<PAGE>
EXHIBIT 4.8
UNITED RENTALS, INC. ACQUISITION PLAN
Adopted Effective April 1, 1999
<PAGE>
UNITED RENTALS, INC.
ACQUISITION PLAN
Table of Contents
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Page
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ARTICLE I
Establishment of the Plan
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1.1 Establishment of Plan........................................... 1
1.2 Establishment of Trust.......................................... 1
1.3 Effective Date.................................................. 1
1.4 Name and Designation............................................ 1
1.5 Withdrawal of Affiliated Companies.............................. 1
1.6 Appendices...................................................... 2
ARTICLE II
Definitions
2.1 Account......................................................... 3
2.2 Administrator................................................... 3
2.3 Affiliated Company.............................................. 3
2.4 Beneficiary..................................................... 3
2.5 Board........................................................... 3
2.6 Break in Service................................................ 3
2.7 Code............................................................ 5
2.8 Company......................................................... 5
2.9 Compensation.................................................... 5
2.10 Effective Date.................................................. 7
2.11 Employee........................................................ 7
2.12 Employer........................................................ 7
2.13 Employer Contribution........................................... 7
2.14 Employment Commencement Date.................................... 7
2.15 ERISA........................................................... 7
2.16 Fiduciary....................................................... 7
2.19 Fiscal Year..................................................... 8
2.18 Highly Compensated Employee..................................... 8
2.19 Hour of Service................................................. 9
2.20 Normal Retirement Age........................................... 10
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<TABLE>
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2.21 Participant.................................................... 10
2.22 Plan........................................................... 10
2.23 Plan Year...................................................... 10
2.24 Prior Employer................................................. 10
2.25 Prior Employer Plan............................................ 10
2.26 Qualified Military Service..................................... 10
2.27 Rollover Contributions......................................... 11
2.28 Termination of Employment...................................... 11
2.29 Total and Permanent Disability................................. 11
2.30 Transaction Date............................................... 11
2.31 Trust.......................................................... 11
2.32 Trustees....................................................... 11
2.33 Valuation Date................................................. 12
2.34 Vesting Computation Period..................................... 12
2.35 Year of Credited Service....................................... 12
ARTICLE III
Eligibility
3.1 Participation.................................................. 12
3.2 Treatment of Qualified Military Service........................ 12
ARTICLE IV
Contributions
4.1 Employer Contributions......................................... 12
4.2 Payment........................................................ 12
4.3 Company Determination.......................................... 13
4.4 Rollover Contributions......................................... 13
4.5 Direct Transfers............................................... 13
4.6 Limits for Highly Compensated.................................. 14
4.7 Correction of Excess Contributions............................. 20
4.8 Correction of Excess Deferrals................................. 25
4.9 Correction of Excess Aggregate Contributions................... 28
4.10 Correction of Multiple Use..................................... 32
ARTICLE V
Individual Accounts
5.1 Individual Accounts............................................ 33
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<TABLE>
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5.2 Allocation of Contributions...................................... 34
5.3 Allocation of Earnings........................................... 34
5.4 Investment Direction............................................. 36
ARTICLE VI
Termination of Employment
6.1 Normal Retirement................................................ 38
6.2 Late Retirement.................................................. 38
6.3 Early Retirement................................................. 38
6.4 Disability Retirement............................................ 39
6.5 Termination Due to Death......................................... 39
6.6 Other Termination of Employment.................................. 39
6.7 Qualified Domestic Relations Orders.............................. 39
6.8 Lost Beneficiary................................................. 43
6.9 Offsets.......................................................... 44
ARTICLE VII
Payment of Benefits
7.1 General.......................................................... 44
7.2 Form of Payment.................................................. 45
7.3 Direct Rollovers................................................. 45
7.4 Notice and Payment Elections..................................... 48
7.5 Mandatory Distributions.......................................... 49
7.6 Commencement of Benefits......................................... 50
7.7 Payments to Incompetents......................................... 51
7.8 Income Tax Withholding........................................... 51
ARTICLE VIII
Distributions to Beneficiaries
8.1 General.......................................................... 51
8.2 Normal Form of Payment........................................... 51
8.3 Beneficiary Designation.......................................... 52
8.4 Qualified Pre-Retirement Survivor Annuity........................ 53
8.5 Qualified Joint and Survivor Annuity............................. 57
</TABLE>
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<TABLE>
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ARTICLE IX
Withdrawals and Loans
9.1 Withdrawals..................................................... 63
9.2 Hardship Withdrawals............................................ 64
9.3 Loans........................................................... 67
ARTICLE X
Contribution and Benefit Limitations
10.1 Contribution Limits............................................. 72
10.2 Overall Limits.................................................. 73
10.3 Annual Adjustments to Limits.................................... 73
10.4 Excess Amounts.................................................. 74
10.5 Definitions..................................................... 75
ARTICLE XI
Top-Heavy Rules
11.1 General......................................................... 77
11.2 Vesting......................................................... 78
11.3 Minimum Contribution............................................ 78
11.4 Definitions..................................................... 79
11.5 Special Rules................................................... 82
11.6 Adjustment of Limitations....................................... 84
ARTICLE XII
Administration of the Plan
12.1 Committee as Administrator...................................... 84
12.2 Procedures...................................................... 85
12.3 Bond and Compensation........................................... 85
12.4 Duties of the Committee......................................... 85
12.5 Allocation and Delegation of Responsibilities................... 86
12.6 Committee Accounts.............................................. 87
12.7 Company to Furnish Information.................................. 87
12.8 Expenses........................................................ 87
12.9 Indemnification................................................. 88
12.10 Reports......................................................... 88
</TABLE>
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<TABLE>
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ARTICLE XIII
Claims Procedure
13.1 Claims Submission............................................... 88
13.2 Claim Review.................................................... 99
13.3 Right of Appeal................................................. 99
13.4 Review of Appeal................................................ 90
13.5 Designation..................................................... 90
ARTICLE XIV
Amendments
14.1 Right to Amend.................................................. 90
14.2 Limitations..................................................... 91
14.3 Amendment to Vesting Schedule................................... 91
ARTICLE XV
Termination
15.1 Right to Terminate.............................................. 92
15.2 Full Vesting on Termination..................................... 92
15.3 Partial Termination............................................. 92
15.4 Distribution on Termination..................................... 93
15.5 Affect on Benefits.............................................. 94
ARTICLE XVI
Miscellaneous
16.1 IRS Approval.................................................... 94
16.2 No Assignment................................................... 95
16.3 Merger.......................................................... 96
16.4 Governing Law................................................... 96
16.5 Construction.................................................... 96
16.6 Company Determinations.......................................... 96
16.7 Counterpart Originals........................................... 97
16.8 Affect on Employment Rights..................................... 97
</TABLE>
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APPENDICES
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1 A&A Tool Rentals and Sales
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2 Valley Rentals
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3 U.S. Rentals
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4 West Main Rentals & Sales
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5 Rental Tools & Equipment Co. International
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6 Power Rental Company
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7 Mercer Equipment
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8 Access Rentals
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9 Gene's Village Rental & Sales, Inc.
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10 Space Maker of VA
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11 Tool Center of Texas
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12 McClinch Equipment Corporation
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13 Mission Valley Rentals
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14 San Leandro Equipment Rental Service
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15 Channel Equipment Company
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16 ASC Equipment Company, Inc.
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17 EGW Machiners (High Reach)
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18 Arrow Equipment
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19 Industrial Lift, Inc.
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20 Gaedcke Equipment Company
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21 Kubota of Grand Rapids
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22 Madison Equipment
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23 Cave Holdings (Equipment Supply; Rylan and High Reach)
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24 Carlson Equipment Company
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<PAGE>
UNITED RENTALS, INC.
ACQUISITION PLAN
ARTICLE I
Establishment of the Plan
-------------------------
1.1 Establishment of Plan. United Rentals, Inc., a Delaware corporation
---------------------
(the "Company"), does hereby establish and adopt this Plan to provide
retirement benefits for certain Employees and to hold the assets transferred to
it by the plans maintained on behalf of certain businesses that have been
acquired by the Company.
1.2 Establishment of Trust. To implement the provisions of this Plan, the
----------------------
Trustees do hereby establish and adopt the Trust to receive, invest and
distribute contributions, the assets described in section 1.1 above and earnings
thereon. The Trust, as established hereunder, shall be the sole source of
benefits under the Plan and the Company shall not have any liability for the
adequacy of the benefits provided under the Plan.
1.3 Effective Date. This Plan and the accompanying Trust shall be
--------------
effective as of April 1, 1999 except as otherwise stated herein.
1.4 Name and Designation. The name of the Plan is the United Rentals,
--------------------
Inc. Acquisition Plan. The name of the Trust is the United Rentals, Inc.
Acquisition Trust. The Plan is a defined contribution, discretionary profit
sharing plan.
1.5 Withdrawal of Affiliated Companies.
----------------------------------
(a) An Affiliated Company's adoption of this Plan may be terminated,
voluntarily or involuntarily, at any time, as provided in this section.
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(b) An Affiliated Company shall withdraw from the Plan and Trust if
the Plan and Trust, with respect to that Affiliated Company, fail to qualify
under sections 401(a) and 501(a) of the Code (or, in the opinion of the
Trustees, they may fail to so qualify) and the continued sponsorship of that
Affiliated Company may jeopardize the status, with respect to the Employer, of
the Plan and Trust under sections 401 and 501(a) of the Code. An Affiliated
Company that no longer qualifies as an Affiliated Company shall withdraw from
the Plan and Trust if so directed by the Administrator. The Affiliated Company
shall receive at least thirty (30) days prior written notice of a withdrawal
under this subsection, unless a shorter period is agreed to.
(c) An Affiliated Company may voluntarily withdraw from the Plan and
Trust for any reason. Such withdrawal requires at least thirty (30) days
written notice to the Administrator and the Trustees, unless a shorter period is
agreed to.
(d) Upon withdrawal, the Trustees shall segregate the assets
attributable to Employees of the withdrawn Affiliated Company, the amount
thereof to be determined by the Administrator and the Trustees. The segregated
assets shall be held, paid to another trust, distributed or otherwise disposed
of as is appropriate under the circumstances; provided, however, that any
transfer shall be for the exclusive benefit of Participants and their
Beneficiaries. A withdrawal of an Affiliated Company from the Plan is not
necessarily a termination under ARTICLE XV. If the withdrawal is a termination
then the provisions of ARTICLE XV shall also be applicable.
1.6 Appendices. To the extent the provisions of any Appendix to this Plan
----------
contradict or supplement any other provision of the Plan, then the provisions of
such Appendix shall prevail, notwithstanding any provision of the Plan to the
contrary.
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ARTICLE II
Definitions
-----------
2.1 Account. The individual bookkeeping account established for each
-------
Participant, as provided in section 5.1.
2.2 Administrator. The person, persons, corporation, committee, group or
-------------
organization designated to be the Administrator of the Plan and to perform the
duties of the Administrator.
2.3 Affiliated Company. Any corporation or other entity that, together
------------------
with the Company, constitutes a member of a controlled group within the meaning
of sections 414(b) or (c) of the Code, constitutes a member of an affiliated
service group, within the meaning of section 414(m) of the Code, or constitutes
any other entity required to be aggregated under section 414(o) of the Code.
All such entities, whether or not incorporated, shall be treated as a single
employer to the extent required by the Code.
2.4 Beneficiary. The person or persons (including a trust or trusts) who
-----------
are entitled to receive benefits from a deceased Participant's Account after
such Participant's death (whether or not such person or persons are expressly so
designated by the Participant).
2.5 Board. The board of directors of the Company.
-----
2.6 Break in Service.
----------------
(a) A twelve (12) consecutive month period commencing on a
Participant's Termination of Employment (and subsequent anniversaries thereof)
during which the Participant does not perform any Hours of Service.
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(b) (1) In computing Hours of Service to determine whether a person
has a Break in Service, a person shall be credited with up to five hundred one
(501) Hours of Service based on the person's previous customary service with
the Employer for any period of absence from work as a result of:
(A) the pregnancy of such person;
(B) the birth of a child of such person;
(C) the placement of a child with such person in connection
with the adoption of such child by such person; or
(D) the caring for such child for a period beginning
immediately following such birth or placement.
(2) If the previous customary service cannot be determined, then
such credit shall be at the rate of eight (8) Hours of Service per day.
(c) The Hours of Service credited under subsection (b) shall be
credited in the Vesting Computation Period in which the absence from work
begins, if the person would be prevented from having a Break in Service in such
Vesting Computation Period solely because of the Hours of Service credited under
subsection (b). If the person would not be prevented from having a Break in
Service during the period described in the preceding sentence, then such Hours
of Service shall be credited in the Vesting Computation Period immediately
following those in which such absence from work begins.
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(d) No credit shall be given under subsection (b) unless such person
furnishes the Administrator with information necessary to establish that the
absence is for one of the reasons enumerated in subsection (b) and the number of
days of such absence.
2.7 Code. The Internal Revenue Code of 1986, as amended.
----
2.8 Company. United Rentals, Inc., a Delaware corporation.
-------
2.9 Compensation.
------------
(a) All of the wages as defined in section 3401(a) of the Code (for
purposes of 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. This definition shall
be interpreted in a manner consistent with the requirements of section 414(s) of
the Code.
(b) Compensation as defined in subsection (a) shall exclude the
following items (even if includable in gross income):
(1) reimbursements or other expense allowances;
(2) fringe benefits (cash and noncash);
(3) moving expenses;
(4) deferred compensation;
(5) welfare benefits; and
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(6) stock options.
(c) Compensation as defined in subsection (a) shall include
(notwithstanding subsection (b)) the following:
(1) elective contributions that are made by the Employer on
behalf of its Employees that are not includable in income under section 125,
section 402(a)(8), section 402(h), or section 403(b);
(2) Compensation deferred under an eligible deferred
compensation plan within the meaning of section 457(b); and
(3) Employee contributions (under governmental plans) described
in section 414(h)(2) that are picked up by the employing unit and thus are
treated as employer contributions.
(4) Bonuses and commissions.
(d) The Compensation of each Employee for any year shall not exceed
one hundred fifty thousand dollars ($150,000); provided, however, that this
limit shall be adjusted in the same manner and at the same time as under section
415(d) of the Code, in accordance with regulations under section 401(a)(17) of
the Code. Compensation for Highly Compensated Employees shall be determined in
accordance with the provisions of section 2.18.
(e) Unless otherwise indicated herein, Compensation shall be
determined only on the basis of amounts paid during the Plan Year, including any
Plan Year with a duration of fewer than twelve (12) months.
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2.10 Effective Date. Except as otherwise provided herein, June 1, 1999.
--------------
2.11 Employee. Except to the extent otherwise provided herein, any
--------
person employed by the Employer, who is expressly so designated as an Employee
on the books and records of the Employer, and who is treated as such by the
Employer for federal employment tax purposes. Any person who, after the close
of a Plan Year, is retroactively treated by the Employer or any other party as
an Employee for such prior Plan Year shall not, for purposes of the Plan, be
considered an Employee for such prior Plan Year unless expressly so treated as
such by the Employer.
2.12 Employer. The Company and any Affiliated Company.
--------
2.13 Employer Contribution. Any contributions by the Employer to the
---------------------
Trust as set forth in ARTICLE IV.
2.14 Employment Commencement Date. The day on which an Employee first
----------------------------
performs an Hour of Service.
2.15 ERISA. The Employee Retirement Income Security Act of 1974, as
-----
amended.
2.16 Fiduciary. Any person who exercises any discretionary authority or
---------
discretionary control over the management of the Plan, or exercises any
authority or control respecting management or disposition of Plan assets; who
renders investment advice for a fee or other compensation, direct or indirect,
as to assets held under the Plan, or has any authority or discretionary
responsibility in the administration of the Plan. This definition shall be
interpreted in accordance with section 3(21) of ERISA.
<PAGE>
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2.17 Fiscal Year. The taxable year of the Company for federal income tax
-----------
purposes. Such taxable year, at the time of the Effective Date of this Plan,
shall be the twelve (12) month period beginning on January 1 and ending on
December 31.
2.18 Highly Compensated Employee
---------------------------
(a) Any Employee who:
(1) is a five percent (5%) owner at any time during the Plan
Year or the preceding Plan Year; or
(2) for the preceding Plan Year received Compensation in excess
of the amount specified in section 414(q)(1)(B)(i) of the Code.
(b) Former Employees will be treated as Highly Compensated
Employees if the former Employee was a Highly Compensated Employee at the time
of his or her separation from service or the former Employee was a Highly
Compensated Employee at any time after attaining age fifty-five (55).
(c) The dollar amounts incorporated under subsection (a)(2)(A)
shall be adjusted as provided in section 414(q)(1) of the Code.
(d) For purposes of this section, the term "Compensation" means
compensation as defined under section 415(c)(3) of the Code.
(e) This section shall be interpreted in a manner consistent with
section 414(q) of the Code and the regulations thereunder and shall be
interpreted to permit any elections permitted by such regulations to be made.
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2.19 Hour of Service.
---------------
(a) Any hour for which an Employee is directly or indirectly paid
(or entitled to payment) by an Employer for the performance of duties as an
Employee, as determined from the appropriate records of the Employer.
(b) In computing Hours of Service, an Employee shall also be
credited with Hours of Service based on the person's previous customary service
with the Employer (not exceeding either eight (8) hours per day or forty (40)
hours per week), for the following periods:
(1) periods (limited to a maximum of five hundred one (501)
hours for any single, continuous period) for which the Employee is directly or
indirectly paid for reasons other than the performance of duties, such as
vacation, holiday, sickness, disability, layoff, jury duty or military duty;
(2) periods for which any federal law requires that credit for
service be given; and
(3) periods for which back pay (irrespective of mitigation of
damages) is either awarded or agreed to by the Employer.
(c) The provisions of subsection (b) shall be further limited to
prevent duplication by only permitting an Employee to receive credit for one (1)
Hour of Service for any given hour.
(d) Hours of Service shall be computed and credited in accordance
with the Department of Labor regulations under section 2530.200b.
<PAGE>
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2.20 Normal Retirement Age. The date upon which a Participant attains
---------------------
age fifty-nine and one-half (59 1/2).
2.21 Participant. A person who has been admitted as a Participant in the
-----------
Plan under ARTICLE III and who has not received a distribution of all the funds
credited to his or her Account (or had such funds fully forfeited).
2.22 Plan. The United Rentals, Inc. Acquisition Plan, including any
----
amendments thereto.
2.23 Plan Year. The annual twelve (12) month period beginning on the
---------
first day of January and ending on December 31.
2.24 Prior Employer. An entity in which the Company or an Affiliated
--------------
Company acquired a controlling interest through the purchase of stock or other
equitable interest, acquired substantially all of the assets used by such entity
in a separate trade or business, or that merged into the Company or an
Affiliated Company. For this purpose, an entity shall be considered to be a
Prior Employer with respect to a Participant only if the Participant was
employed by the entity immediately before the Transaction Date and became an
Employee within a reasonable period of time after the Transaction Date.
2.25 Prior Employer Plan. A plan maintained by a Prior Employer that was
-------------------
intended to be a qualified plan under section 401(a) of the Code.
2.26 Qualified Military Service. Any period of duty on a voluntary or
--------------------------
involuntary basis in the United States Armed Forces, the Army National Guard and
the Air National Guard when engaged in active duty for training, inactive duty
for training or full-time National Guard duty, the commissioned corps of the
Public Health Service and any other category of persons designated by the
President of the United States in time of
<PAGE>
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war or emergency. Such periods of duty shall include active duty, active duty
for training, initial active duty for training, inactive duty training, full-
time National Guard duty and absence from employment for an examination to
determine fitness for such duty.
2.27 Rollover Contributions. A transfer that qualifies under either
----------------------
section 402(c) or section 403(a)(4) of the Code.
2.28 Termination of Employment. The earlier of:
-------------------------
(a) the date on which a Participant retires, is discharged or dies
as an Employee of the Employer; or
(b) the first anniversary of the date on which a Participant
commenced to be absent from service as an Employee of the Employer if the
absence is for any reason not specified in subsection (a), above.
2.29 Total and Permanent Disability. Any medically determinable physical
------------------------------
or mental disorder that renders a Participant incapable of continuing in the
employment of the Employer and is expected to continue for a period not less
than twelve (12) months.
2.30 Transaction Date. The closing date of an acquisition of a Prior
----------------
Employer.
2.31 Trust. The United Rentals, Inc. Acquisition Trust, including any
-----
amendments thereto.
2.32 Trustees. The Trustee (or Trustees) under United Rentals, Inc.
--------
Acquisition Trust as may be designated from time to time by the Company in
accordance with the provisions of the Trust.
<PAGE>
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2.33 Valuation Date. The Plan shall use daily valuations.
--------------
2.34 Vesting Computation Period. The Plan Year.
--------------------------
2.35 Year of Credited Service. A period of Credited Service that equals
------------------------
three hundred sixty-five (365) days. All lesser periods of Credited Service are
disregarded in determining a Participant's Years of Credited Service.
ARTICLE III
Eligibility
-----------
3.1 Participation. Each individual who was an employee of a Prior
-------------
Employer shall become a Participant of this Plan on the date that assets for his
or her benefit from a Prior Employer Plan are transferred to the Plan.
3.2 Treatment of Qualified Military Service. 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 section 414(u) of the Code.
ARTICLE IV
Contributions
-------------
4.1 Employer Contributions. For the Fiscal Year beginning January 1,
----------------------
1999 and each Fiscal Year thereafter, an Employer shall contribute to the Trust
an amount, if any, as shall be determined in the sole discretion of its board.
4.2 Payment. Except as otherwise provided herein, the Employer shall pay
-------
to the Trustees in U.S. currency, or by other property acceptable to the
Trustees, all Employer Contributions for each Fiscal Year within the time
prescribed by law, including
<PAGE>
-13-
extensions granted by the Internal Revenue Service for filing its federal income
tax return for such Fiscal Year.
4.3 Company Determination. The Board shall act on behalf of the
---------------------
Employers and shall determine the amount of all contributions to be made to the
Trust under the terms of the Plan. The Board's determination of the Employer
Contributions shall be final, conclusive and binding on all Participants, the
Trustees and other parties. The Trustees shall have no right or duty to inquire
into the amount of the Employer Contribution or the method used in determining
the amounts thereof.
4.4 Rollover Contributions.
----------------------
(a) A Participant may make a Rollover Contribution to the Plan in
accordance with the provisions of this section.
(b) The Administrator shall accept any Rollover Contribution if, in
its sole discretion, it determines that acceptance of such Rollover Contribution
will not jeopardize the exempt status of the Plan or Trust.
(c) A Participant making a Rollover Contribution shall be entitled to
have it invested and may withdraw it as provided in the Plan. Distributions of
amounts attributable to Rollover Contributions shall be made in the same manner
as distributions of other amounts credited to such Participant under the Plan.
4.5 Direct Transfers.
----------------
(a) The Plan shall accept a transfer of assets directly from another
plan qualified under section 401(a) of the Code only if the Administrator, in
its sole discretion, agrees to accept such a transfer. In determining whether
to accept such a transfer, the
<PAGE>
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Administrator shall consider the administrative inconvenience engendered by such
a transfer and any risks to the continued qualification of the Plan under
section 401(a) of the Code. Acceptance of any such transfer shall not preclude
the Administrator from refusing any such subsequent transfers.
(b) Any transfer of assets accepted under this section shall be
separately accounted for at all times and shall remain subject to the provisions
of the transferor plan as it existed at the time of such transfer (including,
but not limited to qualified joint and survivor annuities and qualified pre-
retirement survivor annuities), to the extent required by section 411(d)(6) of
the Code as if such provisions were part of this Plan. Such provisions shall be
set forth in an Appendix to this Plan. However, in all other respects,
transferred assets will be subject to the terms of this Plan.
(c) Assets accepted under this section shall be fully vested and
nonforfeitable.
4.6 Limits for Highly Compensated.
-----------------------------
(a) (1) This section 4.6 applies with respect to assets transferred
to the Plan pursuant to an Appendix and only with respect to contributions made
under a Prior Employer's plan. To the extent the terms of this section 4.6 are
inconsistent with the terms of a Prior Employer's plan, the terms of the Prior
Employer's plan shall be controlling unless such terms are inconsistent with
applicable law.
(2) Before-tax contributions, after-tax contributions, matching
contributions and qualified nonelective contributions allocable to the Accounts
of Highly Compensated Employees shall not in any Plan Year exceed the limits
specified in this section. The Administrator may make the adjustments
authorized in this section to ensure that the limits of subsection (b) (or any
other applicable limits) are not exceeded,
<PAGE>
-15-
regardless of whether such adjustments affect some Eligible Participants more
than others. This section shall be administered and interpreted in accordance
with Code sections 401(k) and 401(m).
(b) (1) The Actual Deferral Percentage of the Highly Compensated
Employees shall not exceed, in any Plan Year, the greater of:
(A) one hundred twenty-five percent (125%) of the Actual
Deferral Percentage for all other Eligible Participants; or
(B) the lesser of two hundred percent (200%) of the Actual
Deferral Percentage for all other Eligible Participants or the Actual Deferral
Percentage for the other Eligible Participants plus two (2) percentage points.
(2) The Actual Contribution Percentage of the Highly Compensated
Employees shall not exceed, in any Plan Year, the greater of:
(A) one hundred twenty five percent (125%) of the Actual
Contribution Percentage for all other Eligible Participants; or
(B) the lesser of two hundred percent (200%) of the Actual
Contribution Percentage for all other Eligible Participants or the Actual
Contribution Percentage for the other Eligible Participants plus two (2)
percentage points.
(3) The sum of the Actual Deferral Percentage and the Actual
Contribution Percentage for the Highly Compensated Employees shall not exceed,
in any Plan Year, the sum of:
<PAGE>
-16-
(A) one hundred twenty-five percent (125%) of the greater
of:
(i) the Actual Deferral Percentage of the other
Eligible Participants; or
(ii) the Actual Contribution Percentage of the other
Eligible Participants; and
(B) two plus the lesser of:
(i) the amount in paragraph (3)(A)(i); or
(ii) the amount in paragraph (3)(A)(ii); provided that
the amount in this paragraph (3)(B)(ii) shall not exceed two hundred percent
(200%) of the lesser of the amount in paragraph (3)(A)(i) or the amount in
paragraph (3)(A)(ii).
(4) The limitations under section 4.6(b)(3) shall be modified to
reflect any higher limitations provided by the Internal Revenue Service under
regulations, notices or other official statements.
(c) The following terms shall have the meanings specified:
(1) Actual Contribution Percentage. The average of the ratios for a
------------------------------
designated group of Employees (calculated separately for each Employee in the
group) of the sum of the matching contributions (other than those treated as
part of the Actual Deferral Percentage), qualified nonelective contributions
(other than those treated as part of the Actual Deferral Percentage), after-tax
and before-tax contributions (other
<PAGE>
-17-
than those treated as part of the Actual Deferral Percentage) allocated for the
Plan Year on behalf of the Participant, divided by the Participant's
Compensation.
(2) Actual Deferral Percentage. The average of the ratios for a
--------------------------
designated group of Employees (calculated separately for each Employee in the
group) of the sum of the before-tax contributions, qualified nonelective
contributions and matching contributions (that the Employer elects to have
treated as part of the Actual Deferral Percentage) allocated for the Plan Year
on behalf of a Participant, divided by the Participant's Compensation.
(3) Compensation. For purposes of this section 4.6, the term
------------
"Compensation" shall mean any definition of compensation that satisfies Code
section 414(s).
(4) Eligible Participant. Any Employee of the Employer who is
--------------------
authorized under the terms of the Plan to make before-tax contributions or have
qualified nonelective contributions allocated to his or her Account for the Plan
Year.
(d) (1) For purposes of determining the average Actual Deferral
Percentage of Highly Compensated Employees, the contributions made on behalf of
such Participant will include the contributions of family members and such
family members will be disregarded in determining the average Actual Deferral
Percentage for Eligible Participants who are not Highly Compensated Employees.
(2) The term "family member" includes the Participant's spouse,
his or her lineal descendants and ascendants and their spouses.
(3) This subsection only applies to Plan Years beginning before
January 1, 1997.
<PAGE>
-18-
(e) For purposes of determining whether a plan satisfies the Actual
Contribution Percentage test of section 401(m), all employee and matching
contributions that are made under two (2) or more plans that are aggregated for
purposes of section 401(a)(4) and 410(b) (other than section 410(b)(2)(A)(ii))
are to be treated as made under a single plan and that if two (2) or more plans
are permissively aggregated for purposes of section 401(m), the aggregated plans
must also satisfy section 401(a)(4) and 410(b) as though they were a single
plan.
(f) In calculating the Actual Contribution Percentage for purposes of
section 401(m), the actual contribution ratio of a Highly Compensated Employee
will be determined by treating all plans subject to section 401(m) under which
the Highly Compensated Employee is eligible (other than those that may not be
permissively aggregated) as a single plan.
(g) For purposes of determining whether a plan satisfies the Actual
Deferral Percentage test of section 401(k), all elective contributions that are
made under two (2) or more plans that are aggregated for purposes of section
401(a)(4) or 410(b) (other than section 410(b)(2)(A)(ii)) are to be treated as
made under a single plan and that if two (2) or more plans are permissively
aggregated for purposes of section 401(k), the aggregated plans must also
satisfy sections 401(a)(4) and 410(b) as though they were a single plan.
(h) In calculating the Actual Deferral Percentage for purposes of
section 401(k), the actual deferral ratio of a Highly Compensated Employee will
be determined by treating all cash or deferred arrangements under which the
Highly Compensated Employee is eligible (other than those that may not be
permissively aggregated) as a single arrangement.
<PAGE>
-19-
(i) An elective contribution will be taken into account under the
Actual Deferral Percentage test of section 401(k)(3)(A) of the Code for a Plan
Year only if it is allocated to the Employee as of a date within that Plan Year.
For this purpose, an elective contribution is considered allocated as of a date
within a Plan Year if the allocation is not contingent on participation or
performance of services after such date and the elective contribution is
actually paid to the Trust no later than twelve (12) months after the Plan Year
to which the contribution relates.
(j) For purposes of determining whether a plan satisfies the Actual
Contribution Percentage test of section 401(k), all elective contributions that
are made under two (2) or more plans that are aggregated for purposes of section
401(a)(4) or 410(b) (other than section 410(b)(2)(A)(ii)) are to be treated as
made under a single plan and that if two or more plans are permissively
aggregated for purposes of section 401(k), the aggregated plans must also
satisfy sections 401(a)(4) and 410(b) as though they were a single plan.
(k) In the case of a Highly Compensated Employee who is either a five
percent (5%) owner or one of the ten (10) most Highly Compensated Employees and
is thereby subject to the family aggregation rules of section 414(q)(6), the
actual deferral ratio (ADR) for the family group (which is treated as one (1)
Highly Compensated Employee) is the ADR determined by combining the elective
contributions, Compensation and amounts treated as elective contributions of all
eligible family members. Except to the extent taken into account in the
preceding sentence, the elective contributions, Compensation and amounts treated
as elective contributions of all family members are disregarded in determining
the Actual Deferral Percentages for the groups of Highly Compensated Employees
and non-Highly Compensated Employees. This subsection shall only apply to Plan
Years beginning before January 1, 1997.
<PAGE>
-20-
4.7 Correction of Excess Contributions.
----------------------------------
(a) Excess Contributions shall be corrected as provided in this
section. The Administrator may also prevent anticipated Excess Contributions as
provided in this section. The Administrator may use any method of correction or
prevention provided in this section or any combination thereof, as it determines
in its sole discretion. This section shall be administered and interpreted in
accordance with Code sections 401(k) and 401(m).
(b) The Administrator may refuse to accept any or all prospective
before-tax contributions to be contributed by a Participant.
(c) (1) The Employer may, in its sole discretion, elect to
contribute, a qualified nonelective contribution in an amount necessary to
satisfy any or all of the requirements of section 4.6.
(2) Qualified nonelective contributions for a Plan Year shall
only be allocated to the Accounts of Participants who are not Highly Compensated
Employees. Qualified nonelective contributions shall be allocated first to the
Participant with the lowest Compensation for that Plan Year and any remaining
qualified nonelective contributions thereafter shall be allocated to the
Participant with the next lowest Compensation for that Plan Year. This
allocation method shall continue in ascending order of Compensation until all
such qualified nonelective contributions are allocated. The allocation to any
Participant shall not exceed the limits under section 415 of the Code. If two or
more Participants have identical Compensation, the allocations to them shall be
proportional.
(3) Qualified nonelective contributions for a Plan Year shall be
contributed to the Trust within twelve (12) months after the close of such Plan
Year.
<PAGE>
-21-
(d) The Administrator may, during a Plan Year, distribute to a
Participant (or such Participant's Beneficiary if the Participant is deceased),
any or all Excess Contributions or Excess Deferrals (whether before-tax
contributions, Employer Contributions or qualified nonelective contributions)
allocable to that Participant's Account for that Plan Year, notwithstanding any
contrary provision of the Plan. Such distribution may include earnings or
losses (if any) attributable to such amounts, as determined by the
Administrator.
(e) (1) The Administrator may recharacterize any or all Excess
Contributions for a Plan Year as Employee nondeductible contributions in
accordance with the provisions of this subsection. Any Excess Contributions
that are so recharacterized shall be treated as if the Participant had elected
to instead receive cash Compensation on the earliest date that any before-tax
contributions made on behalf of the Participant during the Plan Year would have
been received had the Participant originally elected to receive such amount in
cash and then contributed such amount as an Employee nondeductible contribution.
To the extent required by the Internal Revenue Service, however, such
recharacterized Excess Contributions shall continue to be treated as if such
amounts were not recharacterized.
(2) The Administrator shall report any recharacterized Excess
Contributions as Employee nondeductible contributions to the Internal Revenue
Service and to the affected Participants at such times and in accordance with
such procedures as are required by the Internal Revenue Service. The
Administrator shall take such other actions regarding the amounts so
recharacterized as may be required by the Internal Revenue Service.
(3) Excess Contributions may not be recharacterized under this
subsection more than two and one-half (2 1/2) months after the close of the Plan
Year to
<PAGE>
-22-
which the recharacterization relates. Recharacterization is deemed to occur when
the Participant is so notified (as required by the Internal Revenue Service).
(4) The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by Excess Deferrals previously distributed for
the taxable year ending in the same Plan Year and Excess Deferrals to be
distributed for a taxable year will be reduced by Excess Contributions
previously distributed or recharacterized for the Plan beginning in such taxable
year.
(f) (1) The Administrator may distribute any or all Excess
Contributions for a Plan Year in accordance with the provisions of this
subsection. Such distribution may only occur after the close of such Plan Year
and within twelve (12) months of the close of such Plan Year. In the event of
the termination of the Plan, such distribution shall be made within twelve (12)
months after such termination. Such distribution shall include the income
allocable to the amounts so distributed, as determined under this subsection.
The Administrator may make any special allocations of earnings or losses
necessary to carry out the provisions of this subsection. A distribution of an
Excess Contribution under this subsection may be made without regard to any
notice or consent otherwise required pursuant to Code sections 411(a)(11) and
417.
(2) (A) The income allocable to Excess Contributions
distributed under this subsection shall equal the allocable gain or loss for the
Plan Year. Income includes all earnings and appreciation, including such items
as interest, dividends, rent, royalties, gains from the sale of property,
appreciation in the value of stock, bonds, annuity and life insurance contracts,
and other property, without regard to whether such appreciation has been
realized.
<PAGE>
-23-
(B) The allocable gain or loss for the Plan Year may be
determined under any reasonable method consistently applied by the
Administrator. Alternatively, the Administrator may, in its discretion,
determine such allocable gain or loss for the Plan Year under the method set
forth in subparagraph (C).
(C) Under this method, the allocable gain or loss for the
Plan Year is determined by multiplying the income for the Plan Year allocable to
before-tax contributions (and amounts treated as before-tax contributions) by a
fraction, the numerator of which is the Excess Contributions by the Participant
for the Plan Year and the denominator of which is the total Account balance of
the Participant attributable to before-tax contributions (and amounts treated as
before-tax contributions) as of the beginning of the Plan Year, increased by any
before-tax contributions (and amounts treated as before-tax contributions) by
the Participant for the Plan Year.
(3) Amounts distributed under this subsection (or other
provisions of this section) shall first be treated as distributions from the
Participant's subaccounts in the following order:
(A) from the Participant's before-tax contribution
subaccount (if such Excess Contribution is attributable to before-tax
contributions);
(B) from the Participant's qualified nonelective
contribution subaccount (if such Excess Contribution is attributable to
qualified nonelective contributions); and
(C) from the Participant's Employer Contribution subaccount
(if such Excess Contribution is attributable to Employer Contributions).
<PAGE>
-24-
(g) (1) The term "Excess Contribution" shall mean, with respect to a
Plan Year, the excess of the before-tax contributions (including any qualified
nonelective contributions and matching contributions that are treated as before-
tax contributions under sections 401(k)(2) and 401(k)(3) of the Code) on behalf
of eligible Highly Compensated Employees for the Plan Year over the maximum
amount of such contributions permitted under Code sections 401(k)(2) and
401(k)(3).
(2) For Plan Years beginning before 1997, the amount of Excess
Contributions for a Highly Compensated Employee for a Plan Year is to be
determined by the following leveling method under which the Actual Deferral
Percentage of the Highly Compensated Employee with the highest Actual Deferral
Percentage is reduced to the extent required to:
(A) enable the Plan to satisfy the Actual Deferral
Percentage test; or
(B) cause such Highly Compensated Employee's Actual
Deferral Percentage to equal the Actual Deferral Percentage of the Highly
Compensated Employee with the next highest Actual Deferral Percentage. This
process is repeated until the Plan satisfies the Actual Deferral Percentage
test. For each Highly Compensated Employee, the amount of Excess Contributions
is equal to the total Before-Tax Contributions (plus qualified nonelective
contributions and matching contributions treated as before-tax contributions) on
behalf of the Participant, (determined before the application of this paragraph
(g)(2)) minus the amount determined by multiplying the Participant's Actual
Deferral Percentage (determined after application of this paragraph (g)(2)) by
his or her Compensation used in determining such Actual Deferral Percentage.
(2) For Plan Years beginning after 1996, any distribution
of Excess Contributions for a Plan Year shall be made to Highly
<PAGE>
-25-
Compensated Employees on the basis of the amount of contributions by, or on
behalf of, each such Highly Compensated Employee.
(3) The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by Excess Deferrals previously distributed for
the taxable year ending in the same Plan Year and Excess Deferrals to be
distributed for a taxable year will be reduced by Excess Contributions
previously distributed or recharacterized for the Plan beginning in such taxable
year.
(4) In the case of a Highly Compensated Employee whose actual
deferral ratio (ADR) is determined under the family aggregation rules, the
determination of the amount of excess contributions shall be made as follows:
The ADR is reduced in accordance with the "leveling" method described in section
1.401(k)-1(f)(2) of the regulations and the excess contributions are allocated
among the family members in proportion to the contributions of each family
member that have been combined.
4.8 Correction of Excess Deferrals.
------------------------------
(a) Excess Deferrals shall be corrected as provided in this section.
The Administrator may also prevent anticipated Excess Deferrals as provided in
this section. The Administrator may use any method of correction or prevention
provided in this section or any combination thereof, as it determines in its
sole discretion. A distribution of an Excess Deferral under this section may be
made without regard to any notice or consent otherwise required pursuant to Code
sections 411(a)(11) and 417. This section shall be administered and interpreted
in accordance with Code sections 401(k) and 402(g).
(b) The Administrator may refuse to accept any or all prospective
before-tax contributions to be contributed by a Participant.
<PAGE>
-26-
(c) (1) The Administrator may distribute any or all Excess Deferrals
to the Participant on whose behalf such Excess Deferrals were made before the
close of the Applicable Taxable Year. Distributions under this subsection
include income allocable to the Excess Distribution so distributed, as
determined under this subsection.
(2) Distribution under this subsection shall only be made if all
the following conditions are satisfied:
(A) the Participant seeking the distribution designates the
distribution as an Excess Deferral;
(B) the distribution is made after the date the Excess
Deferral is received by the Plan; and
(C) the Plan designates the distribution as a distribution
of an Excess Deferral.
(3) The income allocable to the Excess Deferral distributed
under this subsection shall be determined in the same manner as under subsection
(d)(3), except that income shall only be determined for the period from the
beginning of the Applicable Taxable Year to the date on which the distribution
is made.
(d) (1) The Administrator may distribute any or all Excess Deferrals
to the Participant on whose behalf such Excess Deferrals were made after the
close of the Applicable Taxable Year. Distribution under this subsection shall
only be made if the Participant timely provides the notice required under
subsection (d)(2) and such distribution is made after the Applicable Taxable
Year and before the first April 15 following the close of the Applicable Taxable
Year. Distributions under this subsection
<PAGE>
-27-
shall include income allocable to the Excess Deferrals so distributed, as
determined under this subsection.
(2) Any Participant seeking a distribution of an Excess Deferral
in accordance with this subsection must notify the Administrator of such request
no later than the first March 15 following the close of the Applicable Taxable
Year. The Administrator may agree to accept notification received after such
date (but before the first April 15 following the close of the Applicable
Taxable Year) if it determines that it would still be administratively
practicable to make such distribution in view of the delayed notification. The
notification required by this subsection shall be deemed made if a Participant's
before-tax contributions to the Plan in any Plan Year create an Excess Deferral.
(3) The income allocable to the Excess Deferral distributed
under this subsection shall be determined in the same manner as under section
4.7(f)(2), except that the term "Excess Deferrals" shall be substituted for
"Excess Contributions" and the term "Applicable Taxable Year" shall be
substituted for "Plan Year." The Administrator may make any special allocations
of earnings or losses necessary to carry out the provisions of this subsection.
(e) The following terms shall have the meanings specified:
(1) Applicable Taxable Year. The taxable year (for federal
-----------------------
income tax purposes) of the Participant in which an Excess Deferral must be
included in gross income (when made) in accordance with section 402(g) of the
Code.
(2) Excess Deferral. A Participant's Before-Tax Contributions
---------------
(and other contributions limited by section 402(g) of the Code), for an
Applicable
<PAGE>
-28-
Taxable Year that are in excess of the limits imposed by Code section 402(g) for
such Applicable Taxable Year.
4.9 Correction of Excess Aggregate Contributions.
--------------------------------------------
(a) Excess Aggregate Contributions shall be corrected as provided in
this section. The Administrator may use any method of correction or prevention
provided in this section or any combination thereof, as it determines in its
sole discretion. This section shall be administered and interpreted in
accordance with Code sections 401(k) and 401(m).
(b) The Administrator may refuse to accept any or all prospective
before-tax contributions to be contributed by a Participant.
(c) (1) The Employer may, in its sole discretion, elect to
contribute, a qualified nonelective contribution in an amount necessary to
satisfy any or all of the requirements of section 4.6.
(2) Qualified nonelective contributions for a Plan Year shall
only be allocated to the Accounts of Participants who are not Highly Compensated
Employees. Qualified nonelective contributions shall be allocated first to the
Participant with the lowest Compensation for that Plan Year and any remaining
qualified nonelective contributions thereafter shall be allocated to the
Participant with the next lowest Compensation for that Plan Year. This
allocation method shall continue in ascending order of Compensation until all
such qualified nonelective contributions are allocated. The allocation to any
Participant shall not exceed the limits under Code section 415. If two or more
Participants have identical Compensation, the allocations to them shall be
proportional.
<PAGE>
(3) Qualified nonelective contributions for a Plan Year shall be
contributed to the Trust within twelve (12) months after the close of such Plan
Year.
(d) The Administrator may, during a Plan Year, distribute to a
Participant (or such Participant's Beneficiary if the Participant is deceased),
any or all Excess Aggregate Contributions allocable to that Participant's
Account for that Plan Year, notwithstanding any contrary provision of the Plan.
Such distribution may include earnings or losses (if any) attributable to such
amounts, as determined by the Administrator.
(e) (1) The Administrator may forfeit any or all Excess Aggregate
Contributions for a Plan Year in accordance with the provisions of this section.
(2) Any forfeitures under this section shall be made in
accordance with the procedures for distributions under subsection (f) except
that such amounts shall be forfeited instead of being distributed.
(f) (1) The Administrator may distribute any or all Excess Aggregate
Contributions for a Plan Year in accordance with the provisions of this section.
Such distribution may only occur after the close of such Plan Year and within
twelve (12) months of the close of such Plan Year. Such distributions shall be
specifically designated by the Administrator as a distribution of Excess
Aggregate Contributions. In the event of the complete termination of the Plan,
such distribution shall be made within twelve (12) months after such
termination. Such distribution shall include the income allocable to the
amounts so distributed, as determined under this subsection. The Administrator
may make any special allocations of earnings or losses necessary to carry out
the provisions of this subsection. A distribution of an Excess Aggregate
Contribution under this subsection may be made without regard to any notice or
consent otherwise required pursuant to sections Code 411(a)(11) and 417.
<PAGE>
-30-
(2) (A) The income allocable to Excess Aggregate Contributions
distributed under this subsection shall equal the allocable gain or loss for the
Plan Year. Income includes all earnings and appreciation, including such items
as interest, dividends, rent, royalties, gains from the sale of property,
appreciation in the value of stock, bonds, annuity and life insurance contracts,
and other property, without regard to whether such appreciation has been
realized.
(B) The allocable gain or loss for the Plan Year may be
determined under any reasonable method consistently applied by the
Administrator. Alternatively, the Administrator may, in its discretion,
determine such allocable gain or loss for the Plan Year under the method set
forth in subparagraph (C).
(C) Under this method, the allocable gain or loss for the
Plan Year is determined by multiplying the income for the Plan Year allocable to
employee contributions, matching contributions and amounts treated as matching
contributions by a fraction, the numerator of which is the Excess Aggregate
Contributions for the Participant for the Plan Year and the denominator of which
is the total Account balance of the Participant attributable to employee
contributions, matching contributions and amounts treated as matching
contributions as of the beginning of the Plan Year, increased by the employee
contributions, matching contributions and amounts treated as matching
contributions for the Participant for the Plan Year.
(3) Amounts distributed under this subsection (or other
provisions of this section) shall first be treated as distributions from the
Participant's subaccounts in the following order:
<PAGE>
(A) from the Participant's qualified nonelective
contribution subaccount (if such Excess Aggregate Contribution is attributable
to qualified nonelective contributions); and
(B) from the Participant's Employer Contribution subaccount
(if such Excess Aggregate Contribution is attributable to Employer
Contributions).
(g) (1) The term "Excess Aggregate Contribution" shall mean, with
respect to a Plan Year, the excess of the aggregate amount of the matching
contributions and employee contributions (including any qualified nonelective
contributions or before-tax contributions taken into account in computing the
Actual Contribution Percentage) actually made on behalf of eligible Highly
Compensated Employees for the Plan Year over the maximum amount of such
contributions permitted under Code section 401(m)(2)(A).
(2) For Plan Years before 1997, the amount of Excess Aggregate
Contributions for a Highly Compensated Employee for a Plan Year is to be
determined by the following leveling method under which the Actual Contribution
Percentage of the Highly Compensated Employee with the highest Actual
Contribution Percentage is reduced to the extent required to:
(A) enable the Plan to satisfy the Actual Contribution
Percentage test; or
(B) cause such Highly Compensated Employee's Actual
Contribution Percentage to equal the Actual Contribution Percentage of the
Highly Compensated Employee with the next highest Actual Contribution
Percentage. This process is repeated until the Plan satisfies the Actual
Contribution Percentage test. For
<PAGE>
-32-
each Highly Compensated Employee, the amount of Excess Aggregate Contributions
is equal to the total employee contributions and matching contributions (plus
qualified nonelective contributions and elective contributions treated as
matching contributions) on behalf of the Participant (determined before the
application of this paragraph (g)(2)) minus the amount determined by multiplying
the Participant's Actual Contribution Percentage (determined after application
of this paragraph (g)(2)) by his or her Compensation used in determining such
Actual Contribution Percentage.
(3) For Plan Years beginning after 1996, any distribution
of Excess Aggregate Contributions for a Plan Year shall be made to Highly
Compensated Employees on the basis of the amount of contributions by, or on
behalf of, each such Highly Compensated Employee.
(4) The terms "employee contributions" and "matching
contributions" shall, for purposes of this section, have the meanings set forth
in Treas. Reg.(S)1.401(m)-1(f).
(5) In the case of a Highly Compensated Employee whose actual
contribution ratio (ACR) is determined under the family aggregation rules, the
determination of the amount of excess aggregate contributions shall be made as
follows: The ACR is reduced in accordance with the "leveling" method described
in section 1.401(m)-1(e)(2) of the regulations and the excess aggregate
contributions are allocated among the family members in proportion to the
contributions of each family member that have been combined.
4.10 Correction of Multiple Use.
--------------------------
(a) If the limitations of Treasury Regulation section 1.401(m)-2 are
exceeded for any Plan Year, then correction shall be made in accordance with the
<PAGE>
-33-
provisions of this section. This section shall be administered and interpreted
in accordance with Code sections 401(k) and 401(m).
(b) Any correction required by this section shall be calculated and
administered in accordance with the provisions for correcting Excess
Contributions (in section 4.7), Excess Aggregate Contributions (in section 4.9)
or both, as the Administrator determines in its sole discretion. Any correction
required by this section, to the extent possible, shall be made only with
respect to those Highly Compensated Employees who are eligible in both the
arrangement subject to Code section 401(k) and the Plan, as subject to Code
section 401(m).
ARTICLE V
Individual Accounts
-------------------
5.1 Individual Accounts. The Administrator shall establish and maintain
-------------------
an Account in the name of each Participant (and any Beneficiary or other person
entitled to a distribution of retirement benefits from the Trust in accordance
with the Plan) to which there shall be credited or debited the Participant's
share of Employer Contributions and the assets transferred to this Plan from the
Participant's Prior Employer Plan, Rollover Contributions, the Participant's
share of the net earnings or net losses on the investments of the assets of the
Trust; distributions from the Participant's Account; and any expenses or
liabilities charged to the Participant's Account. The Account shall contain the
following subaccounts:
(a) an Employer Contribution subaccount to which shall be credited
(i) each such Participant's Employer Contributions made under section 4.1(a);
(ii) the net earnings or net losses attributable to this subaccount from the
investment of the assets of the Trust; (iii) distributions from this subaccount
and (iv) dividends, capital gains distributions and other earnings received on
any shares credited to the Participant's subaccount;
<PAGE>
-34-
(b) a transferred asset subaccount to which shall be credited the
assets transferred to this Plan from the Participant's account in such
Participant's Prior Employer Plan; and
(c) a Rollover Contribution subaccount to which shall be credited (i)
each such Participant's Rollover Contributions made under section 4.5; (ii) the
net earnings or net losses attributable to this subaccount from the investment
of the assets of the Trust; (iii) distributions from this subaccount and (iv)
dividends, capital gains distributions and other earnings received on any shares
credited to the Participant's subaccount; and
(d) such other subaccounts as the Administrator deems advisable.
5.2 Allocation of Contributions.
---------------------------
(a) Employer Contributions shall be allocated to the Account of each
Participant for whom such contribution is made in the proportion that the
Participant's Compensation for that Plan Year bears to the total Compensation of
all such Participants for that Plan Year.
(b) A Participant's Rollover Contributions shall be allocated to such
Participant's Rollover Contribution subaccount as of the last day of the
calendar month during which such contributions were received by the Trustees.
5.3 Allocation of Earnings.
----------------------
(a) (1) The Administrator, as of each Valuation Date, shall adjust
the amounts credited to the Accounts (including Accounts for persons who are no
longer
<PAGE>
-35-
Employees) so that the total of such Account balances equals the fair market
value of the Trust assets as of such Valuation Date. Except as otherwise
provided herein, any changes in the fair market value of the Trust assets since
the preceding Valuation Date shall be charged or credited to each Account in the
ratio that the balance in each such Account as of the preceding Valuation Date
bears to the balances in all Accounts as of that Valuation Date with appropriate
adjustments to reflect any distributions, allocations or similar adjustments to
such Account or Accounts since that Valuation Date.
(2) To the extent that separate investment funds are
established, the adjustments required by subsection (a)(1) shall be made by
applying subsection (a)(1) separately for each such investment fund so that any
changes in the net worth of each such investment fund are charged or credited to
the portion of each Account invested in such investment fund in the ratio that
the portion of each such Account invested in such investment fund as of the
preceding Valuation Date (reduced by any distributions made from that portion of
such Account since that Valuation Date) bears to the total amount credited to
such investment funds as of that Valuation Date (reduced by distributions made
from such investment fund since that Valuation Date).
(3) Interim valuations, in accordance with the foregoing
procedure, may be made at such time or times as the Administrator directs.
(b) The Administrator may, in its sole discretion, direct the
Trustees to segregate and separately invest any Trust assets. If any assets are
segregated in this fashion, the earnings or losses on such assets shall be
determined apart from other Trust assets and shall be adjusted on each Valuation
Date, or at such other times as the Administrator deems necessary, in accordance
with this section.
<PAGE>
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5.4 Investment Direction.
--------------------
(a) The Trustees may, in their discretion, permit Participants, the
Beneficiaries of a deceased Participant and any Alternate Payees to self-direct
the investment of assets credited to the Account of the Participant, Beneficiary
or Alternate Payee. The Trustees shall determine the investment choices to be
made available, which may include designated investment funds, specific
investments or both. The investment choices made available shall be sufficient
to allow compliance with section 404(c) of ERISA.
(b) (1) If the Trustees permit self-directed investments as
described in subsection (a), the Administrator shall establish rules and
procedures that it feels are advisable to implement such an investment program.
Such rules and procedures shall be consistent with section 404(c) of ERISA.
(2) In establishing rules and procedures under subsection
(b)(1), the following shall apply:
(A) Each Participant, Beneficiary or Alternate Payee shall
affirmatively elect to self-direct the investment of assets in his or her
Account, but such election may provide for default investments in the absence
of specific directions from such Participant, Beneficiary or Alternate Payee.
(B) The investment directions of a Participant shall
continue to apply after that Participant's death or incompetence until the
Beneficiary (or, if there is more than one Beneficiary for that Account, all of
the Beneficiaries), guardian or other representatives provide contrary
direction.
<PAGE>
-37-
(C) The Trustees may decline to implement investment
designations if such investment in the Trustees' judgment:
(i) would result in a prohibited transaction under
section 4975 of the Code;
(ii) would generate income taxable to the Trust;
(iii) would not be in accordance with the Plan and
Trust;
(iv) would cause a fiduciary to maintain the indicia
of ownership of any assets of the Trust outside the jurisdiction of the district
courts of the United States other than as permitted by section 404(b) of ERISA
and Labor Reg.(S)2550.404b-1;
(v) would jeopardize the Plan's tax qualified status
under the Code;
(vi) could result in a loss in excess of the amount
credited to the Account; or
(vii) would violate any other requirements of the Code
or ERISA.
(D) The Administrator may establish reasonable restrictions
on the frequency with which investment directions may be given, consistent with
section 404(c) of ERISA.
<PAGE>
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(E) The Administrator may establish limits on the use of
brokers, investment counsel or other advisors that may be utilized, including
specifying that all investments must be made through a designated broker or
brokers.
(F) The Administrator may establish limits on the types of
investments that are permitted.
ARTICLE VI
Termination of Employment
-------------------------
6.1 Normal Retirement. Upon a Participant's attainment of Normal
-----------------
Retirement Age, the entire amount credited to his or her Account as of the last
preceding or coinciding Valuation Date shall become vested and nonforfeitable.
Subject to section 6.2, the Administrator shall direct the Trustees to
distribute to such Participant the amount credited to such Participant's Account
in accordance with the provisions of ARTICLE VII.
6.2 Late Retirement. If a Participant continues to be an Employee beyond
---------------
Normal Retirement Age, any distribution to such Participant shall be deferred
until the Participant's Termination of Employment. Until such Termination of
Employment, such Participant shall continue to participate on the same basis as
before reaching Normal Retirement Age. Upon Termination of Employment, the
Administrator shall direct the Trustees to distribute to such Participant the
amount credited to such Participant?s Account in accordance with the provisions
of ARTICLE VII.
6.3 Early Retirement. To the extent provided in an Appendix, Participants
----------------
shall be entitled to receive a distribution of their Plan Accounts upon Early
Retirement, as defined in such Appendix.
<PAGE>
-39-
6.4 Disability Retirement.
---------------------
(a) If a Participant is determined to have suffered Total and
Permanent Disability, the entire amount credited to the Participant's Account
shall become vested and nonforfeitable. The Administrator shall direct the
Trustees to distribute to such Participant such vested amounts in accordance
with the provisions of ARTICLE VII.
(b) The Total and Permanent Disability of a Participant shall be
determined by the Administrator, in its sole discretion, in accordance with
uniform principles consistently applied and upon the basis of such evidence as
the Administrator deems necessary and desirable. All determinations of the
Administrator regarding Total and Permanent Disability shall be final,
conclusive and binding on all Participants and other parties.
6.5 Termination Due to Death. Following the death of a Participant,
------------------------
further benefits, if any, shall be payable only as provided under ARTICLE VIII.
6.6 Other Termination of Employment. Upon a Participant's Termination of
-------------------------------
Employment for any reason other than retirement after Normal Retirement Age,
death or Total and Permanent Disability, the entire amount credited to the
Participant's Account shall be distributed in accordance with the provisions of
ARTICLE VII.
6.7 Qualified Domestic Relations Orders.
-----------------------------------
(a) Notwithstanding any contrary provision of the Plan, payments
shall be made in accordance with any judgment, decree or order determined to be
a Qualified Domestic Relations Order.
<PAGE>
-40-
(b) (1) If the Plan receives a Domestic Relations Order, the
Administrator shall promptly notify the Participant and each Alternate Payee of
the receipt of such order and of the Plan's procedures for determining whether
such order is a Qualified Domestic Relations Order. The Administrator shall,
within a reasonable period after receipt of such order, determine whether it is
a Qualified Domestic Relations Order and notify the Participant and each
Alternate Payee of that determination.
(2) During any period in which the issue of whether a Domestic
Relations Order is a Qualified Domestic Relations Order is being determined, the
Administrator shall separately account for the amounts that would have been
payable to the Alternate Payee during such period if the order had been
determined to be a Qualified Domestic Relations Order.
(c) (1) A Domestic Relations Order meets the requirements of this
subsection only if such order clearly specifies the following:
(A) the name and last known mailing address (if any) of the
Participant and the name and mailing address of each Alternate Payee covered by
the order;
(B) the amount or the percentage of the Participant's
benefits to be paid by the Plan to each such Alternate Payee or the manner in
which such amount or percentage is to be determined;
(C) the number of payments or period to which such order
applies; and
(E) each plan to which such order applies.
<PAGE>
-41-
(2) A Domestic Relations Order meets the requirements of this
subsection only if such order does not:
(A) require the Plan to provide any type or form of benefit
or any option not otherwise provided under the Plan;
(B) require the Plan to provide increased benefits
(determined on the basis of actuarial value); and
(C) does not require the payment of benefits to an
Alternate Payee that are required to be paid to another Alternate Payee under
another order previously determined to be a Qualified Domestic Relations Order.
(d) A domestic relations order shall not be treated as failing to
meet the requirements of section 6.7(c)(2)(A) solely because such order requires
that payment of benefits be made to an Alternate Payee:
(1) in the case of any payment before a Participant has
separated from service, on or after the date on which the Participant attains
(or would have attained) the Earliest Retirement Date;
(2) as if the Participant had retired on the date on which such
payment is to begin under such order (but taking into account only the present
value of the benefits actually accrued and not taking into account the present
value of any employer subsidy for early retirement); and
(3) in any form in which such benefits may be paid under the
Plan to the Participant (other than in the form of a qualified joint and
survivor annuity with respect to the Alternate Payee and his or her subsequent
spouse).
<PAGE>
-42-
(e) A domestic relations order shall not be treated as failing to
meet the requirements of section 6.7(c)(2)(A) solely because such order requires
that payment of benefits be made to an Alternate Payee at a date before the
Participant is entitled to receive a distribution. Such distribution shall be
made to such Alternate Payee notwithstanding any contrary provision of the Plan.
(f) The following terms shall have the meanings specified:
(1) Alternate Payee. Any spouse, former spouse, child or other
---------------
dependent of a Participant who is recognized by a Domestic Relations Order as
having a right to benefits under the Plan with respect to such Participant.
(2) Domestic Relations Order. A judgment, decree or order
------------------------
relating to child support, alimony or marital property rights, as defined in
section 414(p)(1)(B) of the Code.
(3) Earliest Retirement Date. The earlier of:
------------------------
(A) the date on which the Participant is entitled to a
distribution under the Plan; or
(B) the later of:
(i) the date the Participant attains age fifty (50);
or
(ii) the earliest date on which the Participant could
begin receiving benefits under the Plan if the Participant separated from
service.
<PAGE>
-43-
(4) Qualified Domestic Relations Order. A Domestic Relations
----------------------------------
Order that satisfies the requirements of subsection (c) and section 414(p)(1)(A)
of the Code.
(g) If an Alternate Payee entitled to payment under this section is
the spouse or former spouse of a Participant and payment will otherwise be made
in an Eligible Rollover Distribution, then such spouse or former spouse may
elect that all, or any portion, of such payment shall instead be transferred as
a Direct Rollover. Such Direct Rollover shall be governed by the requirements
of sections 7.3 and 7.4.
(h) If a Domestic Relations Order directs that payment be made to an
Alternate Payee before the Participant's Earliest Retirement Date and such
Domestic Relations Order otherwise qualifies as a Qualified Domestic Relations
Order, then the Domestic Relations Order shall be treated as a Qualified
Domestic Relations Order and such payment shall be made to the Alternate Payee,
even though the Participant is not entitled to receive a distribution under the
Plan because he or she continues to be an Employee of the Employer.
(i) This section shall be interpreted and administered in accordance
with section 414(p) of the Code.
6.8 Lost Beneficiary.
----------------
(a) All Participants and Beneficiaries shall have the obligation to
keep the Administrator informed of their current address until such time as all
benefits due have been paid.
<PAGE>
-44-
(b) If any amount is payable to a Participant or Beneficiary who
cannot be located to receive such payment, such amount may, at the discretion of
the Administrator, be forfeited; provided, however, that if such Participant or
Beneficiary subsequently claims the forfeited amount, it shall be reinstated and
paid to such Participant or Beneficiary. Such reinstatement may, in the
Administrator's sole discretion, be made from Employer Contributions,
forfeitures or Trust earnings, and shall be treated as a special allocation that
supersedes the normal allocation rules in ARTICLE V.
(c) If the Administrator has not, after due diligence, located a
Participant or Beneficiary who is entitled to payment within three (3) years
after the Participant's Termination of Employment, then, at the discretion of
the Administrator, such person may be presumed deceased for purposes of this
Plan. Any such presumption of death shall be final, conclusive and binding on
all parties.
6.9 Offsets. Any transfers or payments made from a Participant's Account
-------
to a person other than the Participant pursuant to the provisions of this Plan
shall reduce the Participant's Account and offset any amounts otherwise due to
such Participant. Such transfers or payments shall not be considered a
forfeiture for purposes of the Plan.
ARTICLE VII
Payment of Benefits
-------------------
7.1 General.
-------
(a) Except as otherwise provided in an Appendix to this Plan, all
pension benefits payable under this Plan shall be paid in the manner and at the
times specified in this ARTICLE. Any payments to Participants or Beneficiaries
shall be made in cash except as otherwise provided herein. Distributions may be
made wholly or partly by an in-kind distribution of assets held by the Trust if
the distributee consents to such an
<PAGE>
-45-
in-kind distribution and the Administrator determines that such an in-kind
distribution is not administratively burdensome.
(b) All payment methods and distributions shall comply with the
requirements of sections 401(a)(4) and 401(a)(9) of the Code and the regulations
thereunder and, if necessary, shall be interpreted to so comply. The provisions
of this ARTICLE apply to all amounts credited to an Account, regardless of the
source of such amounts. All distributions shall be made over a period not to
exceed the life of the Participant receiving the distribution or over the lives
of such Participant and his or her Beneficiary and shall comply with the
incidental death benefit requirement of section 401(a)(9)(G) of the Code.
Distributions shall comply with the regulations under section 401(a)(9) of the
Code, including Treas. Regs.(S)1.401(a)(9)-2. The provisions of the Plan
reflecting section 401(a)(9) of the Code override any distribution provisions in
the Plan inconsistent with section 401(a)(9).
7.2 Form of Payment. Except as otherwise provided in an Appendix to this
---------------
Plan, all payments due under the Plan shall be paid in a single, lump-sum
payment.
7.3 Direct Rollovers.
----------------
(a) A Participant may elect that all or any portion of a distribution
under section 7.2 or section 7.5 that would otherwise be paid as an Eligible
Rollover Distribution shall instead be transferred as a Direct Rollover.
(b) (1) The Administrator shall determine and apply rules and
procedures as it deems reasonable with respect to Direct Rollovers in addition
to, or in lieu of, those set forth in subsection (b)(2). The Administrator may
change such rules and procedures from time to time and shall not be bound by any
previous rules and procedures it has applied.
<PAGE>
-46-
(2) Unless otherwise determined by the Administrator, the following
rules and procedures shall apply to this section:
(A) A Direct Rollover shall not be permitted when the amount
thereof for the year is expected to be less than two hundred dollars ($200).
(B) A Direct Rollover shall not be permitted to more than one
Eligible Retirement Plan.
(c) The following terms shall have the meanings specified:
(1) Direct Rollover. An available distribution that is paid directly
---------------
to an Eligible Retirement Plan for the benefit of the distributee.
(2) Eligible Retirement Plan. An individual retirement account
------------------------
described in section 408(a) of the Code, an individual retirement annuity (other
than an endowment contract) described in section 408(b) of the Code, a qualified
trust described in section 401(a) of the Code if such qualified trust is part of
a defined contribution plan that permits acceptance of Direct Rollovers or an
annuity plan described in section 403(a) of the Code. In the case of a Direct
Rollover for the benefit of the spouse or former spouse of a Participant, the
term "Eligible Retirement Plan shall" only include an individual retirement
account described in section 408(a) of the Code and an individual retirement
annuity (other than an endowment contract) described in section 408(b) of the
Code.
(3) Eligible Rollover Distribution. Any distribution under the Plan
------------------------------
to a Participant, a Participant's spouse or a Participant's former spouse,
except for the following:
<PAGE>
-47-
(A) Any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
over any one of the following periods:
(i) the life of the Participant (or the
of the Participant and the Participant's designated Beneficiary);
(ii) the life expectancy of the Participant (or the
joint life and last survivor expectancy of the Participant and the Participant's
designated Beneficiary); or
(iii) a specified period of ten (10) years or more.
(B) Any distribution to the extent the distribution is
required under section 401(a)(9) of the Code.
(C) The portion of any distribution that is not includable
in gross income (determined without regard to the exclusion for net unrealized
appreciation described in section 402(e)(4) of the Code).
(D) Returns of elective deferrals described in Treas. Reg.
(S)1.415-6(b)(6)(iv) that are returned as a result of the limitations under
section 415 of the Code.
(E) Corrective distributions of excess contributions and
excess deferrals under qualified cash or deferred arrangements as described in
Treas. Reg.(S)1.401(k)-1(f)(4) and (S)1.402(g)-1(e)(3), respectively, and
corrective distributions of
<PAGE>
-48-
excess aggregate contributions as described in Treas. Reg. (S)1.401(m)-1(e)(3),
together with the income allocable to these corrective distributions.
(F) Loans treated as distributions under section 72(p) of
the Code and not excepted by section 72(p)(2) of the Code.
(G) Loans in default that are deemed distributions.
(H) Dividends paid on employer securities as described in
section 404(k) of the Code.
(I) The costs of life insurance coverage.
(J) Similar items designated by the Internal Revenue Service
in revenue rulings, notices, and other guidance of general applicability.
7.4 Notice and Payment Elections.
----------------------------
(a) The Administrator shall provide Participants or other
distributees of Eligible Rollover Distributions with a written notice designed
to comply with the requirements of section 402(f) of the Code. Such notice shall
be provided within a reasonable period of time before making an Eligible
Rollover Distribution.
(b) Any elections concerning payments shall be made on a form
prescribed by the Administrator. The Participant or other distributee shall
submit a completed form to the Administrator at least thirty (30) days before
payment is scheduled to commence, unless the Administrator agrees to a shorter
time period. Any election made under this section shall be revocable until
thirty (30) days before payment is scheduled to commence.
<PAGE>
-49-
(c) An election to have payment made in a Direct Rollover shall only
be valid if the Participant or other distributee provides adequate information
to the Administrator for the implementation of such Direct Rollover and such
reasonable verification as the Administrator may require that the transferee is
an Eligible Retirement Plan.
(d) A Participant or other distributee who fails to timely submit an
election in accordance with the requirements of this section after having timely
received the notice required under subsection (a) shall be paid in a single,
lump-sum.
7.5 Mandatory Distributions.
-----------------------
(a) A Participant who has attained age seventy and one-half (70 1/2)
and is required to receive a distribution pursuant to provisions of section
401(a)(9) shall be paid such amounts and at such times as are determined by the
Administrator to be necessary to comply with such requirements. Such payments
shall be made notwithstanding any contrary provisions of the Plan or election
made by such Participant.
(b) A Participant required to receive distributions under subsection
(a) for a year may elect at any time to withdraw additional amounts from his or
her Account. Such election shall be made on a form prescribed by the
Administrator. Distribution shall be made as soon as administratively feasible
after receipt of such election. The Administrator may prescribe additional rules
and procedures to implement this subsection including the establishment of
minimum withdrawal requirements and limits on the frequency of such withdrawals.
<PAGE>
-50-
7.6 Commencement of Benefits.
------------------------
(a) (1) Except as otherwise provided in an Appendix to this Plan or
this ARTICLE, distribution to a Participant (or Beneficiary) shall commence
within a reasonable period of time following the Participant's Total and
Permanent Disability, death or Termination of Employment.
(2) If the vested amount in the Participant's Account exceeds
five thousand dollars ($5,000) (three thousand five hundred dollars ($3,500)
before January 1, 1998), then payment to the Participant shall not commence
before such Participant has attained the later of Normal Retirement Age or age
sixty- two ( 62), unless the Participant submits written consent to the
Administrator for such earlier commencement. Such written consent must be
obtained not more than ninety (90) days before the commencement of the
distribution.
(b) (1) Distribution shall commence no later than sixty (60) days
after the close of the Plan Year in which the latest of the following occurs:
(A) the Participant attains Normal Retirement Age;
(B) the tenth (10th) anniversary of the year in which the
Participant first became a Participant; or
(C) the Participant ceases to be an Employee.
(2) To the extent required by law, distribution to a Participant
shall commence no later than April 1 of the calendar year following the calendar
year in which the Participant attains age seventy and one-half (70 1/2).
<PAGE>
-51-
(c) If distribution has not commenced in accordance with the
foregoing requirements because the Participant could not be located, the amount
of benefit cannot be determined or for other similar administrative reasons,
then payment retroactive to the required date shall be made.
7.7 Payments to Incompetents. If a Participant or Beneficiary entitled to
------------------------
receive any benefits hereunder is adjudicated to be legally incapable of giving
valid receipt and discharge for such benefits, the benefits may be paid to the
duly authorized personal representative of such Participant or Beneficiary.
7.8 Income Tax Withholding. To the extent required by section 3405 of the
----------------------
Code, distributions and withdrawals from the Plan shall be subject to federal
income tax withholding.
ARTICLE VIII
Distributions to Beneficiaries
------------------------------
8.1 General. Payment of benefits after the death of a Participant (or
-------
Beneficiary receiving benefits) shall be determined and paid to the
Participant's Beneficiary in accordance with this ARTICLE. All amounts credited
to the Account of a Participant who is an Employee on the date of his or her
death shall be nonforfeitable and fully vested. All payments under this ARTICLE
shall be incidental to the retirement benefits otherwise provided for the
Participant and shall be limited in accordance with section 401(a)(9) of the
Code.
8.2 Normal Form of Payment.
----------------------
(a) Except to the extent provide otherwise in an Appendix, any
payments due after a Participant's death shall be paid to the Participant's
Beneficiary (or Beneficiaries) in a single, lump-sum.
<PAGE>
-52-
(b) If a Beneficiary entitled to payment under subsection (a) was the
spouse or former spouse of the deceased Participant and payment will otherwise
be made in an Eligible Rollover Distribution, then such spouse or former spouse
may elect that all, or any portion, of such payment shall instead be transferred
as a Direct Rollover. Such Direct Rollover shall be governed by the
requirements of section 7.3.
8.3 Beneficiary Designation.
-----------------------
(a) A Participant may designate a Beneficiary (including successive
or contingent Beneficiaries) in accordance with this section. Such designation
shall be on a form prescribed by the Administrator, may include successive or
contingent Beneficiaries, shall be effective upon receipt by the Administrator
and shall comply with such additional conditions and requirements as the
Administrator shall prescribe. The interest of any person as Beneficiary shall
automatically cease on his or her death and any further payments from the Plan
shall be made to the next successive or contingent Beneficiary.
(b) A Participant may change his or her Beneficiary designation from
time to time, without the consent or knowledge of any previously designated
Beneficiary, by filing a new Beneficiary designation form with the Administrator
in accordance with subsection (a).
(c) If a Participant dies without a designated Beneficiary surviving,
the Participant's surviving spouse shall be deemed to be such Participant's
Beneficiary, but if the deceased Participant does not have a spouse surviving,
then such Participant's issue, per stirpes, shall be deemed to be such
--- -------
Participant's Beneficiary but if the deceased Participant has neither spouse nor
issue surviving, then such Participant's estate shall be deemed to be such
Participant's Beneficiary.
<PAGE>
-53-
(d) Notwithstanding the foregoing provisions of this section, if a
Participant is married at the time of his or her death, such Participant shall
be deemed to have designated his or her surviving spouse as Beneficiary, unless
such Participant has filed a Beneficiary designation under subsection (a) and
such spouse consents in writing to the election (acknowledging the effect of the
election and specifically acknowledging the nonspouse Beneficiary) and such
consent is witnessed by either the Administrator (or its delegate) or a notary
public. Such consent shall not be required if the Participant does not have a
spouse or the spouse cannot be located. Such consent shall also not be required
if the Participant is legally separated from his or her spouse or the
Participant has been abandoned (under applicable local law) and the Participant
has a court order to such effect, unless a Qualified Domestic Relations Order
provides otherwise. If the Participant's spouse is legally incompetent to give
consent, the spouse's legal guardian (even if the guardian is the Participant)
may give consent.
8.4 Qualified Pre-Retirement Survivor Annuity. To the extent that assets
-----------------------------------------
transferred to the Plan pursuant to an Appendix are subject to the qualified
pre-retirement survivor annuity rules, the following provisions shall apply,
except as otherwise provided in the applicable Appendix.
(a) (1) Unless otherwise elected in the manner prescribed below, the
Beneficiary of the death benefit shall be the Participant's spouse, who shall
receive such benefit in the form of a pre-retirement survivor annuity, except,
however, the Participant may designate a Beneficiary other than his or her
spouse if:
(A) the Participant and his or her spouse have validly
waived the pre-retirement survivor annuity, and the spouse has waived his or her
rights to be the Participant's Beneficiary, or
<PAGE>
-54-
(B) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic relations order," as
defined in Code section 414(p) which provides otherwise), or
(C) the Participant has no spouse, or
(D) the spouse cannot be located.
(2) In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may at any time
revoke his or her Beneficiary designation or change his or her Beneficiary by
filing written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any change in
Beneficiary unless the original consent acknowledged that the spouse had the
right to limit consent only to a specific Beneficiary and that the spouse
voluntarily elected to relinquish such right. In the event no valid Beneficiary
designation exists at the time of the Participant's death, the death benefits
will be paid to his or her estate.
(b) (1) Unless otherwise elected as provided below, a vested
Participant who dies before the annuity starting date and who has a surviving
spouse shall have his or her death benefit paid to his or her surviving spouse
in the form of a pre-retirement survivor annuity ("QPSA"). The Participant's
spouse may direct the payment of the QPSA commence within a reasonable period
after the Participant's death. If the spouse does not so direct, payment of
such benefit will commence at the time the Participant would have attained the
later of his or her Normal Retirement Age or age sixty-two (62). However, the
spouse may elect a later commencement date. Any distribution to the
Participant's spouse shall be subject to the rules specified below.
<PAGE>
-55-
(2) Any election to waive the QPSA before the Participant's
death must be made by the Participant in writing during the election period and
shall require the spouse's irrevocable consent in the same manner provided for
in section 8.5. Further, the spouse's consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse Beneficiary
need not be acknowledged, provided the consent of the spouse acknowledges that
the spouse has the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elects to relinquish such right.
(3) The election period to waive the QPSA shall begin on the
first day of the Plan Year in which the Participant attains age thirty-five (35)
and end on the date of the Participant's death. An earlier waiver (with spousal
consent) may be made, provided a written explanation of the QPSA is given to the
Participant and such waiver becomes invalid at the beginning of the Plan Year in
which the Participant attains age thirty-five (35). In the event a vested
Participant separates from service prior to the beginning of the election
period, the election period shall begin on the date of such separation from
service.
(4) With regard to the election, the Administrator shall provide
each Participant within the applicable period, with respect to such Participant
(and consistent with the applicable regulations), a written explanation of the
QPSA containing comparable information required to that required pursuant to
section 8.5. For the purposes of this paragraph, the term "applicable period"
means, with respect to a Participant, 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 thirty-two (32) and ending with the close
of the Plan Year preceding the Plan Year in which the Participant attains age
thirty-five (35);
<PAGE>
-56-
(B) a reasonable period after the individual becomes a
Participant;
(C) a reasonable period ending after the Plan no longer
fully subsidizes the cost of the QPSA with respect to the Participant;
(D) a reasonable period after Code section 401(a)(11)
applies to the Participant; or
(E) a reasonable period after separation from service in the
case of a Participant who separates before attaining age thirty-five (35). For
this purpose, the Administrator must provide the explanation beginning one year
before the separation from service and ending one year after such separation. If
such a Participant thereafter returns to employment with the Employer, the
applicable period for such Participant shall be redetermined.
(c) For purposes of this section, a reasonable period ending after the
enumerated events described in paragraphs (B), (C) and (D) 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.
(d) If the present value of the QPSA derived from Employer and
Participant contributions does not exceed five thousand dollars ($5,000) (three
thousand five hundred dollars ($3,500) before January 1, 1998), at the time of
any prior distribution, the Administrator shall direct the immediate
distribution of such amount to the Participant's spouse. No distributions may
be made under the preceding sentence after the annuity starting date unless the
spouse consents in writing. If the value exceeds five thousand dollars ($5,000)
(three thousand five hundred dollars ($3,500) before January 1, 1998), at the
time of any prior distribution, an immediate distribution of the
<PAGE>
-57-
entire amount may be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution. Any written consent required
under this paragraph must be obtained not more than ninety (90) days before
commencement of the distribution and shall be made in a manner consistent with
section 8.5.
(e) In the event the death benefit is not paid in the form of a QPSA,
it shall be paid to the Participant's Beneficiary under any one of the optional
forms of distribution otherwise provided in this Plan (including any applicable
Appendix).
(f) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of the Participant shall be made in accordance with
the following requirements and shall otherwise comply with Code section
401(a)(9) and the regulations thereunder. If it is determined, pursuant to the
regulations, that the distribution of a Participant's interest has begun and the
Participant dies before the entire interest has been distributed to him or her,
the remaining portion of such interest shall be distributed at least as rapidly
as under the method of distribution selected as of his or her date of death. If
a Participant dies before he or she has begun to receive any distributions of
his or her interest under the Plan or before distributions are deemed to have
begun pursuant to the regulations, then his or her death benefit shall be
distributed to his or her beneficiaries by December 31 of the calendar year in
which the fifth anniversary of the Participant's death occurs.
8.5 Qualified Joint and Survivor Annuity. To the extent that assets
------------------------------------
transferred to the Plan pursuant to an Appendix are subject to the qualified
joint and survivor annuity rules, the following provisions shall apply, except
as otherwise provided in the applicable Appendix.
<PAGE>
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(a) Normal Form of Payment.
----------------------
(1) Unless otherwise elected as provided below, a Participant
who is married on the "annuity starting date" and who does not die before the
"annuity starting date" shall receive the value of his or her benefits in the
form of a joint and survivor annuity. The joint and survivor annuity is an
annuity that commences immediately and shall be equal in value to a single life
annuity. Unless an Appendix provides otherwise, such joint and survivor benefits
following the Participant's death shall continue to the spouse during the
spouse's lifetime at a rate equal to fifty percent (50%) of the rate at which
such benefits were payable to the Participant. However, the Participant may
elect to receive a smaller annuity benefit with continuation of payments to the
spouse at a rate of sixty-six and two-thirds percent (66 2/3%), seventy-five
percent (75%) or one hundred percent (100%) of the rate payable to a Participant
during his lifetime (or such other rate specified in an Appendix), which
alternative joint and survivor annuity shall be equal in value to the automatic
joint and fifty percent (50%) survivor annuity. Unless an Appendix provides
otherwise, an unmarried Participant shall receive the value of his benefit in
the form of a life annuity. Such unmarried Participants, however, may elect in
writing to waive the life annuity. The election must comply with the provisions
of this section as if it were an election to waive the joint and survivor
annuity by a married Participant, but without the spousal consent requirement.
The Participant may elect to have any annuity provided for in this section
distributed upon the attainment of the "earliest retirement age" under the Plan.
The "earliest retirement age" is the earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
(2) Any election to waive the joint and survivor annuity must be
made by the Participant in writing during the election period and be consented
to by the Participant's spouse. If the spouse is legally incompetent to give
consent, the spouse's legal guardian, even if such guardian is the Participant,
may given consent.
<PAGE>
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Such election shall designate a Beneficiary (or form of benefits) that may not
be changed without spousal consent (unless the consent of the spouse expressly
permits designations by the Participant without the requirement of further
consent by the spouse). Such spouse's consent shall be irrevocable and must
acknowledge the effect of such election and be witnessed by a Plan
representative or a notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the required consent
cannot be obtained because there is no spouse, the spouse cannot be located, or
other circumstances that may be prescribed by the regulations. The election made
by the Participant and consented to by his or her spouse may be revoked by the
Participant in writing without the consent of the spouse at any time during the
election period. The number of revocations shall not be limited. Any new
election must comply with the requirements of this paragraph. A former spouse's
waiver shall not be binding on a new spouse.
(3) The election period to waive the joint and survivor annuity
shall be the ninety- (90) day period ending on the "annuity starting date."
(4) For purposes of this section, the annuity starting date means
the first day of the first period for which an amount is paid for an annuity,
or, in the case of a benefit not payable in the form an annuity, the first day
on which all events have occurred which entitle the Participant to such benefit.
(5) With regard to the election, the Administrator shall provide
to the Participant no less than thirty (30) days and no more than ninety (90)
days before the "annuity starting date" a written explanation of:
(A) the terms and conditions of the joint and survivor
annuity;
<PAGE>
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(B) the Participant's right to make, and the effect of, an
election to waive the joint and survivor annuity;
(C) the right of the Participant's spouse to consent to any
election to waive the joint and survivor annuity; and
(D) the right of the Participant to revoke such election,
and the effect of such revocation.
(6) The annuity starting date for a distribution in a form other
than joint and survivor annuity may be less than thirty (30) days after receipt
of the written explanation described in subparagraph (5), provided: (a) the
Participant has been provided with information that clearly indicates that the
Participant has at least thirty (30) days to consider whether to waive the joint
and survivor annuity and elect (with spousal consent) a form of distribution
other than a joint and survivor annuity; (b) the Participant is permitted to
revoke any affirmative distribution election at least until the annuity starting
date or, if later, at any time prior to the expiration of the seven- (7) day
period that begins the day after the written explanation is provided to the
Participant, and (c) the annuity starting date is a date after the date that the
written explanation was provided to the Participant.
(b) Optional Forms of Payment. In the event a married Participant
-------------------------
duly elects pursuant to this section not to receive his or her benefit in the
form of a joint and survivor annuity, or if such Participant is not married, in
the form of a life annuity, the Administrator, pursuant to the election of the
Participant, shall distribute to a Participant or his or her Beneficiary any
amount to which he or she is entitled under the Plan in any of the optional
forms otherwise provided under the Plan (including any applicable Appendix).
<PAGE>
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(c) Cash Out of Small Amounts. The present value of a Participant's
-------------------------
joint and survivor annuity derived from Employer and Participant contributions
may not be paid without his or her written consent if the value exceeds five
thousand dollars ($5,000) (three thousand five hundred dollars ($3,500) before
January 1, 1998), at the time of any prior distribution. Further, the spouse of
a Participant must consent in writing to any immediate distribution. If the
value of the Participant's benefit derived from Employer and Participant
contributions does not exceed five thousand dollars ($5,000) (three thousand
five hundred dollars ($3,500) before January 1, 1998), at the time of any prior
distribution, the Administrator may immediately distribute such benefit without
such Participant's consent. No distribution may be made under the preceding
sentence after the "annuity starting date" unless the Participant and his or her
spouse consent in writing to such distribution. Any written consent required
under this paragraph must be obtained no more than ninety (90) days before the
commencement of the distribution.
(d) Consent to Distribution. Any distribution to a Participant who
-----------------------
has a benefit which exceeds, or has ever exceeded, five thousand dollars
($5,000) (three thousand five hundred dollars ($3,500) before January 1, 1998),
at the time of any prior distribution shall require such Participant's consent
if such distribution commences prior to the later of his or her Normal
Retirement Age or age sixty-two (62). With regard to this required consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material features and an explanation of
the relative values of the optional forms of benefit available under the Plan
that would satisfy the notice requirements of Code section 417.
(2) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent, it shall be
deemed an election
<PAGE>
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to defer the commencement of payment of any benefit. However, any election to
defer the receipt of benefits shall not apply with respect to any distributions
which are required under the Plan, the Code or the regulations.
(3) Notice of the rights specified under this paragraph shall be
provided no less than thirty (30) days and no more than ninety (90) days before
the "annuity staring date." The annuity starting date for a distribution in a
form other than joint and survivor annuity may be less than thirty (30) days
after receipt of the written explanation described in subparagraph (5),
provided: (a) the Participant has been provided with information that clearly
indicates that the Participant has at least thirty (30) days to consider whether
to waive the joint and survivor annuity and elect (with spousal consent) a form
of distribution other than a joint and survivor annuity; (b) the Participant is
permitted to revoke any affirmative distribution election at least until the
annuity starting date or, if later, at any time prior to the expiration of the
seven- (7) day period that begins the day after the written explanation is
provided to the Participant, and (c) the annuity starting date is a date after
the date that the written explanation was provided to the Participant.
(4) Written consent of the Participant to the distribution must not
be made before the Participant receives the notice and must not be made more
than ninety (90) days before the "annuity starting date."
(5) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the distribution.
(e) Minimum Required Distributions. Notwithstanding any provisions in
------------------------------
the Plan to the contrary, the distribution of Participant's benefits, whether
under the Plan or through the purchase of an annuity contract, shall be made in
accordance with the requirements of, and shall otherwise comply with Code
section 401(a)(9) and the
<PAGE>
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regulations thereunder (including Treasury Regulations section 1.401(a)(9)-2),
the provisions of which are incorporated herein by reference.
(f) Annuity Contracts. All annuity contracts under this section shall
-----------------
be non-transferable when distributed. Furthermore, the terms of any annuity
contract purchased and distributed to a Participant or spouse shall comply with
all of the requirements of the Plan.
ARTICLE IX
Withdrawals and Loans
---------------------
9.1 Withdrawals.
-----------
(a) A Participant may withdraw amounts allocated to his or her
Account after attaining age fifty-nine and one-half (59 1/2). Such withdrawals
shall only be made in accordance with the following procedures (unless an
Appendix requires different procedures):
(1) the Participant shall designate in writing the amount to
be withdrawn;
(2) the withdrawal notice shall be filed with the
Administrator at least thirty (30) days before payment will be made; and
(3) not more than two (2) such withdrawals will be permitted
in any Plan Year.
(b) The Administrator may adopt rules providing that not less than a
minimum amount, as determined by the Administrator, may be withdrawn by a
Participant at any one time.
<PAGE>
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9.2 Hardship Withdrawals.
--------------------
(a) A Participant who has experienced a hardship, as described in
this section, may withdraw amounts from his or her Account. Whether a
Participant is entitled to a withdrawal under this section is to be determined
by the Administrator in accordance with nondiscriminatory and objective
standards. In order to be entitled to a hardship withdrawal under this section,
a Participant must satisfy the requirements of both subsection (b) and
subsection (c).
(b) (1) A Participant will be deemed to have experienced an
immediate and heavy financial need under the requirements of this subsection if
the withdrawal is for:
(A) medical expenses described in section 213(d) of the
Code incurred by the Participant, the Participant's spouse or any dependents of
the Participant;
(B) the purchase (excluding mortgage payments) of a
principal resident of the Participant;
(C) payment of tuition for the next twelve (12) months of
post-secondary education for the Participant or his or her spouse, children or
dependents; or
(D) preventing the eviction of the Participant from his or
her principal residence or the foreclosure on the mortgage of the Participant's
principal residence.
<PAGE>
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(2) The Administrator may, on the basis of such evidence it
deems relevant, determine that the Participant has experienced an immediate and
heavy financial need for reasons other than those enumerated in this subsection.
(c) (1) A withdrawal under this subsection will be deemed necessary
to satisfy an immediate and heavy financial need of the Participant if it
satisfies the requirements of this subsection. To the extent the amount of the
withdrawal would be in excess of the amount required to relieve the financial
need of the Participant or to the extent such need may be satisfied from other
resources that are reasonably available to the Participant, such withdrawal
shall not satisfy the requirements of this subsection. For purposes of this
subsection, a Participant's resources shall be deemed to include those assets
of his or her spouse or minor children that are reasonably available to the
Participant.
(2) A withdrawal may be treated as necessary to satisfy an
immediate and heavy financial need of the Participant if the Administrator
reasonably relies upon the Participant's representation that the need cannot be
relieved:
(A) through reimbursement or compensation by insurance or
otherwise;
(B) by liquidation of the Participant's assets to the
extent such liquidation would not itself cause an immediate and heavy financial
need;
(C) by cessation of elective deferrals under the Plan; or
(D) by other distributions or nontaxable (at the time of
the loan) loans from plans maintained by the Employer or by any other employer
or by borrowing from commercial sources on reasonable commercial terms.
<PAGE>
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(3) A withdrawal will be deemed to satisfy the requirements of
subsection (c) if all of the following requirements are satisfied:
(A) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the Participant;
(B) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans currently available under
all plans maintained by the Employer;
(C) The Plan and all other plans maintained by the Employer
limits the Participant's elective deferrals for the Participant's next taxable
year to the applicable limit under section 402(g) of the Code minus the
Participant's elective deferrals for the year of the hardship distribution; and
(D) The Participant is prohibited, under the Plan or by
agreement, from making elective deferrals to the Plan and all other plans
maintained by the Employer for at least twelve (12) months after the receipt of
the hardship distribution.
(4) The Administrator shall, on the basis of such evidence it
deems relevant, determine the amount necessary to satisfy an immediate and heavy
financial need of the Participant.
(d) Such withdrawals shall only be made in accordance with the
following procedures:
(1) the Participant shall designate in writing the amount to be
withdrawn;
<PAGE>
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(2) the withdrawal notice shall be filed with the Administrator
at least thirty (30) days before payment will be made (or such shorter period as
the Administrator may agree to); and
(3) not more than one (1) such withdrawal will be permitted in
any calendar quarter.
(e) The Administrator may adopt rules providing that not less than a
minimum amount, as determined by the Administrator may be withdrawn by a
Participant at any one time.
9.3 Loans.
-----
(a) (1) Loans may be made to a Participant or Beneficiary as
provided under the provisions of this section. A Participant or Beneficiary who
is not a party-in-interest (as defined in section 3(14) of ERISA, as amended)
shall not be eligible to receive a loan under this ARTICLE. The Administrator
shall establish the terms of such loans, consistent with the provisions of this
section, and shall make all determinations, such as determinations of default,
that may be appropriate.
(2) The Administrator shall be responsible for the
administration of this loan program, which shall be administered in accordance
with the provisions of this section. The terms and conditions of any loans are
to be determined by the Administrator, in its sole discretion, and may be
altered from time to time, with or without notice, as the Administrator so
determines, except that once made, a loan may not be altered other than in
accordance with the express provisions of the applicable loan agreement.
<PAGE>
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(b) (1) A Participant or Beneficiary requesting a loan should
contact the Administrator and provide such information as may be required by the
Administrator. The Administrator shall require that a Participant or Beneficiary
who receives a loan execute a written loan agreement, as prescribed by the
Administrator, establishing the terms and conditions of the loan in accordance
with this section. Loan requests that comply with all the requirements of this
section shall be approved.
(2) Loans shall:
(A) be made available on a reasonably equivalent basis;
(B) be provided on a nondiscriminatory basis;
(C) bear a reasonable rate of interest; and
(D) be adequately secured.
(1) The amount of a loan to a Participant or Beneficiary
(when added to the outstanding balance of other loans to that Participant or
Beneficiary from the Plan) shall not exceed the lesser of:
(A) fifty thousand dollars ($50,000), reduced by the
excess of the highest outstanding balance of loans from the Plan to that
Participant or Beneficiary during the one (1) year period ending on the day
before the day the loan is made, over the outstanding balance of loans from the
Plan to that Participant or Beneficiary on the date the loan is made; or
(B) one-half (1/2) of the present value of the
Participant's or Beneficiary's nonforfeitable Account balance in the Plan.
<PAGE>
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(2) For purposes of this subsection, loans from all plans of
the Employer are aggregated.
(3) Loans made under a qualified retirement plan maintained by
a Prior Employer (or any other employer) may be rolled over into this Plan with
the approval of the Plan Administrator.
(d) (1) Loans shall be made on such terms and subject to such
limitations as the Administrator may prescribe in accordance with this section.
(2) Any loan shall, by its terms, require that repayment
(principal and interest) be made in substantially level amortization with
payments, not less frequently than quarterly, over a period not extending beyond
five (5) years from the date of the loan, unless such loan is used to acquire a
dwelling unit that, within a reasonable period of time (determined at the time
the loan is made) will be used as the principal residence of the Participant or
Beneficiary receiving such loan .
(3) The Administrator may, notwithstanding the foregoing
provisions, alter the requirements of this subsection or subsection (c).
(e) The Administrator shall determine, in its sole discretion, the
interest rate for each loan. The interest rate for a given loan shall be set
forth in the loan agreement and may be either a fixed or variable rate.
(f) (1) The Administrator shall require such security for a
loan as it deems appropriate. Such security may include the Participant's or
Beneficiary's Account balance, the Participant's or Beneficiary's residence
(through a primary or lesser
<PAGE>
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mortgage interest) or any other property of the Participant or Beneficiary. The
Participant or Beneficiary shall pledge such property as security for such loan.
(2) Unless a loan is otherwise secured, all of the Participant's
or Beneficiary's right, title, and interest in the Trust shall be security for
the loan. The loan agreement executed by the Participant or Beneficiary shall
provide that, in the event of any default by the Participant or Beneficiary on a
loan repayment, the Administrator shall be authorized (to the extent permitted
by law) to take any and all actions necessary and appropriate to enforce
collection of the unpaid loan, including wage withholding or garnishment from
the Participant's or Beneficiary's employer, in accordance with the loan
agreement.
(3) In the event the value of the Participant's or Beneficiary's
vested Account balance or other collateral at any time is less than one hundred
twenty-five percent (125%) of the outstanding loan balance, the Administrator
may request additional collateral of sufficient value to provide such collateral
amount. Failure to provide such additional collateral upon a request of the
Administrator shall constitute an event of default.
(g) Except to the extent otherwise explicitly provided in the loan
agreement, if a Participant (or Beneficiary) ceases to be a party-in-interest
(as defined in section 3(14) of ERISA, as amended) by reason of a Termination of
Employment or otherwise, or has collateral that fails to satisfy the
requirements of subsection (f)(3) by reason of a Plan distribution or otherwise,
the unpaid balance of the loan shall be immediately due and payable and the
Administrator may deduct the unpaid balance of the loan (including interest)
from any payment or distribution from the Trust to which such Participant or
Beneficiary may be entitled. If, after such deduction, there still remains an
unpaid balance
<PAGE>
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of any such loan (including interest), then the remaining unpaid balance of such
loan (including interest) may be charged against any other property pledged as
security with respect to such loan.
(h) (1) In the event of a default by a Participant or Beneficiary on
a loan repayment, all remaining payments on the loan shall be immediately due
and payable. The Employer shall, upon the direction of the Administrator (to
the extent permitted by law), deduct the total amount of the loan outstanding
and any unpaid interest due thereon from the wages or salaries payable to the
Participant or Beneficiary in accordance with the Participant's or Beneficiary's
loan agreement. In addition, the Administrator may take any other actions
necessary and appropriate to enforce collection of the unpaid loan.
(2) In the event of a default, foreclosure and attachment of any
Account balance pledge as collateral will not occur until a distributable event
occurs in the Plan. Other collateral may, however, be foreclosed upon
immediately following a default.
(3) For purposes of this section, the term "default" shall mean
failure, by a period of at least ten (10) days, to make any loan payment
(whether principal or interest or both) that is due and payable and any other
event specified to be a default under this section. Neither the Administrator
nor any other fiduciary is required to give any written or oral notice of
default.
(i) Unless otherwise established by the Administrator in the
applicable loan agreement, the following additional terms and conditions shall
apply to any loan:
(1) Loans shall be repaid through payroll reductions.
<PAGE>
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(2) Plan amounts attributable to elective deferrals (as defined
in section 402(g)(3) of the Code) shall only be security for loans to the extent
other security is not available.
(3) Interest paid on a loan and repayments of principal shall be
credited to the Account of the Participant who received the loan.
(4) Only two (2) loans may be outstanding at any time, except
that if a Participant has more than two (2) loans outstanding because of a
rollover or transfer of a loan from a Prior Employer's plan (or any other plan),
then such Participant may not obtain a new loan until the Participant has fewer
than two (2) loans outstanding.
(5) Loans shall only be available if the amount borrowed
satisfies the minimum loan amount requirements, if any, established by the
Administrator (consistent with ERISA and the Code).
ARTICLE X
Contribution and Benefit Limitations
------------------------------------
10.1 Contribution Limits.
-------------------
(a) The Annual Additions that may be allocated to a Participant's
Account for any Limitation Year shall not exceed the lesser of:
(1) thirty thousand dollars ($30,000); or
(2) twenty-five percent (25%) of the Participant's Compensation
for that Limitation Year.
<PAGE>
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(b) If the Employer maintains any other Defined Contribution Plans
then the limitations in subsection (a) shall be computed with reference to the
aggregate Annual Additions for each Participant from all such Defined
Contribution Plans.
(c) If the Annual Additions for a Participant would exceed the
limits specified in this section, then the Annual Additions under this Plan for
that Participant shall be reduced to the extent necessary to prevent such limits
from being exceeded. Such reduction shall be made in accordance with section
10.4.
10.2 Overall Limits.
--------------
(a) If a Participant is participating in both a Defined
Contribution Plan and a Defined Benefit Plan of the Employer, then the sum of
the Defined Contribution Fraction and the Defined Benefit Fraction for any
Limitation Year shall not exceed 1.0.
(b) If the sum of the Defined Contribution Fraction and the Defined
Benefit Fraction would exceed the limits specified in this section, then (unless
the necessary reduction in benefit accruals is mandated under the Defined
Benefit Plan) the Annual Additions under this Plan for that Participant shall be
reduced to the extent necessary to prevent such limits from being exceeded.
(c) The provisions of this section shall only apply to Limitation
Years beginning before January 1, 2000.
10.3 Annual Adjustments to Limits. The dollar limits for and the dollar
----------------------------
limits in the Defined Benefit Fraction and Defined Contribution Fraction shall
be adjusted for cost-of-living to the extent permitted under section 415 of the
Code.
<PAGE>
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10.4 Excess Amounts.
--------------
(a) The foregoing limits shall be limits on the allocation that
may be made to a Participant's Accounts in any Limitation Year. If an excess
Annual Addition would otherwise result from allocation of forfeitures,
reasonable errors in determining Compensation or other comparable reasons, then
the Administrator may take any (or all) of the following steps to prevent the
excess Annual Additions from being allocated:
(1) return any contributions from the Participant, as long as
such return is nondiscriminatory;
(2) hold the excess amounts unallocated in a suspense account
and apply the balance of the suspense account against Employer Contributions for
that Participant made in succeeding years;
(3) hold the excess amounts unallocated in a suspense account
and apply the balance of the suspense account against succeeding year Employer
Contributions;
(4) reallocate the excess amounts to other Participants.
(b) Any suspense account established under this section shall not be
credited with income or loss unless otherwise directed by the Administrator. If
a suspense account under this section is to be applied in a subsequent
Limitation Year, then the amounts in the suspense account shall be applied
before any Annual Additions (other than forfeitures) are made for such
Limitation Year.
<PAGE>
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10.5 Definitions.
-----------
(a) The following terms shall have the meanings specified:
(1) Annual Addition. The sum for any Limitation Year of
---------------
additions (not including Rollover Contributions) to a Participant's Account as a
result of:
(A) Employer Contributions;
(B) Employee contributions;
(C) forfeitures; and
(D) amounts described in Code sections 415(l)(1) and
419A(d)(2).
(2) Defined Benefit Fraction. A fraction, the numerator of
------------------------
which is the Projected Annual Benefit of the Participant under all Defined
Benefit Plans of the Employer (determined as of the close of the Limitation
Year) and the denominator of which is the Projected Annual Benefit the
Participant would have under such plans (determined as of the close of the
Limitation Year) if such plans provided an annual benefit equal to the lesser
of:
(A) the product of 1.25 multiplied by ninety thousand
dollars ($90,000); or
(B) the product of 1.4 multiplied by one hundred percent
(100%) of the Participant's average Compensation for the Participant's three (3)
consecutive Years of Service that produce the highest average Compensation.
<PAGE>
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(3) Defined Benefit Plan. Any plan qualified under section
--------------------
401(a) of the Code that is not a Defined Contribution Plan.
(4) Defined Contribution Fraction. A fraction, the numerator of
-----------------------------
which is the sum of the Annual Additions to the Participant's Accounts as of the
close of the Limitation Year, and the denominator of which is equal to the sum
of the lesser of the following amounts determined for such Limitation Year and
for each prior Year of Service with the Employer:
(A) the product of 1.25 multiplied by thirty thousand
dollars ($30,000); or
(B) the product of 1.4 multiplied by twenty-five percent
(25%) of the Participant's Compensation.
(5) Defined Contribution Plan. A plan qualified under of the Code
that provides an individual account for each Participant and benefits based
solely on the amount contributed to the Participant's account, plus any income,
expenses, gains and losses, and forfeitures of other Participants which may be
allocated to such Participant's account.
(6) Limitation Year. The Plan Year, until the Company adopts a
---------------
different Limitation Year.
(7) Projected Annual Benefit. The annual benefit to which a
------------------------
Participant would be entitled, assuming:
<PAGE>
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(A) the Participant continues in employment until Normal
Retirement Age under the Plan;
(B) the Participant's Compensation for the Limitation Year
remains the same until such Normal Retirement Age; and
(C) all other relevant factors under the Plan for the
Limitation Year will remain constant.
(b) For purposes of this ARTICLE, the term "Compensation" shall mean
all of the wages as defined in section 3401(a) of the Code (for purposes of
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. This definition shall be
interpreted in a manner consistent with the requirements of section 415 of the
Code. Compensation shall also include salary reduction amounts under section
125 cafeteria plans and section 401(k), 403(b) and 457 plans.
ARTICLE XI
Top-Heavy Rules
---------------
11.1 General. This ARTICLE shall only be applicable if the Plan becomes a
-------
Top-Heavy Plan under section 416 of the Code. If the Plan does not become a
Top-Heavy Plan, then none of the provisions of this ARTICLE shall be operative.
The provisions of this ARTICLE shall be interpreted and applied in a manner
consistent with the requirements of section 416 of the Code and the regulations
thereunder.
<PAGE>
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11.2 Vesting.
-------
(a) If the Plan becomes a Top-Heavy Plan, then amounts in a
Participant's Account attributable to Employer Contributions shall be vested in
accordance with this section, in lieu of section 6.5, to the extent this section
produces a greater degree of vesting. This section shall only apply to
Participants who have at least an Hour of Service after the Plan becomes a Top-
Heavy Plan.
(b) If applicable, amounts in a Participant's Account attributable to
Employer Contributions shall vest as follows:
Years of
Top Heavy Service Vested Percentage
----------------- -----------------
Fewer than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
(c) If the Plan ceases to be a Top-Heavy Plan, then subsection (b)
shall no longer be applicable; provided, however, that in no event shall the
vested percentage of any Participant be reduced by reason of the Plan ceasing to
be a Top-Heavy Plan. Subsection (b) shall nevertheless continue to apply for
any Participant who was previously covered by it and who has at least three (3)
Years of Top-Heavy Service.
11.3 Minimum Contribution.
--------------------
(a) For each Plan Year that the Plan is a Top-Heavy Plan, the
Employer shall make an Employer Contribution to be allocated directly to the
Account of each Non-Key Employee as set forth in this section and ARTICLE V.
<PAGE>
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(b) The amount of the Employer Contribution (and forfeitures) required
to be contributed and allocated for a Plan Year by this section is three percent
(3%) of the Top-Heavy Compensation for that Plan Year of each Non-Key Employee
who is both a Participant and an Employee on the last day of the Plan Year for
which the Employer Contribution is made, with adjustments as provided herein.
If the Employer Contribution allocated to the Accounts of each Key Employee for
a Plan Year is less than three percent (3%) of his or her Top-Heavy
Compensation, then the Employer Contribution required by the preceding sentence
shall be reduced for that Plan Year to the same percentage of Top-Heavy
Compensation that was allocated to the Account of the Key Employee whose
Account received the greatest allocation of Employer Contributions for that Plan
Year, when computed as a percentage of Top-Heavy Compensation.
(c) The contribution required by this section shall be reduced for a
Plan Year to the extent of any Employer Contributions made and allocated under
this Plan or any other contributions from the Employer made and allocated under
this or any other Aggregated Plans
11.4 Definitions.
-----------
(a) The following terms shall have the meanings specified herein:
(1) Aggregated Plans.
----------------
(A) The Plan, any plan that is part of a "required
aggregation group" and any plan that is part of a "permissive aggregation group"
that the Employer treats as an Aggregated Plan.
<PAGE>
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(B) The "required aggregation group" consists of each plan of
the Employer in which a Key Employee participates (in the Plan Year containing
the Determination Date or any of the four (4) preceding Plan Years) and each
other plan of the Employer which enables any plan of the Employer in which a Key
Employee participates to meet the requirements of section 401(a)(4) or section
410(b) of the Code. Also included in the required aggregation group shall be any
terminated plan that covered a Key Employee and was maintained within the five
(5) year period ending on the Determination Date.
(C) The "permissive aggregation group" consists of any plan not
included in the "required aggregation group" if the Aggregated Plan described in
subparagraph (A) above would continue to meet the requirements of section
401(a)(4) and 410 of the Code with such additional plan being taken into
account.
(2) Determination Date. The last day of the preceding Plan Year, or,
------------------
in the case of the first plan year of any plan, the last day of such plan year.
The computations made on the Determination Date shall utilize information from
the immediately preceding Valuation Date.
(3) Key Employee.
------------
(A) An Employee (or former Employee) who, at any time during the
Plan Year containing the Determination Date or any of the four (4) preceding
Plan Years, is:
(i) An officer of the Employer with annual Top-Heavy
Compensation for the Plan Year greater than fifty percent (50%) of the amount in
effect under section 415(c)(1)(A) of the Code for the calendar year in which
that Plan Year ends;
<PAGE>
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(ii) one of the ten (10) Employees owning (or considered
as owning under section 318 of the Code) the largest interest in the Employer,
who has more than one-half of one percent (.5%) interest in the Employer, and
who has annual Top-Heavy Compensation for the Plan Year at least equal to the
maximum dollar limitation under section 415(c)(1)(A) of the Code for the
calendar year in which that Plan Year ends;
(iii) a five percent (5%) or greater shareholder in the
Employer; or
(iv) a one percent (1%) shareholder in the Employer with
annual Top-Heavy Compensation from the Employer of more than one hundred fifty
thousand dollars ($150,000).
(B) For purposes of paragraphs (3)(A)(iii) and (3)(A)(iv), the
rules of section 414(b), (c) and (m) of the Code shall not apply. Beneficiaries
of an Employee shall acquire the character of such Employee and inherited
benefits will retain the character of the benefits of the Employee who
performed services.
(4) Non-Key Employee. Any Employee who is not a Key Employee.
----------------
(5) Super Top-Heavy Plan. A Top-Heavy Plan in which the sum of
--------------------
the present value of the cumulative accrued benefits and accounts for Key
Employees exceeds ninety percent (90%) of the comparable sum determined for all
Employees. The foregoing determination shall be made in the same manner as the
determination of a Top-Heavy Plan under this section.
<PAGE>
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(6) Top-Heavy Compensation. The term Top-Heavy Compensation shall
----------------------
have the same meaning as the term Compensation has under section 10.5(b).
(7) Top-Heavy Plan. The Plan is a Top-Heavy Plan for a Plan Year
--------------
if, as of the Determination Date for that Plan Year, the sum of (i) the present
value of the cumulative accrued benefits for Key Employees under all Defined
Benefit Plans that are Aggregated Plans and (ii) the aggregate of the accounts
of Key Employees under all Defined Contribution Plans that are Aggregated Plans
exceeds sixty percent (60%) of the comparable sum determined for all Employees.
(8) Years of Top-Heavy Service. The number of Years of Service
--------------------------
with the Employer that might be counted under section 411(a) of the Code,
disregarding all service that may be disregarded under section 411(a)(4) of the
Code. Such service shall be computed by reference to each Participant's Vesting
Computation Periods.
(b) The definitions in this section and the provisions of this
ARTICLE shall be interpreted in a manner consistent with section 416 of the
Code.
11.5 Special Rules.
-------------
(a) For purposes of determining the present value of the cumulative
accrued benefit for any Participant or the amount of the Account of any
Participant, such present value or amount shall be increased by the aggregate
distributions made with respect to such Participant under the Plan during the
Plan Year that includes the Determination Date and the four (4) preceding Plan
Years (if such amounts would otherwise have been omitted).
<PAGE>
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(b) (1) In the case of unrelated rollovers and transfers, (i) the
plan making the distribution or transfer is to count the distribution as a
distribution under section 416(g)(3) of the Code, and (ii) the plan accepting
the rollover or transfer is not to consider the rollover or transfer as part of
the accrued benefit if such rollover or transfer was accepted after December 31,
1983, but is to consider it as part of the accrued benefit if such rollover or
transfer was accepted before January 1, 1984. For this purpose, rollovers and
transfers are to be considered unrelated if they are both initiated by the
Employee and made from a plan maintained by one employer to a plan maintained by
another employer.
(2) In the case of related rollovers and transfers, the plan
making the distribution or transfer is not to count the distribution or transfer
under section 416(g)(3) of the Code, and the plan accepting the rollover or
transfer counts the rollover or transfer in the present value of the accrued
benefits. For this purpose, rollovers and transfers are to be considered related
if they are not unrelated under subsection (b)(1).
(c) If any individual is a Non-Key Employee with respect to any plan
for any Plan Year, but such individual was a Key Employee with respect to such
plan for any prior Plan Year, any accrued benefit for such Employee (and the
account of such Employee) shall not be taken into account.
(d) Beneficiaries of Key Employees and former Key Employees are
considered to be Key Employees and Beneficiaries of Non-Key Employees and former
Non-Key Employees are considered to be Non-Key Employees.
(e) The accrued benefit of an Employee who has not performed any
service for the Employer maintaining the Plan at any time during the five (5)
year period ending on the Determination Date is excluded from the calculation to
determine top-
<PAGE>
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heaviness. However, if an Employee performs no services, such Employee's total
accrued benefit is included in the calculation for top-heaviness.
11.6 Adjustment of Limitations.
-------------------------
(a) If this section is applicable, then the contribution and benefit
limitations in section 10.5 shall be reduced. Such reduction shall be made by
modifying section 10.5(a)(2)(A) of the definition of Defined Benefit Fraction to
instead be "(A) the product of 1.0 multiplied by ninety thousand dollars
($90,000), or" and by modifying section 10.5(a)(4)(A) of the definition of
Defined Contribution Fraction to instead be "(A) the product of 1.0 multiplied
by thirty thousand dollars ($30,000), or".
(b) This section shall be applicable for any Plan Year in which
either:
(1) the Plan is a Super Top-Heavy Plan, or
(2) the Plan both is a Top-Heavy Plan (but not a Super Top-
Heavy Plan) and provides Employer Contributions (and forfeitures) to the Account
of any Non-Key Employee in an amount less than four percent (4%) of such
Participant's Top-Heavy Compensation, as determined in accordance with section
11.3(b).
ARTICLE XII
Administration of the Plan
--------------------------
12.1 Committee as Administrator. The committee appointed in this section
--------------------------
shall be the Administrator of the Plan. The name of the committee shall be the
Retirement Committee, shall be appointed by the Board and shall consist of at
least two (2) but not more than five (5) individuals. Members of the committee
shall continue to serve until their death, resignation or removal. The committee
and its members shall be the named fiduciaries of the Plan. If at any time any
of the positions on the committee
<PAGE>
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shall be vacant, the Board may make such interim appointments to the committee
as in its judgment shall be necessary to ensure effective administration of the
Plan. The Board may at any time, without advance notice and for any reason,
remove a member of the committee by written notice to such member.
12.2 Procedures.
----------
(a) All resolutions or other actions taken by the Retirement
Committee at a meeting shall be by the affirmative vote of a majority of those
present at the meeting. More than half of the members must be present to
constitute a quorum for a meeting. Any two members of the Retirement Committee
may sign any document or instrument requiring the signature of the committee or
otherwise act on behalf of the committee, unless otherwise directed by the
committee.
(b) The Retirement Committee shall establish such procedures and
rules of conduct as it shall deem advisable.
12.3 Bond and Compensation. The members of the Retirement Committee
---------------------
shall serve without bond, except as otherwise required by law, and without
compensation for their services as such.
12.4 Duties of the Committee. The Retirement Committee shall undertake
------------------------
all duties assigned to it under the Plan and shall undertake all actions,
express or implied, necessary for the proper administration of the Plan. The
Administrator's duties and responsibilities include, but are not limited to, the
following:
(a) adopting and enforcing such rules and regulations that it
deems necessary or appropriate for the administration of the Plan in accordance
with applicable law;
<PAGE>
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(b) interpreting the Plan, with its good faith interpretation thereof
to be final and conclusive on any Employee, former Employee, Participant, former
Participant, Beneficiary or other party;
(c) deciding, in its discretion, all questions concerning the Plan,
including questions of fact and law and the eligibility of any person to
participate in the Plan;
(d) computing the amounts to be distributed to any Participant, former
Participant or Beneficiary in accordance with the provisions of the Plan,
determining the person or persons to whom such amounts will be distributed and
determining when such amounts will be distributed;
(e) authorizing the payment of distributions;
(f) keeping such records and submitting such filings, election,
applications, returns or other documents or forms as may be required under the
Code and applicable regulations under ERISA, or under other federal, state or
local law and regulations; and
(g) appointing such agents, counsel, accountants and consultants as
may be required to assist in administering the Plan.
12.5 Allocation and Delegation of Responsibilities.
---------------------------------------------
(a) The members of the Retirement Committee (and any other named
Fiduciaries) may allocate any duties and responsibilities under the Plan and
Trust among themselves in any mutually agreed upon manner. Such allocation shall
be in a written
<PAGE>
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document, signed by all members of the Retirement Committee (and any other named
Fiduciaries), which shall specifically set forth this allocation of duties and
responsibilities.
(b) Except as otherwise provided in ERISA, the Retirement Committee
may delegate its duties and responsibilities under the Plan and Trust. The
persons to whom such delegation may be made shall include, but are not limited
to, professional administrators, investment managers, investment advisers and
custodians.
(c) Notwithstanding the foregoing provisions of this section, any
responsibilities to manage or control Plan assets (other than the power to
appoint an investment manager) assigned to the Trustees by the Trust shall not
be allocated or delegated to anyone other than the Trustees.
12.6 Committee Accounts. The Retirement Committee shall maintain accounts
------------------
showing the fiscal transactions of the Plan.
12.7 Company to Furnish Information. To enable the Retirement Committee to
------------------------------
perform its functions, the Company shall supply full and timely information to
the committee on all matters relating to the pay of all Participants, their
retirement, death or other cause of Termination of Employment, and such other
pertinent facts as the Retirement Committee may require.
12.8 Expenses. All expenses of Plan administration and operation,
--------
including the fees of any agents or counsel employed and including any expenses
attributable to a termination of the Plan or Trust, shall be paid by the
Company. Expenses related to the liquidation and transfer of assets from a
Prior Employer Plan may be paid by the Company. Any expenses that the Company
fails to pay, including any expenses attributable to a termination of the Plan
and Trust, shall be charged to the Trust. All
<PAGE>
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investment related expenses, including transactional fees and similar charges
charged by brokerage houses, will be paid by the Company and then charged
directly against the Accounts of Participants from whom such expenses were
incurred.
12.9 Indemnification. The Company hereby agrees to indemnify each and
---------------
every individual Trustee, member of the Retirement Committee or Employee acting
on behalf of the committee or Trustees for any expenses or liabilities (other
than those due to willful misconduct) actually incurred in the performance of
their duties under the Plan and Trust.
12.10 Reports. The Retirement Committee shall be responsible for filing
-------
all forms, reports and documents required by law and for providing all necessary
notices to Employees and Beneficiaries, including those respecting the adoption
and qualification of the Plan.
ARTICLE XIII
Claims Procedure
----------------
13.1 Claims Submission.
-----------------
(a) All claims for benefits under the Plan by a Participant or
Beneficiary, regardless of the nature of the claim, shall be initially submitted
in writing to the Administrator. Such claims shall be submitted within a
reasonable period of time after the date such benefit was, or was purported to
be, available to the Participant or Beneficiary, with such determination of
reasonableness to be made by the Administrator in its sole discretion. All
claims must adequately state the basis for the claim including a statement of
all pertinent facts and applicable law, except to the extent expressly waived by
the Administrator. The Administrator may prescribe additional procedural
requirements for claims, not inconsistent herewith.
<PAGE>
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(b) In the event that a Participant or Beneficiary does not receive
any Plan benefit that is claimed, such Participant or Beneficiary shall be
entitled to consideration and review as provided in this ARTICLE. Such
consideration and review shall be conducted in a manner designed to comply with
section 503 of ERISA.
(c) Failure to follow the requirements of this ARTICLE shall result
in the denial of the claim submitted. The Participant or Beneficiary submitting
such deficient claim shall be deemed to have not exhausted his or her
administrative remedies under the Plan.
13.2 Claim Review. Upon receipt of any written claim for benefits, the
------------
Administrator shall be notified and shall give due consideration to the claim
presented. If the claim is denied to any extent by the Administrator, the
Administrator shall furnish the claimant with a written notice setting forth (in
a manner calculated to be understood by the claimant):
(a) the specific reason or reasons for denial of the claim;
(b) a specific reference to the Plan provisions on which the denial
is based;
(c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(d) an explanation of the provisions of this ARTICLE.
13.3 Right of Appeal. A claimant who has a claim denied under section 13.2
---------------
may appeal to the Board for reconsideration of that claim. A request for
reconsideration
<PAGE>
-90-
under this section must be filed by written notice within sixty (60) days after
receipt by the claimant of the notice of denial under section 13.2.
13.4 Review of Appeal. Upon receipt of an appeal the Board shall promptly
----------------
take action to give due consideration to the appeal. Such consideration may
include a hearing of the parties involved, if the Board determines such a
hearing is necessary. In preparing for this appeal the claimant shall be given
the right to review pertinent documents and the right to submit in writing a
statement of issues and comments. After consideration of the merits of the
appeal, the Board shall issue a written decision which shall be binding on all
parties. The decision shall be written in a manner calculated to be understood
by the claimant and shall specifically state its reasons and pertinent Plan
provisions on which it relies. The Trustees' decision shall be issued within
sixty (60) days after the appeal is filed, except that if a hearing is held, the
decision may be issued within one hundred twenty (120) days after the appeal is
filed.
13.5 Designation. The Board may designate one or more of its members or
-----------
any other person of its choosing to make any determination otherwise required
under this ARTICLE.
ARTICLE XIV
Amendments
----------
14.1 Right to Amend. The Company reserves the right to amend this Plan at
--------------
any time, in whole or in part, before or after a termination of the Plan, by an
instrument in writing executed by the Company. The Company shall furnish the
Administrator and the Trustees with a copy of any amendment adopted within
thirty (30) days after such amendment is adopted or effective, whichever is
later. Notwithstanding the foregoing, a duly authorized officer of the Company
may amend the Plan by adding an Appendix or modifying an Appendix described in
Section 1.7; provided, however, that any such
<PAGE>
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amendment shall not provide for any Company contributions other than those
required to satisfy any of the requirements of Code section 401(a).
14.2 Limitations. An amendment of this Plan shall not:
-----------
(a) reduce any vested right or interest to which any Participant or
Beneficiary is then entitled under this Plan or otherwise reduce the vested
rights of a Participant in violation of section 411(d)(6) of the Code;
(b) vest in the Employer any interest or control over any assets of
the Trust;
(c) cause any assets of the Trust to be used for, or diverted to,
purposes other than for the exclusive benefit of Participants and their
Beneficiaries; or
(d) change any of the rights, duties or powers of the Trustees without
their written consent.
14.3 Amendment to Vesting Schedule. Any amendment that modifies the Plan's
-----------------------------
vesting provisions shall either:
(a) provide for a rate of vesting that is at least as rapid for any
Participant as the vesting schedule previously in effect; or
(b) provide that any adversely affected Participant with at least
three (3) Years of Service may elect, in writing, to remain under the vesting
schedule in effect prior to the amendment. Such election must be made within
sixty (60) days after the later of the:
<PAGE>
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(1) adoption of the amendment;
(2) effective date of the amendment; or
(3) issuance by the Company of written notice of the amendment.
ARTICLE XV
Termination
-----------
15.1 Right to Terminate. The Company may terminate this Plan by an
------------------
instrument in writing executed by the Company. The Company shall furnish the
Administrator and the Trustees with a copy of such written instrument within
thirty (30) days after it is adopted or effective, whichever is later. Neither
a temporary cessation nor the suspension of Employer Contributions shall be
deemed to be a termination of this Plan.
15.2 Full Vesting on Termination. Upon termination of this Plan, or
---------------------------
permanent discontinuance of Employer Contributions hereunder, with or without
written notification, the rights of each Participant to the amounts credited to
that Participant's Account at such time shall be fully vested and
nonforfeitable.
15.3 Partial Termination. In the event a partial termination of the Plan
-------------------
is deemed to have occurred, each Participant affected shall be fully vested in
the amounts credited to that Participant's Account with respect to which the
partial termination has occurred. The Trustees shall hold such assets under the
Trust until a distribution is otherwise required (determined without regard to
this section).
<PAGE>
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15.4 Distribution on Termination.
---------------------------
(a) (1) If the Plan is terminated, or contributions permanently
discontinued, the Employer, at its discretion, may (at that time or at any later
time) direct the Trustees to distribute the amounts in a Participant's Account
in accordance with the distribution provisions of the Plan. If the Plan does
not offer an annuity option, then such distribution shall, notwithstanding any
prior provisions of the Plan, be made in a single lump-sum without the
Participant's consent as to the form or timing of such distribution. If,
however, the Employer maintains another defined contribution plan (other than an
employee stock ownership plan), then the preceding sentence shall not apply and
the Employer, at its discretion, may direct such distributions to be made as a
direct transfer to such other plan without the Participant's consent, if the
Participant does not consent to an immediate distribution.
(2) If the Employer does not direct distribution under paragraph
(1), each Participant's Account shall be maintained until distributed in
accordance with the provisions of the Plan (determined without regard to this
section) as though the Plan had not been terminated or contributions
discontinued.
(b) If the Administrator determines that it is administratively
impracticable to make distributions under this section in cash or that it would
be in the Participant's best interest to make some or all of the distributions
with in-kind property, it shall offer all Participants and Beneficiaries
entitled to a distribution under this section a reasonable opportunity to elect
to receive a distribution of the in-kind property being distributed by the
Trust. Those Participants and Beneficiaries so electing shall receive a
proportionate share of such in-kind property in the form (outright, in trust or
in partnership) that the Administrator determines will provide the most feasible
method of distribution.
<PAGE>
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(c) (1) Amounts attributable to elective contributions shall only be
distributable by reason of this section if one of the following is applicable:
(A) the Plan is terminated without the establishment or
maintenance of another defined contribution plan (other than an employee stock
ownership plan);
(B) the Employer has a sale or other disposition to an
unrelated corporation of substantially all of the assets used by the Employer in
a trade or business of the Employer with respect to an Employee who continues
employment with the corporation acquiring such assets; or
(C) the Employer has a sale or other disposition to an
unrelated entity of the Employer's interest in a subsidiary with respect to an
Employee who continues employment with such subsidiary.
(2) For purposes of this section, the term "elective
contributions" means employer contributions made to the Plan that were subject
to a cash or deferred election under a cash or deferred arrangement.
15.5 Affect on Benefits. A termination of the Plan or a permanent
------------------
discontinuance of contributions thereto will not affect the validity of the
Trust or the rights and duties of the Trustees thereunder to pay benefits as
provided in this Plan.
ARTICLE XVI
Miscellaneous
-------------
16.1 IRS Approval. Notwithstanding anything in this instrument to the
------------
contrary, if the Internal Revenue Service shall fail or refuse to issue its
initial determination that the Plan qualifies under section 401(a) of the Code
and the Trust
<PAGE>
-95-
qualifies under section 501(a) of the Code, then the Plan and Trust, at the
election of the Employer, shall be void as of the Effective Date and all
contributions and transferred assets, (including earnings or losses attributable
thereto) shall be returned to the respective parties making such contributions.
16.2 No Assignment.
-------------
(a) Except as provided herein, the right of any Participant or
Beneficiary to any benefit or to any payment hereunder shall not be subject to
alienation, assignment, garnishment, attachment, execution or levy of any kind.
(b) Subsection (a) shall not apply to any payment or transfer
permitted by the Internal Revenue Service pursuant to regulations issued under
section 401(a)(13) of the Code.
(c) Subsection (a) shall not apply to any payment or transfer
pursuant to a Qualified Domestic Relations Order.
(d) Subsection (a) shall not apply to any payment or transfer to the
Trust in accordance with section 401(a)(13)(C) of the Code to satisfy the
Participant's liabilities to the Plan or Trust in any one or more of the
following circumstances:
(1) the Participant is convicted of a crime involving the Plan;
(2) a civil judgment (or consent order or decree) in an action is
brought against the Participant in connection with an ERISA fiduciary violation;
or
<PAGE>
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(3) the Participant enters into a settlement agreement with the
Department of Labor or the Pension Benefit Guaranty Corporation over an ERISA
fiduciary violation.
16.3 Merger. In the event of a merger, consolidation or transfer of assets
------
or liabilities of this Plan and Trust to any other plan, each Participant or
Beneficiary shall be entitled to receive a benefit immediately after the merger,
consolidation or transfer (as if the Plan were terminated) at least equal to the
benefit that would have been receivable immediately before the merger,
consolidation or transfer (as if the Plan were terminated).
16.4 Governing Law. This Plan shall be governed by, construed and
-------------
administered in accordance with ERISA and any other applicable federal law;
provided, however, that to the extent not preempted by federal law this Plan
shall be governed by, construed and administered under the laws of the State of
Delaware, other than its laws respecting choice of law.
16.5 Construction. The provisions of this Plan shall be interpreted and
------------
construed in accordance with the requirements of the Code and ERISA. Any
amendment or restatement of the Plan or Trust that would otherwise violate the
requirements of section 411(d)(6) of the Code or otherwise cause the Plan or
Trust to cease to be qualified under section 401(a) of the Code shall be deemed
to be invalid. Capitalized terms shall have meanings as defined herein.
Singular nouns shall be read as plural, masculine pronouns shall be read as
feminine and vice versa, as appropriate. References to "section" or "ARTICLE"
shall be read as references to appropriate provisions of this Plan, unless
otherwise indicated.
16.6 Company Determinations. Any determinations, actions or decisions of
----------------------
the Company (including but not limited to, Plan amendments and Plan termination)
shall be made by its board of directors in accordance with its established
procedures or by such
<PAGE>
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other individuals, groups or organizations that have been properly delegated by
the board of directors to make such determination or decision.
16.7 Counterpart Originals. This document may be executed in more than one
---------------------
counterpart original.
16.8 Affect on Employment Rights. Neither the existence of the Plan and
---------------------------
Trust nor the substance of any of their provisions shall have any affect on the
employment rights of any Employee.
IN WITNESS WHEREOF, the Company, on behalf of the Employers, has caused
this Plan to be executed by a duly authorized officer this _____ day of
___________________________, 1999.
Attest: UNITED RENTALS, INC.
________________________ By:_________________________________________
Wayland R. Hicks, Chief Operating Officer
