to the Trustee under paragraph 13.3 herein. If the Sponsor is
appointed Custodian, the Fund shall be invested only in the alternatives
available to the Custodian under paragraph 13.4 herein.
13.3 INVESTMENT ALTERNATIVES OF THE TRUSTEE As Trustee, the Sponsor shall
implement an investment program based on the Employer's investment objectives
and the Employee Retirement Income Security Act of 1974. In addition to powers
given by law, the Trustee may:
(a) invest the Fund in any form of property, including common and
preferred stocks, exchange traded put and call options, bonds,
money market instruments, mutual funds (including funds for
which the Trustee or its affiliates serve as investment
advisor), savings accounts, certificates of deposit, Treasury
bills, insurance policies and contracts, or in any other
property, real or personal, having a ready market including
securities issued by the Trustee and/or affiliates of the
Trustee. The Trustee may invest in its own deposits and, if
applicable, those of affiliates, which bear a reasonable
interest rate. No portion of any Qualified Voluntary
Contribution, or the earnings thereon, may be invested in life
insurance contracts or, as with any Participant-directed
investment, in tangible personal property characterized by the
IRS as a collectible,
(b) transfer any assets of the Fund to a group or collective trust
established to permit the pooling of funds of separate pension
and profit-sharing trusts, provided the Internal Revenue
Service has ruled such group or collective trust to be
qualified under Code Section 401(a) and exempt under Code
Section 501(a) (or the applicable corresponding provision of
any other Revenue Act) or to any other common, collective, or
commingled trust fund which has been or may hereafter be
established and maintained by the Trustee and/or affiliates of
the Trustee. Such commingling of assets of the Fund with
assets of other qualified trusts is specifically authorized,
and to the extent of the investment of the Fund in such a
group or collective trust, the terms of the instrument
establishing the group or collective trust shall be a part
hereof as though set forth herein,
(c) invest up to 100% of the Fund in the common stock, debt
obligations, or any other security issued by the Employer or
by an affiliate of the Employer within the limitations
provided under Sections 406, 407, and 408 of the Employee
Retirement
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Income Security Act of 1974 and further provided that such
investment does not constitute a prohibited transaction under
Code Section 4975. Any such investment in Employer securities
shall only be made upon written direction of the Employer who
shall be solely responsible for propriety of such investment,
(d) hold cash uninvested and deposit same with any banking or
savings institution, including its own banking department,
(e) join in or oppose the reorganization, recapitalization,
consolidation, sale or merger of corporations or properties,
including those in which it is interested as Trustee, upon
such terms as it deems wise,
(f) hold investments in nominee or bearer form,
(g) vote proxies and, if appropriate, pass them on to any
investment manager which may have directed the investment in
the equity giving rise to the proxy,
(h) exercise all ownership rights with respect to assets held in
the Fund.
13.4 INVESTMENT ALTERNATIVES OF THE CUSTODIAN As Custodian, the Sponsor shall be
depository of the Fund and shall, at the direction of the Employer, invest all
contributions exclusively in savings or time accounts, savings certificates of
deposit, or other savings or time instruments offered by the Custodian and if
offered, by an affiliate of the Custodian.
13.5 PARTICIPANT LOANS If agreed upon by the Trustee and permitted by the
Employer in the Adoption Agreement, a Plan Participant may make application to
the Employer requesting a loan from the Fund. The Employer shall have the sole
right to approve or disapprove a Participant's application provided that loans
shall be made available to all Participants on a reasonably equivalent basis.
Loans shall not be made available to highly compensated employees [as defined in
Code Section 414(q)] in an amount greater than the amount made available to
other Employees. Any loan granted hereunder shall be made subject to the
following rules:
(a) No loan, when aggregated with any outstanding Participant
loan(s), shall exceed the lesser of (i) $50,000 reduced by the
excess, if any, of the highest outstanding balance of loans
during the one year period ending on the day before the loan
is made, over the outstanding balance of loans from the Plan
on the date the loan is made or (ii) one-half of the fair
market value of a Participant's vested account balance built
up from Employer Contributions, Voluntary Contributions, and
Rollover Contributions. If the Participant's vested account
balance is $20,000 or less, the maximum loan shall not exceed
the lesser of $10,000 or 100% of the Participant's vested
account balance. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a
group of employers described in Code Sections 414(b), 414(c),
and 414(m) are aggregated. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan,
pledge, or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this
paragraph.
(b) All applications must be made on forms provided by the
Employer and must be signed by the Participant.
(c) Any loan granted hereunder shall bear interest at a rate
reasonable at the time of application, considering the purpose
of the loan and the rate being charged by representative
commercial banks in the local area for a similar loan unless
the Employer sets forth a different method for determining
loan interest rates in its loan procedures. The loan agreement
shall also provide that the payment of principal and interest
be amortized in level payments not less frequently than
quarterly.
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(d) The term of such loan shall not exceed five years except in
the case of a loan for the purpose of acquiring any house,
apartment, condominium, or mobile home (not used on a
transient basis) which is used or is to be used within a
reasonable time as the principal residence of the Participant.
The term of such loan shall be determined by the Employer
considering the maturity dates quoted by representative
commercial banks in the local area for a similar loan.
(e) The principal and interest paid by a Participant on his or her
loan shall be credited to the Fund in the same manner as for
any other Plan investment. If elected in the Adoption
Agreement, loans may be treated as segregated investments of
the individual Participants. This provision is not available
if its election will result in discrimination in operation of
the Plan.
(f) If a Participant's loan application is approved by the
Employer, such Participant shall be required to sign a note,
loan agreement, and assignment of one-half of his or her
interest in the Fund as collateral for the loan. The
Participant, except in the case of a profit-sharing plan
satisfying the requirements of paragraph 8.7, must obtain the
consent of his or her Spouse, if any, within the 90 day period
before the time his or her account balance is used as security
for the loan. A new consent is required if the account balance
is used for any renegotiation, extension, renewal or other
revision of the loan, including an increase in the amount
thereof. The consent must be written, must acknowledge the
effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent shall thereafter
be binding with respect to the consenting Spouse or any
subsequent Spouse.
(g) If a valid Spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion
of the Participant's vested account balance used as a security
interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of
determining the amount of the account balance payable at the
time of death or distribution, but only if the reduction is
used as repayment of the loan. If less than 100% of the
Participant's vested account balance (determined without
regard to the preceding sentence) is payable to the surviving
Spouse, then the account balance shall be adjusted by first
reducing the vested account balance by the amount of the
security used as repayment of the loan, and then determining
the benefit payable to the Surviving Spouse.
(h) The Employer may also require additional collateral in order
to adequately secure the loan.
(i) A Participant's loan shall immediately become due and payable
if such Participant terminates employment for any reason or
fails to make a principal and/or interest payment as provided
in the loan agreement. If such Participant terminates
employment, the Employer shall immediately request payment of
principal and interest on the loan. If the Participant refuses
payment following termination, the Employer shall reduce the
Participant's vested account balance by the remaining
principal and interest on his or her loan. If the
Participant's vested account balance is less than the amount
due, the Employer shall take whatever steps are necessary to
collect the balance due directly from the Participant.
However, no foreclosure on the Participant's note or
attachment of the Participant's account balance will occur
until a distributable event occurs in the Plan.
(j) No loans will be made to Owner-Employees (as defined in
paragraph 1.51) or Shareholder-Employees (as defined in
paragraph 1.74), unless an exemption from the prohibited
transactions rules is first obtained from the Department of
Labor.
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13.6 INSURANCE POLICIES If agreed upon by the Trustee and approved by the
Employer in the Adoption Agreement, Employees may elect the purchase of life
insurance policies under the Plan. If elected, the maximum annual premium for a
whole life policy shall not exceed 50% of the aggregate Employer contributions
allocated to the account of a Participant. For profit-sharing plans the 50% test
need only be applied against Employer contributions allocated in the last two
years. Whole life policies are policies with both nondecreasing death benefits
and nonincreasing premiums. The maximum annual premium for term contracts or
universal life policies and all other policies which are not whole life shall
not exceed 25% of aggregate Employer contributions allocated to the account of a
Participant. The two year rule for profit-sharing plans again applies. The
maximum annual premiums for a Participant with both a whole life and a term
contract or universal life policies shall be limited to one-half of the whole
life premiums plus the term premium but shall not exceed 25% of the aggregate
Employer contributions allocated to the account of a Participant, subject to the
two year rule for profit-sharing plans. Any policies purchased under this Plan
shall be held subject to the following rules:
(a) The Trustee shall be applicant and owner of any policies
issued.
(b) All policies or contracts purchased shall be endorsed as
nontransferable, and must provide that proceeds will be
payable to the Trustee; however, the Trustee shall be required
to pay over all proceeds of the contracts to the Participant's
Designated Beneficiary in accordance with the distribution
provisions of this Plan. Under no circumstances shall the
Trust retain any part of the proceeds.
(c) Each Participant shall be entitled to designate a beneficiary
under the terms of any contract issued; however, such
designation will be given to the Trustee which must be the
named beneficiary on any policy. Such designation shall remain
in force, until revoked by the Participant, by filing a new
beneficiary form with the Trustee. A Participant's Spouse will
be the Designated Beneficiary of the proceeds in all
circumstances unless a Qualified Election has been made in
accordance with paragraph 8.4. The beneficiary of a deceased
Participant shall receive, in addition to the proceeds of the
Participant's policy or policies, the amount credited to such
Participant's investment account.
(d) A Participant who is uninsurable or insurable at substandard
rates, may elect to receive a reduced amount of insurance, if
available, or may waive the purchase of any insurance.
(e) All dividends or other returns received on any policy
purchased shall be applied to reduce the next premium due on
such policy, or if no further premium is due, such amount
shall be credited to the Fund as part of the account of the
Participant for whom the policy is held.
(f) If Employer contributions are inadequate to pay all premiums
on all insurance policies, the Trustee may, at the option of
the Employer, utilize other amounts remaining in each
Participant's account to pay the premiums on his or her
respective policy or policies, allow the policies to lapse,
reduce the policies to a level at which they may be
maintained, or borrow against the policies on a prorated
basis, provided that the borrowing does not discriminate in
favor of the policies on the lives of Officers, Shareholders,
and highly compensated Employees.
(g) On retirement or termination of employment of a Participant,
the Employer shall direct the Trustee to cash surrender the
Participant's policy and credit the proceeds to his or her
account for distribution under the terms of the Plan. However,
before so doing, the Trustee shall first offer to transfer
ownership of the policy to the Participant in exchange for
payment by the Participant of the cash value of the policy at
the time of transfer. Such payment shall be credited to the
Participant's account for distribution under the terms of the
Plan. All distributions resulting from the application of this
paragraph shall be subject to the Joint and Survivor Annuity
Rules of Article VIII, if applicable.
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(h) The Employer shall be solely responsible to see that these
insurance provisions are administered properly and that if
there is any conflict between the provisions of this Plan and
any insurance contracts issued that the terms of this Plan
will control.
13.7 EMPLOYER INVESTMENT DIRECTION If agreed upon by the Trustee and approved by
the Employer in the Adoption Agreement, the Employer shall have the right to
direct the Trustee with respect to investments of the Fund, may appoint an
investment manager (registered as an investment advisor under the Investment
Advisors Act of 1940) to direct investments, or may give the Trustee sole
investment management responsibility. The Employer may purchase and sell
interests in a registered investment company (i.e., mutual funds) for which the
Sponsor, its parent, affiliates, or successors, may serve as investment advisor
and receive compensation from the registered investment company for its services
as investment advisor. The Employer shall advise the Trustee in writing
regarding the retention of investment powers, the appointment of an investment
manager, or the delegation of investment powers to the Trustee. Any investment
directive under this Plan shall be made in writing by the Employer or investment
manager, as the case may be. In the absence of such written directive, the
Trustee shall automatically invest the available cash in its discretion in an
appropriate interim investment until specific investment directions are
received. Such instructions regarding the delegation of investment
responsibility shall remain in force until revoked or amended in writing. The
Trustee shall not be responsible for the propriety of any directed investment
made and shall not be required to consult with or advise the Employer regarding
the investment quality of any directed investment held hereunder. If the
Employer fails to designate an investment manager, the Trustee shall have full
investment authority. If the Employer does not issue investment directions, the
Trustee shall have authority to invest the Fund in its sole discretion. While
the Employer may direct the Trustee with respect to Plan investments, the
Employer may not:
(a) borrow from the Fund or pledge any of the assets of the Fund
as security for a loan,
(b) buy property or assets from or sell property or assets to the
Fund,
(c) charge any fee for services rendered to the Fund, or
(d) receive any services from the Fund on a preferential basis.
13.8 EMPLOYEE INVESTMENT DIRECTION If agreed to by the Trustee and approved by
the Employer in the Adoption Agreement, Participants shall be given the option
to direct the investment of their personal contributions and their share of the
Employer's contribution among alternative investment funds established as part
of the overall Fund. Unless otherwise specified by the Employer in the Adoption
Agreement, such investment funds shall be restricted to funds offered by the
Trustee. If investments outside the Trustee's control are allowed, Participants
may not direct that investments be made in collectibles, other than U.S.
Government or State issued gold and silver coins. In this connection, a
Participant's right to direct the investment of any contribution shall apply
only to selection of the desired fund. The following rules shall apply to the
administration of such funds.
(a) At the time an Employee becomes eligible for the Plan, he or
she shall complete an investment designation form stating the
percentage of his or her contributions to be invested in the
available funds.
(b) A Participant may change his or her election with respect to
future contributions by filing a new investment designation
form with the Employer in accordance with the procedures
established by the Plan Administrator.
(c) A Participant may elect to transfer all or part of his or her
balance from one investment fund to another by filing an
investment designation form with the Employer in accordance
with the procedures established by the Plan Administrator.
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(d) The Employer shall be responsible when transmitting Employee
and Employer contributions to show the dollar amount to be
credited to each investment fund for each Employee.
(e) Except as otherwise provided in the Plan, neither the Trustee,
nor the Employer, nor any fiduciary of the Plan shall be
liable to the Participant or any of his or her beneficiaries
for any loss resulting from action taken at the direction of
the Participant.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 APPLICABILITY OF RULES If the Plan is or becomes Top-Heavy in any Plan Year
beginning after 1983, the provisions of this Article will supersede any
conflicting provisions in the Plan or Adoption Agreement.
14.2 MINIMUM CONTRIBUTION Notwithstanding any other provision in the Employer's
Plan, for any Plan Year in which the Plan is Top-Heavy or Super Top-Heavy, the
aggregate Employer contributions and forfeitures allocated on behalf of any
Participant (without regard to any Social Security contribution) under this Plan
and any other Defined Contribution Plan of the Employer shall be lesser of 3% of
such Participant's Compensation or the largest percentage of Employer
contributions and forfeitures, as a percentage of the first $200,000, as
adjusted under Code Section 415(d), of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of the Plan
Year shall be entitled to receive an allocation of the Employer's minimum
contribution for such Plan Year. The minimum allocation applies even though
under other Plan provisions the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because the Participant fails to make Mandatory Contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the Participant
fails to complete 1,000 Hours of Service (or such lesser number designated by
the Employer in the Adoption Agreement) during the Plan Year. A Paired
profit-sharing plan designated to provide the minimum Top-Heavy contribution
must do so regardless of profits. An Employer may make the minimum Top-Heavy
contribution available to all Participants or just non-Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in paragraph 1.12(c) of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in Section 11 of the Adoption Agreement that the
minimum allocation or benefit requirements applicable to Top-Heavy Plans will be
met in the other plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
Contributions made to his or her account, a Top-Heavy minimum will be required
for non-Key Employees who are Participants, however, neither Elective Deferrals
by nor Matching Contributions to non-Key Employees may be taken into account for
purposes of satisfying the top-heavy Minimum Contribution requirement.
14.3 MINIMUM VESTING For any Plan Year in which this Plan is Top-Heavy, the
minimum vesting schedule elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. If the vesting schedule selected by the
Employer in the Adoption Agreement is less liberal than the allowable schedule,
the schedule will automatically be modified. If the vesting schedule under the
Employer's Plan shifts in or out of the Top-Heavy schedule for any Plan Year,
such shift is an amendment to the vesting schedule and the election in paragraph
9.8 of the Plan applies. The minimum vesting schedule applies to all accrued
benefits within the meaning of Code Section 411(a)(7) except those attributable
to Employee contributions, including benefits accrued before the effective date
of Code Section 416 and benefits accrued before the Plan became Top-Heavy.
Further, no reduction in vested benefits may occur in the event the Plan's
status as Top-Heavy changes for any Plan Year. However, this paragraph does not
apply to the account balances of any Employee who does not have an Hour of
Service after the Plan initially becomes Top-Heavy and such Employee's account
balance attributable to Employer contributions and forfeitures will be
determined without regard to this paragraph.
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14.4 LIMITATIONS ON ALLOCATIONS In any Plan Year in which the Top-Heavy Ratio
exceeds 90% (i.e., the Plan becomes Super Top-Heavy), the denominators of the
Defined Benefit Fraction (as defined in paragraph 1.16) and Defined Contribution
Fraction (as defined in paragraph 1.19) shall be computed using 100% of the
dollar limitation instead of 125%.
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ARTICLE XV
AMENDMENT AND TERMINATION
15.1 AMENDMENT BY SPONSOR The Sponsor may amend any or all provisions of this
Plan and Trust/Custodial Account at any time without obtaining the approval or
consent of any Employer which has adopted this Plan and Trust/Custodial Account
provided that no amendment shall authorize or permit any part of the corpus or
income of the Fund to be used for or diverted to purposes other than for the
exclusive benefit of Participants and their beneficiaries, or eliminate an
optional form of distribution. In the case of a mass-submitted plan, the
mass-submitter shall amend the Plan on behalf of the Sponsor.
15.2 AMENDMENT BY EMPLOYER The Employer may amend any option in the Adoption
Agreement, and may include language as permitted in the Adoption Agreement,
(a) to satisfy Code Section 415, or
(b) to avoid duplication of minimums under Code Section 416
because of the required aggregation of multiple plans.
The Employer may add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the Plan
to be treated as an individually designed plan for which the Employer must
obtain a separate determination letter.
If the Employer amends the Plan and Trust/Custodial Account other than as
provided above, the Employer's Plan shall no longer participate in this
Prototype Plan and will be considered an individually designed plan.
15.3 TERMINATION Employers shall have the right to terminate their Plans upon 60
days notice in writing to the Trustee/Custodian. If the Plan is terminated,
partially terminated, or if there is a complete discontinuance of contributions
under a profit-sharing plan maintained by the Employer, all amounts credited to
the accounts of Participants shall vest and become nonforfeitable. In the event
of a partial termination, only those who are affected by such partial
termination shall be fully vested. In the event of termination, the Employer
shall direct the Trustee/Custodian with respect to the distribution of accounts
to or for the exclusive benefit of Participants or their beneficiaries. The
Trustee/Custodian shall dispose of the Fund in accordance with the written
directions of the Plan Administrator, provided that no liquidation of assets and
payment of benefits, (or provision therefor), shall actually be made by the
Trustee/Custodian until after it is established by the Employer in a manner
satisfactory to the Trustee/Custodian, that the applicable requirements, if any,
of the Employee Retirement Income Security Act of 1974 and the Internal Revenue
Code governing the termination of employee benefit plans, have been or are
being, complied with, or that appropriate authorizations, waivers, exemptions,
or variances have been, or are being obtained.
15.4 QUALIFICATION OF EMPLOYER'S PLAN If the adopting Employer fails to attain
or retain Internal Revenue Service qualification, such Employer's Plan shall no
longer participate in this Prototype Plan and will be considered an individually
designed plan.
15.5 MERGERS AND CONSOLIDATIONS
(a) In the case of any merger or consolidation of the Employer's
Plan with, or transfer of assets or liabilities of the
Employer's Plan to, any other plan, Participants in the
Employer's Plan shall be entitled to receive benefits
immediately after the merger, consolidation, or transfer which
are equal to or greater than the benefits they would have been
entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
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(b) Any corporation into which the Trustee/Custodian or any
successor trustee/custodian may be merged or with which it may
be consolidated, or any corporation resulting from any merger
or consolidation to which the Trustee/Custodian or any
successor trustee/custodian may be a party, or any corporation
to which all or substantially all the trust business of the
Trustee/Custodian or any successor trustee/custodian may be
transferred, shall be the successor of such Trustee/Custodian
without the filing of any instrument or performance of any
further act, before any court.
15.6 RESIGNATION AND REMOVAL The Trustee/Custodian may resign by written notice
to the Employer which shall be effective 60 days after delivery. The Employer
may discontinue its participation in this Prototype Plan and Trust/Custodial
Account effective upon 60 days written notice to the Sponsor. In such event the
Employer shall, prior to the effective date thereof, amend the Plan to eliminate
any reference to this Prototype Plan and Trust/Custodial Account and appoint a
successor trustee or custodian or arrange for another funding agent. The
Trustee/Custodian shall deliver the Fund to its successor on the effective date
of the resignation or removal, or as soon thereafter as practicable, provided
that this shall not waive any lien the Trustee/Custodian may have upon the Fund
for its compensation or expenses. If the Employer fails to amend the Plan and
appoint a successor trustee, custodian, or other funding agent within the said
60 days, or such longer period as the Trustee/Custodian may specify in writing,
the Plan shall be deemed individually designed and the Employer shall be deemed
the successor trustee/custodian. The Employer must then obtain its own
determination letter.
15.7 QUALIFICATION OF PROTOTYPE The Sponsor intends that this Prototype Plan
will meet the requirements of the Code as a qualified Prototype Retirement Plan
and Trust/Custodial Account. Should the Commissioner of Internal Revenue or any
delegate of the Commissioner at any time determine that the Plan and
Trust/Custodial Account fails to meet the requirements of the Code, the Sponsor
will amend the Plan and Trust/Custodial Account to maintain its qualified
status.
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ARTICLE XVI
GOVERNING LAW
Construction, validity and administration of the Prototype Plan and
Trust/Custodial Account, and any Employer Plan and Trust/Custodial Account as
embodied in the Prototype document and accompanying Adoption Agreement, shall be
governed by Federal law to the extent applicable and to the extent not
applicable by the laws of the State/Commonwealth in which the principal office
of the Sponsor is located.
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<PAGE> 101
PART I - SECTION 401(A)(17) LIMITATION
[MAY BE ADOPTED BY DEFINED CONTRIBUTION
AND DEFINED BENEFIT PLANS]
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 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.
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MODEL AMENDMENT
REVENUE PROCEDURE 93-47
(This model amendment allows Participants receiving distribution from
safe-harbored profit sharing plans to waive the 30-day period required under the
Unemployment Compensation Act of 1992. Non-safe harbored plans must still
provide notice not less than 30 days and not more than 90 days prior to the
distribution.)
If a distribution is one to which Section 401(a)(11) and 417 of the Internal
Revenue Code do not apply, such distribution may commence less than 30 days
after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the plan administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether
or not to elect a distribution (and, if applicable, a
particular distribution option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
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MODEL AMENDMENTS
REVENUE PROCEDURE 96-49
AMENDMENT 1
Notwithstanding any provision of this plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with 414(u) of the Internal Revenue Code.
AMENDMENT 2
Loan repayments will be suspended under this plan as permitted under 414(u) of
the Internal Revenue Code.
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<PAGE> 1
EXHIBIT (5)
LAW OFFICES
HASKELL SLAUGHTER & YOUNG, L.L.C.
1200 AMSOUTH/HARBERT PLAZA
1901 SIXTH AVENUE NORTH
BIRMINGHAM, ALABAMA 35203-2618
FACSIMILE (205) 324-1133
TELEPHONE (205) 251-1000
PLEASE REPLY TO: BIRMINGHAM
January 21, 1999
The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203
Re: REGISTRATION STATEMENT ON FORM S-8--
THE BANC CORPORATION 401(K) PLAN
OUR FILE NO. 05136-007
Gentlemen:
We have served as counsel for The Banc Corporation, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act
of 1933, as amended, of an aggregate of 200,000 shares (the "Shares") of the
Company's authorized Common Stock, par value $.001 per share, to be issued to
participants in the Company's 401(k) Plan (the "Plan"), pursuant to the
Company's Registration Statement on Form S-8 (the "Registration Statement").
This opinion is furnished to you pursuant to the requirements of Form S-8.
In connection with this opinion, we have examined and are familiar with
originals or copies (certified or otherwise identified to our satisfaction) of
such documents, corporate records and other instruments relating to the
incorporation of the Company and the authorization and issuance of the Shares
and the authorization and adoption of the Plan as we have deemed necessary and
appropriate.
Based upon the foregoing, and having regard for such legal considerations
as we have deemed relevant, it is our opinion that:
<PAGE> 2
The Banc Corporation
January 21, 1999
Page 2
1. The Shares have been duly authorized.
2. Upon issuance, sale and delivery of the Shares as contemplated in the
Registration Statement, the Shares will be legally issued, fully paid and
nonassessable.
We do hereby consent to the reference to our firm in this Registration
Statement and to the filing of this Opinion as an Exhibit thereto.
Very truly yours,
HASKELL SLAUGHTER & YOUNG, L.L.C.
By: /s/ Donald T. Locke
-----------------------------
Donald T. Locke
<PAGE> 1
EXHIBIT (23)-1
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 401(k) Plan of The Banc Corporation of our report
dated November 6, 1998, with respect to the consolidated financial statements
of The Banc Corporation included in its Registration Statement (Form S-1 No.
333-67011), filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Birmingham, Alabama
January 19, 1999
<PAGE> 1
EXHIBIT (23)-2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of The Banc Corporation 401(k) Plan of our reports with
respect to the various consolidated financial statements included in the
registration and prospectus on Form S-1 (Registration No. 333-67011) as follows:
<TABLE>
<CAPTION>
Report Form S-1
Date Page No.
------ --------
<S> <C>
November 6, 1998 F-5
February 5, 1998 F-34
May 6, 1998 F-94
January 8, 1998 F-115
June 11, 1998 F-158
</TABLE>
Birmingham, Alabama
January 19, 1999
/s/ Dudley, Hopton-Jones, Sims & Freeman PLLP
---------------------------------------------
Dudley, Hopton-Jones, Sims & Freeman PLLP
<PAGE> 1
EXHIBIT (23)-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Current Report on Form
S-8 of The Banc Corporation of our report dated February 13, 1998 with respect
to the financial statements of Commerce Bank of Alabama for the year ended
December 31, 1997 included in The Banc Corporation's Registration Statement on
Form S-4 (Commission File No. 333-58493) filed with the Securities and Exchange
Commission.
/s/ Mauldin & Jenkins, LLC
----------------------------------------
Mauldin & Jenkins, LLC
January 18, 1999
<PAGE> 1
EXHIBIT (23)-4
CONSENT OF COCHRAN WHEELER & KENNEDY, P.C.
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 401(k) Plan of The Banc Corporation of our report
dated November 6, 1998, with respect to the consolidated financial statements
of The Banc Corporation included in its Registration Statement (Form S-1 No.
333-67011), filed with the Securities and Exchange Commission.
/s/ Cochran, Wheeler and Kennedy, P.C.
- --------------------------------------
January 20, 1999
<PAGE> 1
(SC&G LOGO) Florida Institute of
- --------------------------- Certified Public Accountants
Saltmarsh, Cleaveland & Gund
Certified Public Accountants American Institute of
and Consultants Certified Public Accountants
Since 1944
AICPA Private
Companies Practice Section
AICPA Private
Practice Section
Exhibit (23)-5
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 9, 1998, except for Note 15 as to which the date
is May 4, 1998, with respect to the consolidated financial statements of
Emerald Coast Bancshares, Inc. and Subsidiary included in the Form S-8 of The
Banc Corporation.
/s/ Saltmarsh, Cleaveland & Gund
Pensacola, Florida
January 20, 1998
900 North 12th Avenue
P.O. Drawer 13207
Pensacola, Florida 32591-3207
(850) 435-8300
FAX: (850) 435-8352
